ChronoScale Holdings Corp

1. Business and Basis of Presentation

Description of the Business

ChronoScale Holdings Corporation (the “Company,” “we,” “our,” or “us”) operates an integrated platform of cloud computing infrastructure and advanced technology solutions. On May 5, 2026, the Company completed a business combination with Applied Digital Cloud Corporation and changed its name from Ekso Bionics Holdings, Inc. to ChronoScale Corporation (“ChronoScale”) (the “Business Combination”). Following the Business Combination, the Company operated through two wholly-owned subsidiaries: Applied Digital Cloud Corporation (“Cloud”) and Ekso Bionics, Inc. and its subsidiaries (“Legacy Ekso”). On July 1, 2026, the Company completed a holding company transaction (the “Holding Company Transaction”) pursuant to which ChronoScale Holdings Corporation became the successor issuer to ChronoScale and the publicly traded parent company. In connection with the Holding Company Transaction, Cloud became a direct wholly-owned subsidiary of ChronoScale Holdings Corporation and changed its name to “ChronoScale Corporation” and ChronoScale became a direct wholly-owned subsidiary of ChronoScale Holdings Corporation, converted from a Nevada corporation to a Nevada limited liability company and changed its name to “ChronoScale Intermediate LLC.” Legacy Ekso is a direct wholly-owned subsidiary of ChronoScale Intermediate LLC. All references to Cloud in these consolidated financial statements refer to Applied Digital Cloud Corporation prior to the Holding Company Transaction and to ChronoScale Corporation following the Holding Company Transaction. The Company is headquartered in Dallas, Texas, and its common stock is listed on the Nasdaq Capital Market under the symbol “CHRN.”

The Company’s cloud business (“the Cloud Business”) provides cloud-based computing services to customers, including artificial intelligence (“AI”) and machine learning (“ML”) developers, by delivering access to high-performance computing infrastructure at third-party colocation facilities. Customers pay a fixed rate for energized space supported by Company-owned equipment. The Company’s platform supports compute-intensive workloads, including AI, ML and high-performance computing (“HPC”), leveraging graphics processing unit (“GPU”)-based infrastructure deployed across multiple United States (“U.S.”) locations.

Legacy Ekso designs, develops and markets exoskeleton technologies that augment human strength, endurance and mobility, with a primary focus on healthcare applications such as rehabilitation and mobility solutions for individuals with physical impairments.

Following the Business Combination, the Company has shifted focus to its Cloud Business operations. The Board of Directors of the Company has approved a plan to divest the Legacy Ekso Business, which has been designated as “held for sale” as of May 31, 2026, with completion expected during fiscal year 2027. As a result, the Company expects to operate primarily as a cloud services provider supporting data-intensive and AI-driven workloads, while completing the divestiture of its Legacy Ekso operations.

Basis of Presentation

The accompanying financial statements present the consolidated financial position, results of operations and cash flows of the Company as a standalone reporting entity. The financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and reflect the consolidated operations of the Company and its wholly-owned subsidiaries for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation.

The Company evaluates events and transactions that occur after the balance sheet date for potential recognition or disclosure in the financial statements in accordance with U.S. GAAP.

The Company classifies its assets and liabilities between current and non-current based on the expected timing of realization or settlement, generally considering a one-year period from the balance sheet date. Revenue and expenses are recognized in the periods in which they are earned or incurred, respectively, in accordance with U.S. GAAP.

Unless otherwise indicated, all dollar and share amounts included in these notes to the consolidated financial statements are in thousands.

Prior to the Business Combination, Cloud existed and functioned as a part of the consolidated business of Applied Digital Corporation, a Nevada corporation (“Applied Parent"). For the periods prior to the Business Combination, the financial statements are prepared on a standalone basis and are derived from Applied Parent's historical accounting records. The Business Combination was accounted for as a reverse acquisition of Ekso Bionics Holdings, Inc. by Cloud as the accounting acquirer. Accordingly, the historical financial statements presented herein are those of ChronoScale Holdings Corporation, the accounting acquirer, and are presented as a continuation of ChronoScale Holdings Corporation financial operations. The operations of Ekso Bionics Holdings, Inc. are consolidated only from the closing date of the Business Combination forward. The financial statements may not be indicative of the Company's future performance and do not necessarily reflect what financial position, results of operations and cash flows would have been had it operated as a standalone business for the period prior to the Business Combination.

The consolidated statement of operations includes all revenues, costs, and expenses directly attributable to the Company including allocation of expense associated with payroll, stock-based compensation and income taxes. Allocations are based on direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of headcount or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the period prior to the Business Combination. The allocated amounts are not necessarily indicative of the amounts that would be incurred or realized had the Company operated as a separate standalone entity during the period prior to the Business Combination. Actual costs the Company may have incurred if it were a standalone entity during the period prior to the Business Combination would depend on a number of factors, including whether functions were outsourced or performed by employees and strategic decisions made in areas of selling, general and administrative expense and infrastructure.

Income tax amounts in the consolidated financial statements have been calculated on a separate return method and presented as if operations were separate taxpayers in the respective jurisdictions for the period prior to the Business Combination.

The consolidated balance sheet includes assets and liabilities for the period prior to the Business Combination that have been determined to be specifically identifiable or otherwise attributable to the Company. Cash includes cash held at legal entities within the Company.

2. Significant Accounting Policies

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet, and the reported amounts of revenue and expenses during the reporting periods. The Company evaluates the estimates on an on-going basis. Although estimates are based on historical facts and various other assumptions that the Company believes are reasonable, actual results could differ from those estimates. For the Company, these estimates include, but are not limited to, the fair value of intangible and tangible assets acquired and liabilities assumed in business combinations, the valuation of warrants, convertible preferred stock, and employee and non-employee director equity awards, accounting for leases, useful lives assigned to long-lived assets, and contingencies.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which when capable of being distinct, are accounted for as separate performance obligations. In accordance with ASC 606, revenue recognition is evaluated based on the following five-step approach, including (i) identification of the contract; (ii) identification of performance obligations; (iii) determination of the transaction price; (iv) allocation of the transaction price; and (v) recognition of revenue.

The Company provides managed cloud infrastructure services to customers, such as AI and ML developers, to help develop their advanced products. Customers pay a fixed rate to the Company in exchange for managed cloud services supported by Company-provided equipment. Revenues are recognized based on the fixed rate, net of any credits for non-performance, over the term of the agreements.

Accounts Receivable

Accounts receivable are primarily comprised of billed and unbilled receivables for which the Company has an unconditional right to consideration and the performance obligations have been satisfied. When applicable, the Company recognizes an allowance for the remaining lifetime expected credit losses based on management’s expectation of collectability. The Company bases its estimate on multiple factors, including historical experience with bad debts, the Company's relationship with its customers and their credit quality, the aging of respective asset balances, current macroeconomic conditions and management’s expectations of conditions in the future. The Company writes off accounts receivable in the period when the likelihood of collection of a balance is considered remote. The Company hasnot experienced material losses related to accounts receivable during the years ended May 31, 2026. However, during the year ended May 31, 2025, the Company recorded $9,508 in bad debt expense related to the specific identification of an uncollectible balance from a single counterparty (this counterparty is no longer a customer of the Company), which is included as a component of “Selling, general and administrative expense” in the consolidated statement of operations. The Company's accounts receivable balances, net of allowances, as of May 31, 2026 and 2025 were $12,542 and $3,788, respectively.

