Applied Digital Opens $100M On-Demand Credit Line to Controlled Unit ChronoScale
Distressed
Company Background
ChronoScale Corporation is a Nasdaq-listed AI infrastructure company formed through the May 2026 combination of Ekso Bionics Holdings and Applied Digital Cloud Corporation, the cloud computing arm of Applied Digital Corporation. Applied Digital and its subsidiary APLD ChronoScale HoldCo LLC together hold approximately 96% of ChronoScale's outstanding common stock, qualifying the company as a "controlled company" under Nasdaq listing rules. The company, with a market capitalization of approximately $3.2 billion, is focused on GPU-based cloud infrastructure for AI workloads.
The transformation was compressed. Ekso Bionics was a medical exoskeleton maker generating roughly $2 million to $4 million in quarterly revenue before the deal; its auditor, WithumSmith+Brown, included a going-concern paragraph in its report on the company's December 31, 2025 financial statements, citing a "liquidity condition." Just months later, the company absorbed Applied Digital Cloud — which had generated approximately $75.2 million in trailing twelve-month revenue as of August 2025 — and rebranded as ChronoScale. On May 29, 2026, the board committed to divesting the legacy Ekso Bionics subsidiary entirely to focus on cloud operations, and management disclosed it expects to incur material charges including severance, lease termination payments, and other exit costs, without yet providing a dollar estimate.
What Was Disclosed
On June 26, 2026, ChronoScale entered into an unsecured Demand Grid Promissory Note with Applied Digital, establishing a credit line of up to $100 million. As of the filing date, no advances had been drawn. The note bears interest at the short-term Applicable Federal Rate, compounded semiannually, and is not convertible into equity. ChronoScale may prepay any outstanding amount without penalty or premium.