What the changes say
- AI data-center construction, lease commencement, and campus cost overruns now drive execution risk.
- Revenue is concentrated among hyperscalers, one crypto-mining customer, and newly consolidated ChronoScale reporting.
- New AI-model efficiency, climate regulation, and convertible-note hedging risks expand technology, regulatory, and market exposure.
What changed since the prior 10-K
New
- NewRisks Related to Our Business and Operations
We may be unable to complete our data center campuses in a timely manner or within anticipated cost estimates
Construction delays, labor or equipment shortages, permitting, utility approvals, and cost overruns could delay Polaris Forge and Delta Forge lease revenue.
- NewRisks Related to Our Business and Operations
Delays in lease commencement could adversely affect our financial condition and results of operations
Significant construction delays could let lessees terminate, while replacing leases and losing concentrated customers could damage results.
- NewRisks Related to Our Business and Operations
During fiscal year 2026, this business segment was comprised of one customer accounting for 59% of our total revenue from continuing operations. No other customers accounted for more than 10% of revenue
One HPC Hosting customer generated 59% of continuing-operations revenue, exposing growth plans and approximately 1.4 GW of leased capacity.
- NewRisks Related to Our Business and Operations
During fiscal year 2026, this business segment was comprised of one customer accounting for 25% of our revenue from continuing operations. No other customers accounted for more than 10% of revenue
The sole crypto-mining customer generated 25% of revenue and could reduce or end its contract with 18 months remaining.
- NewRisks Related to Our Business and Operations
Our consolidated financial statements include the financial results of ChronoScale
APLD’s approximately 96% ownership requires continued consolidation of ChronoScale’s financial results under accounting rules.
- NewRisks Related to Our Business and Operations
internal control over financial reporting, disclosure controls and procedures, audit process, and related accounting judgments may directly affect our consolidated financial statements and our periodic reports filed with the SEC
ChronoScale reporting, audits, controls, and accounting judgments could delay APLD filings or create material errors in consolidated financial statements.
- NewRisks Related to Our Business and Operations
or other attempts to harm or access our systems. Such disruptions could materially and adversely affect our business and our financial condition, operating results, cash flows, and prospects
New climate and energy-use regulation could increase energy, equipment, monitoring, reporting, and compliance costs for APLD and suppliers.
- NewRisks Related to Our Industry
We depend on significant customers for our data centers
AI factory customers could default, become insolvent, or enter bankruptcy, delaying rent collection and making landlord enforcement costly.
- NewRisks Related to Our Industry
The development and advancement in the efficiency of AI models presents risks and challenges that may adversely impact our business and operating results
More efficient AI models could require less computing power and reduce demand for high-density, liquid-cooled data centers.
- NewRisks Related to Our Securities
upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap
Convertible-note hedge counterparties’ stock and derivative transactions could increase volatility or affect APLD’s common-stock and note values.
Dropped
- DroppedRisks Related to Our Business and Operations
We are at an early stage of development of our business, currently have limited sources of revenue, and may not be profitable in the future
Early-stage status, limited revenue history, and uncertainty about achieving profitability.
- DroppedRisks Related to Our Business and Operations
from our hosting operations when our first co-hosting facility came online in February 2022. Accordingly, we have only a limited history upon which an evaluation of our prospects and future performance can be made
Limited operating history and efforts to stabilize revenue through long-term hosting contracts.
- DroppedRisks Related to Our Business and Operations
result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase
- DroppedRisks Related to Our Business and Operations
Data Center Hosting Business
- DroppedRisks Related to Our Business and Operations
Our inability to market and close the sale of our Cloud Services Business that is currently held for sale and treated as discontinued operations may have a material adverse impact on our business and financial condition
- DroppedRisks Related to Our Business and Operations
Our success depends on external factors in the crypto mining industry
- DroppedRisks Related to Our Business and Operations
Our operations could be materially adversely affected by prolonged power outages at any of our facilities
Material weaknesses in internal controls that could cause financial misstatements or missed reporting obligations.
