Legal Proceedings
−Removed: The Company, Wes Cummins, the Company's Chief Executive Officer, and David Rench, the Company's Chief Financial Officer, have been named as a defendants in a class action lawsuit that was filed in August 2023 in the Northern District of Texas (McConnell v.
+Added: The Company, Wes Cummins, the Company's Chief Executive Officer, and David Rench, the Company's Chief Financial Officer, have been named as a defendants in a class action lawsuit that was filed in August 2023 in the U.S.
+Added: District Court for the Northern District of Texas (McConnell v.
Applied Digital Corporation et al., Case No.
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However, this matter is subject to uncertainties, and we could incur judgments or enter into settlements of claims that could adversely affect our financial position, results of operations or cash flows.
−Removed: A description of the risk factors associated with our business is contained in the “Risk Factors” section of our Annual Report.
+Added: On November 15, 2023, a putative securities complaint, captioned Robert Weich v.
+Added: Wes Cummins, Chuck Hastings, Kelli McDonald, Douglas Miller, Virginia Moore, and Richard Nottenburg, No.
+Added: A-23-881629-C, was filed in the U.S.
+Added: District Court for the District of Nevada against certain members of the Company’s Board of Directors and two of its officers, Chief Executive Officer Wesley Cummins and Chief Financial Officer David Rench, asserting breaches of fiduciary duties and unjust enrichment from April 2022 through the present.
+Added: The complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies.
+Added: Specifically, the complaint alleges that the Company overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost cloud services provider and that the Company’s board of directors was not “independent” within the meaning of NASDAQ listing rules.
+Added: A description of the risk factors associated with our business is contained in the “Risk Factors” section of our Annual Report on Form 10-K.
Unregistered Sales of Equity Securities and Use of Proceeds
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.