[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_102":103},"en-item",{"_9":10,"_10":11},"kind","item",{"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29,"_30":31,"_32":31,"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":-5,"_48":49,"_50":-5,"_51":-5,"_52":53,"_54":55,"_56":57,"_58":42,"_59":42,"_60":61,"_62":42,"_63":64},"id","z2prnuc2qa7iwg3ukcnyls6zd","revision",2,"title","Applied Digital Corp. 2026年Q3净亏损1.84亿美元","originalTitle","Applied Digital Corp. (0001144879) (Filer)","summary","Applied Digital Corp. 2026年第三季度净亏损1.84亿美元，总资产达117.07亿美元，总负债79.07亿美元。公司面临重大债务义务和法律诉讼风险，包括证券集体诉讼和衍生诉讼。","reason","Applied Digital Corp. reported a significant net loss of $184.055 million for the three months ended August 31, 2026, with substantial debt obligations and legal risks.","source",{"_12":93,"_94":95,"_9":96,"_97":42,"_98":99,"_100":101},"links",{"_90":91,"_78":92},"publishedAt","2026-10-07T21:19:29.000Z","discoveredAt","2026-10-07T21:26:18.483Z","timelineAt","category","ai-products","tags",[84,85,86,87,88,89],"stockSymbols",[83],"score",81,"selected",true,"channel","news","story",{"_73":74,"_16":75},"x","readingMode","full","author","language","body",{"_64":77,"_78":-5,"_79":80,"_81":82},"outline",[],"relatedStories",[76],"indexable","markdownAvailable","group",{"_65":66,"_45":67,"_68":69,"_70":71,"_72":71},"hasTranslation","bodyLanguage","zh","factId","fd1QnkggtGXM",{"_73":74,"_16":75},"reportCount",1,"additionalSourceCount",0,"developmentCount","publicId","03673e4f-0475-45f1-ac0b-6fd6f6750f14","Applied Digital 财报与债务风险披露",{"_73":74,"_16":75},"

美国

证券交易委员会

华盛顿特区 20549

________________________

10-Q 表格

________________________

(选择一项)


☒	根据《1934 年证券交易法》第 13 或 15(d) 条的季度报告

截至 2026 年 8 月 31 日的季度

或


o	根据《1934 年证券交易法》第 13 或 15(d) 条的过渡报告

从 ________ 至 __________ 的过渡期

委员会文件编号：001-31968

________________________

应用数字公司

(根据其章程指定的注册人全名)

________________________


内华达州	95-4863690
(注册或组织的州或司法管辖区)	(IRS 雇主识别号码)

德克萨斯州达拉斯市 Turtle Creek 大道 3811 号，2100 室	75219
(主要执行办公室地址)	(邮政编码)

(214) 427-1704

注册人的电话号码，包括区号

根据《法案》第 12(b) 条注册的证券：


每类证券的名称	交易代码	每种证券的注册交易所名称
面值为 0.001 美元的普通股	APLD	纳斯达克全球精选市场

通过勾选方框表明注册人：(1) 是否已提交根据《1934 年证券交易法》第 13 或 15(d) 条在前 12 个月内（或注册人需要提交此类报告的较短期间）应提交的所有报告；以及 (2) 是否在过去 90 天内受到此类提交要求的约束。是 x 否 o

通过勾选方框表明注册人是否已根据《S-T 规则》第 405 条（本章第 232.405 条）在前 12 个月内（或注册人需要提交此类文件的较短期间）提交了所有应提交的交互式数据文件。是 x 否 o

通过勾选方框表明注册人是大型加速提交者、加速提交者、非加速提交者、较小报告公司或新兴成长公司。请参见《交易法》第 12b-2 条中“大型加速提交者”、“加速提交者”、“较小报告公司”和“新兴成长公司”的定义。

大型加速提交者

加速提交者

非加速提交者

较小报告公司

新兴成长公司

如果是一家新兴成长公司，请通过勾选方框表明注册人是否已选择不使用根据《交易法》第 13(a) 条提供的任何新修订的财务会计标准的延长过渡期。 o

通过勾选方框表明注册人是否为壳公司（根据《交易法》第 12b-2 条的定义）。是 o 否 x

截至 2026 年 10 月 6 日，有 302,387,140 股面值为 0.001 美元的普通股流通在外。


		页码
第一部分 - 财务信息

项目 1.	财务报表	1
	截至 202 6 年 8 月 31 日和 202 6 年 5 月 31 日的合并资产负债表（未经审计）	1
	Condensed Consolidated Statements of Operations for the three months ended August 31, 2026 and August 31 , 2025 (unaudited)	2
	截至2026年8月31日三个月的合并临时权益和股东权益变动表和 2026年8月 31日，2025年8月 31日（未经审计）	3
	Condensed Consolidated Statements of Cash Flows for the three months ended August 31 , 2026 and August 31 , 2025 (unaudited)	5
	合并财务报表的附注（未经审计）	7
项目 2.	管理层讨论与分析财务状况和经营成果	40
项目 3.	关于市场风险的定量和定性披露	54
项目 4.	控制和程序	54

第二部分 - 其他信息

项目 1.	法律诉讼	55
项目 1A.	风险因素	55
项目 2.	未注册的股权证券销售和资金使用	55
项目 3.	高级证券违约	56
项目 4.	矿山安全披露	56
项目 5.	其他信息	56
项目 6.	附录	57
签名	58

第一部分 - 财务信息

项目 1. 财务报表

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

合并资产负债表（未经审计）

（以千为单位，除非另有说明）


	2026 年 8 月 31 日		2026 年 5 月 31 日
资产
流动资产：
现金及现金等价物	$	2,949,909			$	1,591,988
受限现金	313,385			2,381,027


应收账款	114,110			56,309
预付费用和其他流动资产 (1)	685,638			613,692
待售的流动资产	19,366			19,841
流动资产合计	4,082,408			4,662,857
固定资产，净值	6,330,411			4,236,300
经营租赁使用权资产，净值	72,250			76,922
融资租赁使用权资产，净值	109,887			122,523
其他资产	1,112,220			830,710
总资产	$	11,707,176			$	9,929,312

负债、临时权益和股东权益
流动负债：
应付账款	$	336,865			$	395,474
应计负债	850,355			548,493
经营租赁负债的流动部分	19,199			18,484
融资租赁负债的流动部分	43,490			47,585
债务的流动部分	112,645			16,422

客户存款	16,752			16,752

递延收入	39,217			4,666

由于客户	11,448			10,065
持有待售的流动负债	4,988			7,426
其他流动负债	158,273			97,489
流动负债总额	1,593,232			1,162,856
长期递延收入	107			—
经营租赁负债的长期部分	41,670			47,178
融资租赁负债的长期部分	2,457			10,731
长期债务	6,263,947			4,959,516
其他长期负债	5,432			5,454


负债总额	7,906,845			6,185,735
承诺和或有事项（注释18）
临时权益
系列E优先股，面值0.001美元，授权2,000,000股，截至2026年8月31日未发行和流通股，以及2026年5月31日发行和流通股276,673股	—			6,306
系列E-1优先股，面值0.001美元，授权62,500股，截至2026年8月31日发行和流通股61,831股，以及2026年5月31日发行和流通股61,909股	56,373			56,460
系列G优先股，面值0.001美元，授权1,030,000股，截至2026年8月31日发行和流通股128,750股，以及2026年5月31日未发行和流通股	124,929			—
可赎回非控制性权益	2,010,873			1,956,303
股东权益：
普通股，面值0.001美元，授权600,000,000股，截至2026年8月31日发行304,232,295股，流通297,066,995股，以及截至2026年5月31日发行295,048,903股，流通287,883,603股	305			296
库藏股，截至2026年8月31日和2026年5月31日均为7,165,300股，按成本计算	(52,737)			(52,737)
额外支付资本	2,492,725			2,432,250
累计亏损	(837,821)			(662,333)
归属于Applied Digital Corporation的股东权益总额	1,602,472			1,717,476
非控制性权益	5,684			7,032
包括非控制性权益的股东权益总额	1,608,156			1,724,508
负债、临时权益和股东权益总额	$	11,707,176			$	9,929,312

(1)包括截至2026年8月31日和2026年5月31日的关联方应收款5930万美元和5860万美元。详见注释7 - 关联方交易以进一步讨论。

请参阅未经审计的合并财务报表附注

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

合并损益表（未经审计）

（千美元，除非另有说明）


	截至
	2026年8月31日		2025年8月31日
收入：
服务和其他收入	$	262,755			$	80,934
数据中心租赁和其他收入	79,120			—

总收入	341,875			80,934
成本和费用：
服务和其他收入成本	245,709			58,831
数据中心租赁和其他收入成本	43,862			140
销售、一般及行政费用 (1)	114,683			29,482

资产弃置损失	—			2,243

总成本和费用	404,254			90,696
营业亏损	(62,379)			(9,762)
利息支出	77,383			8,013
利息收入 (2)	(35,821)			(857)
衍生品公允价值变动损失	49,511			—
投资公允价值变动损失	11,352			—






其他净支出	1,311			—
税前净亏损	(166,115)			(16,918)
所得税费用	1,886			8
持续经营的净亏损	(168,001)			(16,926)
终止经营的净亏损	(16,054)			—
净亏损	(184,055)			(16,926)
归属于非控制性权益和可赎回非控制性权益的净亏损	(51,484)			—
优先股股息	(1,543)			(1,576)
归属于普通股股东的净亏损	$	(237,082)			$	(18,502)

归属于普通股股东的净亏损
持续经营	$	(221,028)			$	(18,502)
终止经营	(16,054)			—
归属于普通股股东的净亏损	$	(237,082)			$	(18,502)

归属于普通股股东的基本和稀释净亏损每股
持续经营	$	(0.76)			$	(0.07)
终止经营	(0.06)			—
归属于普通股股东的基本和稀释净亏损每股	$	(0.82)			$	(0.07)

基本和稀释加权平均股份总数	291,557,618			255,892,902

(1)包括截至2026年8月31日的三个月和2025年8月31日的三个月内与关联方相关的销售、一般及行政费用分别为49.7千美元和74.3千美元。有关关联方交易的进一步讨论，请参见第7号附注 - 关联方交易。

(2)包括截至2026年8月31日的三个月内与关联方相关的收入为70万美元。有关关联方交易的进一步讨论，请参见第7号附注 - 关联方交易。

参见未审合并财务报表的附注

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

未审合并所有者权益变动表

截至2026年8月31日的三个月

（千美元，除股份数据外）


	临时权益			永久权益
	优先股 (1)		可赎回非控制性权益		普通股		库藏股		额外股本		累计亏损		所有者权益权益	非控制性权益		总权益
	股份数量	金额			股份数量	金额		股份数量	金额
2026年5月31日余额	338,582		$	62,766		$	1,956,303				295,048,903	$	296		(7,165,300)		$	(52,737)			$	2,432,250			$	(662,333)			$	1,717,476			$	7,032			$	1,724,508
通过股票薪酬计划发行普通股	—	—		—			4,730,140	5		—	—		(5)	—		—			—			—
限制性股票解禁时的税款支付	—	—		—			—	—		—	—		(99,413)	—		(99,413)			—			(99,413)
发行优先股，扣除成本	283,250	274,850		—			—	—		—	—		—	—		—			—			—
优先股转换	(154,500)	(149,921)		—			4,453,252	4		—	—		149,917	—		149,921			—			149,921
赎回优先股	(276,751)	(6,393)		—			—	—		—	—		(603)	—		(603)			—			(603)
优先股股息	—	—		—			—	—		—	—		(1,543)	—		(1,543)			—			(1,543)





非控制性权益的投入，扣除成本	—	—		1,349			—	—		—	—		—	—		—			—			—

非控制性权益优先股股息	—	—		60,051			—	—		—	—		(60,051)	—		(60,051)			—			(60,051)
股票薪酬	—	—		—			—	—		—	—		69,164	—		69,164			—			69,164

子公司发行权益，扣除成本	—	—		—			—	—		—	—		3,009	—		3,009			389			3,398
净亏损	—	—		(6,830)			—	—		—	—		—	(175,488)		(175,488)			(1,737)			(177,225)
2026年8月31日余额	190,581	$	181,302		$	2,010,873				304,232,295	$	305		(7,165,300)	$	(52,737)			$	2,492,725			$	(837,821)			$	1,602,472			$	5,684			$	1,608,156

(1)有关优先股活动的进一步讨论，请参见第16号附注 - 临时权益。

参见未审合并财务报表的附注

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

未审合并所有者权益变动表

截至2025年8月31日的三个月

（千美元，除股份数据外）


	临时权益			永久权益
	优先股 (1)			普通股		库藏股		额外已支付资本		累计亏损		股东权益权益
	股数	金额			股数	金额		股数	金额
2025年5月31日余额	442,158		$	136,037				234,200,868	$	230			(9,291,199)		$	(31,400)			$	1,009,913			$	(481,055)			$	497,688
通过股票薪酬计划发行普通股	—	—			897,022	1		—	—		(1)		—		—
限制性股票解禁时的税款支付	—	—			—	—		—	—		(4,497)		—		(4,497)
发行优先股，扣除成本	180,000	170,396			—	—		—	—		—		—		—
发行股票，扣除成本	—	—			15,320,373	15		—	—		190,406		—		190,421
认股权证转换	—	—			188	—		—	—		1		—		1
按公允价值发行认股权证	—	—			—	—		—	—		121,204		—		121,204
G系列转换	(258,000)	(242,480)			28,165,650	28		—	—		242,452		—		242,480
优先股股息	—	—			—	—		—	—		(1,576)		—		(1,576)
优先股赎回	(225)	(225)			—	—		—	—		—		—		—
基于股票的补偿	—	—			—	—		—	—		15,465		—		15,465
净亏损	—	—			—	—		—	—		—		(16,926)		(16,926)
2025年8月31日余额	363,933	$	63,728				278,584,101	$	274			(9,291,199)	$	(31,400)			$	1,573,367			$	(497,981)			$	1,044,260

(1)参见第16号附注 - 临时权益，了解优先股活动的进一步讨论。

请参阅未经审计的合并财务报表的附注

应用数字公司及其子公司

现金流量表（未经审计）（以千为单位）

截至2026年8月31日和2025年8月31日的三个月


	截至
	2026年8月31日		2025年8月31日
经营活动产生的现金流量
净亏损	$	(184,055)			$	(16,926)
调整项目以将净亏损调节为经营活动产生的净现金：
折旧和摊销	41,912			4,152
基于股票的补偿	66,499			15,465
租赁费用	6,517			5,381

衍生品公允价值变动损失	49,511			—
投资公允价值变动损失	11,352			—


债务发行成本摊销	5,896			4,851
持有待售分类损失	14,126			—



资产弃置损失	—			2,243
认股权证公允价值变动收益	(22)			—
经营性资产和负债变动：
应收账款	(56,977)			(29,525)
预付费用和其他流动资产	(47,786)			(6,962)
客户存款	107			627

递延收入	34,480			(2,316)

应付账款	(7,981)			(77,784)
应计负债	106,701			28,684
应付客户	1,383			(1,753)
租赁资产和负债	5,856			(9,598)
其他流动负债	1,886			—
其他资产	14,516			1,930
经营活动产生的现金流量	63,921			(81,531)
投资活动产生的现金流量
购买固定资产和其他资产	(2,074,698)			(249,914)




对公司的投资	(8,181)			—
投资活动使用的现金流量	(2,082,879)			(249,914)
融资活动产生的现金流量
偿还融资租赁	(14,252)			(29,932)
长期债务借款	1,648,500			65
使用循环信贷	82,390			—

偿还长期债务	(315,932)			(2,416)

支付递延融资费用	(28,879)			(1)
限制性股票解禁时的税款支付	(99,413)			(4,497)

非控股权益发行贡献	1,349			—
普通股发行所得	—			196,366
普通股发行成本	—			(5,945)
优先股发行所得	274,999			175,000
优先股发行成本	(149)			(4,604)
赎回优先股	(6,996)			(225)
支付优先股股息	(1,543)			(1,576)

行使认股权证	—			1




子公司发行股权，扣除成本	3,398			—

融资活动产生的现金流	$	1,543,472			$	322,236

现金、现金等价物和受限现金的净减少额	$	(475,486)			$	(9,209)
期初现金、现金等价物和受限现金（包括来自终止经营的现金）	4,153,431			123,318
期末现金、现金等价物和受限现金（包括来自终止经营的现金）	3,677,945			114,109
减：来自终止经营的现金、现金等价物和受限现金	2			—
来自持续经营的现金、现金等价物和受限现金	$	3,677,943			$	114,109

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简明合并现金流量表（未经审计）（以千为单位）

截至2026年8月31日和2025年8月31日的三个月



	截至三个月末
	2026年8月31日		2025年8月31日
现金流量信息的补充披露
支付的利息	$	242,852		$	9,039

非现金活动的补充披露
通过租赁义务获得的经营租赁资产	$	5,497		$	—
通过租赁义务获得的融资租赁资产	$	—		$	3,966
应付账款和应计负债中的固定资产	$	142,284		$	132,113



优先股转换为普通股	$	149,921		$	242,480

按公允价值发行的认股权证	$	—		$	121,204
以实物形式支付的非现金股息	$	60,051		$	—

参见未经审计的简明合并财务报表附注

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简明合并财务报表附注（未经审计）

截至2026年8月31日的三个月

1. 业务和编制基础

Applied Digital Corporation（“公司”）是一家为人工智能、云计算、网络和区块链工作负载设计、建造和运营高性能、可持续工程数据中心和托管服务的公司。该公司有两个报告业务部门。每个部门的财务信息包含在第19号附注 - 业务部门。

