Applied Digital (APLD) 10-Q 6 Apr 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Feb. 28, 2023	Apr. 06, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 28, 2023
Document Transition Report	false
Entity File Number	001-31968
Entity Registrant Name	APPLIED DIGITAL CORPORATION
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 2100
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 (in shares)		94,901,529
Entity Central Index Key	0001144879
Current Fiscal Year End Date	--05-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Feb. 28, 2023	May 31, 2022
Current Assets:
Cash and cash equivalents	$ 22,921	$ 46,299
Accounts receivable	82	227
Prepaid expenses and other current assets	1,387	1,336
Total current assets	24,390	47,862
Property and equipment, net	167,276	64,260
Right of use asset, net	12,911	6,408
Other Assets	3,030	1,450
TOTAL ASSETS	207,607	119,980
Current Liabilities:
Accounts payable and accrued liabilities	14,000	13,260
Current portion of lease liability	4,193	1,004
Current portion of term loan	4,855	1,333
Customer deposits	36,370	9,524
Current deferred revenue	47,619	3,877
Sales and use tax payable	1,563	0
Total current liabilities	108,600	28,998
Deferred tax liability	260	540
Long-term portion of lease liability	8,490	5,310
Long-term term loan	18,862	5,897
Total liabilities	136,212	40,745
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, 166,666,667 shares authorized, 99,471,127 shares issued and 94,469,399 shares outstanding at February 28, 2023, and 97,837,702 shares issued and 97,801,406 shares outstanding at May 31, 2022	100	98
Treasury stock, 5,001,728 shares at February 28, 2023 and 36,296 shares at May 31, 2022, at cost	(62)	(62)
Additional paid in capital	155,055	128,293
Accumulated deficit	(94,243)	(56,070)
Total stockholders’ equity attributable to Applied Digital Corporation	60,850	72,259
Noncontrolling interest	10,545	6,976
Total Stockholders' equity including noncontrolling interest	71,395	79,235
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$ 207,607	$ 119,980

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Feb. 28, 2023	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)	99,471,127	97,837,702
Common stock, shares outstanding (in shares)	94,469,399	97,801,406
Treasury stock, (in shares)	5,001,728	36,296

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Revenues:
Hosting revenue	$ 14,090	$ 1,026	$ 33,354	$ 1,026
Cost of revenues	10,533	2,073	28,438	2,073
Gross profit	3,557	(1,047)	4,916	(1,047)
Costs and expenses:
Selling, general and administrative	10,514	1,370	42,727	15,585
Total costs and expenses	10,514	1,370	42,727	15,585
Operating loss	(6,957)	(2,417)	(37,811)	(16,632)
Other income (expense):
Interest Expense	(384)	0	(1,125)	0
Gain on extinguishment of accounts payable	0	80	0	405
Loss on extinguishment of debt	0	0	(94)	(1,342)
Total other expense, net	(384)	80	(1,219)	(937)
Net loss from continuing operations before income tax expenses	(7,341)	(2,337)	(39,030)	(17,569)
Income tax benefit (expense)	0	(60)	280	(274)
Net loss from continuing operations	(7,341)	(2,397)	(38,750)	(17,843)
Net gain from discontinued operations, net of income taxes	0	(4,048)	0	(2,870)
Net loss including noncontrolling interests	(7,341)	(6,445)	(38,750)	(20,713)
Net loss attributable to noncontrolling interest	(316)	0	(577)	0
Net loss attributable to Applied Digital Corporation	$ (7,025)	$ (6,445)	$ (38,173)	$ (20,713)
Basic and diluted net (loss) gain per share:
Continuing Operations - basic ( in dollars per share)	$ (0.08)	$ (0.04)	$ (0.41)	$ (0.35)
Continuing Operations - diluted ( in dollars per share)	(0.08)	(0.04)	(0.41)	(0.35)
Discontinued Operations - basic ( in dollars per share)	0	(0.08)	0	(0.06)
Discontinued Operations - diluted ( in dollars per share)	0	(0.08)	0	(0.06)
Basic net loss per share (in dollars per share)	(0.08)	(0.12)	(0.41)	(0.41)
Diluted net loss per share (in dollars per share)	$ (0.08)	$ (0.12)	$ (0.41)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)	94,119,944	53,396,920	93,545,687	50,546,048
Diluted weighted average number of shares outstanding (in shares)	94,119,944	53,396,920	93,545,687	50,546,048

