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Item 9A. Controls and Procedures

2025-07-30 compared with 2024-08-30 · 185 added, 613 removed, 250 unchanged (76% of the section changed)

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A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of May 31, 2024, has concluded that our disclosure controls and procedures were not effective as of May 31, 2024, as a result of the material weaknesses in our internal control over financial reporting disclosed below.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act), have concluded that our disclosure controls and procedures were not effective as of May 31, 2025, as a result of the material weakness in our internal control over financial reporting disclosed below.

Management’s Annual Report on Internal Control Over Financial Reporting

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on that evaluation, and as a result of the material weaknesses described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of May 31, 2024, our disclosure controls and procedures were not effective.

Based on that evaluation, and as a result of the material weakness described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of May 31, 2025, our internal controls over financial reporting were not effective.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.

We have identified the following material weakness in the design of our internal controls:

• We have not yet designed and implemented controls to ensure we can record, process, summarize, and report financial data.

• We have not designed and implemented user access controls to ensure appropriate segregation of duties that would adequately restrict user and privileged access to the financially relevant systems and data to appropriate personnel.

• We did not design and maintain effective controls associated with related party transactions and disclosures.

Controls were not designed or implemented at a sufficient level of precision or rigor to effectively identify related party relationships and disclose their related transactions in our financial statements.

• We also do not have a properly designed internal control system that identifies critical processes and key controls.

The material weaknesses did not result in any identified misstatements to the financial statements, and there were no changes to previously released financial results.

Notwithstanding these material weaknesses in internal control over financial reporting, our management has concluded that, based on their knowledge, the consolidated financial statements, and other financial information included in this Annual Report on Form 10-K present fairly, in all material respects our

financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

In order to remediate these material weaknesses, we have begun to take the following steps, among others:

Hiring additional qualified accounting and financial reporting personnel to support division of responsibilities, including utilizing an advisory, tax and assurance firm to assist with process documentation;

Improving and updating our systems;

Developing IT general controls to manage access and program changes across our key systems and the execution of improvements to application controls within our systems, including implementing user access reviews for all systems on a quarterly basis;

Implementing processes and controls to better identify and manage segregation of duties, including executing an internal audit program to evaluate the design, implementation, and operating effectiveness of key business processes and IT controls.

We will not be able to fully remediate the material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time.

Attestation Report

This Annual Report on Form 10-K does not include an attestation report of the Company's registered public accounting firm due to the fact that the Company is a non-accelerated filer and exempt from the requirement.

We have identified a material weakness in the design of our internal controls as we did not design and maintain effective controls around the accounting and assessment of complex financial instruments.

The material weakness did not result in changes to previously released financial results.

Notwithstanding this material weakness in internal control over financial reporting, our management has concluded that, based on their knowledge, the consolidated financial statements, and other financial information included in this Annual Report on Form 10-K present fairly, in all material respects our financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

In order to remediate this material weakness, we have hired additional qualified accounting personnel as well as engaged with a third-party consultant to assist with analyzing and documenting the treatment of complex financial instruments.

Management is committed to remediating this material weakness as soon as practicable, which we anticipate to be in the first half of fiscal year 2026.

The material weakness will not be considered remediated until the applicable controls have been in place and operating for a sufficient period of time, and management has concluded, through testing, that controls are operating effectively.

Remediation of Previously Identified Material Weaknesses

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated such that those controls are designed, implemented, and operating effectively.

Management's remediation efforts around each previously reported material weakness are detailed below.

The material weakness related to not designing and implementing controls to ensure we can record, process, summarize, and report financial data has been remediated.

Specifically, we have improved and updated our systems and processes as well as hired additional qualified accounting and financial reporting personnel to support division of responsibilities, including utilizing an advisory, tax and assurance firm to assist with process documentation.

The material weakness related to not designing and implementing user access controls to ensure appropriate segregation of duties that would adequately restrict user and privileged access to the financially relevant systems and data to appropriate personnel has been remediated.

Specifically, we have developed IT general controls to effectively manage logical access and changes to our key systems.

We have also developed IT application controls to appropriately segregate duties within our systems.

The material weakness related to not having a properly designed internal control system that identifies critical processes and key controls has been remediated.

Specifically, we have developed a governance, risk and compliance program within the company, supported by risk assessment and scoping processes, as well as executed an internal audit program to evaluate the design, implementation, and operating effectiveness of key business processes and IT controls.

The material weakness related to not designing and maintaining effective controls associated with related party transactions and disclosures has been remediated.

Specifically, management has made modifications to our processes pertaining to related party transactions and disclosures during the three months ended August 31, 2024 and the three months ended November 30, 2024.

These modifications enhanced the precision relating to effectively identifying related party transactions and disclosing their related transactions in our financial statements.

During the year ended May 31, 2025, we completed our testing and evaluation of the newly designed and implemented controls and determined that as of May 31, 2025, the controls have been in place and have operated effectively for a sufficient period of time for management to conclude the material weaknesses have been remediated.

The Company’s independent registered public accounting firm, CBIZ CPAs P.C., which audited the Company’s Consolidated Financial Statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal control over financial reporting, which is included herein.

Changes in Internal Control over Financial Reporting

Except as set forth above, there were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2024, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other than the changes noted above, there were no changes in our internal control over financial reporting, identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) under the Exchange Act, that occurred during the three months ended May 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Stockholders and Board of Directors of Applied Digital Corporation

Adverse Opinion on Internal Control over Financial Reporting

We have audited Applied Digital Corporation’s (the "Company") internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, because of the effect of the material weakness described in the subsequent paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in “ Management's Annual Report on Internal Control over Financial Reporting”:

• The Company has a material weakness in the operating effectiveness around the accounting and assessment of complex financial instruments.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal 2025 consolidated financial statements and this report does not affect our report dated July 30, 2025 on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet as of May 31, 2025 and the related consolidated statements of operations, changes in temporary equity and stockholders’ equity, and cash flows for the year ended May 31, 2025 of the Company and our report dated July 30, 2025 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management’s Annual Report on Internal Control over Financial Reporting".

Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and

that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

July 30, 2025

Other Information

On August 28, 2024, the Company entered into the SEPA with YA Fund, which was amended on August 29, 2024.

Pursuant to the SEPA, subject to certain conditions and limitations, the Company has the option, but not the obligation, to sell to YA Fund, and YA Fund must subscribe for, an aggregate amount of up to $250.0 million of common stock, at the Company’s request any time during the commitment period commencing on September 30, 2024 (the “Effective Date”) and terminating on the first day of the month next following the 36-month anniversary of the Effective Date;

provided, that there is an effective resale registration statement on file with the SEC covering the shares of common stock issued and issuable under the SEPA.

In connection with the execution of the SEPA, the Company agreed to pay a structuring fee (in cash) to YA Fund in the amount of $25,000.

Additionally, the Company agreed to pay a commitment fee of $2,125,000 to YA Fund, payable on the date of the SEPA, in the form of the issuance of 456,287 shares of common stock (the “Commitment Shares”), representing $2,125,000 divided by the average of the daily VWAPs of the common stock during the three trading days immediately prior to August 28, 2024.

Each advance (each, an “Advance”) the Company requests in writing to YA Fund under the SEPA (notice of such request, an “Advance Notice”) may be for a number of shares of common stock up to such amount as is equal to 100% of the average daily volume traded of the common stock during the five trading days immediately prior to the date the Company requests each Advance.

At the Company's option, the shares of common stock purchased pursuant to an Advance delivered by the Company will be purchased at a price equal to (i) 96% of the VWAP of the common stock on the applicable date of delivery of the Advance Notice during regular trading hours on such date (the "Option 1 Market Price") or (ii) 97% of the lowest daily VWAP of the common stock during the three consecutive trading days commencing on the date of the delivery of the Advance Notice (the "Option 2 Market Price"), other than the daily VWAP on a day in which the daily VWAP is less than a minimum acceptable price as stated by the Company in the Advance Notice or there is no VWAP on

the subject trading day.

The Company may establish a minimum acceptable price in each Advance Notice in which the Company elects to use the Option 2 Market Price below which the Company will not be obligated to make any sales to YA Fund.

“VWAP” is defined as the daily volume weighted average price of the shares of common stock for such trading day on Nasdaq during regular trading hours as reported by Bloomberg L.P.

The SEPA will automatically terminate on the earliest to occur of (i) the first day of the month next following the 36-month anniversary of the Effective Date or (ii) the date on which the Company shall have made full payment of Advances pursuant to the SEPA.

The Company has the right to terminate the SEPA at no cost or penalty upon five trading days’ prior written notice to YA Fund, provided that there are no outstanding Advance Notices for which shares of common stock need to be issued.

The Company and YA Fund may also agree to terminate the SEPA by mutual written consent.

Any purchase under an Advance would be subject to certain limitations, including that YA Fund shall not purchase or acquire any shares that would result in it and its affiliates beneficially owning more than 4.99% of the then outstanding voting power or number of shares of common stock or any shares that, aggregated with shares issued under the SEPA, the March PPA or the May PPA, would exceed 19.99% of all shares of common stock outstanding on March 26, 2024 (the “Exchange Cap”), unless the Company obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with applicable Nasdaq rules.

