Cover
Cover - shares | 3 Months Ended | |
Aug. 31, 2022 | Oct. 12, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-31968 | |
Entity Registrant Name | APPLIED BLOCKCHAIN, INC. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 95-4863690 | |
Entity Address, Address Line One | 3811 Turtle Creek, Blvd. | |
Entity Address, Address Line Two | Suite 2125 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75219 | |
City Area Code | 214 | |
Local Phone Number | 556-2465 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | APLD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 94,238,937 | |
Entity Central Index Key | 0001144879 | |
Current Fiscal Year End Date | --05-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 40,830 | $ 46,299 |
Accounts receivable | 50 | 227 |
Prepaid expenses and other current assets | 1,500 | 1,336 |
Total current assets | 42,380 | 47,862 |
Property and equipment, net | 95,095 | 64,260 |
Right of use asset, net | 6,995 | 6,408 |
Utility deposits | 1,450 | 1,450 |
TOTAL ASSETS | 145,920 | 119,980 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 13,456 | 13,260 |
Current portion of lease liability | 1,371 | 1,004 |
Current portion of term loan | 2,587 | 1,333 |
Customer deposits | 14,111 | 9,524 |
Current deferred revenue | 17,142 | 3,877 |
Total current liabilities | 48,667 | 28,998 |
Deferred tax liability | 572 | 540 |
Long-term deferred revenue | 2,051 | 0 |
Long-term portion of lease liability | 5,620 | 5,310 |
Long-term term loan | 12,109 | 5,897 |
Total liabilities | 69,019 | 40,745 |
Commitments and contingencies | ||
Shareholders' equity (deficit): | ||
Common stock, $0.001 par value, 166,666,667 shares authorized, 92,872,271 shares issued and 92,835,974 shares outstanding at August 31, 2022, and 97,837,703 shares issued and outstanding at May 31, 2022 | 93 | 98 |
Additional paid in capital | 128,877 | 128,293 |
Treasury stock, 36,300 shares at August 31, 2022 and May 31, 2022, at cost | (62) | (62) |
Accumulated deficit | (60,601) | (56,070) |
Total stockholders’ equity attributable to Applied Blockchain, Inc. | 68,307 | 72,259 |
Noncontrolling interest | 8,594 | 6,976 |
Total Stockholders' equity (deficit) including noncontrolling interest | 76,901 | 79,235 |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 145,920 | $ 119,980 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Aug. 31, 2022 | May 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 166,666,667 | 166,666,667 |
Common stock, shares issued (in shares) | 92,872,271 | 97,837,703 |
Common stock, shares outstanding (in shares) | 92,835,974 | 97,837,703 |
Treasury stock, (in shares) | 36,300 | 36,300 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Statement [Abstract] | ||
Hosting revenue | $ 6,924 | $ 0 |
Cost of revenues | 6,093 | 0 |
Gross profit | 831 | 0 |
Costs and expenses: | ||
Selling, general and administrative | 4,131 | 698 |
Stock-based compensation | 579 | 12,337 |
Depreciation and amortization | 298 | 3 |
Total costs and expenses | 5,008 | 13,038 |
Operating loss | (4,177) | (13,038) |
Other income (expense): | ||
Interest Expense | (356) | 0 |
Gain on extinguishment of accounts payable | 0 | 40 |
Loss on extinguishment of debt | (94) | (1,342) |
Total other expense, net | (450) | (1,302) |
Net loss from continuing operations before income tax expenses | (4,627) | (14,340) |
Income tax expenses | (32) | 0 |
Net loss from continuing operations | (4,659) | (14,340) |
Net gain from discontinued operations, net of income taxes | 0 | 243 |
Net loss including noncontrolling interests | (4,659) | (14,097) |
Net loss attributable to noncontrolling interest | (128) | 0 |
Net loss attributable to Applied Blockchain | $ (4,531) | $ (14,097) |
Basic and diluted net (loss) gain per share: | ||
Continuing Operations - basic ( in dollars per share) | $ (0.05) | $ (0.32) |
Continuing Operations - diluted ( in dollars per share) | (0.05) | (0.32) |
Discontinued Operations - basic ( in dollars per share) | 0 | 0.01 |
Discontinued Operations - diluted ( in dollars per share) | 0 | 0.01 |
Basic net loss per share (in dollars per share) | (0.05) | (0.31) |
Diluted net loss per share (in dollars per share) | $ (0.05) | $ (0.31) |
Basic weighted average number of shares outstanding (in shares) | 93,105,835 | 44,937,269 |
Diluted weighted average number of shares outstanding (in shares) | 93,105,835 | 44,937,269 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Total Shareholders Equity | Common Stock | Additional Paid in Capital | Treasury Stock | Accumulated deficit | Noncontrolling Interest | Series C Convertible Redeemable Preferred Stock | Series D Convertible Redeemable Preferred Stock | Series A and B Preferred Stock | Series A and B Preferred Stock Common Stock | Series A and B Preferred Stock Additional Paid in Capital | Series A Preferred Stock Preferred Stock | Series B Preferred Stock Preferred Stock |
Beginning balance (in shares) at May. 31, 2021 | 660,000 | 0 | ||||||||||||
Beginning balance at May. 31, 2021 | $ 15,135 | $ 15,135 | $ 0 | |||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||
Issuance of Preferred Stock (in shares) | 1,304,000 | |||||||||||||
Issuance of Preferred Stock | 32,600 | $ 32,600 | ||||||||||||
Issuance Costs of Preferred Stock | (2,698) | $ (2,698) | ||||||||||||
Ending balance (in shares) at Aug. 31, 2021 | 660,000 | 1,304,000 | ||||||||||||
Ending balance at Aug. 31, 2021 | 45,037 | $ 15,135 | $ 29,902 | |||||||||||
Beginning balance, common stock (in shares) at May. 31, 2021 | 1,511,061 | |||||||||||||
Beginning balance, preferred stock (in shares) at May. 31, 2021 | 27,195 | 17,087 | ||||||||||||
Beginning balance at May. 31, 2021 | (2,583) | $ 1 | $ 13,882 | $ (62) | $ (21,623) | $ 3,370 | $ 1,849 | |||||||