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Total	Parent	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated deficit	Noncontrolling Interest	Series C Convertible Redeemable Preferred Stock	Series D Convertible Redeemable 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]
Preferred Stock Dividends Accrued (in shares)								16,086	33,624
Preferred Stock Dividends Accrued	1,242							$ 402	$ 840
Issuance of Preferred Stock (in shares)									1,380,000
Issuance of Preferred Stock	34,500								$ 34,500
Issuance Costs of Preferred Stock	(2,926)								$ (2,926)
Ending balance (in shares) at Feb. 28, 2022								676,086	1,413,624
Ending balance at Feb. 28, 2022	47,951							$ 15,537	$ 32,414
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, treasury stock (in shares) at May. 31, 2021				(36,296,000)
Beginning balance at May. 31, 2021	(2,583)		$ 9	$ (62)	$ 13,874	$ (21,623)						$ 3,370	$ 1,849
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Extinguishment of Debt (in shares)			5,083,828
Extinguishment of Debt	3,477		$ 31		3,446
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										$ 172	$ 14,108	$ (9,452)	$ (4,828)
Service agreement stock compensation (in shares)			18,036,723
Service agreement stock compensation	12,337		$ 108		12,229
Preferred Stock Dividends Accrued	(1,242)					(1,242)
Net loss including noncontrolling interests	(20,713)					(20,713)
Ending balance, preferred stock (in shares) at Feb. 28, 2022												0	0
Ending balance, common stock (in shares) at Feb. 28, 2022			53,396,920
Ending balance, treasury stock (in shares) at Feb. 28, 2022				(36,296,000)
Ending balance at Feb. 28, 2022	(8,609)		$ 320	$ (62)	43,657	(52,524)						$ 0	$ 0
Beginning balance (in shares) at Nov. 30, 2021								660,000	1,380,000
Beginning balance at Nov. 30, 2021	46,709							$ 15,135	$ 31,574
Increase (Decrease) in Temporary Equity [Roll Forward]
Preferred Stock Dividends Accrued (in shares)								16,086	33,624
Preferred Stock Dividends Accrued	1,242							$ 402	$ 840
Ending balance (in shares) at Feb. 28, 2022								676,086	1,413,624
Ending balance at Feb. 28, 2022	47,951							$ 15,537	$ 32,414
Beginning balance, common stock (in shares) at Nov. 30, 2021			53,396,920
Beginning balance, treasury stock (in shares) at Nov. 30, 2021				(36,296,000)
Beginning balance at Nov. 30, 2021	(922)		$ 320	$ (62)	43,657	(44,837)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Preferred Stock Dividends Accrued	(1,242)					(1,242)
Net loss including noncontrolling interests	(6,445)					(6,445)
Ending balance, preferred stock (in shares) at Feb. 28, 2022												0	0
Ending balance, common stock (in shares) at Feb. 28, 2022			53,396,920
Ending balance, treasury stock (in shares) at Feb. 28, 2022				(36,296,000)
Ending balance at Feb. 28, 2022	$ (8,609)		$ 320	$ (62)	43,657	(52,524)						$ 0	$ 0
Beginning balance, common stock (in shares) at May. 31, 2022	97,801,406		97,837,702
Beginning balance, treasury stock (in shares) at May. 31, 2022				(36,296)
Beginning balance at May. 31, 2022	$ 79,235	$ 72,259	$ 98	$ (62)	128,293	(56,070)	$ 6,976
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock - vesting of restricted stock units (in shares)	1,633,425
Issuance of common stock - vesting of restricted stock units	$ (114)	(114)	$ 2		(116)
Stock-based compensation	26,878	26,878			26,878
Capital contribution to noncontrolling interest	4,146						4,146
Stock forfeited during period (in shares)				(4,965,432)
Net loss including noncontrolling interests	$ (38,750)	(38,173)				(38,173)	(577)
Ending balance, common stock (in shares) at Feb. 28, 2023	94,469,399		99,471,127
Ending balance, treasury stock (in shares) at Feb. 28, 2023				(5,001,728)
Ending balance at Feb. 28, 2023	$ 71,395	60,850	$ 100	$ (62)	155,055	(94,243)	10,545
Beginning balance, common stock (in shares) at Nov. 30, 2022			98,948,081
Beginning balance, treasury stock (in shares) at Nov. 30, 2022				(5,001,728)
Beginning balance at Nov. 30, 2022	$ 71,970	63,509	$ 99	$ (62)	150,690	(87,218)	8,461
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock - vesting of restricted stock units (in shares)	523,046
Issuance of common stock - vesting of restricted stock units	$ (114)	(114)	$ 1		(115)
Stock-based compensation	4,480	4,480			4,480
Capital contribution to noncontrolling interest	2,400						2,400
Net loss including noncontrolling interests	$ (7,341)	(7,025)				(7,025)	(316)
Ending balance, common stock (in shares) at Feb. 28, 2023	94,469,399		99,471,127
Ending balance, treasury stock (in shares) at Feb. 28, 2023				(5,001,728)
Ending balance at Feb. 28, 2023	$ 71,395	$ 60,850	$ 100	$ (62)	$ 155,055	$ (94,243)	$ 10,545

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022
CASH FLOW FROM OPERATING ACTIVITIES
Net loss attributable to Applied Digital Corporation	$ (38,173)	$ (20,713)
Net loss from discontinued operations, net of income taxes	0	(2,870)
Net loss attributable to noncontrolling interest	(577)	0
Net loss from continuing operations	(38,750)	(17,843)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and Amortization	4,631	245
Gain on extinguishment of accounts payable	0	(405)
Loss on extinguishment of debt	94	1,342
Stock-Based Compensation	26,878	12,337
Lease Expense	246	136
Deferred Tax	(280)	274
Changes in assets and liabilities:
Accounts receivable	145	12
Prepaid expenses and other current assets	(51)	(2,091)
Customer deposits	26,846	2,126
Deferred revenue	43,742	2,883
Accounts payable and accrued liabilities	(10,020)	4,479
Sales and use tax payable	1,563	0
Interest on finance leases	(104)	0
Lease Assets and Liabilities	(796)	(233)
Net cash provided by operating activities of continuing operations	54,144	3,262
Net cash provided by operating activities of discontinued operations	0	966
NET CASH PROVIDED BY OPERATING ACTIVITIES	54,144	4,228
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment	(96,214)	(28,180)
Investments in private companies	(100)	0
Net cash used in investing activities of continuing operations	(96,314)	(28,180)
Net cash used in investing activities of discontinued operations	0	(7,408)
NET CASH USED IN INVESTING ACTIVITIES	(96,314)	(35,588)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of preferred stock	0	34,500
Repayment of finance leases	(1,635)	(2)
Preferred issuance costs	0	(2,927)
Term loan payoff	(7,056)	0
Proceeds from issuance of term loan	25,567	0
Term Loan Issuance Costs	(333)	0
Loan Payments	(1,784)	0
Payments of employee restricted stock tax withholdings	(114)	0
Noncontrolling interest contributions	4,147	0
Net cash provided by financing activities of continuing operations	18,792	31,571
Net cash provided by financing activities of discontinued operations	0	0
CASH FLOW PROVIDED BY FINANCING ACTIVITIES	18,792	31,571
NET (DECREASE ) INCREASE IN CASH AND CASH EQUIVALENTS	(23,378)	211
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	46,299	11,750
CASH AND CASH EQUIVALENTS, END OF PERIOD	22,921	11,961
Less: cash and cash equivalents of discontinued operations	0	0
Cash and cash equivalents of continuing operations	22,921	11,961
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest Paid	1,118	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Right-of-use asset obtained by lease obligation	8,693	1,207
Fixed assets in accounts payable	$ 9,384	$ 12,156

BUSINESS AND ORGANIZATION

BUSINESS AND ORGANIZATION	9 Months Ended
	Feb. 28, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS AND ORGANIZATION	BUSINESS AND ORGANIZATION Applied Digital Corporation, f/k/a Applied Blockchain, Inc. (the “Company”), is a builder and operator of Next-Gen data centers across North America, which provide substantial computing power to high power computing applications such as blockchain infrastructure, nature language processing, and artificial intelligence. 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. On April 12, 2022, the Company effected a one-for-six (1:6) reverse split (the “Reverse Stock Split”) of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). 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 fractional share. On September 1, 2022, Company entered into a joint venture agreement with GMR Limited (“GMR”) to form Highland Digital Holdings, LLC (“Highland Digital”), which may acquire mining hardware and digital infrastructure assets. The Company and GMR each have a 50% ownership stake in Highland Digital. GMR is the controlling partner and will consolidate the results of Highland Digital in its financial statements. The Company will not consolidate Highland Digital in its financial statements, but will account for the entity under the equity method. In the Quarterly Report on Form 10-Q filed for the quarter ended November 30, 2022, Company had disclosed a firm commitment of $0.6 million to Highland Digital. During the period ended February 28, 2023, the Company’s obligation to fulfill that commitment was relieved, and the Company no longer has such commitment. On February 17, 2023, the Company entered into a letter of credit agreement with Frost Bank for $7.0 million to secure the Company’s power contract at the Ellendale, North Dakota facility. The agreement runs through February 2024.

