Applied Digital (APLD) 10-K 2 Aug 23 2023 FY Annual report Financial data

Cover

Cover - USD ($) $ in Millions	12 Months Ended
	May 31, 2023	Jul. 25, 2023	Nov. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Current Fiscal Year End Date	--05-31
Document Period End Date	May 31, 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	427-1704
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	APLD
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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 Public Float			$ 137.8
Document Financial Statement Error Correction [Flag]	false
Entity Bankruptcy Proceedings, Reporting Current	false
Entity Common Stock, Shares Outstanding		103,950,005
Documents Incorporated by Reference	None.
Entity Central Index Key	0001144879
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

Audit Information

Audit Information	12 Months Ended
	May 31, 2023
Auditor Information [Abstract]
Auditor Name	Marcum LLP
Auditor Location	New York, NY
Auditor Firm ID	688

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Current Assets:
Cash and cash equivalents	$ 28,999	$ 38,798
Accounts receivable	82	227
Prepaid expenses and other current assets	16,678	1,337
Total current assets	45,759	40,362
Property and equipment, net	195,593	64,260
Operating lease right of use asset, net	1,290	1,110
Finance lease right of use asset, net	14,303	5,298
Other Assets	7,012	8,950
TOTAL ASSETS	263,957	119,980
Current Liabilities:
Accounts payable and accrued liabilities	14,776	13,260
Current portion of operating lease liability	320	191
Current portion of finance lease liability	5,722	813
Current portion of term loan	7,950	1,333
Customer deposits	36,370	9,524
Current deferred revenue	48,692	3,877
Sales and use tax payable	1,630	0
Total current liabilities	115,460	28,998
Deferred tax liability	0	540
Long-term portion of operating lease liability	1,005	936
Long-term portion of finance lease liability	8,334	4,374
Other long-term related party liabilities	1,000	0
Total liabilities	194,278	40,745
Commitments and contingencies
Stockholders’ deficit:
Common stock, $0.001 par value, 166,666,667 shares authorized, 100,927,358 shares issued and 95,925,630 shares outstanding at May 31, 2023, and 97,837,703 shares issued and 97,801,407 shares outstanding at May 31, 2022	101	98
Treasury stock, 5,001,728 shares at May 31, 2023 and 36,296 shares at May 31, 2022, at cost	(62)	(62)
Additional paid in capital	160,194	128,293
Accumulated deficit	(100,716)	(56,070)
Total stockholders’ equity attributable to Applied Digital Corporation	59,517	72,259
Noncontrolling interest	10,162	6,976
Total Stockholders' equity including noncontrolling interest	69,679	79,235
Liabilities and Equity, Total	263,957	119,980
Related Party
Current Liabilities:
Long-term portion of term loan	35,257	0
Nonrelated Party
Current Liabilities:
Long-term portion of term loan	$ 33,222	$ 5,897

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	May 31, 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)	100,927,358	97,837,703
Common stock, shares outstanding (in shares)	95,925,630	97,801,407
Treasury stock, (in shares)	5,001,728	36,296

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Revenues:
Hosting revenue	$ 55,392	$ 8,549
Cost of revenues	44,388	9,506
Gross profit	11,004	(957)
Costs and expenses:
Selling, general and administrative	55,059	19,941
Total costs and expenses	55,059	19,941
Operating loss	(44,055)	(20,898)
Other income (expense):
Interest Expense	(1,980)	(112)
Gain on extinguishment of accounts payable	0	406
Loss on extinguishment of debt	(94)	(1,342)
Total other expense, net	(2,074)	(1,048)
Net loss from continuing operations before income tax expenses	(46,129)	(21,946)
Income tax benefit (expense)	523	(540)
Net loss from continuing operations	(45,606)	(22,486)
Net loss from discontinued operations, net of income taxes	0	(1,044)
Net loss including noncontrolling interests	(45,606)	(23,530)
Net loss attributable to noncontrolling interest	(960)	(10)
Net loss attributable to Applied Digital Corporation	$ (44,646)	$ (23,520)
Basic and diluted net loss per share:
Continuing Operations - basic ( in dollars per share)	$ (0.49)	$ (0.39)
Continuing Operations - diluted ( in dollars per share)	(0.49)	(0.39)
Discontinued Operations - basic ( in dollars per share)	0	(0.02)
Discontinued Operations - diluted ( in dollars per share)	0	(0.02)
Basic net loss per share (in dollars per share)	(0.49)	(0.41)
Diluted net loss per share (in dollars per share)	$ (0.49)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)	93,976,233	57,121,096
Diluted weighted average number of shares outstanding (in shares)	93,976,233	57,121,096

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Stockholders’ Equity	Common Stock	Treasury Stock	Additional Paid in Capital	Accumulated Deficit	Noncontrolling interest	Series C Convertible Preferred Stock	Series D Convertible Preferred Stock	Series A Convertible Preferred Stock Preferred Stock	Series B Convertible Preferred Stock Preferred Stock	Series A and B Preferred Stock	Series A and B Preferred Stock Common Stock	Series A and B Preferred Stock Additional Paid in Capital	Series C and D Preferred Stock	Series C and D Preferred Stock Stockholders’ Equity	Series C and D Preferred Stock Common Stock	Series C and D Preferred Stock Additional Paid in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	$ 12,552
Beginning balance (in shares) at May. 31, 2021								660,000	0
Beginning balance at May. 31, 2021	15,135							$ 15,135	$ 0
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of Preferred Stock (in shares)									1,380,000
Issuance of preferred stock	34,500								$ 34,500
Issuance costs	(2,927)								$ (2,927)
Preferred Stock Dividends Accrued (in shares)								25,633	53,587
Preferred Stock Dividends Accrued	1,981							$ 641	$ 1,340
Conversion of Series C and D preferred stock (in shares)								(685,633)	(1,433,587)
Conversion of Series C and D preferred stock	(48,689)							$ (15,776)	$ (32,913)
Ending balance (in shares) at May. 31, 2022								0	0
Ending balance at May. 31, 2022	0							$ 0	$ 0
Beginning balance, preferred stock (in shares) at May. 31, 2021										27,195	17,087
Beginning balance, common stock (in shares) at May. 31, 2021			1,511,061
Beginning balance, treasury stock (in shares) at May. 31, 2021				(36,296)
Beginning balance at May. 31, 2021		$ (2,583)	$ 2	$ (62)	$ 13,881	$ (21,623)	$ 0			$ 3,370	$ 1,849
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Extinguishment of Debt (in shares)			5,083,828
Extinguishment of debt	3,478	3,478	$ 5		3,473
Issuance of Dividends to Preferred Stock (in shares)										60,822	29,772
Issuance of dividends to preferred stock	115	115				(8,946)				$ 6,082	$ 2,979
Conversion of Preferred Stock (in shares)										88,017	46,859		28,765,308				36,440,783
Conversion of series A and B preferred stock										$ (9,452)	$ (4,828)	$ 0	$ 29	$ 14,251	$ 0	$ 48,689	$ 36	$ 48,653
Service agreement stock compensation (in shares)			18,036,723
Service agreement stock compensation	12,337	12,337	$ 18		12,319
Preferred Stock Dividends Accrued	0	(1,981)				(1,981)
Initial public offering of common stock (in shares)			8,000,000
Initial public offering of common stock	40,000	40,000	$ 8		39,992
Offering costs of initial public offering	(4,276)	(4,276)			(4,276)
Contributions by noncontrolling interest	6,986						6,986
Net loss including noncontrolling interests	$ (23,530)	(23,520)				(23,520)	(10)
Ending balance, preferred stock (in shares) at May. 31, 2022										0	0
Ending balance, common stock (in shares) at May. 31, 2022	97,801,407		97,837,703
Ending balance, treasury stock (in shares) at May. 31, 2022	(36,296)			(36,296)
Ending balance at May. 31, 2022	$ 79,235	72,259	$ 98	$ (62)	128,293	(56,070)	6,976			$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	79,235
Ending balance (in shares) at May. 31, 2023								0	0
Ending balance at May. 31, 2023	0							$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock - vesting of awards (in shares)			2,615,550
Issuance of common stock - vesting of awards	$ (168)	(168)	$ 3		(171)
Issuance of common stock - restricted stock awards (in shares)	474,105
Stock-based compensation	$ 32,072	32,072			32,072
Common stock forfeited (in shares)				(4,965,432)
Contributions by noncontrolling interest	4,146						4,146
Net loss including noncontrolling interests	$ (45,606)	(44,646)				(44,646)	(960)
Ending balance, preferred stock (in shares) at May. 31, 2023										0	0
Ending balance, common stock (in shares) at May. 31, 2023	95,925,630		100,927,358
Ending balance, treasury stock (in shares) at May. 31, 2023	(5,001,728)			(5,001,728)
Ending balance at May. 31, 2023	$ 69,679	$ 59,517	$ 101	$ (62)	$ 160,194	$ (100,716)	$ 10,162			$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	$ 69,679