所有对“Applied Digital Corporation”、“我们”、“我们”、“我们的”或“公司”的引用均指Applied Digital Corporation及其子公司。

合并原则

随附的中期未经审计的简明合并财务报表是根据证券交易委员会（“SEC”）的规则和法规编制的，包括10-Q表格的说明和S-X条例第10条的规定。某些信息和附注披露通常包含在公司年度合并财务报表（10-K表格）中，已进行了压缩或省略。截至2026年5月31日的未经审计的简明合并资产负债表源自该日期的审计合并财务报表，但未包含审计年度财务报表所需的全部披露内容。

未经审计的合并财务报表包括公司的账户及其合并子公司和符合“可变利益实体”（\"VIE\"）定义的实体，公司被视为主要受益人或符合“投票权益实体”（\"VOE\"）定义的实体。根据ASC第810章《合并》，当确定公司是该实体运营的主要受益人时，公司会合并该VIE。主要受益人是指有权直接指导最显著影响VIE经济表现的活动，并有义务吸收损失或有权获得可能对VIE产生重大影响的收益的一方。在评估公司是否为主要受益人时，公司会考虑该实体的目的和设计以及该实体设计用来创造并传递给其可变利益持有人的风险。公司还会评估其在VIE中的经济利益。有关投资合并的更多信息，请参见第12号注释 - 可变利益实体。内部账户和交易已予以抵消。

根据投票权益模型，公司合并其多数控股子公司ChronoScale Holdings Corporation（“ChronoScale”）的业绩，因为公司持有ChronoScale的控制性财务权益。ChronoScale中不属于公司的所有权权益在未经审计的合并财务报表中作为非控制性权益列示。合并过程中已抵消所有内部余额和交易。

根据公司的意见，为公允列示所列示的中期期间的业绩，已作出所有必要调整。这些中期期间的经营成果不一定反映全年预期的经营成果。如需进一步信息，请参阅并阅读这些中期未经审计的合并财务报表，并与公司提交给证券交易委员会（SEC）的截至2026年5月31日财年年度报告10-K表格中包含的经审计的合并财务报表一并参考，该报告于2026年7月29日提交。

2. 重要会计政策

除本披露中所述外，公司截至2026年5月31日年度的年度报告10-K表格中包含的重要会计政策没有重大变化。

估计的使用

按照美国通用会计准则（“GAAP”）编制财务报表需要管理层做出估计和假设，这些估计和假设会影响资产负债表日资产和负债的报告金额以及或有资产和负债的披露，以及报告期间收入和费用的报告金额。公司会持续评估其估计，包括与股票薪酬相关的估计，特别是与绩效股票单位的绩效条件的时机和实现可能性相关的内容、或有事项，以及与认股权证公允价值和

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简要合并财务报表的附注（未经审计）

截至2026年8月31日的三个月

可赎回非控制性权益。尽管这些估计基于公司的历史事实和各种其他假设，公司认为这些假设是合理的，但实际结果可能与这些估计不同。

收入确认

ChronoScale 收入

与 ChronoScale 相关的收入按照 ASC 606 进行核算。ChronoScale 是根据 ASC 810 由公司合并的 VOE，为客户提供托管云基础设施服务，例如人工智能和机器学习开发人员，以帮助他们开发高级产品。客户支付固定费率以换取由所提供设备支持的托管云服务。收入根据固定费率，在协议期限内扣除任何非履约信用后确认。在截至2026年8月31日的三个月内，公司还完成了涉及AI基础设施或GPU相关硬件以及辅助支持和维护服务的一次性转售安排。GPU硬件销售的收入在硬件控制权转移给客户时确认。相关支持和维护服务的收入以净额确认，在该时点确认，因为公司在销售安排中充当代理人。

业务分部

公司确定了两个可报告的业务分部：数据中心托管（“数据中心托管业务”）和高性能计算托管（“HPC 托管业务”）。这些分部代表管理层对业务的看法，对于这些业务，可以获取单独的财务信息，并由首席运营决策者（CODM）定期评估，CODM 是公司的首席执行官。

在2026年5月与Ekso Bionics Holdings, Inc.的业务合并交易（“业务合并”）之前，该公司将通过其全资子公司Applied Digital Cloud Corporation（“云服务业务”）运营的云服务业务确定为可报告业务部门。交易后，根据将云服务业务注入Ekso Bionics Holdings, Inc.并成为ChronoScale的一部分的协议，ChronoScale被合并到公司的财务报表中；然而，由于其活动由独立的管理团队管理，且其运营结果不经常由公司的CODM（首席运营官）为资源分配和绩效评估目的进行审查，因此该公司不再将其识别为运营或可报告业务部门。

公司的CODM主要根据合并后的收入和业务部门利润（亏损）以及公司各可报告业务部门的收入和利润来评估业绩并做出运营决策。按业务部门的运营结果包括直接归属于每个业务部门的成本或费用，包括服务和其他营业成本、数据中心租赁和其他营业成本，以及销售、一般及行政费用。

出于内部报告的目的，公司不将利息支出、利息收入、衍生品公允价值变动损失、投资公允价值变动损失、其他费用净额或所得税费用分配到这些业务部门，因为公司认为将这些费用进行分配对于评估业务部门的业绩没有益处。

数据中心托管业务运营数据中心，为加密货币挖矿客户提供电力空间。客户拥有的硬件安装在公司的设施中，公司收取固定费用提供运营和维护服务。

HPC托管业务设计、建设和运营下一代数据中心，这些数据中心旨在以具有成本效益的模式提供大规模计算能力，并支持HPC应用。

有关公司重大会计政策和估计的更多信息，请参阅公司截至2026年5月31日的年度报告10-K表格中包含的合并财务报表的第2号重要会计政策，该报告已提交给证券交易委员会。

重分类

在截至2025年8月31日的季度中，云服务业务被列为终止经营并待售。然而，在截至2026年2月28日的季度中，公司决定云服务业务

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简要合并财务报表附注（未审计）

截至2026年8月31日的三个月

由于与Ekso Bionics Holdings, Inc.（“Ekso”）签订《贡献和交换协议》，该公司不再符合持有待售和终止经营的会计处理条件，因此云服务业务成为Ekso的全资子公司。因此，云服务业务被重新归类为持续经营，其资产和负债已重新归入各自的持有和使用资产负债表项目，前期财务报表也已追溯调整以反映此披露方式。

公司已对未经审计的合并损益表中的收入和销售成本的披露方式进行修订，以分别披露服务和其他收入及销售成本，以及数据中心租赁和其他收入及销售成本。前期金额已重新分类以符合本期的披露方式。这些披露方式的变更对之前报告的总收入、总销售成本或净损失没有影响。

在截至2026年8月31日的季度内，公司在其未经审计的合并损益表中单独披露了利息费用和利息收入，因为这些金额是重要的。前期金额已重新分类以符合本期的披露方式。这些披露方式的变更对之前报告的净损失没有影响。

现金、现金等价物和受限现金

公司的受限现金余额包括债务服务储备金和由现金担保的信用证。债务服务储备金存放在单独的账户中，用于在建设期间支付高级担保债券的利息和本金。有关进一步讨论，请参见第9号附注 - 债务。这些余额以货币市场基金和活期存款账户的组合形式持有，每种形式公司均认为属于第1级，公司认为这近似于公允价值。

截至2026年8月31日和2026年5月31日未经审计的合并资产负债表中的现金、现金等价物和受限现金，在未经审计的合并现金流量表中包括的金额如下（单位：千美元）：


	2026年8月31日		2026年5月31日
现金及现金等价物	$	2,949,909			$	1,591,988
受限现金	313,385			2,381,027
其他资产中的受限现金	414,649			180,415
现金、现金等价物和受限现金总额	$	3,677,943			$	4,153,430

持有待售资产

公司通常在满足以下条件时将资产归类为待售资产：(i) 管理层已制定出售该资产的计划，(ii) 该资产可立即出售，(iii) 管理层已启动寻找买方或买方的积极计划以及其他完成出售计划所需的行动，(iv) 预计在一年内出售该资产的可能性很大，(v) 该资产正在以与当前公允价值合理相关的价格进行营销，以及(vi) 预计不会对出售计划进行重大更改。根据ASC 360，财产、厂房和设备 - 长期资产的减值或处置，被归类为待售的财产不再计提折旧，并按照其账面价值或估计公允价值减去估计出售成本的较低者进行报告。财产、厂房和设备 - 长期资产的减值或处置。截至2026年8月31日，ChronoScale的Ekso业务符合待售标准，并在未经审计的合并资产负债表（参见第6号注释 - 停止运营）以及1440万美元的某些公司资产中被归类为待售。Ekso业务的出售已于2026年9月30日完成。有关Ekso业务出售的更多信息，请参阅第21号注释 - 后续事件。

停止运营

如果相关处置组满足以下所有条件，公司认为将业务归类为停止运营是适当的：(i) 处置组是公司的组成部分，(ii) 该组成部分符合待售标准，以及(iii) 该组成部分的处置代表了对公司运营和财务结果有重大影响的战略性转变。截至2026年8月31日，ChronoScale的Ekso业务被认定为停止运营

目录 s

应用数字公司及其子公司

合并中期财务报表的附注（未经审计）

截至2026年8月31日的三个月

由于满足所有三个标准（参见第6号注释 - 停止运营），该业务已停止运营。Ekso业务的出售已于2026年9月30日完成。有关Ekso业务出售的更多信息，请参阅第21号注释 - 后续事件。

近期会计准则

尚未采用的会计准则

2024年11月，FASB发布了ASU 2024-03，收入表 - 报告综合收益 - 费用分解披露（子主题220-40）：收入表费用的分解。该ASU旨在通过增加相关费用科目的分解，提高收入表披露的透明度。2025年1月，FASB发布了ASU No. 2025-01，该ASU修订了ASU No. 2024-03的生效日期，以明确所有公开业务实体必须在2026年12月15日之后开始的年度报告期间以及2027年12月15日之后开始的年度报告期间内的中期期间采用该指引，并允许提前采用。该ASU允许采用前瞻性或追溯性应用。公司目前正在评估该ASU对其财务报表列报和披露的影响，并计划从2027年6月1日开始的财年开始采用该规定。

2025年9月，FASB发布了ASU 2025-06，无形资产 - 商誉和其他 - 内部使用软件（子主题350-40）：对内部使用软件会计的针对性改进。该ASU旨在通过删除所有关于软件开发项目阶段的参考内容来简化资本化指引，从而使指引对不同的软件开发方法保持中立。该ASU中的修订内容适用于2027年12月15日之后开始的年度报告期间以及这些年度报告期间内的中期报告期间，允许提前采用。该更新中的修订允许实体使用前瞻性、追溯性或修改后的过渡方法应用新指引。公司目前正在评估该ASU对其财务报表的影响，并计划从2028年6月1日开始的财年开始采用该规定。

2025年12月，FASB发布了ASU 2025-11，中期报告（主题270）范围有限的改进。该ASU旨在改善ASC 270中期报告中的指引的可导航性，并明确其适用条件。根据修订内容，如果实体根据GAAP提供中期财务报表和附注，则适用ASC 270。ASU 2025-11还涉及此类财务报表的形式和内容、中期披露要求，并确立了一项原则，即实体必须披露自上一个年度报告期结束以来对其产生重大影响的事件。ASU 2025-11适用于2027年12月15日之后开始的年度报告期间内的中期报告期间，允许提前采用。公司目前正在评估该ASU对其财务报表的影响，并计划从2028年6月1日开始的财年开始采用该规定。

2025年12月，FASB发布了ASU 2025-12，即《典籍改进》。本次更新中的修正措施旨在对GAAP进行其他渐进式改进，并便于从技术性更正、无意中适用典籍、澄清及其他小幅改进中产生的广泛主题的典籍更新。这些最终的修正措施统称为典籍改进。ASU 2025-12适用于所有实体在2026年12月15日之后开始的年度报告期，以及这些年度报告期内的中期报告期。公司目前正在评估采用ASU 2025-12对公司的合并财务报表可能产生的影响，并计划从2027年6月1日开始的财年开始采用该规定。

2026年4月，FASB发布了ASU 2026-01，即《权益（主题505）：权益分类优先股的初始计量》。该ASU提供了关于权益分类优先股的实物股息（“PIK”）的初始计量的指导，并不影响股息确认的时间。该修正案适用于2026年12月15日之后开始的财年以及这些财年内的中期期间。允许提前采用。公司目前正在评估采用该ASU对公司的合并财务报表可能产生的影响，并计划从2027年6月1日开始的财年开始采用该规定。

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

未审合并财务报表附注

截至2026年8月31日的三个月

3. 企业合并

2026年5月5日，公司通过其全资子公司APLD ChronoScale HoldCo LLC（“贡献方”），完成了企业合并，根据该合并，贡献方将Applied Digital Cloud（“云”）100%的股权利益转让给公开交易公司Ekso Bionics Holdings, Inc.（“Ekso”），以换取Ekso普通股股票（“2026年5月交易”）。尽管Ekso是法律上的收购方，但Cloud被确定为会计上的收购方，该交易根据ASC 805，企业合并进行了会计处理。交易完成后，Ekso更名为ChronoScale Corporation。

由于该交易，在交易完成时，公司拥有ChronoScale约97%的已发行普通股，而原有Ekso股东保留约3%（在不考虑新投资可能造成的稀释之前），这代表了ChronoScale的非控制性权益。截至2026年8月31日，公司拥有ChronoScale约96%的已发行普通股。

由于该交易被记录为反向收购，所转移的对价是根据Cloud在交易后需要发行的股权数量来衡量的，以使原始Ekso股东在合并公司中获得与交易后相同的股权比例。所转移对价的公允价值约为5760万美元，基于4,357,026股股权，按收购日Ekso的收盘价13.22美元/股计算。对价完全以股权形式支付。

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

合并中期财务报表的附注（未经审计）

截至2026年8月31日的三个月

下表总结了收购日所获得的资产和承担的负债的公允价值：


现金及现金等价物	$	13,492
应收账款，扣除坏账准备后的净额	4,125
存货	4,562
预付费用	1,150
固定资产，净额	1,086
经营租赁使用权资产，净额	315
无形资产，净额	10,950
其他资产	369
所获总资产	$	36,049

应付账款	$	(281)
应计费用	(5,055)
递延收入	(1,400)
经营租赁负债	(321)
流动负债	(3,346)
非流动递延收入	(1,288)
非流动负债	(464)
非流动经营租赁负债	(114)
其他非流动负债	(3,305)
所承担的总负债	$	(15,574)

可识别净资产总额	$	20,475
减：通过PIPE获得的现金（如下文定义）	(15,000)
所获净资产的公允价值	5,475
减：已售资产的减值（参见第6号附注 - 停业部分）	2,365
公允价值减去出售成本	$	3,110

总对价转移	$	57,623
减：公允价值减去出售成本	3,110
商誉	$	54,513

截至收购日，所获应收账款的公允价值约为410万美元。ChronoScale预计可以收回大部分所获应收账款。

所获无形资产的公允价值包括Ekso的开发技术及商标。开发技术和商标的估值由第三方估值专家使用节省特许权使用费法进行。有关ChronoScale截至2026年8月31日止三个月其已售净资产减值损失的信息，请参见第6号附注 - 停业部分 — 已售净资产减值损失。

与该交易相关，ChronoScale安排了一项公开交易中的私人投资（“PIPE”），指的是在交易结束时向选定投资者发行ChronoScale股权的私人配售。根据PIPE协议，ChronoScale同意以每股12.01美元的价格向贡献者发行并出售1,311,407股普通股，从而产生约1570万美元的总毛收益，其中包含0.8百万美元的发行成本。

业务合并导致确认了约5450万美元的商誉，这是根据支付对价超过所获可辨认净资产公允价值的部分计算得出的。商誉主要归因于预期的运营协同效应、组建的员工队伍、上市公司平台优势以及其他不符合单独确认条件的无形利益。商誉被分配至ChronoScale，预计该实体将从收购的协同效应中受益。截至2026年5月31日，ChronoScale根据ASC 280标准并不作为一个单独的报告分部，尽管此前云业务曾被列为一个报告分部。分配的商誉包含在用于商誉减值测试的报告单元中。公司预计，50万美元的商誉将在税务上可抵扣。

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简要合并财务报表附注（未审计）

截至2026年8月31日的三个月

其他不符合单独确认条件的无形利益。商誉被分配至ChronoScale，预计该实体将从收购的协同效应中受益。截至2026年5月31日，ChronoScale根据ASC 280标准并不作为一个单独的报告分部，尽管此前云业务曾被列为一个报告分部。分配的商誉包含在用于商誉减值测试的报告单元中。公司预计，50万美元的商誉将在税务上可抵扣。

由于被收购资产和承担负债的公允价值在计量期间（自收购日起长达一年）可能会发生变化，ChronoScale记录了一项计量调整，将商誉减少了约10万美元，降至约5440万美元。

非控制性权益的收购日公允价值约为460万美元，该价值基于原有Ekso股东保留的股权权益以及收购日Ekso的收盘股价为每股13.22美元。非控制性权益在公司合并资产负债表中作为永久性权益的一个单独组成部分列示。

与交易相关的成本，包括法律、会计、估值和其他专业费用530万美元，在发生时作为费用确认，且不作为支付对价的一部分。

以下未审计的假设财务信息展示了如果收购于2025年6月1日完成，合并后的运营结果。未审计的假设信息仅用于信息参考，不一定反映如果收购在该日期完成时可能实现的运营结果，也不旨在预测未来结果。


	截至
	2025年8月31日
假设收入	$	82,991
假设净损失	$	(19,635)

