Avalanche Treasury Corp

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026

Note 1. Organization

Description of Business

Avalanche Treasury Corporation (the “Company”) was incorporated in Delaware on September 22, 2025 in connection with the transactions that culminated in the Business Combination with Mountain Lake Acquisition Corp. (“MLAC”), which closed on June 11, 2026. On October 1, 2025, the Company entered into a Business Combination Agreement (the “Agreement”) with Mountain Lake Acquisition Corp. (“SPAC”), Avalanche Treasury Company LLC, a Delaware limited liability company (“Treasury LLC”), Avalanche SPAC Merger Sub LLC (“SPAC Merger Sub”), Avalanche Company Merger Sub LLC (“Company Merger Sub,” and together with SPAC Merger Sub, the “Company Subsidiaries”), and Dragonfly Digital Management, LLC (the “Seller”), pursuant to which the transactions contemplated therein (collectively, the “Business Combination”) were consummated on June 11, 2026 (the “Closing Date”). Following the Business Combination and related recapitalization transactions, the Company became a publicly traded company and operates through Avalanche Treasury Company, LLC to hold and manage AVAX, conduct staking and validator operations, and support other Avalanche-related activities.

Pursuant to the Agreement, on the Closing Date, (i) SPAC Merger Sub merged with and into SPAC (the “SPAC Merger”), with SPAC continuing as the surviving entity and a wholly owned subsidiary of the Company, and (ii) Company Merger Sub merged with and into Avalanche Treasury Company LLC (the “Subsidiary Merger,” and together with the SPAC Merger, the “Mergers”), with Treasury LLC continuing as the surviving entity and a wholly owned subsidiary of the Company.

In connection with the Subsidiary Merger, each member of Treasury LLC other than the Seller receivedone share of the Company’s Class A common stock, par value $0.01 per share (“Class A Stock”), for each unit held immediately prior to the effective time of the Subsidiary Merger, and the Seller receivedone share of Class A Stock andone share of the Company’s Class B common stock, par value $0.01 per share (“Class B Stock”), for each unit it held. As a result of the consummation of the Business Combination, the Company became a publicly traded entity and Treasury LLC became its wholly owned subsidiary.

The Company is an operating company focused exclusively on business lines relating to Avalanche and AVAX, offering public-market investors a differentiated, capital-efficient means of gaining exposure to Avalanche and AVAX through (i) the targeted accumulation of AVAX; (ii) treasury management activities, including staking and other yield-generating strategies designed to increase AVAX per share over time; and (iii) broader ecosystem participation, including validator operations, Avalanche L1 activation, infrastructure services and other corporate development initiatives intended to expand the Company’s participation in the Avalanche ecosystem.

Note 2. Liquidity and Going Concern

For the six months ended June 30, 2026, the Company has generated revenue from staking rewards, net of fees of $3,602,544 and reported a net loss of $71,438,032. As of June 30, 2026, the Company had aggregate cash of $3,370,858 and a net working capital of $2,805,358.

The Company assesses its liquidity based on its ability to generate and maintain adequate sources of liquidity to meet its current and future obligations. Its expected primary uses of liquidity on a short- and long-term basis include working capital requirements, business acquisitions and other general corporate purposes. The Company’s future capital requirements will depend on a number of factors.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15,Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASC Subtopic 205-40), management evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these unaudited condensed consolidated financial statements are issued.

On June 11, 2026, the Company completed the Business Combination and obtained additional liquidity, including proceeds from the related loan facility. As of June 30, 2026, the Company also held liquid digital assets that are available to fund its operations and meet its obligations as they become due. The Company’s current liquidity resources, together with expected cash flows from operations, are expected to be sufficient to fund its operating and other liquidity requirements for at least twelve months from the date these unaudited condensed consolidated financial statements are issued.

Accordingly, after considering the Company’s cash, liquid digital assets, expected operating cash flows and other available sources of liquidity, management concluded that the conditions and events considered in the aggregate do not raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date these unaudited condensed consolidated financial statements are issued.

Note 3. Reverse Recapitalization.

As discussed in Note 1, “Organization and Description of the Business”, the Business Combination was consummated on June 11, 2026, which for accounting purposes, was treated as the equivalent of the Company issuing stock for the net assets of MLAC, accompanied by a recapitalization. Under this method of accounting, MLAC was treated as the acquired company for financial accounting and reporting purposes under GAAP.

Transaction proceeds

Upon the closing of the Business Combination, the Company received gross proceeds of $1.6 million from the Business Combination offset by total transaction costs of $1.6 million. The following table reconciles the elements of the Business Combination to the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in stockholders’ equity for the six months ended June 30, 2026:

The number of shares of Common Stock issued immediately following the consummation of the Business Combination were as follows:

MLAC Rights

Upon consummation of the Business Combination, each outstanding right automatically converted intoone-tenth (1/10) of one share of the Company’s Class A common stock. No fractional shares were issued in connection with the conversion of the rights, and the rights ceased to be outstanding following the Business Combination.

The table below summarizes the Company Units and corresponding PubCo common stock outstanding following the Business Combination:

Transaction Overview

On June 11, 2026 (the “Closing Date”), Avalanche Treasury Corporation consummated the transactions contemplated by the Agreement. The Business Combination included the domestication of MLAC, the MLAC Merger, the Company Merger and the other related transactions contemplated by the Agreement, including the Company Unit Subscription, the Foundation Transaction and the Dragonfly Contribution (each defined below).

Domestication and Merger Steps

On the Closing Date, MLAC domesticated by way of continuation from the Cayman Islands to the State of Delaware (the “Domestication”). Following the Domestication, Avalanche SPAC Merger Sub LLC (“MLAC Merger Sub”) merged with and into MLAC, with MLAC surviving as a wholly owned subsidiary of the Company (the “MLAC Merger”). Company Merger Sub also merged with and into Avalanche Treasury Company, LLC, with Avalanche Treasury Company, LLC surviving as a wholly owned subsidiary of the Company (the “Company Merger” and, together with the MLAC Merger, the “Mergers”).