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
CASH FLOW FROM OPERATING ACTIVITIES
Net loss attributable to Applied Digital Corporation	$ (44,646)	$ (23,520)
Net loss from discontinued operations, net of income taxes	0	(1,044)
Net loss attributable to noncontrolling interest	(960)	(10)
Net loss from continuing operations	(45,606)	(22,486)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and Amortization	7,267	1,120
Gain on extinguishment of accounts payable	0	(406)
Loss on extinguishment of debt	94	1,342
Stock-Based Compensation	32,072	12,337
Operating lease expense	347	328
Non-cash interest expense	410	0
Changes in assets and liabilities:
Accounts receivable	145	(227)
Prepaid expenses and other current assets	(766)	(1,331)
Customer deposits	26,846	9,524
Deferred revenue	44,815	3,877
Deferred Tax	(540)	540
Accounts payable and accrued liabilities	(6,265)	6,417
Other Assets	364	(1,450)
Lease Assets and Liabilities	(118)	0
Payments of operating leases	(330)	(310)
Net cash provided by operating activities of continuing operations	58,735	9,275
Net cash used in operating activities of discontinued operations	0	(10,147)
NET CASH PROVIDED BY(USED IN) OPERATING ACTIVITIES	58,735	(872)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment and other assets	(128,721)	(54,974)
Deposits on equipment	(2,557)	0
Investments in private companies	(810)	0
Net cash used in investing activities of continuing operations	(132,088)	(54,974)
Net cash provided by investing activities of discontinued operations	0	9,103
NET CASH USED IN INVESTING ACTIVITIES	(132,088)	(45,871)
CASH FLOW FROM FINANCING ACTIVITIES
Initial public offering of common stock	0	40,000
Issuance of preferred stock	0	34,500
Repayment of finance leases	(3,353)	(221)
Term loan payoff	(7,056)	0
Proceeds from issuance of term loan	45,650	7,324
Proceeds from issuance of related party term loan	36,500	0
Loan Payments	(2,977)	0
Payments of employee restricted stock tax withholdings	(168)	0
Noncontrolling interest contributions	4,147	6,986
Net cash provided by financing activities of continuing operations	70,628	81,292
Net cash provided by financing activities of discontinued operations	0	0
CASH FLOW PROVIDED BY FINANCING ACTIVITIES	70,628	81,292
NET (DECREASE ) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(2,725)	34,549
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	46,299	11,750
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	43,574	46,299
Less: cash, cash equivalents, and restricted cash of discontinued operations	0	0
Cash, cash equivalents, and restricted cash of continuing operations	43,574	46,299
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest Paid	1,570	112
Income Taxes Paid	18	0
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Non-cash dividends paid in-kind	0	11,042
Operating right-of-use assets obtained by lease obligation	397	1,288
Finance right-of-use assets obtained by lease obligation	12,331	5,418
Fixed assets in accounts payable	7,399	6,998
Related Party
CASH FLOW FROM FINANCING ACTIVITIES
Term Loan Issuance Costs	(1,548)	0
Nonrelated Party
CASH FLOW FROM FINANCING ACTIVITIES
Term Loan Issuance Costs	(567)	(94)
Preferred Stock
CASH FLOW FROM FINANCING ACTIVITIES
Stock issuance costs	0	(2,927)
Common Stock
CASH FLOW FROM FINANCING ACTIVITIES
Stock issuance costs	$ 0	$ (4,276)

BUSINESS AND ORGANIZATION

BUSINESS AND ORGANIZATION	12 Months Ended
	May 31, 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 designer, builder and operator of next-generation digital infrastructure. The Company has three primary business streams, artificial intelligence (“AI”) cloud services, high performance computing (“HPC”) datacenter hosting, and crypto datacenter hosting. For the fiscal year ended May 31, 2023, the Company has only had operational activity in the crypto datacenter hosting business. The Company was originally incorporated in Nevada in May 2001. On November 14, 2022, the Company changed its corporate name from Applied Blockchain, Inc. to Applied Digital Corporation.

LIQUIDITY AND FINANCIAL CONDITI

LIQUIDITY AND FINANCIAL CONDITION	12 Months Ended
	May 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND FINANCIAL CONDITION	LIQUIDITY AND FINANCIAL CONDITIONAs of May 31, 2023, the Company had approximate cash and cash equivalents of $29.0 million and negative working capital of $69.7 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 were issued.

BASIS OF PRESENTATION AND SIGNI

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	May 31, 2023
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The accompanying consolidated financial statements of the Company include the accounts of the Company and its wholly owned and controlled subsidiaries. Consolidated subsidiaries results are included from the date the subsidiary was formed or acquired. Noncontrolling interests in consolidated subsidiaries in the consolidated financial statements represent non-controlling stockholders' proportionate share of the operations in such subsidiaries. Intercompany investments, balances and transactions have been eliminated in the consolidated financial statements. The Company’s consolidated operating subsidiaries include the Company's wholly-owned subsidiaries, the Company's interest in Highland Digital Holdings LLC, and the Company's majority interests in Sai Foundry Computing LLC, as well as 1.21 Gigawatts LLC. Use of Estimates The preparation of 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 are: • The valuation allowance associated with the Company’s deferred tax assets. • The probability assessment associated with performance conditions in share based payment awards 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. Our cash equivalents in excess of federally insured limits potentially subject us to concentrations of credit risk, although we believe they are subject to minimal risk. Restricted Cash The Company has restricted cash related to its letters of credit totaling $14.6 million. The Company is required to keep these balances in separate accounts for the duration of the letter of credit agreements, which last through the first quarter of calendar 2024 . The following tables reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of May 31, 2023, and May 31, 2022. (in thousands) May 31, 2023 May 31, 2022 Cash and cash equivalents $ 28,999 $ 38,798 Restricted cash included in prepaid expenses and other current assets 14,575 — Restricted cash included in other assets — 7,501 Total Cash, Cash Equivalents, and Restricted Cash $ 43,574 $ 46,299 Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of maintenance and repairs is charged to operations as incurred, whereas significant improvements that extend the life of an asset are capitalized. Lease Accounting The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term. For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow and incorporates the term and economic environment of the associated lease. For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with an initial term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant. Variable lease costs are recognized as incurred. Assets and liabilities related to operating leases are presented in separate captions from those relating to finance leases. For the Company's finance leases, expense is split between amortization and interest expense. Variable lease costs are recognized as incurred. Assets and liabilities related to finance leases are presented in separate captions from those relating to operating leases. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company provides energized space to customers who locate their hardware within the Company’s co- hosting facility. All hosting performance obligations are achieved simultaneously by providing the hosting environment for the customers’ operations. Hosting revenue is recorded monthly in fixed amounts, net of credits for non-performance, based on the terms of the hosting agreements. Any ancillary revenue for maintenance or installation services is at a point in time when the Customer has received the full service. As these services support the hosting operation as a whole, all revenue is within the hosting revenue caption. Customer contracts include advance payment terms. Advanced payments are recorded as deferred revenue until the related service is provided. Stock-based compensation 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 has recognized the cost of the restricted stock-based on the grant date fair value of the awards ratably over the related vesting terms as it is probable that the performance condition for the reserved underlying shares will be met. Restricted Stock Units The Company has granted restricted stock units (“RSUs”) to certain consultants and employees, in all cases as compensatory grants for services rendered to the Company, which contain performance conditions that affect vesting. The Company has recognized the cost of these RSUs based on the grant date fair value ratably for each tranche, as applicable, based on the probability that the performance conditions will be achieved over the related vesting terms. In addition, the Company has granted RSUs to employees as compensation for employment services. The average term of the RSUs granted under the employee incentive plan is three years from grant date, and the only conditions for vesting are service conditions. The Company has recognized the expense of the RSUs based on grant date fair value of the awards ratably over the service period. Income Taxes ASC Topic 740, Income Taxes, (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The benefit of a tax position is recognized in the financial statements in the period during which based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure, and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements. Segment Information The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company has one operating and reporting segment. 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. The Company has determined that there are no recently issued pronouncements that are currently applicable to the Company. Reclassifications Within the Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. The Company has reclassified restricted cash from cash and cash equivalents to other assets. In addition, the Company has reclassified utility deposits to other assets. These reclassifications had no impact on reported operating income or net income; cash flows from operations, investing, or financing activities; or total assets and liabilities.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	May 31, 2023
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of May 31, 2023 and 2022: (in thousands) Estimated Useful Life May 31, May 31, Hosting Equipment Electric Generation and Transformers 15 years $ 4,655 $ 4,338 Other Equipment and Fixtures 6 years 1,685 588 Construction in Progress 106,226 18,305 Information Systems and Software 5 years 21,173 9,608 Land & Building Land 2,152 1,074 Land Improvements 15 years 1,293 1,180 Building 39 years 63,350 30,176 Total cost of property and equipment 200,534 65,269 Accumulated Depreciation (4,940) (1,009) Property and Equipment, Net $ 195,593 $ 64,260

