Management Change/Compensation Form 8 K

Management Updates

On October 8, 2024, the Board of Directors (the "Board") of Applied Digital Corporation, a Nevada corporation (the "Company"), approved a change in management, as previously announced on October 9, 2024. Effective October 15, 2024, David Rench, the Company's current Chief Financial Officer since March 2021, is transitioning from his role as Chief Financial Officer to Chief Administrative Officer of the Company. Also effective October 15, 2024, Saidal Mohmand, the Company's current Executive Vice President of Finance, will succeed Mr. Rench as the Company's Chief Financial Officer. Mr. Mohmand's appointment as Chief Financial Officer was contingent on satisfactory completion of independence and conflict checks, which were satisfactorily completed on October 15, 2024.

Mr. Mohmand, age 34, has served as the Company's Executive Vice President of Finance since September 2021, where he led the Company's financial strategy and capital market initiatives. In addition to Mr. Mohmand's role as Chief Financial Officer of the Company, since July 2020 he has served as the Director of Research at 272 Capital LP ("272 Capital"), an investment advisory firm (founded by Wes Cummins, the Company's Chairman and Chief Executive Officer) specializing in technology hardware, software, and service companies. Following the acquisition of 272 Capital by B. Riley Financial (Nasdaq: RILY) in August 2021, Mr. Mohmand served as Director of Research at B. Riley Asset Management from August 2021 to February 2024. Prior to such positions, Mr. Mohmand served as Director of Research at GrizzlyRock Capital, a value-oriented long/short fund based in Chicago, from December 2013 to June 2020. Mr. Mohmand earned his B.B.A. in Finance and Accountancy from Western Michigan University.

In connection with the transition of Mr. Mohmand's role to Chief Financial Officer, the Company and Mr. Mohmand entered into an Offer Letter, dated October 11, 2024, as well as a Non-Disclosure, Invention Assignment and Restrictive Covenants Agreement, attached as Exhibit A to the Offer Letter (together, the "Mohmand Offer Letter"). Pursuant to the terms of the Mohmand Offer Letter, Mr. Mohmand will serve as the Chief Financial Officer of the Company and is entitled to receive an annual base salary of $475,000 per annum, subject to review from time to time by the Company, and is also eligible for an annual performance bonus with a target amount of 75% of his annual base salary. Mr. Mohmand is also eligible for grants of equity awards, including an award of 490,000 restricted stock units that are expected to be subject to time-based vesting conditions, as set forth in the Mohmand Offer Letter, and an additional 490,000 performance stock units that are expected to be subject to time- and performance-based vesting conditions, as well as additional equity awards that may be granted from time to time. If Mr. Mohmand's employment is terminated without Cause (as defined in the Mohmand Offer Letter), Mr. Mohmand will receive, subject to execution, delivery, and non-revocation of a general release of claims against the Company, (i) an amount equal to twelve months' annual base salary (or in the event of a termination without Cause within eighteen months following a change in control, twenty-four months' annual base salary), payable in equal installments as salary continuation payments, and (ii) an amount equal to 100% of Mr. Mohmand's target annual bonus for the fiscal year in which termination occurs.

Mr. Mohmand is also bound by an indefinite confidentiality obligation, a non-competition covenant during employment and for 12 months post-termination, a non-solicitation covenant with respect to Company personnel and business partners during employment and for 12 months post-termination, assignment of intellectual property, and indefinite non-disparagement obligations.

The foregoing description of the Mohmand Offer Letter is not complete and is subject to the full text of the Mohmand Offer Letter, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

There are no arrangements or understandings between Mr. Mohmand and any other person pursuant to which he was appointed as an officer and Mr. Mohmand does not have a direct or indirect material interest in any "related party" transaction required to be separately disclosed pursuant to Item 404(a) of Regulation S-K. Mr. Mohmand does not have any family relationships with any of the Company's directors or executive officers.