LIQUIDITY AND FINANCIAL CONDITI

LIQUIDITY AND FINANCIAL CONDITION	9 Months Ended
	Feb. 28, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND FINANCIAL CONDITION	LIQUIDITY AND FINANCIAL CONDITIONAs of February 28, 2023, the Company had approximate cash and cash equivalents of $22.9 million and negative working capital of $84.2 million. Historically the Company has incurred losses and has relied on equity and debt financings to fund its operations. Based on an 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	9 Months Ended
	Feb. 28, 2023
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The accompanying interim unaudited condensed 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 unaudited condensed 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 and nine months ended February 28, 2023 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 unaudited condensed 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 of 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 letters of credit that it holds with Vantage Bank and Frost Bank. The Company is required to keep these balances in separate accounts for the duration of the letter of credit agreements, which last through January 2024 and February 2024, respectively. The Company also has restricted cash related to its Starion Term Loan Buy-Down (as defined below). The following table reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of February 28, 2023 and May 31, 2022. (in thousands) February 28, 2023 May 31, 2022 Net Cash & Equivalents $ 8,421 $ 38,798 Restricted Cash $ 14,500 $ 7,501 Total Cash & Cash Equivalents $ 22,921 $ 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. Reclassifications Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.

PROPERTY AND EQUIPMENT AND DEPO

PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT	9 Months Ended
	Feb. 28, 2023
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT	PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT Property and equipment consisted of the following as of February 28, 2023, and May 31, 2022: (in thousands) Estimated Useful Life February 28, May 31, Hosting Equipment Electric Generation and Transformers 15 years $ 4,520 $ 4,338 Other Equipment and Fixtures 5 years-7 years 1,034 588 Construction in Progress 109,822 18,305 Information Systems and Software 5 years 11,229 9,608 Land & Building Land 2,152 1,074 Land Improvements 15 years 1,285 1,180 Building 39 years 33,008 30,176 Deposits on Equipment 7,816 — Total cost of property and equipment 170,865 65,269 Accumulated Depreciation (3,590) (1,009) Property and Equipment, Net $ 167,276 $ 64,260

REVENUE FROM CONTRACTS WITH CUS

REVENUE FROM CONTRACTS WITH CUSTOMERS	9 Months Ended
	Feb. 28, 2023
Revenue from Contract with Customer [Abstract]
REVENUE FROM CONTRACTS WITH CUSTOMERS	REVENUE FROM CONTRACTS WITH CUSTOMERS The Company recognizes revenue when promised services are transferred to customers in an amount that reflects the consideration 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 and nine months ended February 28, 2023 and 2022, respectively. Three Months Ended February 28, Customer 2023 2022 Customer A 26 % 62 % Customer B 25 % — % Customer C 16 % 16 % Customer D 13 % 9 % Customer E 13 % 13 % Others 7 % — % Nine Months Ended February 28, Customer 2023 2022 Customer A 31 % 62 % Customer B 23 % — % Customer C 17 % 16 % Customer D 14 % 9 % Customer E 13 % 13 % Others 3 % — % Remaining Performance Obligations As of February 28, 2023, the Company had $47.6 million in deferred revenue, which represents the Company’s remaining performance obligations. The Company expects to recognize the entire $47.6 million within the next 12 months. Deferred Revenue Changes in the Company's deferred revenue balances from hosting operations for the three and nine months ended February 28, 2023 and 2022, respectively, are shown in the following table: (in thousands) (in thousands) Three Months Ended February 28, 2023 Three Months Ended February 28, 2022 Balance at November 30, 2022 $ 29,394 Balance at November 30, 2021 $ — Advance billings $ 32,315 Advance billings $ 3,909 Revenue recognized $ (14,090) Revenue recognized $ (1,026) Other adjustments $ — Other adjustments $ — Balance at February 28, 2023 $ 47,619 Balance at February 28, 2022 $ 2,883 (in thousands) (in thousands) Nine Months Ended February 28, 2023 Nine Months Ended February 28, 2022 Balance at May 31, 2022 $ 3,877 Balance at May 31, 2021 $ — Advance billings $ 76,961 Advance billings $ 3,909 Revenue recognized $ (33,354) Revenue recognized $ (1,026) Other adjustments $ 135 Other adjustments $ — Balance at February 28, 2023 $ 47,619 Balance at February 28, 2022 $ 2,883 Customer Deposits Changes in the Company's customer deposits balances for the three and nine months ended February 28, 2023 and 2022, respectively, are shown in the following table: (in thousands) (in thousands) Three Months Ended February 28, 2023 Three Months Ended February 28, 2022 Balance at November 30, 2022 $ 24,689 Balance at November 30, 2021 $ — Customer deposits received $ 11,681 Customer deposits received $ 5,645 Customer deposits refunded $ — Customer deposits refunded $ — Other adjustments $ — Other adjustments $ — Balance at February 28, 2023 $ 36,370 Balance at February 28, 2022 $ 5,645 (in thousands) (in thousands) Nine Months Ended February 28, 2023 Nine Months Ended February 28, 2022 Balance at May 31, 2022 $ 9,524 Balance at May 31, 2021 $ — Customer deposits received $ 26,980 Customer deposits received $ 5,645 Customer deposits refunded $ — Customer deposits refunded $ — Other adjustments $ (135) Other adjustments $ — Balance at February 28, 2023 $ 36,370 Balance at February 28, 2022 $ 5,645