Pursuant to the SEPA, the Company agreed to file a resale registration statement with the SEC for the resale under the Securities Act by YA Fund of the common stock issued under the SEPA, including the Commitment Shares.

The Company shall not have the ability to request any Advances until such resale registration statement is declared effective by the SEC.

Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications

During the fiscal quarter ended May 31, 2024 , Douglas Miller , a member of the Board , adopted a Rule 10b5-1 plan providing for the sale of up to 65,000 shares of the Company’s common stock.

Pursuant to this plan, Mr.

Miller may sell shares of common stock beginning on August 15, 2024, subject to the terms of the agreement, and the plan terminates on December 31, 2024.

During the fiscal quarter ended May 31, 2025 , Mark Chavez , Chief Compliance Officer and General Counsel , adopted a Rule 10b5-1 plan terminating December 31, 2027.

Chavez's Rule 10b5-1 trading arrangement calls for potential sales of a percentage of shares that he could receive upon the future vesting of certain outstanding equity awards, net of any shares withheld by the Company to satisfy applicable taxes.

The number of shares to be withheld, and thus the exact maximum number of shares to be sold pursuant to Mr.

Chavez’s Rule 10b5-1 trading arrangement, can only be determined upon the occurrence of the future vesting events.

For purposes of this disclosure, without subtracting any shares to be withheld upon future vesting events, the maximum aggregate number of shares to be sold pursuant to Mr.

Chavez’s Rule 10b5-1 trading arrangement is 435,000 .

The trading arrangement is intended to satisfy the affirmative defense of Rule 10b5-1(c).

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Directors, Executive Officers and Corporate Governance

Our directors and their ages as of the date of this filing are set forth below.

Each director is elected annually to serve until the next annual meeting of shareholders, or until his or her successor is duly elected.

Name Age Position(s) Period of Service

Wes Cummins 46 Chief Executive Officer and Chairman of the Board of Directors Director from February 2007 to December 2020 and March 2021 to Present, sole officer from March 2012 to December 2020 and CEO, Secretary and Treasurer from March 2021 to Present

Ella Benson 38 Director April 2024 to Present

Chuck Hastings 46 Director April 2021 to Present

Rachel Lee 40 Director February 2024 to Present

Douglas Miller 67 Director April 2021 to Present

Richard Nottenburg 70 Director June 2021 to Present

Kate Reed 38 Director and Chief Growth Officer November 2023 to Present;

Chief Growth Officer from May 2024 to Present

There are no family relationships between any of our directors or executive officers.

The biographies of our directors and certain information regarding each director’s experience, attributes, skills and/or qualifications that led to the conclusion that the director should be serving as a director of our Company are as follows:

Cummins has served as a member of our Board from 2007 until 2020 and from March 11, 2021 through present.

During that time Mr.

Cummins also served in various executive officer positions and he is currently serving as our chairman of the Board and Chief Executive Officer.

Cummins is also the founder and CEO of 272 Capital LP, a registered investment advisor, which he sold to B.

Riley Financial, Inc.

RILY) in August 2021.

Following the sale, Mr, Cummins served as President of B.

Riley Asset Management until February 2024.

Cummins has been a technology investor for over 20 years and held various positions in capital markets including positions at investment banks and hedge funds.

Prior to founding 272 Capital and starting our operating business, Mr.

Cummins was an analyst with Nokomis Capital, L.L.C., an investment advisory firm, a position he held from October 2012 until February 2020.

Cummins also served as president of B.

Riley & Co., from 2002 to 2011.

Cummins also serves as a member of the board of Sequans Communications S.A.

SQNS), a fabless designer, developer and supplier of cellular semiconductor solutions for massive, broadband and critical Internet of Things (IoT) markets.

Cummins served on the board of Telenav (NASDAQ:

TNAV) from August 2016 until February 2021.

Cummins also served on the board of Vishay Precision Group, Inc.

VPG) from July 2017 to June 2024.

He holds a BSBA from Washington University in St.

Louis where he majored in finance and accounting.

We believe Mr.

Cummins is qualified to serve on our Board because of his business and leadership experience, as well as a result of having served as a director since starting our operating business.

Benson brings over a decade of experience in financial services and currently serves as a Director at Oasis Management Co., Ltd.

She has substantial experience working with public companies undergoing strategic transitions.

Benson served on the board of directors of Stratus Properties (NASDAQ:

STRS) from 2017 to 2020.

Prior to joining Oasis in 2013, Ms.

Benson was an analyst at GAM, an independent asset management firm, from 2009 to 2013.

Benson holds a Bachelor of Business Administration in Finance from the McCombs School of Business at the University of Texas at Austin.

Since May 2024, Ms.

Benson has served as a member of the Company’s Board where she is also the Chairperson of the Nominating and Governance Committee.

We believe Ms.

Benson is qualified to serve on our Board because of her substantial experience working with public companies undergoing strategic transitions

Chuck Hastings

Hastings currently serves as Chief Executive Officer of B.

Riley Wealth Management.

Hastings joined B.

Riley Financial in 2013 as a portfolio manager and became Director of Strategic Initiatives at B.

Riley Wealth Management in 2018 and President in 2019.

Prior to joining B.

Hastings served as Portfolio Manager at Tri Cap LLC and was Head Trader at GPS Partners, a Los Angeles-based hedge fund, where he managed all aspects of trading and process including price and liquidity discovery and trade execution from 2005 to 2009.

While at GPS Partners, Mr.

Hastings was instrumental in growing the fund with the founding partners from a small start-up to one of the largest funds on the West Coast.

Earlier in his career, Mr.

Hastings served as a convertible bond trader at Morgan Stanley in New York.

Hastings also serves as a Board member for IQvestment Holdings.

Hastings holds a B.A.

in political science from Princeton University.

We believe Mr.

Hastings is qualified to serve on our Board because he is a recognized leader in the financial industry with more than two decades of global financial and business expertise.

Lee brings 17 years of finance and investment experience and 10 years of board experience at growth companies, including publicly traded entities.

Most recently, Ms.

Lee served as a Partner and the Head of the Consumer Private Equity practice at Ares Management Corporation (NYSE:

ARES) and spent almost 15 years at the firm.

In her role as the Head of Consumer Private Equity, she led all aspects of deal activity from origination to monetization including due diligence, debt capital raises, tack-on acquisitions, legal negotiations, and exits via initial public offerings.

Before joining Ares in 2008, Ms.

Lee was in the investment banking division at J.P.

Morgan, where she participated in the execution of a variety of transactions, including leveraged buyouts, mergers and acquisitions, and debt and equity financings across various industries.

Lee also serves on the boards of Bank of Hope (NASDAQ:

HOPE) and Legacy Franchise Concepts and previously served on the boards of Cooper’s Hawk Winery and Restaurants and Floor and Decor Holdings (NYSE:

FND), among others.

She holds a B.S.

in Corporate Finance and a B.S.

in Accounting from the University of Southern California.

We believe Ms.

Lee is qualified to serve on our Board because of her finance and investment experience and 10 years of board experience at growth companies, including publicly traded entities.

Douglas Miller

Miller has served as a member of the board of directors of three public companies over the past nine years:

Telenav, Inc.

TNAV) from July 2015 to February 2021, CareDx, Inc.

CDNA) from July 2016 to May 2017, and Procera Networks, Inc.

PKT) from May 2013 to June 2015.

He has chaired the Audit Committee for each of these companies, and has also served as a Lead Independent Director and as chair or committee member on Compensation, Nominating and Governance and Special committees.

Prior to his roles as board member, Mr.

Miller served as senior vice president, chief financial officer and treasurer of Telenav, Inc.

a wireless application developer specializing in personalized navigation services, from 2006 to 2012.

From 2005 to 2006, Mr.

Miller served as vice president and chief financial officer of Longboard, Inc., a privately held provider of telecommunications software.

Prior to that, from 1998 to 2005, Mr.

Miller held various management positions, including senior vice president of finance and chief financial officer, at Synplicity, Inc., a publicly traded electronic design automation company.

Miller also served as chief financial officer of 3DLabs, Inc., a publicly held graphics semiconductor company, and as an audit partner at Ernst & Young LLP, a professional services organization.

Miller is a certified public accountant (inactive).

He holds a B.S.C.

in Accounting from Santa Clara University.

We believe Mr.

Miller is qualified to serve on our Board because of his board experience at publicly traded companies and his finance and accounting experience.

Richard Nottenburg

Nottenburg is Executive Chairman of NxBeam Inc., which designs and builds leading proprietary mmWave ICs and radio products to power the next generation of satellite and terrestrial communication networks.

Nottenburg is on the board of directors of Cognyte Software Ltd., (NASDAQ:

CGNT),a global leader in security analytics software and Verint Systems Inc.

VRNT), a customer engagement company.

He serves as chairman of the compensation committee of both companies.

He is also a member of the board of Sequans Communications S.A.

SQNS), a leading developer and provider of 5G and 4G chips and modules for massive, broadband and critical IoT applications where he serves on both the audit and compensation committees.