- DroppedRisks Related to Our Business and Operations
A decline in the price of cryptoassets could lead to a reduction in the usage of mining equipment at our facilities
Prior data-center hosting concentration among four customers, including one representing 93% of revenue.
- DroppedRisks Related to Our Business and Operations
We have an evolving business model which is subject to various uncertainties
- DroppedRisks Related to Our Business and Operations
We are, and may in the future be, the subject of unfavorable allegations made by short sellers. For example, in 2023, short sellers published reports that contained certain allegations against us that we believe to be misleading
- DroppedRisks Related to Our Business and Operations
Our and our customer's operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in Bitcoin and other cryptoassets
- DroppedRisks Related to Our Business and Operations
The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives
- DroppedRisks Related to Our Business and Operations
If the award of Bitcoin reward for solving blocks and transaction fees is not sufficiently high, our customer may not have an adequate incentive to continue mining and may cease mining operations, which would have an adverse effect on our business and results of operations
Difficulty selling the cloud business held for sale and discontinued operations.
- DroppedRisks Related to Our Business and Operations
our business, prospects or operations. In addition, such events could have a material adverse effect on our co-hosting facilities, particularly any investment or commitments made by us for co-hosting facilities
- DroppedRisks Related to Our Business and Operations
Because the number of Bitcoin awarded for solving a block in the Bitcoin network blockchain continually decreases, miners must invest in increasing processing power to maintain their yield of Bitcoins, which might make Bitcoin mining uneconomical for our customer
Crypto-mining industry risks affecting customers’ ability to continue operating.
- DroppedRisks Related to Our Business and Operations
Intellectual property rights claims may adversely affect the operation of some or all cryptoasset networks
- DroppedRisks Related to Our Industry
AI does not develop to the extent we or our prospective tenants expect, our business, and financial condition may be adversely impacted
- DroppedRisks Related to Our Industry
The price of Bitcoin may be affected by the sale of Bitcoin by other vehicles investing in Bitcoin or tracking Bitcoin markets
- DroppedRisks Related to Our Industry
The lack of regulation of digital asset exchanges which Bitcoin, and other cryptocurrencies, are traded on may expose us to the effects of negative publicity resulting from fraudulent actors in the cryptocurrency space and can adversely affect an investment in the Company
- DroppedRisks Related to Our Industry
Banks and financial institutions may not provide banking services, or may cut off services, to businesses that engage in cryptocurrency-related activities, and turmoil among financial institutions arising from or relating to cryptoassets or in general can materially adversely affect us and our industry
- DroppedRisks Related to Our Industry
provide cryptocurrency-related activities may continue to have difficulties in finding banks and financial institutions willing to provide them services which may decrease the usefulness of cryptocurrencies as a payment system and harm public perception of cryptocurrencies, and could decrease their usefulness
- DroppedRisks Related to Our Industry
The impact of geopolitical and economic events on the supply and demand for cryptoassets is uncertain
Prolonged power outages at facilities, including prior disruptions at Ellendale and Garden City.
- DroppedRisks Related to Our Industry
Governmental actions may have a materially adverse effect on the cryptoasset mining industry as a whole, which would have an adverse effect on our business and results of operations
- DroppedRisks Related to Our Industry
Acceptance and/or widespread use of Bitcoin and other cryptoassets is uncertain
- DroppedRisks Related to Our Industry
It may be illegal now, or in the future, to acquire, own, hold, sell or use Bitcoin or other cryptocurrencies, participate in blockchains or utilize similar Bitcoin assets in one or more countries, the ruling of which would adversely affect our and our customers’ business
- DroppedRisks Related to Our Industry
Bitcoin is subject to halving, which may adversely affect our customers’ ability to continue mining at our facilities
- DroppedRisks Related to Our Industry
We may face risks of Internet disruptions, which could have an adverse effect on the price of Bitcoin and other cryptoassets
- DroppedRisks Related to Our Industry
If a malicious actor or botnet obtains control in excess of 50% of the processing power active on any cryptoasset network, it is possible that such actor or botnet could manipulate the blockchain in a manner that adversely affects an investment in us
- DroppedRisks Related to Our Securities
Our efforts to raise capital is for the purpose of executing on development plans and strategic growth opportunities as they arise; however, holders of our common stock may experience dilution as a result of our sales of newly issued shares of our common stock in such offerings
- DroppedRisks Related to Our Securities
The price of our common stock could decline if there are substantial sales of shares of our common stock, if there is a large number of shares of our common stock available for sale, or if there is the perception that these sales could occur
Cryptoasset price declines reducing customers’ mining activity and facility usage.