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Feb. 28, 2023
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 period ended February 28, 2022, a related party note payable was held by the CEO of the Company. During this period, the outstanding debt principal of $0.5 million and accrued interest of $1.6 million were 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 an exchange agreement, the note payable was surrendered and cancelled, and all rights including rights to accrued interest due were extinguished. Related Party Revenue The Company has material transactions with two related parties Company A is a customer and is also the parent company of the minority member of the 1.21 Gigawatts joint venture.. Company B is a customer and is also the controlling member of the Highland Digital joint venture. Company B became a related party during September 2022. The following tables illustrate related party revenue for the three and nine months ended February 28, 2023 and February 28, 2022. Revenue for the Three Months ended (in thousands) February 28, 2023 February 28, 2022 Customer A $ 3,700 $ 634 Customer B $ 5,828 $ 392 Revenue for the Nine Months ended (in thousands) February 28, 2023 February 28, 2022 Customer A $ 10,169 $ 634 Customer B $ 14,450 $ 392 The following tables illustrate related party deferred revenue and deposits balances as of February 28, 2023 and May 31, 2022. Customer A Balances as of (in thousands) February 28, 2023 May 31, 2022 Deferred revenue $ 1,616 $ 1,721 Customer Deposits $ 1,584 $ 1,719 Customer B Balances as of (in thousands) February 28, 2023 May 31, 2022 Deferred revenue $ 2,997 $ 1,150 Customer Deposits $ 7,214 $ 5,048

DEBT

DEBT	9 Months Ended
	Feb. 28, 2023
Debt Disclosure [Abstract]
DEBT	DEBT Letter of Credit As of February 28, 2023 and May 31, 2022, the Company had letters of credit with Vantage Bank and Frost Bank that together total $14.5 million. As discussed in Footnote 3, the Company is required to maintain theses amount in separate cash balance, and therefore the cash is restricted. Further, the Company had no unused lines of credit as of February 28, 2023 or May 31, 2022, respectively. Starion Term Loan On July 25, 2022, APLD Hosting, LLC, a wholly-owned subsidiary of Applied Digital Corporation, entered into a Loan Agreement with Starion Bank 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 that time, the Company will be subject to a debt service coverage ratio. Deferred financing costs related to the Starion Term Loan total $0.1 million. The City of Jamestown, North Dakota and Stutsman County’s Economic Development Fund provides a multimillion-dollar economic development program, available to assist with expanding or relocating businesses. As part of financial packages, the Jamestown Stutsman Development Corporation (JSDC) makes direct loans, equity investments, and interest buy-downs to businesses. The Company has entered into an agreement with JDSC and Starion Bank which buys down the Company’s interest rate to 1.5% for a period of 13 months through a loan and community bond (the “Starion Term Loan Buy-Down”). The loan totals $0.2 million and bears an interest rate of 2%, and the bond totals $0.5 million. In connection with the Starion Loan Agreement, the Company repaid all of the outstanding balance on the March 11, 2022 agreement between the Company and Vantage Bank Texas. This agreement included a promissory note agreement for $7.5 million for a five year term with an interest rate of 5% per annum. Vantage Garden City Loan On November 7, 2022, APLD – Rattlesnake Den I, LLC, a wholly-owned subsidiary of the Company, entered into a Loan Agreement with Vantage Bank Texas and the Company, as guarantor, which agreement provides for a term loan in the principal amount of $15 million (the “Vantage Garden City Loan Agreement”). The Vantage Garden City Loan Agreement will be advanced in 16 installments for working capital needs for the Borrower’s datacenter in Garden City, Texas, with each installment not exceeding approximately $0.9 million for the costs and expenses of a building at the Company’s hosting facility in Garden City, Texas (the “Garden City Facility”). The unpaid principal amount of the Vantage Garden City Loan Agreement will bear interest at a fixed rate of 6.15% per annum, and the Borrower may prepay the Vantage Garden City Loan Agreement, in whole or in part, without the payment of any fee or penalty. The Vantage Garden City Loan Agreement matures April 26, 2028. The Vantage Garden City Loan Agreement contains customary representations, warranties, covenants and events of default. As of February 28, 2023, an aggregate amount of $10.3 million has been advanced under the Vantage Garden City Loan Agreement. Total deferred costs related to the issuance of this loan total are $0.2 million. Starion Ellendale Loan On February 16, 2023, APLD ELN-01 LLC, a wholly-owned subsidiary of the Company, entered into a Loan Agreement with Starion Bank and the Company as Guarantor (the “Ellendale Loan Agreement”). The Ellendale Loan Agreement provides for a term loan in the principal amount of $20 million with a maturity date of February 3, 2028. The Loan Agreement contains customary covenants, representations and warranties and events of default. The Loan Agreement provides for an interest rate of 7.48% per annum. The proceeds of the Loan will be used to fund expansion on the Ellendale hosting datacenter. As of February 28, 2023, the Company had not received funding from the Ellendale Loan Agreement, and accordingly no amounts have been included in the tables below. Remaining Principal Payments and Term Loan Balances Below is a summary of the remaining principal payments due over the life of the term loans as of February 28, 2023. Year Principal Payments (in thousands) FY23 $ 901 FY24 5,502 FY25 5,887 FY26 6,231 FY27 5,004 Thereafter 526 Total Term Loan Remaining Payments $ 24,051 Below is a summary of the Company’s term loan balances, including current debt and deferred financing fees as of February 28, 2023 and May 31, 2022. (in thousands) February 28, 2023 May 31, 2022 Term Loan Balance $24,051 $7,324 Less: Deferred Issuance Costs (333) (94) Less: Current portion of Term Loan (4,855) (1,333) Long-term Portion of Term Loan $18,862 $5,897

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Feb. 28, 2023
Equity [Abstract]
STOCKHOLDERS' EQUITY	STOCKHOLDERS’ EQUITY Common Stock The table below illustrates the Company’s common stock balances as February 28, 2023 and May 31, 2022. Share Amounts As Of February 28, 2023 May 31, 2022 Authorized to Issue 166,666,667 166,666,667 Issued 99,471,127 97,837,702 Outstanding 94,469,399 97,801,406 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 for the nine months ended February 28, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,666 $ 8.04 Granted 77,500 $ 2.04 Vested (1,048,333) $ 7.60 Forfeited — $ — Outstanding as of February 28, 2023 395,833 $ 8.04 As of February 28, 2023, total remaining expense to be recognized related to these awards was $0.2 million and the weighted average remaining recognition period for the unvested awards was one month. Restricted Stock Units The Company has granted restricted stock unit awards (“RSUs”) 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. Equity Plans 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 for deferral of cash and stock compensation if such deferral provisions are activated at a future date. As of February 28, 2023, the Company had issued approximately 8.0 million awards under the plans. The following is a summary of the activity and balances for unvested restricted stock units granted for the nine months ended February 28, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,666 $ 8.04 Granted 7,897,907 $ 2.32 Vested (630,529) $ 5.33 Forfeited (473,748) $ 7.32 Outstanding as of February 28, 2023 8,585,296 $ 3.01 As of February 28, 2023, total remaining expense to be recognized related to these awards was $13.3 million and the weighted average remaining recognition period for the unvested awards was 20 months. Share Forfeiture On June 6, 2022, through an agreement between the Company and Xsquared Holding Limited (“Sparkpool”), Sparkpool agreed to forfeit 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 returned to the Company and placed in treasury.

