A Dallas-based cryptocurrency infrastructure firm is looking to move to the Nasdaq.
Applied Blockchain, an owner and operator of data center facilities used for mining crypto assets, filed plans with the SEC to uplist from the OTC Pink market to the Nasdaq Global Select Market in a move that could raise up to around $63 million.
“We are building next-gen data centers, which are designed to provide massive computing power,” the company wrote in its SEC filing. “Working with expert advisors in the fields of power, crypto mining operations, procurement, and construction, we’ve designed a plan for a prefabricated facility and organization within the facility that can be delivered and installed quickly and maximize performance and efficiency.”
Plans 5GW of energy over the next five years
With a facility in North Dakota already producing 55 megawatts of power and plans to develop a 200-megawatt wind-powered facility in Texas, Applied said it plans to use the offering’s proceeds to purchase, lease, construct, or enter into energy service agreements at additional facilities. Ultimately it expects to bring 5 gigawatts of energy online over the next five years, the company said in its filing.
“Initially, these data centers will primarily host servers securing the Bitcoin network but can also host hardware for other applications, such as artificial intelligence, machine learning, and other blockchain networks in the future,” Applied wrote. “We have a colocation business model where our customers place hardware they own into our facilities, and we provide full operational and maintenance services for a fixed fee.”
Applied is planning to offer around 3.2 million shares with an estimated mean price of $18.54. That would give the company a market capitalization of about $1.8 billion, according to the Dallas Business Journal. It’s planning a one-for-six reverse stock split and will trade under the ticker APLD—the same it uses currently on the over-the-counter markets.
Exploring REIT plans
Applied emerged from stealth mode last April with an oversubscribed $16.5 million private equity investment and strategic partnership with SparkPool and General Mining Research. It followed that with a $32.5 million private placement led by Bitmain last July. In its filing, the company said it initially intended to focus on mining Bitcoin and Ethereum. However, over the course of the year, the company shifted its focus to co-hosting facilities. It said it’s exploring the possibility of converting its business to a real estate investment trust structure.
The company said it’s seeing a boost in demand for crypto-mining infrastructure following China’s crackdown on mining last year due to environmental and market stability concerns.
“Even prior to the crypto-mining restrictions in China, power capacity available for Bitcoin mining was scarce, especially at scalable sites,” Applied wrote. “This scarcity of mining power allows us to realize attractive hosting rates in the current market, in particular given our ability to provide long-term hosting contracts.”
According to its filing, Applied has 47 full-time employees and seven independent contractors on its team. It leases around 10,700 square feet of space in Dallas’ Oak Lawn neighborhood.
“Through our build-out of our first Midwest facility and the prior experience our leadership team brings to our initiatives, we believe that we have developed a repeatable power strategy to significantly scale our operations,” Applied wrote in the filing. “In addition, we are currently focused on and will continue to target states that have favorable laws and regulations for the crypto mining industry, which we believe further de-risks the scaling of our operations.”
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