apld-20221130

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2022


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ and __________

Commission file number 001-31968

________________________

APPLIED DIGITAL CORPORATION

(Exact name of registrant as specified in its charter)

________________________


Nevada			95-4863690
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3811 Turtle Creek, Blvd., Suite 2100, Dallas, TX			75219
(Address of Principal Executive Offices)			(Zip Code)

(214) 556-2465

Registrant's telephone number, including area code

Applied Blockchain, Inc.

(Former name, former address and former fiscal year, if changed since last report)

________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	APLD	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of January 10, 2023, 94,474,316 shares of Common Stock, $0.001 par value, were outstanding.

Table of Contents


		Page
Part I - Financial Information

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of November 30, 2022 and May 31, 2022 (unaudited)	1
	Condensed Consolidated Statements of Operations for the three and six month periods ended November 30, 2022 and November 30, 2021 (unaudited)	2
	Condensed Consolidated Statements of Consolidated Statements of Changes in Stockholders’ Equity for the three month periods ended November 30, 2022 and November 30, 2021 (unaudited)	3
	Condensed Consolidated Statements of Consolidated Statements of Changes in Stockholders’ Equity for the six month periods ended November 30, 2022 and November 30, 2021 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the six month periods ended November 30, 2022 and November 30, 2021 (unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	25

Part II - Other Information

Item 1.	Legal Proceedings	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

Part I - Financial Information

Item 1. Financial Statements

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except number of shares and par value data)


	November 30, 2022		May 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	18,074	$	46,299
Accounts receivable	276		227
Prepaid expenses and other current assets	2,397		1,336
Total current assets	20,747		47,862
Property and equipment, net	132,893		64,260
Right of use asset, net	12,353		6,408

Utility deposits	1,450		1,450
TOTAL ASSETS	$	167,443	$	119,980

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	7,472	$	13,260
Current portion of lease liability	3,664		1,004

Current portion of term loan	4,122		1,333
Customer deposits	24,689		9,524
Current deferred revenue	29,394		3,877
Sales and use tax payable	865		—
Total current liabilities	70,206		28,998
Deferred tax liability	260		540

Long-term portion of lease liability	8,631		5,310
Long-term term loan	16,376		5,897
Total liabilities	$	95,473	$	40,745
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.001 par value, 166,666,667 shares authorized, 93,982,650 shares issued and 93,946,353 shares outstanding at November 30, 2022, and 97,837,703 shares issued and 97,801,406 shares outstanding at May 31, 2022	$	94	$	98
Additional paid in capital	150,695		128,293
Treasury stock, 36,300 shares at November 30, 2022 and May 31, 2022, at cost	(62)		(62)
Accumulated deficit	(87,218)		(56,070)
Total stockholders’ equity attributable to Applied Digital Corporation	63,509		72,259
Noncontrolling interest	8,461		6,976
Total Stockholders' equity (deficit) including noncontrolling interest	$	71,970	$	79,235
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	167,443	$	119,980

and use t

See Accompanying Notes to the Financial Statements

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

SEC Form 10-Q filed by Applied Blockchain Inc.