Beginning balance at May. 31, 2021 | 12,552 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Extinguishment of Debt (in shares) | 5,083,828 | |||||||||||||
Extinguishment of Debt | 3,478 | $ 5 | 3,473 | |||||||||||
Issuance of Dividends to Preferred Stock (in shares) | 60,822 | 29,772 | ||||||||||||
Issuance of Dividends to Preferred Stock | 115 | (8,946) | $ 6,082 | $ 2,979 | ||||||||||
Conversion of Preferred Stock (in shares) | 28,765,308 | 88,017 | 46,859 | |||||||||||
Conversion of Preferred Stock | $ 0 | $ 29 | $ 14,251 | $ (9,452) | $ (4,828) | |||||||||
Service agreement stock compensation (in shares) | 18,036,723 | |||||||||||||
Service agreement stock compensation | 12,337 | $ 18 | 12,319 | |||||||||||
Net loss including noncontrolling interests | (14,097) | (14,097) | ||||||||||||
Ending balance, preferred stock (in shares) at Aug. 31, 2021 | 0 | 0 | ||||||||||||
Ending balance, common stock (in shares) at Aug. 31, 2021 | 53,396,920 | |||||||||||||
Ending balance at Aug. 31, 2021 | (750) | $ 53 | 43,925 | (62) | (44,666) | $ 0 | $ 0 | |||||||
Ending balance at Aug. 31, 2021 | $ 44,286 | |||||||||||||
Beginning balance, common stock (in shares) at May. 31, 2022 | 97,837,703 | 97,837,703 | ||||||||||||
Beginning balance at May. 31, 2022 | $ 79,235 | $ 72,259 | $ 98 | 128,293 | (62) | (56,070) | $ 6,976 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock based compensation | 579 | 579 | 579 | |||||||||||
Capital contribution to noncontrolling interest | 1,746 | 1,746 | ||||||||||||
Stock cancellation (in shares) | (4,965,432) | |||||||||||||
Stock Cancellation | 0 | $ (5) | 5 | |||||||||||
Net loss including noncontrolling interests | $ (4,659) | (4,531) | (4,531) | (128) | ||||||||||
Ending balance, common stock (in shares) at Aug. 31, 2022 | 92,835,974 | 92,872,271 | ||||||||||||
Ending balance at Aug. 31, 2022 | $ 76,901 | $ 68,307 | $ 93 | $ 128,877 | $ (62) | $ (60,601) | $ 8,594 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net loss attributable to Applied Blockchain | $ (4,531) | $ (14,097) |
Net gain from discontinued operations, net of income taxes | 0 | (243) |
Net loss attributable to noncontrolling interest | (128) | 0 |
Net loss from continuing operations | (4,659) | (14,340) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and Amortization | 1,136 | 3 |
Gain on extinguishment of accounts payable | 0 | (40) |
Loss on extinguishment of debt | 94 | 1,342 |
Stock-Based Compensation | 579 | 12,337 |
Deferred Tax | 32 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 177 | 0 |
Utility Deposits | 0 | (773) |
Prepaid expenses and other current assets | (164) | (770) |
Customer deposits | 4,587 | 0 |
Deferred revenue | 15,316 | 0 |
Accounts payable and accrued liabilities | 196 | 368 |
Net cash provided by (used in) operating activities of continuing operations | 17,294 | (1,870) |
Net cash provided by operating activities of discontinued operations | 0 | 435 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 17,294 | (1,435) |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (31,673) | (988) |
Deposit on equipment | 0 | (10,300) |
Net cash used in investing activities of continuing operations | (31,673) | (11,288) |
Net cash used in investing activities of discontinued operations | 0 | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (31,673) | (11,288) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Issuance of preferred stock | 0 | 32,600 |
Repayment of finance leases | (209) | 0 |
Preferred stock issuance costs | 0 | (2,698) |
Term loan paydown | (7,056) | 0 |
Proceeds from issuance of term loan | 15,000 | 0 |
Term Loan Issuance Costs | (140) | 0 |
Loan principal payments | (432) | 0 |
Equity contributions to subsidiaries | 1,747 | 0 |
Net cash provided by financing activities of continuing operations | 8,910 | 29,902 |
Net cash provided by financing activities of discontinued operations | 0 | 0 |
CASH FLOW PROVIDED BY FINANCING ACTIVITIES | 8,910 | 29,902 |
NET (DECREASE ) INCREASE IN CASH AND CASH EQUIVALENTS | (5,469) | 17,179 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 46,299 | 11,750 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 40,830 | 28,929 |
Less: cash and cash equivalents of discontinued operations | 0 | 0 |
Cash and cash equivalents of continuing operations | 40,830 | 28,929 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest Paid | 356 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Right-of-use asset obtained by lease obligation | 922 | 1,291 |
Fixed assets in accounts payable | $ 8,352 | $ 4,391 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 3 Months Ended |
Aug. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND ORGANIZATION | BUSINESS AND ORGANIZATION Applied Blockchain, Inc. (the “Company”) is a builder and operator of next-generation data centers across North America, which provide substantial computing power to blockchain infrastructure and support Bitcoin mining. The Company has a colocation business model where customers place hardware they own into the Company’s facilities and the Company provides full operational and maintenance services for a fixed fee. The Company typically enters into long term fixed rate contracts with its customers. During the three month period ended August 31, 2022, the Company formed ELN-01, LLC, which is a Delaware limited liability company formed to build and operate a co-hosting facility. Reverse Stock Split The Company’s board of directors approved a reverse split of shares of the Company’s common stock on a one-for-six (1:6) basis , which was effected on April 12, 2022 (the “Reverse Stock Split”). All references to Common Stock, options to purchase common stock, restricted stock units, share data, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. No fractional shares of the Company’s common stock were issued in connection with the Reverse Stock Split. Any fractional share resulting from the Reverse Stock Split was rounded down to the nearest whole share and the affected holder received cash in lieu of such fraction share. |