Previously, Dr.

Nottenburg served as President and Chief Executive Officer and a member of the board of directors of Sonus Networks, Inc.

from 2008 through 2010.

From 2004 until 2008, Dr.

Nottenburg was an officer with Motorola, Inc., ultimately serving as its Executive Vice President, Chief Strategy Officer and Chief Technology Officer.

We believe Dr.

Nottenburg is qualified to serve on our Board because of his industry expertise and board experience at publicly traded companies.

Reed brings expertise in technology leadership including Artificial Intelligence and Analytics, Cyber Security, and Cloud Computing.

Reed has served in various capacities at IBM Corporation since 2014.

She has been Director of Sales, Red Hat since 2021.

Prior to that she served as Strategic Partnership Executive, With Watson from 2019 to 2021, as Business Unit Executive, IBM Security Trusteer from 2017 to 2019 and initially as Strategy Leader – Enterprise Content Management, IBM Cloud.

Reed continues to lead revenue generating teams, designing technology strategies that align with organizational goals, ensuring seamless integration and leveraging the latest advancements to drive business success.

We believe Ms.

Reed is qualified to serve on our Board because of her industry expertise and experience designing technology strategies.

Executive Officers

Our executive officers and their ages as of the date of this filing are set forth below.

Our executive officers are elected by, and serve at the discretion of, our Board.

Name Age Position(s) Period of Service

Wes Cummins 46 Chief Executive Officer and Chairman of the Board Sole officer from March 2012 to December 2020;

Chief Executive Officer, Secretary and Treasurer from March 2021 to Present

David Rench 46 Chief Financial Officer March 2021 to Present

Michael Maniscalco 44 Chief Technology Officer Executive Vice President of Technology from September 2021 to June 2023;

Chief Technology Officer beginning in July 2023

The business experience for the past five years, and in some instances, for prior years, of each of our executive officers is as follows :

See description the above section entitled “Directors.”

Rench became our chief financial officer in March 2021 and continues to serve in that capacity.

Prior to joining us, Mr.

Rench co-founded in 2009, and from 2010 to 2017 served as the VP of Finance and Operations of, a software startup company, Ihiji, until the company was acquired by Control4 in 2017.

After the acquisition of Ihiji, Mr.

Rench joined and served as Chief Financial Officer of Hirzel Capital, an investment management company, from 2017 to 2020.

Rench holds a BBA from the Neeley School of Business at Texas Christian University in Fort Worth, Texas, and an MBA from the Cox School of Business at Southern Methodist University in Dallas, Texas.

Michael Maniscalco

Maniscalco became our Executive Vice President of Technology in February 2022, and was named Chief Technology Officer in July 2023.

Maniscalco co-founded Ihiji, a remote network management services company, where he served as the Vice President of Product through February 2018, after Ihiji was acquired in 2017.

From 2018 until his employment with the Company, Mr.

Maniscalco founded and served as Chief Executive Officer of Better Living Technologies from 2018 to 2022.

In addition, Mr.

Maniscalco has founded several other companies and organizations over the last five years.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires the Company’s directors, executive officers and persons who beneficially own more than 10% of its common stock to file reports of ownership and changes in ownership with the Commission and to furnish the Company with copies of all such reports they file.

Based on the Company’s review of the copies of such forms received by it, or written representations from certain reporting persons, the Company believes that none of its directors, executive officers or persons who beneficially own more than 10% of the common stock failed to comply with Section 16(a) reporting requirements during the fiscal year ended May 31, 2024 (the “Last Fiscal Year”), except for one Form 4 filed by Virginia Moore reporting eight late transactions.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees, officers, and directors.

The full text of our code of business conduct and ethics is posted on the Investors section of our website:

www.applieddigital.com.

We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of these provisions, on our website or in public filings.

Board Composition

Our Board currently consists of seven members.

Each of our current directors serves until the next annual meeting of our stockholders or earlier death, resignation or removal.

Despite the expiration of a director’s term, however, the director shall continue to serve until such director’s successor is elected and qualifies or until there is a decrease in the number of directors.

Director Independence

Our common stock is listed on The Nasdaq Global Select Market.

Under the Nasdaq Listing Rules, independent directors must comprise a majority of our Board.

In addition, the Nasdaq Listing Rules require that all the members of such committees be independent.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Compensation committee members must also satisfy the independence criteria established by the Nasdaq Listing Rules in accordance with Rule 10C-1 under the Exchange Act.

Under the Nasdaq Listing Rules, a director will only qualify as an “independent director” if, among other qualifications, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board undertook a review of its composition, the composition of its committees and the independence of each director.

Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that Ms.

Hastings, Ms.

Miller and Dr.

Nottenburg do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the Nasdaq Listing Rules and the SEC.

Our Board has appointed Mr.

Miller as our lead independent director.

Our lead independent director is expected to provide leadership to our Board if circumstances arise in which the role of chief executive officer and chairperson of our Board may be, or may be perceived to be, in conflict, and perform such additional duties as our Board may otherwise determine and delegate.

Board Committees

Our Board has established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee, each of which have the composition and responsibilities described below.

Members serve on these committees until their resignation or until otherwise determined by our Board.

Each committee operates under a written charter approved by our Board that satisfies the applicable rules of the SEC and the listing standards of the Nasdaq Global Select Market.

Copies of each committee’s charter are posted on the Investors section of our website.

Membership in each committee is shown in the following table.

Audit Committee Compensation Committee Nominating and Governance Committee

Ella Benson ▲

Chuck Hastings ● ●

Rachel Lee ● ●

Douglas Miller ▲ ●

Richard Nottenburg ● ▲ ●

▲ Chair ● Member

Audit Committee

Our Audit Committee is comprised of Mr.

Hastings and Dr.

Miller is the chairperson of our Audit Committee.

Each Audit Committee member meets the requirements for independence under the current Nasdaq Listing Rules and Rule 10A-3 under the Exchange Act .

Miller qualifies as an “audit committee financial expert” as defined in Item 407(d) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

This designation does not impose any duties, obligations, or liabilities that are greater than are generally imposed on members of our Audit Committee and our Board.

Each member of our Audit Committee is financially literate.

Our Audit Committee is directly responsible for, among other things:

• selecting a firm to serve as the independent registered public accounting firm to audit our consolidated financial statements;

• ensuring the independence of the independent registered public accounting firm;

• discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, our interim and year-end operating results;

• establishing procedures for employees to anonymously submit concerns about questionable accounting or audit matters;

• considering the adequacy of our internal controls and internal audit function;

• inquiring about significant risks, reviewing our policies for risk assessment and risk management, including cybersecurity risks, and assessing the steps management has taken to control these risks;

• reviewing and overseeing our policies related to compliance risks;

• reviewing related party transactions that are material or otherwise implicate disclosure requirements;

• approving or, as permitted, pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm.

Compensation Committee

Our Compensation Committee is comprised of Dr.

Nottenburg, Ms.

Nottenburg is the chairperson of our Compensation Committee.

The composition of our Compensation Committee meets the requirements for independence under the Nasdaq Listing Rules.

Each member of this committee is a “non-employee director,” as defined in Rule 16b-3 promulgated under the Exchange Act and an “outside director” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended .

Our Compensation Committee is responsible for, among other things:

• reviewing and approving, or recommending that our Board approve, the compensation and the terms of any compensatory agreements of our executive officers;

• reviewing and recommending to our Board the compensation of our directors;

• administering our stock and equity incentive plans;

• reviewing and approving, or making recommendations to our Board with respect to, incentive compensation and equity plans;

• establishing our overall compensation philosophy.

Nominating and Governance Committee

Our Nominating and Governance Committee is comprised of Ms.

Nottenburg, and Mr.

Benson is the chairperson of our Nominating and Governance Committee.

The composition of our Nominating and Governance Committee meets the requirements for independence under the Nasdaq Listing Rules.

Our Nominating and Governance Committee is responsible for, among other things:

• identifying and recommending candidates for membership on our Board;

• recommending directors to serve on board committees;

• reviewing and recommending our corporate governance guidelines and policies;

• reviewing succession plans for senior management positions, including the chief executive officer;

• reviewing proposed waivers of the code of business conduct and ethics for directors, executive officers, and employees (with waivers for directors or executive officers to be approved by the Board);

• evaluating, and overseeing the process of evaluating, the performance of our Board and individual directors;

• advising our Board on corporate governance matters.

Board’s Role in Risk Oversight

Our Board is primarily responsible for overseeing our risk management processes.

Our Board, as a whole, determines our appropriate level of risk, assesses the specific risks that we face, and reviews management’s strategies for adequately mitigating and managing the identified risks.

Although our Board administers this risk management oversight function, the committees of our Board support our Board in discharging its oversight duties and address risks inherent in their respective areas.

The Audit Committee reviews our major financial risk exposures and the steps management has taken to monitor and control such exposures, including our procedures and related policies with respect to risk assessment and risk management.

Our Audit Committee also reviews matters relating to compliance, cybersecurity, and security and reports to our Board regarding such matters.

The Compensation Committee reviews risks and exposures associated with compensation plans and programs.