REVENUE FROM CONTRACTS WITH CUS

REVENUE FROM CONTRACTS WITH CUSTOMERS	12 Months Ended
	May 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE FROM CONTRACTS WITH CUSTOMERS	REVENUE FROM CONTRACTS WITH CUSTOMERSBelow is a summary of the Company’s revenue concentration by major customer for the years ended May 31, 2023 and 2022 Fiscal Year Ended Customer May 31, 2023 May 31, 2022 Customer A 24 % — % Customer B 20 % 13 % Customer C 19 % 41 % Customer D 14 % 16 % Customer E 12 % 15 % Customer F 11 % 15 % Total 100 % 100 % Remaining Performance Obligations As of May 31, 2023, the Company had $48.7 million in deferred revenue, which represents the Company’s remaining performance obligations. The Company expects to recognize all of this revenue within the next 12 months. Deferred Revenue Changes in the Company's deferred revenue balances for the years ended May 31, 2023 and 2022, respectively, are shown in the following table: (in thousands) Balance at May 31, 2021 $ — Advance billings 12,426 Revenue recognized (8,549) Other adjustments — Balance at May 31, 2022 $ 3,877 Advance billings 100,072 Revenue recognized (55,392) Other adjustments 135 Balance at May 31, 2023 $ 48,692 Customer Deposits Changes in the Company's customer deposits balances for the years ended May 31, 2023 and 2022, respectively, are shown in the following table: (in thousands) Balance at May 31, 2021 $ — Customer deposits received $ 9,524 Customer deposits refunded — Other adjustments — Balance at May 31, 2022 $ 9,524 Customer deposits received $ 26,981 Customer deposits refunded — Other adjustments $ (135) Balance at May 31, 2022 $ 36,370

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	May 31, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS Related Party Notes Payable See discussion below in Note 7 - Debt, regarding the Company's term loan agreement with B. Riley Commercial Capital, LLC and B. Riley Securities, Inc, both wholly-owned subsidiaries of B. Riley Financial, Inc. Bryant Riley, chairman of the board and co-chief executive officer, of B. Riley Financial, Inc. (Nasdaq: RILY), directly or indirectly through subsidiaries of RILY, held in excess of 5% of our then outstanding Common Stock beginning in April 2023. The following table illustrates the related party balances on this loan for the fiscal year ended May 31, 2023. (in thousands) Description May 31, 2023 Principal Outstanding $ 36,500 Other long-term liabilities 1,000 Accrued Interest Payable 81 Related Party Revenue The Company has revenue transactions with two related party customers: • Customer A is a subsidiary of an entity which is deemed to beneficially own over 5% of the Company's outstanding common stock. • Customer B is 60% owned by an individual who is deemed to beneficially own over 5% of the Company's outstanding stock. The following tables illustrate related party revenue for fiscal years ended ended May 31, 2023 and May 31, 2022. (in thousands) Related Party Revenue for the Fiscal Year Ended Customer May 31, 2023 May 31, 2022 Customer A $ 8,007 $ 1,417 Customer B $ 6,401 $ 1,268 The following tables illustrate related party deferred revenue and deposits balances as of May 31, 2023 and May 31, 2022. (in thousands) Customer A Balances as of Caption May 31, 2023 May 31, 2022 Deferred revenue $ 1,474 $ 692 Customer Deposits $ 2,450 $ 2,059 (in thousands) Customer B Balances as of Caption May 31, 2023 May 31, 2022 Deferred revenue $ 50 $ 262 Customer Deposits $ 1,361 $ 1,171 Related Party Sublease Income For the fiscal years ending May 31, 2023 and May 31, 2022, the Company received sublease income from B. Riley Asset Management, which is also a wholly-owned subsidiary of B. Riley Financial, Inc. Mr. Cummins, the CEO of the Company, is also the President of B. Riley Asset Management. (in thousands) Description May 31, 2023 May 31, 2022 Sublease Income $ 84 $ 80

DEBT

DEBT	12 Months Ended
	May 31, 2023
Debt Disclosure [Abstract]
DEBT	DEBT Below is a summary of the Company’s term loan balances, including current debt and deferred financing fees as of May 31, 2023 and 2022. (in thousands) May 31, 2023 May 31, 2022 Total Outstanding Loan Balances 79,441 7,324 Less: Deferred Issuance Costs (3,012) (94) Less: Current portion of Term Loan (7,950) (1,333) Less: Long-term related party loan (35,257) — Long-term portion of Term Loan $33,222 $5,897 Below is the weighted-average interest rate for the Company's term loans as of May 31, 2023 and 2022. May 31, 2023 May 31, 2022 Weighted-average interest rate 13.4 % 5.0 % Remaining Principal Payments Below is a summary of the remaining principal payments due over the life of the term loans as of May 31, 2023. (in thousands) Year Principal Payments FY24 $ 9,394 FY25 46,586 FY26 10,780 FY27 8,550 FY28 4,131 Thereafter — Total Term Loan Remaining Payments $ 79,441 Starion Term Loan On July 25, 2022, APLD Hosting, LLC, a wholly-owned subsidiary of the Company, 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 under the Starion Loan Agreement 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 loan agreement between the Company and Vantage Bank Texas. This loan 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 indirect 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 loan pursuant to the Vantage Garden City Loan Agreement will be advanced in 16 installments, 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 Garden City Facility will bear interest at a fixed rate of 6.15% per annum, and the Company may prepay the Garden City Facility, in whole or in part, without the payment of any fee or penalty. The Garden City Facility matures April 26, 2028. The Vantage Garden City Loan Agreement contains customary representations, warranties, covenants and events of default. As of May 31, 2023, an aggregate amount of $10.3 million has been advanced under the Vantage Garden City Loan Agreement, with the outstanding balance totaling $10.1 million. 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 Ellendale Loan Agreement contains customary covenants, representations and warranties and events of default. The Ellendale Loan Agreement provides for an interest rate of 7.48% per annum. The proceeds of the loan under the Ellendale Loan Agreement will be used to fund expansion on the Ellendale, North Dakota hosting datacenter. Total deferred costs related to the issuance of this loan total are $0.2 million. As of May 31, 2023, the total balance outstanding under the Ellendale Loan Agreement was $19.7 million. B. Riley Loan On May 23, 2023, Sai Computing LLC, a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement (the "B. Riley Loan and Security Agreement") with B. Riley Commercial Capital, LLC and B. Riley Securities, with the Company as Guarantor. The B. Riley Loan and Security Agreement provides for a term

INCOME TAXES

INCOME TAXES	12 Months Ended
	May 31, 2023
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The Company recorded income tax benefit of $0.5 million for the year ended May 31, 2023, compared to income tax expense of $0.5 million for the year ended May 31, 2022. The Company’s effective tax rate was 1.2% and (2.4)%, for the years ended May 31, 2023 and 2022 respectively. (in thousands) For the Fiscal Year Ended May 31, 2023 May 31, 2022 Current expense / (benefit) Federal $ — $ — Foreign — — State 18 — Total current expense $ 18 $ — Deferred expense / (benefit) Federal $ (540) $ 540 Foreign — — State — — Total deferred (benefit) expense $ (540) $ 540 Total income tax (benefit) expense $ (523) $ 540 The following table reconciles the statutory rate to our effective tax rate: May 31, 2023 May 31, 2022 Expected income tax expense (benefit) at U.S. Statutory Rate 21.0 % 21.0 % Stock-based compensation (6.0) % — % State income taxes, net of federal tax benefit — % 4.5 % Change in valuation allowance (13.0) % (27.0) % Other, net (0.8) % (0.9) % Income tax expense / (benefit) 1.2 % (2.4) % Deferred income taxes reflect the temporary differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts utilized for tax purposes. The primary components of the temporary differences that gave rise to the Company's deferred tax assets and liabilities are as follows for the year ended May 31, 2023, and 2022: (in thousands) May 31, 2023 May 31, 2022 Deferred Tax Assets: Net Operating Loss $ 15,137 $ 11,971 Stock-Based Compensation 3,068 — Capitalized Research and Development 897 — Lease Liability 1,875 2,080 Other 360 248 Gross Deferred Tax Assets 21,337 14,298 Less: Valuation Allowances (15,697) (9,346) Total Net Deferred Tax Asset $ 5,640 $ 4,953 Deferred Tax Liabilities: Property, Plant, and Equipment $ (3,712) $ (3,407) Right of Use Assets (1,929) (2,086) Other — — Total Net Deferred Tax Liability (5,640) (5,493) Net deferred tax assets (liabilities) $ — $ (540) The Company had $114.8 million and $83.6 million of federal and state tax net operating losses at May 31, 2023 and 2022, respectively. At May 31, 2023, $99.3 million is available indefinitely to offset future income. The remaining carryforward amounts expire at varying dates beginning in 2028. A valuation allowance is provided when it is more likely than not that some portion or the entire net deferred tax asset will not be realized. The Company has recorded an increase in the valuation allowance of $6.3 million and $6.2 million as of May 31, 2023 and 2022, respectively. The Company has provided a valuation allowance for the portion of the deferred tax assets that it has determined are not more likely than not to be recognized. The valuation allowance is primarily attributable to deferred tax assets for net operating losses that management believes are more likely than not to expire prior to being realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income of the appropriate character (i.e., capital or ordinary) during the period in which the temporary differences become deductible. Management considers, among other things, the scheduled reversals of deferred tax liabilities and the history of positive taxable income in evaluating the realizability of the deferred tax assets. Management believes that it is not likely that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards that could be used annually to offset future taxable income. The Company is subject to U.S. federal income tax. Tax years ending May 31, 2021 through May 31, 2023 are open to examination by the major taxing jurisdictions to which the Company is subject, as carryforward attributes generated in these years may still be adjusted upon examination by the Internal Revenue Service (IRS) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other taxing jurisdictions for any tax years.

