《Applied Digital Corporation (APLD) 2024年10-K年度報告「NASDAQ」.pdf》由會員分享，可在線閱讀，更多相關《Applied Digital Corporation (APLD) 2024年10-K年度報告「NASDAQ」.pdf（155頁珍藏版）》請在三個皮匠報告上搜索。
1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended May 31,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For t
2、he transition period from toCommission file number 001-31968APPLIED DIGITAL CORPORATION(Exact name of registrant as specified in its charter)Nevada95-4863690(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)3811 Turtle Creek Boulevard,Suite 2100,Dallas,
3、Texas75219(Address of Principal Executive Offices)(Zip Code)(214)427-1704Registrants telephone number,including area codeSecurities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,par value$0.001 per shareAPLDNa
4、sdaq Global Select MarketIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes o No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes o No xIndicate by ch
5、eck mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Actof 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports);and(2)has been subjectto such filing requirements
6、 for the past 90 days.Yes x No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate web site,if any,every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12
7、 months(or forsuch shorter period that the registrant was required to submit and post such files).Yes x No oIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reportingcompany.See the definitions of“large accelerated f
8、iler,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated fileroAccelerated filero2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm1/1552025/5/19 10:16apld-20240531https:/www.se
9、c.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm2/155Non-accelerated filerxSmaller reporting companyxEmerging growth companyoIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying withany new or
10、 revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.oIndicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of itsinternal control over financial reporting under Section 404(b)of
11、 the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accountingfirm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant includedin the filing reflect the correc
12、tion of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensationreceived by any of the registrants executive officers during the relevant recovery period pursuan
13、t to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No xAs of November 30,2023,the last business day of the registrants most recently completed second fiscal quarter,the aggregate market value ofthe common stock held by non-affi
14、liates of the registrant was approximately$399.2 million,based on the closing price of the registrants commonstock on November 30,2023,as reported on the Nasdaq Global Select Market.Shares of the registrants common stock held by each executiveofficer,director,and each other person who may be deemed
15、to be an affiliate of the registrant,have been excluded from this computation.Thisdetermination of affiliate status is not necessarily a conclusive determination for other purposes.The registrant had outstanding 157,438,246 shares of common stock as of August 27,2024.DOCUMENTS INCORPORATED BY REFERE
16、NCENone.2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm3/155Table of ContentsPagePart IItem 1.Business4Item 1A.Risk Factors11Item 1B.Unresolved Staff Comments43Item 1C.Cybersecurity43Item 2.Properties44Item 3.Legal Proceedings44Item 4.M
17、ine Safety Disclosures45Part IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of EquitySecurities46Item 6.Reserved46Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations47Item 7A.Quantitative and Qualitative Disclosu
18、res About Market Risk63Item 8.Financial Statements and Supplementary Data64Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure93Item 9A.Controls and Procedures93Item 9B.Other Information94Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspecti
19、ons95Part IIIItem 10.Directors,Executive Officers and Corporate Governance95Item 11.Executive Compensation101Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters106Item 13.Certain Relationships and Related Transactions,and Director Independence109Ite
20、m 14.Principal Accounting Fees and Services110Part IVItem 15.Exhibits,Financial Statement Schedules111Item 16.Form 10-K Summary115Signatures11632025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm4/155Part IFORWARD LOOKING STATEMENTSThis Ann
21、ual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,asamended,and Section 21E of the Securities Exchange Act of 1934,as amended,that involve substantial risks and uncertainties.You can identify these forward-looking statements through our us
22、e of words such as“may,”“can,”“anticipate,”“assume,”“should,”“indicate,”“would,”“believe,”“contemplate,”“expect,”“seek,”“estimate,”“continue,”“plan,”“point to,”“project,”“predict,”“could,”“intend,”“target,”“potential”and other similar words and expressions of the future.Statements that containthese
23、words and other statements that are forward-looking in nature should be read carefully because they discuss futureexpectations,contain projections of future results of operations or of financial positions,or state other“forward-looking”information.These statements are based on our managements belief
24、s and assumptions,which are based on currently available information.Ouractual results,and the assumptions on which we relied,could prove materially different from our expectations.You are cautionednot to place undue reliance on forward-looking statements.Except as otherwise may be required by law,w
25、e undertake noobligation to update or revise forward-looking statements to reflect changed assumptions,the occurrence of unanticipated events oractual operating results.There are a number of important factors that could cause our actual results to differ materially from thoseexpressed in any forward
26、-looking statement made by us.These factors include,but are not limited to:our ability to complete construction of the Ellendale HPC data center;availability of financing to continue to grow our business;labor and other workforce shortages and challenges;power or other supply disruptions and equipme
27、nt failures;our dependence on principal customers;the addition or loss of significant customers or material changes to our relationships with these customers;our sensitivity to general economic conditions including changes in disposable income levels and consumer spendingtrends;our ability to timely
28、 and successfully build new hosting facilities with the appropriate contractual margins andefficiencies;our ability to continue to grow sales in our hosting business;volatility of cryptoasset pricesuncertainties of cryptoasset regulation policy;andequipment failures,power or other supply disruptions
29、.You should carefully review the risks described in Item 1A of this Annual Report on Form 10-K,as the occurrence of any of theseevents could have an adverse effect,which may be material,on our business,results of operations,financial condition,or cashflows.Moreover,we operate in an evolving environm
30、ent.New risk factors and uncertainties emerge from time to time,and it is notpossible for our management to predict all risk factors and uncertainties,nor are we able to assess the impact of all of these riskfactors on our business or the extent to which any risk factor,or combination of risk factor
31、s,may cause actual results to differmaterially from those contained in any forward-looking statements.These risks and others described under the section“RiskFactors”below are not exhaustive.Item 1.BusinessOverviewOur BusinessWe are a United States(U.S.)designer,developer,and operator of next-generat
32、ion digital infrastructure across North America.We provide digital infrastructure solutions and cloud services to the rapidly growing industries of High-Performance Computing(HPC)and Artificial Intelligence(AI).We operate in three distinct business segments,2025/5/19 10:16apld-20240531https:/www.sec
33、.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm5/15542025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm6/155including,Blockchain data center hosting(the Data Center Hosting Business),cloud services through a wholly ow
34、ned subsidiary(the Cloud Services Business)and HPC data center hosting(the HPC Hosting Business),as further discussed below.We completed our initial public offering in April 2022 and our common stock began trading on the Nasdaq Global Select Market(“Nasdaq”)on April 13,2022.In November 2022,we chang
35、ed our name from Applied Blockchain,Inc.to Applied DigitalCorporation.Data Center Hosting BusinessOur Data Center Hosting Business provides energized infrastructure services to crypto mining customers.Our custom-designeddata centers allow customers to rent space based on their power requirements.We
36、currently serve seven crypto mining customers,all of which have entered into contracts with us ranging from three to five years.This business segment accounts for the majority ofthe revenue we generate from our operations(approximately 83%for the fiscal year ended May 31,2024).We currently operate s
37、ites in Jamestown and Ellendale,North Dakota,with a total hosting capacity of approximately 286 MW:Jamestown,North Dakota:106 MW facility.Ellendale,North Dakota:180 MW facility.In March 2021,we executed a strategy planning and portfolio advisory services agreement(the Services Agreement)with GMRLimi
38、ted,a British Virgin Island limited liability company(GMR),Xsquared Holding Limited,a British Virgin Island limitedliability company(SparkPool)and Valuefinder,a British Virgin Islands limited liability company(Valuefinder and,togetherwith GMR and SparkPool,the Service Provider(s).Under the Services
39、Agreement,the Service Providers agreed to providecrypto asset mining management and analysis and assist us in securing difficult-to-obtain mining equipment.Under the terms of theServices Agreement,we issued 7,440,148 shares of our common stock to each of GMR and SparkPool and 3,156,426 shares of our
40、common stock to Valuefinder.In June 2022,SparkPool ceased all operations and forfeited 4,965,432 shares of our common stockback to us.In March 2022,we decided to terminate our crypto mining operations,shifting our focus and our business strategy to developingthe HPC Hosting Business and our other tw
41、o business segments(including the Data Center Hosting Business).Each ServiceProvider advised us concerning the design and buildout of our hosting operations.We continue to partner with GMR,and otherproviders as they remain our strategic equity investors.Our partners have strong relationships across
42、the cryptocurrency ecosystem,which we may leverage to identify leads for the expansion of our operations and business segments.Compared to our previous mining operations,co-hosting revenues are less subject to volatility related to the underlying crypto-asset markets.We have a contractual ceiling fo
43、r our energy costs through our Amended and Restated Electric Service Agreement,entered into in September 2023 with a utility in the upper Midwest(the Electric Service Agreement).One of the main benefits ofthe Electric Service Agreement is the low cost of power for mining.Even before the recently imp
44、osed crypto mining restrictions inChina,power capacity available for Bitcoin mining was scarce,especially at scalable sites with over 100 MW of potential capacity.This scarcity of mining power allows us to realize attractive hosting rates in the current market.The Electric Service Agreementhas also
45、enabled us to launch our hosting business with long-term customer contracts.In March 2024,we announced that we entered into a definitive agreement to sell our 200 MW campus in Garden City,TX,to MaraGarden City LLC,a Delaware limited liability company and subsidiary of Marathon Digital Holdings(Nasda
46、q:MARA).Wecompleted the sale transaction on April 1,2024.Cloud Services BusinessWe officially launched our Cloud Services Business in May 2023.We operate our Cloud Services Business through our whollyowned subsidiary,Applied Digital Cloud Corporation(Applied Digital Cloud),which provides cloud servi
47、ces to customers,suchas AI and machine learning developers.Our Cloud Services Business specializes in providing GPU computing solutions toempower customers in executing critical workloads related to AI,machine learning(ML),52025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/0