Concentration of Credit Risk

The Company extends credit to customers in the normal course of business. Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the consolidated financial statements. The Company does not require collateral from its customers to secure accounts receivable.

The Company's accounts receivable as of May 31, 2026 are derived from revenue earned from a single customer. For the year ended May 31, 2026, this customer accounted for approximately 100% of the Company's revenues and accounts receivable. The Company expects that one or a limited number of its customers will continue to account for a high percentage of its revenue for the foreseeable future.

The Company monitors the credit quality of its customer on an ongoing basis and has not historically experienced any significant losses related to receivables, except for the one-off uncollectible balance identified during the year ended May 31, 2025; refer to the Accounts Receivable section above for more information. However, the Company's financial condition, results of operations, and cash flows are dependent upon the continued relationship with, and financial condition of, this customer. In the event that this customer chooses to terminate or not renew its contract with Cloud, the Company's operating results would suffer dramatically until it obtains replacement customers, which could result in a material adverse effect on the Company's business, results of operations and future prospects.

Segments

For the year ended May 31, 2026, the Company has identifiedone operating segment, the Cloud Business, which has also been determined to be the Company’s primary reportable business segment. Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Operating Decision Maker (“CODM”), which is the Company’s Chief Executive Officer. The Company's CODM evaluates performance and makes operating decisions primarily based on revenue and profit (loss).

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets (see “Note 4 - Property and Equipment”). Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is included in earnings. Leasehold improvements and assets recorded in association with our leases are amortized over the shorter of the expected lease term or the estimated useful life of the asset. Construction in progress represents assets received but not placed into service as of May 31, 2026 and May 31, 2025.

Goodwill

The Company records goodwill when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired. The Company performs an annual impairment assessment, or more frequently if indicators of potential impairment exist, which includes evaluating qualitative and quantitative factors to assess the likelihood of an impairment of goodwill. Such indicators include, but not limited to, material departures from projected sales volume, deteriorating gross margins, and uncertainties regarding continued commercialization as a result of changing business strategies.

Impairment or Disposal of Long-Lived Assets

Our long-lived assets are reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We also evaluate the period of depreciation and amortization of long-lived assets to determine whether events or circumstances warrant revised estimates of useful lives. When indicators of impairment are present, we determine the recoverability of our long-lived assets by comparing the carrying value of our long-lived assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the estimated future undiscounted cash flows demonstrate the long-lived assets are not recoverable, an impairment loss would be calculated based on the excess of the carrying amounts of the long-lived assets over their fair value. The Company’s estimates of fair values are based on the best information available and require the use of estimates, judgments, and projections.

Lease Accounting

The Company determines whether an arrangement contains a lease at the inception of the arrangement. The Company leases data center and office space under operating leases and equipment under both financing and operating leases. If a lease is determined to exist, the term of such lease is assessed based on the commencement date, which is the date on which the underlying asset is made available for the Company’s use by the lessor. For leases with renewal periods or early terminations at the Company’s option, the Company determines the expected lease term based on whether the exercise of any renewal option or early termination is reasonably certain at the inception of the lease.

At the commencement date of a lease, we recognize a right-of-use asset representing our right to use the underlying asset during the lease term and a lease liability for the present value of the future lease payments. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments.

For operating leases, we recognize fixed lease expense on a straight-line basis over the lease term. For finance leases, we recognize amortization expense on the right-of-use asset and interest expense on the lease liability over the lease term. Variable lease costs are recognized as incurred. Assets and liabilities related to finance leases are presented separately from those relating to operating leases on our consolidated balance sheets. We do not record lease contracts with a term of 12 months or less on our consolidated balance sheets. We have also elected for all leases to not separate lease and non-lease components.

Warrant Valuation

The Company generally accounts for warrants issued in connection with equity financings as a component of equity, unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that it may need to settle the warrants in cash.

Where there is a possibility that the Company may have to settle warrants in cash, it estimates the fair value of the issued warrants as a liability at each reporting date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statements of operations and comprehensive loss. The fair values of these warrants have been determined using the Black-Scholes option-pricing model (the “Black-Scholes Model”) and the Binomial Lattice model (the “Lattice Model”). The Black-Scholes Model requires inputs, such as the expected volatility, expected term, exercise price, risk-free interest rate, and the value of the underlying security. The Lattice Model provides for assumptions regarding expected volatility, expected term, exercise price, risk-free interest rates, the value of the underlying security, and the probability of and likely timing of a specific event within the period to maturity. These values are subject to a significant degree of the Company's judgment. In addition to the aforementioned inputs, the Company’s common stock price represents a significant input that affects the valuation of the warrants.

Assets Held For Sale

The Company generally considers assets to be held for sale when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) management has initiated an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group, (iv) the sale of the property within one year is considered probable, (v) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value and (vi) significant changes to the plan to sell are not expected. Property classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell in accordance with ASC 360, Property, Plant and Equipment - Impairment or Disposal of Long-Lived Assets. Upon the Business Combination date, and as of May 31, 2026, the Company deemed its Legacy Ekso Business met the held for sale criteria and was classified as such on the consolidated balance sheet as of May 31, 2026.

Discontinued Operations

The Company deems it appropriate to classify a business as a discontinued operation if the related disposal group meets all of the following criteria: (i) the disposal group is a component of the Company, (ii) the component meets the held for sale criteria, and (iii) the disposal of the component represents a strategic shift that has a major effect on the Company's operations and financial results. However, a business that is classified as held for sale upon acquisition qualifies for discontinued operations presentation regardless of whether the disposal represents a strategic shift that has (or will have) a major effect on the Company's operations and financial results.

On May 5, 2026, in connection with the Business Combination, the Company classified the Legacy Ekso Business as held for sale. Because the Legacy Ekso Business met the criteria to be classified as "held for sale" upon acquisition, the business qualifies for discontinued operations presentation in accordance with ASC 205-20, Discontinued Operations. Accordingly, the Company has presented the assets and liabilities of the Legacy Ekso Business separately as current assets and liabilities held for sale on its consolidated balance sheets and the operating results of the Legacy Ekso Business separately as net loss from discontinued operations in its consolidated statements of operations as of and for the year ended May 31, 2026, respectively.

Income Taxes

Income tax amounts in the consolidated financial statements have been calculated on a separate return method and presented as if operations were separate taxpayers in the respective jurisdictions. Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the future tax consequences attributable to differences that exist between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as tax attributes such as net operating loss, capital loss and tax credits carryforwards on a taxing jurisdiction basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are expected, more likely than not, to be realized in the future. A tax benefit from an uncertain income tax position may be recognized in the financial statements only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority's widely understood administrative practices and precedents. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Any subsequent changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

ASC Topic 740, Income Taxes, (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure, and transition.

The Company's policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and penalties as components of income tax expense.

Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements.

For further information on income taxes, see “Note 9 - Income Taxes” below.

Stock-based Compensation

The Company measures stock-based compensation expense for restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and performance stock units (“PSUs”) made to employees and non-employee directors based on the Company’s closing stock price on the date of grant and recognizes the value on a straight-line basis over the requisite service periods of the awards.

The Company records compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award. For awards with performance-based conditions, at the point that it becomes probable that the performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based condition is probable based on the expected satisfaction of the performance conditions as of the reporting date. The amount of stock-based compensation expense recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. The Company accounts for forfeitures as they occur.