LIQUIDITY AND FINANCIAL CONDITI
LIQUIDITY AND FINANCIAL CONDITION | 3 Months Ended |
Aug. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND FINANCIAL CONDITION | LIQUIDITY AND FINANCIAL CONDITIONAs of August 31, 2022, the Company had approximate cash and cash equivalents of $40.8 million and negative working capital of $6.3 million. Historically the Company has incurred losses and has relied on equity financings to fund its operations. Based on analysis of cash flows, current net working capital, and expected operations revenue, the Company believes its current cash on hand is sufficient to meet its operating and capital requirement for at least next twelve months from the date these financial statements are issued. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The accompanying interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements on Form 10-K have been condensed or omitted. The Condensed Consolidated Balance Sheet as of May 31, 2022 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim Consolidated Financial Statements in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2022 filed with the SEC on August 29, 2022. Significant Accounting Policies and Use of Estimates: There were no material changes in the Company’s significant accounting policies for the three months ended August 31, 2022 as compared to the year ended May 31, 2022. See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year-ended May 31, 2022, as filed with the SEC, for additional information regarding the Company’s significant accounting policies and use of estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates associated with asset valuations, and the valuation allowance associated with the Company’s deferred tax assets. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. The Company’s cash equivalents in excess of federally insured limits potentially subject us to concentrations of credit risk, although the Company believes it is subject to minimal risk. The Company has restricted cash related to its letter of credit totaling $7.5 million. The company is required to keep this balance in a separate account for the duration of the letter of credit agreement, which lasts through January 2024. The following tables reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of August 31, 2022, and May 31, 2022. (in thousands) August 31, 2022 May 31, 2022 Net Cash & Equivalents $ 33,330 $ 38,798 Restricted Cash $ 7,500 $ 7,501 Total Cash & Cash Equivalents $ 40,830 $ 46,299 Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In August 2020, the FASB issued ASU No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has adopted ASU and determined that the adoption had no material impact on its financial statements and related disclosures. In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP; and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP; however, this ASU requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU 2016-13 amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of June 1, 2023. Early adoption will continue to be permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Aug. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of August 31, 2022, and May 31, 2022: (in thousands) Estimated Useful Life August 31, May 31, Hosting Equipment Electric Generation and Transformers 15 years 4,376 4,338 Other Equipment and Fixtures 5 years-7 years 588 588 Construction in Progress 46,086 18,305 Information Systems and Software 5 years 9,675 9,608 Land & Building Land 2,125 1,074 Land Improvements 15 years 1,259 1,180 Building 39 years 32,833 30,176 Total cost of property and equipment 96,942 65,269 Accumulated Depreciation (1,847) (1,009) Property Plant and Equipment, Net $ 95,095 $ 64,260 Depreciation expense from continuing operations totaled $838,000 and $3,000 for the three-month periods ended August 31, 2022 and 2021, respectively. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Aug. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERSThe Company recognizes revenue when promised services are transferred to customers in an amount that reflects the consideration to which the Company expects to be received in exchange for those services. The Company notes all revenue recognized from continuing operations during the quarter was received through hosting revenue. Below is a summary of the Company’s revenue concentration by major customer for the three-month periods ended August 31, 2022 and 2021, respectively. Three Months Ended August 31, Customer 2022 2021 Customer A 35.5 % — % Customer B 21.0 % — % Customer C 16.5 % — % Customer D 14.4 % — % Customer E 12.6 % — % Remaining Performance Obligations As of August 31, 2022, the Company had $19.2 million in deferred revenue, which represents the Company’s remaining performance obligations. The Company expects to recognize $17.1 million within the next 12 months. Deferred Revenue Changes in the Company's deferred revenue balances from hosting operations for the three-month periods ended August 31, 2022 and 2021, respectively, are shown in the following table: Balance at May 31, 2022 $ 3,877 Balance at May 31, 2021 $ — Advance billings 22,240 Advance billings — Revenue recognized (6,924) Revenue recognized — Other adjustments $ — Other adjustments $ — Balance at August 31, 2022 $ 19,193 Balance at August 31, 2021 $ — Customer Deposits Changes in the Company's customer deposits balances for the three-month periods ended August 31, 2022 and 2021, respectively, are shown in the following table: Balance at May 31, 2022 $ 9,524 Balance at May 31, 2021 $ — Customer deposits received 4,587 Customer deposits received — Customer deposits refunded — Customer deposits refunded — Balance at August 31, 2022 $ 14,111 Balance at August 31, 2021 $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Aug. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related Party Policy Parties are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all material related party transactions. Related Party Note Payable During the three month period ended August 31, 2021, a related party note payable was held by the CEO of the Company. During this period, the outstanding debt principal of $470,000 and accrued interest of $1.6 million was converted to 5.1 million shares of Common Stock with a fair value of $0.75 per share which resulted in a loss on extinguishment of $1.3 million. Upon the consummation of the Exchange Agreement, the note payable was surrendered and cancelled; all rights including rights to accrued interest due were extinguished. Related Party Revenue One of the Company's major customers is an entity that is the parent company of the minority member of the 1.21 Gigawatts joint venture. The Company recognized $2.5 million and no revenue from this customer for the three-month periods ended August 31, 2022 and 2021, respectively. The Company had $2.0 million and no advance billings from this customer and $1.7 million and no deposits from this customer as of August 31, 2022 and May 31, 2022, respectively. |
DEBT
DEBT | 3 Months Ended |
Aug. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Letter of Credit As of August 31, 2022 and May 31, 2022, the Company had a letter of credit totaling $7.5 million. As discussed in Footnote 3, the Company is required to maintain this amount in a separate cash balance, and therefore the cash is restricted. Further, the Company has no unused lines of credit as of August 31, 2022 or May 31, 2022, respectively. Term Loan On July 25, 2022, the Company entered into a Loan Agreement with Starion Bank (“Starion Lender”) and the Company as Guarantor (the “Starion Loan Agreement”). The Starion Loan Agreement provides for a term loan (the “Starion Term Loan”) in the principal amount of $15 million with a maturity date of July 25, 2027. The Starion Loan Agreement provides for an interest rate of 6.50% per annum. The Starion Loan Agreement contains customary covenants, representations and warranties and events of default. The Company is not subject to financial covenants until May 31, 2024. At this time, the Company will be subject to a debt service coverage ratio. Deferred financing costs related to the Starion Term Loan totals $142,000. The effective interest rate was 7.0% as of August 31, 2022. Below is a summary of the term loan balance, including current debt and deferred financing fees as of August 31, 2022 and May 31, 2022. (in thousands) August 31, May 31, 2022 Term Loan Balance $14,790 $7,324 Less: Deferred Issuance Costs (140) (94) Less: Current portion of Term Loan (2,587) (1,333) Long-term Portion of Term Loan $12,063 $5,897 Below is a summary of the remaining principal payments due over the life of the Starion Loan Agreement note as of August 31, 2022. Year Principal Payments (in thousands) FY23 $ 1,923 FY24 2,726 FY25 2,923 FY26 3,134 FY27 3,361 Thereafter 583 Total Term Loan Remaining Payments $ 14,650 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) | 3 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY (DEFICIT) | SHAREHOLDERS’ EQUITY (DEFICIT) Common Stock The Company is authorized to issue 166,666,667 shares of Common Stock at $0.001 par value per share. As of August 31, 2022, 92,872,271 shares of Common Stock were issued and 92,835,974 shares were outstanding and as of May 31, 2022, 97,837,703 shares of Common Stock were issued and outstanding. Note that all shares of Common Stock in this disclosure reflect the one-for-six reverse stock split disclosed in Note 1 - Business and Organization. Restricted Stock Awards The Company has granted restricted stock awards to officers and directors. Each of the awards vests upon the completion of service conditions for specified times and a performance condition for the occurrence of an effective registration statement covering the resale of the shares of common stock comprising the stock award with the Securities and Exchange Commission (the “SEC”). The Company will recognize the cost of the restricted stock based on the grant date fair value of the awards over the related vesting terms using a straight-line method when it is probable that the performance condition for the reserved underlying shares will be met. The following is a summary of the activity and balances for unvested restricted stock awards granted: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,665 $ 8.04 Granted — $ — Vested — $ — Forfeited — $ — Outstanding as of August 31, 2022 1,366,665 $ 8.04 Restricted Stock Units The Company has granted restricted stock awards to certain consultants, in all cases as compensatory grants for consulting services rendered to the Company which contain performance conditions that affect vesting. The Company will recognize the cost of these RSUs based on the grant date fair value of the awards when it is probable that the performance conditions will be achieved over the related vesting terms. The following is a summary of the activity and balances for unvested restricted stock units granted: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,646 $ 8.04 Granted 505,834 $ 4.86 Vested — $ — Forfeited 416,650 $ 8.04 Outstanding as of August 31, 2022 1,880,830 $ 7.18 Stock-Based Compensation Expense Total stock based compensation expense for the respective periods is listed below in thousands As of August 31, 2022 August 31, 2021 Stock-based compensation expense $579 $12,337 At August 31, 2022, there was $23.9 million of unrecognized stock compensation expense, which the Company expects to recognize over a weighted-average period of 8.5 months as the performance conditions are met. Share Forfeiture On June 6, 2022, through an agreement between the Company and Sparkpool, Sparkpool agreed to forfeit to the Company shares of Common Stock that had been issued pursuant to the service agreement executed on March 19, 2021. Sparkpool ceased providing the contracted services for the Company, and agreed to forfeit shares to compensate for future services that will not be rendered. As a result of this agreement, 4,965,432 shares of Common Stock were forfeited and canceled by the Company. Equity Plan Approval On October 9, 2021, the Company’s board of directors approved two equity incentive plans, which the Company’s stockholders approved on January 20, 2022. The two plans consist of the 2022 Incentive Plan, previously referred to in the Company’s SEC filings as the 2021 Incentive Plan (the “Incentive Plan”), which provides for grants of various equity awards to the Company’s employees and consultants, and the 2022 Non-Employee Director Stock Plan previously referred to in the Company’s SEC filings as the 2021 Non-Employee Director Stock Plan (the “Director Plan” and, together with the Incentive Plan, the “Plans”), which provides for grants of restricted stock to non-employee directors and |
LEASES
LEASES | 3 Months Ended |
Aug. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES During the three months ended August 31, 2022, the Company added 11 leases. The Company considered the nature of the leases under ASC 842 Leases |
LEASES | LEASES During the three months ended August 31, 2022, the Company added 11 leases. The Company considered the nature of the leases under ASC 842 Leases |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Aug. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments As of August 31, 2022, the Company has commitments related to its term loan and lease agreements , which have been disclosed in Note 7 - Term Loan and Note 11 - Leases, respectively. Energy Commitment The Company also has a commitment of approximately $24.2 million related to the energy services agreement for its first cohosting facility as of August 31, 2022. The minimum term of this agreement is five years, and will remain in effect on a year-to-year basis unless terminated by either party by notice given at least 365 calendar days in advance of termination. The commitment is fully due within the next year, as the company commits to specific power consumption on an annual basis as part of the energy services agreement. The Company purchased approximately $4.9 million and $0 in power under the energy services agreement during the the three-month periods ended August 31, 2022 and 2021, respectively Claims and Litigation |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Aug. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHAREBasic net income (loss) per share (“EPS”) of Common Stock is computed by dividing the Company’s net earnings (loss) by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the earnings of the entity. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive. Refer to Footnote 9 for details on outstanding classes of preferred shares. The table below shows the calculation for this quarter’s earnings per share: Basic and diluted loss per share: Quarterly Period Ended August 31, 2022 August 31, 2021 Net loss from continuing operations $ (4,659) $ (14,340) Net gain from discontinued operations, net of income taxes — 243 Net loss including noncontrolling interests (4,659) (14,097) Net loss attributable to noncontrolling interest (128) — Net loss attributable to Applied Blockchain $ (4,531) $ (14,097) Basic and diluted net (loss) gain per share: Continuing Operations $ (0.05) $ (0.32) Discontinued Operations $ — $ 0.01 Basic and diluted net loss per share $ (0.05) $ (0.31) Basic and diluted weighted average number of shares outstanding 93,105,835 44,937,269 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Aug. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS During February 2022, the Company implemented plans to cease all cryptomining operations and start the sale process of all cryptomining equipment. The Company ceased all crypto mining operations and completed the sale of the assets shortly during the year ended May 31, 2022. The Company has no plans to return to crypto mining operations in the future as the Company grows. The results of these operations have been displayed as discontinued operations. Operating results of discontinued operations are summarized below: Three Months Ended August 31, 2022 August 31, 2021 Cryptoasset mining revenue, net $ — $ 612 Cost of sales — 349 Gross profit — 263 Impairment of cryptocurrency assets — (20) Net gain from discontinued operations $ — $ 243 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The accompanying interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements on Form 10-K have been condensed or omitted. The Condensed Consolidated Balance Sheet as of May 31, 2022 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. For further information, please refer to and read these interim Consolidated Financial Statements in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2022 filed with the SEC on August 29, 2022. |