未审计的假设结果包括直接与收购相关的调整，包括收购的无形资产摊销及其相关的所得税影响。除收购的无形资产摊销影响外，未发现其他每股收益影响。

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简要合并财务报表附注（未审计）

截至2026年8月31日的三个月

4. 固定资产

截至2026年8月31日和2026年5月31日，固定资产包括以下内容（以千为单位）：


	预计使用寿命	2026年8月31日		2026年5月31日
网络设备、电气设备和软件	3年 - 5年	$	40,425			$	38,669
机械基础设施	20年	194,896			71,939
电气基础设施	15年	237,495			104,491
电力生成和变压器	15年 - 30年	344,021			188,110
土地和建筑物
建筑物	39年	471,239			279,308
建筑物改进	15年 - 25年	1,085,386			682,348
土地		150,363			59,713
土地改进	15年	109,095			43,786
租赁改良	3年 - 7年	1,142			1,142
在建工程		3,670,267			2,776,232
其他设备和固定装置	5年 - 10年	132,918			68,128
固定资产总成本		6,437,247			4,313,866
累计折旧		(106,836)			(77,566)
固定资产净值		$	6,330,411			$	4,236,300

截至2026年8月31日和2025年8月31日的三个月内，折旧费用分别为2930万美元和270万美元。

公司会将用于融资其资本支出所借资金的部分利息资本化。资本化的利息作为资产成本的一部分进行记录，并在与相关资产相同的期间内进行折旧。截至2026年8月31日和2025年8月31日的三个月内，资本化利息成本分别为3570万美元和870万美元。

5. 收入

以下是截至2026年8月31日和2025年8月31日的三个月内，公司主要客户收入集中情况的摘要。


	三个月结束于
	2026年8月31日		2025年8月31日
客户A	56	%		32	%
客户B	21	%		—	%
客户C	11	%		47	%

客户D	—	%		21	%

公司的合同负债包括当公司收到对合同中提供的商品或服务的对价时产生的递延收入。截至2026年8月31日和2026年5月31日，公司分别记录了3930万美元和470万美元的递延收入，主要与租户装修服务的预付账单和电力交付有关。公司根据预期确认收入的时间对递延收入进行分类，通常在期末后短时间内确认。截至2026年5月31日和2025年5月31日的递延收入全部在截至2026年8月31日和2025年8月31日的三个月内确认为收入。

此外，合同资产包括在向客户开票之前确认收入时记录的未开票应收账款。这些金额主要与根据ASC 842确认的收入和租赁协议规定的开票之间的差异以及租户装修服务产生的应收账款有关。合同

目录 s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

简要合并财务报表附注（未审计）

截至2026年8月31日的三个月

截至2026年8月31日和2026年5月31日，资产余额分别为1.031亿美元和4310万美元，并包含在未审合并资产负债表的“应收账款，净额”和“其他资产”中。

客户存款

公司截至2026年8月31日和2025年8月31日三个月内的客户存款余额变化如下表所示（以千为单位）：


	结束于三个月
	2026年8月31日		2025年8月31日
期初余额	$	16,752			$	16,125
收到的客户存款	—			627
退还的客户存款	—			—
已使用的客户存款	—			—


期末余额	$	16,752			$	16,752

6. 终止经营

During the year ended May 31, 2026, the Board of Directors of ChronoScale committed to a plan to divest its wholly owned subsidiary, Ekso Bionics, Inc., a Delaware corporation (“Ekso”), and to focus ChronoScale's operations solely on its Cloud Services Business. As such, legacy Ekso met the criteria to be classified as \"held for sale\" on the unaudited condensed consolidated balance sheets. Therefore, upon consolidation, the Company reported Ekso's operations as discontinued operations in its unaudited condensed consolidated statements of operations for the three months ended August 31, 2026 in accordance with ASC 205-20, Discontinued Operations. The sale of the Ekso business was completed on September 30, 2026. Refer to Note 21 - Subsequent Events for additional information regarding the sale of the Ekso business.

The financial results of Ekso are presented as net loss from discontinued operations on the unaudited condensed consolidated statements of operations. The following table presents the major components of the financial results of Ekso for the periods presented (in thousands):


	Three Months Ended
	August 31, 2026
Revenue	$	2,597
Cost of revenues	1,289
Selling, general and administrative	17,366

Operating loss from discontinued operations	(16,058)
Interest expense	(4)
Net loss from discontinued operations before income tax expense	(16,054)
Income tax expense	—
Net loss from discontinued operations	$	(16,054)

Table of Content s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

As of August 31, 2026, the assets and liabilities of Ekso are classified as current in the unaudited condensed consolidated balance sheets, as it is probable that the sale will occur within one year. The following table represents the aggregated carrying amounts of classes of assets and liabilities that are classified as held for sale on the unaudited condensed consolidated balance sheets for the periods presented (in thousands):


	August 31, 2026		May 31, 2026
Assets:
Cash and cash equivalents	$	2			$	2
Accounts receivable	3,090			3,914
Prepaid expenses and other current assets	5,659			5,604
Property and equipment, net	1,069			1,084
Operating lease right of use asset, net	284			284
Intangible assets	10,950			10,950
Other assets	425			368
Less: Impairment on assets held for sale	$	(16,491)			$	(2,365)
Total current assets held for sale	$	4,988			$	19,841

Liabilities:
Accounts payable	$	360			$	263
Accrued liabilities	1,859			4,205
Current portion of operating lease liability	191			290
Deferred revenue	2,493			2,563

Long-term portion of operating lease liability	86			105
Total current liabilities held for sale	$	4,988			$	7,426

Loss on Impairment of Net Assets Held for Sale

In connection with the classification of the Ekso business as held for sale and discontinued operations, the Company evaluated the Ekso business for impairment as of August 31, 2026, in accordance with ASC 360-10, Impairment and Disposal of Long-Lived Assets. The Ekso business was measured at the lower of its carrying amount and fair value less cost to sell.

During the first and second quarters of fiscal year 2027, the Company continued to market the Ekso business and advance negotiations with prospective buyers. The disposal of the Ekso business was completed on September 30, 2026.

As of August 31, 2026, the Ekso business consisted of approximately $21.5 million of assets and $5.0 million of liabilities, resulting in net assets of $16.5 million. The Company estimated the fair value of the Ekso business to be $1.5 million. After deducting $2.6 million of estimated incremental costs to sell the Ekso business, the Company determined that the fair value less costs to sell resulted in a negative value of $1.1 million. The fair value less costs to sell used for measuring the Ekso business under ASC 360-10 is floored at $0, and as a result, the remaining $1.1 million of estimated costs to sell Ekso is not included in this initial impairment calculation and will be recognized as period expenses when incurred. As the Ekso business’s carrying amount of $16.5 million exceeded its estimated fair value less costs to sell, the Company recognized an impairment loss of $14.1 million as of August 31, 2026. The impairment loss was recognized through a valuation allowance and was not allocated to the individual classes of assets held for sale. The impairment loss is included in net loss from discontinued operations in the unaudited condensed consolidated statement of operations for the three months ended August 31, 2026. The related valuation allowance is presented as valuation allowance for impairment loss on the unaudited condensed consolidated balance sheet as of August 31, 2026.

Table of Content s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Following the closing of the sale of the Ekso business, the Company does not expect further material impairment losses related to the Ekso business as of the date of this Quarterly Report on Form 10-Q.

The Company determined that no impairment of goodwill, which was assigned to ChronoScale as discussed in Note 3 - Business Combination, existed for the three months ended August 31, 2026.

The following table summarizes the net cash flows from discontinued operations of Ekso for the three months ended August 31, 2026 (in thousands):


	Three Months Ended
	August 31, 2026
Net cash used in operating activities - discontinued operations	$	(1,257)
Net cash used in investing activities - discontinued operations	$	15

7. Related Party Transactions

Base Electron

In the prior year, the Company and Base Electron Corporation (“Base Electron”) entered into the Intercompany Administrative Services Agreement (the \"Intercompany Agreement\"). The amount of services provided during the three months ended August 31, 2026 were approximately $0.1 million.

In the prior fiscal year, Base Electron issued to the Company approximately 10% of Base Electron’s outstanding equity. The investment in Base Electron is accounted for at cost under ASC 321 as it is an equity security without a readily determinable fair value and will be evaluated quarterly for impairment indicators. There were no impairment indicators during the three months ended August 31, 2026. As of August 31, 2026, the Company determined the fair value of the investment was $2.0 million, which is recorded as an Other asset on the unaudited condensed consolidated balance sheets.

Base Electron Demand Grid Promissory Note

In the prior fiscal year, Base Electron entered into a promissory note with the Company (“Demand Grid Promissory Note”) for up to $100.0 million which is payable on-demand. As of August 31, 2026, the principal balance of the Demand Grid Promissory Note was $58.5 million, which was recorded as a related party loan receivable and presented within Prepaid expense and other current assets on the unaudited condensed consolidated balance sheets. During the three months ended August 31, 2026, approximately $0.7 million of interest income was recognized. Further, no allowance for credit loss and no credit loss expense have been recognized for the three months ended August 31, 2026, and receivables are presented at their gross amount, which approximates the net amount expected to be collected.

Other Related Party Transactions

Related party transactions included within selling, general and administrative expense on the unaudited condensed consolidated statement of operations include software license fees of $49.7 thousand and $74.3 thousand during the three months ended August 31, 2026 and 2025, respectively, which were incurred with a company whose chairman is also a member of the Company’s Board of Directors.

Table of Content s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

8. Fair Value Measurements

There have been no significant changes to the Company’s valuation techniques or fair value measurement policies from those disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2026.

The carrying amounts of cash and cash equivalents including notice deposits and certificate of deposits, restricted cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, amounts due to customers and other short-term financial instruments approximate their fair values principally due to their short-term maturities.

The following table presents the Company’s financial assets, presented in the unaudited condensed consolidated balance sheets within Other assets, measured at fair value on a recurring basis (in thousands):


		August 31, 2026		May 31, 2026
Assets:	Fair Value Hierarchy	Fair Value		Fair Value
Equity investments	Level 1	$	7,846			$	19,198
Derivative instruments:
Derivative associated with Redeemable preferred shares	Level 3	169,837			163,283
B&W warrants	Level 3	34,727			90,793
Total assets measured at fair value		$	212,410			$	273,274

Our investments in equity securities with readily determinable fair values are measured at fair value using quoted market prices and, therefore, are classified within Level 1 of the fair value hierarchy. Our investments in equity securities without readily determinable fair values are accounted for at cost under ASC 321 and are evaluated quarterly for impairment indicators. There were no impairment indicators during the quarter for these investments. Refer to Note 11 - Derivative Assets for a discussion of the valuation assumptions and inputs used in measuring the Company’s derivative instruments and Note 9 - Debt for a discussion of the fair value measurement of the Company’s debt.

9. Debt

The Company’s outstanding debt consisted of the following components (in thousands):


	Interest Rate	Maturity Date	August 31, 2026		May 31, 2026
2030 9.250% Senior Secured Notes (1)	9.25%	December 2030	$	2,350,000			$	2,350,000
2031 6.750% Senior Secured Notes (2)	6.75%	March 2031	2,150,000			2,150,000
2031 7.000% Senior Secured Notes	7.00%	June 2031	1,590,000			—
Convertible Notes, senior unsecured (3)	2.75%	June 2030	450,000			450,000
Bridge Facility (4)	See below	April 2027	—			300,000
2026 Revolving Credit Facility (5)	See below	See below	82,390			—




Other debt (6)			99,215			56,680
Deferred financing costs, net of amortization			(345,013)			(330,742)
Less: Current portion of debt			(112,645)			(16,422)
Long-term debt, net			$	6,263,947			$	4,959,516

(1)The 2030 9.250% Senior Secured Notes are guaranteed by APLD ELN-02 HoldCo LLC, APLD ELN-03 HoldCo LLC, APLD ELN-02 LLC, APLD ELN-03 LLC, APLD ELN-02 LandCo LLC and APLD ELN-03 LandCo LLC, each a majority-owned subsidiary of the Company, and are secured by the equity interests of the issuer and guarantors, the Project Accounts (as defined in the 2030 Notes Indenture), and substantially all of the assets of the issuer and guarantors.

(2)The 6.750% 2031 Senior Secured Notes are guaranteed by APLD FAR-01 HoldCo LLC, APLD FAR-02 HoldCo LLC, APLD FAR-01 LLC, APLD FAR-02 LLC, APLD FAR-01 LandCo LLC and APLD FAR-02 LandCo LLC, each majority-owned subsidiaries of the Company, and are secured by the equity interests of the issuer and guarantors, the

Table of Content s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Project Accounts (as defined in the 2031 6.750% Notes Indenture), and substantially all of the assets of the issuer and guarantors.

(3)The net carrying amount of the Convertible Notes was $276.6 million and $276.0 million and the remaining unamortized deferred financing costs related to the issuance was $173.4 million and $174.0 million, each as of August 31, 2026 and May 31, 2026, respectively.

(4)The Bridge Facility is guaranteed by the wholly owned subsidiaries of APLD ComputeCo 3 LLC and by the Company and is secured by substantially all assets of APLD ComputeCo 3 LLC and the subsidiary guarantors, as well as a pledge of the equity interests of APLD ComputeCo 3 LLC by APLD HPC Holdings 2 LLC. The Bridge Facility bears interest at a rate equal to either Daily SOFR plus 2.75% per annum or the Base Rate plus 1.75% per annum, depending on the type of loans under any Borrowing.

(5)The 2026 Revolving Credit Facility is guaranteed by the Company, APLD Intermediate HoldCo LLC (as the borrower), Applied Talent Resources LLC, James River Housing LLC, APLD Holdings 1 LLC, APLD Holdings 2 LLC, APLD HPC TopCo LLC, and APLD HPC Holdings LLC and is secured by substantially all assets of the loan parties, subject to certain exclusions. The 2026 Revolving Credit Facility bears interest at a rate per annum equal to, at the borrower’s election, either Term SOFR plus 2.25% or the Alternate Base Rate plus 1.25%. Additionally, there is an unused commitment fee of 0.25% per annum based on the daily unused amount, payable quarterly in arrears at the end of each quarter. The 2026 Revolving Credit Facility matures on the earlier of (i) May 29, 2029 and (ii) the date that is ninety-one (91) days prior to a specified date under the Preferred Equity Purchase Agreement.

(6)Other debt as of August 31, 2026 includes three secured terms loans totaling $19.2 million (previously disclosed in our Annual Report on Form 10-K for the year ended May 31, 2026), as well as two promissory notes the Company entered into during the second fiscal quarter of 2026 for a total of approximately $18.5 million and the Texas Capital Note entered into during the current quarter for $58.5 million (as defined and discussed below). As of May 31, 2026, the balance includes the three secured term loans and two promissory notes referenced above, as well as $12.0 million of proceeds from the issuance of two SAFE agreements, classified as liabilities, which were repaid during the three months ended August 31, 2026 (as discussed below).

Below is the weighted-average interest rate for the Company's term loans:


	August 31, 2026		August 31, 2025
Weighted-average interest rate	7.3	%		7.1	%

Remaining Principal Payments

Below is a summary of the remaining principal payments due over the life of the term loans as of August 31, 2026 (in thousands):


FY27	$	108,739
FY28	221,545
FY29	341,453
FY30	354,294
FY31	4,256,666
Thereafter	1,438,908
Total	$	6,721,605

Debt Fair Value Measurements

The carrying value of the Company's variable rate borrowings approximate fair value at August 31, 2026 and May 31, 2026, as applicable, each balance sheet date due to the variable nature of the interest rates and the short period between interest rate resets. Further, the Company determined that the estimated fair values of the Promissory Note approximated their respective carrying amounts based on the relatively short period of time since the business combination acquisition date, the continued accretion of acquisition-date fair value adjustments through the effective interest method, and the

Table of Content s

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

absence of significant changes in the underlying economics, contractual terms, or assumptions that would materially impact the estimated fair values of the instruments since the acquisition date.

The Company has determined the fair value of its 2030 Senior Secured Notes, 2031 Senior Secured Notes and 2031 7% Senior Secured Notes to be approximately $2.5 billion, $2.0 billion and $1.5 billion, respectively, as of August 31, 2026 using level 2 inputs. The Company has determined the fair value of its 2030 Senior Secured Notes and the 2031 Senior Secured Notes to be approximately $2.5 billion and $2.2 billion, respectively, as of May 31, 2026 using level 2 inputs. The Company has determined the fair value of its fixed rate term loans to be $18.4 million and $22.4 million, in aggregate, as of August 31, 2026 and May 31, 2026, respectively, based on discounted cash flow analysis, which uses Level 3 inputs. The Company has determined the fair value of its Convertible Notes, senior unsecured to be $399.1 million and $392.9 million as of August 31, 2026 and May 31, 2026, respectively, based on discounted cash flow analysis, which uses Level 3 inputs.

Cloud SAFE Payoff

During the fiscal year ended May 31, 2025, the Company entered into two Simple Agreements for Future Equity (“SAFEs”) with an investor for equity in Applied Digital Cloud Corporation, which was, at that time, a wholly-owned subsidiary, for aggregate proceeds of $12.0 million. On June 2, 2026, following an agreement reached with the investor, the Company paid off all amounts outstanding under the SAFEs, totaling $13.3 million. During the three months ended August 31, 2026, the Company recorded a loss of $1.3 million, which is included within other expense, net within the unaudited condensed consolidated statement of operations.

7.000% Senior Secured Notes due 2031

On June 16, 2026, the Company’s subsidiary APLD ComputeCo 3 LLC (“APLD ComputeCo 3”) completed a private offering of 7.000% Senior Secured Notes due 2031 (the “2031 7.000% Notes”). The 2031 7.000% Notes were sold pursuant to the terms of a purchase agreement, dated as of June 9, 2026, entered into by and among APLD ComputeCo 3, the subsidiary guarantors thereto and Goldman Sachs & Co. LLC, as representative (the “Representative”) of the several initial purchasers (the “Initial Purchasers”), in a Rule 144A/Regulation S offering. The aggregate principal amount of notes sold in the offering was $1.59 billion.