48、00114487924000216/apld-20240531.htm7/155rendering,and other HPC tasks.Our managed hosting cloud service allows customers to sign service contracts,utilizing ourCompany-provided equipment for seamless and cost-effective operations.We are rolling out multiple GPU clusters,each comprising 1,024 GPUs,wh
49、ich are available for lease by our customers.Additionally,we have secured contracts with colocation service providers to ensure secure space and energy for our hostingservices.Our strategy is to utilize a blend of third-party colocation and our own HPC data centers to deliver cloud services to ourcu
50、stomers.We currently rely on a few major suppliers for our products in this business segment:NVIDIA Corp.(NVIDIA),Super MicroComputer Inc.(Super Micro),Hewlett Packard Enterprise(HPE)and Dell Technologies Inc.(Dell).In May 2023,wepartnered with Super Micro,a renowned provider of Application-Optimize
51、d Total IT Solutions.Together,we aim to deliver theCompanys cloud services to our customers.Super Micros high-performance server and storage solutions are designed to address awide range of computational-intensive workloads.Their next-generation GPU servers are incredibly power-efficient,which is vi
52、talfor data centers as the power requirements for large-scale AI models continue to increase.Optimizing the Total Cost of Ownership(TCO)and Total Cost to Environment(TCE)is critical for data center operators to ensure sustainable operations.In June 2023,we announced a partnership with HPE,a global c
53、ompany specializing in edge-to-cloud technology.As part of thiscollaboration,HPE will provide its powerful and energy-efficient supercomputers to support large-scale AI through our cloudservice.HPE has been supportive in core design considerations and engineering of Company-owned facilities which wi
54、ll supportApplied Digital Clouds infrastructure.In addition,we have supply agreements with Dell for delivery of AI and GPU servers.By May 31,2024,the Company had received and deployed a total of 6,144 GPUs;4,096 GPUs were actively recognizing revenueand 2,048 GPUs were pending customer acceptance to
55、 start revenue recognition.The Cloud Services Business currently serves twocustomers and accounted for approximately 17%of our revenue in fiscal year 2024.As we ramp up operations in this businesssegment,we expect to acquire and deploy additional GPUs,increase revenue from the Cloud Services Busines
56、s and increase thepercentage of our revenue produced by our Cloud Services Business.HPC Hosting BusinessOur HPC Hosting Business specializes in designing,constructing,and managing data centers tailored to support HPC applications,including AI.The Company is currently building two HPC focused data ce
57、nters.The first facility,which is nearing completion,is a 7.5 MWfacility in Jamestown,ND location adjacent to the Companys 106 MW Data center hosting facility.The Company also brokeground on a 100 MW HPC data center in project in Ellendale,ND,on land located adjacent to its existing 180 MW Data cent
58、erhosting facility.These separate and unique buildings,designed and purpose-built for GPUs,will sit separate from the Companyscurrent buildings and host more traditional HPC applications,such as natural language processing,machine learning,andadditional HPC developments.The Company has entered into
59、exclusivity and executed a letter of intent with a US-based hyperscaler for a 400 MW capacitylease,inclusive of our current 100 MW facility and two forthcoming buildings in Ellendale,North Dakota.On July 26,2024,theCompany extended the initial exclusivity period under the previously announced letter
60、 of intent with the U.S.based hyperscaler forleasing the HPC Ellendale Facility.The Company is in advanced discussions with traditional financing counterparties for thisinvestment-grade tenant.We anticipate that this business segment will begin generating meaningful revenues once the HPC Ellendale F
61、acility becomesoperational,which is expected in calendar year 2025.CompetitionAs a company operating data centers,we face significant competition from various cloud competitors and data center providers inthe U.S.Our primary competitors in the cloud services market are cloud service providers,such a
62、s Coreweave,Crusoe Energy,andLambda Labs.Additionally,we compete with several prominent data center providers,including Digital Realty,Equinix,Inc.,NTT,and various private operators in the U.S.These competitors own or operate properties similar to our data centers.Specifically,within our Data Center
63、 Hosting Business,we compete against Core Scientific,2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm8/15562025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm9/155Bitdeer Techno
64、logies Group,and Riot Platforms,amongst other private operators.As we navigate this competitive landscape,westrive to innovate and differentiate our services to attract and retain customers.Many of our competitors offer more locations in more markets worldwide and have well-established international
65、 operations.Manyof our competitors may have significant advantages over us,including greater name recognition,longer operating histories andhigher operating margins,pre-existing relationships with current or potential customers,the capacity to provide the same oradditional products and services at a
66、 lower cost,more significant marketing budgets and other financial and operational resources,more robust internal controls and systems,and better established,more extensive scale and lower cost suppliers and supplierrelationships.We face significant competition from our competitors,and we expect suc
67、h competition to continue to increase,which couldsignificantly harm our business,financial condition,and results of operations.If we cannot compete successfully against ourcurrent and future competitors,we may not be able to retain and grow our customer base,and our business and prospects may beharm
68、ed.Industry TrendsWe believe the data center industry is poised for significant growth,driven by the rapid adoption of digital technologies across allsectors.As businesses prioritize digital transformation,the demand for data center infrastructure is expected to increasesubstantially.Companies requi
69、re robust,reliable,and scalable solutions to process,analyze,and store vast amounts of data in real-time,and data centers play a crucial role in meeting these needs.Cloud adoption,particularly hybrid cloud solutions,drives data center demand significantly.Hybrid cloud infrastructure offersbusinesses
70、 the flexibility to scale their IT resources while maintaining the security and privacy of sensitive data.As morecompanies migrate their applications and data to the cloud,data center capacity requirements will continue to grow.Edge computing is another key trend shaping the data center industry.The
71、 proliferation of internet devices and the need for real-time data processing are driving the deployment of data centers closer to the network edge.This approach reduces latency,improves application performance,and optimizes IT infrastructure costs and complexity.Sustainability and energy efficiency
72、 are increasingly important considerations in the data center industry.Companies are investingin renewable energy sources,such as solar and wind power,and implementing advanced cooling and power managementtechnologies to reduce their environmental impact and operating costs.The AI market has experie
73、nced significant growth and development in recent years,with the rapid advancement of machinelearning,natural language processing,and computer vision.The global AI market is expected to reach$500 billion by 2027,drivenby increasing adoption across various industries,including healthcare,finance,tran
74、sportation,and manufacturing.However,the AIlandscape is also facing challenges and uncertainties.Developing more advanced AI systems,such as large language models andgenerative AI,has raised concerns about potential misuse,bias,and the displacement of human workers.Companies operating inAI are under
75、 increasing pressure to address these issues and ensure the responsible development and deployment of theirtechnologies.Providers offering comprehensive power,space,and connectivity solutions globally while prioritizing sustainability and energyefficiency will be best positioned to capitalize on the
76、 increasing demand for data center services.Materials and SuppliersMaintaining key supplier relationships is crucial to our business operations,as we rely on these relationships,such as with Dell,HPE,NVIDIA,and Super Micro,to secure essential computing hardware,infrastructure components,and other ma
77、terials.Thecomplexity of developing HPC and cloud hardware at scale limits the number of suppliers capable of meeting our requirements.Consequently,we have established purchase orders with leading hardware manufacturers,which include extended deliveryschedules spanning several months before the hard
78、ware is delivered to our facilities.These fluctuations in delivery timelinesnecessitate careful planning and advanced purchasing strategies to ensure we can acquire hardware well before their anticipateddeployment.Developing the HPC Ellendale Facility demands significant electrical infrastructure co
79、mponents and construction raw materials.We proactively procure these materials from our suppliers in sufficient quantities to facilitate hardware2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm10/15572025/5/19 10:16apld-20240531https:/ww
80、w.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm11/155deployment at scale and on accelerated timelines.To mitigate potential supply chain disruptions and ensure the smooth operation ofour facilities,we have established long-term contracts and agreements with key suppliers.T
81、hese arrangements give us greatercertainty regarding the availability and pricing of essential components and materials.Furthermore,we continuously monitormarket trends and maintain open lines of communication with our suppliers to anticipate and address potential supply chainchallenges.By proactive
82、ly managing our supplier relationships,securing necessary materials in advance,and closely monitoring marketconditions,we aim to minimize the impact of supply chain fluctuations on our operations.This approach enables us to maintain asteady pace of hardware deployments and facility development,ultim
83、ately supporting our goal of expanding our HPC and cloudcapabilities and maximizing shareholder value.However,we rely on a limited number of vendors for certain products and servicesfor our data center facilities,and some of our contracts provide a single source of materials.If any of our key suppli
84、ers cannotperform under their contracts or satisfy our orders,it could significantly delay our data center development and operations.Whilewe may be able to engage replacement suppliers,this would likely lead to operational delays and increased costs.Global LogisticsGlobal supply logistics have caus
85、ed delays across all distribution channels,impacting the HPC and AI markets.Delivery schedulesfor specialized equipment,such as high-performance computing systems,AI hardware,and necessary infrastructure components,have been affected due to constraints on globalized supply chains.These constraints e
86、xtend to procuring construction materials andspecialized electricity distribution equipment required to develop HPC and AI facilities.Efforts to mitigate delivery delays areongoing to avoid materially impacting deployment schedules;however,there are no assurances that such mitigation efforts willcon
87、tinue to be successful.To help address global supply logistics and pricing concerns,we have implemented proactive measuressuch as procuring and holding required materials.We continuously monitor developments in the global supply chain which isnecessary to assess their potential impact on the Company
88、s expansion plans within the HPC and AI markets.RegulatoryThe regulatory landscape surrounding HPC,cloud,and blockchain hosting services is evolving rapidly,and we anticipate increasedscrutiny and potential regulation in the near and long term.These developments may significantly impact our business
89、 andoperations in ways that are difficult to predict.In the realm of cloud computing,there are growing concerns about the ethical implications and potential misuse of thesetechnologies,particularly in association with AI and machine learning.Governments and regulatory bodies are consideringmeasures