- DroppedRisks Related to Our Securities
expect, but are not required, to enter into one or more derivative transactions with respect to our common stock with the investors of the Convertible Notes concurrently with or after the pricing of the Convertible Notes
Uncertainty from an evolving cryptoasset and blockchain-related business model and regulation.
Reworded
- 100% rewrittenRisks Related to Our Business and Operations
Our existing indebtedness arrangements contain several restrictive covenants and events of default that limit our corporate activities
Debt-covenant risk now centers on the May 29, 2026 Revolving Credit Agreement and note indentures, with specified limits on borrowing, liens, distributions, and asset sales.
- 86% rewrittenRisks Related to Our Securities
The capped call transactions may affect the value of the Convertible Notes and our common stock
The capped-call description now provides less detail in this risk about reducing conversion dilution and offsetting excess cash payments.
- 85% rewrittenRisks Related to Our Securities
We have financed much of our strategic growth through our at-the-market (“ATM”) offerings and issuances of our common stock and preferred stock
Financing shifted to the June 2025 ATM: up to $200 million, 15.3 million shares sold, and approximately $196.4 million raised by May 31, 2026.
- 83% rewrittenRisks Related to Our Business and Operations
We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness
The refinancing discussion no longer specifically emphasizes replacing the SMBC Credit Agreement with permanent project financing.
- 81% rewrittenRisks Related to Our Business and Operations
Certain natural disasters or other external events, including climate change or mechanical failures, could harm our business, financial condition, results of operations, cash flows, and prospects
The provided text removes the climate-legislation uncertainty discussion from this risk, which now focuses on operational disruptions and cyber threats.
- 63% rewrittenRisks Related to Our Industry
The use and continued pace of developments in AI are inherently uncertain. Failure by us to keep up with evolving data center requirements and regulatory frameworks for AI, could have a material adverse effect on our business and financial condition
The risk now expressly warns that AI may not develop as APLD or prospective tenants expect.
- 63% rewrittenRisks Related to Our Business and Operations
We have substantially concentrated our operations in the state of North Dakota and, thus, are particularly exposed to the regulatory framework and changes in the regulatory environment, market conditions and natural disasters in that state
APLD now says it operates only in North Dakota while building campuses elsewhere, and updates the revenue period through fiscal 2026.
Was: We have concentrated our operations in the state of North Dakota and, thus, are particularly exposed to the regulatory framework and changes in the regulatory environment, market conditions and natural disasters in that state
- 61% rewrittenRisks Related to Our Securities
The prepaid forward transaction may affect the value of our common stock and may result in unexpected market activity in our common stock
The provided prepaid-forward transaction wording is substantively unchanged, continuing to describe hedging-related short positions and potential stock activity.