Consideration and Exchange Mechanics

The Business Combination and related transactions included the following consideration and exchange mechanics. Legacy Company Units converted on aone-for-one basis into shares of the Company’s common stock, as described below:

Company Unit Subscription, Token Sale and Contribution

Concurrently with the execution of the Agreement, the Company, Avalanche Treasury Company, LLC and MLAC entered into Company Unit Subscription Agreements pursuant to which investors purchased approximately $216 million of Company Units at $10.00 per Company Unit, payable in cash, USDC or AVAX (the “Company Unit Subscription”). At Closing, each Company Unit held by the Company Unit Investors converted automatically intoone share of non-voting Class A common stock, par value $0.01 per share, of the Company.

The Business Combination also included (i) the contribution by Dragonfly, directly and indirectly through certain related funds, of 1,960,040 AVAX tokens to Avalanche Treasury Company, LLC in exchange for 5,805,638 Company Units (the “Dragonfly Contribution”) and (ii) the sale by Avalanche BVI and Avalanche Cayman (together, the “Foundation”) of AVAX tokens to Avalanche Treasury Company, LLC pursuant to the Token Sale Agreement dated October 1, 2025 (the “Foundation Transaction”).

Transactions costs

For the three and six months ended June 30, 2026, transaction costs incurred within the condensed consolidated statements of operations were as follows:

Contingent Consideration

In connection with the Business Combination Agreement and the Sponsor Support Agreement, the Company entered into earn-out arrangements with certain former equity holders of Astral (the “Astral Earn-out”) and the sponsor (the “Sponsor Earn-out,” and together with the Astral Earn-out, the “Earn-out Arrangements”). The Earn-out Arrangements provide for the issuance or release of shares of the Company’s common stock upon achievement of specified market-price thresholds following the Business Combination and include provisions that may accelerate issuance or release upon certain change-in-control events.

The Earn-out Arrangements were negotiated in connection with the Business Combination and do not represent settlement of pre-existing relationships, compensation for post-combination services or reimbursement of acquisition-related costs. Accordingly, the Company determined that the Earn-out Arrangements represent contingent consideration issued in connection with the Business Combination.

The Company evaluated the Earn-out Arrangements underASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Because certain settlement provisions may result in settlement outcomes that are not indexed solely to the Company’s own stock, the Earn-out Arrangements do not meet the criteria for equity classification under ASC 815-40 and are therefore classified as liabilities.

The Astral Earnout Shares, together with any shares received upon equitable adjustment of the Astral Earnout Shares, shall be subject to the Astral Transfer at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by the Company during the Earnout Period.

The Astral Earnout Shares shall vest, shall no longer be subject to the Astral Transfer and shall be released from the Astral Escrow Account to Astral, in the amounts specified below, upon the Company meeting the price milestones specified below:

(a)Upon the occurrence of Triggering Event I,666,667 shares of Company Class A Stock;

(b)Upon the occurrence of Triggering Event II,666,667 shares of Company Class A Stock; and

(c)Upon the occurrence of Triggering Event III,666,666 shares of Company Class A Stock. Notwithstanding the foregoing, in the event that during the Earnout Period, the Company is subject to a Change in Control, then all of the Astral Earnout Shares, together with any shares received upon equitable adjustment of the Astral Earnout Shares, then remaining in the Astral Escrow Account shall no longer be subject to the Astral Transfer and shall be released to Astral from the Astral Escrow Account.

Each Triggering Event shall only occur once, if at all, and all Astral Earnout Shares not released by the end of the Earnout Period will be transferred to the Company through an Astral Transfer, in each case as set forth in the Business Combination Agreement.

In addition,1,600,000 Sponsor Earnout Shares have been deposited into an escrow account with Continental Stock Transfer and Trust Company and will be released in tranches as provided in the Sponsor Support Agreement and the Sponsor Escrow Agreement. The Sponsor agreed that all of the Sponsor Earnout Shares, together with any shares received upon equitable adjustment of the Sponsor Earnout Shares, shall be subject to the Sponsor Transfer at the end of the Earnout Period in the event that not all of the Triggering Events are achieved by the Company.

The Sponsor Earnout Shares shall vest, no longer be subject to the Sponsor Transfer and shall be released from the escrow account to the Sponsor, in the amounts specified below, upon the Company meeting the price milestones specified below:

(a)Upon the occurrence of Triggering Event I,533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor;

(b)Upon the occurrence of Triggering Event II,533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor; and

(c)Upon the occurrence of Triggering Event III,533,334 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor.

The Earn-out Arrangements were initially recognized at fair value as of the Closing Date in accordance with ASC 820, Fair Value Measurement. The fair value measurement considers the contractual terms of the arrangements, including applicable stock-price thresholds, expected volatility of the Company’s common stock, expected term, risk-free interest rate and the probability and timing of potential settlement events, as applicable. The earn-out contingent consideration was valued using a Monte Carlo simulation based on a Geometric Brownian Motion in a risk-neutral framework. Due to the use of significant unobservable inputs, the Earn-out Arrangements are classified within Level 3 of the fair value hierarchy.

Astral and the Company executed a side-letter agreement on August 13, 2026 and agreed that the issuance of the 2,000,000 Astral Post-Closing Shares shall be delivered on a date identified by Astral but in any event by September 11, 2026 (see Note 13). The post-closing liability associated with those 2,000,000 Astral shares were initially valued at $1.85 per share, or approximately $3.7 million.

The Company remeasures the Earn-out Arrangements at fair value at each reporting date until the respective obligations are settled, with changes in fair value recognized in earnings in the period in which they occur. Upon settlement, the related liability is derecognized, with any difference between its carrying amount immediately prior to settlement and the settlement value recognized in earnings.

The following table presents a reconciliation of the Company’s Earn-out Arrangements measured at fair value for the six months ended June 30, 2026:

As of June 30, 2026, the Earn-out Arrangements shares of 3,600,000 are are issued in Escrow with the transfer agent but not outstanding.

Accounting Treatment

The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP, with Avalanche Treasury Company, LLC treated as the accounting acquirer and MLAC treated as the acquired company for financial accounting and reporting purposes. Because MLAC did not meet the definition of a business under ASC 805, Business Combinations, the transaction was not accounted for as a business combination using acquisition accounting.