90、to ensure the responsible development and deployment of AI systems,including transparency,accountability,and fairnessguidelines.As a company operating in this space,we closely monitor these developments and attempt to adhere to any forthcomingregulations or industry best practices.The amount of ener
91、gy used for crypto mining and colocation services has recently received increased attention.In January 2024,the U.S.Energy Information Administration conducted an emergency survey of electricity consumption data from cryptocurrencymining companies in the U.S.This indicates that more focus is being p
92、laced on the energy usage of these activities.It is unclearhow the information collected will be used for future regulations,but it is expected that energy efficiency and sustainability willbecome more critical factors regulating this industry.Furthermore,using digital assets,including Bitcoin,in il
93、licit financial activities has become a significant concern for regulators andlawmakers.Leaders in the U.S.House Financial Services Committee and U.S.Senate Banking Committee have expressed interestin passing legislation to provide additional regulatory authority to address these risks.The U.S.Treas
94、ury Department has alsorequested additional authorities to combat using digital assets in illegal activities.While there is currently insufficient support forany particular proposal,we expect that regulatory efforts in this area will continue to evolve and potentially impact our business.We also clo
95、sely follow developments related to regulating digital asset markets and financial services.In January 2024,the SECapproved a series of spot Bitcoin exchange-traded funds(ETFs),marking a significant milestone in the mainstream adoption ofdigital assets.However,the regulatory landscape for digital as
96、set markets remains complex and uncertain,with various agenciesand lawmakers proposing different approaches to oversight and regulation.82025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm12/155As a company operating at the intersection of
97、data center,cloud and HPC hosting services,we are committed to maintaining aproactive and adaptive approach to regulatory compliance.We closely monitor legislative and regulatory developments and engagein dialogue with relevant stakeholders to ensure our business practices align with the evolving le
98、gal and regulatory framework.Despite the uncertainties posed by the changing regulatory landscape,we remain committed to delivering innovative andresponsible solutions in the data center,cloud and HPC hosting markets while prioritizing compliance and risk management.However,if we fail to comply with
99、 applicable laws and regulations,we may be subject to significant liabilities,including fines andpenalties,and our business,financial condition,or results of operations could be adversely affected.Employees and Human Capital ResourcesDuring 2023 and 2024,we invested significantly in our workforce to
100、 retain and attract top-tier employees.We expanded ouremployee base and promoted individuals internally to critical positions.As of May 31,2024,we employed approximately 150 full-time employees across various departments,including engineering,IT,operations,construction,administration,finance,andcomm
101、unications.We also engage consultants and contractors as needed to supplement our permanent workforce.Our human capital strategy aligns employee interests with our long-term success drivers.We implemented a long-termperformance incentive program,granting eligible employees service-based restricted s
102、tock awards that vest over three years andperformance-based restricted stock awards that vest upon achieving specific performance milestones.This performance program isa key employee incentive,aligning their long-term interests with the Companys objectives.In addition to the long-term incentive prog
103、ram and competitive cash compensation,we provide employees comprehensive healthbenefits,paid parental leave,paid time off,and additional benefits.We aim to attract a diverse pool of top candidates and fostertheir career growth by hiring the best talent,regardless of educational background.We seek ca
104、ndidates from local communities andlarge cities,with diverse backgrounds.We are committed to providing each employee with a long-term,growth-oriented career.Webelieve our ability to retain our workforce depends on fostering a sustainably safe,respectful,fair and inclusive environment thatpromotes di
105、versity,equity and inclusion within and outside the business.Diversity,Equity,and InclusionWe support diversity and inclusion within our workplace framework,fostering an environment conducive to employee growth.Ourpolicies are strategically structured to advance equity and regard for all individuals
106、.We actively endorse and welcome diversebackgrounds,experiential perspectives,and varying opinions.Our operational alignment with our Code of Ethics and BusinessConduct,as well as our Non-Discrimination and Anti-Harassment Policy,underscores our commitment to establishing a securemilieu where the fu
107、ndamental rights of each employee are safeguarded,devoid of discriminatory practices or harassment.Ourstrategic objective is to establish a workplace ecosystem where equal avenues for success are accessible to all employees.Compensation and BenefitsOur compensation schemes are structured to incentiv
108、ize the recruitment,retention,and motivation of personnel to pursue our long-term objectives.We conduct rigorous evaluations,benchmarking salary and wages against quantitative metrics,and adjustmonetary compensations to ensure competitive alignment with employee roles,skill levels,tenure,and geograp
109、hic considerations.Our commitment to pay equity is reinforced by a robust process that facilitates merit-based increases in incentives andcompensations tied to performance.Furthermore,our benefits portfolio encompasses various offerings,including medical,dental,and vision insurance coverage foremplo
110、yees and their dependents,various paid and unpaid leave options,and life and disability/accident insurance coverage.Our Growth StrategiesContinued expansion of businesses.We have started expansion into hosting for HPC applications.We have current plans to expand our HPC hosting capacity up to 400MW
111、through build outs at existing and future locations.Further,we launched our Cloud Services Business92025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm13/155through Applied Digital Cloud and are currently serving customers through our coloc
112、ations.The Cloud Services Businessaccounted for approximately 17%of our revenue in fiscal year 2024.Leverage leading equipment vendors to grow operations while minimizing risk.We believe that the signing of our initial customers for our Cloud Services Business will help us elevate our profile within
113、 themarket.Further,we are working with Super Micro and HPE,which are both leading vendors in the AI hosting space,and webelieve that we will be able to leverage their networks to identify leads for the expansion of our Cloud Services Business and HPCHosting Business.Secure scalable power sites.We ha
114、ve developed a pipeline of potential power sources across our sites in Jamestown and Ellendale,North Dakota.Through ourbuild-out of our first North Dakota facility and the prior experience our leadership team brings to our initiatives,we believe that wehave developed a repeatable power strategy to s
115、ignificantly scale our operations.In addition,we are currently focused on and willcontinue to target states that have favorable laws and regulations for HPC application industries,which we believe furtherminimizes the risks associated with the scaling of our operations.Vertically integrate power ass
116、ets.We are increasingly looking at various types of power assets to support the growth of our hosting operations.This also includespower generation assets,which longer-term could be used to reduce our cost of power.Our management team has experience notonly in evaluating and acquiring power assets,b
117、ut also in the conversion of power assets to crypto mining/hosting operations andthe construction of data centers with the specific purpose of mining cryptocurrency assets.Site Selection CriteriaTo the extent we are building new facilities,our site selection criteria considers geographic diversity,a
118、ttractive return oninvestment,and environmental impact.Geographic DiversityGeographic diversity minimizes the risk to us of any event in a particular region that may impact our facilities.We expect to chooselocations in environments that are policy and regulation friendly,and find sites with less ex
119、pensive stable energy.Environmental ImpactWe are doing our part to be as environmentally conscious as possible when choosing sites for development by targeting renewableenergy assets to minimize our carbon footprint.Further,because data centers like ours represent a unique power load,we believeour d
120、emand for renewable energy and entry into agreements with renewable energy providers will increase and accelerate thebuildout of renewable energy infrastructures.There is no assurance that selection criteria will be met or that viable sites will be selected.CustomersWe have material customer concent
121、ration in our crypto data center hosting business.We have entered into service contracts with allseven of our customers in this business segment,who have collectively contracted to use the entire capacity of our two Data CenterHosting facilities.In addition,one of our customers accounts for 62%of ou
122、r revenue.As of May 31,2024,GMR Limited(“GMR”)held more than 5%of our outstanding common stock.Guo Chen,a 50%owner andsole director of GMR,is also deemed to beneficially own shares of our common stock held by GMR.Mr.Chen also owns 60%ofAlternity Fund Ltd.,which owns 100%of GOI.Our hosting arrangemen
123、ts with Spring Mud and GOI are therefore consideredrelated party transactions in the reporting period covered by this report.We have disclosed related party revenue in theaccompanying footnotes to the financial statements.On July 25,2024,GMR Limited reported that they have ceased to be thebeneficial
124、 owner of more than 5%of our outstanding common stock.102025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm14/155Our crypto hosting site-level strategy consists of having one key anchor tenant that has signed a 35 year long-term contract at
125、 thesite and filling the rest of the facility with customers with 1836 month terms.We currently serve seven crypto mining customerswho have entered into contracts ranging from three to five years.We also have material customer concentrations in our Cloud Services Business,as we only have two custome
126、rs.We announced thatwe had signed our first customer in our Cloud Services Business May 2023.If we acquire rights to additional properties and buildadditional facilities,we intend to use a mix of third-party colocation centers and our HPC data centers to deliver AI Cloud servicesto customers.Corpora
127、te InformationOur executive office is located at 3811 Turtle Creek Blvd.,Suite 2100,Dallas,Texas 75219,and our phone number is(214)427-1704.Our principal website address is .We make available free of charge through the Investor Relations link on our website access to press releases and investorprese
128、ntations,as well as all materials that we file electronically with the SEC,including our annual report on Form 10-K,quarterlyreports on Form 10-Q,current reports on Form 8-K and amendments to those reports,filed or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934(the
129、“Exchange Act”)as soon as reasonably practicable after electronically filingsuch materials with,or furnishing them to,the SEC.In addition,the SEC maintains an Internet website,www.sec.gov,that containsreports,proxy and information statements and other information that we file electronically with the
130、 SEC.We are a“smaller reporting company”as defined in Rule 12b-2 of the Exchange Act and may rely on exemptions from certaindisclosure requirements that are available to smaller reporting companies under the Exchange Act.Item 1A.Risk FactorsAn investment in our common stock is speculative and illiqu
