ChronoScale Holdings Corp

Debt Financing During the fiscal year ended May 31, 2025, we entered into two Simple Agreement for Future Equity (“SAFE”) agreements totaling $12.0 million with an investor.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

These decreases were partially offset by approximately $9.5 million increase in bad debt expense, $1.8 million increase in lease and related expenses due to operating leases expense for data center space not yet being used to generate revenue, and $0.3 million increase in other costs that were not directly attributable to generating revenue.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

We expect to have sufficient liquidity, including cash on hand, payments from customers, access to debt financing, and access to public capital markets, to support ongoing operations and meet our working capital needs for at least the next 12 months and all of our known requirements and plans for cash.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

See “Note 5 - Debt” for further discussion.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

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.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock, which is intended to provide authoritative guidance on how an issuer should initially measure paid-in-kind dividends on equity-classified preferred stock.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 8-K/A, including information with respect to Cloud’s plans and strategy for Cloud’s business, includes forward-looking statements that involve risks and uncertainties.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Despite the uncertainties posed by the changing regulatory landscape, we remain committed to delivering innovative and responsible solutions in cloud services while prioritizing compliance and risk management.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Actual costs that the Company may have incurred if it were a standalone entity 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.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 8-K/A, including information with respect to Cloud’s plans and strategy for Cloud’s business, includes forward-looking statements that involve risks and uncertainties.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

Despite the uncertainties posed by the changing regulatory landscape, we remain committed to delivering innovative and responsible solutions in cloud services while prioritizing compliance and risk management.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

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.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026

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.

SEC original ↗ChronoScale Holdings Corp — Earnings release (8-K exhibit)EX-99Jun 30, 2026