The 2031 7.000% Notes were issued at a price equal to 100% of their aggregate principal amount. APLD ComputeCo 3 used or intends to use the net proceeds from the offering to fund the construction and associated expenses of its ELN-04 data center project, repay in full the outstanding borrowings and related amounts under its then existing bridge facility, fund debt service reserves and interest during construction, and pay transaction and operating expenses.

Also on June 16, 2026, APLD ComputeCo 3, its direct parent and the subsidiary guarantors entered into an indenture for the 2031 7.000% Notes (the “2031 7.000% Notes Indenture”) with Wilmington Trust, National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), governing the 2031 7.000% Notes. The 2031 7.000% Notes are senior secured obligations of APLD ComputeCo 3 and bear interest at a rate of 7.000% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026. The 2031 7.000% Notes will mature on June 15, 2031, unless earlier redeemed or repurchased in accordance with their terms.

The principal amount of the 2031 7.000% Notes will amortize on a semi-annual basis beginning after the final commencement date of the applicable data center leases in effect on the issue date. The initial annual amortization amount will equal 2.70% of the original aggregate principal amount of the 2031 7.000% Notes and will increase by 0.50% per annum on each anniversary of the issue date commencing after the first installment is due, subject to adjustment as set forth in the 2031 7.000% Notes Indenture.

On or after June 15, 2028, APLD ComputeCo 3 may redeem the 2031 7.000% Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the 2031 7.000% Notes Indenture. Prior to June 15, 2028, APLD ComputeCo 3 may redeem the 2031 7.000% Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount redeemed, plus an applicable “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, prior to June 15, 2028, APLD ComputeCo 3 may redeem up to 40% of the aggregate principal amount of the 2031 7.000% Notes with the proceeds of

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

certain equity offerings at the redemption price set forth in the 2031 7.000% Notes Indenture, plus accrued and unpaid interest, , to, but excluding, the redemption date, subject to the conditions set forth in the 2031 7.000% Notes Indenture. Prior to June 15, 2028, APLD ComputeCo 3 may also redeem up to 10% of the original aggregate principal amount of the 2031 7.000% Notes during each calendar year at the redemption price set forth in the 2031 7.000% Notes Indenture, plus accrued and unpaid interest, to, but excluding, the redemption date.

The 2031 7.000% Notes Indenture limits the ability of APLD ComputeCo 3 and the subsidiary guarantors to, among other things: (i) incur or guarantee additional indebtedness; (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments; (iii) make certain investments; (iv) create or incur liens; (v) consummate certain asset sales; (vi) enter into sale and leaseback transactions; (vii) conduct certain operations or hold certain assets outside their permitted businesses; (viii) engage in certain transactions with affiliates; and (ix) merge, consolidate or transfer or sell all or substantially all of their assets. These covenants are subject to a number of important qualifications and exceptions as set forth in the 2031 7.000% Notes Indenture.

Additionally, upon the occurrence of specified change of control events, APLD ComputeCo 3 must offer to repurchase the 2031 7.000% Notes at 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to, but excluding, the purchase date. Upon receipt of certain termination fees under an applicable data center lease, APLD ComputeCo 3 generally will be required to apply the proceeds to redeem the 2031 7.000% Notes at 100% of the principal amount, plus accrued and unpaid interest, to, but excluding, the redemption date, subject to the permitted deferral and replacement tenant provisions set forth in the 2031 7.000% Notes Indenture. The 2031 7.000% Notes Indenture also provides for customary events of default.

The 2031 7.000% Notes are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by APLD ComputeCo 3’s subsidiaries, including APLD ELN-04 HoldCo LLC, APLD ELN-04 LLC and APLD ELN-04 LandCo LLC. The 2031 7.000% Notes and the related guarantees are secured, subject to permitted liens and certain exclusions, by first-priority liens on substantially all of the assets of APLD ComputeCo 3 and the subsidiary guarantors, including the applicable project accounts, and by a pledge of the equity interests of APLD ComputeCo 3 held by its direct parent.

In connection with the 2031 7.000% Notes, the Company provides a customary completion guarantee with respect to the construction and completion of the ELN-04 data center project. Other than the completion guarantee, the Company is not a guarantor of any obligations under the 2031 7.000% Notes.

As of August 31, 2026, the remaining unamortized debt issuance costs were approximately $28.7 million. The debt issuance costs are presented as a direct deduction from the outstanding principal balance of the 2031 7.000% Notes and are amortized to interest expense using the effective interest method.

Satisfaction of Escrow Release Condition for 6.750% Senior Secured Notes due 2031

On June 18, 2026, APLD ComputeCo 2 LLC satisfied the escrow release condition under the escrow agreement for the 6.750% Senior Secured Notes due 2031 (the “2031 6.750% Notes”) and executed and delivered to the escrow agent an escrow release certificate directing the escrow agent to release the funds in the escrow account to APLD ComputeCo 2 and apply such funds in accordance with the escrow agreement and the Indenture for the 2031 6.750% Notes.

Upsize 2026 Revolving Credit Facility

On June 26, 2026, the commitments under the 2026 Revolving Credit Facility were increased by $80.0 million, from $350.0 million to $430.0 million. Following the increase, the remaining accordion capacity under the facility was $120.0 million. The additional commitments are subject to the existing terms and conditions of the 2026 Revolving Credit Facility.

As of August 31, 2026, approximately $82.4 million was drawn under the 2026 Revolving Credit Facility and approximately $241.0 million of standby letters of credit were outstanding under the 2026 Revolving Credit Facility.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Loan and Security Agreement

On June 30, 2026, the Company entered into a Loan and Security Agreement (the “Texas Capital Loan Agreement”) with Texas Capital Bank (“Texas Capital”) and issued a related promissory note in the stated principal amount of $58.5 million (the “Texas Capital Note”). The Texas Capital Note bears interest at a rate per annum equal to one-month Term SOFR plus 2.75% and matures on June 30, 2031.

The Texas Capital Note is secured by certain corporate assets. The Texas Capital Loan Agreement requires the Company to maintain a specified level of liquidity based, in part, on the Company’s market capitalization and requires the Company’s market capitalization to remain above $2.0 billion as of the close of any trading day. The Texas Capital Loan Agreement also contains customary affirmative and negative covenants, cross-default provisions, and events of default.

The Company was in compliance with the applicable financial covenants under all outstanding debt arrangements as of August 31, 2026.

10. Balance Sheet Components

Certain balance sheet components are as follows (in thousands):


	August 31, 2026		May 31, 2026
Prepaid expenses and other current assets
Short term equipment and utility deposit	$	560,523			$	500,290
Deferred issuance costs	2,966			3,397
Short term lease incentive	8,543			6,231
Related party receivable (1)	59,334			58,632
Prepaid expenses	29,641			24,471
Other current assets	24,631			20,671
Total Prepaid expenses and other current assets	$	685,638			$	613,692

(1)Balance as of August 31, 2026 consists of the $59.2 million promissory note and $0.1 million of deferred construction costs with Base Electron. See Note 7 - Related Party Transactions for further discussion.


	August 31, 2026		May 31, 2026
Other assets
Long term lease incentive	$	196,223			$	199,391
Restricted cash	414,649			180,415
Deposits on assets & construction	170,978			47,719

Goodwill (1)	54,387			54,513
Lease receivables	34,141			21,026
Deferred lease costs	—			10,729
Derivative assets (2)	169,837			163,283
Investments in other companies (3)	64,092			123,329
Investment in related party (4)	2,000			2,000
Other	5,913			28,221
Total Other assets	$	1,112,220			$	830,710

(1)Balance as of August 31, 2026 consists of goodwill held at ChronoScale.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

(2)Balance as of August 31, 2026 consists of the fair value of derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s noncontrolling interest. See Note 8 - Fair Value Measurements, Note 16 - Temporary Equity, and Note 11 - Derivative Assets for further discussion.

(3)Includes $34.7 million of warrants, which are accounted for as derivatives, and $7.8 million of common shares, which are recorded at fair value, issued by B&W to the Company in association with the Company’s investment in B&W. See Note 11 - Derivative Assets for further discussion. The balance also includes a $10.0 million investment by the Company in Corintis SA (“Corintis”) in exchange for Series A1 preferred shares, approximating 4% of Corintis’s outstanding equity. The Series A1 preferred shares are convertible preferred shares with no redemption rights. The investment in Corintis is accounted for at cost under ASC 321. During the quarter ended August 31, 2026, the Company invested in three private companies for a total of $8.2 million, which are included within this balance. These investments are accounted for at cost under ASC 321. See Note 8 - Fair Value Measurements for further discussion on fair value measurements for equity investments and derivative assets.

(4)Includes a $2.0 million investment in Base Electron. See further discussion of the transaction in Note 7 - Related Party Transactions.


	August 31, 2026		May 31, 2026
Accrued liabilities
Accrued construction payables	$	563,897			$	307,812
Accrued expenses	135,587			81,311
Accrued interest	142,042			151,215
Other accrued liabilities	8,829			8,155
Total Accrued liabilities	$	850,355			$	548,493


	August 31, 2026		May 31, 2026
Other current liabilities
Construction retainer	$	154,749			$	95,848
Other	3,524			1,641
Total Other current liabilities	$	158,273			$	97,489

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

11. Derivative Assets

APLD HPC TopCo 2’s Redeemable Noncontrolling Interest

The preferred units and corresponding common units associated with APLD HPC TopCo 2’s redeemable noncontrolling interest were determined to have embedded derivative features, the Redemption features and the Contingent Dividend Rate Increase feature, requiring bifurcation and remeasurement at fair value at each reporting date, with the changes in fair value recorded through earnings. The Redemption features are inclusive of the Investor put option upon a Sale, APLD Holdings call option, and the Distribution Redemptions (all as defined within the A&R UPA). Due to these redemption rights, at each balance sheet date, the Company is required to adjust the carrying value of the derivatives to fair value and record any changes in fair value within earnings. The Company engaged a third party valuation specialist in determining the value of the embedded derivatives using a binomial lattice model, which includes Level 3 unobservable inputs. The key inputs used were the estimated credit spread of the associated preferred stock and corresponding common units, volatility, and risk-free rate of the derivative assets:

As of

August 31, 2026

May 31, 2026

Expected maturity date

October 6, 2032

Credit spread (annual)

8.29

9.00

Yield volatility

42.5

40.0

Put right/trigger event

de minimis

Risk-free rate

USD Yield Curve

Number of time-steps

100

During the three months ended August 31, 2026, the Company recorded a gain on change in fair value of derivatives of $6.6 million, which is included within the loss on change in fair value of derivatives assets within the unaudited condensed consolidated statement of operations.

B&W Warrants

During the fiscal year ended May 31, 2026, the Company entered into agreements which resulted in the Company acquiring 500,000 shares of Babcock & Wilcox (“B&W”) common stock as well as two warrants to purchase 2,600,000 shares and 2,630,000 shares, respectively, of B&W common stock with an exercise price of $4.11 for a period of seven years.

The warrants were determined to be derivative assets and were required to be measured at fair value at issuance under ASC 815. They will be remeasured at fair value at each reporting date with changes in fair value reported on the unaudited condensed consolidated statement of operations. To allocate the initial contribution between the common stock and the warrants, the Company determined the fair value of each and utilized the relative fair value allocation method. The B&W warrants are measured at fair value using the Black-Scholes Option Pricing model. Inherent in pricing models are assumptions related to expected share-price volatility, contractual term, risk-free interest rate and dividend yield, which are considered Level 3 inputs. The estimated fair value of the B&W Warrants are based on the following significant inputs as of August 31, 2026 and May 31, 2026:

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026


	As of	As of
	August 31, 2026	May 31, 2026
Time to expiry	6.18 years	6.43 years
Stock price	$	7.54		$	18.45
Volatility	105.0	%	110.0	%
Risk-free rate	4.52	%	4.19	%
Dividend yield	—	%	—	%

During the three months ended August 31, 2026, the Company recorded a loss of $56.1 million, which is included within the loss on change in fair value of derivatives assets within the unaudited condensed consolidated statement of operations.

12. Variable Interest Entities

Based upon the criteria set forth in ASC 810, Consolidation, the Company consolidates VIEs in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE.

Consolidated VIE

The Company has determined that it is the primary beneficiary of one VIE, APLD HPC TopCo 2 LLC (“TopCo 2”), as it has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

During the fiscal year ended May 31, 2026, TopCo 2 completed four closings under its Amended and Restated Unit Purchase Agreement (“A&R UPA”), issuing 1,825,000 preferred units and 144,593 corresponding common units for proceeds of approximately $1.8 billion to MIP HPC Holdings, LLC. The issuance of the preferred units at closing resulted in a redeemable noncontrolling interest - see Note 16 - Temporary Equity for further discussion. In addition, pursuant to the A&R UPA, on October 6, 2025, the Company issued warrants to purchase an aggregate of 2.4 million shares of the Company’s common stock as described in Note 14 - Warrants.

The purpose of TopCo 2 is to design, build and operate high-performance, sustainably engineered data centers and colocation services for artificial intelligence, cloud, and networking workloads in North Dakota. TopCo 2 is a bankruptcy-remote legal entity with separate assets and liabilities. The creditors of TopCo 2 have recourse to the Company’s general

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

credit. The following table presents the assets and liabilities held by TopCo 2 as of August 31, 2026, which are included in the unaudited condensed consolidated balance sheets (in thousands):


	August 31, 2026
Assets:
Cash and cash equivalents	$	2,909,372
Restricted cash	510,963
Accounts receivable	44,925
Prepaid expenses and other current assets	573,876
Property and equipment, net	5,803,969
Other assets	440,148
Total assets	$	10,283,253

Liabilities:
Accounts payable	$	221,607
Accrued liabilities	745,548

Current deferred revenue	39,669
Other current liabilities	147,070
Long-term debt	5,918,619
Total liabilities	$	7,072,513

Third-party equity ownership interests in TopCo 2 represents a noncontrolling interest and is presented as temporary equity in the unaudited condensed consolidated balance sheets separate from the Company’s stockholders’ equity. The amount of net income (loss) attributable to noncontrolling interests is disclosed in the unaudited condensed consolidated statement of operations.

Unconsolidated VIE

As discussed in Note 7 - Related Party Transactions, Base Electron is a related party formed to develop power generation and infrastructure projects supporting the broader AI industry. The Company has determined that Base Electron is a VIE because it does not have sufficient equity at risk to finance its activities without additional subordinated financial support. The Company's variable interests in Base Electron consist of its equity investment and related party promissory note.

Additionally, the Company has determined that it is not the primary beneficiary of Base Electron because it does not have the power to direct the activities that most significantly impact Base Electron's economic performance. Accordingly, the Company does not consolidate Base Electron because ASC 810 requires both power and economics for consolidation.

As of August 31, 2026, the carrying value of the Company's investment in Base Electron was $2.0 million and the outstanding balance of the related party promissory note was $59.3 million, which together reflect the Company's maximum exposure to loss. The Company is not contractually required to provide financial support to Base Electron and did not provide material non-contractual financial support during the three months ended August 31, 2026.

13. Income Taxes

The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period.

The Company has an effective tax rate of approximately (1)% and 0% for the three months ended August 31, 2026, and August 31, 2025, respectively, primarily due to the recording of a valuation allowance against its deferred tax assets, as well as the mix of earnings across its separate operational components within the Company.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

ASC 740, Income Taxes (“ASC 740”), requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some or a portion or all the deferred tax assets will not be realized. As of August 31, 2026 and May 31, 2026, the Company estimated a portion of its deferred tax assets will be utilized to offset the Company’s deferred tax liabilities. Based upon the level of historical losses and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of the remaining deductible temporary differences, and as a result the Company has recorded a valuation allowance as of August 31, 2026 and May 31, 2026 for the amount of deferred tax assets that will not be realized.

There were no material changes to the unrecognized tax benefits for the three months ended August 31, 2026.

14. Warrants

A summary of warrant activity for the three months ended August 31, 2026 is presented below:


	Warrants	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)
Outstanding at May 31, 2026	28,091,029		$	8.61		7.86
Granted	—		—		—
Forfeited	—		—		—
Exercised	—		—		—
Outstanding at August 31, 2026	28,091,029		$	8.61		7.60

AI Warrants

The Company issued warrants to purchase up to 3,000,000 shares of Common Stock related to the AI Bridge Loan during the fiscal year ended May 31, 2024 (the “AI Warrants”). The AI Warrants are exercisable upon payment of the applicable exercise price in cash or through cashless exercise for a period of five years. 1,500,000 AI Warrants have an exercise price of $10.00 per share of Common Stock and 1,500,000 AI Warrants have an exercise price of $7.50 per share of Common Stock. As of August 31, 2026, all of the AI Warrants were outstanding.

Macquarie Warrants

On November 27, 2024, as partial consideration for the Macquarie Promissory Note, the Company issued warrants to purchase up to 1,035,197 shares of the Company’s common stock. The Macquarie Warrants are exercisable from and after the date that is six months following the date of issuance thereof and will have a five and one-half-year term and an exercise price of $9.66 per share, which exercise price must be paid in cash. The Macquarie Warrants survived the termination of the Macquarie Promissory Note and remain outstanding as of August 31, 2026.

STB Warrant

On February 27, 2025, the Company issued a warrant to STB Applied Holdings LLC to purchase 1,000,000 shares of the Company’s common stock at the exercise price of $7.83 per share (the “STB Warrant”) for consideration of $50,000. The warrant is exercisable upon payment of the applicable exercise price in cash or through cashless exercise for a period of five years from the Initial Exercise Date. As of August 31, 2026, 200,000 of the STB Warrants remain outstanding.

