ChronoScale Corp 8-K

What Happened
ChronoScale Corporation (CHRN) filed an 8-K on June 26, 2026 reporting it entered into an unsecured Demand Grid Promissory Note with Applied Digital Corporation (the Lender) that makes a line of credit available to ChronoScale with a maximum principal amount of $100,000,000 (reduced by the dollar value of any credit support provided by the Lender or affiliates). The company says it may use borrowings for working capital and general corporate purposes. To date, there have been no advances under the Note.

Key Details

• Effective Date: June 26, 2026. Note is unsecured and payable on demand.
• Maximum capacity: $100,000,000 minus any credit support value provided by the Lender or affiliates.
• Interest: short-term Applicable Federal Rate (per IRC §1274(d)), compounded semiannually; prepayment allowed without penalty.
• No conversion: the Note is not convertible into ChronoScale common stock. No draws have been made so far.
• Related-party facts: Applied Digital (and related entities) and its subsidiaries hold ~96% of ChronoScale’s outstanding shares; several directors (Wes Cummins, Ella Benson, Douglas Miller, Richard Nottenburg) serve on both companies’ boards. The transaction was approved by the Related Party Committees of both boards.
• Reported under Item 1.01 (material agreement) and Item 2.03 (creation of a direct financial obligation); the Note is filed as Exhibit 4.1.

Why It Matters
This agreement gives ChronoScale immediate access to a large unsecured credit facility that could be used to support liquidity and operations, but it also creates potential indebtedness of up to $100M (subject to adjustments and draws). Because the lender is a controlling shareholder and several directors serve on both company boards, investors should note the related‑party nature of the financing — the company states the terms were reviewed and approved by Related Party Committees. The Note is non‑convertible, so it does not cause immediate dilution, and interest is tied to the federal Applicable Federal Rate rather than a fixed market rate.