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT)	12 Months Ended
	May 31, 2023
Equity [Abstract]
STOCKHOLDERS' EQUITY (DEFICIT)	STOCKHOLDERS’ EQUITY (DEFICIT) 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 May 31, 2023, the Company had issued approximately 0.6 million shares of restricted stock awards and approximately 12.4 million of restricted stock units under the plans. Restricted Stock Awards The following is a summary of the activity and balances for unvested restricted stock awards granted for the fiscal year ended May 31, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,666 $ 8.04 Granted 551,605 $ 2.19 Vested (1,537,316) $ 7.38 Forfeited — $ — Outstanding as of May 31, 2023 380,955 $ 2.22 As of May 31, 2023, total remaining expense to be recognized related to these awards was $0.8 million and the weighted average remaining recognition period for the unvested awards was 5 months. Restricted Stock Units The following is a summary of the activity and balances for unvested restricted stock units granted for the fiscal year ended May 31, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,666 $ 8.04 Granted 12,391,207 $ 2.28 Vested (1,180,525) $ 6.41 Forfeited (536,413) $ 6.71 Outstanding as of May 31, 2023 12,465,935 $ 2.53 As of May 31, 2023, total remaining expense to be recognized related to these awards was $31.5 million and the weighted average remaining recognition period for the unvested awards was 24 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 to it pursuant to the service agreement executed on March 19, 2021. Sparkpool had 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	12 Months Ended
	May 31, 2023
Leases [Abstract]
LEASES	LEASES The Company has entered into leases for hosting equipment, office space, and land. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions. The liabilities are split between current and long-term, respectively. The Company presents lease costs as follows: (in thousands) Fiscal Year Ended Lease Type Consolidated Statements of Operations Presentation May 31, 2023 May 31, 2022 Operating lease cost: Operating lease expense Selling, General and Administrative $ 347 $ 328 Short-term lease expense Selling, General and Administrative 187 126 Sublease Income Selling, General and Administrative (103) (159) Total operating lease cost $ 431 $ 295 Finance lease expense: Amortization of ROU assets related to revenue production Cost of Sales 554 85 Amortization of ROU assets not related to revenue production Depreciation and Amortization Expense 2,782 26 Interest on finance leases Interest Expense 773 50 Variable finance lease expense Selling, General and Administrative 3 — Total finance lease cost $ 4,112 $ 161 Total Lease Cost $ 4,543 $ 456 The following table represents the Company’s future minimum lease payments as of May 31, 2023: (in thousands) Year Operating Leases Finance Leases Total FY24 $ 445 $ 6,687 $ 7,132 FY25 482 5,429 5,911 FY26 495 348 844 FY27 158 188 346 FY28 — 180 180 Beyond — 87,145 87,145 Total $ 1,580 $ 99,977 $ 101,557 Present value of lease liabilities $ (255) $ (85,921) $ (86,176) Less: Current portion of lease liability $ 320 $ 5,722 $ 6,042 Long-term portion of lease liability $ 1,005 $ 8,334 $ 9,339 Supplemental cash flow and other information related to leases is as follows: Fiscal Year Ended May 31, 2023 May 31, 2022 Weighted-average years remaining (in years) Finance leases 22 57 Operating leases 3 4 Weighted-average discount rate Finance leases 8 % 8 % Operating leases 11 % 13 % The Company has entered into operating leases signed but not yet commenced with total minimum payments of approximately $83.1 million to support the Company's AI Cloud service business. The payments are expected to be made over a total of 84 months.
LEASES	LEASES The Company has entered into leases for hosting equipment, office space, and land. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions. The liabilities are split between current and long-term, respectively. The Company presents lease costs as follows: (in thousands) Fiscal Year Ended Lease Type Consolidated Statements of Operations Presentation May 31, 2023 May 31, 2022 Operating lease cost: Operating lease expense Selling, General and Administrative $ 347 $ 328 Short-term lease expense Selling, General and Administrative 187 126 Sublease Income Selling, General and Administrative (103) (159) Total operating lease cost $ 431 $ 295 Finance lease expense: Amortization of ROU assets related to revenue production Cost of Sales 554 85 Amortization of ROU assets not related to revenue production Depreciation and Amortization Expense 2,782 26 Interest on finance leases Interest Expense 773 50 Variable finance lease expense Selling, General and Administrative 3 — Total finance lease cost $ 4,112 $ 161 Total Lease Cost $ 4,543 $ 456 The following table represents the Company’s future minimum lease payments as of May 31, 2023: (in thousands) Year Operating Leases Finance Leases Total FY24 $ 445 $ 6,687 $ 7,132 FY25 482 5,429 5,911 FY26 495 348 844 FY27 158 188 346 FY28 — 180 180 Beyond — 87,145 87,145 Total $ 1,580 $ 99,977 $ 101,557 Present value of lease liabilities $ (255) $ (85,921) $ (86,176) Less: Current portion of lease liability $ 320 $ 5,722 $ 6,042 Long-term portion of lease liability $ 1,005 $ 8,334 $ 9,339 Supplemental cash flow and other information related to leases is as follows: Fiscal Year Ended May 31, 2023 May 31, 2022 Weighted-average years remaining (in years) Finance leases 22 57 Operating leases 3 4 Weighted-average discount rate Finance leases 8 % 8 % Operating leases 11 % 13 % The Company has entered into operating leases signed but not yet commenced with total minimum payments of approximately $83.1 million to support the Company's AI Cloud service business. The payments are expected to be made over a total of 84 months.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	May 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments As of May 31, 2023, the Company has commitments related to its term loan and lease agreements , which have been disclosed in Note 7 - Debt and Note 10 - Leases , respectively. The Company also has the following commitments: Jamestown Energy Services Agreement The Company has a commitment of approximately $28 million related to the energy services agreement for its Jamestown, North Dakota hosting facility. 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 fiscal year, as the company commits to specific power consumption on an annual basis as part of the energy services agreement. Other The Company has other purchase commitments of approximately $10.2 million related to the buildout of its AI Cloud hosting services business and insurance premiums. These commitments are expected to be fulfilled within twelve months of May 31, 2023. The Company also has a commitment for 1,024 H100 GPUs to support its AI Cloud services business, which has been subsequently financed through an arrangement totaling approximately $41 million over 24 months as discussed in Note 14 - Subsequent Events . Contingencies Letter of Credit As of May 31, 2023 and May 31, 2022, the Company had letters of credit outstanding totaling $14.5 million and $7.5 million, respectively. As discussed in Note 3 - Basis of Presentation and Significant Accounting Policies , the Company is required to maintain these amounts in separate accounts, and therefore the cash is restricted. Further, the Company had no unused lines of credit as of May 31, 2023 or May 31, 2022, respectively. Mediation The Company has agreed to enter into mediation, tentatively scheduled for August 18, 2023, around the allegations previously announced by the Company on June 23, 2023. The Company estimates the potential range of loss based on such allegations to be $0 to $1 million. Claims and Litigation

EARNINGS PER SHARE

EARNINGS PER SHARE	12 Months Ended
	May 31, 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. As of May 31, 2023, the Company had approximately 12.8 million shares of granted but unvested restricted stock and restricted stock units that would have a potentially dilutive effect on earnings per share. Earnings per share for the year ended May 31, 2023 and 2022 are shown in the following table: (in thousands, except for share and per share data) Fiscal Year Ended May 31, 2023 May 31, 2022 Net loss from continuing operations $ (45,606) $ (22,486) Net loss from discontinued operations, net of income taxes — (1,044) Net Loss including noncontrolling interests (45,606) (23,530) Net Loss attributable to noncontrolling interest (960) (10) Net loss attributable to Applied Digital Corporation $ (44,646) $ (23,520) Continuing operations $ (0.49) $ (0.39) Discontinued operations $ — $ (0.02) Basic and diluted net loss per share $ (0.49) $ (0.41) Basic and diluted weighted average number of shares outstanding 93,976,233 57,121,096