CoreWeave Warrants

In connection with certain data center leases with CoreWeave, the Company issued warrants to CoreWeave to purchase up to 13,062,521 and 8,393,611 shares of the Company’s common stock on May 28, 2025 and August 28, 2025, respectively, at an exercise price of $7.19 and $10.75 per share, respectively (the “CoreWeave Warrants”). The CoreWeave Warrants are exercisable upon issuance, upon payment of the applicable exercise price in cash or through cashless exercise for a period of 10 years each from the respective issuance date of such warrants. As of August 31, 2026, 21,455,832 warrant shares remain outstanding.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

MAM Warrants

On October 6, 2025, in connection with the Amended and Restated Unit Purchase Agreement dated October 3, 2025 (the “Purchase Agreement”), the Company issued MIP VI REIT AIV, L.P. and MIP VI DC REIT AIV, L.P. two warrants (the “MAM Warrants”) to acquire up to 2,400,000 shares of the Company’s common stock at an exercise price of $8.29 per share, subject to adjustment in accordance with the terms and conditions set forth in the warrants. The MAM Warrants have a five and one-half-year term. As of August 31, 2026, the MAM Warrants have not been exercised and remain outstanding.

15. Stock-Based Compensation Plans

2024 Plan

On October 8, 2024, the Company’s Board of Directors approved the Applied Digital Corporation 2024 Omnibus Equity Incentive Plan (the “2024 Plan”), which the Company’s stockholders approved on November 20, 2024. The 2024 Plan provides for grants of various equity awards for eligible employees, officers, non-employee directors and other service providers. Upon stockholder approval of the 2024 Plan, the 2022 Plans (as defined below) were terminated; provided that all awards (as defined in the 2022 Plans) outstanding under the 2022 Incentive Plan and the 2022 Non-Employee Director Stock Plan shall continue in effect in accordance with their terms.

On November 5, 2025, at the Annual Stockholders’ Meeting, the Company’s stockholders approved an amendment to the 2024 Plan to increase the number of shares of common stock authorized for issuance thereunder by 15,000,000 shares.

2022 Plans

On October 9, 2021, the Company’s Board of Directors (the “Board”) approved two equity incentive plans, which the Company’s stockholders approved on January 20, 2022. The two plans consist of the 2022 Incentive Plan, previously referred to in the Company’s SEC filings as the 2021 Incentive Plan (the “Incentive Plan”), which provides for grants of various equity awards to the Company’s employees and consultants, and the 2022 Non-Employee Director Stock Plan previously referred to in the Company’s SEC filings as the 2021 Non-Employee Director Stock Plan (the “Director Plan” and, together with the Incentive Plan, the “2022 Plans”), which provides for grants of restricted stock to non-employee directors and for deferral of cash and stock compensation if such deferral provisions are activated at a future date.

As of August 31, 2026, the Company had issued awards of approximately 23.2 million shares of common stock of the Company under the 2022 Plans, 20.4 million under the 2024 Plan, and 600,000 shares of common stock outside of either plan, related to an employment inducement award. As of August 31, 2026, there are approximately 7.6 million shares of common stock available for issuance under the 2024 Plan.

The Company capitalizes a portion of stock-based compensation costs for employees who work directly on construction and development of the Company's data centers. The Company recognized stock-based compensation associated with the 2022 and 2024 Plans as follows (in thousands):


	Three Months Ended
	August 31, 2026		August 31, 2025
Services and other cost of revenue	$	746			$	773
Data center rental and other cost of revenue	270			8
Selling, general, and administrative	65,483			13,755
Capitalized (1)	2,665			929
Total stock-based compensation	$	69,164			$	15,465

(1)Capitalized to Construction in progress in the unaudited condensed consolidated balance sheets.

Restricted Stock Awards

The following is a summary of the activity and balances for unvested restricted stock awards granted during the three months ended August 31, 2026:

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Outstanding as of May 31, 2026	35,722		$	3.73
Granted	—		—
Vested	—		—
Forfeited	—		—
Outstanding as of August 31, 2026	35,722		$	3.73

As of August 31, 2026, total remaining expense to be recognized related to these awards was $0.1 million and the weighted average remaining recognition period for the unvested awards was 0.6 years.

Restricted Stock Units

The following is a summary of the activity and balances for unvested restricted stock units granted during the three months ended August 31, 2026:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Outstanding as of May 31, 2026	7,965,833		$	20.87
Granted	696,797		32.41
Vested	(856,409)		10.44
Forfeited	(38,553)		14.20
Outstanding as of August 31, 2026	7,767,668		$	23.08

As of August 31, 2026, total remaining expense to be recognized related to these awards was $150.6 million and the weighted average remaining recognition period for the unvested awards was 2.6 years.

Performance Stock Units

Performance stock units (“PSUs”) represent a right to receive a certain number of shares of common stock based on the achievement of performance goals and continued employment during the vesting period (provided that the PSUs may remain outstanding and eligible to vest following certain terminations during the vesting period). PSUs granted by the Company vest depending on the achievement of Company and individual performance financial, operational and/or market-price driven measures, which must occur on or prior to the deadline set forth in each applicable PSU aware. The fair value of PSUs, except PSUs for which vesting is based on the market price, is based on the closing price on the date of grant. The compensation expense related to these PSUs is recognized over the vesting period when the achievement of the performance conditions becomes probable. The total compensation cost for the PSUs is determined based on the most likely outcome of the performance conditions and the number of awards expected to vest.

In the prior fiscal year, the Company granted the CEO 4.5 million PSUs with market-price based and service-based vesting conditions. The awards vest based on the achievement of certain stock price targets as well as his continued employment with the Company (except that continued employment is not required if his employment is terminated by the Company without “cause,” he resigns for “good reason,” he dies or incurs a “disability,” or the Company elects not to renew his employment term).

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

The following is a summary of the activity and balances for unvested performance stock units granted during the three months ended August 31, 2026:


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Outstanding as of May 31, 2026	14,386,250		$	18.45
Granted	—		—
Vested	(6,911,250)		10.14
Forfeited	—		—
Outstanding as of August 31, 2026	7,475,000		$	26.14

As of August 31, 2026, total remaining expense to be recognized related to these awards was $90.8 million and the weighted average remaining recognition period for the unvested awards was 3.5 years.

16. Temporary Equity

Preferred Stock

The following is a summary of the activity and balances for preferred stock during the three months ended August 31, 2025 (in thousands, other than share data):


	Series E Redeemable Preferred Stock				Series E-1 Redeemable Preferred Stock	Series G Convertible Preferred Stock
	Shares	Amount				Shares	Amount		Shares	Amount
Outstanding as of June 1, 2025	301,673		$	6,932					62,485		$	57,011		78,000	$	72,094
Issuances, net of costs	—		—					—		10			180,000	170,386
Conversions	—		—					—		—			(258,000)	(242,480)
Redemptions	—		—					(225)		(225)			—	—
Outstanding as of August 31, 2025	301,673		$	6,932					62,260		$	56,796		—	$	—

The following is a summary of the activity and balances for preferred stock during the three months ended August 31, 2026 (in thousands, other than share data):


	Series E Redeemable Preferred Stock		Series E-1 Redeemable Preferred Stock		Series G Convertible Preferred Stock
	Shares	Amount		Shares	Amount		Shares	Amount
Outstanding as of June 1, 2026	276,673		$	6,306			61,909		$	56,460		—	$	—
Issuances, net of costs	—		—			—		—			283,250	274,850
Conversions	—		—			—		—			(154,500)	(149,921)
Redemptions	(276,673)		(6,306)			(78)		(87)			—	—
Outstanding as of August 31, 2026	—		$	—			61,831		$	56,373		128,750	$	124,929

Series E Redeemable Preferred Stock

During the fiscal year ended May 31, 2025, the Company closed on four offerings of the Series E Redeemable Preferred Stock (the “Series E Preferred Stock”). The Company sold total shares of 301,673 for proceeds of $6.9 million net of issuance costs of $0.6 million. The Series E Preferred Stock offering was terminated on August 9, 2024.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

There were no material changes to the terms of the Series E Preferred Stock during the three months ended August 31, 2026. During the three months ended August 31, 2026 and August 31, 2025, the Company declared and paid approximately $163,000 and $170,000, respectively, of dividends related to Series E Preferred Stock as presented on the unaudited condensed consolidated statement of operations.

During the three months ended August 31, 2026, all 276,673 shares of Series E Preferred Stock were redeemed.

Series E-1 Redeemable Preferred Stock

On September 23, 2024, the Company entered into a dealer manager agreement for the offering of up to 62,500 shares of Series E-1 Redeemable Preferred Stock, par value $0.001 per share (“Series E-1 Preferred Stock”), at a price per share of $1,000 (the “Series E-1 Stated Value”). During the fiscal year ended May 31, 2025, the Company closed on eight offerings in which the Company issued 62,500 shares for gross proceeds of $62.5 million. The Series E-1 Preferred Stock offering was completed as of May 31, 2025.

There were no material changes to the terms of the Series E-1 Preferred Stock during the three months ended August 31, 2026. During the three months ended August 31, 2026 and August 31, 2025, the Company declared and paid approximately $1.4 million and $1.4 million, respectively, of dividends related to the Series E-1 Preferred Stock as presented on the unaudited condensed consolidated statements of operations.

During the three months ended August 31, 2026, 78 shares of Series E-1 Preferred Stock were redeemed.

Series G Convertible Preferred Stock

On June 26, 2026, the Company entered into the sixth amendment (the “Sixth Amendment”) to the PEPA to increase the aggregate commitment amount under the PEPA for the issuance of shares of Series G Preferred Stock from $1,590,000,000 to $2,000,000,000. There were no other material changes to the terms of the Series G Preferred Stock during the three months ended August 31, 2026.

As Series G Preferred Stock may be reissued, during the three months ended August 31, 2026, the Company issued and sold 283,250 shares of Series G Preferred Stock for gross proceeds of $275.0 million. During the three months ended August 31, 2026, 154,500 shares of Series G Preferred Stock were converted into 4.5 million shares of the Company’s common stock. As of August 31, 2026, 128,750 shares of Series G Preferred Stock were issued and outstanding.

Redeemable Noncontrolling Interest

APLD HPC TopCo 2 LLC

As discussed within Note 12 - Variable Interest Entities above, APLD HPC TopCo 2 LLC (“TopCo 2”) completed four closings under its A&R UPA during the fiscal year ended May 31, 2026, issuing 1,825,000 preferred units and 144,593 corresponding common units for proceeds of approximately $1.8 billion to MIP HPC Holdings, LLC, which resulted in a redeemable noncontrolling interest.

There were no material changes to the terms of the redeemable noncontrolling interest during the three months ended August 31, 2026.

The balance sheets and operating activities of TopCo 2 are included in the Company's unaudited condensed consolidated financial statements. The Company adjusts net income in the unaudited condensed consolidated statements of operations to exclude the proportionate share of results that is attributable to the redeemable noncontrolling interest. Additionally, the Company presents the proportionate share that is attributable to the redeemable noncontrolling interest as temporary equity within the unaudited condensed consolidated balance sheets. This temporary equity presentation is the result of the redeemable noncontrolling interest being subject to certain redemption rights that are not entirely within the Company's control. Due to these redemption rights, at each balance sheet date, the Company is required to adjust the carrying value of the derivatives to fair value and record any changes in fair value within earnings. See Note 11 - Derivative Assets for

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

further details. The Company will adjust redeemable noncontrolling interest for the attribution of net income (loss) and preferred dividends of TopCo 2 to the noncontrolling interest holder.

Net loss attributable to MIP HPC Holdings, LLC was $66.9 million for the three months ended August 31, 2026. The proportionate share of net income was accounted for as a reduction in deriving net income attributable to common stock in the Company's unaudited condensed consolidated statements of operations.

The carrying value of the redeemable noncontrolling interest was $2.0 billion and $2.0 billion as of August 31, 2026 and May 31, 2026, respectively. The change in redeemable noncontrolling interest consists of $60.1 million of preferred stock dividends paid in-kind, $1.3 million of contributions from noncontrolling interest, net of costs and $6.8 million in current year net loss attributable to non-controlling interest.

17. Leases

Lessor Accounting

On June 5, 2026, the Company entered into an approximately 15-year lease (with three five-year renewal options) with a high investment-grade hyperscaler at its Delta Forge 2 210 MW critical IT load campus located in its southern region, comprising a single building under construction. The lease is for the full 210 MW of critical IT load, representing approximately $5.2 billion of contracted revenue over the base term, with expected delivery in the first half of calendar year 2028. Following the signing of this lease, our aggregate contracted critical IT load is 1,410 MW.

A summary of minimum lease payments due from these leases is shown below. These amounts do not reflect future rental revenues from renewal or replacement of existing leases unless the Company is reasonably certain it will exercise the option or the lessee has the sole ability to exercise the option. Reimbursements of operating expenses and variable rent increases are excluded from the table below (in thousands):


	Minimum Contracted Payments
FY27	$	467,961
FY28	1,579,517
FY29	2,360,558
FY30	2,371,420
FY31	2,371,420
Thereafter	26,580,159
Total	$	35,731,035

Lessee Accounting

From time to time, the Company enters into leases for equipment and office space. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance lease right of use assets and liabilities separately on the unaudited condensed consolidated balance sheets as their own captions, with the liabilities split between current and long-term.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Components of lease expense were as follows (in thousands):


	Three Months Ended
	August 31, 2026		August 31, 2025
Operating lease cost:
Operating lease expense	$	6,517		$	6,252
Short-term lease expense	106		697
Total operating lease cost	6,623		6,949
Finance lease expense:
Amortization of right-of-use assets(1)	14,999		15,334
Interest on lease liabilities	1,523		3,530
Total finance lease cost	16,522		18,864
Variable lease cost	599		749

Total net lease cost	$	23,744		$	26,562

(1) Amortization of right-of-use assets is included within cost of revenues and selling, general and administrative expense in the unaudited condensed consolidated statements of operations.

The following table represents the Company’s future minimum lease payments as of August 31, 2026:


	Operating Leases		Finance Leases		Total
FY27	$	16,036			$	37,374	$	53,410
FY28	23,967			10,968		34,935
FY29	18,391			—		18,391
FY30	4,812			—		4,812
FY31	1,315			—		1,315
Thereafter	4,553			—		4,553
Total lease payments	69,074			48,342		117,416
Less: imputed interest	(8,205)			(2,395)		(10,600)
Total lease liabilities	60,869		45,947		106,816
Less: Current portion of lease liability	(19,199)			(43,490)		(62,689)
Long-term portion of lease liability	$	41,670			$	2,457	$	44,127

Supplemental cash flow and other information related to leases is as follows:


	Three Months Ended
	August 31, 2026		August 31, 2025
Weighted-average years remaining (in years):
Operating leases	3.2 years		3.7 years
Finance leases	0.9 years		1.1 years

Weighted-average discount rate:
Operating leases	7.5	%		7.4	%
Finance leases	9.9	%		9.9	%

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

18. Commitments and Contingencies

Commitments

Energy Contracts

As of August 31, 2026, the Company had a minimum commitment of approximately $12.1 million related to the energy services agreement for its Jamestown, North Dakota co-hosting facility payable over, approximately, the next 0.4 years.

Construction Contracts

The Company routinely engages with construction vendors for the construction of our facilities. These engagements are governed by contracts containing standard terms and conditions, including certain milestones that obligate the Company to pay as work is completed. In the event of termination of any of these contracts by the Company, the Company would be liable for all work that has been completed or in process, plus any applicable fees. The Company generally has the right to cancel these open purchase orders prior to delivery or terminate the contracts without cause.

Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the ordinary course of business.

Securities Lawsuit

The Company, Wes Cummins, the Company's Chief Executive Officer, and David Rench, the Company's then Chief Financial Officer, have been named as defendants in a putative securities class action lawsuit in the matter styled, McConnell v. Applied Digital Corporation, et al., Case No. 3:23-cv-1805, filed in August 2023 in the U.S. District Court for the Northern District of Texas (the “Securities Lawsuit”). Specifically, the complaint asserts claims pursuant to Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 based on allegedly false or misleading statements regarding the company’s business, operations, and compliance policies, including claims that the Company overstated the profitability of its Data Center Hosting Business and its ability to successfully transition into a low-cost cloud services provider and that the Company’s board of directors was not “independent” within the meaning of Nasdaq listing rules. On May 22, 2024, the court appointed lead plaintiff and approved lead counsel, and on July 22, 2024, lead plaintiff filed an amended complaint which asserts the same claims based on similar allegations in the original complaint. On September 20, 2024, the defendants filed a motion to dismiss the amended complaint. On November 20, 2024, lead plaintiff filed his opposition to the Motion to Dismiss. On January 3, 2025, the defendants filed their reply in further support of the Motion to Dismiss. On September 8, 2025, the Court issued an order staying the Securities Lawsuit and administratively closing it pending resolution of the Motion to Dismiss.

The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in the Securities Lawsuit. If an unfavorable action were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

Derivative Lawsuit

On November 15, 2023, a derivative action was filed in the matter styled, Weich v. Cummins, et al., Case No. A-23-881629-C in the District Court of Clark County, Nevada (the “Derivative Lawsuit”). The Weich complaint named as defendants certain members of the Company’s Board of Directors and its Chief Executive Officer Wesley Cummins and purports to name the Company’s then Chief Financial Officer David Rench as a defendant. The complaint asserted claims for breach of fiduciary duties, corporate waste and unjust enrichment based upon allegations that the defendants caused or allowed the Company to make materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the complaint alleged that the Company overstated the profitability of the Data Center Hosting Business and its ability to successfully transition into a low-cost cloud services provider and that the Board was not “independent” within the meaning of Nasdaq listing rules. On February 27, 2024, the derivative plaintiff filed an amended complaint asserting the same claims as the original complaint.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

including the Company, on the grounds that the plaintiff failed to plead (1) demand futility as to each of plaintiff’s claims or (2) a claim for breach of fiduciary duty. The order dismissed all claims against all defendants, including the Company. The plaintiff can seek leave to file an amended complaint but to date has not done so.