We believe this division of responsibilities is an effective approach for addressing the risks we face and that our Board leadership structure supports this approach.

Our Board is responsible for the oversight of cybersecurity risk management.

The Board delegates oversight of the cybersecurity risk management program to the Audit Committee.

The management of the program is the responsibility of our Risk Management Committee, comprised of our Chief Executive Officer, Chief Financial Officer and Chief Technology Officer.

The Risk Management Committee provides quarterly updates to the Audit Committee on our cybersecurity risk management program, including updates on (1) any critical cybersecurity risks;

(2) ongoing cybersecurity initiatives and strategies;

(3) applicable regulatory requirements;

and (4) industry standards.

The Risk Management Committee also notifies the Board of any cybersecurity incidents (suspected or actual) and provides updates on the incidents as well as cybersecurity risk mitigation activities as appropriate.

Executive Compensation

The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons.

The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company.

A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Form 10-K.

The remaining information required by this Item 10 will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such disclosure is incorporated herein by reference.

Executive Compensation

We are a “smaller reporting company” under applicable SEC rules and are providing disclosure regarding our executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, which means that we are not required to provide a compensation discussion and analysis and certain other disclosures regarding our executive compensation.

The following discussion relates to the compensation of each of the Company’s Chief Executive Officer and its two other most highly compensated individuals who were serving as executive officers at the end of the fiscal year ended May 31, 2024, for services rendered in all capacities during such year (the “Named Executive Officers”), consisting of Wes Cummins, our Chief Executive Officer, Secretary, Treasurer, Chairman of the Board, David Rench, our Chief Financial Officer, and Michael Maniscalco, our Chief Technology Officer.

Summary Compensation Table

The following table presents information regarding the total compensation awarded to, earned by, or paid to Named Executive Officers as of May 31, 2024 and May 31, 2023 for services rendered in all capacities to us for the years ended May 31, 2024 and May 31, 2023.

Name and Principal Position(s) Year Salary ($) Bonus ($) Non-Equity Incentive Plan Compensation ($) (1)

All Other Compensation ($) (2)

Wes Cummins 2024 $ 600,000 $ 600,000 $ — $ 1,695,169 $ 2,895,169

Chief Executive Officer, President, Secretary and Treasurer 2023 $ 312,500 $ 150,000 $ — $ 5,492,078 $ 5,954,578

David Rench 2024 $ 475,000 $ 475,000 $ — $ 767,990 $ 1,717,990

Chief Financial Officer 2023 $ 272,292 $ 339,375 $ — $ 2,098,578 $ 2,710,245

Michael Maniscalco 2024 $ 375,000 $ 367,875 $ — $ 432,698 $ 1,175,573

Chief Technology Officer (3)

2023 $ 200,000 $ 92,500 $ — $ 854,941 $ 1,147,441

(1) Consists of value of restricted stock awards made outside of the 2022 Incentive Plan.

(2) Consists of restricted stock units granted through the 2022 Incentive Plan and health care premiums paid by the Company.

Maniscalco joined the Company in September 2021 as EVP, Technology, and became Chief Technology Officer on July 5, 2023.

Narrative Disclosure to Summary Compensation Table

Employment Agreements with Named Executive Officers

Cummins Agreement

Cummins is our Chief Executive Officer.

On January 4, 2022, we and Mr.

Cummins entered into an Employment Agreement, effective as of November 1, 2021, as amended on September 25, 2023 (as amended, the “Cummins Employment Agreement”).

Pursuant to the Cummins Employment Agreement, Mr.

Cummins receives a base salary of $600,000 per annum, subject to review and adjustment (but not downward) from time to time during the term of the Cummins Employment Agreement based on Mr.

Cummins’s performance, and is also eligible for an annual bonus, to be determined at the Board’s sole discretion.

The term of the Cummins Employment Agreement ends on October 31, 2024, with automatic one (1) year extensions unless notice not to renew is given by either party at least 60 days prior to the relevant end date.

The Cummins Employment Agreement granted Mr.

Cummins an incentive award of 500,000 restricted shares of our common stock (“Restricted Stock”), which are fully vested as of the date hereof.

The Cummins Employment Agreement requires Mr.

Cummins to devote his full-time efforts to his employment duties and obligations, and provides that Mr.

Cummins will be entitled to participate in all benefit plans provided to our employees in accordance with our applicable plan, policy or practices, as well as in any long-term incentive program established by us.

It also provides for unlimited annual paid vacation, and reimbursement of reasonable business expenses, and provides that either party may terminate the employment arrangement pursuant to the notice requirements set forth in the Cummins Employment Agreement.

We may terminate the Cummins Employment Agreement upon Mr.

Cummins’s breach of any term of the Cummins Employment Agreement or where there is just Cause (as defined in the Cummins Employment Agreement) for termination.

Cummins may terminate the Cummins Employment Agreement in the event that we discontinue operating its business at the location where the Employee is employed, at his sole option, or with notice of a minimum of 2 weeks.

Cummins employment is terminated without Cause or resigns with Good Reason (as defined in the Incentive Plan (as defined below)), during the 24-month period following a Change in Control (as defined in the Incentive Plan), Mr.

Cummins shall be entitled to a severance payment equal to 2 times the following amount:

Cummins’s base salary plus Mr.

Cummins’s target bonus, each for the year in which the termination of employment occurs, subject to adjustments if such severance payments cause Mr.

Cummins to be liable for federal excise tax under Section 4999 of the Internal Revenue Code levied on certain "excess parachute payments" as defined in Code Section 280G.

The Cummins Employment Agreement contains restrictive covenants prohibiting Mr.

Cummins from disclosing our confidential information at any time, from competing with us in any geographic area where we do business during his employment, and from soliciting our employees, contractors or customers, during his employment and for one year thereafter.

In June 2023, the Compensation Committee increased Mr.

Cummins’s annual base salary to $600,000.

Rench Agreement

Rench is our Chief Financial Officer.

On January 4, 2022, we and Mr.

Rench entered into an Employment Agreement, effective as of November 1, 2021 (as amended, the “Rench Employment Agreement”).

Pursuant to the Rench Employment Agreement, Mr.

Rench receives a base salary of $240,000 per annum, subject to review and adjustment (but not downward) from time to time during the term of the Cummins Employment Agreement based on Mr.

Rench’s performance, and is also eligible for an annual bonus, to be determined at the Board’s sole discretion.

The term of the Rench Employment Agreement ends on October 31, 2024, with automatic one (1) year extensions unless notice not to renew is given by either party at least 60 days prior to the relevant end date.

The Rench Employment Agreement grants Mr.

Rench an incentive award of 166,666 shares of Restricted Stock, which are fully vested as of the date hereof.

The Rench Employment Agreement requires Mr.

Rench to devote 40 hours per week to his employment duties and obligations, and provides that Mr.

Rench will be entitled to participate in all benefit plans provided to our employees in accordance with our applicable plan, policy or practices, as well as in any long-term incentive program established by us.

We may terminate the Rench Employment Agreement upon Mr.

Rench’s breach of any term of the Rench Employment Agreement or where there is just Cause (as defined in the Rench Employment Agreement) for termination.

Rench may terminate the Rench Employment Agreement in the event that we discontinue operating its business at the location where the Employee is employed, at his sole option, or with notice of a minimum of 2 weeks.

Rench employment is terminated without Cause or resigns with Good Reason (as defined in the Incentive Plan), during the 24-month period following a Change in Control (as defined in the Incentive Plan), Mr.

Rench shall be entitled to a severance payment equal to 2 times the following amount:

Rench’s base salary plus Mr.

Rench’s target bonus, each for the year in which the termination of employment occurs, subject to adjustments if such severance payments cause Mr.

Rench to be liable for federal excise tax under Section 4999 of the Internal Revenue Code levied on certain "excess parachute payments" as defined in Code Section 280G.

The Rench Employment Agreement contains restrictive covenants prohibiting Mr.

Rench from disclosing our confidential information at any time, from competing with us in any geographic area where we do business during his employment, and from soliciting our employees, contractors or customers, during his employment and for one year thereafter.

On October 10, 2023, the Compensation Committee increased Mr.

Rench’s annual base salary to $475,000, effective September 1, 2023.

Maniscalco Agreement

The Company does not currently have an employment agreement with Mr.

Maniscalco receives a base salary of $375,000 per annum, subject to annual review, and is eligible for an annual bonus of up to 75% of his base salary, to be determined at our sole discretion.

Maniscalco is entitled to participate in all benefit plans provided to our employees in accordance with our applicable plan, policy or practices, as well as in any long-term incentive program established by us.

Potential Payments upon Termination or Change in Control

In addition to any payments provided by the Named Executive Officers’ employment agreements, as described above, under the terms of each Named Executive Officer’s restricted stock award (each, an “Award”), if the Named Executive Officer’s employment terminates before the Award is vested and the termination is on account of the Named Executive Officer’s death, disability or termination by the Company without Cause (as defined in the Award), the Named Executive Officer will vest in a portion of the unvested Award based on the number of full months of employment that the Named Executive Officer has completed as of the termination date, and since the grant date of the Award.