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	12 Months Ended
	May 31, 2023
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	DISCONTINUED OPERATIONSDuring the fiscal year ended May 31, 2022, the Company recognized a net loss from discontinued operations related to the Company's cryptocurrency mining operation. The Company had no results from discontinued operations during the year ended May 31, 2023. Operating results of discontinued operations are summarized below: (in thousands) Fiscal Year Ended May 31, 2022 Cryptoasset Mining Revenue $ 2,987 Cost of Sales 1,611 Gross Profit 1,376 Impairment of Cryptocurrency Assets (393) Gain on Sale of Fixed Assets 1,229 Loss on Asset Reclass to Discontinued Operations (3,256) Net Loss from Discontinued Operations $ (1,044)

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	May 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Financing Arrangements The Company entered into a finance arrangement for approximately $41 million over 24 months for 1,024 H100 GPUs in connection with its AI Cloud Services business. Additional Debt Financing The Company received an additional $3 million in funding from the B. Riley Loan and Security Agreement, bringing the total outstanding loan principal balance to $39.5 million. Subsequently, the Company repaid the entire outstanding loan principal balance, along with all outstanding interest and fees. Common Stock Issuance The Company began issuing common stock under an "at the market" sale agreement pursuant to which the Company may sell up to $125 million in shares of Common Stock. The Company has sold approximately 7.9 million shares. Net proceeds, less commission fees of approximately $2.0 million, are approximately $64.7 million. Customer Prepayment The Company has confirmed receipt of a customer prepayment for its AI cloud services business of approximately $22.5 million.

BASIS OF PRESENTATION AND SIG_2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	May 31, 2023
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation: The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The accompanying consolidated financial statements of the Company include the accounts of the Company and its wholly owned and controlled subsidiaries. Consolidated subsidiaries results are included from the date the subsidiary was formed or acquired. Noncontrolling interests in consolidated subsidiaries in the consolidated financial statements represent non-controlling stockholders' proportionate share of the operations in such subsidiaries. Intercompany investments, balances and transactions have been eliminated in the consolidated financial statements. The Company’s consolidated operating subsidiaries include the Company's wholly-owned subsidiaries, the Company's interest in Highland Digital Holdings LLC, and the Company's majority interests in Sai Foundry Computing LLC, as well as 1.21 Gigawatts LLC.
Use of Estimates	Use of Estimates The preparation of 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 are: • The valuation allowance associated with the Company’s deferred tax assets. • The probability assessment associated with performance conditions in share based payment awards
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. Our cash equivalents in excess of federally insured limits potentially subject us to concentrations of credit risk, although we believe they are subject to minimal risk.
Property and Equipment	Property and Equipment
Lease Accounting	Lease Accounting The Company determines whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term. For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company’s incremental borrowing rate reflects the rate it would pay to borrow and incorporates the term and economic environment of the associated lease. For the Company’s operating leases, fixed lease payments are recognized as lease expense on a straight-line basis over the lease term. For leases with an initial term of 12 months or less, any fixed lease payments are recognized on a straight-line basis over the lease term and are not recognized on the Company’s consolidated balance sheet as an accounting policy election. Leases qualifying for the short-term lease exception were insignificant. Variable lease costs are recognized as incurred. Assets and liabilities related to operating leases are presented in separate captions from those relating to finance leases. For the Company's finance leases, expense is split between amortization and interest expense. Variable lease costs are recognized as incurred. Assets and liabilities related to finance leases are presented in separate captions from those relating to operating leases.
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company provides energized space to customers who locate their hardware within the Company’s co-
Share-based compensation	Stock-based compensation 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 has recognized the cost of the restricted stock-based on the grant date fair value of the awards ratably over the related vesting terms as it is probable that the performance condition for the reserved underlying shares will be met. Restricted Stock Units The Company has granted restricted stock units (“RSUs”) to certain consultants and employees, in all cases as compensatory grants for services rendered to the Company, which contain performance conditions that affect vesting. The Company has recognized the cost of these RSUs based on the grant date fair value ratably for each tranche, as applicable, based on the probability that the performance conditions will be achieved over the related vesting terms. In addition, the Company has granted RSUs to employees as compensation for employment services. The average term of the RSUs granted under the employee incentive plan is three years from grant date, and the only conditions for vesting are service conditions. The Company has recognized the expense of the RSUs based on grant date fair value of the awards ratably over the service period.
Income Taxes	Income Taxes ASC Topic 740, Income Taxes, (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The benefit of a tax position is recognized in the financial statements in the period during which based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure, and transition.
Segment Information	Segment Information The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions, allocation of resources, and assessing financial performance. Accordingly, the Company has one operating and reporting segment.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company
Reclassifications	Reclassifications Within the Consolidated Financial Statements certain immaterial amounts have been reclassified to conform with current period presentation. The Company has reclassified restricted cash from cash and cash equivalents to other assets. In addition, the Company has reclassified utility deposits to other assets. These reclassifications had no impact on reported operating income or net income; cash flows from operations, investing, or financing activities; or total assets and liabilities.

BASIS OF PRESENTATION AND SIG_3

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	May 31, 2023
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents	The following tables reconciles cash and cash equivalents and restricted cash to presentation on the balance sheet as of May 31, 2023, and May 31, 2022. (in thousands) May 31, 2023 May 31, 2022 Cash and cash equivalents $ 28,999 $ 38,798 Restricted cash included in prepaid expenses and other current assets 14,575 — Restricted cash included in other assets — 7,501 Total Cash, Cash Equivalents, and Restricted Cash $ 43,574 $ 46,299

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	May 31, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	Property and equipment consisted of the following as of May 31, 2023 and 2022: (in thousands) Estimated Useful Life May 31, May 31, Hosting Equipment Electric Generation and Transformers 15 years $ 4,655 $ 4,338 Other Equipment and Fixtures 6 years 1,685 588 Construction in Progress 106,226 18,305 Information Systems and Software 5 years 21,173 9,608 Land & Building Land 2,152 1,074 Land Improvements 15 years 1,293 1,180 Building 39 years 63,350 30,176 Total cost of property and equipment 200,534 65,269 Accumulated Depreciation (4,940) (1,009) Property and Equipment, Net $ 195,593 $ 64,260

REVENUE FROM CONTRACTS WITH C_2

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)	12 Months Ended
	May 31, 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 years ended May 31, 2023 and 2022 Fiscal Year Ended Customer May 31, 2023 May 31, 2022 Customer A 24 % — % Customer B 20 % 13 % Customer C 19 % 41 % Customer D 14 % 16 % Customer E 12 % 15 % Customer F 11 % 15 % Total 100 % 100 %
Schedule of Deferred Revenue	Changes in the Company's deferred revenue balances for the years ended May 31, 2023 and 2022, respectively, are shown in the following table: (in thousands) Balance at May 31, 2021 $ — Advance billings 12,426 Revenue recognized (8,549) Other adjustments — Balance at May 31, 2022 $ 3,877 Advance billings 100,072 Revenue recognized (55,392) Other adjustments 135 Balance at May 31, 2023 $ 48,692
Schedule of Customer Deposits	Changes in the Company's customer deposits balances for the years ended May 31, 2023 and 2022, respectively, are shown in the following table: (in thousands) Balance at May 31, 2021 $ — Customer deposits received $ 9,524 Customer deposits refunded — Other adjustments — Balance at May 31, 2022 $ 9,524 Customer deposits received $ 26,981 Customer deposits refunded — Other adjustments $ (135) Balance at May 31, 2022 $ 36,370

RELATED PARTY TRANSACTIONS (Tab

RELATED PARTY TRANSACTIONS (Tables)	12 Months Ended
	May 31, 2023
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	The following table illustrates the related party balances on this loan for the fiscal year ended May 31, 2023. (in thousands) Description May 31, 2023 Principal Outstanding $ 36,500 Other long-term liabilities 1,000 Accrued Interest Payable 81 The following tables illustrate related party revenue for fiscal years ended ended May 31, 2023 and May 31, 2022. (in thousands) Related Party Revenue for the Fiscal Year Ended Customer May 31, 2023 May 31, 2022 Customer A $ 8,007 $ 1,417 Customer B $ 6,401 $ 1,268 The following tables illustrate related party deferred revenue and deposits balances as of May 31, 2023 and May 31, 2022. (in thousands) Customer A Balances as of Caption May 31, 2023 May 31, 2022 Deferred revenue $ 1,474 $ 692 Customer Deposits $ 2,450 $ 2,059 (in thousands) Customer B Balances as of Caption May 31, 2023 May 31, 2022 Deferred revenue $ 50 $ 262 Customer Deposits $ 1,361 $ 1,171 For the fiscal years ending May 31, 2023 and May 31, 2022, the Company received sublease income from B. Riley Asset Management, which is also a wholly-owned subsidiary of B. Riley Financial, Inc. Mr. Cummins, the CEO of the Company, is also the President of B. Riley Asset Management. (in thousands) Description May 31, 2023 May 31, 2022 Sublease Income $ 84 $ 80