Accordingly, the consolidated financial statements of the combined company represent a continuation of the financial statements of Avalanche Treasury Company, LLC. The transaction was treated as the equivalent of Avalanche Treasury Company, LLC issuing equity for the net assets of MLAC, accompanied by a recapitalization. The net assets of MLAC were recorded at historical cost, andno goodwill orother intangible assets were recognized as a result of the Business Combination.

In connection with the reverse recapitalization, the historical equity structure of Avalanche Treasury Company, LLC was recast to reflect the legal capital structure of the combined company following the Business Combination.

Earnings Per Share

As a result of the reverse recapitalization, the Company’s historical equity structure was recast to reflect the Company’s common stock structure, and weighted-average shares outstanding for the periods presented were calculated using the post-recapitalization share structure, applying the applicable exchange mechanics to the legacy equity interests of Avalanche Treasury Company, LLC. Pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations were based on the number of combined company shares outstanding, assuming the Business Combination occurred on January 1, 2025.

Note 4. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the accounting rules and regulations of the Securities and Exchange Commission (the “SEC”). References to GAAP issued by the Financial Accounting Standards Board (“FASB”) in these accompanying notes to the unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company’s Registration Statement on Form S-4, as filed with the SEC.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Avalanche Treasury Corporation and the Company’s wholly-owned subsidiaries. All intercompany transactions have been eliminated upon consolidation of these entities.

Use of Estimates

The preparation of financial statements in conformity with GAAP accounting principle requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates and assumptions include those related to the valuation and impairment assessment of digital assets, the recognition of staking reward revenue, and the evaluation of contingent liabilities.

Management bases its estimates and assumptions on currently available information and various judgments that it believes are reasonable under the circumstances. Actual results could differ materially from those estimates, and such differences may be reflected in future periods as facts and circumstances change.

Segment Information

ASC 280, “Segment Reporting” (“ASC 280”), defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company operates as asingle operating segment. The Company’s CODM is the Chief Executive Officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. Currently, the CODM currently reviews total expenses as the primary measure to manage the business and does not segment the business for internal reporting or decision making. The CODM does not review segment assets at a level other than that presented in the Company’s balance sheet. There are no significant expense categories regularly provided to the CODM beyond those disclosed in the statement of operations.

Concentration of Credit Risk

Cash

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the FDIC up to $250,000 per depositor, per insured bank. As of June 30, 2026, the Company had $3,104,357 in cash balances in excess of the FDIC insured limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

USD Coin

The Company holds U.S. Dollar Currency (“USDC”), a fiat-backed stablecoin issued on public blockchain networks. USDC is accounted for as a financial asset. Based on the terms governing USDC, the Company has a contractual right to redeem USDC for U.S. dollars on demand. Because this right represents a contractual claim to cash, USDC meets the definition of a financial asset under ASC 825-10,* Financial Instruments — Overall*. USDC is recognized as a financial asset upon acquisition.

The Company classifies its USDC as current assets on the balance sheet. The Company safeguards its USDC through third-party custodians. As of June 30, 2026 and December 31, 2025, the Company held USDC balances of $5,405,837 and $3,373,564, respectively, with third-party custodian Coinbase Custody Trust Company, LLC. The Company’s USDC holdings are subject to the creditworthiness and reserve practices of the issuer. Although USDC is designed to maintain a stable value, de-pegging events, regulatory actions, or issuer level risks could impair the Company’s ability to redeem USDC at par.

For the three and six months ended June 30, 2026 the Company earned yield of $14,815 and $21,059 USDC on USDC balances through participation in a third-party wallet and recorded $35,874 related to these USDC as other income in the accompanying unaudited condensed consolidated statement of operations. The Company’s purchases, sales, and dispositions of USDC are reflected within investing activities in the statement of cash flows. Contributions of USDC received in connection with private placement member interest agreements are presented as non-cash financing activities in the accompanying statement of cash flows.

Digital Assets

The Company holds digital assets, which include Avalanche (“AVAX”), staked Avalanche (“stAVAX”) and sAVAX, a liquid staking token representing AVAX staked through a third-party liquid staking protocol (“sAVAX”), which expose it to concentrations of market, credit and custodial risk. As of June 30, 2026 and December 31, 2025, digital assets represented a significant portion of the Company’s total assets. The Company’s holdings of AVAX and stAVAX are not insured or guaranteed by any government or third-party institution. Changes in market prices, protocol performance, or blockchain network conditions could materially affect the fair value of these assets.

The Company safeguards its digital assets through third-party custodians. As of June 30, 2026 and December 31, 2025, the Company held approximately 4,510,207 and 8,329,871 AVAX, respectively, with Coinbase Custody Trust Company. The Company heldno AVAX as of June 30, 2026 and approximately 5,249,578 AVAX as of December 31, 2025 with BitGo Trust Company, Inc. In addition, the Company heldno stAVAX as of June 30, 2026 and approximately 1,180,516 stAVAX as of December 31, 2025 with BitGo Trust Company, Inc. As of June 30, 2026, the Company also held approximately 10,802,156 AVAX with Anchorage Digital Bank. Lastly, the Company heldno sAVAX as of June 30, 2026 or December 31, 2025.

The Company’s AVAX, stAVAX and sAVAX holdings are dependent on the performance and security of the underlying Avalanche blockchain and the specific staking protocol that issues AVAX, stAVAX and sAVAX. Smart contract vulnerabilities, validator performance issues, or protocol governance actions could adversely affect the value or liquidity of AVAX, stAVAX and sAVAX.

Digital asset markets may experience periods of reduced liquidity. The Company may be unable to convert AVAX, stAVAX or sAVAX into fiat currency or other digital assets on a timely basis or at expected prices.

Business Combinations

The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, the Company applies its judgment to determine whether the acquired net assets meets the definition of a business by considering if the set includes an acquired input, process, and the ability to create outputs.

The Company accounts for business combinations using the acquisition method when it has obtained control. The Company measures goodwill as the fair value of the consideration transferred including the fair value of any non-controlling interest recognized, less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at their fair value as of the acquisition date. Transaction costs, other than those associated with the issuance of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred.

Any contingent consideration is measured at fair value at the acquisition date. For contingent consideration that does not meet all the criteria for equity classification, such contingent consideration is required to be recorded at its initial fair value at the acquisition date, and on each balance sheet date thereafter. Changes in the estimated fair value of liability-classified contingent consideration are recognized on the condensed consolidated statements of operations in the period of change.