Under the terms of each Named Executive Officer’s PSU Award, the portion of the Target Award that will be earned and vested is determined based on both the months of employment completed as of the termination date and on achievement of certain performance factors defined in the Award during the period prior to the termination of employment.

In addition, if there is a change in control of the Company (as defined in the Award, a “Change in Control”) while the Award remains unvested, the Award will be treated in accordance with one of the following as determined by the Compensation Committee:

(1) the Award may be replaced with a new award that constitutes a “Replacement Award” under the terms of the Award and relevant tax rules;

(2) if the Company’s stock continues to be publicly traded on the Nasdaq Global Select Market (or another established securities market) after the Change in Control, then the Award will continue in place and be treated as a Replacement Award;

or (3) if, following the Change in Control, the Company’s stock is no longer publicly traded on The Nasdaq Global Select Market (or another established securities market), the unvested portion of the Award shall become vested immediately prior to the consummation of the Change in Control.

Notwithstanding any of the foregoing, the Committee may determine that any unvested portion of the Award will be cancelled and terminated for consideration instead.

Notwithstanding the foregoing, for PSU Awards, if the Change in Control occurs prior to the date that the Committee determines the number of units earned under the Award, the Named Executive Officer will vest in a portion of the Award based on the months of employment completed as of the Change in Control, applied to the higher of 100% of the target Award and the amount earned based on actual performance as of the end of the last full calendar quarter preceding the Change in Control date.

If payment of an Award in connection with a Change in Control would result in liability for an excise tax under Section 4999 of the Code for “excess parachute payments” as defined in Section 280G of the Code, the amount of the Award may be reduced to avoid imposition of the excise tax, if such reduction results in a greater post-tax benefit to the Named Executive Officer as compared to payment of the full amount of the Award and imposition of the excise tax.

Severance Agreements

Except for the payments provided by the Named Executive Officers’ employment agreements, as described above , none of our employees have severance agreements.

Welfare and other benefits

We provide health, dental, and vision insurance benefits to the Named Executive Officers, on the same terms and conditions as provided to all other eligible U.S.

employees except for an employee in North Dakota with separate benefit arrangements due to North Dakota state laws.

We maintain a broad-based 401(k) plan including the Named Executive Officers.

The Named Executive Officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by the Company during the fiscal year ended May 31, 2024.

The Named Executive Officers did not participate in, or earn any benefits under, a non-qualified deferred compensation plan sponsored by the Company during the fiscal year ended May 31, 2024.

Outstanding Equity Awards At May 31, 2024

The following table summarizes, for each of the Named Executive Officers, the number of shares of common stock underlying outstanding stock awards held as of May 31, 2024.

Name Grant Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($)

Wes Cummins 8/5/2022 250,000 (1) $ 507,500

4/4/2023 400,000 (2) $ 888,000

David Rench 8/5/2022 125,000 (3) $ 253,750

4/4/2023 140,000 (4) $ 310,800

Michael Maniscalco 8/5/2022 70,833 (5) $ 143,791

4/4/2023 50,000 (6) $ 111,000

1/31/2024 200,000 (7) $ 1,028,000

(1) Consists of restricted stock units that vest as follows:

83,333 on each of August 5, 2024 and February 5, 2025 and 83,334 on August 5, 2025.

(2) Consists of restricted stock units that vest as follows:

100,000 on each of October 4, 2024, April 4, 2025, October 4, 2025 and April 4, 2026.

(3) Consists of restricted stock units that vest as follows:

41,667 on each of February 5, 2025 and August 5, 2025 and 41,666 on August 5, 2024.

(4) Consists of restricted stock units that vest as follows:

35,000 on each of October 4, 2024, April 4, 2025, October 4, 2025 and April 4, 2026.

(5) Consists of restricted stock units that vest as follows:

23,611 on February 5, 2025, 23,610 on August 5, 2024 and 23,612 on August 5, 2025.

(6) Consists of restricted stock units that vest as follows:

12,500 on each of October 4, 2024, April 4, 2025, October 4, 2025 and April 4, 2026.

(7) Consists of restricted stock units that vest as follows:

33,333 on each of July 31, 2024, January 31, 2025, January 31, 2026 and July 31, 2026 and 33,334 on each of July 31, 2025 and January 31, 2027.

Director Compensation Table

The following table sets forth information concerning the compensation paid to certain of our non-employee directors

who served on our Board during fiscal year ended May 31, 2024:

Name Fees Earned or Paid in Cash ($) Stock Awards

All Other Compensation ($) Total

Ella Benson (2)

$ 3,634 $ 332,792 (7) $ — $ 336,426

Charles Hastings $ 41,667 $ 329,148 (8) $ — $ 370,815

Rachel Lee (3)

$ 14,605 $ 343,018 (9) $ 1,955 $ 359,578

Kelli McDonald (4)

$ 30,132 $ 329,148 (10) $ — $ 359,280

Douglas Miller $ 77,083 $ 329,148 (11) $ — $ 406,231

Virginia Moore (5)

$ 33,511 $ 329,148 (12) $ — $ 362,659

Richard Nottenburg $ 59,167 $ 1,373,148 (13) $ 2,300 $ 1,434,615

Kate Reed (6)

$ 20,000 $ 360,011 (14) $ — $ 380,011

(1) Amounts shown represent the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, of awards of restricted stock granted during fiscal year ended May 31, 2024.

Benson has served as a director since April 2024.

Lee has served as a director since February 2024.

McDonald served as director through February 2024.

Moore served as director through February 2024.

Reed was appointed the Chief Growth Officer of the Company in May of 2024.

Benson held unvested restricted stock awards for 101,461 shares of common stock as of May 31, 2024.

Hastings held unvested restricted stock awards for 33,685 shares of common stock as of May 31, 2024.

Lee held unvested restricted stock awards for 79,219 shares of common stock as of May 31, 2024.

(10) 33,685 shares of common stock associated with unvested restricted stock awards were forfeited upon Ms.

McDonald's resignation from the Company's Board of Directors effective February 2024.

Miller held unvested restricted stock awards for 33,685 shares of common stock as of May 31, 2024.

(12) 33,685 shares of common stock associated with unvested restricted stock awards were forfeited upon Ms.

Moore's resignation from the Company's Board of Directors effective February 2024.

Nottenburg held unvested restricted stock awards for 333,685 shares of common stock as of May 31, 2024.

Reed held unvested restricted stock awards for 57,160 shares of common stock and unvested restricted stock units of 300,000 shares of common stock as of May 31, 2024.

Non-Employee Director Compensation Policy

The following table shows the annual cash retainer fees for non-employee directors:

Base retainer $ 40,000

Audit Committee Chair $ 20,000

Audit Committee Member $ 10,000

Compensation Committee Chair $ 15,000

Compensation Committee Member $ 7,500

Nominating and Governance Committee Chair $ 12,000

Nominating and Governance Committee Member $ 6,000

Lead Independent Director $ 25,000

Directors serving in multiple leadership roles receive incremental compensation for each role.

Directors are not expected to receive additional compensation for attending regularly scheduled Board or committee meetings.

For less than full years of service, the compensation paid to the non-employee directors will be prorated based on the number of days of service.

Directors also receive customary reimbursement for reasonable out-of-pocket expenses related to Board service.

In addition to the annual cash retainer fees, directors also receive an annual grant of restricted stock valued at $160,000, calculated using the closing price of the common stock on the Nasdaq Global Select Market on the date of grant, which is the date of each annual meeting of stockholders, and vesting on the first anniversary of the date of grant.

On November 9, 2023, each director received a grant of restricted stock awards for 33,685 shares of common stock that will vest on November 9, 2024 in order to compensate such elected or re-elected director (at the Annual Meeting of the Company's stockholders held on November 9, 2023) to serve on the Company's Board for the subsequent 12 months.

Directors who are employees of the Company do not receive any additional compensation for Board service.

Information required by this Item 11 will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such disclosure is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plans

On October 9, 2021, our Board approved two equity incentive plans, which our stockholders approved on January 20, 2022.

The two plans consist of the 2021 Incentive Plan (the “Incentive Plan”), which provides for grants of various equity awards to our employees and consultants, and the 2021 Non-Employee Director Stock Plan (as amended, the “Director Plan” and, together with the Incentive Plan, the “Plans”), which provides for grants of restricted stock to non-employee directors and for deferral of cash and stock compensation if such deferral provisions are activated at a future date.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides certain information with respect to all of the Company’s equity compensation plans in effect as of May 31, 2024:

Number of shares of Common Stock issuable upon exercise of outstanding options, warrants or rights

Weighted average exercise price of outstanding options, warrants or rights

Number of shares of Common Stock remaining available for future issuance

Incentive Plan

8,354,997 (1)

Director Plan

638,895 — 720,333

Plans not approved by shareholders

8,993,892 — 720,333

(1) Includes 5,244,986 shares of our Common Stock underlying outstanding RSU awards subject to time-based vesting and 3,110,011 shares subject to certain performance share unit awards, of which 2,800,000 shares which were awarded to certain executives.

