ChronoScale Holdings Corp (CHRN) stock intrinsic value fair value estimate & owner earnings analysis

ChronoScale (formerly Ekso Bionics) closed a business combination on May 5, 2026 that made its GPU cloud business, previously owned by Applied Digital, the operating company. That business rents dedicated NVIDIA H100 GPU capacity, about 6,144 GPUs across colocation centers in Colorado, Minnesota and Utah, to one customer, Together AI, at a fixed per-GPU per-hour price. The original Ekso exoskeleton business is being sold (held for sale) and is excluded from this valuation, as are its older financial records, because they describe a different company. Only two years of cloud-business figures exist, so the analysis rests on them and on the contract terms rather than on a long track record. What the numbers show. Revenue for the year ended May 31, 2026 was $71.6M, down 15% from $84.4M after a customer was lost in December 2024. Operating cash flow was $39.1M, but the business obtains its GPUs through finance leases whose principal repayments are reported outside operating cash flow: $89.5M this year and $114.7M the year before, on top of $26.9M of equipment purchases. We treat those repayments as the true cost of the equipment. On that basis owner earnings were about -$0.60 per share this year and -$0.56 the year before. Those repayments were funded by cash contributed by Applied Digital, which now controls the company and has provided a grid note of up to $100M. Because the lease payments were renegotiated and stretched, the remaining finance lease payments are only $62.0M ($51.1M in fiscal 2027, $11.0M in fiscal 2028). Beyond that the equipment is fully paid for. That roll-off is what the valuation turns on, not the past two years of negative results. Growth check. Owner earnings did not grow last year (-$0.56 to -$0.60). We assume no growth in any case, just flat revenue at about the current level while the contract and equipment life support it. Base case, about $0.13 per share. The Together AI agreement was renewed effective March 1, 2026 for twelve months, then renews in sixty-day steps unless either side gives notice. Together AI has been a customer since December 2023 and has renewed repeatedly, which we credit. Cash generated before equipment costs is about $33M a year (operating cash flow excluding working-capital swings, less stock compensation). Fiscal 2027 is negative after roughly $46M of lease principal, fiscal 2028 is about $22M, and we credit roughly a year and a half more at about $33M until the H100s reach the end of the five-year useful life the company uses for its equipment leases, with the remaining colocation payments through fiscal 2030 charged afterward. No replacement GPUs, price rises or new customers are assumed, since none are contracted. Bear case, about -$0.62 per share. Together AI is the only customer, its notice period is short, and the company lost a customer in December 2024. If Together AI leaves when the current term ends in early 2027 and nothing replaces it, the company still owes $62.0M of finance lease payments and $65.1M of colocation lease payments through fiscal 2030, plus $4.3M of notes. On our estimate those obligations exceed what the business would earn, so the company appears to owe roughly $90M more than the cloud business is worth. We assume no value from reselling the GPUs because no resale price is documented. Bull case, about $0.43 per share. Together AI keeps renewing at today's prices for three years after the leases are paid off, with about $10M a year set aside for equipment upkeep. We do not include the announced two-year Microsoft partnership for about 50 megawatts of GB300 capacity: it depends on financing not yet obtained and carries penalties if milestones are missed. We also exclude any rise in GPU rental prices or any new customers. What could make this wrong. Rental rates are described as subject to change and the March 2026 renewal price is not disclosed, so revenue could be lower or higher than the flat level we assume. Per-share figures use about 145.6M shares outstanding; new equity issued to fund the Microsoft build would dilute this. Working-capital and lease-liability movements in the cash flow statement were large and are excluded from owner earnings. The company also completed a reverse stock split in June 2025 to regain Nasdaq bid-price compliance; that has been cured.