When the initial accounting for a business combination has not been finalized by the end of the reporting period in which the transaction occurs, the Company reports provisional amounts. Provisional amounts are adjusted during the measurement period, which does not exceed one year from the acquisition date. These adjustments, or recognition of additional assets or liabilities, reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

The Company accounts for certain business combinations that meet the definition of a reverse recapitalization in accordance withASC 805, Business Combinations, and ASC 810, Consolidation. A reverse recapitalization occurs when the legal acquirer is determined to be the accounting acquiree, and the legal acquiree is determined to be the accounting acquirer.

Notes Payable

The Company accounts for borrowings as notes payable. Notes payable are initially recognized at the amount of proceeds received and are subsequently measured at amortized cost. Interest expense is recognized over the term of the borrowing based on the contractual terms of the applicable agreements. Digital assets pledged as collateral in connection with borrowings continue to be recognized as assets of the Company unless control of such assets is transferred in accordance with the terms of the underlying agreements.

Concentration and Current Vulnerability

The Company’s activities consisted principally of investing, staking and evaluating digital token technologies that run on the Avalanche public blockchain network. Due to the current nature of the Company’s operations and the scale of business transacted on the Avalanche Network, a concentration could potentially result in vulnerability as of the reporting date. The concentration and potential associated vulnerabilities are listed below:

The AVAX and stAVAX tokens perform various functions within the Avalanche Ecosystem, including incentivizing network security and functionality and acting as the payment currency on the primary network. Therefore this concentration may result in vulnerability to a near-term severe impact, and at least a possibility that there could be events outside of the Company’s control that may result in a severe impact in the near future.

Based on the above concentrations, as of the date of these unaudited condensed consolidated financial statements, and in the event of a dissolution of Avalanche Foundation or an inability of the Avalanche public blockchain and/or AVAX or stAVAX to function as expected, these could result in near-term severe impacts to the Company’s business.

Management monitors these concentrations on an ongoing basis and may adjust its USDC and digital asset exposure in response to market, regulatory, or operational developments.

The Company relies on third-party service providers to perform certain functions essential to its operations. Any disruptions to the Company’s service providers’ business operations resulting from business failures, financial instability, security failures, government mandated regulation or operational problems could have an adverse impact on the Company’s ability to access critical services and be disruptive to the operations of the Company.

If the Company were to liquidate a significant block of AVAX in a single transaction, this may adversely impact the price per AVAX in the market. Although substantial portions of the AVAX are subject to lock-up restrictions, there could be liquidity risk if the Company were to sell a significant block of AVAX.

Digital Assets

The Company’s digital assets include holdings of AVAX, the native token of the Avalanche blockchain network, which are measured at fair value in accordance with ASU 2023-08,Intangibles — Goodwill and Other — Crypto Assets, codified in ASC Subtopic 350-60 and stAVAX, a liquid staking token on the Avalanche blockchain network, which fall within the scope of ASC 350-30. The digital assets held by the Company are included in current and non-current assets in the accompanying balance sheet. Certain AVAX holdings are classified as current assets because they are readily convertible to cash in active markets and are available to support the Company’s operations and liquidity needs.

The Company’s AVAX are measured at fair value as of each reporting period using Level 1 inputs in accordance with ASC 820,Fair Value Measurement. Level 1 inputs are based on quoted prices in active markets for identical assets that the Company has the ability to access. The Company has determined its principal market to be Coinbase, which serves as its primary digital asset exchange for purchases and sales and the market in which it conducts the majority of its trading activity and due to the most volume of all accessible markets. Fair value is determined using the closing price as of 12:00 AM UTC on Coinbase on the Company’s financial statement measurement date. Changes in fair value are recognized within change in fair value of digital assets within operating expense in the Company’s accompanying unaudited condensed consolidated statement of operations. Realized gains and losses on disposition are recognized using specific identification.

The Company’s stAVAX and sAVAX are intangible assets that do not meet the criteria in ASC 350-60-15-1 and are accounted for as indefinite-lived intangible assets. The Company exchanges AVAX for liquid staking receipt tokens, including stAVAX and sAVAX, through the Hypha Protocol and BENQI Protocol, respectively, in connection with its liquid staking activities. These receipt tokens entitle the holder to redeem the digital intangible assets for which they were exchanged. Holders of stAVAX and sAVAX have claims on underlying staked AVAX and associated staking rewards. Accordingly, these tokens are not standalone intangible assets but liquid staking tokens that convey rights to underlying assets. ASU 2023-08 excludes digital assets that provide enforceable rights to underlying goods, services, or other assets.

Accordingly, the Company tests stAVAX and sAVAX for impairment annually and more frequently when events or changes in circumstances indicate that fair value is below carrying amount. If fair value exceeds carrying value, no upward adjustment is recorded. The Company monitors the value of AVAX subsequent to the initial recognition of stAVAX and sAVAX on an intraday basis for changes in circumstances that may indicate that the carrying amounts of stAVAX and sAVAX may not be recoverable. This ongoing assessment considers significant declines in the market value of AVAX.

While impairment assessments are performed daily, any identified impairment losses are formally recorded on a quarterly basis in the Company’s financial statements. For the period from January 1, 2026 through June 30, 2026, the Company recognized impairment on stAVAX and sAVAX based on the lowest intraday value of AVAX identified during the period when such value was below the respective carrying values of stAVAX and sAVAX.

For the three and six months ended June 30, 2026, the Company recorded impairment losses related to its stAVAX of $427,989 and $5,487,722, respectively, and impairment losses related to its sAVAX of $10,672,560 and $10,672,560, respectively. Total impairment losses related to stAVAX and sAVAX were $11,100,549 and $16,160,282, respectively, for the three and six months ended June 30, 2026, and are presented in operating expenses in the accompanying unaudited condensed consolidated statements of operations.

The Company’s current treasury strategy is primarily to retain its digital assets for investment and to generate returns through staking and liquid staking activities, as applicable. The Company does not generally acquire digital assets for the purpose of short-term trading; however, from time to time, the Company may sell, redeem or otherwise dispose of digital assets to fund operating activities, satisfy liquidity requirements, rebalance its treasury holdings or for other strategic purposes.