These certain executive awards were subsequently canceled.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information with respect to the beneficial ownership of our common stock, as of August 26, 2024 (unless otherwise noted) by:

(a) each of our Named Executive Officers

(b) each of our Directors

(d) each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock.

We have determined beneficial ownership in accordance with the rules of the SEC.

Unless otherwise indicated below, to our knowledge, based on information furnished to us, the persons and entities named in the table have sole voting and investment power with respect to all shares that they beneficially own, subject to applicable community property laws.

Any securities that are exercisable for, or convertible into, shares of common stock within 60 days of August 26, 2024 are deemed to be outstanding and to be beneficially owned by the person holding the securities for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

We have based our calculation of the percentage ownership of our common stock on 157,438,246 shares of our common stock outstanding on August 27, 2024.

Number of Shares Beneficially Owned Percentage of Common Stock

Directors & Named Executive Officers:

Wes Cummins (2)

23,281,455 14.79 %

Chuck Hastings

Michael Maniscalco (3)

Douglas Miller

Richard Nottenburg

Kate Reed (4)

David Rench (5)

All current directors and executive officers as a group (9 persons) 25,342,361 16.10 %

5% or greater holders:

CIM APLD Lender Holdings, LLC (6)

9,265,366 5.89 %

Hood River Capital Management LLC (7)

9,596,231 6.10 %

* Less than 1% of outstanding shares.

(1) Except as otherwise indicated, the address of each person named in this table is c/o Applied Digital Corporation, 3811 Turtle Creek Boulevard, Suite 2100, Dallas, Texas 75219.

(2) Includes (i) 17,590,238 shares of common stock held by Cummins Family Ltd, of which Mr.

Cummins is the CEO, (ii) 3,964,764 shares of common stock held directly including restricted stock and common stock held by Wesley Cummins IRA Account, (iii) 1,626,453 shares of Common Stock held by 272 Capital, LP, of which, of which Mr.

Cummins was the President and CEO until his resignation effective February 5, 2024, and (iv) 100,000 shares of Common Stock issuable upon vesting of RSUs held by Mr.

Cummins within 60 days of August 27, 2024.

(3) Includes 12,500 shares of restricted Common Stock issuable upon vesting of RSUs held by Mr.

Maniscalco within 60 days of August 27, 2024.

(4) Does not include 300,000 shares of Common Stock issuable upon vesting of RSUs held by Ms.

Reed which were granted to Ms.

Reed upon her employment as the Company's Chief Growth Officer, which will not vest within 60 days of August 27, 2024.

(5) Includes 35,000 shares of restricted Common Stock issuable upon vesting of RSUs held by Mr.

Rench within 60 days of August 27, 2024.

(6) Based upon information contained in a Schedule 13G jointly filed by CIM APLD Lender Holdings, LLC (“APLD Lender Holdings”), APLD Lender Holdings Parent, LLC (“APLD Lender Holdings Parent”), CIM Infrastructure Fund III, L.P.

(“CIM IF III”), CIM Infrastructure Fund III GP, LLC (“CIM IF III GP”), CIM Applied Digital Parallel, LLC (“Applied Digital Parallel”), CIM Infrastructure Fund III (Lux) SCSp (“Luxembourg SCSp”), CIM Infrastructure III GP (Lux), S.a.r.l.

(“Luxembourg S.a r.l.”), CIM Group Management, LLC (“CIM Group Management”), CIM Group Management Holdings, LLC (“CIM Group Management Holdings”) and CIM Group, LLC (“CIM Group”) on June 17, 2024.

Includes 9,265,366 shares of common stock.

APLD Lender Holdings Parent is the managing member of APLD Lender Holdings.

The controlling owners of APLD Lender Holdings Parent are CIM IF III and Applied Digital Parallel.

CIM IF III GP is the general partner of CIM IF III.

Luxembourg SCSp is the majority owner of Applied Digital Parallel.

Luxembourg S.a r.l.

is the general partner of Luxembourg SCSp.

CIM Group Management is the manager of CIM IF III GP and the sole owner of Luxembourg S.a r.l.

CIM Group Management Holdings is the sole owner of CIM Group Management.

CIM Group is the majority owner of CIM Group Management Holdings.

(7) Based upon information contained in a Schedule 13F filed by Hood River Capital Management LLC on August 14, 2024.

Includes 9,596,231 shares of common stock.

Information required by this Item 12 will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such disclosure is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

Related Party Transactions

In addition to the compensation arrangements discussed in the sections titled “Management” and “Executive Officer and Director Compensation,” the following is a description of each transaction since June 1, 2022 and each currently proposed transaction in which:

we have been or are to be a participant;

the amount involved exceeded or will exceed $120,000;

any of our directors, executive officers, or holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest.

GMR Limited Service Order

As of May 31.

2024, GMR Limited (“GMR”) held more than 5% of our outstanding common stock.

Each of Guo Chen, a 50% owner and sole director of GMR, and Bo Dong, 50% owner of GMR, are deemed to beneficially own shares of our common stock held by GMR.

GMR and subsidiaries made payments to the Company of approximately $9.2 million during the fiscal year ended May 31, 2023, and approximately $6.0 million during the fiscal year ended May 31, 2024.

Chen owns 60% of Alternity Fund Ltd., which owns 100% of GOI.

Jason Zhang, a former director of the Company, owned 15% of Alternity during the fiscal year ended May 31, 2024.

On December 8th, 2021, we entered into a Service Order with GOI pursuant to which we provide energized space for mining activities of GOI.

GOI paid approximately $6.4 million during the fiscal year ended May 31, 2023, and approximately $6.1 million during the fiscal year ended May 31, 2024, to the Company pursuant to the Service Order.

On July 25, 2024, GMR Limited reported that they have ceased to be the beneficial owner of more than 5% of our outstanding common stock.

Riley Loan & Security Agreement

Bryant Riley, chairman of the board and co-chief executive officer, of B.

Riley Financial, Inc.

RILY), directly or indirectly through subsidiaries of RILY, held in excess of 5% of our then outstanding common stock beginning in April 2023.

Such shares no longer represent more than 5% of our outstanding common stock.

On May 23, 2023, the Company entered into a Loan and Security Agreement with B.

Riley Commercial Capital, LLC and B.

Riley Securities, Inc., each of which is a wholly-owned subsidiary of RILY, with a total possible principal amount up to $50 million.

As of May 31, 2024 the total loan balance of $44.5 million was repaid in full.

AI Bridge Loan

On January 30, 2024, the Company issued the AI Bridge Loan payable to AI Bridge Funding LLC (the “Lender”), providing for an unsecured loan in the aggregate principal amount of up to $20.0 million, of which $15.0 million was available immediately and funded upon the execution of the AI Bridge Loan.

The obligation of the Lender to advance the remaining $5.0 million shall be in the Lender’s sole discretion.

The AI Bridge Loan will mature on January 30, 2026 and bears interest at a rate of 12.5% per annum.

During the fiscal fourth quarter 2024, the principal balance of the AI Bridge Loan, $20.0 million as of May 1, 2024, was converted into common stock pursuant to the terms of the AI Bridge Loan resulting in the Company issuing 8,421,146 in shares of its common stock to the Lender.

Affiliates of the Lender are both an investor in B.

Riley Financial, Inc.

and also an investment management client of B.

Riley Asset Management.

As previously disclosed, the Company’s Chairman and Chief Executive Officer, served as the President of B.

Riley Asset Management, and effective February 5, 2024, resigned from that position.

Other Related Party Transactions

During the fiscal years ended May 31, 2024 and 2023, the Company received sublease income of $70,000 and $103,000, respectively, from B.

Riley Financial, Inc.

During the fiscal years ended May 31, 2024 and 2023, the Company paid construction and consulting costs of $0.3 million and $0.1 million, respectively, to a company owned by a family member of the Company’s Chief Financial Officer.

During the fiscal years ended May 31, 2024 and 2023, the Company paid software license fees of $0.2 million and $0.1 million, respectively, to a company whose chairman is also a member of the Board.

During the fiscal year ended May 31, 2024, the Company paid consulting fees of $43,000 to a member of the Board for sales consulting work.

No such payments were made during the fiscal year ended May 31, 2023.

Review, Approval, or Ratification of Transactions with Related Parties

In April 2024, we adopted a charter of the Audit Committee, pursuant to which all related party transactions including those between us, our directors, executive officers, majority stockholders and each of our respective affiliates or family members will be reviewed and approved by our Audit Committee, or if no Audit Committee exists, by a majority of the independent members of our Board.

Our existing policies are designed to comply with the Nasdaq Listing Rules and the rules and regulations of the SEC.

Director Independence

Please see the discussion of director independence under Item 10.

Directors, Executive Officers and Corporate Governance starting on page 99 above.

Indemnification of Officers and Directors

We have entered into indemnification agreements with each of our current directors and executive officers.

These agreements require us to indemnify these individuals to the fullest extent permitted under Nevada law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

We also intend to enter into indemnification agreements with our future directors and executive officers.

Information required by this Item 13 will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such disclosure is incorporated herein by reference.