131、id and involves a high degree of risk including the risk of a loss of yourentire investment.You should carefully consider the risks and uncertainties described below and the other information contained inthis report and our other reports filed with the Securities and Exchange Commission.The risks se
132、t forth below are not the onlyones facing us.Additional risks and uncertainties may exist that could also adversely affect our business,operations and financialcondition.If any of the following risks actually materialize,our business,financial condition and/or operations could suffer.Insuch event,th
133、e value of our common stock could decline,and you could lose all or a substantial portion of the money that you payfor our common stock.Risk Factors SummaryWe are providing the following summary of the risk factors contained in this Annual Report on Form 10-K to enhance thereadability and accessibil
134、ity of our risk factor disclosures.We encourage you to carefully review the full risk factors containedherein in their entirety for additional information regarding the material factors that make an investment in our securitiesspeculative or risky.These risks and uncertainties include,but are not li
135、mited to,the following:Risks Related to Our Business and OperationsWe are at an early stage of development of our business,currently have limited sources of revenue,and may not becomeprofitable in the future.We may be unable to access sufficient additional capital needed to grow our business.Upon th
136、e occurrence of an Amortization Event(as defined in the Promissory Notes(as defined below),we may berequired to make payments that could cause us financial hardship.We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the termsof our original
137、 indebtedness.We previously identified material weaknesses in our internal control over financial reporting and may identify additionalmaterial weaknesses in the future or otherwise fail to maintain an effective system of internal controls,any of which mayresult in material misstatements of our fina
138、ncial statements or cause us to fail to meet our periodic reporting obligations.We are subject to a highly evolving regulatory landscape and any adverse changes to or our or our co-hosting customersfailure to comply with any laws or regulations could adversely affect our business,prospects or operat
139、ions.112025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm15/155Our business depends upon the demand for data centers.If our co-hosting customers determine not to use our co-hosting facility,our co-hosting operations may suffer fromsignific
140、ant losses.If we are not able to secure additional financing to continue our construction efforts with respect to the HPC EllendaleFacility,the completion of this project may be delayed.Our HPC Hosting Business is expected to have significant customer concentration.Failure to attract,grow and retain
141、 a diverse and balanced customer base,including key magnet customers,could harm ourbusiness and operating results.We depend upon third-party suppliers for power,and we are vulnerable to service failures and price increases by suchsuppliers and to volatility in the supply and price of power in the op
142、en market.Our operations could be materially adversely affected by prolonged power outages at any of our facilities.We rely on a limited number of suppliers to support our operations.Any failure of our physical or information technology or operational technology infrastructure or services could lead
143、 tosignificant costs and disruptions.If we incorrectly estimate our hosting capacity requirements and related capital expenditures,our results of operationscould be adversely affected.Certain natural disasters or other external events,including climate change or mechanical failures,could harm ourbus
144、iness,financial condition,results of operations,cash flows,and prospects.We have an evolving business model which is subject to various uncertainties.Various actual and potential conflicts of interest may be detrimental to our stockholders.The loss of any of our management team,our inability to exec
145、ute an effective succession plan,or our inability to attractand retain qualified personnel,could adversely affect our business.We may become involved in litigation arising in the ordinary course of our business that may materially adversely affectus.Employee disputes or litigation and related unfavo
146、rable publicity may negatively affect our future business,financialcondition,and operating results.We could incur significant costs related to environmental matters,including from government regulation,privatelitigation,and existing conditions at some of our properties.We may not be able to compete
147、with other companies,some of which have greater resources and experience.If the award of Ether/Bitcoin reward for solving blocks and transaction fees,is not sufficiently high,our customers maynot have an adequate incentive to continue mining and may cease mining operations,which could lead to our fa
148、ilure toachieve profitability.Intellectual property rights claims may adversely affect the operation of some or all cryptoasset networks.We face risks related to public health epidemics and pandemics,including COVID-19,which could significantly disruptour business.We have concentrated our operations
149、 and,thus,are particularly exposed to changes in the regulatory environment,marketconditions and natural disasters in the state of North Dakota where our data centers are located.We are establishing data centers in remote areas,which may adversely affect our ability to retain staff and increase ourc
150、ompensation costs.Risks Related to Our IndustryUncertainty in the global economy and instability within international relations,including changes in governmentalpolicies relating to technology,and any potential downturn in the semiconductor and electronics industries,maynegatively impact our busines
151、s.Banks and financial institutions may not provide banking services,or may cut off services,to businesses that engage incryptocurrency-related activities,and turmoil among financial institutions arising from or relating to cryptoassets or ingeneral can materially adversely affect us and our industry
152、.The impact of geopolitical and economic events on the supply and demand for cryptoassets is uncertain.122025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm16/1552025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000
153、114487924000216/apld-20240531.htm17/155Governmental actions may have a materially adverse effect on the cryptoasset mining industry as a whole,which wouldhave an adverse effect on our business and results of operations.Risks Related to Our SecuritiesOur stock price has been volatile and may continue
154、 to be volatile in the future;this volatility may affect your ability to,and the price at which you could,sell our common stock.We may not be able to maintain the listing of our common stock on Nasdaq,which may adversely affect the flexibility ofholders of common stock to resell their securities in
155、the secondary market.If securities or industry analysts do not publish research or reports about our business,or if they downgrade theirrecommendations regarding our common stock,its trading price and volume could decline.We have issued and may in the future issue new shares of our common stock,whic
156、h has a dilutive effect on ourstockholders.Substantial blocks of our common stock may be sold into the market as a result of the Prepaid Advance Agreements.Risks Related to Our Business and OperationsWe are at an early stage of development of our business,currently have limited sources of revenue,an
157、d may not becomeprofitable in the future.We are subject to the risks and uncertainties of a new business,including the risk that we may never further develop,completedevelopment of or successfully market any of our proposed services.We began generating revenue from our crypto miningbusiness in June
158、2021,however,during the building of our co-hosting operations,we determined that it would be beneficial to ourstockholders to focus more of our resources on this line of business than on expanding our mining operations.Accordingly,inMarch 2022,we ceased all crypto mining operations.We began generati
159、ng revenue from our hosting operations when our first co-hosting facility came online in February 2022.Accordingly,we have only a limited history upon which an evaluation of ourprospects and future performance can be made.As we grow and develop as a business,we are attempting to reduce the impact of
160、 variability on our revenue and hosting costs byentering into long term contracts with the goal of having one blue chip anchor tenant that has signed a 3-5 year long-term contractat each site and filling the rest of the facility with customers with 18-36 month terms.In our cloud hosting business,we
161、providecloud infrastructure for highly scalable General Processing Unit(“GPU”)accelerated applications,or GPU clusters,to ourcustomers under contracts spanning 2436 months.As these are novel products in the industry,the value and longevity of theGPUs remain uncertain in this rapidly evolving market.
162、In our HPC Hosting Business,we plan to enter into long-term contracts ofapproximately 10 years to host customers GPU clusters.Given that we have not previously operated an HPC data center of thisscale,the profitability of these contracts cannot be determined at this time.If we are unable to successf
163、ully implement ourdevelopment plan or to increase our generation of revenue,we will not become profitable in the future and may be unable tocontinue our operations.Furthermore,we have a history of operating losses and our proposed operations continue to be subject to all business risksassociated wit
164、h new enterprises.We incurred net losses of$149.3 million and$44.6 million for the fiscal years ended May 31,2024 and 2023,respectively.We expect to continue to incur net losses for the foreseeable future as we grow our business.Weintend to continue scaling our company to increase our customer base
165、and implement initiatives,including new business lines andglobal expansion.These efforts may prove more expensive than we currently anticipate and may not result in increased revenue orprofitability in the short term or at all.We will also incur increased compliance costs associated with growth,expa
166、nding ourcustomer base,and being a public company.Our efforts to grow our business may be costlier than we expect,or the revenuegrowth rate may be slower than we expect.As we pivot towards new markets such as cloud services and HPC data center hosting,we acknowledge that our limited experience in th
167、ese areas may impact our ability to accurately assess our prospects.The likelihoodof our success must be considered in light of the expenses,difficulties,complications,problems and delays frequently encounteredin connection with the expansion of a business,operating a business in a competitive indus
168、try,and the continued development ofadvertising,promotions and a corresponding customer base.There can be no assurance that we will ever operate profitably.132025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm18/155We may be unable to acces
169、s sufficient additional capital needed to grow our business.We expect to need to raise substantial additional capital to expand our operations,pursue our growth strategies and to respond tocompetitive pressures or unanticipated working capital requirements.Construction of our facilities,including th
170、e construction ofthe HPC Ellendale Facility,are capital-intensive projects,and we anticipate that our current and future strategic growth initiativeswill likewise continue to be capital-intensive.We intend to use the SEPA(as defined below)to provide additional capital to us.However,market conditions
171、 and certain restrictions contained in the agreement governing the SEPA may limit our ability to accesscapital under such agreement.We expect to raise additional capital to fund these and other future strategic growth initiatives,however,we may be unable to do so in a timely manner,in sufficient qua
172、ntities,or on terms acceptable to us,if at all,which couldimpair our growth and adversely affect our existing operations.If we raise additional equity financing,our stockholders mayexperience significant dilution of their ownership interests,and the per share value of our common stock could decline.