Digital assets held for investment that are staked remain recorded within digital assets on the balance sheet. Staking rewards earned by the Company through staking of these assets are recognized as an addition to digital assets and as staking revenue in the accompanying unaudited condensed consolidated statements of operations in the period in which such rewards are recognized.

The Company classifies digital assets as current or non-current based on management’s intended use of the assets and its expectations regarding the timing of their disposition. Digital assets that the Company expects to sell or otherwise monetize within the next twelve months, including amounts expected to be used to fund operating activities and other liquidity requirements, are classified as current assets. Digital assets that the Company intends to retain for long-term investment and does not expect to monetize within the next twelve months are classified as non-current assets. As of June 30, 2026, approximately $19.0 million of the Company’s digital assets were classified as current based on management’s expectation that such assets may be monetized within the next twelve months to support the Company’s operating and liquidity requirements.

Purchases of digital assets are reflected as cash flows used in investing activities in the accompanying statement of cash flows. Contributions of digital assets received in connection with private placement member interest agreements are presented as non-cash financing activities in the accompanying statement of cash flows.

Staking Rewards

The Company recognizes revenue from its staking activities in accordance with ASC 606,Revenue from Contracts with Customers, applied by analogy. To determine the appropriate amount of revenue to be recognized the Company performs the following steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including the constraint on variable consideration, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies each performance obligation.

The Company participates in direct staking in proof-of-stake blockchain networks by staking or delegating digital assets held for investment. The Company utilizes third-party node operators to operate validator infrastructure on the Company’s behalf, provide staking facilitation services, and support staking- related reporting and monitoring. The Company is entitled to receive protocol-defined staking rewards only when the validator to which it has staked tokens successfully maintains protocol defined uptime. The Company’s performance obligation is the delegation of its AVAX tokens to a third-party node operator for a defined staking period. This obligation is satisfied over time as the node operator maintains the required uptime throughout the staking period, since the customer simultaneously receives and consumes the benefit provided. The transaction price, measured at inception, is recognized ratably over the staking period. The staking terms are contractually fixed at inception and the Company does not have the practical ability to withdraw its tokens prior to the expiration of the staking period. Staked digital assets remain under the Company’s ownership and continue to be measured at fair value.

The Company delegates to third-party node operators to facilitate its staking operations, including the setup, operation, and maintenance of their validator nodes. While the Company determines the amount of AVAX staked and the timing of staking and unstaking, the third-party service providers control the underlying infrastructure critical to the staking process, including node availability and the ability to meet the network’s uptime requirements necessary to earn staking rewards. Because the Company is dependent on the third-party vendors’ infrastructure to meet the performance obligation of the node and to generate rewards, and because the vendors bear primary responsibility for ensuring the nodes remain operational and eligible for rewards, the Company has determined that it acts as the agent in these arrangements. Although the Company retains ownership of the underlying digital assets and directs certain aspects of the staking process, the nature and extent of the vendors’ involvement in delivering the staking service is the predominant factor in this assessment. Accordingly, the Company recognizes staking rewards on a net basis as revenue, net of fees paid to the third-party service providers.

The transaction price consists entirely of variable consideration in the form of staking rewards, which is contingent upon successful uptime requirements by the node operator. The Company constrains variable consideration until it is probable that a significant reversal of cumulative revenue recognized will not occur. Validators are required to maintain a minimum uptime of 90% (previously 80%) throughout the staking period. Failure to meet this threshold results in the forfeiture of all staking rewards for the validator and its delegators, including the Company. As such, the consideration the Company expects to receive is contingent upon the node operator’s performance and is accounted for as variable consideration under ASC 606, by analogy. The transaction price is measured at inception using either the most likely amount or expected value method, depending on which method the Company expects to better predict the amount of consideration to which it will be entitled. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty is subsequently resolved. The performance obligation is satisfied over time as the node operator maintains the required uptime throughout the staking period, since the customer simultaneously receives and consumes the benefit provided. The transaction price is recognized ratably over the staking period, subject to the variable consideration constraint. Revenue is not recognized until the uncertainty associated with the variable consideration is resolved, which is typically at the end of the validation period. As of June 30, 2026 and December 31, 2025 there were no active validation periods in progress.

The fair value of reward tokens is determined using quoted prices on the principal market for the related digital asset at contract inception, which corresponds to the date the staking arrangement is initiated and the transaction price is established. The performance obligation is satisfied over time throughout the staking period as the node operator maintains the required uptime.

The Company participates in liquid staking by staking AVAX through liquid staking protocols rather than operating its own validators. In connection with these activities, the Company receives stAVAX and sAVAX tokens, which are liquid staking receipt tokens representing claims on underlying staked AVAX and accumulated staking rewards and are custodied with BitGo or Anchorage. Unlike direct staking, rewards are not paid separately. Instead, staking rewards are reflected through increases in the respective AVAX-to-stAVAX and AVAX-to-sAVAX exchange rates over time. Staking rewards are not continuously reflected in token balances but are instead realized separately. Staking rewards are therefore recognized only when the stAVAX and sAVAX are redeemed and derecognized, measured at the fair value of AVAX at contract inception, which is when the AVAX were staked. Staking rewards received or receivable upon redemption and derecognition of stAVAX and sAVAX are presented in staking rewards, net of fees in the Company’s condensed consolidated statements of operations.

Upon staking AVAX through the liquid staking protocols, the AVAX is derecognized because the protocols obtain the ability to deploy and direct its use, and the stAVAX and sAVAX tokens received concurrently are then recognized. Any gain or loss on the staking transaction is recognized in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) based on the difference between the carrying amount of the AVAX staked and the fair value of the stAVAX and sAVAX received and included in realized gain on digital assets in the Company’s condensed consolidated statements of operations.

When the Company initiates a redemption of stAVAX and sAVAX, the Company derecognizes the stAVAX and sAVAX at its carrying amount on the date the redemption request is accepted by the applicable protocol. At that time, the Company recognizes a receivable for the underlying AVAX expected to be received upon completion of the protocol’s withdrawal process and additional staking rewards no longer accrue. The AVAX receivable is initially measured at the fair value of the AVAX expected to be received, including staking rewards, determined by the protocol’s exchange rate at the time of redemption. Any gain or loss on redemption is recognized in accordance with ASC 610-20 based on the difference between the AVAX receivable and the cost basis of the stAVAX and sAVAX at the time of redemption with such differences included in realized loss on digital assets in the Company’s condensed consolidated statements of operations. The Company may subsequently redeem stAVAX and sAVAX for AVAX through the respective liquid staking protocols.