Liquidity

As of May 31, 2026, the Company had cash of $9,664 and a working capital deficit of $42,644. Historically, the Company has incurred losses and has relied on Applied Parent to provide financing for its operations. In connection with the Business Combination, the Company raised $15,750 in equity funding (gross, before deducting Business Combination and other related expenses).

Subsequent to the fiscal year ended May 31, 2026, the Company entered into the Grid Note (as defined below), which made available to the Company an aggregate principal amount up to $100,000, reduced by the value of any of our liabilities guaranteed by the lender and a reserve amount determined by the lender. Based on the current forecast, approximately $93,000 of undrawn capacity under the Grid Note is available to the Company. Applied Parent has agreed not to exercise its demand right under the Grid Note prior to August 20, 2027.

Management prepared a cash flow forecast covering the period through August 31, 2027, which includes expected cash flows from operations and known and reasonably knowable contractual obligations, including debt principal and interest payments and operating and finance lease payments. Based on this forecast, the Company's available liquidity, considering of cash on hand and available liquidity under the Grid Note, is expected to exceed forecasted cash commitments by approximately $61,016 during the look-forward period.

Based on this analysis, the Company believes the company has sufficient liquidity to meet its obligations as they become due for at least one year after the issuance of the consolidated financial statements. Accordingly, management concluded that substantial doubt about the Company's ability to continue as a going concern is not raised.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with prospective or retrospective application permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statement presentation and disclosures and plans to adopt this pronouncement beginning with its fiscal year beginning June 1, 2027.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with U.S. GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and plans to adopt this pronouncement beginning with its fiscal year beginning June 1, 2028.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments in this update are to make other incremental improvements to U.S. GAAP and facilitate codification updates for a broad range of Topics arising from technical corrections, unintended application of the codification, clarifications, and other minor improvements. The resulting amendments are collectively referred to as Codification improvements. ASU 2025-12 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact the adoption of ASU 2025-12 may have on the Company’s consolidated financial statements.

3. Business Combinations

Ekso Bionics Holdings, Inc.

On May 5, 2026, the Company completed the Business Combination contemplated by the Contribution and Exchange Agreement. At the Closing, APLD ChronoScale HoldCo LLC, a wholly-owned subsidiary of APLD Intermediate HoldCo LLC (the “Contributor”), transferred to the Company all of its right, title and interest in 1.2 shares of common stock of Cloud, representing 100% of the issued and outstanding equity interests of Applied Digital Cloud Corporation, in exchange for 138,217 newly issued shares of common stock of the Company. As a result of the Business Combination, Cloud became a direct, wholly-owned subsidiary of the Company. Following the consummation of the Applied Parent PIPE Investment and the closing of the Business Combination, Applied Parent and Contributor collectively beneficially owned approximately 97% of the outstanding common stock of the Company and the legacy Ekso shareholders owned approximately 3% of the Company’s outstanding common stock. Based on the relative voting rights and ownership interests following the Business Combination, Cloud was determined to be the accounting acquirer and the transaction was accounted for as a reverse acquisition.

Holding Company Transaction

On July 1, 2026, the Company completed the Holding Company Transaction pursuant to which ChronoScale Holdings Corporation became the successor issuer to ChronoScale and the publicly traded parent company, and Applied Digital Cloud Corporation became a direct wholly-owned subsidiary of ChronoScale Holdings Corporation and was renamed “ChronoScale Corporation.” All references to “Cloud” following the Holding Company Transaction refer to ChronoScale Corporation.

The aggregate purchase consideration in the Business Combination was $57,623, which was comprised of the following:

The fair value of the common stock, preferred stock, and assumed restricted stock units included in the purchase consideration was estimated based on our $13.22 closing stock price on the Business Combination acquisition date.

In connection with the Business Combination, the Company assumed certain equity awards. The portion of these awards attributable to pre-combination service, valued at $1,080, was included in the total purchase price. The remaining compensation expense for awards requiring post-combination service will be recognized over the respective awards' remaining requisite service period.

The acquisition-related costs were $5,363, and were recorded in selling, general and administrative expense in the consolidated statements of operations during the year ended May 31, 2026.

The preliminary fair values of assets acquired and liabilities assumed on the Business Combination acquisition date are summarized as follows:

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is expected to be deductible for tax purposes. Goodwill is entirely attributable to the expected synergies and economic benefits associated with the access to public markets resulting from the Business Combination transaction, rather than the Legacy Ekso Business which is classified as held for sale and discontinued operations as of May 31, 2026. There were no changes to goodwill in the period between the Business Combination acquisition date and May 31, 2026.

The acquired assets and assumed liabilities were recorded at their estimated fair values, which are subject to change during the measurement period, which is up to one year from the date of acquisition. Assets and liabilities held for sale were recorded at their estimated fair values less costs to sell, as presented in the following table:

The fair value of the assumed debt was determined based on a valuation performed by an independent third-party valuation specialist in connection with the acquisition.

The fair value of acquired intangible assets consists of legacy Ekso's developed technology and trade name. The valuations of the developed technology and trade name were performed by a third-party valuation specialist using the relief-from-royalty method. The following table presents the amounts allocated to the intangible assets identified as of the date of acquisition and their estimated useful lives:

The following unaudited pro forma combined financial information presents the combined results of Cloud and Ekso Bionics Holdings, Inc. as if the Business Combination had occurred on June 1, 2024, the beginning of the comparable prior annual reporting period:

The unaudited pro forma combined financial information has been derived from the historical financial information of Cloud and Ekso Bionics Holdings, Inc. and reflects pro forma adjustments for the reversal of historical amortization expense related to intangible assets.

The unaudited pro forma combined financial information does not necessarily reflect what the combined company’s financial condition or results of operations would have been had the Business Combination and related financing transactions been completed as of June 1, 2024. The unaudited pro forma combined financial information is presented for informational purposes only and may not be indicative of the Company’s future financial condition or results of operations. As Legacy Ekso assets qualify as held for sale and discontinued operations, an adjustment was not recorded for amortization expense within the unaudited pro forma combined financial information.

4. Property and Equipment

Property and equipment, net consisted of the following as of May 31, 2026 and 2025:

Depreciation expense totaled $5,725 and $1,932 for the fiscal years ended May 31, 2026 and 2025, respectively, and was included as a component of cost of revenues and selling, general and administrative expense in the consolidated statements of operations.

5. Revenue from Contracts with Customers

Below is a summary of the Company’s revenue concentration by major customer for the fiscal years ended May 31, 2026 and May 31, 2025:

For the year ended May 31, 2026, the Company's revenue is concentrated with a single customer, Together AI, which utilizes GPU capacity across all three of the Company’s third-party colocation centers, pursuant to a master terms of service agreement originally entered into in December 2023 (as amended to date, the “Together AI Agreement”). The Together AI Agreement was most recently renewed effective March 1, 2026 for an initial term of twelve months, after which it automatically renews for successive sixty-day periods unless either party provides prior written notice of termination. Pursuant to the terms of the Together AI Agreement, the Company provides Together AI with access to dedicated NVIDIA H100 GPU infrastructure across multiple clusters totaling approximately 6.1 GPUs. The Company's services are priced at a fixed, per-GPU per-hour rate which is billed and paid monthly. In the Company's industry, it is common to have a concentrated number of customers and relatively short-term contracts with customers (typically, on a month-to-month or annual basis). The loss of, or a significant reduction in services provided to, this customer could have a material impact on the Company's financial position, result of operations, and cash flows.

