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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
February
26, 2026
(Date
of earliest event reported)
APPLIED
DIGITAL CORPORATION
(Exact
name of registrant as specified in its charter)
| Nevada |
|
001-31968 |
|
95-4863690 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification No.) |
| 3811
Turtle Creek Blvd., Suite
2100, Dallas, TX |
|
75219 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
214-427-1704
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| |
☐ |
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| |
|
|
| |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
|
| |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
|
| |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐ Emerging
growth company
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock |
|
APLD |
|
Nasdaq
Global Select Market |
Item 1.01. Entry into a Material Definitive Agreement.
Guarantee
On
February 26, 2026, Applied Digital Corporation (“Applied Digital” or the “Company”) entered into a Guarantee
(the “Guarantee”) in favor of The Babcock & Wilcox Company (NYSE: BW) (“B&W”), pursuant to which Applied
Digital has agreed to unconditionally and irrevocably guarantee the full and timely performance by Base Electron, Inc. (“Base Electron”)
of its obligations under that certain Design-Build Agreement, dated February 26, 2026, by and between Base Electron and B&W (the
“Design-Build Agreement”). The Design-Build Agreement contemplates the engineering, procurement, construction and commissioning
of a power generation facility with an expected nameplate capacity of approximately 1.2 GW anticipated to support power needs
for data center operations, including potentially supplying power to the Company’s own data center campuses under future
separate power supply agreements.
Pursuant
to the terms of the Guarantee, if Base Electron fails to perform any of its obligations under the Design-Build Agreement, the Company
would be required, upon written demand by B&W, to perform such obligations or cause such obligations to be performed, including payment
and specific performance.
Applied
Digital’s obligations under the Guarantee are absolute and unconditional and continue until all obligations under the Design-Build
Agreement have been fully performed or otherwise discharged. However, the Company may, in its sole discretion, terminate the Guarantee
and all of its existing and future obligations thereunder upon the occurrence of any one of the following events,
(i)
the listing of Base Electron’s equity securities on a national securities exchange,
(ii)
the consummation by Base Electron of a financing transaction resulting in gross proceeds of at least $50 million (provided that Base
Electron is current in its payments to B&W), or
(iii)
the payment by the Company of a termination fee equal to either $50 million (if paid by August 1, 2026 and Base Electron is current in
its payments to B&W) or $100 million.
Consideration
Payable to Applied Digital
In
connection with and as partial consideration for the Company’s entry into the Guarantee, Base Electron has agreed to issue to Applied
Digital 10% of Base Electron’s outstanding equity.
Base
Electron is an independent power producer formed by certain executive officers, directors and/or affiliates of Applied Digital for the
purpose of developing dedicated, reliable power generation intended to support Applied Digital’s long-term campus strategy and
its disciplined approach to scaling Artificial Intelligence infrastructure. Base Electron is an independent company from Applied Digital
focused on delivering returns to its investors from its development of stabilized power infrastructure and potentially
through a customer-provider relationship with Applied Digital. Accordingly, the transactions described in this Current Report on Form
8-K, including the Guarantee, constitute related-party transactions under applicable Securities and Exchange Commission rules. The Company’s
Board of Directors, acting through its Audit Committee and disinterested directors, reviewed and approved Applied Digital’s entry
into the Guarantee and the related issuance of Base Electron equity to the Company after considering the terms thereof, the strategic
rationale of the transaction, and the relationships described above.
The
foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Guarantee,
a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
Guarantee constitutes an obligation under an off-balance sheet arrangement as defined in Item 303(a)(4) of Regulation S-K. Applied Digital’s
maximum potential exposure under the Guarantee is effectively limited by the obligations of Base Electron under the Design-Build Agreement,
which provides for an anticipated total contract price of approximately $2.4 billion, subject to Applied Digital’s right to limit
those obligations by terminating the Guarantee under the circumstances set forth in Item 1.01 of this Current Report on Form 8-K.
The
information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Forward-Looking
Statements
This
Current Report on Form 8-K and other reports filed by the Company from time to time with the SEC contains “forward-looking statements”
as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance,
product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations
of words, such as “will,” “continue,” “build,” “future,” “increase,” “drive,”
“believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,”
“expect,” “project” and “predict.” Other examples of forward-looking statements may include, but
are not limited to, (i) statements that reflect perspectives and expectations regarding lease agreements and any current or prospective
data center campus development, (ii) statements about the high-performance computing (HPC) industry, (iii) statements of Company plans
and objectives, including the Company’s evolving business model, or estimates or predictions of actions by suppliers, (iv) statements
of future economic performance, (v) statements of assumptions underlying other statements and statements about the Company or its business
and (vi) the Company’s plans to obtain future project financing. You are cautioned not to rely on these forward-looking statements.
These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions
prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s
expectations and projections. These risks, uncertainties, and other factors include, among others: our ability to complete construction
of our data center campuses as planned; the lead time of customer acquisition and leasing decisions and related internal approval processes;
changes to artificial intelligence and high performance compute infrastructure needs and their impact on future plans; costs related
to the HPC operations and strategy; our ability to timely deliver any services required in connection with completion of installation
under the lease agreements; our ability to raise additional capital to fund the ongoing datacenter construction and operations; our ability
to obtain financing of datacenter leases on acceptable financing terms, or at all; our dependence on principal customers, including our
ability to execute and perform our obligations under our leases with key customers, including without limitation, the datacenter leases
with CoreWeave and at our Polaris Forge 2 campus, at future data centers and with future tenants; our ability to timely and successfully
build new hosting facilities with the appropriate contractual margins and efficiencies; power or other supply disruptions and equipment
failures; the inability to comply with regulations, developments and changes in regulations; cash flow and access to capital; availability
of financing to continue to grow our business; decline in demand for our products and services; maintenance of third party relationships;
and conditions in the debt and equity capital markets. A further list and description of these risks, uncertainties and other factors
can be found in the Company’s most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, including in the
sections captioned “Forward-Looking Statements” and “Risk Factors,” and in the Company’s subsequent filings
with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, on the Company’s
website (www.applieddigital.com) under “Investors,” or on request from the Company. Information in this Current Report on
Form 8-K is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information contained
in these materials, except as required by law.
Item
9.01. Financial Statements and Exhibits.
EXHIBIT
INDEX
| Exhibit
No. |
|
Description |
| 10.1* |
|
Guarantee, dated February 26, 2026, by Applied Digital Corporation in favor of The Babcock & Wilcox Company. |
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
| Dated:
March 4, 2026 |
By: |
/s/
Saidal L. Mohmand |
| |
Name: |
Saidal
L. Mohmand |
| |
Title: |
Chief
Financial Officer |