173、Furthermore,if we engage in additional debt financing,the holders of debt likely would have priority over the holders of ourcommon stock on order of payment preference.We may be required to accept terms that restrict our ability to incur additionalindebtedness,pay dividends to our shareholders,or ta
174、ke other actions.We may also be required to maintain specified liquidity orother ratios that could otherwise not be in the interests of our stockholders.If we are unable to raise the additional capital needed toexecute our future strategic growth initiatives,we may be less competitive in our industr
175、y and the results of our operations andfinancial condition may suffer.In addition,under the terms of the Prepaid Advance Agreements(as defined below),until the YA Notes(as defined below)arerepaid in full,we are prohibited,subject to certain exceptions,from obtaining additional financing through a“Va
176、riable RateTransaction”(as defined in the Prepaid Advance Agreements),including sales of our common stock or Common Stock Equivalents(as defined in the Prepaid Advance Agreements),that are convertible into,exchangeable or exercisable for common stock(A)where the conversion price,exercise price,excha
177、nge rate or other price fluctuates upon and/or varies with the trading prices of orquotations for our common stock at any time after the initial issuance thereof,or(B)with a conversion,exercise price or exchangerate that is subject to being reset at some future date after the initial issuance of suc
178、h equity or debt security or upon the occurrenceof specified or contingent events directly or indirectly related to our business or the market for our common stock,in each case,subject to certain exceptions,including for an at-the-market offering.These provisions could make investing in our securiti
179、es lessattractive to investors and could limit our ability to obtain adequate financing on a timely basis or on acceptable terms in the future,which could have significant harmful effects on our financial condition and business and could include substantial limitations onour ability to continue to c
180、onduct operations.Our level of debt may negatively impact our liquidity,restrict our operations and ability to respond to business opportunities,and increase our vulnerability to adverse economic and industry conditions.We utilize debt financing in our capital structure and may incur additional debt
181、.Our level of debt could have significantconsequences,including limiting our ability to obtain additional financing for working capital,capital expenditures,acquisitions orother general corporate purposes;requiring a substantial portion of our cash flows to be dedicated to debt service payments inst
182、eadof other purposes;imposing financial and other restrictive covenants on our operations,including debt service coveragerequirements and limitations on our ability to(i)declare or pay dividends or repurchase shares of our common stock;(ii)purchaseassets,make investments,complete acquisitions,consol
183、idate or merge with or into,or sell,transfer or lease all or substantially allof our assets to,another person;(iii)enter into sale/leaseback transactions or certain transactions with affiliates;(iv)incuradditional indebtedness;and(v)incur liens,making us more vulnerable to economic downturns and lim
184、iting our ability towithstand competitive pressures or take advantage of new opportunities to grow our business.Our ability to meet our debt service obligations,comply with our debt covenants and deleverage depends on our cash flows andfinancial performance,which are affected by financial,business,e
185、conomic and other factors.The rate at which we will be able toor choose to deleverage is uncertain.Failure to meet our debt service obligations or comply with our debt covenants could result inan event of default under the applicable indebtedness.We may be unable to cure,or obtain a waiver of,an eve
186、nt of default orotherwise amend our debt agreements to prevent an event of default thereunder on terms acceptable to us or at all.In that event,thedebt holders could accelerate the related debt,which may result in the cross-acceleration or cross-default of other debt or otherobligations.We also util
187、ize convertible debt in our capital structure.In the event that holders of our convertible debt exerciseconversion rights,we will be required to settle the principal amount of any converted notes in cash.If we do not have sufficientfunds available to repay indebtedness when due,whether at maturity,b
188、y acceleration or upon conversion,we may be required tosell important strategic assets;refinance our existing142025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm19/155debt;incur additional debt or issue common stock or other equity securit
189、ies,which we may not be able to do on terms acceptable tous,in amounts sufficient to meet our needs or at all.Our inability to service our debt obligations or refinance our debt could harmour business.Further,if we are unable to repay,refinance or restructure our secured indebtedness,the holder of s
190、uch debt couldproceed against the collateral securing the indebtedness.Refinancing our indebtedness may also require us to expense previousdebt issuance costs or to incur new debt issuance costs.We also guarantee a significant amount of obligations of our subsidiaries owed to third parties.We may be
191、 required to pay all of theoutstanding obligations covered by our guarantees,which would significantly reduce our cash position and may force us to seekadditional financing,which may not be available on terms acceptable to us,if at all.We may from time to time seek to further refinance our substanti
192、al indebtedness by issuing additional shares of common stock orother securities that are convertible into common stock or grant the holder the right to purchase common stock,each of which maydilute our existing stockholders,reduce the value of our common stock,or both.Our existing indebtedness arran
193、gements contain several restrictive covenants and events of default that limit our corporateactivities.The terms of the Ellendale Loan Agreement require APLD ELN-01 LLC,our wholly owned subsidiary(“ELN-01”)to meet certainfinancial covenants,contain other covenants and reference multiple potential ev
194、ents of default,including payment defaults,covenant defaults and material cross defaults to certain ELN-01 contracts.Among the restrictions imposed under the EllendaleLoan Agreement,ELN-01 has agreed to maintain a minimum debt services coverage ratio after distributions of 1.25:1.00.The terms of the
195、 Cornerstone Bank Loan require APLD GPU-01,LLC,our wholly owned subsidiary of the Company(“GPU-01”)to meet certain financial covenants,contain other affirmative and negative covenants and reference multiple potential events ofdefault,including payment defaults,covenant defaults(subject to applicable
196、 cure periods),and payment cross default to otherGPU-01 indebtedness.Among the restrictions imposed under the Ellendale Loan Agreement,ELN-01 has agreed to maintain aminimum debt services coverage ratio(i)pre-distributions,of 1.20:1.00 and(ii)post-distributions,of 1.00:1.00.The terms of the CIM Prom
197、issory Note restrict APLD Holdings 2 LLC,our wholly owned subsidiary(“Holdings 2”)and eachother Note Party(as defined in the CIM Promissory Note)from incurring additional indebtedness,incurring liens,disposing ofproperty and creating subsidiaries in violation of the note and reference multiple poten
198、tial events of default,including paymentdefaults,covenant defaults and cross default to certain other indebtedness.The terms of the YA Notes reference multiple potential events of default including payment defaults,covenant defaults,crossdefault to certain other indebtedness,failure to deliver share
199、s upon conversion and failure to timely file certain reports with theSEC.Even if we are able to meet our obligations under these debt instruments,the amount of debt we have could adversely affect us bylimiting our ability to obtain any necessary financing in the future for our working capital needs,
200、as well as other capitalexpenditures,debt service obligations,dividend payments,if any,or other purposes.It also places us at a disadvantage relative toour competitors who may have lower levels of debt,while making us more vulnerable to a downturn in our business or theeconomy in general.Upon the oc
201、currence of an Amortization Event(as defined in the YA Notes(defined below),we may be required to makepayments that could cause us financial hardship.On March 27,2024,we entered into a Prepaid Advance Agreement(as amended,the“March PPA”)with YA II PN,LTD.(“YAFund”).In accordance with the terms of th
202、e March PPA,on March 27,2024,YA Fund agreed to advance to us up to$50 million,pursuant to two unsecured promissory notes(as amended,the“Initial YA Notes”).In addition,on May 24,2024,we entered intoanother Prepaid Advance Agreement with YA Fund(as amended,the“May PPA”)and together with the March PPA(
203、the“PrepaidAdvance Agreements”),pursuant to which we issued an unsecured promissory note to YA Fund to advance up to$42.1 million(asamended,the“May Note”and collectively with the Initial YA Notes,the“YA Notes”).152025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924
204、000216/apld-20240531.htm20/155In connection with our entry into the Prepaid Purchase Agreements with YA Fund and under the terms of the YA Notes,an“Amortization Event”is deemed to have occurred if:(1)the daily VWAP of our common stock is lower than the Floor Price(asdefined in each respective YA Not
205、e)then in effect for three trading days during a period of five consecutive trading days,(2)wehave issued to the Investor pursuant to the PPA in excess of 99%of all of the Conversion Shares available under the Exchange Cap(as such terms are defined under the YA Notes),or(3)at any time after(a)May 1,
206、2024 for the Initial YA Notes,or(b)August 15,2024 for the May Note,any of the Conversion Shares to be issued under the YA Notes are not eligible to be sold pursuant to theregistration statement related to such notes for a period of ten consecutive trading days.Within three trading days of anAmortiza
207、tion Event,we must pay to YA Fund an amount in cash equal to:(i)$9.0 million of principal amount among both YANotes plus(ii)a 5%payment premium,plus(iii)accrued and unpaid interest(if any),which payments would continue monthlythereafter until such“Amortization Event”is no longer continuing.In the ev
208、ent that the Company fails to pay any amount when and as due and payable under the YA Notes,including any amountsowed as a result of an“Amortization Event,”and such failure is not cured within five days after written notice thereof,an event ofdefault will have deemed to occur,and the full unpaid pri
209、ncipal amount of the YA Notes,together with interest and other amountsowing in respect thereof,to the date of acceleration shall become,at YA Funds election,immediately due and payable in cash.These financial obligations may impose an undue and unsustainable burden on us and may have a material adve
210、rse effect on ouroperations and financial condition.We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms ofour original indebtedness.It is likely that we will need to refinance at least a portion of our outstanding debt as it mature
211、s.If we are unable to refinance orextend principal payments due at maturity or pay them with proceeds of other capital transactions,then our cash flow may not besufficient in all years to repay all such maturing debt and to pay distributions.Further,if prevailing interest rates or other factors atth
212、e time of refinancing,such as the reluctance of lenders to make commercial real estate loans,result in higher interest rates uponrefinancing,then the interest expense relating to that refinanced indebtedness would increase.We previously identified material weaknesses in our internal control over fin
213、ancial reporting and may identify additionalmaterial weaknesses in the future or otherwise fail to maintain an effective system of internal controls,any of which may resultin material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.We are a re