The Company recognizes income from liquid staking when the related rewards are earned and are measurable and realizable. As of June 30, 2026, the Company hadno stAVAX or sAVAX tokens. As of December 31, 2025, the Company held 1,180,516 stAVAX tokens with a carrying value of $15,246,914 andno sAVAX tokens. During the six months ended June 30, 2026, the Company recorded impairment losses of $5,487,722 and $10,672,560 related to stAVAX and sAVAX, respectively. The Company also recognized gains on redemption of $1,810,121 and $2,146,582 related to stAVAX and sAVAX, respectively, during the six months ended June 30, 2026. The Company recognized liquid staking rewards of $660,693 and $250,294 from stAVAX and sAVAX, respectively, during the three and six months ended June 30, 2026.

Restrictions on AVAX

On or about October 1, 2025 (the Effective Date), the Company acquired a total of 8,658,685 restricted AVAX tokens fromsix counterparties, with a fair value of $106.5 million, pursuant to a combination of the Contribution Agreement, the Token Sale Liability (“TSA”), and separate subscription or contribution agreements with each investor.

All AVAX tokens received by the Company are subject to contractual transfer restrictions that prevent the Company from selling, transferring, or otherwise disposing of the tokens during the applicable lockup periods. These restrictions are implemented through a combination of paper-lock provisions (contractual restrictions enforced through the terms of the applicable agreements) and P-chain lock provisions (protocol- enforced restrictions embedded at the Avalanche blockchain level). The lockup schedules vary by investor, with restriction periods ranging from approximately 7 months to approximately 56 months. Each tranche is subject to a staged unlock schedule under which tokens become freely transferable in periodic monthly increments over the restriction period.

The Company is permitted to engage in certain activities with respect to the restricted tokens during the lockup period, including protocol staking, liquid staking, yield generation, and limited liquidity provision, subject to the terms and conditions specified in the applicable agreements. The restrictions limit the Company’s ability to access the liquidity for these AVAX until the lock-up periods expire. The Company may be exposed to increased price volatility to restricted AVAX because it cannot sell these positions during the lock-up period. Changes in protocol governance, network performance or market conditions could affect the timing or value of future unlocks.

The Company considered the restrictions noted above in accordance with ASU 2022-03,Fair Value Measurement (Topic 820) — Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, and determined that all of the restrictions would be considered entity-specific or sales restrictions rather than restrictions on the underlying token (i.e. the restrictions don’t follow the underlying token), therefore the Company will not consider these restrictions in determining the fair value of the digital assets.

The following summarizes the restrictions on the locked AVAX as of June 30, 2026 and December 31, 2025:

Token Sale Liability

The TSA represented an asset acquisition funded through a combination of cash, USDC and equity-based consideration. Prior to settlement, the TSA represented the fair value of the Company’s obligation to issue Class A Common Stock to satisfy the remaining contractual consideration of $30.0 million. The TSA met the criteria for liability classification under ASC 480-10-25-14(a) and was remeasured at fair value each reporting period, with changes in fair value recognized in earnings.

On June 11, 2026, the Company settled the remaining TSA through the issuance of Class A Common Stock in connection with the closing of the Business Combination. Upon settlement, the carrying value of the TSA liability was reclassified to stockholders’ equity. To the extent the fair value of the equity issued differed from the carrying amount of the TSA liability immediately prior to settlement, the Company recognized a loss on settlement of approximately $6.9 million, which is included in other income (expense), net, in the accompanying consolidated statements of operations. Following the settlement, no TSA liability remained outstanding as of June 30, 2026.

Subscription Receivable

The Company records subscription receivables when Class A Common Stock are issued pursuant to executed subscription agreements for which consideration, including cash, USDC, or digital assets, has not yet been received. Subscription receivables are presented as a contra-equity balance within stockholder’s equity in the accompanying condensed consolidated balance sheets.

The subscription receivable is initially measured based on the fair value of the AVAX tokens to be received on the issuance date of the related Class A Common Stock. Subsequent changes in the fair value of the AVAX tokens underlying the subscription receivable are recognized through equity as an adjustment to additional paid-in capital and do not impact the condensed consolidated statements of operations.

As of June 30, 2026 and December 31, 2025, the subscription receivable represented 133,563 and 192,923 AVAX tokens to be received under executed subscription agreements, with carrying amounts of $4,100,380 and $5,922,749, respectively.

Fair Value Measurement

The Company measures certain assets and liabilities at fair value in accordance with ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value 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. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 — Inputs that are both significant to the fair value measurement and unobservable.

The estimated fair value of certain financial instruments, including cash, accounts payable, accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

Deferred Transaction Costs

The Company capitalized transaction costs, in accordance withASC 340-40, Other Assets and Deferred Costs — Contracts with Customers, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s closing of the Transactions. The deferred costs were expensed upon the consummation Business Combination. At June 30, 2026 and December 31, 2025, the Company recorded $0 and $1,845,131 in deferred transaction costs on the accompanying balance sheet.

Net Loss Per Share

Basic net loss per share attributable to holders of Class A Common Stock is computed by dividing net loss attributable to holders of Class A Common Stock by the weighted-average number of shares of Class A Common Stock outstanding during the period. The Company’s Class B Common Stock is not a participating security and, therefore, is not included in the calculation of basic net loss per share.

Diluted net loss per share attributable to holders of Class A Common Stock is computed by giving effect to all potentially dilutive securities outstanding during the period using the treasury stock method or if-converted method, as applicable. Potential common shares are excluded from the calculation of diluted net loss per share when their effect would be anti-dilutive.

For the three and six months ended June 30, 2026, the Company’s diluted weighted-average shares of Class A Common Stock outstanding were equal to its basic weighted-average shares of Class A Common Stock outstanding because the Company reported a net loss for each period. Accordingly, all potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive.

