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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
February
6, 2026
(Date
of earliest event reported)
APPLIED
DIGITAL CORPORATION
(Exact
name of registrant as specified in its charter)
| Nevada |
|
001-31968 |
|
95-4863690 |
| (State
or other jurisdiction |
|
(Commission |
|
(IRS
Employer |
| of
incorporation) |
|
File
Number) |
|
Identification
No.) |
| 3811
Turtle Creek Blvd., Suite 2100, Dallas, TX |
|
75219 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
214-427-1704
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| |
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
|
| |
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
|
| |
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
|
| |
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| |
☐ |
Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock |
|
APLD |
|
Nasdaq
Global Select Market |
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Equity
Awards
On
February 6, 2026 (the “Grant Date”), the Board of Directors (the “Board”) of Applied Digital Corporation (the
“Company”), based on the recommendation of the Compensation Committee of the Board (the “Compensation Committee”),
unanimously approved the grant to Jason Zhang of 1,500,000 performance stock units (the “Zhang PSUs”), and 500,000 restricted
stock units (the “Zhang RSUs”) in connection with Mr. Zhang’s previously announced transition to the role of President
and Co-Founder of the Company. In addition, the Board, based on the recommendation of the Compensation Committee, approved the grant
to Saidal Mohmand, the Company’s Chief Financial Officer, of 750,000 performance stock units (the “Mohmand PSUs,” and
together with the Zhang PSUs, the “PSUs”), and 250,000 restricted stock units (the “Mohmand RSUs,” and together
with the Zhang RSUs, the “RSUs”). The RSUs and PSUs were granted under the Company’s 2024 Omnibus Equity Incentive
Plan (as amended from time to time, the “Plan”). Each PSU and RSU represents a right to receive one share of the Company’s
common stock upon vesting, subject to the terms and conditions described below.
These
awards are intended to be in lieu of any future equity awards to Messrs. Zhang and Mohmand for the next five years (unless there are
unexpected changes in the Company’s business or other unforeseen factors that the Board or the Compensation Committee determines
would make it in the best interests of the Company and its stockholders to grant additional equity award(s) to Mr. Mohmand and/or Mr.
Zhang), are structured to further align the total compensation of Messrs. Zhang and Mohmand with the Company’s continued growth
and business objectives, and would (in the case of achievement of the goals tied to vesting of the PSUs) meaningfully and measurably
strengthen the Company’s performance, thereby driving stockholder value creation.
Background
Since
the Company’s pivot in its business strategy and becoming one of the leading designers, builders,
and operators of high-performance, sustainably engineered data centers and colocation services for artificial intelligence, cloud, networking,
and blockchain workloads, the Company has delivered strong stockholder returns. The Company’s stock price in calendar year
2025 alone increased by approximately 214%. The Company reached a significant milestone in 2025, by leasing the full capacity of its
first 400MW high performance computing (“HPC”) data center campus in Ellendale, North Dakota (“Polaris Forge
1”) to a hyperscaler tenant, as well as signing a lease for 200MW of its Harwood, North Dakota campus (“Polaris Forge 2”),
which is in early construction phases, with an investment-grade hyperscaler tenant. The Company has begun to recognize revenue with respect
to the first of the Polaris Forge 1 leases and expects its revenue to increase significantly from its previous levels in calendar year
2026, as additional facilities are brought online. In 2026, the Company has already announced groundbreaking at another data center campus
in the Southern United States (“Delta Forge 1”) that is expected to initially support 430 MW of total utility power across
two buildings. The Board believes that the leadership and contributions from Messrs. Zhang and Mohmand have been and continue to be a
key factor in the Company’s ongoing success. In his prior role of Co-Founder and Chief Strategy Officer, Mr. Zhang has led a number
of the Company’s strategic initiatives, including the negotiation and execution of the Polaris Forge 1 and Polaris Forge 2 leases.
Since Mr. Mohmand’s appointment as Chief Financial Officer of the Company in October 2024, the Company’s revenue increased
by $121.7 million, or 176%, to $190.8 million for the six months ended November 30, 2025, compared to $69.1 million for the six months
ended November 30, 2024. The Board believes that the Company continues to have tremendous growth potential and that given Messrs. Zhang
and Mohmand’s prior contributions and proven track record, a long-term program incentivizing Messrs. Zhang and Mohmand to realize
that growth potential is in the best interests of the Company and its stockholders. In approving the PSUs and RSUs, the Board recognized,
among other things, the combination of leadership, experience, and knowledge of the Company’s industry and business that each of
Messrs. Zhang and Mohmand bring to the Company, and the continued importance of Messrs. Zhang and Mohmand to drive long-term value for
the Company and its stockholders, as well as, in the case of Mr. Zhang, his expanded responsibilities in connection with his recent elevation
to the role of President and Co-Founder of the Company.