- 58% rewrittenRisks Related to Our Industry
There are risks related to technological obsolescence, the vulnerability of the global supply chain to AI and cryptoasset hardware disruption, and our customers’ difficulty in obtaining new hardware which may have a negative effect on our business
Was: There are risks related to technological obsolescence, the vulnerability of the global supply chain to cryptoasset hardware disruption, and our customers’ difficulty in obtaining new hardware which may have a negative effect on our business
- 49% rewrittenRisks Related to Our Business and Operations
We may become subject to regulatory inquiry relating to trading activity and/or short selling strategies in our common stock
- 49% rewrittenRisks Related to Our Business and Operations
Failure to attract, grow and retain a diverse and balanced customer base could harm our business and operating results
Was: Failure to attract, grow and retain a diverse and balanced customer base, including key anchor customers, could harm our business and operating results
- 41% rewrittenRisks Related to Our Business and Operations
We are subject to risks associated with our need for significant electrical power
- 33% rewrittenRisks Related to Our Business and Operations
As we are establishing data centers in areas with lower populations, recruiting and retaining the necessary staff to operate our locations may pose a challenge
- 27% rewrittenRisks Related to Our Business and Operations
Joint ventures, joint ownership arrangements and other projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects
- 23% rewrittenRisks Related to Our Business and Operations
Various actual and potential conflicts of interest may be detrimental to our stockholders
- 22% rewrittenRisks Related to Our Business and Operations
The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected
All 64 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Business and Operations
- 01We may be unable to access sufficient additional capital needed to grow our business
- 02Our level of debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions
- 03Our existing indebtedness arrangements contain several restrictive covenants and events of default that limit our corporate activities100% rewritten
- 04We may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness83% rewritten
- 05We may be unable to complete our data center campuses in a timely manner or within anticipated cost estimatesNew
- 06Delays in lease commencement could adversely affect our financial condition and results of operationsNew
- 07During fiscal year 2026, this business segment was comprised of one customer accounting for 59% of our total revenue from continuing operations. No other customers accounted for more than 10% of revenueNew
- 08During fiscal year 2026, this business segment was comprised of one customer accounting for 25% of our revenue from continuing operations. No other customers accounted for more than 10% of revenueNew
- 09Our consolidated financial statements include the financial results of ChronoScaleNew
- 10internal control over financial reporting, disclosure controls and procedures, audit process, and related accounting judgments may directly affect our consolidated financial statements and our periodic reports filed with the SECNew
- 11Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, operating results, and financial condition
- 12We are subject to a highly evolving regulatory landscape and any adverse changes to certain laws or regulations could adversely affect our customers and our business, prospects or operations
- 13We could incur significant costs related to environmental matters, including from government regulation, private litigation, and existing conditions at some of our properties
- 14Our business depends upon the demand for data centers
- 15Any delays or unexpected costs developing our existing space, developable land and newly acquired properties may delay and harm our growth prospects, future operating results and financial condition
- 16We have substantially concentrated our operations in the state of North Dakota and, thus, are particularly exposed to the regulatory framework and changes in the regulatory environment, market conditions and natural disasters in that state63% rewritten
- 17We may be unable to lease vacant or development space, renew leases, or re-lease space as leases expire
- 18Failure to attract, grow and retain a diverse and balanced customer base could harm our business and operating results49% rewritten
- 19We are continuing to invest in our expansion efforts but may not have sufficient customer demand in the future to realize expected returns on these investments
- 20Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect our business
- 21We are subject to risks associated with our need for significant electrical power41% rewritten
- 22Even if we have additional space available for lease at any one of our data centers, our ability to lease this space to existing or new customers could be constrained by our ability to provide sufficient electrical power
- 23We depend upon third-party suppliers for power, and we are vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market
- 24Any failure of our physical or information technology or operational technology infrastructure or services could lead to significant costs and disruptions
- 25Any disruption of service experienced by certain of our third-party service providers, or our ineffective management of relationships with third-party service providers could harm our business, financial condition, operating results, cash flows, and prospects
- 26If we incorrectly estimate our hosting capacity requirements and related capital expenditures, our results of operations could be adversely affected
- 27We depend on third parties to provide network connectivity to the customers in our data centers and any delays or disruptions in connectivity may materially adversely affect our operating results and cash flow
- 28Certain natural disasters or other external events, including climate change or mechanical failures, could harm our business, financial condition, results of operations, cash flows, and prospects81% rewritten