Principal Accounting Fees and Services

The following table presents fees billed to the Company for professional services rendered by our independent registered public accounting firm, Marcum LLP, for the fiscal years ended May 31, 2024 and 2023:

(in thousands) Fiscal Years Ended May 31,

Type of Fees:

Audit fees $ 484 $ 464

All other fees 376 92

Total fees $ 860 $ 556

For the fiscal years ended May 31, 2024 and 2023, the Audit Committee approved all of the services provided by, and fees paid to, Marcum LLP.

The Audit Committee has established a policy requiring approval by it of all fees for audit and non-audit services to be provided by the Company’s independent registered public accountants, prior to commencement of such services.

Consideration and approval of fees generally occurs at the Committee’s regularly scheduled meetings or, to the extent that such fees may relate to other matters to be considered at special meetings, at those special meetings.

Information required by this Item 14 will be included in our definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and such disclosure is incorporated herein by reference.

Exhibits, Financial Statement Schedules

5 unchanged sentences

(Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 11, 2024).

C ert ificate of t he Designations , Powers, Preferences and Rights of Series F Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024).

C ertificate , Amendment or Withdrawal of D esignation, relating to the Series A Preferred Stock, filed with the Secretary of State of Nevada on October 21, 2024 (I nc orporated by reference to Exhibit 3 .1 to the Company's Current Report on Form 8-K, filed with the SEC on October 24, 2024).

Certificate, Amendment or Withdrawal of Designation, relating to the Series B Preferred Stock, filed with the Secretary of State of Nevada on October 21, 2024 (Incorporated by reference to Exhibit 3.

2 to the Company's Current Report on Form 8-K, filed with the SEC on October 24, 2024).

Certificate, Amendment or Withdrawal of Designation, relating to the Series D Preferred Stock, filed with the Secretary of State of Nevada on October 21, 2024 (Incorporated by reference to Exhibit 3.

3 to the Company's Current Report on Form 8-K, filed with the SEC on October 24, 2024).

Certificate of Designations of the Powers, Preferences and R elative, Participating, Optional and Ot her Restrictions of Series E-1 Preferred Stock filed with the Secretary of State of the State of Nevada on November 8, 2024 (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on November 14 , 2024).

Certificate, Amendment or Withdrawal of Designation, relating to the Series F Preferred Stock, filed with t he Secretary of State of Nevada on April 11, 2025 ( Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q, fi led with the SEC on April 14, 202 5).

Certificate of the Designations of Powers, Preferences and R ights of Series G Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 1, 2025 ).

3.2 Certificate of Amendment, dated November 20, 2024, to Second Amended and Restated Articles of Incorporat ion, as ame nded (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, fi led with the SEC on November 21, 2024).

3.3 Third Amended and Restated Bylaws of the Company.

37 unchanged sentences

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 14, 2024).

4.8 In denture , dated as of November 4, 2024, between Applied Digital Corp or ation and Wilmington Trust, National Association , as trustee, relating to the 2.75% convertible senior notes (Incorporated by reference to Exhibit 4.1 to the Company's Cur rent Report on Form 8-K, filed with the S EC on November 5 , 2024) .

4.9 F orm of note rep resenting the 2.75% Convertible S enior Notes due 20 30 (Incorporated by reference to Exhibit 4.

1 to the Company's Current Report on Form 8-K, filed with the SEC on November 5, 2024) .

For m of Warrant (Incorporated by reference to Exhibit 4.1 to the Co mpany's Current Report on Form 8-K, filed with the SEC on December 2, 2024 ).

Form of Restricted Stock Unit Awar d Agreement, by and between the Company and Laura Laltrello (Inco rporated by reference to Exhibit 4.11 to the Company's Registration Statement on Form S-8 , filed with the SEC on January 6, 202 5).

4.12 Warrant, dated February 27, 2025, by and between Applied Digital Corporation and STB Applied Holdings LLC (Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on April 14, 2025).

4.13 Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 2025) .

Description of Securities.

29 unchanged sentences

(Incorporated by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-8, filed with the SEC on June 17, 2022).

Amendment to 2022 Incentive Plan .

Amendment to 2022 Incentive Plan (Incorporated by reference to Exhibit 10.12.4 to the Company's Annual Report on Form 10-K, filed with the SEC on August 30, 2024) .

10.13† 2022 Non-Employee Director Stock Plan.

122 unchanged sentences

(Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed with the SEC on June 10, 2024).

Registration Rights Agreement, dated June 7, 2024, by and between Applied Digital Corporation and CIM APLD Lender Holdings, LLC.

Security Agreement, dated June 21, 2024, by and between Applied Digital Cloud Corporation and YA II PN, LTD.

10.57 Registration Rights Agreement, dated June 7, 2024, by and between Applied Digital Corporation and CIM APLD Lender Holdings, LLC (Incorporated by reference to Exhibit 10.57 to the Company's Ann ual R eport on Form 10-K, fi led with the SEC on Aug ust 30, 202 4) .

10.58 Security Agreement, dated June 21, 2024, by and between Applied Digital Cloud Corporation and YA II PN, LTD ( Incorporated by reference to Exhibit 10.58 to the Company's Annual Report on Form 10 -K, filed with the SEC on August 30, 2024) .

10.59 Waiver Agreement, dated August 11, 2024, by and between APLD Holdings 2 LLC and CIM APLD Lender Holdings, LLC.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 14, 2024).

Standby Equity Purchase Agreement, dated August 28, 2024, by and between Applied Digital Corporation and YA II PN, LTD.

First Amendment to the Standby Equity Purchase Agreement, dated August 29, 2024, by and between Applied Digital Corporation and YA II PN, LTD.

Standby Equity Purchase Agreement, dated August 28, 2024, by and between Applied Digital Corporation and YA II PN, LTD (Incorporated by reference to Exhibit 10.60 to the Company's Annual Report on Form 10-K, filed with the SEC on August 30, 2024).

10.61 First Amendment to the Standby Equity Purchase Agreement, dated August 29, 2024, by and between Applied Digital Corporation and YA II PN, LTD (Incorporated by reference to Exhibit 10.61 to the Company's Annual Report on Form 10-K, filed with the SEC on August 30, 2 0 24) .

10.62 F orm of Securities Purchase Agreement (Incorporated by reference to Exhibit 10 .1 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024).

10.63 F orm of Registration Rights Agreement (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024).

10.64 I rrev ocable Proxy, dated August 30, 2024, by YA II PN, LTD (Incorporated by reference to Exhibit 10 .

3 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024).

10.65 Consent, Waiver and Second Amendment to Prepaid Advance Agreements, dated August 21, 2024, by and between Applied Digital Corporation and YA II PN, LT D (Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024) .

10.66 Consent, Waiver and Third Amendment to Prepaid Advance Agreements, dated August 2 9 , 2024, by and between Applied Digital Corporation and YA II PN, LTD (Incorporated by reference to Exhibit 10.

5 to the Company's Current Report on Form 8-K, filed with the SEC on August 30, 2024).

10.67 Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on September 10, 2024).

10.68 Form of Registration Rights Agreement (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on September 1 0, 2024).

10.69 Dealer Manager Agreement, dated September 23, 2024, by and be tween Applied Digi tal Corporation and Preferred Capital Secu rities , LLC (Incorporated by reference to Exhibit 10.70 to t he Company's Registration Statement on Form S-1, fi led with the SEC on September 2 3 , 2024).

Amend ed and Restated Services Agreement , dated September 23, 2024, by and between Applied Digital Corporation and Preferred Shareholder Services , LLC (Incorporated by reference to Exhibit 10.7 1 to the Company's Registration Statement on Form S-1, filed with the SEC on September 23, 2024).

10.71 Form of Selected Dealer Agreement (Incorporated by reference to Exhibit 10.7 2 to the Company's Registration Statement on Form S-1, filed with the SEC on September 23, 2024).

10.72 First Amendment to Promissory Note and Waiver Agreement, dated Octo ber 8, 2024, by and between APLD Holdings 2 LL C and CIM APLD Lende r Holdings, LLC (Inco rporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10- Q, filed with the SEC on October 9, 2024).

R estricted Stock Unit Award, dated October 10, 2024, by and between Applied Digital Corporation and Wes Cummins (Incorporated by reference to Exhibit 10.

1 1 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on January 14, 2025) .

10.74 Letter Agreement, dated October 16, 2024, by and between Applied Digital Corporation and YA II PN, LTD ( Incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on January 14, 2025) .

R estricted Stock Unit Award, dated October 17, 2024, by and between Applied Digital Corporation and Saidal Mohmand (Incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q, filed with the SEC on January 14, 2025).

Restricted Stock Unit Award, dated November 15, 2024, by and between Applied Digital Corporation and David Rench (Incorporated by reference to Exhibit 10.15 to the Comp any's Quarterly Report on Form 10-Q, fi led with the SEC on January 14, 2025).

Mohmand Offer Letter, dated October 11, 2024, by and between Applied Digital Corporation and Saidal Mohmand (Inco rporated by reference to Ex hibit 10.1 to the Company's Current Report on Form 8- K, fi led with the SEC on October 15, 2024).

Amendment No .