The
Board believes that the PSUs and RSUs are appropriate awards because of the importance of retaining and incentivizing Messrs. Zhang and
Mohmand to promote the Company’s sustained, long-term financial and operational performance. The Board believes the PSUs and RSUs
best align the interests of Messrs. Zhang and Mohmand with those of the Company and its stockholders, as (i) achievement of the goals
tied to vesting of the PSUs would require Messrs. Zhang and Mohmand to meaningfully and measurably strengthen the Company’s performance,
thereby driving stockholder value creation; and (ii) the maximum value, if any, that Messrs. Zhang and Mohmand will realize from the
RSUs will require Messrs. Zhang and Mohmand, as applicable, to remain employed with the Company in a role approved by the Board for the
five years after the Grant Date (other than in connection with certain terminations of employment, as described below). The Board believes
that any dilution to the Company’s stockholders resulting from the vesting of the RSUs is minimal as the RSUs represent less than
1% of the shares outstanding as of the Grant Date, and such dilution is reasonable in light of the benefits to the Company and its stockholders
of retaining Messrs. Zhang and Mohmand for the duration of the five-year vesting period. In addition, the Board believes that because
the PSUs represent less than 1% of the shares outstanding as of the Grant Date, the dilutive effect on the stockholders is reasonable
given the benefits to the Company of achieving the goals tied to the vesting of the PSUs. In designing the PSUs and RSUs, the Compensation
Committee was advised by an independent compensation consultant.
Terms
of the Zhang PSUs
The
Zhang PSUs are eligible to vest in four equal tranches of 375,000 PSUs, based on milestones tied to the Company (or any subsidiary or
affiliate) entering into, on or after the Grant Date, binding contracts, licenses, leases, or service agreements, in each case, with
investment-grade hyperscalers that provide for a minimum term of no less than fifteen (15) base years (excluding renewals and options)
(each, a “Signing-Based Hurdle”), as well as the aggregate capacity of data centers subject to PSU-Eligible Contracts achieving
their ready for service dates (each, a “Ready for Service-Based Hurdle” and, together with the Signing-Based Hurdles, the
“Hurdles”), as set forth in the tables below. The Zhang PSUs will only be earned and vest if the relevant Hurdles are achieved
on or before the five-year anniversary of the Grant Date, subject to Mr. Zhang’s continued full-time employment with the Company
in a role approved by the Board on the applicable vesting date.
| Hurdle | |
Type of Hurdle | |
MW or GW Target | |
PSUs Eligible to Vest on
Achievement
of MW
or GW Target |
| First Hurdle | |
Signing-Based Hurdle | |
600 MW | |
375,000 |
| Second Hurdle | |
Signing-Based Hurdle | |
1.6 GW | |
375,000 |
| Third Hurdle | |
Ready for Service-Based Hurdle | |
600 MW | |
375,000 |
| Fourth Hurdle | |
Ready for Service-Based Hurdle | |
1.6 GW | |
375,000 |
Upon
a Change in Control:
| ● | Except
as provided below, any unvested Zhang PSUs will be automatically forfeited without consideration. |
| | | |
| ● | If
the Company (or any subsidiary or affiliate) (i) has entered into PSU-Eligible Contracts
for no less than 60% of either of the Signing-Based Hurdles, then, with respect to the unvested
Zhang PSUs, (A) the Third Hurdle shall be deemed to have been achieved as of the date of
the consummation of the Change in Control to the same extent as the First Hurdle has been
achieved as of such date, (B) the Fourth Hurdle shall be deemed to have been achieved as
of the date of the consummation of the Change in Control to the same extent as the Second
Hurdle has been achieved as of such date (each of (A) and (B), the “Deemed Achievement”),
and (ii) with respect to each Hurdle for which there has been no less than 60% achievement,
a ratable number of Zhang PSUs shall vest, in an amount equal to the product of (A) the percentage
(not to exceed 100%) of the applicable Hurdle achieved upon consummation of such Change in
Control (after giving effect to the Deemed Achievement), and (B) the number of Zhang PSUs
that vest upon achievement of 100% of such Hurdle. |
Upon
Mr. Zhang’s termination due to death, Disability, without Cause, for Good Reason, or due to the Company’s non-renewal of
Mr. Zhang’s employment Term (each, as defined in the employment agreement by and between the Company and Jason Zhang dated August
1, 2025 (the “Zhang Employment Agreement”)), the Zhang PSUs shall remain outstanding and shall continue to be eligible to
vest for 12 months after Mr. Zhang’s termination, or if earlier, until the five-year anniversary of the Grant Date, in the event
that the applicable Hurdles are achieved, and on the last day of such period the Zhang PSUs, to the extent unvested, will be forfeited.