DEBT (Tables)

DEBT (Tables)	12 Months Ended
	May 31, 2023
Debt Disclosure [Abstract]
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 May 31, 2023 and 2022. (in thousands) May 31, 2023 May 31, 2022 Total Outstanding Loan Balances 79,441 7,324 Less: Deferred Issuance Costs (3,012) (94) Less: Current portion of Term Loan (7,950) (1,333) Less: Long-term related party loan (35,257) — Long-term portion of Term Loan $33,222 $5,897 Below is the weighted-average interest rate for the Company's term loans as of May 31, 2023 and 2022. May 31, 2023 May 31, 2022 Weighted-average interest rate 13.4 % 5.0 %
Schedule of Maturities of Long-Term Debt	Remaining Principal Payments Below is a summary of the remaining principal payments due over the life of the term loans as of May 31, 2023. (in thousands) Year Principal Payments FY24 $ 9,394 FY25 46,586 FY26 10,780 FY27 8,550 FY28 4,131 Thereafter — Total Term Loan Remaining Payments $ 79,441

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	May 31, 2023
Income Tax Disclosure [Abstract]
Schedule of Components of Income Tax Expense (Benefit)	(in thousands) For the Fiscal Year Ended May 31, 2023 May 31, 2022 Current expense / (benefit) Federal $ — $ — Foreign — — State 18 — Total current expense $ 18 $ — Deferred expense / (benefit) Federal $ (540) $ 540 Foreign — — State — — Total deferred (benefit) expense $ (540) $ 540 Total income tax (benefit) expense $ (523) $ 540
Schedule of Effective Income Tax Rate Reconciliation	The following table reconciles the statutory rate to our effective tax rate: May 31, 2023 May 31, 2022 Expected income tax expense (benefit) at U.S. Statutory Rate 21.0 % 21.0 % Stock-based compensation (6.0) % — % State income taxes, net of federal tax benefit — % 4.5 % Change in valuation allowance (13.0) % (27.0) % Other, net (0.8) % (0.9) % Income tax expense / (benefit) 1.2 % (2.4) %
Schedule of Deferred Tax Assets and Liabilities	The primary components of the temporary differences that gave rise to the Company's deferred tax assets and liabilities are as follows for the year ended May 31, 2023, and 2022: (in thousands) May 31, 2023 May 31, 2022 Deferred Tax Assets: Net Operating Loss $ 15,137 $ 11,971 Stock-Based Compensation 3,068 — Capitalized Research and Development 897 — Lease Liability 1,875 2,080 Other 360 248 Gross Deferred Tax Assets 21,337 14,298 Less: Valuation Allowances (15,697) (9,346) Total Net Deferred Tax Asset $ 5,640 $ 4,953 Deferred Tax Liabilities: Property, Plant, and Equipment $ (3,712) $ (3,407) Right of Use Assets (1,929) (2,086) Other — — Total Net Deferred Tax Liability (5,640) (5,493) Net deferred tax assets (liabilities) $ — $ (540)

STOCKHOLDERS' EQUITY (DEFICIT)

STOCKHOLDERS' EQUITY (DEFICIT) (Tables)	12 Months Ended
	May 31, 2023
Equity [Abstract]
Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity	The following is a summary of the activity and balances for unvested restricted stock awards granted for the fiscal year ended May 31, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,366,666 $ 8.04 Granted 551,605 $ 2.19 Vested (1,537,316) $ 7.38 Forfeited — $ — Outstanding as of May 31, 2023 380,955 $ 2.22 The following is a summary of the activity and balances for unvested restricted stock units granted for the fiscal year ended May 31, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2022 1,791,666 $ 8.04 Granted 12,391,207 $ 2.28 Vested (1,180,525) $ 6.41 Forfeited (536,413) $ 6.71 Outstanding as of May 31, 2023 12,465,935 $ 2.53

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	May 31, 2023
Leases [Abstract]
Summary of Lease Cost, Supplemental Cash Flow and Other Information	The Company presents lease costs as follows: (in thousands) Fiscal Year Ended Lease Type Consolidated Statements of Operations Presentation May 31, 2023 May 31, 2022 Operating lease cost: Operating lease expense Selling, General and Administrative $ 347 $ 328 Short-term lease expense Selling, General and Administrative 187 126 Sublease Income Selling, General and Administrative (103) (159) Total operating lease cost $ 431 $ 295 Finance lease expense: Amortization of ROU assets related to revenue production Cost of Sales 554 85 Amortization of ROU assets not related to revenue production Depreciation and Amortization Expense 2,782 26 Interest on finance leases Interest Expense 773 50 Variable finance lease expense Selling, General and Administrative 3 — Total finance lease cost $ 4,112 $ 161 Total Lease Cost $ 4,543 $ 456 Fiscal Year Ended May 31, 2023 May 31, 2022 Weighted-average years remaining (in years) Finance leases 22 57 Operating leases 3 4 Weighted-average discount rate Finance leases 8 % 8 % Operating leases 11 % 13 %
Schedule of Future Minimum Finance Lease Payments	The following table represents the Company’s future minimum lease payments as of May 31, 2023: (in thousands) Year Operating Leases Finance Leases Total FY24 $ 445 $ 6,687 $ 7,132 FY25 482 5,429 5,911 FY26 495 348 844 FY27 158 188 346 FY28 — 180 180 Beyond — 87,145 87,145 Total $ 1,580 $ 99,977 $ 101,557 Present value of lease liabilities $ (255) $ (85,921) $ (86,176) Less: Current portion of lease liability $ 320 $ 5,722 $ 6,042 Long-term portion of lease liability $ 1,005 $ 8,334 $ 9,339
Schedule of Future Minimum Operating Lease Payments	The following table represents the Company’s future minimum lease payments as of May 31, 2023: (in thousands) Year Operating Leases Finance Leases Total FY24 $ 445 $ 6,687 $ 7,132 FY25 482 5,429 5,911 FY26 495 348 844 FY27 158 188 346 FY28 — 180 180 Beyond — 87,145 87,145 Total $ 1,580 $ 99,977 $ 101,557 Present value of lease liabilities $ (255) $ (85,921) $ (86,176) Less: Current portion of lease liability $ 320 $ 5,722 $ 6,042 Long-term portion of lease liability $ 1,005 $ 8,334 $ 9,339

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	12 Months Ended
	May 31, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	Earnings per share for the year ended May 31, 2023 and 2022 are shown in the following table: (in thousands, except for share and per share data) Fiscal Year Ended May 31, 2023 May 31, 2022 Net loss from continuing operations $ (45,606) $ (22,486) Net loss from discontinued operations, net of income taxes — (1,044) Net Loss including noncontrolling interests (45,606) (23,530) Net Loss attributable to noncontrolling interest (960) (10) Net loss attributable to Applied Digital Corporation $ (44,646) $ (23,520) Continuing operations $ (0.49) $ (0.39) Discontinued operations $ — $ (0.02) Basic and diluted net loss per share $ (0.49) $ (0.41) Basic and diluted weighted average number of shares outstanding 93,976,233 57,121,096

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	12 Months Ended
	May 31, 2023
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations	Operating results of discontinued operations are summarized below: (in thousands) Fiscal Year Ended May 31, 2022 Cryptoasset Mining Revenue $ 2,987 Cost of Sales 1,611 Gross Profit 1,376 Impairment of Cryptocurrency Assets (393) Gain on Sale of Fixed Assets 1,229 Loss on Asset Reclass to Discontinued Operations (3,256) Net Loss from Discontinued Operations $ (1,044)

LIQUIDITY AND FINANCIAL CONDI_2

LIQUIDITY AND FINANCIAL CONDITION (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 28,999	$ 38,798
Working capital	$ (69,700)

BASIS OF PRESENTATION AND SIG_4

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions	12 Months Ended
	May 31, 2023 USD ($) segment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted cash | $	$ 14.6
Number of operating segments	1
Number of reportable segments	1
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award requisite service period	3 years

BASIS OF PRESENTATION AND SIG_5

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 28,999	$ 38,798
Restricted cash included in prepaid expenses and other current assets	14,575	0
Restricted cash included in other assets	0	7,501
Total Cash, Cash Equivalents, and Restricted Cash	$ 43,574	$ 46,299