Deferred Revenue

Changes in the Company's deferred revenue balances for the fiscal years ended May 31, 2026 and May 31, 2025, respectively, are shown in the following table:

(1) During the year ended May 31, 2025, this adjustment represents deferred revenue associated with a contract that was cancelled during the 2024 fiscal year and repaid during the 2025 fiscal year.

6. Discontinued Operations

On May 5, 2026, in connection with the Business Combination, the Company classified the Legacy Ekso Business as held for sale. Because the Legacy Ekso Business met the criteria to be classified as "held for sale" upon acquisition, the business qualifies for discontinued operations presentation in accordance with ASC 205-20, Discontinued Operations. As such, the Company reported the Legacy Ekso Business as discontinued operations for the fiscal year ended May 31, 2026. The Company expects the sale of the Legacy Ekso Business to occur within 12 months from the date it met the held for sale criteria.

The financial results of the Legacy Ekso Business are presented as net loss from discontinued operations on the consolidated statements of operations. The results of operations included within discontinued operations represent the period from May 5, 2026 through May 31, 2026 and include directly attributable revenues and expenses. Corporate overhead costs and other general administrative expenses that are not directly attributable to the operations of the discontinued component have not been allocated to discontinued operations. The following table presents the major components of the financial results of the Legacy Ekso Business for the periods presented.

As of May 31, 2026, the assets and liabilities of the Legacy Ekso Business are classified as current in the Company's 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 consolidated balance sheets for the periods presented:

The following table summarizes the net cash flows from discontinued operations of the Legacy Ekso Business for the years ended May 31, 2026, and May 31, 2025:

7. Related Party Transactions

The Company has transactions with related parties, primarily with its parent entity, Applied Parent. As a result of its ownership interest and control, Applied Parent is considered a related party.

Management Advisory and Corporate Services Agreement

In connection with the business combination, the Company entered into a Management Advisory and Corporate Services Agreement (the “Services Agreement”) and related commercial arrangements with Applied Parent, pursuant to which Applied Parent will provide certain services to the Company. The Services Agreement provides management advisory and corporate services to the Company including financial, managerial, operational, strategic, financing, acquisition, and divestiture-related advice. The arrangements generally have an initial term of approximatelyone year and are subject to automatic monthly renewal provisions unless terminated by either party in accordance with the terms of the Services

Agreement. The Company compensates Applied Parent for these services through a combination of management services fees based on a percentage of revenue and fixed fees for corporate and administrative services. The Company may also reimburse Applied Parent for certain costs incurred on its behalf.

Expenses (and, where applicable, income) associated with these arrangements are recognized as the related services are rendered. The Company believes that fees charged under the Services Agreement and related arrangements are consistent with market terms.

Related Party Transactions and Balances

The Consolidated Financial Statements presented for the periods prior to the Business Combination are prepared on a standalone basis and are derived from the consolidated financial statements and accounting records of Applied Parent, as relevant. For purposes of preparing the Consolidated Financial Statements on a “carve-out” basis, Management allocated a portion of Applied Parent corporate expenses to the Company. The Parent provides shared services, utilizes cash pooling in situations where the Parent pays for an expense associated with the Company. Shared services consist, but are not limited to, financing, payroll, stock-based compensation, and other expenses that are either specifically identifiable or clearly applicable to the Company. These expenses have been allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of headcount or other allocation methodologies considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented. Management considers that such allocations have been made on a reasonable basis; however, these allocations may not be indicative of the actual expense that would have been incurred had the Company operated as an independent, stand-alone public entity.

As of the balance sheet dates, amounts due to or from related parties for the period ending May 31, 2026 and 2025 are considered immaterial.

The Company identified Applied Parent as a related party based on its controlling ownership interest. Based on a review of contractual arrangements and Directors’ and Officers’ questionnaires, the Company did not identify any reportable related party transactions other than those with Applied Parent. Refer to Note 10. Stockholders' Equity – Contributions from Applied Parent for additional information regarding transactions with Applied Parent.

The Company did not identify any additional related party arrangements, including loans, guarantees, or transactions with directors, officers, or their immediate family members.

8. Debt

B. Riley Promissory Note

On May 5, 2026, in connection with the Business Combination, the Company assumed a Secured Promissory Note and Security Agreement (the “B. Riley Promissory Note”) by and between Legacy Ekso and B. Riley Commercial Capital, LLC (“B. Riley”) as lender. The B. Riley Promissory Note provides for a secured term loan in an aggregate principal amount of up to $2,000. The loan matures on the earlier of the receipt of at least $2,400 in net proceeds from the sale of the equity interests of the Company from new equity investors (a “Qualified Financing”), or September 14, 2026 (the “Maturity Date”). The Company has received a waiver under the B. Riley Promissory Note such that the Business Combination pursuant to the Contribution and Exchange Agreement dated as of February 15, 2026 and certain related transactions, such as the proposed financing that occurred on May 5, 2026, do not constitute an Event of Default (as defined under the B. Riley Promissory Note). The proposed financing, or the May 2026 APLD Parent PIPE Investment, is described in Note 10. Stockholder's Equity — May 2026 APLD Parent PIPE Investment.

In connection with the Business Combination, the B. Riley Promissory Note was recorded at its estimated acquisition-date fair value of $2,239, in accordance with ASC 805. As a result of this fair value measurement, all unamortized debt issuance costs and any debt discount previously recorded by Legacy Ekso were eliminated. The difference between the fair value and the related principal amount and other expected payments (as described below) of the B. Riley Promissory Note represents the new debt discount, which is accreted to interest expense over the remaining life of the B. Riley Promissory Note using the effective interest method.

Borrowings under the B. Riley Promissory Note bear interest at the rate of 10% per annum, which shall be payable in full on the Maturity Date. On the Maturity Date, the Company shall pay to B. Riley an exit fee in the amount of 10% of the original principal amount of the loan, which shall in the aggregate be $200 (the “Exit Fee”). The Company may prepay the obligations under the B. Riley Promissory Note at any time in whole or in part. In connection with such prepayment, the Company must pay all accrued but unpaid interest on such portion of the principal prepaid, all interest that would have accrued through the Maturity Date on such principal amount prepaid and the portion of the Exit Fee applicable to such principal amount prepaid. B. Riley may elect to convert the obligations under the B. Riley Promissory Note, including the principal, interest, and Exit Fee, into equity securities of the Company in connection with a Qualified Financing at the purchase price per share paid by the lead investor thereunder.

The B. Riley Promissory Note also contains customary affirmative and negative covenants, including negative covenants limiting the ability of the Company and the Subsidiary to, among other things, incur debt, grant liens, dispose of assets, and make certain restricted payments, in each case, subject to limitations and exceptions set forth in the B. Riley Promissory Note. As of May 31, 2026, the Company was compliant with all covenants.

The following table presents the principal amount, Exit Fee and expected interest payment, debt discount, and carrying value of the Company's B. Riley Promissory Note as of May 31, 2026, which was classified as current:

The effective interest rate for the period from May 5, 2026 through May 31, 2026 was 19.1%. Since the Exit Fee is mandatory, it was included in the cash flows used to apply the effective interest method and will result in an additional liability of $200 upon loan repayment. The following table sets forth the total interest expense recognized for the year ended May 31, 2026 (from May 5, 2026 to May 31, 2026):

As of May 31, 2026, the B. Riley Promissory Note had accrued interest of $14.