In the event of a Change in Control following any such termination, vesting of any then-unvested Zhang PSUs shall be determined as set
forth above with respect to a Change in Control, and any Zhang PSUs that do not vest shall be forfeited.
Shares
of common stock issued with respect to the Zhang PSUs may not be sold, assigned, pledged or transferred for two years from the date of
issuance, other than shares withheld in respect of tax withholding obligations, or shares transferred by Mr. Zhang for estate planning
purposes.
Terms
of the Mohmand PSUs
The
Mohmand PSUs are eligible to vest based on the achievement of net operating income targets, measured on a trailing twelve-month basis
(the “NOI Targets”), as set forth in the table below. The Mohmand PSUs will only be earned and vest if the net operating
income from the Company’s HPC Hosting Business segment equals or exceeds the applicable NOI Target on or before February 28, 2031,
subject to Mr. Mohmand’s continued full-time employment with the Company in a role approved by the Board on the applicable vesting
date.
| NOI Target | |
PSUs Eligible to Vest |
| $1,000,000,000 | |
375,000 |
| $2,000,000,000 | |
375,000 |
Upon
a Change in Control, net operating income will be calculated based on Contracted NOI (as defined below), and
| ● | Except
as provided below, any unvested Mohmand PSUs will be automatically forfeited without consideration. |
| | | |
| ● | With
respect to any NOI Target which has been no less than 60% achieved, a ratable number of Mohmand
PSUs shall vest in an amount equal to (A) the percentage of the applicable NOI Target deemed
achieved, based on Contracted NOI, upon consummation of a Change in Control (not to exceed
100%) multiplied by (B) the number of Mohmand PSUs that vest upon 100% achievement of such
NOI Target. |
For
purposes of the Mohmand PSUs, “Contracted NOI” means, in general, the NOI projected to be earned by the Company on a consolidated
basis over the 12 full calendar month period starting with the 13th and ending with the 24th full calendar month after consummation of
a Change in Control, calculated based the Company’s consolidated financial performance, from the critical IT load contracted for
pursuant to all contracts, licenses, leases, or service agreements entered into by the Company (or any subsidiary or affiliate thereof)
in effect as of the consummation of such Change in Control.
Upon
Mr. Mohmand’s termination due to death, Disability, without Cause, or for Good Reason, the Mohmand PSUs shall remain outstanding
and continue to be eligible to vest if the applicable NOI Target is achieved within 12 months after Mr. Mohmand’s termination,
or if earlier, by February 28, 2031, after which the Mohmand PSUs will be forfeited to the extent unvested. In the event of a Change
in Control following any such termination, vesting of any then-unvested Mohmand PSUs shall be determined as set forth above with respect
to a Change in Control, and any Mohmand PSUs that do not vest shall be forfeited. For purposes of the foregoing, “Cause”
will have the meaning given such term in Mr. Mohmand’s letter agreement with the Company, dated October 11, 2024 (the “Mohmand
Offer Letter”), and “Disability” and “Good Reason” are defined in the award agreement evidencing the Mohmand
PSUs.
Shares
of common stock issued with respect to the Mohmand PSUs may not be sold, assigned, pledged or transferred for two years from the date
of issuance, other than shares withheld in respect of tax withholding obligations, or shares transferred by Mr. Mohmand for estate planning
purposes.
Terms
of the RSUs
The
RSUs are each subject to vesting as follows: one-fifth of the RSUs shall vest on the one-year anniversary of the Grant Date (the “Cliff
Date”), and the remainder will vest every six months after the Cliff Date in equal installments of 50,000, with respect to Mr.