The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this action. If an unfavorable action were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

As of August 31, 2026, there were no other pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s consolidated operations. There are also no legal proceedings in which any of the Company’s management or affiliates is an adverse party or has a material interest adverse to the Company’s interest.

19. Business Segments

As discussed above, prior to the Business Combination, the Cloud Services Business was identified as a reportable segment. Following the consummation of the Business Combination in May 2026, which resulted in the formation of ChronoScale, the Cloud Services Business is no longer a reportable segment because its activities are not regularly reviewed by the CODM, which is the Company’s Chief Executive Officer, for purposes of resource allocation and performance assessment. As such, the results of ChronoScale, inclusive of the Cloud Services Business, which is now part of ChronoScale, are included in Other and are not separately presented as a segment for all periods presented.

The Company's business is made up of two operating segments: the Data Center Hosting Business and the HPC Hosting Business. These segments represent management's view of the business for which separate financial information is available and evaluated regularly by the CODM.

The Company's CODM evaluates performance and makes operating decisions primarily based on revenue and segment profit (loss) on a consolidated basis and for each of the Company's reportable segments. Operating results by segment include costs or expenses directly attributable to each segment, which include selling, general, and administrative expenses, loss on classification of held for sale and loss on abandonment of assets. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Segment revenues and segment profit are regularly reviewed by the CODM and compared against historical results, forecast and budget information in order to make decisions about how to allocate capital and other resources to each segment.

The Company does not allocate interest expense, interest income, loss on change in fair value of derivatives, loss on change in fair value of investment, other expense, net or income tax expense to these segments for internal reporting purposes, as the Company does not believe that allocating these expenses is beneficial in evaluating segment performance. The \"Other\" includes corporate related items not allocated to reportable segments for purposes of making operating decisions or assessing financial performance.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

The following tables present segment information, including revenue by segment and segment profit (loss) for the three months ended August 31, 2026 and August 31, 2025 (in thousands):


	Three Months Ended August 31, 2026
	Data Center Hosting Business		HPC Hosting Business
Revenue:
Services and other revenue	$	37,755			$	183,518
Data center rental and other revenue	—			79,120

Total segment revenue	37,755			262,638
Costs and expenses:
Services and other cost of revenue	23,978			176,100
Data center rental and other cost of revenue	—			43,861
Selling, general and administrative (1)	450			9,246



Total costs and expenses	24,428			229,207
Segment profit	$	13,327			$	33,431

(1)Does not include selling, general and administrative expense that is not allocated to reportable segments, such as certain amounts of stock-based compensation, personnel expenses, and professional service expenses.


	Three Months Ended August 31, 2025
	Data Center Hosting Business		HPC Hosting Business
Revenue:
Services and other revenue	$	37,921			$	26,296
Data center rental and other revenue	—			—

Total segment revenue	37,921			26,296
Costs and expenses:
Services and other cost of revenue	30,409			25,044
Data center rental and other cost of revenue	—			140
Selling, general and administrative (1)	965			1,894

Loss on abandonment of assets	512			1,240

Total costs and expenses	31,886			28,318
Segment profit (loss)	$	6,035			$	(2,022)

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

The following tables present the reconciliation to net loss before income tax expense (in thousands):


	Three Months Ended
	August 31, 2026		August 31, 2025
Segment profit
Data Center Hosting Business	$	13,327			$	6,035
HPC Hosting Business	33,431			(2,022)
Total segment profit	46,758			4,013
Other (1)	(109,137)			(13,775)
Operating loss	(62,379)			(9,762)
Interest expense	77,383			8,013
Interest income	(35,821)			(857)
Loss on change in fair value of derivatives	49,511			—
Loss on change in fair value of investment	11,352			—




Other expense, net	1,311			—



Net loss before income tax expense	$	(166,115)			$	(16,918)

(1)Other includes corporate related items not allocated to reportable segments and ChronoScale.

We also provide the following additional segment disclosures (in thousands):


	Three Months Ended
	August 31, 2026		August 31, 2025
Depreciation and amortization:
Data Center Hosting Business	$	2,386			$	3,391
HPC Hosting Business	22,900			698
Other (1)	16,626			63
Total depreciation and amortization (2)	$	41,912			$	4,152

(1)Other includes corporate related items not allocated to reportable segments and ChronoScale.

(2)Includes amortization of the finance lease right-of-use assets.

Information on segment assets and a reconciliation to consolidated assets are as follows (in thousands):


	August 31, 2026		May 31, 2026
Data Center Hosting Business	$	111,850			$	113,788
HPC Hosting Business	10,805,831			8,999,081
Total segment assets	10,917,681			9,112,869
Other (1)	789,495			816,443
Total assets	$	11,707,176			$	9,929,312

(1)Other includes corporate related items not allocated to reportable segments and ChronoScale.

20. Loss Per Share

Basic net income (loss) per share (“EPS”) of common stock is computed by dividing a company’s net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive. The table below shows the calculation for earnings per share:


	Three Months Ended
	August 31, 2026		August 31, 2025
Net loss	$	(184,055)			$	(16,926)
Net loss attributable to noncontrolling interest and redeemable noncontrolling interest	(51,484)			—
Preferred dividends	(1,543)			(1,576)
Net loss attributable to common stockholders	$	(237,082)			$	(18,502)

Net loss attributable to common stockholders:
Continuing operations	$	(221,028)			$	(18,502)
Discontinued operations	(16,054)			—
Net loss	$	(237,082)			$	(18,502)

Basic and diluted net loss per share attributable to common stockholders:
Continuing operations	$	(0.76)			$	(0.07)
Discontinued operations	(0.06)			—
Basic and diluted net loss per share	$	(0.82)			$	(0.07)

Basic and diluted weighted average number of shares outstanding	291,557,618			255,892,902

As of August 31, 2026 and August 31, 2025, the Company had approximately 15.2 million and 14.4 million shares, respectively, of granted but unvested performance stock units and restricted stock units that would have a potentially dilutive effect on earnings per share.

As of August 31, 2026 and August 31, 2025, the Company had approximately 7.5 million and 4.4 million shares, respectively, associated with the Company’s preferred stock which have been excluded from the calculation of earnings per share because the effect of those shares would be antidilutive. Additionally, the Company had approximately 28.1 million and 25.5 million warrants outstanding as of August 31, 2026 and August 31, 2025, respectively, which have been excluded from the calculations of earnings per share because the effect of those shares would be antidilutive. Lastly, if the Company's Convertible Notes were converted into shares of the Company's common stock as of August 31, 2026, approximately 46.1 million shares were excluded from the calculations of earnings per share because the effect of those shares would be antidilutive.

21. Subsequent Events

Series G

Subsequent to the quarter, 128,750 shares of Series G Preferred Stock were converted into an aggregate of 5.2 million shares of the Company’s common stock.

Sale of Legacy Ekso Business

On September 30, 2026, ChronoScale, through its wholly-owned subsidiary ChronoScale Intermediate LLC, completed the sale of its legacy Ekso business through two related transactions: Ekso and its wholly-owned German subsidiary sold substantially all of the assets of Ekso’s “EksoWorks” industrial exoskeleton business, including the EVO product line, to DynaWear Tech, Inc. under an asset purchase agreement, and immediately thereafter, ChronoScale Intermediate LLC sold all of the outstanding capital stock of Ekso, which held the remaining neuro-rehabilitation business, to WanderEkso Inc., a subsidiary of Wandercraft SAS, under a stock purchase agreement.

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APPLIED DIGITAL CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended August 31, 2026

Base Electron Power Purchase Agreement

On October 4, 2026, the Company entered into a Power Purchase Agreement with Base Electron, for the purchase of capacity and energy from an approximately 1,200 MW natural gas-fired generation facility to be developed by Base Electron in North Dakota, which is intended to provide dedicated generation for the Company’s Polaris Forge 3 campus expansion.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, 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 use of words such as “will,” “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 contain these words and other statements that are forward-looking in nature should be read carefully because they discuss future expectations, contain projections of future results of operations or of financial positions, or state other “forward-looking” information.

These statements are based on our management’s beliefs and assumptions, which are based on currently available information. Our actual results, and the assumptions on which we relied, could prove materially different from our expectations. You are cautioned not to place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. There are a number of important factors that could cause our actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:

•our ability to complete construction of our data center campuses;

•our dependence on principal customers, including our ability to execute leases with key customers;

•availability of financing to continue to grow our business;

•labor and other workforce shortages and challenges;

•power or other supply disruptions and equipment failures;

•the addition or loss of significant customers or material changes to our relationships with these customers;

•delays or denials of entitlements or permits, including zoning, siting, utility and other permits, or other delays resulting from requirements of public agencies and utility companies;

•our sensitivity to general economic conditions including changes in disposable income levels and consumer spending trends;

•our ability to timely and successfully build new data center facilities with the appropriate contractual margins and efficiencies; and

•uncertainties of regulation policy.

You should carefully review the risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended May 31, 2026, which was filed with the SEC on July 29, 2026, as well as any other cautionary language in this Quarterly Report on Form 10-Q, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations, financial condition or cash flows.

A comparison of our results of operations and cash flows for the three months ended August 31, 2025 can be found under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended August 31, 2025, filed with the SEC on October 9, 2025.

During the fiscal year 2026, we completed the contribution of our Cloud Services Business to ChronoScale (as defined below), formerly Ekso (as defined below). As a result of this transaction, certain prior-period amounts presented in this Quarterly Report have been recast to conform to the current period presentation. The recast primarily reflects changes associated with the transaction, including revisions to the presentation of certain historical financial statement line items and related disclosures. As a result, certain fiscal quarter 2025 amounts presented in this Quarterly Report differ from the amounts previously reported in our Quarterly Report on Form 10-Q for the quarter ended August 31, 2025.

Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time, and it is not possible for our management to predict all risk factors and uncertainties, nor are we able to assess the impact of all of these risk factors on our business or the extent to which any risk factor, or combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks are not exhaustive.

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Executive Overview

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q.

Business Overview

We are a U.S. designer, developer, and operator of high-performance, sustainably engineered data centers and colocation services for artificial intelligence (“AI”), networking, and blockchain workloads. We provide digital infrastructure solutions to the rapidly growing industries of high-performance computing (“HPC”) and AI. We operate in two distinct business segments, data center hosting (the \"Data Center Hosting Business\") and HPC data center hosting (the “HPC Hosting Business”), both of which are included in our unaudited consolidated financial statements, as further discussed below. Management considers the Data Center Hosting Business and the HPC Hosting Business to be our core operations for long-run strategic and performance evaluation purposes.

We consolidate entities that meet the definition of a variable interest entity (“VIE”) for which the Company is considered the primary beneficiary or entities that meet the definition of a voting interest entity (“VOE”). The Company consolidates a VIE where it has been determined that the Company is the primary beneficiary of the entity's operation in accordance with ASC Topic 810, Consolidations. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. In evaluating whether the Company is the primary beneficiary, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of the entity and the risks the entity was designed to create and pass through to its variable interest holders. The Company also evaluates its economic interests in the VIE.

On May 5, 2026, we completed the separation of our cloud services business. As of August 31, 2026 we owned approximately 96% of the outstanding common stock of ChronoScale Holdings Corporation (“ChronoScale”). We consolidate ChronoScale under the voting interest model because we hold a controlling financial interest. The ownership interests in ChronoScale not attributable to us are presented as noncontrolling interests in the unaudited condensed consolidated financial statements.

Trends and Other Factors Affecting Our Business

Regulatory Environment

The regulatory landscape surrounding AI and blockchain hosting services is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term. Any such developments may significantly impact our business and operations in ways that are difficult to predict.

Governments and regulatory bodies are considering measures to ensure the responsible development and deployment of AI systems, including transparency, accountability, and fairness guidelines. For example, in the U.S Senate, committees of jurisdiction have passed several AI bills that establish industry standards and impose significant obligations in relation to the use of AI systems. On the state level, several U.S. states have considered AI legislation, which aims to reduce risk associated with the use of AI; while certain states have passed comprehensive AI legislation. A number of states have recently issued moratoriums on future AI data centers while other states are considering the same. In Europe, the EU AI Act has been adopted, portions of which have started to take effect, with other portions continuing to take effect over the next several years.

The amount of energy used for AI and crypto mining has also received significant attention. The U.S. Energy Information Administration has recently launched surveys relating to electricity consumption from both data centers and cryptocurrency mining in the U.S. Certain U.S. states have also conducted similar studies. This indicates that more focus is being placed on the energy usage of these activities. It is unclear how the information collected will be used for future regulations, but it is expected that energy efficiency and sustainability will be critical factors regulating our industries. While there is currently insufficient support for any particular proposal, we expect that regulatory efforts in this area will continue to evolve and potentially impact our business.

As a company operating at the intersection of data center and HPC hosting services, we are committed to maintaining a proactive and adaptive approach to regulatory compliance. We closely monitor legislative and regulatory developments and engage in dialogue with relevant stakeholders to ensure our business practices align with the evolving legal and regulatory framework. Despite the uncertainties posed by the changing regulatory landscape, we remain committed to delivering

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innovative and responsible solutions in the data center and HPC hosting markets while prioritizing compliance and risk management. However, if we fail to comply with applicable laws and regulations, we may be subject to significant liabilities, including fines and penalties, and our business, financial condition, or results of operations could be adversely affected.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our unaudited condensed consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Our critical accounting estimates are identified and described in our annual consolidated financial statements and the related notes included in our Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q.

Business Update

HPC Hosting Business

Our HPC Hosting Business designs, constructs, and operates next-generation data centers, which are designed to provide massive computing power and support HPC applications within a cost-effective model.

In the prior fiscal year, we commenced operations at our first HPC data center at our Polaris Forge 1 campus in Ellendale, North Dakota, with 100 MW of capacity. During the quarter, we began commencing operations at our second HPC data center at our Polaris Forge 1 campus, which reached its full 150MW of capacity as of the date of filing of this Form 10-Q.

Our third HPC building at our Polaris Forge 1 campus, which is expected to provide an additional 150MW of capacity, is currently under construction. We anticipate reaching full ready for service in calendar year 2027.

Our two buildings at our Polaris Forge 2 campus, with an aggregate 300MW of capacity, are currently under construction. We anticipate reaching initial ready for service in the second half of calendar year 2026 and full capacity in early calendar year 2027.

Our two buildings at our Polaris Forge 3 campus, with an aggregate 300MW capacity, are currently under construction. We anticipate reaching initial ready for service in the second half of calendar year 2027 and full capacity in the second half of calendar year 2028.

Our two buildings at our Delta Forge 1 campus, with an aggregate 300MW capacity, are currently under construction. We anticipate reaching initial ready for service in the first half of calendar year 2027 and full capacity in early calendar 2028.

On June 5, 2026, we entered into an approximately 15-year lease (with three five-year renewal options) with a high investment-grade hyperscaler at our Delta Forge 2 campus located in our southern region, comprising a single 210 MW building under construction. The lease is for the full 210 MW of critical IT load, representing approximately $5.2 billion of contracted revenue over the base term, with expected delivery in the first half of calendar year 2028.

We recognized $262.6 million in revenue from this business segment during the three months ended August 31, 2026, with $183.5 million related to services and other revenue and $79.1 million related to data center rental and other revenue.

Data Center Hosting Business

Our Data Center Hosting Business provides energized infrastructure services to crypto mining customers. Our custom-designed data centers allow customers to rent space based on their power requirements. As of August 31, 2026, our 106 MW facility in Jamestown, North Dakota and our 180 MW facility in Ellendale, North Dakota continue to operate at full capacity.

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We recognized $37.8 million in revenue from this business segment during the three months ended August 31, 2026.

ChronoScale

In the prior fiscal year, we completed the separation of our cloud business in a series of transactions. As of August 31, 2026, we own approximately 96% of the issued and outstanding equity of ChronoScale Holdings Corporation (\"ChronoScale Holdings\"). ChronoScale Holdings owns and operates our historic cloud business through its wholly owned subsidiary, ChronoScale Corporation, and is consolidated into our financial statements.

The cloud business currently operates in three states: Colorado, Minnesota and Utah. This business provides cloud services to customers, such as AI and machine learning developers by renting space at third party co-location centers and providing the customers with access to its cloud computing equipment. Additionally, effective in the first quarter of fiscal year 2027, ChronoScale Holding’s cloud business provides AI infrastructure, or GPU-related, hardware, and ancillary support and maintenance services, through resale arrangements.

On July 1, 2026, we completed a holding company formation transaction (the “Holding Company Transaction”) that created the new parent holding company as the public company, with its operating companies as wholly-owned subsidiaries, including Applied Digital Cloud Corporation, which changed its name to ChronoScale Corporation. We effected the holding company structure to better reflect our individual operating businesses, which allows for and can accommodate future growth from internal operations and generally provides for greater administrative and operational flexibility. ChronoScale Holdings has the exact same classes and number of shares outstanding after the Holding Company Transaction as its predecessor had outstanding immediately before the Holding Company Transaction, and as such, the shareholders of ChronoScale Corporation prior to the Holding Company Transaction were not diluted as a result thereof. Following the Holding Company Transaction, ChronoScale Holdings became the successor issuer to ChronoScale and continues to trade on Nasdaq under the ticker symbol “CHRN” with the same CUSIP.