214、cently public company and are now required to comply with the SECs rules implementing Section 302 of the Sarbanes-Oxley Act(“SOX”),which requires our management to certify financial and other information in our quarterly and annual reportsand provide an annual management report on the effectiveness
215、of our internal control over financial reporting.To comply with therequirements of being a public company,we will need to upgrade our systems,including information technology,implementadditional financial and management controls,reporting systems and procedures and hire additional accounting,finance
216、 and legalstaff.We have identified the following material weaknesses in the design of our internal controls:We have not designed and implemented controls to ensure we can record,process,summarize,and report financial data.We have not yet designed and implemented user access controls to ensure approp
217、riate segregation of duties that wouldadequately restrict user and privileged access to the financially relevant systems and data to appropriate personnel.We did not design and maintain effective controls associated with related party transactions and disclosures.Controls inplace were not designed o
218、r implemented at a sufficient level of precision or rigor to effectively identify related partyrelationships and disclose their related transactions in our financial statements.We also do not have a properly designed internal control system that identifies critical processes and key controls.We are
219、in the process of remediating such material weaknesses and there can be no assurance as to when or if we will fullyremediate such material weaknesses.162025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm21/155Our efforts to develop and main
220、tain our internal controls may not be successful,and we may be unable to maintain effectivecontrols over our financial processes and reporting in the future and comply with the certification and reporting obligations underSections 302 and 404 of SOX.Any failure to maintain effective controls or any
221、difficulties encountered in our implementation orimprovement of our internal controls over financial reporting could result in material misstatements that are not prevented ordetected on a timely basis,which could potentially subject us to sanctions or investigations by the SEC or other regulatoryau
222、thorities.Ineffective internal controls could also cause investors to lose confidence in our reported financial information.We are subject to a highly evolving regulatory landscape and any adverse changes to or our co-hosting customers failure tocomply with any laws or regulations could adversely af
223、fect our business,prospects or operations.Our customers businesses are subject to extensive laws,rules,regulations,policies and legal and regulatory guidance,includingthose governing securities,commodities,cryptoasset custody,exchange and transfer,data governance,data protection,cybersecurity and ta
224、x.Many of these legal and regulatory regimes were adopted prior to the advent of the Internet,mobiletechnologies,cryptoassets and related technologies.As a result,they do not contemplate or address unique issues associated withthe crypto economy,are subject to significant uncertainty,and vary widely
225、 across U.S.federal,state and local and internationaljurisdictions.These legal and regulatory regimes,including the laws,rules and regulations thereunder,evolve frequently and maybe modified,interpreted and applied in an inconsistent manner from one jurisdiction to another,and may conflict with one
226、another.Moreover,the complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of thecrypto economy requires us to exercise our judgement as to whether certain laws,rules and regulations apply to us or ourcustomers,and it is possible that governmental
227、bodies and regulators may disagree with our or our customers conclusions.To theextent we or our customers have not complied with such laws,rules and regulations,we could be subject to significant fines andother regulatory consequences,which could adversely affect our business,prospects or operations
228、.As cryptoasset has grown inpopularity and in market size,the Federal Reserve Board,U.S.Congress and certain U.S.agencies(e.g.,the Commodity FuturesTrading Commission,the SEC,the Financial Crimes Enforcement Network and the Federal Bureau of Investigation)have begun toexamine the operations of crypt
229、oasset networks,cryptoasset users and cryptoasset exchange markets.Ongoing and future regulatory actions could effectively prevent our customers mining operations and our ongoing or planned co-hosting operations,limiting or preventing future revenue generation by us or rendering our operations obsol
230、ete.Such actions couldseverely impact our ability to continue to operate and our ability to continue as a going concern or to pursue our strategy at all,which would have a material adverse effect on our business,prospects or operations.Our business depends upon the demand for data centers.We are in
231、the business of owning,acquiring,developing and operating data centers.A reduction in the demand for data centerspace,power or connectivity would have a greater adverse effect on our business and financial condition than if we owned aportfolio with a less specialized use.Our substantial development
232、activities make us particularly susceptible to general economicslowdowns as well as adverse developments in the data center,Internet and data communications and broader technologyindustries.Any such slowdown or adverse development could lead to reduced corporate IT spending or reduced demand for dat
233、acenter space.Reduced demand could also result from business relocations,including to metropolitan areas that we do not currentlyserve.Changes in industry practice or in technology could also reduce demand for the physical data center space we provide.Inaddition,our customers may choose to develop n
234、ew data centers or expand their own existing data centers or consolidate into datacenters that we do not own or operate,which could reduce demand for our newly developed data centers or result in the loss of oneor more key customers.If any of our key customers were to do so,it could result in a loss
235、 of business to us or put pressure on ourpricing.Mergers or consolidations of technology companies could reduce further the number of our customers and potentialcustomers and make us more dependent on a more limited number of customers.If our customers merge with or are acquired byother entities tha
236、t are not our customers,they may discontinue or reduce the use of our data centers in the future.Our financialcondition,results of operations,cash flow,cash available for distribution and ability to satisfy our debt service obligations could bematerially adversely affected as a result of any or all
237、of these factors.172025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm22/155Our business has and is expected to continue to have significant customer concentration.We generate a large portion of our revenue from a small number of customers.
238、If we were to lose one or more of our largecustomers,our operating results could suffer dramatically.Data Center Hosting BusinessDuring fiscal year 2024,this business segment was comprised of seven customers accounting for approximately 83%of ourrevenue.One of such customers accounted for 62%of our
239、revenue during fiscal year 2024.During fiscal year 2023,six customersaccounted for 100%of our revenue,all of which accounted for over 10%of our total revenue.No other customers accounted formore than 10%of revenue for any of these periods.Cloud Services BusinessDuring fiscal year 2024,two customers
240、accounted for approximately 17%of our revenue;neither of these two customers accountedfor more than 10%of our revenue.We expect that the limited number of customers will continue to account for a high percentage of our revenue for the foreseeablefuture.In addition,demand for our services generated b
241、y these customers may fluctuate significantly from quarter to quarter.Theconcentration of our customer base increases risks related to the financial condition of our customers,and the deterioration infinancial condition of a single customer or the failure of a single customer to perform its obligati
242、ons could have a material adverseeffect on our results of operations and cash flow.If a subset or all of our customers were to experience harm or loss due tounforeseen circumstances,it could negatively impact their businesses.In the event that any of our customers experience a declinein their equipm
243、ent usage for any reason,or decide to discontinue the use of our facilities,we may be compelled to lower our leaseprices or risk losing a significant customer.Such developments could adversely affect our profit margins and financial position,leading to a negative impact on our revenue and operationa
244、l results.Our success depends on external factors in the crypto mining industry.We have a material concentration of customers in the crypto mining industry.The crypto mining industry is subject to various riskswhich could adversely affect our current customers ability to continue to operate their bu
245、sinesses,including,but not limited to:ongoing and future government or regulatory actions that could effectively prevent our customers mining operations,withlittle to no access to policymakers and lobbying organizations in many jurisdictions;a high degree of uncertainty about cryptoassets status as
246、a“security,”a“commodity”or a financial instrument in anyrelevant jurisdiction which may subject our customers to regulatory scrutiny,investigations,fines,and other penalties;banks or financial institutions may close the accounts of businesses engaging in cryptoasset-related activities as a result of
247、compliance risk,cost,government regulation or public pressure;use of cryptoassets in the retail and commercial marketplace is limited;extreme volatility in the market price of cryptoassets that may harm our customers financial resources,ability to meet theircontractual obligations to us or cause the
248、m to reduce or cease mining operations;use of a ledger-based platform may not necessarily benefit from viable trading markets or the rigors of listingrequirements for securities creating higher potential risk for fraud or the manipulation of the ledger due to a control event;concentrated ownership,l
249、arge sales of cryptoassets,or distributions or redemptions by vehicles invested in cryptoassetscould have an adverse effect on the demand for,and market price of,such cryptoasset;our customers could face difficulty adapting to emergent digital ledgers,blockchains,or alternatives thereto,rapidlychang
250、ing technology or methods of,rules of,or access to,platforms;the number of cryptoassets awarded for solving a block in a blockchain could decrease,which may adversely affect ourcustomers incentive to expend processing power to solve blocks and/or continue mining and our customers may not haveaccess
251、to resources to invest in increasing processing power,when necessary,in order to maintain the continuing revenueproduction of their mining operations;182025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm23/155our customers may face third pa
252、rties intellectual property claims or claims relating to the holding and transfer ofcryptoassets and their source code,which,regardless of the merit of any such action,could reduce confidence in some orall cryptoasset networks long-term viability or the ability of end-users to hold and transfer cryp
253、toassets;contributors to the open-source structure of the cryptoasset network protocols are generally not directly compensated fortheir contributions in maintaining and developing the protocol and may lack incentive to properly monitor and upgrade theprotocols;a disruption of the Internet on which o
254、ur customers business of mining cryptoassets is dependent;decentralized nature of the governance of cryptoasset systems,generally by voluntary consensus and open competitionwith no clear leadership structure or authority,may lead to ineffective decision making that slows development or preventsa net