LEASES

LEASES	9 Months Ended
	Feb. 28, 2023
Leases [Abstract]
LEASES	LEASES During the nine months ended February 28, 2023, the Company entered into twenty-five new leases, bringing the total number of leases to 44. The Company considered the nature of the leases under ASC 842 Leases
LEASES	LEASES During the nine months ended February 28, 2023, the Company entered into twenty-five new leases, bringing the total number of leases to 44. The Company considered the nature of the leases under ASC 842 Leases

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Feb. 28, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments As of February 28, 2023, the Company has commitments related to its term loan and lease agreements , which have been disclosed in Note 7 - Debt and Note 9 - Leases, respectively. Energy Commitment The Company also has an annual minimum commitment of approximately $24.2 million related to the energy services agreement for its Jamestown, North Dakota cohosting facility as of February 28, 2023. 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. Claims and Litigation

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Feb. 28, 2023
Earnings Per Share [Abstract]
EARNINGS PER SHARE	EARNINGS PER SHARE Basic 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. The table below shows the calculation for earnings per share: Basic and diluted loss per share: Three Months Ended Nine Months Ended February 28, 2023 February 28, 2022 February 28, 2023 February 28, 2022 Net loss from continuing operations $ (7,341) $ (2,397) $ (38,750) $ (17,843) Net loss from discontinued operations, net of income taxes — (4,048) — (2,870) Net loss including noncontrolling interests (7,341) (6,445) (38,750) (20,713) Net loss attributable to noncontrolling interest (316) — (577) — Net loss attributable to Applied Digital Corporation $ (7,025) $ (6,445) $ (38,173) $ (20,713) Basic and diluted net (loss) gain per share: Continuing Operations $ (0.08) $ (0.04) $ (0.41) $ (0.35) Discontinued Operations $ — $ (0.08) $ — $ (0.06) Basic and diluted net loss per share $ (0.08) $ (0.12) $ (0.41) $ (0.41) Basic and diluted weighted average number of shares outstanding 94,119,944 53,396,920 93,545,687 50,546,048

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	9 Months Ended
	Feb. 28, 2023
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 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 Nine Months Ended in thousands February 28, 2023 February 28, 2022 February 28, 2023 February 28, 2022 Cryptoasset mining revenue, net $ — $ 907 $ — $ 2,945 Cost of sales — 628 — 1,589 Gross profit — 279 — 1,356 Impairment of cryptocurrency assets — (225) — (390) Loss on the sale of fixed assets $ — (578) $ — (582) Loss on the reclassification of fixed assets (3,524) (3,254) Net loss from discontinued operations $ — $ (4,048) $ — $ (2,870)

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Feb. 28, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSOn March 30, 2023, the Company received funding for the Starion Ellendale Loan. The funding, net of issuance fees, totaled $19.8 million. See full discussion over Starion Ellendale Loan in in Note 7 - Debt.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Feb. 28, 2023
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation: The accompanying interim unaudited condensed 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
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 and nine months ended February 28, 2023 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 unaudited condensed 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 of 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 PronouncementsThe 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.
Reclassifications	Reclassifications Within the Condensed Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities.
Revenue Recognition	The Company recognizes revenue when promised services are transferred to customers in an amount that reflects the consideration 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)	9 Months Ended
	Feb. 28, 2023
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents	The following table reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of February 28, 2023 and May 31, 2022. (in thousands) February 28, 2023 May 31, 2022 Net Cash & Equivalents $ 8,421 $ 38,798 Restricted Cash $ 14,500 $ 7,501 Total Cash & Cash Equivalents $ 22,921 $ 46,299

PROPERTY AND EQUIPMENT AND DE_2

PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT (Tables)	9 Months Ended
	Feb. 28, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	Property and equipment consisted of the following as of February 28, 2023, and May 31, 2022: (in thousands) Estimated Useful Life February 28, May 31, Hosting Equipment Electric Generation and Transformers 15 years $ 4,520 $ 4,338 Other Equipment and Fixtures 5 years-7 years 1,034 588 Construction in Progress 109,822 18,305 Information Systems and Software 5 years 11,229 9,608 Land & Building Land 2,152 1,074 Land Improvements 15 years 1,285 1,180 Building 39 years 33,008 30,176 Deposits on Equipment 7,816 — Total cost of property and equipment 170,865 65,269 Accumulated Depreciation (3,590) (1,009) Property and Equipment, Net $ 167,276 $ 64,260