On August 6, 2026, ChronoScale entered into a two-year strategic partnership with Microsoft to support the planned development of approximately 50 MW of AI compute capacity. On August 24, 2026, ChronoScale entered into a one-year extension of such strategic partnership, resulting in a total of a three-year service term. Upon projected completion, the deployment is expected to expand available compute capacity and further strengthen ChronoScale’s digital infrastructure supporting AI and cloud computing applications.

Debt and Equity Offerings and Changes to Equity

Cloud SAFE Payoff

During the fiscal year ended May 31, 2025, we entered into two Simple Agreements for Future Equity (“SAFEs”) with an investor for equity in Cloud, which was, at that time, our wholly-owned subsidiary, for aggregate proceeds of $12.0 million. On June 2, 2026, following an agreement reached with the investor, we paid off all amounts outstanding under the SAFEs, totaling $13.3 million.

$1.59 Billion Senior Secured Notes due 2031

On June 16, 2026, APLD ComputeCo 3 LLC refinanced the Bridge Facility with the closing of a $1.59 billion offering (the “2031 7.000% Notes Offering”) of 7.000% senior secured notes due 2031 (the “2031 7.000% Notes”) at an issue price of 100.000% of par. The 2031 7.000% Notes are senior secured obligations of APLD ComputeCo 3 LLC and bear interest at a rate of 7.000% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026. The principal amount of the 2031 7.000% Notes will amortize on a semi-annual basis on June 15 and December 15 of each year, pursuant to the terms and amounts set forth in the 2031 7.000% Notes Indenture. The 2031 7.000% Notes will mature on June 15, 2031, unless earlier redeemed or repurchased in accordance with their terms. The 2031 7.000% Notes are fully and unconditionally guaranteed by the subsidiary guarantors, all of which are wholly owned subsidiaries of APLD ComputeCo 3 LLC. The Company provided a customary completion guarantee for the 2031 7.000% Notes Offering.

Series G Preferred Stock

On June 26, 2026, we entered into the sixth amendment to the PEPA to increase the aggregate commitment amount under the PEPA for the issuance of shares of Series G Preferred Stock from $1,590,000,000 to $2,000,000,000.

As Series G Preferred Stock may be reissued, during the three months ended August 31, 2026, we issued and sold 283,250 shares of Series G Preferred Stock for gross proceeds of $275.0 million. During the three months ended August 31, 2026,

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154,500 shares of Series G Preferred Stock were converted into 4.5 million shares of our common stock. As of August 31, 2026, 128,750 shares of Series G Preferred Stock were issued and outstanding.

Satisfaction of Escrow Release Condition for 6.750% Senior Secured Notes due 2031

On June 18, 2026, APLD ComputeCo 2 satisfied the escrow release condition under the escrow agreement for the 2031 6.750% Notes and executed and delivered to the escrow agent an escrow release certificate directing the escrow agent to release the funds in the escrow account to APLD ComputeCo 2 and apply such funds in accordance with the escrow agreement and the indenture for the 2031 6.750% Notes.

Upsize of 2026 Revolving Credit Facility

On June 26, 2026, in connection with the 2026 Revolving Credit Facility, the Company, APLD Intermediate HoldCo, and certain subsidiaries of APLD Intermediate HoldCo entered into an Incremental Assumption Agreement No. 1 (the “Incremental Assumption Agreement”), with First National Bank of Omaha (in its capacities as administrative agent and collateral agent under the 2026 Revolving Credit Facility) and the lenders and issuing banks party thereto, providing for an Incremental Revolving Facility Commitment (as defined in the Incremental Assumption Agreement) in an aggregate principal amount of up to $80.0 million (the “Incremental Revolving Financing”). After giving effect to the Incremental Assumption Agreement, the aggregate revolving commitments under the 2026 Revolving Credit Facility increased to $430.0 million, with an additional $120 million accordion option remaining. The Incremental Revolving Financing constitutes a part of the 2026 Revolving Credit Facility and is subject to the terms and conditions of the Revolving Credit Agreement and the other loan documents entered into in connection therewith.

Loan and Security Agreement

On June 30, 2026, we entered into a Loan and Security Agreement (the \"Texas Capital Loan Agreement\") with Texas Capital Bank (\"Texas Capital\") and a related Promissory Note in favor of Texas Capital in the stated principal amount of $58.5 million (the \"Texas Capital Note\"). The Texas Capital Loan Agreement contains standard terms, conditions and covenants. Interest is payable on the Texas Capital Note at the sum of an adjusted term SOFR plus an applicable margin. The Texas Capital Note matures on June 30, 2031.

Series E and Series E-1 Redemptions

During the three months ended August 31, 2026, 276,673 shares of Series E Preferred Stock were redeemed as well as 78 shares of Series E-1 Preferred Stock.

Recent Developments

Series G

Subsequent to the quarter, 128,750 shares of Series G Preferred Stock were converted into an aggregate of 5.2 million shares of the Company’s common stock.

Sale of Legacy Ekso Business

Base Electron Power Purchase Agreement

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Results of Operations

Comparative Results for the Three Months Ended August 31, 2026 and August 31, 2025:

The following table sets forth key components of the results of operations (in thousands) during the three months ended August 31, 2026 and August 31, 2025.


	Three Months Ended
	August 31, 2026		August 31, 2025
Revenue:
Services and other revenue	$	262,755			$	80,934
Data center rental and other revenue	79,120			—

Total revenue	341,875			80,934
Costs and expenses:
Services and other cost of revenue	245,709			58,831
Data center rental and other cost of revenue	43,862			140
Selling, general and administrative (1)	114,683			29,482

Loss on abandonment of assets	—			2,243

Total costs and expenses	404,254			90,696
Operating loss	(62,379)			(9,762)
Interest expense	77,383			8,013
Interest income (2)	(35,821)			(857)
Loss on change in fair value of derivatives	49,511			—
Loss on change in fair value of investment	11,352			—






Other expense, net	1,311			—
Net loss before income tax expense	(166,115)			(16,918)
Income tax expense	1,886			8
Net loss from continuing operations	(168,001)			(16,926)
Net loss from discontinued operations	(16,054)			—
Net loss	(184,055)			(16,926)
Net loss attributable to noncontrolling interest and redeemable noncontrolling interest	(51,484)			—
Preferred dividends	(1,543)			(1,576)
Net loss attributable to common stockholders	$	(237,082)			$	(18,502)

Net loss attributable to common stockholders
Continuing operations	$	(221,028)		$	(18,502)
Discontinued operations	(16,054)			—
Net loss	$	(237,082)			$	(18,502)

Basic and diluted net loss per share attributable to common stockholders
Continuing operations	$	(0.76)			$	(0.07)
Discontinued operations	(0.06)			—
Basic and diluted net loss per share	$	(0.82)			$	(0.07)

Basic and diluted weighted average number of shares outstanding	291,557,618		255,892,902

Adjusted Amounts (3)
Adjusted revenue	$	300,393		$	64,216
Adjusted operating income (loss)	$	37,816		$	(3,616)
Adjusted operating margin	13	%		(6)	%

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Adjusted net loss from continuing operations attributable to common stockholders	$	(4,053)	$	(7,570)

Adjusted net loss from continuing operations attributable to common stockholders per diluted share	$	(0.01)	$	(0.03)

Other Financial Data (3)
EBITDA	$	(72,625)	$	(18,140)
as a percentage of adjusted revenue	(24)	%	(28)	%
Adjusted EBITDA	$	64,412	$	537
as a percentage of adjusted revenue	21	%	1	%
Net operating income	$	58,829	$	—
Net operating income margin	89	%	—	%

(1)Includes related party selling, general and administrative expense of $49.7 thousand and $74.3 thousand for the three months ended August 31, 2026 and August 31, 2025, respectively. See Note 7 - Related Party Transactions for further discussion of related party transactions.

(2)Includes related party income of $0.7 million for the three months ended August 31, 2026. See Note 7 - Related Party Transactions for further discussion of related party transactions.

(3)Adjusted Amounts and Other Financial Data are non-GAAP performance measures. These non-GAAP measures exclude the results of the Cloud Services Business. A reconciliation of reported amounts to adjusted amounts can be found in the \"Non-GAAP Measures and Reconciliation\" section of Management’s Discussion and Analysis.

Commentary on Results of Operations Comparative Results for the Three Months Ended August 31, 2026 compared to the Three Months Ended August 31, 2025

Revenue

Services and other revenue increased $181.8 million, or 225%, from $80.9 million for the three months ended August 31, 2025 to $262.8 million for the three months ended August 31, 2026. The increase was primarily due to an increase in tenant fit-out services of approximately $157.2 million. This revenue also consisted of approximately $23.0 million in GPU hardware sales related to ChronoScale. The remaining increase in services and other revenue was due to performance improvements in Data Center Hosting Business and ChronoScale during the three months ended August 31, 2026 compared to the three months ended August 31, 2025.

Data center rental and other revenue was $79.1 million for the three months ended August 31, 2026 compared to no revenue for the three months ended August 31, 2025, as our HPC Hosting Business commenced operations in the second half of the fiscal year 2026, resulting in approximately $65.8 million related to base rent, net of $0.9 million in amortization of customer lease incentives, and $13.3 million related to tenant recoveries.

Cost of revenues

Services and other cost of revenues increased $186.9 million, or 318%, from $58.8 million for the three months ended August 31, 2025 to $245.7 million for the three months ended August 31, 2026. The increase in services and other cost of revenues was due to the following changes:

•approximately $151.1 million increase in expenses associated with tenant fit-out services for our HPC Hosting Business;

•approximately $22.4 million in cost of revenue associated with GPU hardware sales related to ChronoScale, which commenced during the current fiscal quarter;

•approximately $14.2 million increase in depreciation and amortization expense due to the Cloud Services Business no longer being classified as held for sale;

•approximately $3.6 million increase in lease and lease related expenses primarily related to ChronoScale’s operating leases; and

•approximately $0.3 million increase in personnel expenses and other costs due to the increases in headcount as well as other related costs directly supporting revenue.

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These increases were partially offset by a decrease of approximately $4.7 million in energy costs associated with our Data Center Hosting Business and other costs directly supporting revenue.

Data center rental and other cost of revenue increased by $43.7 million, from $0.1 million for the three months ended August 31, 2025 to $43.9 million for the three months ended August 31, 2026 as the Company’s HPC hosting operations were not fully commenced during the first fiscal quarter 2026. The increase in data center rental and other cost of revenue was categorized as follows:

•approximately $22.4 million increase in depreciation and amortization associated with our HPC Hosting Business;

•approximately $13.3 million increase in expenses which are reimbursable as tenant recoveries;

•approximately $5.6 million increase in rental property operating expenses, which are not eligible for recovery from our tenant;

•approximately $1.3 million increase in property insurance expenses associated with our HPC Hosting Business; and

•approximately $0.8 million increase in property tax expenses associated with our HPC Hosting Business.

Selling, general and administrative expense

Selling, general and administrative expense increased $85.2 million, or 289%, from $29.5 million for the three months ended August 31, 2025 to $114.7 million for the three months ended August 31, 2026. The increase in selling, general and administrative expense was categorized as follows:

•approximately $51.7 million increase in stock based compensation primarily due to an increase in shares awarded related to the increase in headcount and increase in performance stock awards granted in the period after the three months ended August 31, 2025;

•approximately $12.1 million increase in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business;

•approximately $9.9 million increase in personnel expenses related to the increase in headcount;

•approximately $9.5 million increase in other selling, general, and administrative expense such as travel, computer and software expenses; and

•approximately $2.0 million increase in lease and lease related expense primarily related to ChronoScale’s operating leases.

Loss on abandonment of assets

Loss on abandonment of assets was $2.2 million for the three months ended August 31, 2025, driven by the write down of assets to their fair value upon disposal. There was no such loss recorded in the current year comparative period.

Interest expense

Interest expense increased $69.4 million, or 866%, from $8.0 million for the three months ended August 31, 2025, to $77.4 million for the three months ended August 31, 2026. As we entered into more debt arrangements, there was an increase of approximately $66.4 million in interest expense, approximately $2.8 million in loan issuance discount, and approximately $2.4 million in loan issuance cost. These increases were partially offset by a decrease of $2.2 million in finance lease interest associated with the renegotiation of the majority of our finance leases during fiscal year ended May 31, 2026.

Interest income

Interest income increased $35.0 million, or 4,080%, from $0.9 million for the three months ended August 31, 2025 to $35.8 million for the three months ended August 31, 2026 due to an increase in funds held in interest-bearing accounts.

Loss on change in fair value of derivatives

Loss on the change in fair value of derivatives was $49.5 million for the three months ended August 31, 2026, due a decrease of $56.1 million in the fair value of our Babcock & Wilcox Enterprises, Inc. (“B&W”) common stock warrant and an increase of $6.6 million in the fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s redeemable noncontrolling interest. There was no such loss recorded in the prior year comparative period.

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Loss on change in fair value of investment

Loss on change in fair value of investment was $11.4 million for the three months ended August 31, 2026, due to a decrease in fair value of our investment in B&W common stock. There was no such loss recorded in the prior year comparative period.

Other expense, net

Other expense, net was $1.3 million for the three months ended August 31, 2026 and consisted of a loss of approximately $1.3 million due to the settlement of the SAFEs as a result of an agreement reached with the investor offset by a gain on the fair value of warrants issued to third parties. There was no such activity recorded in the prior year comparative period.

Income tax expense

Income tax expense was $1.9 million for the three months ended August 31, 2026, compared to nominal expense for the three months ended August 31, 2025. This change was driven by an increase in current federal and state income tax expense during the current fiscal quarter.

Net loss from discontinued operations

Net loss from discontinued operations was $16.1 million for the three months ended August 31, 2026 and represents the income statement activity related to the Ekso business at ChronoScale classified as held for sale and discontinued operations. There was no such activity in the prior year comparative period.

Comparative Segment Data for the Three Months Ended August 31, 2026 and August 31, 2025:

The following table sets forth the operating (loss) profit for each of our segments for the three months ended August 31, 2026 and August 31, 2025 (in thousands):


	Three Months Ended
	August 31, 2026		August 31, 2025
Segment profit
Data Center Hosting Business	$	13,327			$	6,035
HPC Hosting Business	33,431			(2,022)
Total segment profit	$	46,758			$	4,013

Commentary on Segment Data Comparative Results for the Three Months Ended August 31, 2026 compared to the Three Months Ended August 31, 2025

Data Center Hosting Business

Operating Profit

Data Center Hosting Business operating profit increased $7.3 million, or 121%, from $6.0 million for the three months ended August 31, 2025 to $13.3 million for the three months ended August 31, 2026 primarily due to a decrease of $6.4 million in cost of revenues due to more advantageous power pricing when compared to the to the three months ended August 31, 2025.

HPC Hosting Business

Operating Profit

HPC Hosting Business operating profit increased $35.5 million, or 1,753%, from a loss of $2.0 million for the three months ended August 31, 2025 to a profit of $33.4 million for the three months ended August 31, 2026. The change is primarily due to revenue generated from the first two buildings at our Polaris Forge 1 campus, as well as tenant fit-out services performed, net of expenses during the three months ended August 31, 2026 compared to the three months ended August 31, 2025.

Non-GAAP Measures

To supplement our unaudited condensed consolidated financial statements presented under GAAP, we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional

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information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our core business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations. Management considers the Data Center Hosting Business and the HPC Hosting Business to be our core operations for long-run strategic and performance evaluation purposes. Accordingly, these non-GAAP financial measures exclude the results of our consolidated subsidiary, ChronoScale. ChronoScale is included in our unaudited condensed consolidated financial statements and results of continuing operations. Due to its strategic role relative to the Company’s core business, management believes the ChronoScale results may obscure underlying trends in the performance of core operations when included in certain non-GAAP measures.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Excluding the results of ChronoScale in our non-GAAP financial measures removes revenues and expenses that are part of the Company’s consolidated results and continuing operations and should not be viewed as measures or reflections of liquidity or profitability in accordance with GAAP. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this Quarterly Report on Form 10-Q have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

Adjusted Revenue

“Adjusted revenue” is a non-GAAP financial measure that represents total revenue excluding ChronoScale revenue.

Adjusted Operating Income (Loss), Adjusted Net Loss from Continuing Operations, and Adjusted Net Loss from Continuing Operations per Diluted Share

“Adjusted operating income (loss)” and “Adjusted net loss from continuing operations” are non-GAAP financial measures that represent operating income and net income (loss) from operations excluding ChronoScale, respectively. Adjusted operating income (loss) is Operating loss excluding operating (loss) income from ChronoScale, stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, non-cash amortization of customer lease incentives, loss on abandonment of assets, restructuring expenses and other non-recurring expenses that management believes are not representative of our expected ongoing costs. Adjusted net loss from continuing operations is Adjusted operating income (loss) further adjusted for interest expense directly attributable to ChronoScale, loss on change in fair value of derivatives, and loss on change in fair value of investment. We define “Adjusted net loss from continuing operations per diluted share” as Adjusted net loss from continuing operations divided by weighted average diluted share count.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as earnings before interest expense, interest income, income tax expense, and depreciation and amortization and excluding results of ChronoScale. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation, non-cash amortization of customer lease incentives, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, loss on abandonment of assets, loss on change in fair value of derivatives, loss on change in fair value of investments, restructuring expenses, and other non-recurring expenses that management believes are not representative of our expected ongoing costs.