PROPERTY AND EQUIPMENT - Schedu

PROPERTY AND EQUIPMENT - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 200,534	$ 65,269
Accumulated Depreciation	(4,940)	(1,009)
Property and Equipment, Net	$ 195,593	64,260
Electric Generation and Transformers
Property, Plant and Equipment [Line Items]
Estimated Useful Life	15 years
Total cost of property and equipment	$ 4,655	4,338
Other Equipment and Fixtures
Property, Plant and Equipment [Line Items]
Estimated Useful Life	6 years
Total cost of property and equipment	$ 1,685	588
Construction in Progress
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 106,226	18,305
Information Systems and Software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Total cost of property and equipment	$ 21,173	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	$ 1,293	1,180
Building
Property, Plant and Equipment [Line Items]
Estimated Useful Life	39 years
Total cost of property and equipment	$ 63,350	$ 30,176

PROPERTY AND EQUIPMENT - Narrat

PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	May 31, 2023	May 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation	$ 3.9	$ 1

REVENUE FROM CONTRACTS WITH C_3

REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Concentration Risk by Major Customer (Details)	12 Months Ended
	May 31, 2023	May 31, 2022
Concentration Risk [Line Items]
Concentration risk	100%	100%
Customer A | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	24%	0%
Customer B | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	20%	13%
Customer C | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	19%	41%
Customer D | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	14%	16%
Customer E | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	12%	15%
Customer F | Revenue Benchmark | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk	11%	15%

REVENUE FROM CONTRACTS WITH C_4

REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) $ in Millions	May 31, 2023 USD ($)
Revenue, Major Customer [Line Items]
Revenue, remaining performance obligation, amount	$ 48.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-06-01
Revenue, Major Customer [Line Items]
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	12 Months Ended
	May 31, 2023	May 31, 2022
Contract with Customer, Liability [Roll Forward]
Balance, beginning of the period	$ 3,877	$ 0
Advance billings	100,072	12,426
Revenue recognized	(55,392)	(8,549)
Other adjustments	135	0
Balance, end of the period	$ 48,692	$ 3,877

REVENUE FROM CONTRACTS WITH C_6

REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of Customer Deposits (Details) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022
Customer Deposits [Roll Forward]
Balance, beginning of period	$ 9,524,000	$ 0
Customer deposits received	26,981,000	9,524,000
Customer deposits refunded	0	0
Other adjustments	(135,000)	0
Balance, end of period	$ 36,370,000	$ 9,524,000

RELATED PARTY TRANSACTIONS - Re

RELATED PARTY TRANSACTIONS - Related Party Loan (Details) - Medium-term Notes - USD ($) $ in Thousands	May 31, 2023	May 23, 2023	May 31, 2022
Related Party Transaction [Line Items]
Balance outstanding	$ 79,441		$ 7,324
B. Riley loan and security agreement
Related Party Transaction [Line Items]
Balance outstanding	36,500
Other long-term liabilities	1,000	$ 1,000
Accrued Interest Payable	$ 81

RELATED PARTY TRANSACTIONS - Na

RELATED PARTY TRANSACTIONS - Narrative (Details)	12 Months Ended
	May 31, 2023 customer
Note Payable [Line Items]
Number of related party customers	2
Related Party
Note Payable [Line Items]
Related party ownership interests	5%
Related Party | Customer A
Note Payable [Line Items]
Related party ownership interests	5%
Related Party | Customer B
Note Payable [Line Items]
Related party ownership interests	60%
Related Party | Customer B by Individual
Note Payable [Line Items]
Related party ownership interests	5%

RELATED PARTY TRANSACTIONS - _2

RELATED PARTY TRANSACTIONS - Related Party Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Related Party Transaction [Line Items]
Hosting revenue	$ 55,392	$ 8,549
Deferred revenue	48,692	3,877	$ 0
Customer A | Related Party
Related Party Transaction [Line Items]
Hosting revenue	8,007	1,417
Deferred revenue	1,474	692
Customer Deposits	2,450	2,059
Customer B | Related Party
Related Party Transaction [Line Items]
Hosting revenue	6,401	1,268
Deferred revenue	50	262
Customer Deposits	$ 1,361	$ 1,171

RELATED PARTY TRANSACTIONS - Su

RELATED PARTY TRANSACTIONS - Sublease Income (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Related Party Transaction [Line Items]
Sublease Income	$ 103	$ 159
Related Party
Related Party Transaction [Line Items]
Sublease Income	$ 84	$ 80

DEBT - Schedule of Long-Term De

DEBT - Schedule of Long-Term Debt Instruments (Details) - Medium-term Notes - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Debt Instrument [Line Items]
Balance outstanding	$ 79,441	$ 7,324
Less: Deferred Issuance Costs	(3,012)	(94)
Less: Current portion of Term Loan	(7,950)	(1,333)
Related Party
Debt Instrument [Line Items]
Long-term portion of Term Loan	(35,257)	0
Nonrelated Party
Debt Instrument [Line Items]
Long-term portion of Term Loan	$ (33,222)	$ (5,897)

DEBT - Weighted Average Interes

DEBT - Weighted Average Interest Rate (Details)	May 31, 2023	May 31, 2022
Debt Disclosure [Abstract]
Weighted-average interest rate	13.40%	5%

DEBT - Schedule of Maturities o

DEBT - Schedule of Maturities of Long-Term Debt (Details) - Medium-term Notes $ in Thousands	May 31, 2023 USD ($)
Debt Instrument [Line Items]
FY24	$ 9,394
FY25	46,586
FY26	10,780
FY27	8,550
FY28	4,131
Thereafter	0
Total Term Loan Remaining Payments	$ 79,441

DEBT - Narrative (Details)

DEBT - Narrative (Details) $ in Thousands			12 Months Ended
	May 23, 2023 USD ($)	Mar. 11, 2022 USD ($)	May 31, 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			$ 3,012				$ 94
Balance outstanding			79,441				$ 7,324
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
Jamestown Stutsman Development Corporation Interest Buy Down | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount			$ 200
Interest rate			2%
Debt instrument, interest Rate, buy down, new percentage			1.50%
Debt instrument, interest rate, buy down term			13 months
Jamestown Stutsman Development Corporation Interest Buy Down | Bonds
Debt Instrument [Line Items]
Promissory note amount			$ 500
Vantage Bank Texas (VBT) Promissory Note | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount		$ 7,500
Interest rate		5%
Term		5 years
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
Balance outstanding			10,100
Debt instrument, loan advances, number of installments | installment					16
Debt instrument, loan advances, installment maximum					$ 900
Debt instrument, 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%
Debt issuance costs, net				$ 200
Balance outstanding			19,700
B. Riley loan and security agreement | Medium-term Notes
Debt Instrument [Line Items]
Promissory note amount	$ 50,000
Interest rate	9%
Balance outstanding			36,500
Fee	$ 1,500
Term fee	$ 1,000		$ 1,000
Unused borrowing capacity, fee	3%

INCOME TAXES - Narrative (Detai

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (523)	$ 540
Effective income tax rate reconciliation, percent	1.20%	(2.40%)
Tax net operating losses	$ 114,800	$ 83,600
Operating loss carryforwards, not subject to expiration	99,300
Increase in valuation allowance	$ 6,300	$ 6,200

INCOME TAXES - Schedule of Comp

INCOME TAXES - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Current expense / (benefit)
Federal	$ 0	$ 0
Foreign	0	0
State	18	0
Total current expense	18	0
Deferred expense / (benefit)
Federal	(540)	540
Foreign	0	0
State	0	0
Total deferred (benefit) expense	(540)	540
Total income tax (benefit) expense	$ (523)	$ 540

INCOME TAXES - Schedule of Effe

INCOME TAXES - Schedule of Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	May 31, 2023	May 31, 2022
Income Tax Disclosure [Abstract]
Expected income tax expense (benefit) at U.S. Statutory Rate	21%	21%
Stock-based compensation	(6.00%)	0%
State income taxes, net of federal tax benefit	0%	4.50%
Change in valuation allowance	(13.00%)	(27.00%)
Other, net	(0.80%)	(0.90%)
Income tax expense / (benefit)	1.20%	(2.40%)

INCOME TAXES - Schedule of Defe

INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Deferred Tax Assets:
Net Operating Loss	$ 15,137	$ 11,971
Stock-Based Compensation	3,068	0
Capitalized Research and Development	897	0
Lease Liability	1,875	2,080
Other	360	248
Gross Deferred Tax Assets	21,337	14,298
Less: Valuation Allowances	(15,697)	(9,346)
Total Net Deferred Tax Asset	5,640	4,953
Deferred Tax Liabilities:
Property, Plant, and Equipment	(3,712)	(3,407)
Right of Use Assets	(1,929)	(2,086)
Other	0	0
Total Net Deferred Tax Liability	(5,640)	(5,493)
Net deferred tax assets (liabilities)	$ 0	$ (540)

