Form S-1 / A Applied Blockchain, Inc.

On July 29, 2021, we filed a certificate of amendment to our articles with the Secretary of State of Nevada, in order to increase our authorized share capital to 1,005,000,000 shares and to designate 1,000,000,000 to ordinary actions. On the same day, we filed with the Secretary of State for Nevada the certificate of designation to establish Series D Convertible Redeemable Preferred Shares (the “Series D Preferred Shares”).

To raise funds to rent or purchase property, purchase and install a physical building on such land to house our co-hosting facility, make deposits for our energy services agreement, and purchase additional crypto-mining hardware to continue to develop our mining activity and build our corporate co-hosting, August 4 and 5, 2021, in accordance with this placement agent agreement, dated July 30, 2021, by and between us and B. Riley Securities, Inc (the “Selling Agent Agreement”), issued 1,300,000 Series D Preferred Shares to us to certain investors for gross proceeds of $ 32,500,000. On August 25, 2021, pursuant to this placement agent agreement dated July 30, 2021, we issued 4,000 additional Series D preferred shares to an investor for gross proceeds of $ 100,000. On October 7, 2021, we amended the placement agent agreement to extend the length of time that previously unsold Series D preferred shares could be sold and issued the remaining 76,000 Series D preferred shares to investors for gross proceeds. of $ 1,900,000. We used a portion of the proceeds from the Series D preferred share offering, among other things, to purchase a property on which to set up our first co-hosting facility, pay the sums needed to enter into an energy services agreement, order the prefabricated building which is being installed to serve as the first co-accommodation location and to purchase additional mining equipment.

During the fiscal year ended May 31, 2021, we formed two subsidiaries, Shanghai Sparkly Ore Tech, Ltd and Applied Blockchain, Ltd. Shanghai Sparkly Ore Tech, Ltd. is a wholly owned foreign entity in China which is currently dormant. Applied Blockchain, Ltd. is a wholly owned subsidiary formed in Grand Cayman. Applied Blockchain, Cayman was dormant, except it had a digital wallet that we could use in the future if we mine for crypto outside the United States until October 12, 2021, when it has entered into a service agreement with Xsquared Holding Limited.

In June 2021, we formed a wholly owned subsidiary, APLD Hosting, LLC, in Nevada. APLD Hosting enters into agreements to own and operate our co-hosting facilities.

On October 22, 2021, we formed 1.21 Gigawatts LLC in Delaware to develop, build, finance, operate and maintain data centers.

On November 2, 2021, we formed a wholly owned subsidiary, Applied Talent Resources LLC, in Nevada to employ and manage our employees, the personnel of our entities and projects, and employment-related plans and policies.

On November 8, 2021, we formed APLD-JTND Phase II, LLC, and on November 15, 2021, we formed APLD – Rattlesnake Den I, LLC and APLD Rattlesnake Den II, LLC, each of which is a Delaware limited liability company incorporated to build and operate a co-hosting facility.

In December 2021, Bitmain and we agreed to a non-binding list of conditions to form one or more entities owned 80% by us and 20% by Bitmain to develop, acquire, build, finance, operate, maintain and own a or several next-generation data centers with up to 1.5 GW of capacity to host the blockchain infrastructure.

Our competitive strengths

First-rate strategic partnerships with the main players in the industry. We believe that our partnerships with SparkPool, GMR and Bitmain have provided, and some partners continue to provide us, a significant competitive advantage. SparkPool operated one of the largest Ethereum mining pools in the world and was one of the leading developers of mining software in the world. SparkPool provided us with mining software, hardware selection, analytics, and purchasing power. SparkPool is currently in the process of shutting down its operations due to the crackdown on mining operations in China and is assisting us in a transition to a new Ether mining pool manager, Ethermine. We have also entered into a new agreement with SparkPool under which SparkPool will advise us on starting and operating our own Ethereum mining pool as a third party service. SparkPool supports us in the engineering and design of our sites. GMR also provides us with mining asset selection, asset management and trading services. GMR has also been a promoter of our hosting strategy, having signed a contract for approximately 50% of our 100 MW capacity as part of our


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