Net Operating Income

\"Net Operating Income\" is a non-GAAP financial measure that represents base rental revenue from the HPC Hosting Business. Net Operating Income is HPC Hosting Business base rental revenue, excluding the non-cash amortization of one-

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time customer lease incentives provided at contract inception, less rental property operating expenses, property taxes, and property insurance expenses. \"Net Operating Income Margin\" is defined as Net Operating Income divided by HPC Hosting Business base rental revenue.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands, except percentage data)


	Three Months Ended
	August 31, 2026		August 31, 2025
Adjusted revenue
Total Revenue (GAAP)	$	341,875			$	80,934
Less: ChronoScale revenue	(41,482)			(16,718)
Adjusted revenue (Non-GAAP)	$	300,393			$	64,216

Adjusted operating income (loss)
Operating loss (GAAP)	$	(62,379)			$	(9,762)
Operating loss from ChronoScale	25,354			(12,531)
Stock-based compensation (1)	59,391			14,446
Non-recurring repair expenses (2)	72			173
Diligence, acquisition, disposition and integration expenses (3)	11,911			1,196
Litigation expenses (4)	1,177			190
Non-cash amortization of customer lease incentives	854			—

Loss on abandonment of assets	—			1,751



Restructuring expenses (5)	129			431
Other non-recurring expenses (6)	1,307			490
Adjusted operating income (loss) (Non-GAAP)	$	37,816			$	(3,616)
Adjusted operating margin	13	%		(6)	%

Adjusted net loss from continuing operations
Net loss from continuing operations (GAAP)	$	(168,001)			$	(16,926)
Operating loss from ChronoScale	25,354			(12,531)
Net interest expense directly attributable to ChronoScale	1,557			3,210
Stock-based compensation (1)	59,391			14,446
Non-recurring repair expenses (2)	72			173
Diligence, acquisition, disposition and integration expenses (3)	11,911			1,196
Litigation expenses (4)	1,177			190
Non-cash amortization of customer lease incentives	854			—

Loss on abandonment of assets	—			1,751


Loss on change in fair value of derivatives	49,511			—
Loss on change in fair value of investment	11,352			—







Restructuring expenses (5)	129			431

Other non-recurring expenses (6)	2,640			490
Adjusted net loss from continuing operations (Non-GAAP)	$	(4,053)			$	(7,570)
Diluted weighted average number of shares outstanding (Non-GAAP)	291,557,618		255,892,902
Adjusted net loss from continuing operations per diluted share (Non-GAAP)	$	(0.01)			$	(0.03)

EBITDA and Adjusted EBITDA
Net loss from continuing operations (GAAP)	$	(168,001)			$	(16,926)
Operating loss from ChronoScale	25,354			(12,531)

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Interest expense	77,383		8,013
Interest income	(35,821)		(857)
Income tax (benefit) expense	1,886		8
Depreciation and amortization	26,574		4,153
EBITDA (Non-GAAP)	$	(72,625)		$	(18,140)
Stock-based compensation (1)	59,391		14,446
Non-recurring repair expenses (2)	72		173
Diligence, acquisition, disposition, and integration expenses (3)	11,911		1,196
Litigation expenses (4)	1,177		190
Non-cash amortization of customer lease incentives	854		—


Loss on change in fair value of derivatives	49,511		—
Loss on change in fair value of investment	11,352		—
Loss on abandonment of assets	—		1,751







Restructuring expenses (5)	129		431
Other non-recurring expenses (6)	2,640		490
Adjusted EBITDA (Non-GAAP)	$	64,412		$	537

Net Operating Income
HPC Hosting Business base rental revenue (GAAP)	$	65,800		$	—
Non-cash amortization of customer lease incentives	854		—
Rental property operating expenses	(5,726)		—
Property taxes	(821)		—
Property insurance expenses	(1,278)		—
Net Operating Income (Non-GAAP)	$	58,829		$	—
Net Operating Income margin	89	%	—	%

(1)Represents stock-based compensation expense and employment taxes incurred in connection with the vesting of stock-based awards.

(2)Represents costs incurred for the non-recurring repair and replacement of equipment at our data center facilities.

(3)Represents legal, accounting and consulting costs incurred in association with certain discrete transactions and projects.

(4)Represents non-recurring litigation expense associated with our defense of class action lawsuits and legal fees related to matters with certain former employees. We do not expect to incur these expenses on a regular basis.

(5)Represents non-recurring expenses associated with employee separations.

(6)Represents expenses that are not representative of our expected ongoing costs.

Funding Requirements

We have experienced net losses through the period ended August 31, 2026. Our transition to profitability is dependent on the successful operation of our business.

We expect to have sufficient liquidity, including cash on hand, payments from customers, access to debt financing, and access to public capital markets, to support ongoing operations and meet our working capital needs for at least the next 12 months and all of our known requirements and plans for cash. However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our ongoing operations and development plans. We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect, in which case, we would be required to obtain additional financing sooner than currently projected, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

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We expect that our general and administrative expenses and our operating expenditures will continue to increase as we continue to expand our operations. We believe that the significant investments in property and equipment will remain throughout fiscal year 2027 as we continue construction of our HPC hosting facilities.

Sources of Liquidity

Our primary capital requirements are to fund the development and expansion of our data center infrastructure, support working capital needs, cover operating expenses, and finance capital expenditures associated with technology upgrades and facility enhancements. As of August 31, 2026, we had unrestricted cash and cash equivalents of $2.9 billion and restricted cash of $728.0 million. Historically, we have incurred losses and have relied on equity and debt financings to fund our operations. We have primarily generated cash in the last 12 months from the proceeds of our term loans, issuances of preferred stock, senior secured notes (issued by our subsidiaries), debt facilities and the receipt of contractual deposits and revenue payments from customers.

We believe that existing cash balances, cash flows from operations, existing debt facilities, and access to capital markets will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, and other contractual obligations, for at least the next twelve months.

Recent Financing Activities

See Note 9 - Debt in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on our term loans and other debt instruments.

7.000% Senior Secured Notes due 2031

On June 16, 2026, APLD ComputeCo 3 LLC refinanced the Bridge Facility with the closing of a $1.59 billion offering (the “2031 7.000% Notes Offering”) of 7.000% senior secured notes due 2031 (the “2031 7.000% Notes”) at an issue price of 100.000% of par. The 2031 7.000% Notes are senior secured obligations of APLD ComputeCo 3 and bear interest at a rate of 7.000% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026. The principal amount of the 2031 7.000% Notes will amortize on a semi-annual basis on June 15 and December 15 of each year, pursuant to the terms and amounts set forth in the 2031 7.000% Notes Indenture. The 2031 7.000% Notes will mature on June 15, 2031, unless earlier redeemed or repurchased in accordance with their terms. The 2031 7.000% Notes are fully and unconditionally guaranteed by the subsidiary guarantors, all of which are wholly owned subsidiaries of APLD ComputeCo 3 LLC. The Company provided a customary completion guarantee for the 2031 7.000% Notes Offering.

Series G Convertible Preferred Stock

During the three months ended August 31, 2026, the Company issued and sold 283,250 shares of Series G Preferred Stock for gross proceeds of $275.0 million. During the three months ended August 31, 2026, 154,500 shares of Series G Preferred Stock were converted into 4.5 million shares of the Company’s common stock. As of August 31, 2026, 128,750 shares of Series G Preferred Stock were issued and outstanding.

Upsize of 2026 Revolving Credit Facility

On June 26, 2026, in connection with the 2026 Revolving Credit Facility, the Company, APLD Intermediate HoldCo, and certain subsidiaries of APLD Intermediate HoldCo entered into an Incremental Assumption Agreement No. 1 (the Incremental Assumption Agreement”), with First National Bank of Omaha (in its capacities as administrative agent and collateral agent under the 2026 Revolving Credit Facility) and the lenders and issuing banks party thereto, providing for an Incremental Revolving Facility Commitment (as defined in the Incremental Assumption Agreement) in an aggregate principal amount of up to $80.0 million (the “Incremental Revolving Financing”). After giving effect to the Incremental Assumption Agreement, the aggregate revolving commitments under the 2026 Revolving Credit Facility increased to $430.0 million, with an additional $120.0 million accordion option remaining. The Incremental Revolving Financing constitutes a part of the 2026 Revolving Credit Facility and is subject to the terms and conditions of the Revolving Credit Agreement and the other loan documents entered into in connection therewith.

As of August 31, 2026, approximately $241.0 million of standby letters of credit were outstanding under the 2026 Revolving Credit Facility. Refer to Note 9 - Debt in the accompanying notes to the unaudited condensed consolidated financial statements for additional information.

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Loan and Security Agreement

Material Contractual Obligations

In the ordinary course of business, we enter into contractual arrangements that require future cash payments. The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of August 31, 2026 (in thousands):


	Payments Due by Period
	Total	Remainder of FY 2027	FY 2028	FY 2029	FY 2030	FY 2031	Thereafter
Debt obligations(1)	$	6,721,605		$	108,739		$	221,545		$	341,453	$	354,294	$	4,256,666	$	1,438,908
Interest on debt obligations(2)	2,156,434		326,507		490,014		464,054		437,126		391,956	46,777

Operating lease obligations(3)	69,074		16,036		23,967		18,391		4,812		1,315	4,553
Financing lease obligations(4)	48,342		37,374		10,968		—		—		—	—
Power commitments(5)	12,121		12,121		—		—		—		—	—
Preferred share dividends(6)	31,999		4,174		5,565		5,565		5,565		5,565	5,565

(1)Debt obligations presented in the table reflect scheduled principal payments related to our outstanding debt as described in Note 9 - Debt to the unaudited condensed consolidated financial statements for further discussion.

(2)Estimated interest payments on our debt obligations include estimated future interest payments based on the terms of the debt agreements. See Note 9 - Debt to the unaudited condensed consolidated financial statements for further discussion.

(3)Operating lease obligations include future minimum payments for our operating leases.

(4)Financing lease obligations include future minimum payments for our finance leases.

(5)Power commitments represents our obligation related to the energy services agreement for our Jamestown, North Dakota co-hosting facility payable. See Note 18 - Commitments and Contingencies to the unaudited condensed consolidated financial statements for further discussion.

(6)Preferred share dividends represent estimated future dividend payments per year in accordance with preferred stock that has been issued. The estimated future dividend payments will continue until preferred stock is redeemed.

Summary of Cash Flows

The following table provides information about our net cash flow for the three months ended August 31, 2026 and August 31, 2025, respectively.


	Three Months Ended
$ in thousands	August 31, 2026		August 31, 2025
Net cash provided by (used in) operating activities	$	63,921			$	(81,531)
Net cash used in investing activities	(2,082,879)		(249,914)
Net cash provided by financing activities	1,543,472			322,236
Net decrease in cash and cash equivalents, and restricted cash	(475,486)		(9,209)
Cash, cash equivalents, and restricted cash, beginning of period, including cash from discontinued operations	4,153,431			123,318
Cash, cash equivalents, and restricted cash, end of period, including cash from discontinued operations	$	3,677,945			$	114,109
Less: Cash, cash equivalents, and restricted cash from discontinued operations	$	2			$	—
Cash, cash equivalents, and restricted cash from continued operations	$	3,677,943			$	114,109

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Commentary on the change in cash flows between the Three Months Ended August 31, 2026 and Three Months Ended August 31, 2025

Operating Activities

The net cash provided by (used in) operating activities changed by $145.5 million, or 178%, from $81.5 million used in operating activities for the three months ended August 31, 2025 to $63.9 million provided by operating activities for the three months ended August 31, 2026. Activities that positively impacted operating cash flows during the three months ended August 31, 2026 included stock-based compensation, loss on change in fair value of derivatives, loss on change in fair value of investment, loss on classification of held for sale and non-cash interest expense. Other impacts included changes in operating assets and liabilities primarily affected by changes in the timing and quantity of services provided and associated working capital needs.

Investing Activities

The net cash used in investing activities increased by $1.8 billion, or 733%, from $249.9 million for the three months ended August 31, 2025, to $2.1 billion for the three months ended August 31, 2026. This increase was primarily due to an increase of approximately $1.8 billion in investments in property and equipment during the three months ended August 31, 2026 as our payments in the current period for construction of each of our Polaris Forge 1, Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2 campus data center facilities increased as well as investment in companies.

Financing Activities

The net cash provided by financing activities increased by $1.2 billion, or 379%, from $322.2 million for the three months ended August 31, 2025 to $1.5 billion for the three months ended August 31, 2026. The primary reason for the change was an increase in the net borrowings of long-term debt of $1.6 billion from the issuance of our 2031 Notes as well as an our draw on the 2026 Revolver of $82.4 million. Additionally, there was an increase in receipt of net proceeds from offerings of our preferred stock of approximately $104.5 million during the three months ended August 31, 2026 compared to the three months ended August 31, 2025. These increases were partially offset by an increase of $313.5 million in repayments of long-term debt as well as a decrease of $196.4 million in proceeds from common stock during the three months ended August 31, 2026 compared to the three months ended August 31, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our exposure to market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026.

Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures that is designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to the our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer and principal accounting officer), as appropriate, to allow timely decisions regarding required disclosure. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of August 31, 2026, have concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the three months ended August 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings.

The Company, Wes Cummins, the Company's Chief Executive Officer, and David Rench, the Company's then Chief Financial Officer, have been named as defendants in a putative securities class action lawsuit in the matter styled, McConnell v. Applied Digital Corporation, et al., Case No. 3:23-cv-1805, filed in August 2023 in the U.S. District Court for the Northern District of Texas (the “Securities Lawsuit”). Specifically, the complaint asserts claims pursuant to Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 based on allegedly false or misleading statements regarding the company’s business, operations, and compliance policies, including claims that the Company overstated the profitability of its Data Center Hosting Business and its ability to successfully transition into a low-cost cloud services provider and that the Company’s board of directors was not “independent” within the meaning of Nasdaq listing rules. On May 22, 2024, the court appointed lead plaintiff and approved lead counsel, and on July 22, 2024, Lead Plaintiff filed an amended complaint which asserts the same claims based on similar allegations in the original complaint. On September 20, 2024, the defendants filed a motion to dismiss the amended complaint. On November 20, 2024, Lead Plaintiff filed his opposition to the Motion to Dismiss. On January 3, 2025, the defendants filed their reply in further support of the Motion to Dismiss. On September 8, 2025, the Court issued an order staying the Securities Lawsuit and administratively closing it pending resolution of the Motion to Dismiss. See discussion in Note 18 - Commitments and Contingencies.

Derivative Lawsuit

On June 5, 2024, following briefing and argument on the defendants’ motion to dismiss the Derivative Lawsuit, the Court entered an order granting the defendants’ motion without prejudice and dismissing all claims against all defendants, including the Company, on the grounds that the plaintiff failed to plead (1) demand futility as to each of plaintiff’s claims or (2) a claim for breach of fiduciary duty. The order dismissed all claims against all defendants, including the Company. The plaintiff can seek leave to file an amended complaint but to date has not done so.

There are no other pending lawsuits that could reasonably be expected to have a material adverse effect on the results of the Company’s consolidated operations.

Item 1A. Risk Factors

As of the date of this filing, there have been no material changes to the risk factors associated with our business previously disclosed in the “Risk Factors” section in Part I, Item 1A, of our Annual Report on 2026 Form 10-K for the fiscal year ended May 31, 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Base Electron Power Purchase Agreement

On October 4, 2026, the Company entered into a Power Purchase Agreement and a related credit support agreement with Base Electron for the purchase of capacity and energy from an approximately 1,200 MW natural gas-fired generation facility to be developed by Base Electron in Center, North Dakota, which is intended to provide dedicated generation for the Company's Polaris Forge 3 campus. The Power Purchase Agreement has a 15-year delivery term and provides for fixed monthly payments based on target contract capacity, and may be terminated by Base Electron if financial close for the facility has not occurred by March 31, 2027. The Power Purchase Agreement and the credit support agreement were approved by the Company's Board of Directors following review and recommendation by the Board's Base Electron Related Party Transaction Committee.

As of October 4, 2026, the Company owned approximately 10% of Base Electron. Base Electron is an independent power producer formed for the purpose of developing and operating dedicated power generation infrastructure for high-density AI data center campuses. It is owned and managed by certain officers and directors of the Company, including Messrs. Cummins and Zhang and Dr. Nottenburg, acting in their individual capacities, as well as numerous third parties. In addition, Messrs. Cummins and Zhang serve as the Chief Executive Officer, and President and Secretary of Base Electron, respectively.

Item 6. Exhibits

EXHIBIT INDEX


Exhibit Number	Description of Document
4.1	Indenture, dated as of June 16, 2026, among APLD ComputeCo 3 LLC, APLD HPC Holdings 2 LLC, the Subsidiary Guarantors as defined therein and Wilmington Trust, National Association, as trustee and collateral agent, relating to the 7.000% senior secured notes. (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 16, 2026).
4.2	Form of Note representing the 7.000% Senior Secured Notes due 2031 (included as Exhibit A to Exhibit 4.1). (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 16, 2026).
10.1†	Credit Agreement, dated as of May 29, 2026, by and between Applied Digital Corporation, APLD Intermediate Holdco LLC, the lenders party thereto, First National Bank of Omaha and Goldman Sachs Lending Partners LLC. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2026).
10.2^	Incremental Assumption Agreement No. 1, dated as of June 26, 2026, by and among Applied Digital Corporation, APLD Intermediate Holdco LLC, the Subsidiary Guarantors, lenders and each issuing bank party thereto, and First National Bank of Omaha. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2026).
10.3^	Form of Sixth Amendment to Preferred Equity Purchase Agreement by and between the Company and the investors signatory thereto. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2026).
31.1*	Chief Executive Officer’s Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Chief Financial Officer’s Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Furnished herewith.

^ The schedules to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

† Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, Texas on October 7, 2026.

APPLIED DIGITAL CORPORATION

By:

/s/ Wes Cummins

Name: Wes Cummins

Title: Chief Executive Officer, Secretary and Treasurer (Principal Executive Officer)

By:

/s/ Saidal Mohmand

Name: Saidal Mohmand

Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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