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 |