REVENUE FROM CONTRACTS WITH C_2

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)	9 Months Ended
	Feb. 28, 2023
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 and nine months ended February 28, 2023 and 2022, respectively. Three Months Ended February 28, Customer 2023 2022 Customer A 26 % 62 % Customer B 25 % — % Customer C 16 % 16 % Customer D 13 % 9 % Customer E 13 % 13 % Others 7 % — % Nine Months Ended February 28, Customer 2023 2022 Customer A 31 % 62 % Customer B 23 % — % Customer C 17 % 16 % Customer D 14 % 9 % Customer E 13 % 13 % Others 3 % — %
Schedule of Deferred Revenue	Changes in the Company's deferred revenue balances from hosting operations for the three and nine months ended February 28, 2023 and 2022, respectively, are shown in the following table: (in thousands) (in thousands) Three Months Ended February 28, 2023 Three Months Ended February 28, 2022 Balance at November 30, 2022 $ 29,394 Balance at November 30, 2021 $ — Advance billings $ 32,315 Advance billings $ 3,909 Revenue recognized $ (14,090) Revenue recognized $ (1,026) Other adjustments $ — Other adjustments $ — Balance at February 28, 2023 $ 47,619 Balance at February 28, 2022 $ 2,883 (in thousands) (in thousands) Nine Months Ended February 28, 2023 Nine Months Ended February 28, 2022 Balance at May 31, 2022 $ 3,877 Balance at May 31, 2021 $ — Advance billings $ 76,961 Advance billings $ 3,909 Revenue recognized $ (33,354) Revenue recognized $ (1,026) Other adjustments $ 135 Other adjustments $ — Balance at February 28, 2023 $ 47,619 Balance at February 28, 2022 $ 2,883
Schedule of Customer Deposits	Changes in the Company's customer deposits balances for the three and nine months ended February 28, 2023 and 2022, respectively, are shown in the following table: (in thousands) (in thousands) Three Months Ended February 28, 2023 Three Months Ended February 28, 2022 Balance at November 30, 2022 $ 24,689 Balance at November 30, 2021 $ — Customer deposits received $ 11,681 Customer deposits received $ 5,645 Customer deposits refunded $ — Customer deposits refunded $ — Other adjustments $ — Other adjustments $ — Balance at February 28, 2023 $ 36,370 Balance at February 28, 2022 $ 5,645 (in thousands) (in thousands) Nine Months Ended February 28, 2023 Nine Months Ended February 28, 2022 Balance at May 31, 2022 $ 9,524 Balance at May 31, 2021 $ — Customer deposits received $ 26,980 Customer deposits received $ 5,645 Customer deposits refunded $ — Customer deposits refunded $ — Other adjustments $ (135) Other adjustments $ — Balance at February 28, 2023 $ 36,370 Balance at February 28, 2022 $ 5,645

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	9 Months Ended
	Feb. 28, 2023
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	The following tables illustrate related party revenue for the three and nine months ended February 28, 2023 and February 28, 2022. Revenue for the Three Months ended (in thousands) February 28, 2023 February 28, 2022 Customer A $ 3,700 $ 634 Customer B $ 5,828 $ 392 Revenue for the Nine Months ended (in thousands) February 28, 2023 February 28, 2022 Customer A $ 10,169 $ 634 Customer B $ 14,450 $ 392 The following tables illustrate related party deferred revenue and deposits balances as of February 28, 2023 and May 31, 2022. Customer A Balances as of (in thousands) February 28, 2023 May 31, 2022 Deferred revenue $ 1,616 $ 1,721 Customer Deposits $ 1,584 $ 1,719 Customer B Balances as of (in thousands) February 28, 2023 May 31, 2022 Deferred revenue $ 2,997 $ 1,150 Customer Deposits $ 7,214 $ 5,048

DEBT (Tables)

DEBT (Tables)	9 Months Ended
	Feb. 28, 2023
Debt Disclosure [Abstract]
Schedule of Maturities of Long-Term Debt	Below is a summary of the remaining principal payments due over the life of the term loans as of February 28, 2023. Year Principal Payments (in thousands) FY23 $ 901 FY24 5,502 FY25 5,887 FY26 6,231 FY27 5,004 Thereafter 526 Total Term Loan Remaining Payments $ 24,051
Schedule of Long-Term Debt Instruments	Below is a summary of the Company’s term loan balances, including current debt and deferred financing fees as of February 28, 2023 and May 31, 2022. (in thousands) February 28, 2023 May 31, 2022 Term Loan Balance $24,051 $7,324 Less: Deferred Issuance Costs (333) (94) Less: Current portion of Term Loan (4,855) (1,333) Long-term Portion of Term Loan $18,862 $5,897

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Feb. 28, 2023
Equity [Abstract]
Schedule of Common Stock	The table below illustrates the Company’s common stock balances as February 28, 2023 and May 31, 2022. Share Amounts As Of February 28, 2023 May 31, 2022 Authorized to Issue 166,666,667 166,666,667 Issued 99,471,127 97,837,702 Outstanding 94,469,399 97,801,406
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 for the nine months ended February 28, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,666 $ 8.04 Granted 77,500 $ 2.04 Vested (1,048,333) $ 7.60 Forfeited — $ — Outstanding as of February 28, 2023 395,833 $ 8.04 Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,666 $ 8.04 Granted 7,897,907 $ 2.32 Vested (630,529) $ 5.33 Forfeited (473,748) $ 7.32 Outstanding as of February 28, 2023 8,585,296 $ 3.01

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Feb. 28, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The table below shows the calculation for earnings per share: Basic and diluted loss per share: Three Months Ended Nine Months Ended February 28, 2023 February 28, 2022 February 28, 2023 February 28, 2022 Net loss from continuing operations $ (7,341) $ (2,397) $ (38,750) $ (17,843) Net loss from discontinued operations, net of income taxes — (4,048) — (2,870) Net loss including noncontrolling interests (7,341) (6,445) (38,750) (20,713) Net loss attributable to noncontrolling interest (316) — (577) — Net loss attributable to Applied Digital Corporation $ (7,025) $ (6,445) $ (38,173) $ (20,713) Basic and diluted net (loss) gain per share: Continuing Operations $ (0.08) $ (0.04) $ (0.41) $ (0.35) Discontinued Operations $ — $ (0.08) $ — $ (0.06) Basic and diluted net loss per share $ (0.08) $ (0.12) $ (0.41) $ (0.41) Basic and diluted weighted average number of shares outstanding 94,119,944 53,396,920 93,545,687 50,546,048

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	9 Months Ended
	Feb. 28, 2023
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Operating results of discontinued operations are summarized below: Three Months Ended Nine Months Ended in thousands February 28, 2023 February 28, 2022 February 28, 2023 February 28, 2022 Cryptoasset mining revenue, net $ — $ 907 $ — $ 2,945 Cost of sales — 628 — 1,589 Gross profit — 279 — 1,356 Impairment of cryptocurrency assets — (225) — (390) Loss on the sale of fixed assets $ — (578) $ — (582) Loss on the reclassification of fixed assets (3,524) (3,254) Net loss from discontinued operations $ — $ (4,048) $ — $ (2,870)