- 29or other attempts to harm or access our systems. Such disruptions could materially and adversely affect our business and our financial condition, operating results, cash flows, and prospectsNew
- 30Joint ventures, joint ownership arrangements and other projects pose unique challenges and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects27% rewritten
- 31If we fail to effectively manage our growth, our business, financial condition and results of operations could be harmed
- 32Various actual and potential conflicts of interest may be detrimental to our stockholders23% rewritten
- 33We may become subject to regulatory inquiry relating to trading activity and/or short selling strategies in our common stock49% rewritten
- 34We and our third-party providers may be vulnerable to cyberattacks and security breaches that could materially disrupt or compromise our operations, data and results
- 35The loss of any of our management team, our inability to execute an effective succession plan, or our inability to attract and retain qualified personnel, could adversely affect our business
- 36We may become involved in litigation arising in the ordinary course of our business that may materially adversely affect us
- 37Employee disputes or litigation and related unfavorable publicity may negatively affect our future business, financial condition, and operating results
- 38Scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks
- 39We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance
- 40Our customers frequently make advance deposits based on anticipated future usage
- 41We may not be able to compete with other companies, some of which have greater resources and experience
- 42If we cannot adapt to evolving technology or customer demands in a timely and cost-effective manner, our ability to sustain and grow our business may be adversely affected
- 43If one of our customers were to obtain exclusive rights to the technologies we employ across our businesses, our ability to realize significant operating efficiencies could be jeopardized
- 44The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected22% rewritten
- 45We may be exposed to liabilities under the Foreign Corrupt Practices Act (“FCPA”), and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business
- 46As we are establishing data centers in areas with lower populations, recruiting and retaining the necessary staff to operate our locations may pose a challenge33% rewritten
Risks Related to Our Industry
- 47Uncertainty in the global economy and instability within international relations, including changes in governmental policies relating to technology, and any potential downturn in the semiconductor and electronics industries, may negatively impact our business
- 48We are in the process of completing several data center campuses. Fluctuations in long-term interest rates can materially impact the cost of capital required to finance our current and future projects
- 49We depend on significant customers for our data centersNew
- 50The use and continued pace of developments in AI are inherently uncertain. Failure by us to keep up with evolving data center requirements and regulatory frameworks for AI, could have a material adverse effect on our business and financial condition63% rewritten
- 51The development and advancement in the efficiency of AI models presents risks and challenges that may adversely impact our business and operating resultsNew
- 52There are risks related to technological obsolescence, the vulnerability of the global supply chain to AI and cryptoasset hardware disruption, and our customers’ difficulty in obtaining new hardware which may have a negative effect on our business58% rewritten
Risks Related to Our Securities
- 53Our stock price has been volatile and may continue to be volatile in the future; this volatility may affect your ability to, and the price at which you could, sell our common stock
- 54We have financed much of our strategic growth through our at-the-market (“ATM”) offerings and issuances of our common stock and preferred stock85% rewritten
- 55If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, its trading price and volume could decline
- 56We do not expect to declare or pay dividends in the foreseeable future, which may limit the return our shareholders realize on their investment
- 57Provisions in our Articles (as defined below), our Bylaws (as defined below), and Nevada law may discourage a takeover attempt even if a takeover might be beneficial to our stockholders
- 58The rights of holders of our Series E and E-1 Preferred Stock rank senior to the rights of the holders of our common stock
- 59Our ability to redeem shares of Series E and E-1 Preferred Stock may be limited by our available funds, ability to issue the full amount of shares of common stock and applicable federal and Nevada law
- 60The Convertible Notes may adversely affect the market price of our common stock
- 61Conversion of the Convertible Notes will dilute the ownership interest of existing stockholders or may otherwise depress the price of our common stock
- 62The prepaid forward transaction may affect the value of our common stock and may result in unexpected market activity in our common stock61% rewritten
- 63The capped call transactions may affect the value of the Convertible Notes and our common stock86% rewritten
- 64upon any conversion of the Convertible Notes and/or offset any potential cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a capNew
Other Applied Digital 10-Ks
- FY2025 10-K risk factors85 risks
The company relies heavily on a single customer for 93 percent of revenue in fiscal year 2025 and is concentrated in North Dakota data centers. Massive capital needs, debt agreements like the SMBC Credit Agreement, and the construction of Polaris Forge 1 dominate risk exposure. Operations depend entirely on continuous high-voltage power availability and vulnerability to third-party outages.
Filed Jul 30, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.