The Company evaluated the B. Riley Promissory Note and determined that certain redemption features met the definition of an embedded derivative liability that are required to be bifurcated from the host instrument. However, since the conversion option did not include a discount on the price per share or have a fixed conversion price, and the full interest and Exit Fee are guaranteed regardless of the timing of the event, the fair value of the compound embedded derivative was determined to have no value. Therefore, no derivative liability was recorded.

Parker Hannifin Promissory Note

On May 5, 2026, in connection with the Business Combination, the Company assumed an unsecured, subordinated promissory note (the “Parker Hannifin Promissory Note”) issued to Parker Hannifin Corporation (“Parker”) by Legacy Ekso, which carried an outstanding principal of $1,875. The Parker Hannifin Promissory Note, which is subordinate to the B. Riley Promissory Note, bears no interest with principal payable in equal installments due on the last day of each calendar quarter, and matures on September 30, 2027.

As part of the Business Combination, the Parker Hannifin Promissory Note was recorded at its estimated acquisition-date fair value of $1,571 in accordance with ASC 805. As a result of this fair value measurement, all unamortized debt discount previously recorded by Legacy Ekso was eliminated. The fair value as part of the Business Combination was estimated using a discounted cash flow analysis, based on the scheduled principal payments and a discount rate reflecting the Parker Hannifin Promissory Note's subordinated status and the Company's credit risk. The difference between the fair value and the principal amount of the Parker Hannifin Promissory Note creates a debt discount, which is accreted to interest expense over the remaining term of the Parker Hannifin Promissory Note using the effective interest method. The accretion of the debt discount resulted in interest expense of $27 and an effective interest rate of 22.7% for the period from May 5, 2026 to May 31, 2026.

The Parker Hannifin Promissory Note, upon the occurrence of an event of default, allows for the levying of interest equal to the lesser of (a)5% per annum and (b) the maximum interest rate permitted under applicable law on the then entire outstanding principal balance, and also for the acceleration of all outstanding liabilities and obligations, making them immediately payable. Under the terms of the Parker Hannifin Promissory Note, the following occurrences constitute a default, and could, upon written notice or declaration by Parker, allow for the levying of interest and or the acceleration of principal outstanding: (i) failure to pay any amount of the principal when due and payable, (ii) the dissolution of the Company (including the declaration of bankruptcy), and (iii) the acquisition of the Company by another entity or the sale of substantially all of its assets to another entity.

The following table presents scheduled principal payments of the Company's Parker Hannifin Promissory Note as of May 31, 2026:

Simple Agreement for Future Equity

During the fiscal year ended May 31, 2025, Cloud, which at the time was a wholly-owned subsidiary of Applied Parent, entered intotwo Simple Agreements for Future Equity (“SAFE”) agreements totaling $12,000 with an investor (the “Investor”).

The SAFE agreements were accounted in accordance with ASC 480: Distinguishing Liabilities from Equity. Per the SAFE agreements, as the underlying share class has not been issued yet and as such, equity classification cannot be determined based on redemption rights, these agreements were classified as liabilities and included in long-term debt at their face value on the Company’s consolidated balance sheet as of May 31, 2025.

The debt liability related to this SAFE was subsequently transferred from the Company to Applied Parent prior to the consummation of the Business Combination on May 5, 2026. As a result, there is no debt liability, related to this SAFE, on the Company's consolidated balance sheet as of May 31, 2026.

9. Income Taxes

The components of consolidated income before taxes from continuing operations were as follows:

Income tax expense from continuing operations for the fiscal years ended May 31, 2026 and 2025 was $0.

Beginning in the fiscal year ended May 31, 2026, the Company adopted ASU 2023-09 prospectively. A reconciliation of the statutory income tax rate from continuing operations to the Company's effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended May 31, 2026 is as follows:

The following table reconciles the statutory rate to the Company's effective tax rate for the fiscal year ended May 31, 2025:

Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the years ended May 31, 2026 and 2025 was immaterial.

Deferred income taxes reflect the temporary differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts utilized for tax purposes. The primary components of the temporary differences that gave rise to the Company's deferred tax assets and liabilities for the fiscal years ended May 31, 2026 and 2025 are as follows:

As of May 31, 2026, the deferred tax assets, deferred tax liabilities, and valuation allowance depicted in the table above, include $63,142 of deferred tax assets, $1,528 of deferred tax liabilities, and $61,614 of related valuation allowances associated with discontinued operations on the consolidated balance sheet.

The Company had $386,571 and $172,000 of federal and state tax net operating losses as of May 31, 2026 and 2025, respectively. As of May 31, 2026, $386,571 is available indefinitely to offset future income of the Company.

A valuation allowance is provided when it is more likely than not that some portion or the entire net deferred tax asset will not be realized. The Company has recorded an increase in the valuation allowance of $13,293 as of May 31, 2026. The Company has provided a valuation allowance for the portion of the deferred tax assets that it has determined are not more likely than not to be recognized.

The valuation allowance is primarily attributable to deferred tax assets for net operating losses that management believes are more likely than not to expire prior to being realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income of the appropriate character (i.e., capital or ordinary) during the period in which the temporary differences become deductible. Management considers, among other things, the scheduled reversals of deferred tax liabilities and the history of positive taxable income in evaluating the realizability of the deferred tax assets. Management believes that it is not likely that the results of future operations will generate sufficient taxable income to realize its deferred tax assets. Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership, including a sale of the Company or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards that could be used annually to offset future taxable income.

The Company recognized $1,754 of unrecognized tax benefits for the year ended May 31, 2026. The Company didnot have any unrecognized tax benefits for the year ended May 31, 2025. The Company recognizes interest expense related to unrecognized tax benefits in income tax expense. The Company did not have any interest expense or expense for penalties related to unrecognized tax benefits for the reported periods. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended May 31, 2025 and 2026, were as follows:

The Company is subject to U.S. federal and state income tax examinations. Tax years ended May 31, 2023 through May 31, 2026 are open to examination by the major taxing jurisdictions to which the Company is subject, as carryforward attributes generated in these years may still be adjusted upon examination by the Internal Revenue Service ("IRS") or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other taxing jurisdictions for any tax years.

10. Stockholders' Equity

Summary

The Company’s authorized capital stock as of May 31, 2026 consisted of 290,000 shares of common stock. As of May 31, 2026, there were 145,212 shares of common stock issued and outstanding.

Common Stock

The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as the Board of Directors may determine. Holders of common stock are entitled toone vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting for the election of directors. The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding share of common stock is duly and validly issued, fully paid, and non-assessable.

May 2026 APLD Parent PIPE Investment

On May 1, 2026, in connection with, and as a condition to the Business Combination Closing, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Applied Parent (the “APLD Parent PIPE Investment”), pursuant to which the Company agreed to sell and issue to Applied Parent 1,311 shares of Common Stock (the “Private Placement Shares”). The Private Placement Shares were sold in the APLD Parent PIPE Investment at an offering price of $12.01 per share, the closing price of the Common Stock on April 30, 2026, the date immediately preceding the date of execution of the Securities Purchase Agreement, for gross proceeds of approximately $15,750. The closing of the APLD Parent PIPE Investment took place on May 5, 2026, immediately prior to the Business Combination Closing.