Income taxes

The Company accounts for income taxes under the asset and liability method in accordance with FASB ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards, as applicable. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect of changes in enacted tax rates on deferred tax assets and liabilities is recognized in income in the period of enactment. A valuation allowance is established when necessary to reduce deferred tax assets to the amount that is more likely than not to be realized.

The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable taxing authority. Recognized tax positions are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Company is not currently aware of any uncertain tax positions that could result in significant payments, accruals or material changes to its tax positions. The Company is subject to examination by applicable taxing authorities for tax years since inception.

Recent Accounting Pronouncements:

Recent Accounting Pronouncements, not yet adopted:

ASU 2024-03, “Disaggregation of Income Statement Expenses (“DISE”)” (“ASU 2024-03”) requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosure about selling expenses.ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 31, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements and disclosures.

In May 2025, the FASB issuedASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The standard revises current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. The amendments differ from current U.S. GAAP because, for certain transactions, they replace the requirement that the primary beneficiary of a VIE is always the acquirer with an assessment that requires an entity to consider the factors to determine which entity is the accounting acquirer. Under the amendments, acquisition transactions in which the legal acquiree is a VIE will, in more instances, result in the same accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity. The ASU does not change the accounting for a transaction determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting acquiree. The new guidance will become effective for interim and annual reporting periods beginning on January 1, 2027, will require a prospective transition method for business combinations that occur after the initial adoption date, and early adoption is permitted. Management is currently evaluating the impact of the new standard on the Company’s financial statements.

Note 5. Stockholder’s equity

The authorized capital stock of the Company consists of 700,000,000 shares of capital stock, par value $0.01 per share, including 550,000,000 shares of Class A Common Stock,100,000,000 shares of Class B Common Stock and 50,000,000 shares of preferred stock.

As of June 30, 2026, the Earn-out Arrangements shares of 3,600,000 are are issued in Escrow with the transfer agent but not outstanding (see Note 3).

Voting Rights

Holders of Class A Common Stock will not be entitled to vote on any matters voted on by shareholders, except as required by the General Corporation Law of the State of Delaware (the “DGCL”), until all shares of Class B Common Stock are cancelled.

In particular, pursuant to Section 242 of the DGCL (as interpreted by case law), until all shares of Class B Common Stock are cancelled, holders of Class A Common Stock, (i) are entitled to vote, as a separate class, exclusively on any proposed amendment to the Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws that would adversely affect the powers, preferences or rights of holders of Class A Common Stock that are unique to such class (such as their economic rights), and (ii) are not entitled to vote on any other matters (including,inter alia, the election of directors, the decision to bring suit against directors, etc). In respect of the matters under point (i) above that are voted on by holders of Class A Common Stock, each holder of Class A Common Stock would be entitled toone (1) vote for each share held of record as of the applicable record date relating to such matter, and the approval of a majority of the outstanding shares of Class A Common Stock is required, in each case, as set forth in the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the DGCL.

Once all shares of Class B Common Stock are canceled, holders of Class A Common Stock will acquire full voting rights.

Each holder of Class B Common Stock is entitled toone (1) vote for each share held of record as of the record date on all matters voted on by shareholders, including the election of directors.

The Company Board is elected annually, and each director holds office for the term for which he or she is elected and until his or her successor is elected and qualified, except in the case of his or her death, resignation, removal or disqualification, and pursuant to the terms and conditions set forth in the Organizational Documents.

Dividend Rights

Holders of shares of Class A Common Stock are entitled to dividends when, as and if declared by the Company Board out of funds legally available therefor, subject to any preferential or other rights of any outstanding Company preferred stock. Holders of shares of Class B Common Stock are not entitled to dividends.

Transferability

Shares of Class A Common Stock are freely transferable, subject to any restrictions pursuant to the DGCL and applicable federal securities laws. Transfers of shares of Class A Common Stock held by Dragonfly and certain MLAC Insiders will be subject to the lock-up restrictions pursuant the Lock-Up Agreements. Shares of Class B Common Stock are not freely transferable, except to an Affiliate of a holder of shares of Class B Common Stock in accordance with the terms of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws. If a holder of shares of Class B Common Stock transfers any of its shares of Class A Common Stock to third parties other than their respective Affiliates, such that as a result of such transfer, said transferor would hold a number of shares of Class B Common Stock greater than the number of shares of Class A Common Stock it holds, then said excess shares of Class B Common Stock shall be automatically cancelled for no consideration concurrently with such transfer, so that immediately following such transfer, the number of shares of Class B Common Stock held by said transferor equals the number of shares of Class A Common Stock held by the same transferor.

Liquidation and Dissolution Rights

Subject to applicable law, upon liquidation, dissolution or winding up of the Company’s affairs, holders of shares of Class A Common Stock will be entitled to receive pro rata on a share-for-share basis, the assets available for distribution after payment of liabilities and payment of preferential and other amounts, if any, payable on any outstanding convertible notes or preferred stock. Holders of shares of Class B Common Stock are not entitled to liquidating distributions.

Note 6. Related Party Transactions

Loan agreements

On October 10, 2025, certain members of Avalanche Treasury Company (the “Contributing Members”), considered related parties, entered into loan contribution agreements with Avalanche Treasury Company and the Company, an affiliate and related party, to fund formation and general and administrative expenses prior to the Business Combination (as defined in Note 2). The loans are unsecured, bear interest at 4.35% per annum compounded annually, and are repayable from the proceeds of the Business Combination or other available funds thereafter. Interest is computed on a 365-day basis and limited to the maximum rate permitted by law. As of December 31, 2025 the Company drew $91,500 on these notes and paid $91,500 on these notes. As of June 30, 2026 and December 31, 2025, there wereno outstanding balances on these loans.

Note 7. Debt

FalconX Credit Facility

On March 20, 2026 the Company entered into a master lender agreement with FalconX Charlie, Inc. (the “Master Lender Agreement”) and on May 29, 2026, the Company entered into a loan term sheet with FalconX Charlie, Inc. (the “Loan Term Sheet”) pursuant to which it may borrow up to $25.0 million, collateralized by certain of the Company’s AVAX holdings. As of June 11, 2026 the Company borrowed $23.0 million under the facility, all of which remained outstanding as of June 30, 2026. The loan is open-term with no stated maturity date and bears interest at 7.0% per annum on any outstanding borrowings. The Company recognized interest expense of $83,808 and $83,808 related to the loan during the three and six months ended June 30, 2026, respectively.