BUSINESS AND ORGANIZATION - Nar

BUSINESS AND ORGANIZATION - Narrative (Details) $ / shares in Units, $ in Thousands	Apr. 12, 2022 $ / shares	Feb. 28, 2023 USD ($) $ / shares	Feb. 17, 2023 USD ($)	Nov. 30, 2022 USD ($)	Sep. 01, 2022	May 31, 2022 USD ($) $ / shares
Noncontrolling Interest [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001				$ 0.001
Committed amount				$ 600
Stock split	0.1667
Letter of Credit
Noncontrolling Interest [Line Items]
Line of credit, maximum borrowing capacity		$ 14,500				$ 14,500
Letter of Credit | Line of Credit | Frost Bank Letter of Credit
Noncontrolling Interest [Line Items]
Line of credit, maximum borrowing capacity			$ 7,000
Highland Digital Holdings, LLC
Noncontrolling Interest [Line Items]
Ownership percentage					50%
Highland Digital Holdings, LLC | GMR Limited
Noncontrolling Interest [Line Items]
Ownership percentage					50%

LIQUIDITY AND FINANCIAL CONDI_2

LIQUIDITY AND FINANCIAL CONDITION (Details) - USD ($) $ in Thousands	Feb. 28, 2023	May 31, 2022	Feb. 28, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents of continuing operations	$ 22,921	$ 46,299	$ 11,961
Negative working capital	$ (84,200)

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Feb. 28, 2023	May 31, 2022	Feb. 28, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 8,421	$ 38,798
Restricted Cash	14,500	7,501
Cash and cash equivalents	$ 22,921	$ 46,299	$ 11,961

PROPERTY AND EQUIPMENT AND DE_3

PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Feb. 28, 2023	May 31, 2022
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 170,865	$ 65,269
Accumulated Depreciation	(3,590)	(1,009)
Property and Equipment, Net	$ 167,276	64,260
Electric Generation and Transformers
Property, Plant and Equipment [Line Items]
Estimated Useful Life	15 years
Total cost of property and equipment	$ 4,520	4,338
Other Equipment and Fixtures
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 1,034	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	$ 109,822	18,305
Information Systems and Software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Total cost of property and equipment	$ 11,229	9,608
Land
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 2,152	1,074
Land Improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	15 years
Total cost of property and equipment	$ 1,285	1,180
Building
Property, Plant and Equipment [Line Items]
Estimated Useful Life	39 years
Total cost of property and equipment	$ 33,008	30,176
Equipment Deposits
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 7,816	$ 0

PROPERTY AND EQUIPMENT AND DE_4

PROPERTY AND EQUIPMENT AND DEPOSITS ON EQUIPMENT - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 0.9	$ 0.2	$ 2.6	$ 0.2

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		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Customer A
Concentration Risk [Line Items]
Concentration risk	26%	62%	31%	62%
Customer B
Concentration Risk [Line Items]
Concentration risk	25%	0%	23%	0%
Customer C
Concentration Risk [Line Items]
Concentration risk	16%	16%	17%	16%
Customer D
Concentration Risk [Line Items]
Concentration risk	13%	9%	14%	9%
Customer E
Concentration Risk [Line Items]
Concentration risk	13%	13%	13%	13%
Others
Concentration Risk [Line Items]
Concentration risk	7%	0%	3%	0%

REVENUE FROM CONTRACTS WITH C_4

REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) $ in Millions	Feb. 28, 2023 USD ($)
Revenue, Major Customer [Line Items]
Revenue, remaining performance obligation, amount	$ 47.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-03-01
Revenue, Major Customer [Line Items]
Revenue, remaining performance obligation, amount	$ 47.6
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 ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Movement in Deferred Revenue [Roll Forward]
Beginning balance	$ 29,394	$ 0	$ 3,877	$ 0
Advance billings	32,315	3,909	76,961	3,909
Revenue recognized	(14,090)	(1,026)	(33,354)	(1,026)
Other adjustments	0	0	135	0
Ending balance	$ 47,619	$ 2,883	$ 47,619	$ 2,883

REVENUE FROM CONTRACTS WITH C_6

REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Customer Deposits (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Customer Deposits [Roll Forward]
Balance, beginning of period	$ 24,689,000	$ 0	$ 9,524,000	$ 0
Customer deposits received	11,681,000	5,645,000	26,980,000	5,645,000
Customer deposits refunded	0	0	0	0
Other adjustments	0	0	(135,000)	0
Balance, ending of period	$ 36,370,000	$ 5,645,000	$ 36,370,000	$ 5,645,000

RELATED PARTY TRANSACTIONS - Na

RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Note Payable [Line Items]
Loss on extinguishment of debt	$ 0	$ 0	$ 94	$ 1,342
Affiliated Entity
Note Payable [Line Items]
Notes payable, related parties		$ 500		$ 500
Debt conversion, converted instrument, shares issued, fair value, per share (in dollars per share)		$ 0.75		$ 0.75
Loss on extinguishment of debt		$ 1,300
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]
Customer Deposits		$ 1,600		$ 1,600

RELATED PARTY TRANSACTIONS - Re

RELATED PARTY TRANSACTIONS - Related Party Revenue (Details) - Affiliated Entity - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022	May 31, 2022
Customer A
Related Party Transaction [Line Items]
Revenue from related parties	$ 3,700	$ 634	$ 10,169	$ 634
Deferred revenue	1,616		1,616		$ 1,721
Customer Deposits	1,584		1,584		1,719
Customer B
Related Party Transaction [Line Items]
Revenue from related parties	5,828	$ 392	14,450	$ 392
Deferred revenue	2,997		2,997		1,150
Customer Deposits	$ 7,214		$ 7,214		$ 5,048

DEBT - Narrative (Details)

DEBT - Narrative (Details) $ in Thousands		9 Months Ended
	Mar. 11, 2022 USD ($)	Feb. 28, 2023 USD ($)	Feb. 16, 2023 USD ($)	Nov. 07, 2022 USD ($) installment	Jul. 25, 2022 USD ($)	May 31, 2022 USD ($)
Medium-term Notes
Debt Instrument [Line Items]
Debt issuance costs, net		$ 333				$ 94
The Starion Loan Agreement | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount					$ 15,000
Interest rate					6.50%
Debt issuance costs, net		100
Vantage Bank Texas (VBT) Promissory Note | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount	$ 7,500
Interest rate	5%
Term	5 years
Jamestown Stutsman Development Corporation Interest Buy Down | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount		$ 200
Interest rate		2%
Buy down, new percentage		1.50%
Buy down term		13 months
Jamestown Stutsman Development Corporation Interest Buy Down | Bonds
Debt Instrument [Line Items]
Promissory note amount		$ 500
Vantage Garden City Loan Agreement | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount				$ 15,000
Interest rate				6.15%
Debt issuance costs, net		200
Number of loan advance installments | installment				16
Loan advances, installment maximum				$ 900
Loan advances to date		10,300
Ellendale Loan Agreement | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount			$ 20,000
Interest rate			7.48%
Letter of Credit
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity		$ 14,500				$ 14,500