Lake Street Capital Markets, LLC (the “Placement Agent”) served as the Company’s exclusive placement agent in connection with the APLD Parent PIPE Investment. As compensation for the services provided by the Placement Agent in the APLD Parent PIPE Investment, the Company paid the Placement Agent a cash fee equal to 5.0% of the aggregate gross proceeds raised in the APLD Parent PIPE Investment, or approximately $750. The Company received net proceeds of approximately $15,000, after deducting placement agent fees and offering expenses paid by the Company. The Company is using the net proceeds from the May 2026 APLD Parent PIPE Investment for working capital and general corporate purposes.

Contributions from Applied Parent

The historical financial statements of the Company, prior to the Business Combination, have been prepared on a standalone basis and were derived from the consolidated financial statements and accounting records of Applied Parent, inclusive of certain allocations of assets, liabilities, and costs from Applied Parent. Because these allocations have no history nor expectation of being settled in cash, these allocations were treated as contributions from Applied Parent in the consolidated statements of temporary equity and stockholders' equity.

11. Warrants

In connection with the Business Combination on May 5, 2026, the Company assumed Legacy Ekso's outstanding warrants, which entitle holders to purchase shares of the Company's common stock at predetermined exercise prices.

Warrants outstanding as of May 31, 2026 and May 5, 2026 (as a result of the Business Combination, there were no comparable balances as of May 31, 2025) were as follows:

On May 11, 2026,700 warrants were exercised. The weighted-average exercise price of the warrants outstanding as of May 31, 2026 was $9.19.

January 2026 Warrants

In January 2026, Legacy Ekso issued warrants to purchase up to an aggregate of 356 shares of the Company's common stock at an exercise price of $8.22 per share (the “January 2026 Private Placement Warrants”).The January 2026 Private Placement Warrants were assumed in connection with the Business Combination. Each January 2026 Private Placement Warrant was exercisable starting on July 22, 2026, subject to certain conditions set forth in the January 2026 Private Placement Warrants, including that the holder does not at the time of such exercise hold any shares of the Company’s Series B Convertible Preferred Stock (“Series B Preferred Stock”) or the underlying shares of the Company’s common stock.

On January 22, 2026, in connection with the January 2026 Private Placement, the Company issued to Lake Street Capital Markets, LLC (“Lake Street”) the warrants to purchase up to 14 shares of the Company's common stock, at an exercise price equal to $8.22 per share (the “January 2026 Placement Agent Warrant”), in substantially the same form as the January 2026 Private Placement Warrants. The January 2026 Placement Agent Warrant was assumed in connection with the Business Combination.

The January 2026 Private Placement Warrants and the January 2026 Placement Agent Warrant are classified as warrant liabilities due to not being indexed to the Company's common stock. In connection with the Business Combination, these warrant liabilities were measured at fair value upon the Business Combination acquisition date and are remeasured to fair value at each reporting date using certain estimated inputs, which are classified within Level 3 of the fair value hierarchy. The following assumptions were used in the valuations to measure the fair value of the January 2026 Private Placement Warrants and the January 2026 Placement Agent Warrant:

January 2026 Private Placement Warrants and Placement Agent Warrants

October 2025 Warrants

In October 2025, Legacy Ekso issued the October 2025 Placement Agent Warrants, exercisable for up to 15 shares of the Company’s common stock at an exercise price of $4.81 per share (the "October 2025 Placement Agent Warrants"). The October 2025 Placement Agent Warrants were assumed in connection with the Business Combination and remain immediately exercisable, expiring on October 30, 2030.

March 2025 Inducement Warrants

In March 2025, Legacy Ekso issued the March 2025 Inducement Warrants to purchase up to an aggregate of 700 shares of the Company's common stock at an exercise price of $6.36 per share (the “Inducement Warrant”). The Inducement Warrant was assumed in connection with the Business Combination and was fully exercised on May 11, 2026. The exercise of these warrants was included in the consolidated statements of temporary equity and stockholders' equity in the Exercise of warrants line item.

September 2024 Warrants

In September 2024, Legacy Ekso issued the September 2024 Series A Warrants, exercisable for an aggregate of up to 400 shares of the Company’s common stock at an exercise price of $15.00 per share (the "Series A Warrants"). The Series A Warrants were assumed in connection with the Business Combination, and as of May 31, 2025 there remain 73 unexercised Series A Warrants, which are classified as equity in the consolidated balance sheet. The Series A Warrants are exercisable immediately and expire on September 4, 2029.

12. Stock-Based Compensation Plans

2014 Equity Incentive Plan

In 2014, Ekso Bionics Holdings, Inc.'s Board of Directors and a majority of the stockholders adopted Ekso Bionics Holdings, Inc.'s Amended and Restated 2014 Equity Incentive Plan (the "2014 Plan"), which expired on January 31, 2024. Following such expiration and prior to the 2024 Annual Meeting of Stockholders (the "Annual Meeting"), no grants were made under the 2014 Plan. On June 6, 2024, the Ekso Bionics Holdings, Inc. held its Annual Meeting, whereby the Board of Directors and a majority of the stockholders adopted, amended, and restated the 2014 Plan (the "Restated 2014 Plan") to extend the term of the 2014 Plan until April 15, 2034, and to increase the total number of shares of common stock authorized for issuance by 67 shares relative to the amount available for issuance at the time the 2014 Plan expired. Immediately prior to the Closing, the Restated 2014 Plan was terminated but any outstanding equity awards made thereunder continue to be governed by their existing terms.

2026 Omnibus Equity Incentive Plan

Effective upon the Closing, the Company adopted the 2026 Omnibus Equity Incentive Plan, as amended and as adopted by ChronoScale Holdings following the Holding Company Transaction (“2026 Plan”). The 2026 Plan was approved by the Board on February 14, 2026, and by the Principal Stockholders on February 20, 2026.

The purpose of the 2026 Plan is to provide a means whereby eligible employees, officers, non-employee directors and other service providers develop a sense of proprietorship and personal involvement in the development and financial success of the Company and to encourage them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders. The key provisions, among others, of the 2026 Plan are as follows:

•The 2026 Plan will continue until terminated by the Board, but no awards shall be granted on or after the 10th anniversary of the date of the 2026 Plan’s initial adoption by the Board.

•The 2026 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and performance stock units, incentive bonus awards, other cash-based awards and other stock-based awards to eligible employees, non-employee directors and other service providers, to be granted from time to time as determined by the Board or its designees.

•An aggregate of 22,500,000 shares of the Company's common stock is authorized for issuance pursuant to awards under the 2026 Plan.

In connection with the consummation of the Business Combination, Ekso Bionics Holdings, Inc. 2017 Employee Stock Purchase Plan and the Restated 2014 Plan were terminated immediately prior to the Closing, provided that outstanding awards under the Restated 2014 Plan continued to be governed by their existing terms. Subsequently, in connection with the Holding Company Transaction, where ChronoScale Holdings became the successor issuer of ChronoScale, all outstanding equity awards under the Restated 2014 Plan and the 2026 Plan were converted into a right to receive a number of shares of common stock of ChronoScale Holdings.

As of May 31, 2026, the total number of shares authorized for grant under the 2026 Plan is shown in the table below:

Shares available for future grant as of May 31, 2026 under the 2026 Plan were as follows:

Restricted Stock Awards

The Company issued time-based restricted stock awards (“RSAs”) to its Board of Directors. Each RSA represents a share of the Company’s common stock, subject to forfeiture unless time-based vesting is satisfied. The fair values of the RSAs are determined based on the closing price of the Company’s common stock on the date of grant.