Zhang, and 25,000, with respect to Mr. Mohmand, such that the RSUs will each be fully vested on the five-year anniversary of the Grant
Date. The RSUs will be treated as follows upon a termination of employment:
| ● | With
respect to Mr. Zhang, upon his termination without Cause, for Good Reason, or due to the
Company’s non-renewal of Mr. Zhang’s employment Term, subject to the terms and
conditions of the Zhang Employment Agreement, 50% of the outstanding and unvested Zhang RSUs
will accelerate and become vested and the balance will be forfeited or, in the event of a
Change in Control Termination (as defined in the Zhang Employment Agreement), 100% of the
outstanding and unvested Zhang RSUs will accelerate and become vested. |
| | | |
| ● | With
respect to Mr. Mohmand, upon his termination without Cause or for Good Reason, subject to
Mr. Mohmand’s timely delivery and non-revocation of an executed release of claims in
a form provided by the Company, and Mr. Mohmand’s continued compliance with the terms
and conditions of the Mohmand Offer Letter, Mr. Mohmand’s Employee Non-Disclosure,
Invention Assignment and Restrictive Covenants Agreement with the Company, and such release,
50% of the outstanding and unvested Mohmand RSUs will accelerate and become vested and the
balance will be forfeited or, in the event of a Change in Control Termination (as defined
in the award agreement evidencing the Mohmand RSUs), 100% of the outstanding and unvested
Mohmand RSUs will accelerate and become vested. |
The
PSUs and the RSUs shall be subject to forfeiture at the election of the Company, without payment of consideration, in the event Mr. Zhang
breaches Section 5 of the Zhang Employment Agreement (Restrictive Covenants), or Mr. Mohmand breaches that certain Employee Non-Disclosure,
Invention Assignment, and Restrictive Covenants Agreement dated October 15, 2024, or any other agreement between Mr. Zhang or Mr. Mohmand
and the Company, as applicable, with respect to non-competition, non-solicitation, no-hire, non-disparagement, assignment of inventions
and contributions and/or non-disclosure obligations. The PSUs and RSUs will also be subject to the Company’s Clawback Policy, as
in effect from time to time.
The
foregoing description of the PSUs and RSUs does not purport to be complete and is qualified in its entirety by the full text of the Performance
Stock Unit Agreements evidencing the Zhang PSUs and the Mohmand PSUs, and the Restricted Stock Unit Agreements evidencing the Zhang RSUs
and the Mohmand RSUs, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K
and are incorporated by reference herein.
Forward-Looking
Statements
This
Current Report on Form 8-K and other reports filed by the Company from time to time with the SEC contains “forward-looking statements”
as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance,
product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations
of words, such as “will,” “continue,” “build,” “future,” “increase,” “drive,”
“believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,”
“expect,” “project” and “predict.” Other examples of forward-looking statements may include, but
are not limited to, (i) statements that reflect perspectives and expectations regarding lease agreements and any current or prospective
data center campus development, (ii) statements about the high-performance computing (HPC) industry, (iii) statements of Company plans
and objectives, including the Company’s evolving business model, or estimates or predictions of actions by suppliers, (iv) statements
of future economic performance, (v) statements of assumptions underlying other statements and statements about the Company or its business
and (vi) the Company’s plans to obtain future project financing. You are cautioned not to rely on these forward-looking statements.
These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions
prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s
expectations and projections. These risks, uncertainties, and other factors include, among others: our ability to complete construction
of our data center campuses as planned; the lead time of customer acquisition and leasing decisions and related internal approval processes;
changes to artificial intelligence and high performance compute infrastructure needs and their impact on future plans; costs related
to the HPC operations and strategy; our ability to timely deliver any services required in connection with completion of installation
under the lease agreements; our ability to raise additional capital to fund the ongoing datacenter construction and operations; our ability
to obtain financing of datacenter leases on acceptable financing terms, or at all; our dependence on principal customers, including our
ability to execute and perform our obligations under our leases with key customers, including without limitation, the datacenter leases
with CoreWeave and at our Polaris Forge 2 campus, at future data centers and with future tenants; our ability to timely and successfully
build new hosting facilities with the appropriate contractual margins and efficiencies; power or other supply disruptions and equipment
failures; the inability to comply with regulations, developments and changes in regulations; cash flow and access to capital; availability
of financing to continue to grow our business; decline in demand for our products and services; maintenance of third party relationships;
and conditions in the debt and equity capital markets. A further list and description of these risks, uncertainties and other factors
can be found in the Company’s most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, including in the
sections captioned “Forward-Looking Statements” and “Risk Factors,” and in the Company’s subsequent filings
with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, on the Company’s
website (www.applieddigital.com) under “Investors,” or on request from the Company. Information in this Current Report
on Form 8-K is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information
contained in these materials, except as required by law.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
| Exhibit
No. |
|
Description |
| |
|
|
| 10.1 |
|
Performance Stock Unit Award, dated February 6, 2026, by and between Applied Digital Corporation and Jason Zhang. |
| 10.2 |
|
Performance Stock Unit Award, dated February 6, 2026, by and between Applied Digital Corporation and Saidal Mohmand. |
| 10.3 |
|
Restricted Stock Unit Award, dated February 6, 2026, by and between Applied Digital Corporation and Jason Zhang. |
| 10.4 |
|
Restricted Stock Unit Award, dated February 6, 2026, by and between Applied Digital Corporation and Saidal Mohmand. |
| 104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
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.
| Dated:
February 9, 2026 |
By: |
/s/
Saidal L. Mohmand |
| |
Name: |
Saidal
L. Mohmand |
| |
Title: |
Chief
Financial Officer |