STOCKHOLDERS' EQUITY (DEFICIT_2

STOCKHOLDERS' EQUITY (DEFICIT) - Additional Details (Details) $ in Millions		12 Months Ended
	Jun. 06, 2022 shares	May 31, 2023 USD ($) shares	Oct. 09, 2021 plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plans | plan			2
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants to date (in shares)		600,000
Compensation cost expected | $		$ 0.8
Unrecognized stock compensation expense, period for recognition		5 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants to date (in shares)		12,400,000
Compensation cost expected | $		$ 31.5
Unrecognized stock compensation expense, period for recognition		24 months
Xsquared Holding Limited
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock forfeited during period (in shares)	4,965,432

STOCKHOLDERS' EQUITY (DEFICIT_3

STOCKHOLDERS' EQUITY (DEFICIT) - Restricted Stock Awards (Details) - Restricted Stock	12 Months Ended
	May 31, 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
Granted (in shares) | shares	551,605
Vested (in shares) | shares	(1,537,316)
Forfeited (in shares) | shares	0
Outstanding at end of period (in shares) | shares	380,955
Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of period (in USD per share) | $ / shares	$ 8.04
Granted (in USD per share) | $ / shares	2.19
Vested (in USD per share) | $ / shares	7.38
Forfeited (in USD per share) | $ / shares	0
Outstanding at end of period (in USD per share) | $ / shares	$ 2.22

STOCKHOLDERS' EQUITY (DEFICIT_4

STOCKHOLDERS' EQUITY (DEFICIT) - Restricted Stock Units (Details) - Restricted Stock Units (RSUs)	12 Months Ended
	May 31, 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	1,791,666
Granted (in shares) | shares	12,391,207
Vested (in shares) | shares	(1,180,525)
Forfeited (in shares) | shares	(536,413)
Outstanding at end of period (in shares) | shares	12,465,935
Weighted Average Grant Date Fair Value Per Share
Outstanding at beginning of period (in USD per share) | $ / shares	$ 8.04
Granted (in USD per share) | $ / shares	2.28
Vested (in USD per share) | $ / shares	6.41
Forfeited (in USD per share) | $ / shares	6.71
Outstanding at end of period (in USD per share) | $ / shares	$ 2.53

LEASES - Summary of lease cost

LEASES - Summary of lease cost (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Operating lease cost:
Operating lease expense	$ 347	$ 328
Short-term lease expense	187	126
Sublease Income	(103)	(159)
Total operating lease cost	431	295
Finance lease expense:
Interest on finance leases	773	50
Variable finance lease expense	3	0
Total finance lease cost	4,112	161
Total Lease Cost	4,543	456
Cost of Sales
Finance lease expense:
Amortization of ROU assets	554	85
Depreciation and Amortization Expense
Finance lease expense:
Amortization of ROU assets	$ 2,782	$ 26

LEASES - Schedule of future min

LEASES - Schedule of future minimum lease payments (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Operating Leases
FY24	$ 445
FY25	482
FY26	495
FY27	158
FY28	0
Beyond	0
Total	1,580
Present value of lease liabilities	(255)
Less: Current portion of lease liability	320	$ 191
Long-term portion of lease liability	1,005	936
Finance Leases
FY24	6,687
FY25	5,429
FY26	348
FY27	188
FY28	180
Beyond	87,145
Total	99,977
Finance Lease, Liability	(85,921)
Less: Current portion of lease liability	5,722	813
Long-term portion of finance lease liability	8,334	$ 4,374
Total
FY24	7,132
FY25	5,911
FY26	844
FY27	346
FY28	180
Beyond	87,145
Total	101,557
Present value of lease liabilities	(86,176)
Less: Current portion of lease liability	6,042
Long-term portion of lease liability	$ 9,339

LEASES - Summary of supplementa

LEASES - Summary of supplemental cash flow and other information (Details)	May 31, 2023	May 31, 2022
Leases [Abstract]
Finance lease, weighted average remaining lease term	22 years	57 years
Operating lease, weighted average remaining lease term	3 years	4 years
Finance lease, weighted average discount rate	8%	8%
Operating lease, weighted average discount rate	11%	13%

LEASES - Narrative (Details)

LEASES - Narrative (Details) $ in Millions	May 31, 2023 USD ($)
Leases [Abstract]
Operating lease, not yet commenced, minimum payments	$ 83.1
Operating lease, not yet commenced, term of contract	84 months
Finance lease, not yet commenced, minimum payments	$ 8.5
Finance lease, not yet commenced, term of contract	30 months

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands	12 Months Ended
	May 31, 2023 USD ($) unit	Jun. 23, 2023 USD ($)	Jun. 15, 2023 unit	May 31, 2022 USD ($)
Class of Stock [Line Items]
Service contract, term	5 years
Minimum | Subsequent Event
Class of Stock [Line Items]
Estimate of possible loss		$ 0
Maximum | Subsequent Event
Class of Stock [Line Items]
Estimate of possible loss		$ 1,000
Letter of Credit
Class of Stock [Line Items]
Line of credit, maximum borrowing capacity	$ 14,500			$ 7,500
Energy Service
Class of Stock [Line Items]
Contractual obligation	28,000
AI Cloud Hosting Service
Class of Stock [Line Items]
Contractual obligation	$ 10,200
Graphic Processing Units
Class of Stock [Line Items]
Purchase obligation, units | unit	1,024
Graphic Processing Units | Subsequent Event
Class of Stock [Line Items]
Purchase obligation, units | unit			26,000

EARNINGS PER SHARE - Narrative

EARNINGS PER SHARE - Narrative (Details) shares in Millions	12 Months Ended
	May 31, 2023 shares
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount	12.8

EARNINGS PER SHARE - Schedule o

EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Earnings Per Share [Abstract]
Net loss from continuing operations	$ (45,606)	$ (22,486)
Net loss from discontinued operations, net of income taxes	0	(1,044)
Net loss including noncontrolling interests	(45,606)	(23,530)
Net loss attributable to noncontrolling interest	(960)	(10)
Net Income (Loss)	$ (44,646)	$ (23,520)
Continuing Operations - basic ( in dollars per share)	$ (0.49)	$ (0.39)
Continuing Operations - diluted ( in dollars per share)	(0.49)	(0.39)
Discontinued Operations - basic ( in dollars per share)	0	(0.02)
Discontinued Operations - diluted ( in dollars per share)	0	(0.02)
Basic net loss per share (in dollars per share)	(0.49)	(0.41)
Diluted net loss per share (in dollars per share)	$ (0.49)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)	93,976,233	57,121,096
Diluted weighted average number of shares outstanding (in shares)	93,976,233	57,121,096

DISCONTINUED OPERATIONS - Opera

DISCONTINUED OPERATIONS - Operating Results (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Loss from Discontinued Operations	$ 0	$ (1,044)
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		2,987
Cost of Sales		1,611
Gross Profit		1,376
Impairment of Cryptocurrency Assets		(393)
Gain on Sale of Fixed Assets		1,229
Loss on Asset Reclass to Discontinued Operations		(3,256)
Net Loss from Discontinued Operations		$ (1,044)

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) $ in Thousands	2 Months Ended
	Aug. 02, 2023 USD ($) unit shares	Jun. 15, 2023 unit	May 31, 2023 USD ($) unit	May 31, 2022 USD ($)	May 31, 2021 USD ($)
Subsequent Event [Line Items]
Finance lease payments			$ 99,977
Deferred revenue			$ 48,692	$ 3,877	$ 0
Graphic Processing Units
Subsequent Event [Line Items]
Purchase obligation, units | unit			1,024
Medium-term Notes
Subsequent Event [Line Items]
Balance outstanding			$ 79,441	$ 7,324
B. Riley loan and security agreement | Medium-term Notes
Subsequent Event [Line Items]
Balance outstanding			$ 36,500
Subsequent Event
Subsequent Event [Line Items]
Finance lease payments	$ 41,000
Finance lease, term of contract	24 months
Gross proceeds from sale	$ 125,000
Number of shares sold in transaction (in shares) | shares	7,900,000
Payments of stock issuance costs	$ 2,000
Issuance of common stock	64,700
Subsequent Event | AI Cloud Services
Subsequent Event [Line Items]
Deferred revenue	$ 22,500
Subsequent Event | Graphic Processing Units
Subsequent Event [Line Items]
Units obtained in exchange for finance lease liability, units | unit	1,024
Purchase obligation, units | unit		26,000
Units received and deployed | unit		1,024
Subsequent Event | B. Riley loan and security agreement | Medium-term Notes
Subsequent Event [Line Items]
Proceeds from debt, net of issuance costs	$ 3,000
Balance outstanding	$ 39,500