RSA activity for the year ended May 31, 2026 is summarized below:

As of May 31, 2026, $17,479 of total unrecognized compensation expense related to unvested RSAs was expected to be recognized over a weighted-average period of 1.96 years.

Restricted Stock Units

The Company issued time-based restricted stock units (“RSUs”) to employees. Each RSU represents the right to receiveone share of the Company’s common stock upon vesting and subsequent settlement. The fair values of the RSUs are determined based on the closing price of the Company’s common stock on the date of grant.

RSU activity for the year ended May 31, 2026 is summarized below:

The total grant-date fair value of RSUs that vested during the year ended May 31, 2026 was $833. As of May 31, 2026, $111 of total unrecognized compensation expense related to unvested RSUs was expected to be recognized over a weighted-average period of 1.34 years.

Stock Options

In connection with the Business Combination, on May 5, 2026, Ekso Bionics Holdings, Inc's outstanding stock options remained outstanding under the Restated 2014 Plan, and in connection with the Holding Company Transaction, such stock options were converted into a right to purchase a number of shares of common stock of ChronoScale Holdings.

As of May 31, 2026, there were 9 stock options outstanding, with a weighted-average exercise price of $276.10 and a weighted-average remaining contractual life of 2.39 years. Stock option activity during the year ended May 31, 2026 (from May 5, 2026 to May 31, 2026) was de minimis.

No stock options were granted or exercised during the year ended May 31, 2026 (from May 5, 2026 to May 31, 2026).

As of May 31, 2026, total unrecognized compensation cost related to unvested stock options was $0.

Compensation Expense

Stock-based compensation expense is included in the consolidated statements of operations in cost of revenues or selling, general and administrative expenses, depending on the nature of the services provided. Stock-based compensation expense related to RSAs, RSUs, and Phantom PSUs (as defined below) was recorded as follows:

(*) During the prior year ended May 31, 2025, the Company’s Board of Directors determined that the performance criteria associated with certain performance stock units granted to certain executives in the third fiscal quarter of 2024 were not met. As such, the Company recognized a reversal of the stock-based compensation expense previously recognized for the performance stock unit awards that were subsequently cancelled.

Modification of Liability Classified Incentive Award to Equity Classified Award

In connection with the Business Combination on May 5, 2026, the Company assumed 257 outstanding phantom performance-based restricted stock units ("Phantom PSUs") from Legacy Ekso, which were issued to Legacy Ekso's executive officers. The Phantom PSUs were originally structured as cash-settled awards and were subject to performance conditions based on the occurrence of a change in control and achievement of a specified stock price. Both conditions were satisfied on May 5, 2026, upon the closing of the Business Combination transaction, and as a result, the Phantom PSUs vested in full. On the Business Combination date, the corresponding liability of $3,397 was included under the caption "Accrued liabilities" in the preliminary fair values table of Note 3. Business Combinations.

On May 20, 2026, the Company amended the settlement terms of the Phantom PSUs to provide for the issuance of 181 shares of common stock and $1,000 in cash in total.

The Company accounted for the amendments as modifications of liability-classified awards under ASC 718, Compensation—Stock Compensation. The Company remeasured the awards based on the Company’s common stock price of $15.77 per share on May 20, 2026. The share-settled portion was reclassified from accrued liabilities to additional paid-in capital at its modification-date fair value of $2,860 and will not be subsequently remeasured. The $1,000 cash-settled portion was paid out in full in May 2026; therefore, there wasno corresponding liability to the Company as of May 31, 2026. As a result of the modification and related remeasurement, the Company recognized $462 of additional stock-based compensation expense during the year ended May 31, 2026, which is included as a component of Selling, general and administrative expense. The shares had not been issued as of May 31, 2026 due to an external securities-law issuance restriction and are expected to be issued by the second fiscal quarter of 2027.

13. Temporary Equity

Preferred Stock

The Company may issue shares of preferred stock from time to time in one or more series, each of which will have such distinctive designation or title as shall be determined by its Board of Directors and will have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in such resolution or resolutions providing for the issue of such class or series of preferred stock as may be adopted from time to time by the Board of Directors.

The Company’s authorized capital stock as of May 31, 2026 consisted of 10,000 shares of convertible preferred stock. As of May 31, 2026, there were 3 shares of the Company's Series B Preferred Stock issued and outstanding.

Series B Convertible Preferred Stock

Legacy Ekso issued Series B Convertible Preferred Stock, which was subsequently assumed by the Company in connection with the Business Combination. Each assumed share is convertible into shares of the Company's common stock and represents a portion of the equity interests held by legacy security holders.

On January 20, 2026, Legacy Ekso entered into securities purchase agreements (collectively, the “Purchase Agreements”) with certain institutional and accredited investors (the “Purchasers”) pursuant to which Ekso Bionics Holdings, Inc. agreed to issue and sell, in a private placement (the “January 2026 Private Placement”), (i) an aggregate of 5.9 shares of its newly designated Series B Convertible Preferred Stock, with a stated value (the “Stated Value”) of $1,000 per share (the “Series B Preferred Stock”) convertible into an aggregate of 712 shares (the “January 2026 Conversion Shares”) of common stock of the Company, at a conversion price of $8.22 per share, at the holder's option and subject to certain customary adjustments, and (ii) the January 2026 Private Placement Warrants.

Holders of Series B Preferred Stock shall be entitled to vote together with the holders of Common Stock, as a single class, on an as-converted basis with respect to all matters submitted to a vote of the Company’s stockholders, except as otherwise required by law.

The Series B Preferred Stock ranks senior to all classes and series of common stock and junior to all existing and future debt of the Company. Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of the Series B Preferred Stock will be entitled to receive distributions out of the funds and assets of the Company available for distribution to stockholders, after payment or provision for the Company’s debts and other liabilities, in an amount per share equal to the then-current stated value of the Series B Preferred Stock, which is initially $1,000 per share and is subject to equitable adjustment for stock splits, stock combinations, recapitalizations and similar transactions, before any distributions are made on any shares of common stock or other capital stock ranking junior to the Series B Preferred Stock. If the Company’s assets available for distribution are insufficient to pay the full liquidation preference payable on the Series B Preferred Stock, holders of the Series B Preferred Stock will share ratably in any distribution in proportion to the amounts that would otherwise be payable with respect to such shares if all amounts payable were paid in full. The Series B Preferred Stock is on parity with any future class or series of equity securities of the Company that, by its terms, is entitled to receive dividends and amounts distributable upon a liquidation in proportion to its respective accrued and unpaid dividends per share or liquidation preference, without preference or priority over the Series B Preferred Stock.

The Series B Preferred Stock includes optional redemption rights, of which: (i) holders may require cash redemption at the Stated Value upon the suspension of the Company's common stock from trading on its principal trading market for a certain time period or the common stock failing to be listed on its principal trading market, and (ii) at any time after January 22, 2027, the Company or holders may redeem all or a portion of the shares at the Stated Value, subject to certain exceptions.

While the Series B Preferred Stock meets the equity classification criteria, the redemption features, particularly the time-based redemption right, make it probable of becoming redeemable. Accordingly, the Series B Preferred Stock is classified as Temporary equity (or mezzanine equity) in the Company's consolidated balance sheet as of May 31, 2026.