255、work from overcoming emergent obstacles;andsecurity breaches,hacking,or other malicious activities or loss of private keys relating to,or hack or other compromise of,digital wallets used to store our customers cryptoassets could adversely affect their ability to access or sell theircryptoassets or e
256、ffectively utilize impacted platforms.Even if we can diversify our customer base,negative impacts to the crypto mining industry may negatively affect our business,financial condition,operating results,liquidity,and prospects.If our co-hosting customers determine not to use our co-hosting facility,ou
257、r co-hosting operations may suffer from significantlosses.We currently have material customer concentration of crypto mining customers.As a result of the risks our crypto mining customers face,it is not possible for us to predict the future level of demand for ourservices that will be generated by t
258、hese customers or the future demand for the products and services of these customers.Shouldsome or all of our co-hosting customers suffer from harm or loss due to a set of circumstances,their businesses could be negativelyimpacted or prevented.Further,our contracts with these customers permit them t
259、o terminate our services at any time(subject tonotice and certain other provisions).If any of our customers experience declining mining operations for any reason or determine tostop utilizing our co-hosting facilities,we could be pressured to reduce the prices we charge for our services or we could
260、lose amajor customer.Any such development could have an adverse effect on our margins and financial position and would negativelyaffect our revenues and results of operations.If we are not able to secure additional financing to continue our construction efforts with respect to the HPC Ellendale Faci
261、lity,the completion of this project may be delayed.We are currently in the process of constructing the HPC Ellendale Facility,which requires significant capital expenditures.If weare not able to secure additional financing to continue our construction efforts with respect to the HPC Ellendale Facili
262、ty,thecompletion of this project may be delayed and our ability to collect any potential renal revenue or to otherwise monetize thisfacility may be compromised,which could have an adverse effect on our expansion strategy and our ability to generate significantor any revenue from our HPC Hosting Busi
263、ness segment.We may be unable to lease vacant or development space,renew leases,or re-lease space as leases expire.We intend to continue to add new space to our development inventory and to continue to develop additional space from thisinventory.A portion of the space that we develop has been,and ma
264、y continue to be,developed on a speculative basis,meaning thatwe do not have a signed customer agreement for the space when we begin the development process.We also develop spacespecifically for customers pursuant to agreements signed prior to beginning of the development process.In those cases,if w
265、e fail tomeet our development obligations under those agreements,these customers may be able to terminate the agreements and we wouldbe required to find a new customer for this space.In addition,in certain circumstances we may lease data center facilities prior totheir completion.If we fail to compl
266、ete the facilities in a timely manner,the customer may be entitled to terminate its agreement,seek damages or penalties against us or pursue other remedies and we may be required to find a new customer for the space.Wecannot assure you that once we have developed space or land we will be able to suc
267、cessfully lease it at all,or at rates we considerfavorable or expected at the time we commenced development.Further,once development of a data center facility is complete,weincur certain operating expenses even if there are no customers occupying any space.If we are not able to complete development
268、ina timely manner or successfully lease the space that we develop,if development costs are higher than we currently estimate,or ifrental rates are lower than expected when we began the project or are otherwise undesirable,our financial condition,results2025/5/19 10:16apld-20240531https:/www.sec.gov/
269、Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm24/155192025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm25/155of operations,cash flow,cash available for distribution and ability to satisfy our debt service obligations cou
270、ld be materiallyadversely affected.Failure to attract,grow and retain a diverse and balanced customer base,including key magnet customers,could harm ourbusiness and operating results.Our ability to attract,grow and retain a diverse and balanced customer base,consisting of enterprises,cloud service p
271、roviders,network service providers,and digital economy customers,some of which we consider to be key magnets drawing in othercustomers,may affect our ability to maximize our revenues.Dense and desirable customer concentrations within a facility enableus to better generate significant interconnection
272、 revenues,which in turn increases our overall revenues.Our ability to attractcustomers to our data centers will depend on a variety of factors,including our product offerings,the presence of carriers,theoverall mix of customers,the presence of key customers attracting business through ecosystems,the
273、 data centers operatingreliability and security and our ability to effectively market our product offerings.Our inability to develop,provide or effectivelyexecute any of these factors may hinder the development,growth and retention of a diverse and balanced customer base andadversely affect our busi
274、ness,financial condition and results of operations.Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits,orotherwise adversely affect our business.Our ability to retain,increase,and engage our customer base and to increase our revenue
275、 depends heavily on our ability to continueto evolve our existing services and to create successful new services,both independently and in conjunction with developers orother third parties.We may introduce significant changes to our existing services or acquire or introduce new and unprovenservices,
276、including using technologies with which we have little or no prior development or operating experience.For example,weare making significant investments in AI,including providing computing capacity to support AI.These efforts,including theintroduction of new services or changes to existing services,m
277、ay result in new or enhanced governmental or regulatory scrutiny,litigation,ethical concerns,or other complications that could adversely affect our business,reputation,or financial results.If ournew services fail to engage users or developers,or if our business plans are unsuccessful,we may fail to
278、attract or retain users or togenerate sufficient revenue,operating margin,or other value to justify our investments,and our business may be adverselyaffected.We are subject to risks associated with our need for significant electrical power.Our operations require significant amounts of electrical pow
279、er and we anticipate our demand for electrical power will continue togrow.The fluctuating price of electricity required for our operations and to power our expansion may inhibit our profitability.If weare unable to continue to obtain sufficient electrical power on a cost-effective basis,we may not r
280、ealize the anticipated benefits ofour significant capital investments.We depend upon third-party suppliers for power,and we are vulnerable to service failures and price increases by such suppliersand to volatility in the supply and price of power in the open market.We rely on third parties to provid
281、e power to our data centers,and we cannot ensure that these third parties will deliver such powerin adequate quantities or on a consistent basis.We are also reliant on third parties to deliver additional power capacity to supportthe growth of our business.If the amount of power available to us is in
282、adequate to support our customer requirements,we may beunable to satisfy our obligations to our customers or grow our business.In addition,our data centers may be susceptible to powershortages and planned or unplanned power outages caused by these shortages.Power outages may last beyond our backup a
283、ndalternative power arrangements,which would harm our customers and our business.Any loss of services or equipment damagecould adversely affect both our ability to generate revenues and our operating results,harm our reputation and potentially lead tocustomer disputes or litigation.In addition,we ma
284、y be subject to risks and unanticipated costs associated with obtaining power from various utility companies.Utilities that serve our data centers may be dependent on,and sensitive to price increases for,a particular type of fuel,such asnatural gas,coal or nuclear.In addition,the price of these fuel
285、s and the total cost of delivered electricity could increase as a resultof:regulations intended to regulate carbon emissions and other pollutants,ratepayer surcharges related to recovering the cost ofextreme weather events and natural disasters,geopolitical conflicts,military conflicts,grid moderniz
286、ation charges,as well as othercharges borne by ratepayers.Increases in the cost of power at any of our data centers could put those locations at a competitivedisadvantage relative to data centers that are supplied power at a lower price.2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/d
287、ata/1144879/000114487924000216/apld-20240531.htm26/155202025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm27/155We have also entered into power purchase agreements with contract terms ranging from 4 to 5 years.These agreements require usto
288、 purchase renewable energy and/or renewable energy credits from producers at fixed prices over the terms of the contracts,subject to certain adjustments.In the event that the market price for energy decreases,we may be required to pay more under thepower purchase agreements than we would otherwise i
289、f we were to purchase renewable energy credits on the open market,whichcould adversely affect our results of operations.Additionally,interruptions in the operations of one or more of the suppliers underthese agreements,as a result of extreme weather events,natural disasters or otherwise,could negati
290、vely impact the quantity ofrenewable energy credits delivered to us.In particular,disruptions in the oil and gas and electric power markets have caused,andcould continue to cause,significant increases in energy prices,which could have a material effect on our business.Our operations could be materia
291、lly adversely affected by prolonged power outages at any of our facilities.Beginning in December 2023,we encountered a series of outages at our Ellendale and Garden City locations which had asignificant adverse impact on our revenue in the third and fourth quarter of fiscal 2024 until the repairs an
292、d upgrades necessary torestore full operational capacity were substantially complete.The outage had no impact on the HPC Ellendale Facility underconstruction,which is being designed to provide higher levels of availability in accordance with industry standards.The outagealso had no impact on our Clo
293、ud Services Business as those services are currently being hosted using third-party facilities.Despiteour concentrated efforts towards remediation and recent return to full operational capacity,there can be no assurance that similar orgreater power outages will not occur at our facilities in the fut
294、ure.If and as they occur,we may have to reduce or cease ouroperations at such impacted facility,which may materially adversely affect our business,financial condition,and operating results.Any failure of our physical or information technology or operational technology infrastructure or services coul
295、d lead tosignificant costs and disruptions.Our business depends on providing customers with highly reliable services,including with respect to power supply,physicalsecurity,cybersecurity,and maintenance of environmental conditions.We may fail to provide such services because our operationsare vulner
