Applied Blockchain, Inc. today announced it is entering the crypto hosting business, following the closing of a $32.5 million private placement on July 30, 2021. The private placement was led by Bitmain, a producer of products for blockchain and artificial intelligence (AI) applications. The proceeds will fund the acquisition of land, construction of facilities, component procurement and other project costs related to the Company’s hosting business in North America. Once constructed, the hosting facilities will house up to 500 megawatts of power and will enable the Company to generate a stable cash flow stream through long-term hosting agreements and lower the cost of power for the Company’s own mining operations.
Bitmain joins SparkPool and GMR as strategic partners for the Company, assisting in the operation and development of its mining and hosting businesses as well as the identification of other strategic business initiatives. In addition to the strategic and equity partnerships, the Company has secured long term hosting agreements with Bitmain and GMR.
“The successful private placement secures the project’s development to establish a large-scale data center in North America,” says Irene Gao, Antminer BD Director, NCSA Region at Bitmain. “We are confident that our partnership with Applied Blockchain will provide professional mining services to move the industry forward.”
“The crackdown on mining operations in China created a unique opportunity for us to launch our own hosting operations with our current partners as well as add another blue-chip partner,” said Applied Blockchain, Inc.’s CEO and Chairman, Wes Cummins. “This new venture complements our existing mining business, services a real and growing demand for hosting capacity and leverages domestic resources and talent to create an even more compelling economic profile for our shareholders.”
Mr. Cummins continued, “Over the last several months we have assembled an impressive team of specialists including engineers and contractors that have experience in procurement and building out hosting facilities who are not only experts in their respective fields but understand our vision and what we are focused on accomplishing. We are entering into a long term agreement with a utility and are strategically locating our hosting operations in the Upper Midwest where there is an abundance of energy production and ample real estate available at an attractive valuation for additional expansion. We expect our first 50 megawatts of capacity to be operational before year end with plans to ultimately scale to more than 500 megawatts, making Applied one of the largest hosting providers in the world.”
“This industry is young and evolving rapidly, and as such it is important that a company can position itself to react quickly to capture opportunities like this one,” adds Mr. Cummins, “I’m proud of the team and the relationships we have built in such a short time to take advantage and execute on this new business.”
B. Riley Securities, Inc. served as placement agent for the private placement.