v3.26.1
Business Combination
 12 Months Ended
May 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination Business Combination
On May 5, 2026, the Company, through APLD ChronoScale HoldCo LLC, a wholly owned subsidiary, (“Contributor”), completed a transaction pursuant to which Contributor contributed 100% of the equity interests of Applied Digital Cloud (“Cloud”) to Ekso Bionics Holdings, Inc. (“Ekso”), a publicly traded company, in exchange for shares of Ekso common stock (the "May 2026 transaction"). Although Ekso was the legal acquirer, Cloud was identified as the accounting acquirer and the transaction was accounted for as a reverse acquisition under ASC 805, Business Combinations. Following the closing of the transaction, Ekso was renamed ChronoScale Corporation (“ChronoScale”).
As a result of the transaction, at closing, the Company owned approximately 97% of ChronoScale’s outstanding common stock, and legacy Ekso shareholders retained approximately 3% (before giving effect to any dilution from new investments) which represents a noncontrolling interest in ChronoScale.
As the transaction was accounted for as a reverse acquisition, the consideration transferred was measured based on the number of equity interests Cloud would have had to issue to provide legacy Ekso shareholders with the same percentage ownership interest in the combined company that resulted from the transaction. The fair value of the consideration transferred was approximately $57.6 million, based on 4,357,026 equity interests valued at Ekso's closing share price of $13.22 per share on the acquisition date. The consideration was entirely in the form of equity.
The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:
Cash and cash equivalents$13,492 
Accounts receivable, net of allowance for doubtful accounts4,125 
Inventory4,562 
Prepaid expenses1,150 
Property and equipment, net1,086 
Operating lease right-of-use assets, net315 
Intangible assets, net10,950 
Other assets369 
Total assets acquired$36,049 
Accounts payable$(281)
Accrued expenses(5,055)
Deferred revenues(1,400)
Operating lease liabilities(321)
Debt, current(3,346)
Deferred revenues non-current(1,288)
Debt, non-current(464)
Operating lease liabilities, non-current(114)
Other non-current liabilities(3,305)
Total liabilities assumed$(15,574)
Total identifiable net assets$20,475 
Less: Cash acquired through PIPE (defined below)(15,000)
Fair value of net assets acquired5,475 
Less: Impairment for assets held for sale (see Note 6 - Discontinued Operations)
2,365 
Fair value less costs to sell$3,110 
Total consideration transferred$57,623 
Less: Fair value less costs to sell3,110 
Goodwill$54,513 
The fair value of acquired accounts receivable was approximately $4.1 million as of the acquisition date. ChronoScale expects to collect substantially all acquired receivables.
The fair value of acquired intangible assets consists of 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. Acquired intangible assets are amortized over the estimated useful lives on a straight-line basis.
In connection with the transaction, ChronoScale arranged a private investment in public equity (“PIPE”), which refers to a private placement of ChronoScale’s equity to select investors concurrent with closing. Pursuant to the PIPE Agreement, ChronoScale agreed to issue and sell 1,311,407 shares of its common stock to Contributor at a price of $12.01 per share, resulting in aggregate gross proceeds of approximately $15.7 million, net of $0.8 million in offering costs.
The business combination resulted in the recognition of goodwill of approximately $54.5 million, which is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired. The goodwill is primarily attributed to the expected operational synergies, assembled workforce, public company platform benefits, and other intangible benefits that do not qualify for separate recognition. The goodwill was assigned to ChronoScale, which was expected to benefit from the synergies of the acquisition. As of May 31, 2026, ChronoScale was not a separate reportable
segment under ASC 280, although the Cloud Business had previously been presented as a reportable segment. The assigned goodwill is included within the reporting unit used for goodwill impairment testing. The Company expects that $0.5 million of goodwill will be deductible for tax purposes.
The acquisition-date fair value of the noncontrolling interest was approximately $4.6 million, based on the equity interests retained by legacy Ekso shareholders and Ekso's closing share price of $13.22 per share on the acquisition date. The noncontrolling interest is presented as a separate component of permanent equity in the Company’s consolidated balance sheet.
Acquisition-related costs in connection with the transaction, including legal, accounting, valuation, and other professional fees of $5.3 million were expensed as incurred and are not included as a component of consideration transferred. Total transaction costs incurred were approximately $5.3 million.
The following unaudited pro forma financial information presents the combined results of operations as if the acquisition had occurred on June 1, 2024. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had occurred as of that date, nor is it intended to project future results.
Fiscal Year Ended
May 31, 2026May 31, 2025
Revenue$623,068 $243,220 
Net loss$(203,175)$(245,278)
The unaudited pro forma results include adjustments directly attributable to the acquisition, including amortization of acquired intangible assets and the related income tax effects. No additional earnings per share impacts were identified other than the impact of amortization of acquired intangible assets.