As of May 5, 2026, in connection with the Business Combination, the Series B Preferred Stock that remained outstanding following the transaction was recognized at its acquisition-date carrying value of $3,854. The existing carrying value was originally determined using a binomial lattice model in accordance with ASC 805. On May 13, 2026, the Company issued a total of 356 shares of common stock upon the conversion of 2.93 shares of Series B Preferred Stock held by one of the holders. As of May 31, 2026, there were 2.93 shares of Series B Preferred Stock outstanding, which will continue to be accreted up to its full redemption value of $2,926 over the period ending January 20, 2027, using the effective yield method. Accretion is classified and recorded as a deemed dividend, which increases loss available to common stockholders used for the basic and diluted net loss per common share calculation.

The following table presents the accretion and carrying amount of the Series B Preferred Stock as of May 31, 2026:

(1) Represents the carrying value, at May 13, 2026, of 2.93 shares of Series B Convertible Preferred Stock that were converted into 356 shares of common stock of the Company. This conversion occurred on May 13, 2026.

14. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following:

•Level 1 — Quoted prices in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

•Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation.

The Company's fair value hierarchies for its financial assets and liabilities which require fair value measurement on a recurring basis are as follows:

During the years ended May 31, 2026 and 2025, there were no transfers between Level 1, Level 2, or Level 3 assets and liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to the Company's established practice.

The following table sets forth a summary of the changes in the fair value of Company’s Level 3 financial liabilities during the year ended May 31, 2026, which were measured at fair value on a recurring basis:

Refer to Note 11. Warrants for additional information regarding the valuation of warrants.

Fair value measurements related to assets acquired and liabilities assumed in connection with the Business Combination are discussed in further detail in Note 3 - Business Combinations.

Nonrecurring fair value measurements associated with assets and liabilities classified as held for sale are described in Note 6 - Discontinued Operations, including the determination of fair value less costs to sell.

15. Leases

The Company enters into leases for equipment and data center 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 right of use assets and liabilities separately on the balance sheet as their own captions, with the liabilities split between current and long-term, respectively.

During the year ended May 31, 2026, the Company renegotiated the majority of its finance leases to extend the duration of the lease agreements, thus extending finance lease payments through fiscal year 2028. In accordance with ASC 842, as the modifications were not separate contracts, the Company reassessed the classification of the leases, noting no change in classification. As such, the Company reallocated the remaining consideration in the contract and remeasured the lease liability using a discount rate for each of the leases determined at the effective date of the modification. The Company recognized the amount of the remeasurement of the lease liability for each of the modified leases as an adjustment to the corresponding right-of-use asset.

Components of lease expense were as follows:

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

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

Supplemental information related to leases is as follows:

16. Commitments and Contingencies

Commitments

Material Contracts

As of May 31, 2026, the Company had no minimum commitments of material contracts.

Purchase Obligations

The Company routinely purchases components and equipment from a variety of suppliers. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

The Company had purchase obligations primarily for purchases of its AI infrastructure totaling $3,757 as of May 31, 2026, which are expected to be paid within one year. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

The Company has financing and operating lease commitments totaling $127,131 payable over the lease terms of its equipment and data center and office space leases as disclosed in Note 15. Leases.

Loss Contingencies

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

As of May 31, 2026, there were no 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.

17. Business Segments

Operating segments are defined as components of a public entity for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company's CODM is its Chief Executive Officer who reviews financial information, presented on a consolidated basis, for purposes of making operating decisions, evaluating financial performance, and allocating resources. The Company is managed as a single operating segment that primarily focuses on an end-to-end AI infrastructure platform that offers energy-enabled data center capacity through AI infrastructure, orchestration, data integration, agentic AI workflows, and outcome engineers.

The Company’s CODM uses net loss as presented on the consolidated statements of operations to measure segment loss and assesses financial performance against expectations for the Company's single reportable segment to decide how to allocate resources. Additionally, the CODM reviews and uses consolidated expenses included in net loss to manage the Company’s operations and assess operating performance. The measure of consolidated assets is reported on the Company's consolidated balance sheets as total assets. The significant consolidated expenses regularly provided to the CODM are those presented on the consolidated statements of operations. These significant consolidated expenses include cost of revenues and selling, general and administrative expenses. Other segment items that are presented on the consolidated statements of operations include interest expense, net, loss on change in fair value of warrants, other expense, net, and net loss from discontinued operations.

18. Net Loss Per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of common stock outstanding during the period. Diluted net loss per share, when applicable, reflects the effect of potentially dilutive securities unless their effect would be antidilutive. When the Company reports a net loss, diluted net loss per share is generally equal to basic net loss per share, as the inclusion of potential common shares would be antidilutive.

The following table presents the calculation of basic and diluted net loss per common share for the periods presented, including adjustments for deemed dividends and discontinued operations, where applicable:

(*) For the year ended May 31, 2026 (from May 5, 2025 to May 31, 2026), the deemed dividend represents the periodic accretion of the redeemable Series B Preferred Stock's carrying amount to its full redemption value of $5,852, which increases loss available to common stockholders used for the basic and diluted net loss per common share calculation. Refer to Note 13. Temporary Equity – January 2026 Series B Preferred Stock for additional information regarding the January 2026 Series B Preferred Stock.

The following potential shares of common stock were excluded from the calculation of diluted net loss per share for the periods presented because including them would have been antidilutive due to the Company’s net loss position:

19. Subsequent Events

The Company has evaluated events that occurred after the balance sheet date and through the date the financial statements were issued. The Company concluded that no subsequent events occurred during this period that would require recognition in the consolidated financial statements or disclosure in the notes thereto, except as described below.

Demand Grid Promissory Note

On June 26, 2026, the Company, as the borrower, entered into a Demand Grid Promissory Note (the “Grid Note”) with Applied Parent, as the lender. This related-party agreement provides the Company with a revolving line of credit.

The aggregate principal amount available under the note is up to $100,000, reduced by the value of any Company liabilities guaranteed by the lender and a reserve amount determined by the lender. Advances on the Grid Note bear interest at the short-term Applicable Federal Rate, compounded semi-annually, and the Grid Note is payable on demand. Applied Parent has agreed not to exercise its demand right under the Grid Note prior to August 20, 2027.

On July 1, 2026, the Company drew $7,000 under the Grid Note.

Warrant Exercises

On July 21, 2026, we issued a total of 67 shares of our common stock upon the exercise of 67 Series A Warrants held by an investor, with an exercise price of $15.00 per common stock warrant, resulting in net proceeds of approximately $1,000.

On July 21, 2026, a Series B Preferred Stock holder converted 2.9 shares of Series B Preferred Stock into a total of 356 shares of the Company’s Common Stock. As a result, there are currentlyno outstanding shares of Series B Preferred Stock.

Microsoft Strategic Partnership

On August 6, 2026, the Company entered into atwo-year strategic partnership with Microsoft to support the planned deployment of approximately 50 megawatts of AI compute capacity. The deployment is expected to utilize NVIDIA GB300 systems and advanced liquid-cooling infrastructure designed to support high-density, next-generation artificial intelligence and accelerated compute workloads. Upon projected completion in the first calendar quarter of 2027, the deployment is expected to expand the Company's available compute capacity and further strengthen its position as a provider of high-performance digital infrastructure supporting AI and cloud computing applications. The deployment is subject to the Company's ability to obtain financing on favorable terms and other customary development, construction, and operational conditions and milestones, for which there could be penalties and other credits available to the Company's counterparty if the Company does not meet or perform.