2 to Executive Employment Agreement, dated October 15, 2024, by and be tween Applied Digital Corporation and D a vid Rench (Incorporated by reference to Exhibit 10.

2 to the Company's Current Report on Form 8-K, filed with the SEC on October 15, 2024).

Executive Employment Agreement, dated October 10, 2024, by and between Applied Digital Corporation and Wes Cummins (Incorporated by reference to Exhibit 10.

3 to the Company's Current Report on Form 8-K, filed with the SEC on October 15, 2024).

Form of Prepaid Forward Confirmation (Incorporated by reference to Exhibit 10 .1 to the Company's Current Report on Form 8-K, filed with the SEC on November 5, 2024) .

10.81 Form of Capped C all Confirmat ion (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on November 5, 2024) .

Offer Letter, dated November 15, 2024, by and between Applied Digital Corp oration and David Rench (Incorporated by reference to Exhibit 10 .1 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Applied Digital Cor porat ion 2024 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Form of Incentive Stock Option Grant Agreement (Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Form of Nonqualified Stock Option Grant Agreement (Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Form of Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Form of Restricted Stock Award Agreement (Incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Form of Performance Stock Award Agre ement (Incorporated by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K, filed with the SEC on November 21, 2024).

Promissory Note, dated November 27, 2024, issued by APLD ELN-02 Holdings LLC and payable to Macquarie Equipment Capital, Inc.

( Incorporated by reference to Exhibit 10.

1 to the Company's Current Report on Form 8-K, filed with the SEC on December 2 , 2024).

Limited Parent Guarantee, dated November 27, 2024, issued by APLD Holdings 2 LLC in favor of Macquarie Equipment Capital, Inc.

(Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on December 2, 2024 ).

Guarantee and Collateral Agreement, dated November 27, 2024, by and among APLD ELN-02 Holdings LLC, APLD ELN-02 LLC, APLD ELN-02 A LLC, APLD ELN-02 B LLC, APLD ELN-02 C LLC and Macquarie Equipment Capital, Inc.

(Incorporated by reference to Exhibit 10.

3 to the Company's Current Report on Form 8-K, filed with the SEC on December 2, 2024).

10.92 Pledge Agreement, dated November 27, 2024, issued by APLD Holdings 2 LLC in favor of Macquarie Equipment Capital, Inc.

(Incorporated by reference to Exhibit 10.

4 to the Company's Current Report on Form 8-K, filed with the SEC on December 2, 2024).

Offer Letter, effective November 27, 2024 , by and between Applied Digital Corporation and Laura Laltrello (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on December 4 , 2024).

Performance Stock Unit Award, dated January 7, 2025, by and between Applied Digital Corporation and Wes Cummins (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on January 8, 2025) .

Performance Stock Unit Award, dated January 7, 2025, by and between Applied Digital Corporation and Saidal Mohmand (Incorporated by reference to Exhibit 10.

2 to the Company's Current Report on Form 8-K, filed with the SEC on January 8, 2025).

Performance Stock Unit Award, dated January 7, 2025, by and between Applied Digital Corporation and David Rench (Incorporated by reference to Exhibit 10.

3 to the Company's Current Report on Form 8-K, filed with the SEC on January 8, 2025).

Unit Purchase Agreement, dated January 13, 2025, by and among Applied Digital Corporation, APLD HPC Holdings LLC and MIP VI Holdings II, LLC (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on Jan uary 14, 2025 ) .

Credit and Guaranty Agreement, dated as of February 11, 2025, by and among APLD HPC Holdings LLC, the Subsidiary Guarantors, the Lenders and Sumitomo Mitsui Banking Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, fi led with the SEC on February 13, 2025) .

10.99 Pledge Agreement, dated as of February 11, 2025, by and among APLD HPC Holdings LLC, APLD HPC TopCo LLC and Sumitomo Mitsui Banking Corporation (Incorporated by reference to Exhibit 10.

2 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2025) .

Parent Guarantee, dated as of February 11, 2025, by and among APLD HPC Holdings LLC, Applied Digital Corporation and Sumitomo Mitsui Banking Corporation (Incorporated by reference to Exhibit 10.

3 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2025) .

Collateral Agency, Security and Depositary Agreement, dated as of February 11, 2025, by and among APLD HPC Holdings LLC, the Subsidiary Guarantors and Sumitomo Mitsui Banking Corporation (Incorporated by reference to Exhibit 10.

4 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2025) .

First Amendment to Unit Purchase Agreement, dated February 11, 2025, by and between Applied Digital Corporation, APLD HPC Holdings LLC, APLD HPC TopCo LLC, and MIP VI HPC Holdings, LLC (Incorporated by reference to Exhibit 10.

5 to the Company's Current Report on Form 8-K, filed with the SEC on February 13, 2025) .

Transi tion Agreement, dated February 18, 2025, by and between the Company and David Rench ( Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on February 21, 2025).

Separation Agreement, dated February 20 , 2025, by and between the Company and Michael Maniscalco (Incorporated by reference to Exhibit 10.

2 to the Company's Current Report on Form 8-K, filed with the SEC on February 21, 2025).

Form of Preferred Equity Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 1, 2025)

Building 2 Datacenter Lease, dated May 28, 2025, by and between APLD ELN-02 LLC and CoreWeave, Inc.

(Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 202 5).

Building 3 Datacenter Lease, dated May 28, 2025, by and between APLD ELN-0 3 LLC and CoreWeave, Inc.

(Incorporated by reference to Exhibit 10.

2 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 2025).

Regi s tration Rights Agreement, dated May 28, 2 025 , by and between Applied Digital Corp oration and CoreWeave, Inc.

(Incorporated by reference to Exhibit 10.

3 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 2025).

Letter Agreement, dated May 28, 2025, by and between Applied Digital Corporation and Coreweave, Inc.

(Incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 2025).

I nsider Trading Policy

21.1* List of Subsidiaries.

23.1* Consent of CBIZ CPAs P.C .

23.2* Consent of Marcum LLP

5 unchanged sentences

97.1† Compensation Recovery Policy.

(Incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K, filed with the SEC on August 30, 2024)

* Filed herewith.

2 unchanged sentences

# Portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K.

The omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

% The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5) and Item 1.01, Instruction 4 of Form 8-K.

The omitted information is not material and is a type of information that the registrant treats as private or confidential.

% The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).

The Registrant agrees to furnish supplementally a copy of all omitted schedules to the Securities and Exchange Commission upon its request.

Form 10-K Summary

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, in the City of Dallas, Texas on August 30, 2024.

APPLIED DIGITAL CORPORATION

1 unchanged sentence

Chief Executive Officer, Secretary and Treasurer (Principal Executive Officer)

/s/ David Rench

/s/ Saidal Mohmand

Saidal Mohmand

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints Wes Cummins and David Rench, and each of them individually, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments to this Report together with all schedules and exhibits thereto, (ii) act on, sign and file with the Securities and Exchange Commission any and all exhibits to this Report and any and all exhibits and schedules thereto, (iii) act on, sign and file any and all such certificates, notices, communications, reports, instruments, agreements and other documents as may be necessary or appropriate in connection therewith and (iv) take any and all such actions which may be necessary or appropriate in connection therewith, granting unto such agents, proxies and attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, and hereby approving, ratifying and confirming all that such agents, proxies and attorneys-in-fact, any of them or any of his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints Wes Cummins and Saidal Mohmand, and each of them individually, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments to this Report together with all schedules and exhibits thereto, (ii) act on, sign and file with the Securities and Exchange Commission any and all exhibits to this Report and any and all exhibits and schedules thereto, (iii) act on, sign and file any and all such certificates, notices, communications, reports, instruments, agreements and other documents as may be necessary or appropriate in connection therewith and (iv) take any and all such actions which may be necessary or appropriate in connection therewith, granting unto such agents, proxies and attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, and hereby approving, ratifying and confirming all that such agents, proxies and attorneys-in-fact, any of them or any of his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

/s/ Wes Cummins

Chief Executive Officer and Chairman

August 30, 2024

/s/ Wes Cummins Chief Executive Officer and Chairman

July 30, 2025

Wes Cummins (Principal Executive Officer)

/s/ David Rench

Chief Financial Officer

August 30, 2024

David Rench (Principal Financial Officer and Principal Accounting Officer)

/s/ Chuck Hastings

Director August 30, 2024

/s/ Saidal Mohmand Chief Financial Officer

July 30, 2025

Saidal Mohmand

(Principal Financial Officer and Principal Accounting Officer)

/s/ Chuck Hastings Director July 30, 2025

Chuck Hastings

/s/ Douglas Miller

Director August 30, 2024

/s/ Douglas Miller Director July 30, 2025

Douglas Miller

/s/ Richard Nottenburg

Director August 30, 2024

/s/ Richard Nottenburg Director July 30, 2025

Richard Nottenburg

/s/ Rachel Lee

Director August 30, 2024

/s/ Kate Reed

Director August 30, 2024

/s/ Ella Benson

Director August 30, 2024

/s/ Rachel Lee Director July 30, 2025

/s/ Ella Benson Director July 30, 2025

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.

What changed 10-K

Item 9A. Controls and Procedures