DEBT - Schedule of Maturities o

DEBT - Schedule of Maturities of Long-Term Debt (Details) - Medium-term Notes $ in Thousands	Feb. 28, 2023 USD ($)
Debt Instrument [Line Items]
FY23	$ 901
FY24	5,502
FY25	5,887
FY26	6,231
FY27	5,004
Thereafter	526
Total Term Loan Remaining Payments	$ 24,051

DEBT - Schedule of Long-Term De

DEBT - Schedule of Long-Term Debt Instruments (Details) - Medium-term Notes - USD ($) $ in Thousands	Feb. 28, 2023	May 31, 2022
Debt Instrument [Line Items]
Term Loan Balance	$ 24,051	$ 7,324
Less: Deferred Issuance Costs	(333)	(94)
Less: Current portion of Term Loan	(4,855)	(1,333)
Long-term Portion of Term Loan	$ 18,862	$ 5,897

STOCKHOLDERS' EQUITY - Table of

STOCKHOLDERS' EQUITY - Table of Common Stock (Details) - shares	Feb. 28, 2023	May 31, 2022
Equity [Abstract]
Common stock, shares authorized (in shares)	166,666,667	166,666,667
Common stock, shares issued (in shares)	99,471,127	97,837,702
Common stock, shares outstanding (in shares)	94,469,399	97,801,406

STOCKHOLDERS' EQUITY - Schedule

STOCKHOLDERS' EQUITY - Schedule of Restricted Stock Awards (Details) - Restricted Stock	9 Months Ended
	Feb. 28, 2023 $ / 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	1,366,666
Grants in period (in shares) | shares	77,500
Vested (in shares) | shares	(1,048,333)
Forfeited (in shares) | shares	0
Outstanding at end of period (in shares) | shares	395,833
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	2.04
Vested (in dollars per share) | $ / shares	7.60
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

STOCKHOLDERS' EQUITY - Addition

STOCKHOLDERS' EQUITY - Additional Information (Details) $ in Millions		9 Months Ended
	Jun. 06, 2022 shares	Feb. 28, 2023 USD ($) shares	May 31, 2022 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, shares issued (in shares)		99,471,127	97,837,702
Common stock, shares outstanding (in shares)		94,469,399	97,801,406
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
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense | $		$ 0.2
Unrecognized stock compensation expense, period for recognition		1 month
Grants in period (in shares)		77,500
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense | $		$ 13.3
Unrecognized stock compensation expense, period for recognition		20 months
Grants to date (in shares)		8,000,000
Grants in period (in shares)		7,897,907

STOCKHOLDERS' EQUITY - Schedu_2

STOCKHOLDERS' EQUITY - Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - $ / shares	9 Months Ended
	Feb. 28, 2023	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)	1,791,666
Grants in period (in shares)	7,897,907
Vested (in shares)	(630,529)
Forfeited (in shares)	(473,748)
Outstanding at end of period (in shares)	8,585,296
Weighted Average Grant Date Fair Value Per Share
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share)	$ 3.01	$ 8.04
Granted (in dollars per share)	2.32
Vested (in dollars per share)	5.33
Forfeited (in dollars per share)	7.32
Weighted average grant date fair value, outstanding at end of period (in dollars per share)	$ 3.01

LEASES - Narrative (Details)

LEASES - Narrative (Details) $ in Millions	9 Months Ended
	Feb. 28, 2023 USD ($) lease
Leases [Abstract]
Number of finance leases entered into	25
Total number of leases	44
Weighted average remaining lease term	30 months
Present value of lease liabilities	7.87%
Right-of-use asset obtained in exchange for finance lease liability | $	$ 8.7

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Cost of revenues	$ 10,533	$ 2,073	$ 28,438	$ 2,073
Energy Service
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Contractual obligation	$ 24,200		$ 24,200
Service contract, term			5 years

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		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Earnings Per Share [Abstract]
Net loss from continuing operations	$ (7,341)	$ (2,397)	$ (38,750)	$ (17,843)
Net gain from discontinued operations, net of income taxes	0	(4,048)	0	(2,870)
Net loss including noncontrolling interests	(7,341)	(6,445)	(38,750)	(20,713)
Net loss attributable to noncontrolling interest	(316)	0	(577)	0
Net loss attributable to Applied Digital Corporation	$ (7,025)	$ (6,445)	$ (38,173)	$ (20,713)
Continuing Operations - basic ( in dollars per share)	$ (0.08)	$ (0.04)	$ (0.41)	$ (0.35)
Continuing Operations - diluted ( in dollars per share)	(0.08)	(0.04)	(0.41)	(0.35)
Discontinued Operations - basic ( in dollars per share)	0	(0.08)	0	(0.06)
Discontinued Operations - diluted ( in dollars per share)	0	(0.08)	0	(0.06)
Basic net loss per share (in dollars per share)	(0.08)	(0.12)	(0.41)	(0.41)
Diluted net loss per share (in dollars per share)	$ (0.08)	$ (0.12)	$ (0.41)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)	94,119,944	53,396,920	93,545,687	50,546,048
Diluted weighted average number of shares outstanding (in shares)	94,119,944	53,396,920	93,545,687	50,546,048

DISCONTINUED OPERATIONS - Opera

DISCONTINUED OPERATIONS - Operating Results (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net loss from discontinued operations	$ 0	$ (4,048)	$ 0	$ (2,870)
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	907	0	2,945
Cost of sales	0	628	0	1,589
Gross profit	0	279	0	1,356
Impairment of cryptocurrency assets	0	(225)	0	(390)
Loss on the sale of fixed assets	0	(578)	0	(582)
Loss on the reclassification of fixed assets		(3,524)		(3,254)
Net loss from discontinued operations	$ 0	$ (4,048)	$ 0	$ (2,870)

DISCONTINUED OPERATIONS - Narra

DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Thousands	Feb. 28, 2023	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

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) $ in Millions	Mar. 30, 2023 USD ($)
Subsequent Event | Ellendale Loan Agreement | Medium-term Notes
Subsequent Event [Line Items]
Proceeds from debt, net of issuance costs	$ 19.8