296、able to,among other things,mechanical or telecommunications failure,power outage,human error,physical or electronicsecurity breaches,cyberattacks,war,terrorism,fire,earthquake,pandemics,hurricane,flood and other natural disasters,sabotageand vandalism.Substantially all of our customer agreements inc
297、lude terms requiring us to meet certain service level commitments.Any failure tomeet these or other commitments or any equipment damage in our data centers due to any reason could subject us to contractualliability,including service level credits against customer rent payments,legal liability and mo
298、netary damages,regulatory sanctions,or,in certain cases of repeated failures,the right by the customer to terminate the agreement.Service interruptions,equipmentfailures or security breaches could also materially impact our brand and reputation globally and lead to customer contractterminations or n
299、on-renewals and an inability to attract customers in the future.Any disruption of service experienced by certain of our third-party service providers,or our ineffective management ofrelationships with third-party service providers could harm our business,financial condition,operating results,cash fl
300、ows,andprospects.We rely on several third-party service providers for services that are essential to our business model,the most important of whichare our suppliers of power,electrical equipment(including GPU servers),building materials,and construction services.Additionally,as we build our Cloud Se
301、rvices Business,we also expect to rely on third parties to lease or sell us equipment whichwe then lease to certain of our Cloud services customers.In addition,we may depend upon outside advisors who may not beavailable on reasonable terms as needed,or at all.To supplement the business experience of
302、 our officers and directors,we may berequired to employ technical experts,appraisers,attorneys,or other consultants or advisors.Our management,with approval of ourBoard of Directors(the“Board”)in certain cases,without any input from stockholders,will make the selection of any suchadvisors.Furthermor
303、e,it is anticipated that such persons may be engaged on an“as needed”basis without a continuing fiduciary orother obligation to us.In the event we consider it necessary to hire outside advisors,we may elect to hire persons who are affiliates,if they are able to provide the required services.If these
304、 third parties or other outside advisors experience difficulty providing theservices we require,or if they experience disruptions or financial distress or cease operations temporarily or permanently,or if theproducts they supply are defective or cease to operate for any reason,it could make it diffi
305、cult for us to execute our operations.Ifwe are unsuccessful in identifying or finding highly qualified third-party service providers or employees,if we fail to negotiatecost-effective212025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm28/1
306、55relationships with them or if we are ineffective in managing and maintaining these relationships,it could materially and adverselyaffect our business and our financial condition,operating results,cash flows,and prospects.Any delays or unexpected costs in the development of our existing space and d
307、evelopable land and new properties acquired fordevelopment may delay and harm our growth prospects,future operating results and financial condition.We are currently in the process of building the HPC Ellendale Facility and we may in the future continue to build out additionalHPC hosting facilities o
308、n a speculative basis at significant cost.Our successful development of this and future projects is subject tomany risks,including those associated with:delays in construction,or changes to the plans or specifications;budget overruns,increased prices for raw materials or building supplies,or lack of
309、 availability and/or increased costs forspecialized data center components,including long lead time items such as generators;construction site accidents and other casualties;financing availability,including our ability to obtain construction financing and permanent financing,or increases ininterest
310、rates or credit spreads;labor availability,costs,disputes and work stoppages with contractors,subcontractors or others that are constructing theproject;failure of contractors to perform on a timely basis or at all,or other misconduct on the part of contractors;access to sufficient power and related
311、costs of providing such power to our customers;environmental issues;supply chain constraints;fire,flooding,earthquakes and other natural disasters;pandemics;geological,construction,excavation and equipment problems;anddelays or denials of entitlements or permits,including zoning and related permits,
312、or other delays resulting fromrequirements of public agencies and utility companies.In addition,development activities,regardless of whether they are ultimately successful,also typically require a substantial portionof our managements time and attention.This may distract our management from focusing
313、 on other operational activities of ourbusiness.If we are unable to complete development projects successfully,our business may be adversely affected.If we incorrectly estimate our hosting capacity requirements and related capital expenditures,our results of operations could beadversely affected.We
314、are continuously evaluating our capacity requirements in order to effectively manage our capital expenditures and operatingresults.However,we may be unable to accurately project our future capacity needs or sufficiently allocate resources to addresssuch needs.If we underestimate these requirements,w
315、e may not be able to provide sufficient service to existing customers or maybe required to limit new customer acquisition,both of which may materially and adversely impair our results of operations.Similarly,we have entered into multi-year contract commitments with colocation service providers.If we
316、 overestimate our capacityrequirements and therefore secure excess capacity and have excess capital expenditures,our operating material could be materiallyreduced.We depend on third parties to provide network connectivity to the customers in our data centers and any delays or disruptions inconnectiv
317、ity may materially adversely affect our operating results and cash flow.We are not a telecommunications carrier.Although our customers generally are responsible for providing their own networkconnectivity,we still depend upon the presence of telecommunications carriers fiber networks serving our dat
318、a centers in order toattract and retain customers.We believe that the availability of carrier capacity will directly affect our ability to achieve ourprojected results.Any carrier may elect not to offer its services within our data centers.Any carrier that has decided to providenetwork connectivity
319、to our data centers may not continue to do so for any period of time.Further,some carriers are experiencingbusiness difficulties or have announced consolidations.As a result,some carriers2025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm29
320、/155222025/5/19 10:16apld-20240531https:/www.sec.gov/Archives/edgar/data/1144879/000114487924000216/apld-20240531.htm30/155may be forced to downsize or terminate connectivity within our data centers,which could have an adverse effect on the business ofour customers and,in turn,our own operating resu
321、lts.Our data centers may require construction and operation of a sophisticated redundant fiber network.The construction required toconnect multiple carrier facilities to our data centers is complex and involves factors outside of our control,including regulatoryrequirements and the availability of c
322、onstruction resources.We have obtained the right to use network resources owned by othercompanies,including rights to use dark fiber,in order to attract telecommunications carriers and customers to our portfolio.If theestablishment of highly diverse network connectivity to our data centers does not
323、occur,is materially delayed or is discontinued,oris subject to failure,our operating results and cash flow may be materially adversely affected.Additionally,any hardware or fiberfailures on this network may result in significant loss of connectivity to our data centers.This could negatively affect o
324、ur ability toattract new customers or retain existing customers,which could have an adverse effect on our business,financial condition andresults of operations.Certain natural disasters or other external events,including climate change or mechanical failures,could harm our business,financial conditi
325、on,results of operations,cash flows,and prospects.We may also experience disruptions due to mechanical failure,human error,physical or electronic security breaches,war,terrorism,fire,earthquake,pandemics,hurricane,flood and other natural disasters,sabotage and vandalism.Our systems may besusceptible
326、 to damage,interference,or interruption from modifications or upgrades,power loss,telecommunications failures,computer viruses,ransomware attacks,computer denial of service attacks,phishing schemes,or other attempts to harm or accessour systems.Such disruptions could materially and adversely affect
327、our business and our financial condition,operating results,cashflows,and prospects.In addition,there continues to be a lack of consistent climate legislation,which creates economic and regulatory uncertainty for ourbusiness.With the energy demand of our business,we may become a target for future env
328、ironmental and energy regulation.Newlegislation and increased regulation regarding climate change could impose significant costs on us and our suppliers,includingcosts related to increased energy requirements,capital equipment,environmental monitoring and reporting,and other costs tocomply with such
329、 regulations.Further,any future climate change regulations could also negatively impact our ability to competewith companies situated in areas not subject to such limitations.Given the political significance and uncertainty around the impact of climate change and how it should be addressed,and energ
330、ydisclosure and use regulations,we cannot predict how legislation and regulation will affect our financial condition and results ofoperations in the future in the U.S.Further,even without such regulation,increased awareness and any adverse publicity in theglobal marketplace about potential impacts o
331、n climate change or energy use by us or other companies in our industry could harmour reputation.Any of the foregoing could result in a material adverse effect on our business and financial condition.Joint ventures,joint ownership arrangements and other projects pose unique challenges and we may not
332、 be able to fullyimplement or realize synergies,expected returns or other anticipated benefits associated with such projects.From time to time,we may be involved in strategic joint ventures and other joint ownership arrangements.We may not always bein complete alignment with our joint venture or joi
333、nt owner counterparties;we may have differing strategic or commercialobjectives and may be outvoted by our joint venture partners or we may disagree on governance matters with respect to the jointventure entity or the jointly owned assets.As a result,when we enter into joint ventures or joint ownership arrangements,we maybe subject to a number of risks.In some joint ventures and joint ownership ar
0731-84720580
sgpjbg002
工作日 9:30 - 18:00
研報
新質生產力
DeepSeek?
低空經濟
大模型
AI Agent
AI Infra
具身智能
自動駕駛
寵物
銀發經濟
人形機器人
企業出海
算力
微短劇
薪酬
白皮書
創新藥
人工智能
AI產業
信息科技
互聯網
消費經濟
汽車交通
電商零售
傳媒娛樂
醫藥健康
投資金融
能源環境
地產建筑
傳統產業
英文報告
其它
最新報告
中英對照
全文搜索
報告精選
PDF上傳翻譯
多格式文檔互轉
入駐&報告售賣
會員權益
機構報告
券商研報
財報庫
專題合集
英文報告
數據圖表
會議報告
其他資源
行業聚焦
芯片產業
熱點概念
全球咨詢智庫
人工智能
500強
新質生產力
會議峰會
新能源汽車
企業年報
互聯網
公司研究
行業綜觀
消費教育
科技通信
醫藥健康
人力資源
投資金融
汽車產業
物流地產
電子商務
傳統產業
傳媒營銷
其它
2025低空經濟/低空產業報告合集（共49套打包）
2025年智算中心/AIDC/AI數據中心研究報告合集（共37套打包）
AI、科技與通信
廣告、傳媒與營銷
消費、零售與支付
HR、文化與旅游
金融、保險與投資
能源、環境與工業
醫療制藥與大健康
物流、地產與建筑
其他行業
AI ? 科技 ? 通信
數字化
金融財經
智能制造
電商傳媒
地產建筑
醫療醫學
能源化工
其他行業
收藏
下載
2025-05-20
AI查數
行業數據
政策法規
商業模式
產業鏈
競爭格局
市場規模
產業概述
其它
2025年
AI讀財報
年報
一季報
半年報
三季報
IPO招股書
社會責任報告
A股
IPO申報
港股
美股&全球
新三板
掃碼登錄
手機快捷登錄
賬號登錄
