ChronoScale Holdings Corp

As of the date of this filing, we have not identified any material changes to the risk factors associated with our business and previously disclosed in the “Risk Factors” section in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended May 31, 2026, other than as set forth below:

We will require substantial additional financing to meet our obligations under customer agreements and fund our growth, and we may be unable to obtain such financing when needed or on acceptable terms.

Our customer agreements and growth plans require substantial capital expenditures to acquire GPUs and related equipment, secure and develop data center capacity, and deploy infrastructure on specified schedules. We expect to seek funding through multiple transactions, which may include registered or unregistered equity or debt financings, equipment financing and joint venture arrangements. Customer upfront payments and our existing cash resources may be insufficient to fund these commitments, and we may need to obtain financing before we receive the revenue expected from the related deployments. For example, our agreement with Microsoft requires us to procure large-scale GPU capacity and complete a dedicated data center facility on a fixed delivery schedule, obligations that will require financing beyond our existing cash resources.

There can be no assurance that any contemplated financing will be completed, that it will provide sufficient proceeds, or that funds will be available when required under our customer agreements. Our ability to obtain financing may depend on market conditions, the availability and value of collateral, prospective lenders’ and investors’ assessment of our business and customer arrangements, and our ability to satisfy financing conditions. If financing is delayed or unavailable, we may be unable to place equipment orders, complete construction or deliver capacity on schedule. This could result in customer credits or penalties, termination of customer agreements, repayment of upfront payments, and the loss of anticipated revenue. We may also need to reduce or delay other planned investments or seek alternative financing on less favorable terms.

Additionally, any equity securities offerings could substantially dilute our existing stockholders and may, in certain cases, carry rights senior to those of our common stock. Debt financing could increase our fixed payment obligations, require us to pledge assets, and impose covenants that limit our operating and financing flexibility. Joint venture or other alternative arrangements may require us to share the economics of projects or relinquish some control over them. Any of these outcomes could materially adversely affect our business, financial condition, results of operations and liquidity.

Our current and prospective international business relationships expose us to risks under U.S. economic sanctions and export control laws, and a failure to comply could materially harm our business.

We are subject to economic sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and other applicable authorities. We are engaged in business discussions with companies outside the United States, including in China and Singapore, and may pursue additional international relationships. Although those jurisdictions are not themselves subject to comprehensive U.S. sanctions, a prospective counterparty, its owners, affiliates, intermediaries, financial institutions or end users could be subject to sanctions or have dealings involving sanctioned persons or jurisdictions. Complex ownership structures and indirect transactions may make these risks difficult to identify, and sanctions designations and restrictions can change during an ongoing relationship.

We are also subject to export control laws, including the Export Administration Regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security. These laws may restrict the export, re-export or transfer of advanced computing equipment, software and technology based on the destination, end user or intended use, and may require licenses or other authorizations that could be delayed or denied. Our international business discussions may require us to assess whether equipment or technology could be transferred to, or used for the benefit of, a restricted party or end user, including through an intermediary.

We have implemented procedures intended to support compliance with applicable sanctions and export control laws. However, those procedures may not identify every prohibited party or transaction or prevent conduct by employees, agents or counterparties that exposes us to liability. Compliance concerns or changes in applicable restrictions could require us to delay, abandon or terminate a transaction or relationship. An actual or alleged violation could result in government investigations, substantial civil or criminal penalties, restrictions on our business and reputational harm. Any of these outcomes could materially adversely affect our business, financial condition and results of operations.