Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements

v3.26.3
Fair Value Measurements
 3 Months Ended
Aug. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company applies the provisions of ASC 820, Fair Value Measurement, for purposes of measuring and disclosing fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following:
•Level 1 — Quoted prices in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation.
Fair value measurements related to assets acquired and liabilities assumed in connection with the Business Combination are discussed in Note 3. Business Combinations.
Nonrecurring fair value measurements associated with assets and liabilities classified as held for sale are described in Note 6. Discontinued Operations, including the determination of fair value less costs to sell.
Warrant Liabilities
The Company's fair value hierarchies for its financial assets and liabilities, specifically its warrant liabilities, which require fair value measurement on a recurring basis, are as follows (in thousands):
Total Level 1 Level 2 Level 3
August 31, 2026
Liabilities
Warrant liabilities $ 5,432  $ —  $ —  $ 5,432 
May 31, 2026
Liabilities
Warrant liabilities $ 5,454  $ —  $ —  $ 5,454 
For the three months ended August 31, 2026 and 2025, there were no transfers between Level 1, Level 2, or Level 3 assets and liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to the Company's established practice.
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities during the three months ended August 31, 2026, which were measured at fair value on a recurring basis (in thousands):
Warrant liability
Balance as of May 31, 2026 $ 5,454 
Gain on change in fair value of warrants (22)
Balance as of August 31, 2026 $ 5,432 
Refer to Note 11. Warrants for additional information regarding the valuation of warrants.
Parker Hannifin and B. Riley Promissory Notes
In connection with the Business Combination, the Company assumed certain debt obligations of Ekso Bionics Holdings, Inc., including the Parker Hannifin Promissory Note and the B. Riley Promissory Note. As part of acquisition accounting, these instruments were initially recognized at their estimated fair values. Subsequent to the acquisition date, the promissory notes have been accounted for using the amortized cost method and are accreted using the effective interest method over their remaining contractual terms. Refer to Note 8. Debt for additional information regarding the valuation of the Company's promissory notes.
Accordingly, the Parker Hannifin Promissory Note and B. Riley Promissory Note are not remeasured to fair value through earnings at each reporting date. However, in accordance with ASC 825, the Company is required to disclose the estimated fair value of financial instruments carried at amortized cost.
The Company estimates the fair value of the Parker Hannifin Promissory Note and the B. Riley Promissory Note using valuation techniques consistent with those used in the acquisition-date valuation, including discounted cash flow methodologies that incorporate contractual cash flows and assumptions regarding market participant required rates of return and credit risk. Because these valuations include significant unobservable inputs, the Company classified both instruments within Level 3 of the fair value hierarchy as of August 31, 2026.
The following table presents the carrying amounts and estimated fair values of the Company's promissory notes as of August 31, 2026 (in thousands):
Carrying Amount Estimated Fair Value Fair Value Hierarchy
Parker Hannifin Promissory Note $ 1,370  $ 1,388  Level 3
B. Riley Promissory Note 2,385  2,187  Level 3
Total $ 3,755  $ 3,575 

As of August 31, 2026, the Company determined that the estimated fair values of the Parker Hannifin Promissory Note and the B. Riley Promissory Note materially approximated their respective carrying amounts. This conclusion was based on the relatively short period of time since the Business Combination acquisition date, the continued accretion of acquisition-date fair value adjustments through the effective interest method, and the absence of significant changes in the underlying economics, contractual terms, or assumptions that would materially impact the estimated fair values of the instruments since the acquisition date. On September 30, 2026, in connection with the closing of the sale of the Legacy Ekso Business, the Company repaid all amounts outstanding under the Parker Hannifin Promissory Note. Refer to Note 19. Subsequent Events for additional information regarding the sale of the Legacy Ekso Business and Parker Hannifin Promissory Note.