Significant Accounting Policies and Use of Estimates | Significant Accounting Policies and Use of Estimates: There were no material changes in the Company’s significant accounting policies for the three months ended August 31, 2022 as compared to the year ended May 31, 2022. See Note 3 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year-ended May 31, 2022, as filed with the SEC, for additional information regarding the Company’s significant accounting policies and use of estimates. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates associated with asset valuations, and the valuation allowance associated with the Company’s deferred tax assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. The Company’s cash equivalents in excess of federally insured limits potentially subject us to concentrations of credit risk, although the Company believes it is subject to minimal risk. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change. In August 2020, the FASB issued ASU No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company has adopted ASU and determined that the adoption had no material impact on its financial statements and related disclosures. In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP; and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP; however, this ASU requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at fair value through net income. The ASU 2016-13 amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of June 1, 2023. Early adoption will continue to be permitted. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures. |
Revenue Recognition | The Company recognizes revenue when promised services are transferred to customers in an amount that reflects the consideration to which the Company expects to be received in exchange for those services. The Company notes all revenue recognized from continuing operations during the quarter was received through hosting revenue. |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following tables reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of August 31, 2022, and May 31, 2022. (in thousands) August 31, 2022 May 31, 2022 Net Cash & Equivalents $ 33,330 $ 38,798 Restricted Cash $ 7,500 $ 7,501 Total Cash & Cash Equivalents $ 40,830 $ 46,299 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following as of August 31, 2022, and May 31, 2022: (in thousands) Estimated Useful Life August 31, May 31, Hosting Equipment Electric Generation and Transformers 15 years 4,376 4,338 Other Equipment and Fixtures 5 years-7 years 588 588 Construction in Progress 46,086 18,305 Information Systems and Software 5 years 9,675 9,608 Land & Building Land 2,125 1,074 Land Improvements 15 years 1,259 1,180 Building 39 years 32,833 30,176 Total cost of property and equipment 96,942 65,269 Accumulated Depreciation (1,847) (1,009) Property Plant and Equipment, Net $ 95,095 $ 64,260 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Below is a summary of the Company’s revenue concentration by major customer for the three-month periods ended August 31, 2022 and 2021, respectively. Three Months Ended August 31, Customer 2022 2021 Customer A 35.5 % — % Customer B 21.0 % — % Customer C 16.5 % — % Customer D 14.4 % — % Customer E 12.6 % — % |
Schedule of Deferred Revenue | Changes in the Company's deferred revenue balances from hosting operations for the three-month periods ended August 31, 2022 and 2021, respectively, are shown in the following table: Balance at May 31, 2022 $ 3,877 Balance at May 31, 2021 $ — Advance billings 22,240 Advance billings — Revenue recognized (6,924) Revenue recognized — Other adjustments $ — Other adjustments $ — Balance at August 31, 2022 $ 19,193 Balance at August 31, 2021 $ — |
Schedule of Customer Deposits | Changes in the Company's customer deposits balances for the three-month periods ended August 31, 2022 and 2021, respectively, are shown in the following table: Balance at May 31, 2022 $ 9,524 Balance at May 31, 2021 $ — Customer deposits received 4,587 Customer deposits received — Customer deposits refunded — Customer deposits refunded — Balance at August 31, 2022 $ 14,111 Balance at August 31, 2021 $ — |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | Below is a summary of the term loan balance, including current debt and deferred financing fees as of August 31, 2022 and May 31, 2022. (in thousands) August 31, May 31, 2022 Term Loan Balance $14,790 $7,324 Less: Deferred Issuance Costs (140) (94) Less: Current portion of Term Loan (2,587) (1,333) Long-term Portion of Term Loan $12,063 $5,897 |
Schedule of Maturities of Long-Term Debt | Below is a summary of the remaining principal payments due over the life of the Starion Loan Agreement note as of August 31, 2022. Year Principal Payments (in thousands) FY23 $ 1,923 FY24 2,726 FY25 2,923 FY26 3,134 FY27 3,361 Thereafter 583 Total Term Loan Remaining Payments $ 14,650 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following is a summary of the activity and balances for unvested restricted stock awards granted: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,665 $ 8.04 Granted — $ — Vested — $ — Forfeited — $ — Outstanding as of August 31, 2022 1,366,665 $ 8.04 Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,646 $ 8.04 Granted 505,834 $ 4.86 Vested — $ — Forfeited 416,650 $ 8.04 Outstanding as of August 31, 2022 1,880,830 $ 7.18 |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount | Total stock based compensation expense for the respective periods is listed below in thousands As of August 31, 2022 August 31, 2021 Stock-based compensation expense $579 $12,337 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The table below shows the calculation for this quarter’s earnings per share: Basic and diluted loss per share: Quarterly Period Ended August 31, 2022 August 31, 2021 Net loss from continuing operations $ (4,659) $ (14,340) Net gain from discontinued operations, net of income taxes — 243 Net loss including noncontrolling interests (4,659) (14,097) Net loss attributable to noncontrolling interest (128) — Net loss attributable to Applied Blockchain $ (4,531) $ (14,097) Basic and diluted net (loss) gain per share: Continuing Operations $ (0.05) $ (0.32) Discontinued Operations $ — $ 0.01 Basic and diluted net loss per share $ (0.05) $ (0.31) Basic and diluted weighted average number of shares outstanding 93,105,835 44,937,269 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Operating results of discontinued operations are summarized below: Three Months Ended August 31, 2022 August 31, 2021 Cryptoasset mining revenue, net $ — $ 612 Cost of sales — 349 Gross profit — 263 Impairment of cryptocurrency assets — (20) Net gain from discontinued operations $ — $ 243 |
BUSINESS AND ORGANIZATION - Nar
BUSINESS AND ORGANIZATION - Narrative (Details) | 3 Months Ended | |
Apr. 12, 2022 | Aug. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Stock split | 0.1667 | 0.1667 |
LIQUIDITY AND FINANCIAL CONDI_2
LIQUIDITY AND FINANCIAL CONDITION (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 | Aug. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash and cash equivalents of continuing operations | $ 40,830 | $ 46,299 | $ 28,929 |
Negative working capital | $ (6,300) |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Accounting Policies [Abstract] | ||
Restricted Cash | $ 7,500 | $ 7,501 |
BASIS OF PRESENTATION AND SIG_5
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 | Aug. 31, 2021 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 33,330 | $ 38,798 | |
Restricted Cash | 7,500 | 7,501 | |
Cash and cash equivalents | $ 40,830 | $ 46,299 | $ 28,929 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | May 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 96,942 | $ 65,269 |
Accumulated Depreciation | (1,847) | (1,009) |
Property Plant and Equipment, Net | $ 95,095 | 64,260 |
Electric Generation and Transformers | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Total cost of property and equipment | $ 4,376 | 4,338 |
Other Equipment and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 588 | 588 |
Other Equipment and Fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Other Equipment and Fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 46,086 | 18,305 |
Information Systems and Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Total cost of property and equipment | $ 9,675 | 9,608 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 2,125 | 1,074 |
Land Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Total cost of property and equipment | $ 1,259 | 1,180 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 39 years | |
Total cost of property and equipment | $ 32,833 | $ 30,176 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 838 | $ 3 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Concentration Risk by Major Customer (Details) - Customer Concentration Risk - Revenue Benchmark | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk | 35.50% | 0% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk | 21% | 0% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk | 16.50% | 0% |
Customer D | ||
Concentration Risk [Line Items] | ||
Concentration risk | 14.40% | 0% |
Customer E | ||
Concentration Risk [Line Items] | ||
Concentration risk | 12.60% | 0% |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) $ in Millions | Aug. 31, 2022 USD ($) |
Revenue, Major Customer [Line Items] | |
Revenue, remaining performance obligation, amount | $ 19.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-01 | |
Revenue, Major Customer [Line Items] | |
Revenue, remaining performance obligation, amount | $ 17.1 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Deferred Revenue (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Movement in Deferred Revenue [Roll Forward] | ||
Beginning balance | $ 3,877,000 | $ 0 |
Advance billings | 22,240,000 | 0 |
Revenue recognized | (6,924,000) | 0 |
Other adjustments | 0 | 0 |
Ending balance | $ 19,193,000 | $ 0 |
REVENUE FROM CONTRACTS WITH C_6
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Customer Deposits (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Customer Deposits [Roll Forward] | ||
Balance, beginning of period | $ 9,524,000 | $ 0 |
Customer deposits received | 4,587,000 | 0 |
Customer deposits refunded | 0 | 0 |
Balance, ending of period | $ 14,111,000 | $ 0 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | May 31, 2022 | |
Note Payable [Line Items] | |||
Loss on extinguishment of debt | $ 94 | $ 1,342 | |
Affiliated Entity | |||
Note Payable [Line Items] | |||
Notes payable, related parties | $ 470 | ||
Debt conversion, converted instrument, shares issued, fair value, per share (in dollars per share) | $ 0.75 | ||
Loss on extinguishment of debt | $ 1,300 | ||
Affiliated Entity | Minority Member of 1.21 Gigawatts | |||
Note Payable [Line Items] | |||
Due to related parties | 1,700 | $ 0 | |
Revenue from related parties | 2,500 | $ 0 | |
Due from related parties | $ 2,000 | $ 0 | |
Affiliated Entity | Convertible Common Stock | |||
Note Payable [Line Items] | |||
Debt conversion, converted instrument, shares issued (in shares) | 5,100,000 | ||
Affiliated Entity | Interest Payable | |||
Note Payable [Line Items] | |||
Due to related parties | $ 1,600 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 3 Months Ended | |||
Aug. 31, 2022 | Jul. 25, 2022 | May 31, 2022 | Mar. 11, 2022 | |
Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, net | $ 140,000 | $ 94,000 | ||
The Loan Agreement | Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Promissory note amount | $ 15,000,000 | |||
Interest rate | 6.50% | |||
Debt issuance costs, net | $ 142,000 | |||
Effective interest rate, percentage | 7% | |||
Vantage Bank Texas (VBT) Promissory Note | Medium-term Notes | ||||
Debt Instrument [Line Items] | ||||
Promissory note amount | $ 7,500,000 | |||
Interest rate | 5% | |||
Term | 5 years | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum borrowing capacity | $ 7,500,000 | $ 7,500,000 |
DEBT - Schedule of Long-Term De
DEBT - Schedule of Long-Term Debt Instruments (Details) - Medium-term Notes - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Debt Instrument [Line Items] | ||
Term Loan Balance | $ 14,790 | $ 7,324 |
Less: Deferred Issuance Costs | (140) | (94) |
Less: Current portion of Term Loan | (2,587) | (1,333) |
Long-term Portion of Term Loan | $ 12,063 | $ 5,897 |
DEBT - Schedule of Maturities o
DEBT - Schedule of Maturities of Long-Term Debt (Details) - The Loan Agreement - Medium-term Notes $ in Thousands | Aug. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
FY23 | $ 1,923 |
FY24 | 2,726 |
FY25 | 2,923 |
FY26 | 3,134 |
FY27 | 3,361 |
Thereafter | 583 |
Total Term Loan Remaining Payments | $ 14,650 |
SHAREHOLDERS' EQUITY (DEFICIT_2
SHAREHOLDERS' EQUITY (DEFICIT) - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Jun. 06, 2022 shares | Apr. 12, 2022 | Aug. 31, 2022 USD ($) $ / shares shares | May 31, 2022 $ / shares shares | Oct. 09, 2021 plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized (in shares) | 166,666,667 | 166,666,667 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock, shares outstanding (in shares) | 92,835,974 | 97,837,703 | |||
Stock split | 0.1667 | 0.1667 | |||
Unrecognized stock compensation expense | $ | $ 23,900 | ||||
Unrecognized stock compensation expense, period for recognition | 8 months 16 days | ||||
Number of equity incentive plans | plan | 2 | ||||
Xsquared Holding Limited | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock forfeited during period (in shares) | 4,965,432 |
SHAREHOLDERS' EQUITY (DEFICIT_3
SHAREHOLDERS' EQUITY (DEFICIT) - Schedule of Restricted Stock Awards (Details) - Restricted Stock | 3 Months Ended |
Aug. 31, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 1,366,665 |
Grants in period (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 1,366,665 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share) | $ / shares | $ 8.04 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Weighted average grant date fair value, outstanding at end of period (in dollars per share) | $ / shares | $ 8.04 |
SHAREHOLDERS' EQUITY (DEFICIT_4
SHAREHOLDERS' EQUITY (DEFICIT) - Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - $ / shares | 3 Months Ended | |
Aug. 31, 2022 | May 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 1,791,646 | |
Grants in period (in shares) | 505,834 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | 416,650 | |
Outstanding at end of period (in shares) | 1,880,830 | |
Weighted Average Grant Date Fair Value Per Share | ||
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share) | $ 7.18 | $ 8.04 |
Granted (in dollars per share) | 4.86 | |
Vested (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 8.04 | |
Weighted average grant date fair value, outstanding at end of period (in dollars per share) | $ 7.18 |
SHAREHOLDERS' EQUITY (DEFICIT_5
SHAREHOLDERS' EQUITY (DEFICIT) - Schedule of Share Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Equity [Abstract] | ||
Stock-based compensation | $ 579 | $ 12,337 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2022 USD ($) lease | |
Leases [Abstract] | |
Number of finance leases | lease | 11 |
Weighted average remaining lease term | 32 months |
Present value of lease liabilities | 7.33% |
Liability and right of use assets added during period | $ | $ 922 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Contractual obligation | $ 24,200 | |
Service contract, term | 5 years | |
Power purchased | $ 4,900 | $ 0 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss from continuing operations | $ (4,659) | $ (14,340) |
Net gain from discontinued operations, net of income taxes | 0 | 243 |
Net loss including noncontrolling interests | (4,659) | (14,097) |
Net loss attributable to noncontrolling interest | (128) | 0 |
Net loss attributable to Applied Blockchain | $ (4,531) | $ (14,097) |
Continuing Operations - basic ( in dollars per share) | $ (0.05) | $ (0.32) |
Continuing Operations - diluted ( in dollars per share) | (0.05) | (0.32) |
Discontinued Operations - basic ( in dollars per share) | 0 | 0.01 |
Discontinued Operations - diluted ( in dollars per share) | 0 | 0.01 |
Basic net loss per share (in dollars per share) | (0.05) | (0.31) |
Diluted net loss per share (in dollars per share) | $ (0.05) | $ (0.31) |
Basic weighted average number of shares outstanding (in shares) | 93,105,835 | 44,937,269 |
Diluted weighted average number of shares outstanding (in shares) | 93,105,835 | 44,937,269 |
DISCONTINUED OPERATIONS - Opera
DISCONTINUED OPERATIONS - Operating Results (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net gain from discontinued operations, net of income taxes | $ 0 | $ 243 |
Discontinued Operations, Held-for-sale | Mining Segment | Mining Segment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cryptoasset mining revenue, net | 0 | 612 |
Cost of sales | 0 | 349 |
Gross profit | 0 | 263 |
Impairment of cryptocurrency assets | 0 | (20) |
Net gain from discontinued operations, net of income taxes | $ 0 | $ 243 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Discontinued Operations, Held-for-sale | Mining Segment | Mining Segment | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets of discontinued operations | $ 0 | $ 0 |