Under the terms of the Master Lender Agreement, upon any draw on the facility, the Company would be required to pledge AVAX tokens as collateral, the fair value of which must meet or exceed specified collateral coverage ratios at the time of borrowing and on an ongoing basis. In the event that the fair value of the pledged AVAX declines below certain maintenance thresholds, the Company may be required to post additional collateral or repay a portion of the outstanding balance to restore the required coverage ratio. A further decline below a liquidation threshold could result in the lender liquidating a portion or all of the pledged collateral to satisfy the outstanding obligation. Either party may terminate the agreement in accordance with its terms, and any outstanding principal and accrued interest would become due upon termination. As of June 30, 2026, the Company had pledged 7.8 million AVAX tokens as collateral under the Master Lender Agreement, with an aggregate fair value of approximately $51 million (see Note 4).

Note 8. Commitments and Contingencies

Subscription Agreement

On October 1, 2025, Avalanche Treasury Company, MLAC, and certain investors entered into Subscription Agreements providing for a private placement of Company Units at $10.00 per unit, payable in cash or AVAX tokens, for an aggregate value of approximately $216 million. The proceeds from the sale of Company Units are intended to provide capitalization for Avalanche Treasury Company and the post-Closing combined entity. Upon Closing, each Company Unit automatically converted intoone share of the Class A Common Stock. During October and November 2025, Avalanche Treasury Company received proceeds with a fair value of approximately $178.2 million which consisted of $96.5 million,22,300,205 USDC, valued at $22.3 million, and 3,340,696 AVAX, valued at $59.4 million pursuant to the Subscription Agreements and issued 21,235,349 membership interests.

Note 9. Fair Value Measurements

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of June 30, 2026 and December 31, 2025:

AVAX and USDC

In determining the value of its AVAX and USDC investments, the Company uses quoted prices as determined by utilizing Coinbase closing prices at 12:00 AM UTC.

Token Sale Liability

In determining the fair value of the token sale liability, the Company used quoted prices as determined by utilizing Coinbase closing prices at 12:00 AM UTC, net of cash received.

stAVAX and sAVAX

Certain assets are measured at fair value on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable. As of June 30, 2026 and December 31, 2025 the Company recognized impairment charges related to its stAVAX, which are accounted for as indefinite-lived intangible assets.

For the six months ended June 30, 2026, the Company recognized impairment losses of $5.5 million, related to its stAVAX due to declining market values of AVAX. Fair value was determined using the quoted price of AVAX because stAVAX does not have a directly observable quoted price in an active market.

For the six months ended June 30, 2026, the Company recognized an impairment loss of $10.7 million related to its sAVAX due to declining market values of AVAX. Fair value was determined using the quoted price of AVAX because sAVAX does not have a directly observable quoted price in an active market.

Earn-out liability

As of June 30, 2026, the Company measured the contingent consideration value using a Monte Carlo simulation based on a Geometric Brownian Motion in a risk-neutral framework.

Significant unobservable inputs used in the valuation as of June 30, 2026 included the following:

Post Share Issuance Liability

In determining the fair value of the post share issuance liability, the Company used quoted prices as determined by utilizing closing share price of the Company’s Class A Common Stock.* *

Note 10. Staking Revenue

The Company participates in staking activities on the Avalanche network through validator arrangements with Chorus One AG, Tarmac Labs Inc., and ParaFi Technologies LLC. Under these arrangements, the service providers operate and maintain validator node infrastructure, including monitoring and reporting services, under the direction of the Company. The Company sets the contractual staking terms, which could range from 14 to 365 days. The Company retains ownership and control of its staked AVAX tokens at all times through the staking process.

The Company earns staking rewards in exchange for delegating digital assets to support network validation activities on the Avalanche blockchain protocol. Staking rewards consist of block rewards, transaction fees, and, where applicable, supplemental protocol incentives. Rewards are distributed directly by the Avalanche protocol to the Company’s designated wallet.

Performance Obligation

The Company’s performance obligation is the delegation of its AVAX tokens to a third-party node operator for a defined staking period. This obligation is satisfied over time as the node operator maintains the required uptime throughout the staking period, since the customer simultaneously receives and consumes the benefit provided. The transaction price, measured at inception, is recognized ratably over the staking period. The staking terms are contractually fixed at inception and the Company does not have the practical ability to withdraw its tokens prior to the expiration of the staking period. Revenue is measured as the net amount of staking rewards earned by the Company less fees paid to node operators.

Transaction Price and Variable Consideration

The transaction price consists of variable consideration in the form of staking rewards net of fees paid to third-party node operators as disclosed in “Service Fees” below. The amount of rewards is determined by protocol-defined formulas and is affected by factors such as network activity, validator performance, and total staked amounts.

Because staking rewards are variable and contingent upon successful validation by the node operator, the Company constrains variable consideration until it is probable that a significant reversal of cumulative revenue recognized will not occur. Validators are required to maintain a minimum uptime of 90% (previously 80%) throughout the staking period. Failure to meet this threshold results in the forfeiture of all staking rewards for the validator and its delegators, including the Company. As such, the consideration the Company expects to receive is contingent upon the node operator’s performance and is accounted for as variable consideration under ASC 606, by analogy. The transaction price is measured at inception using either the most likely amount or expected value method, depending on which method the Company expects to better predict the amount of consideration to which it will be entitled. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty is subsequently resolved. The performance obligation is satisfied over time as the node operator maintains the required uptime throughout the staking period, since the customer simultaneously receives and consumes the benefit provided. The transaction price is recognized ratably over the staking period, subject to the variable consideration constraint. Revenue is not recognized until the uncertainty associated with the variable consideration is resolved, which is typically at the end of the validation period. As of June 30, 2026 and December 31, 2025, there were no active validation periods in progress.

The fair value of reward tokens is determined using quoted prices on the principal market for the related digital asset at contract inception, which corresponds to the date the staking arrangement is initiated and the transaction price is established. The performance obligation is satisfied over time throughout the staking period as the node operator maintains the required uptime. The duration of staking periods ranges from 14 to 365 days as determined by the Company at the time of delegation.

Agent Considerations

Staking Activities

The Company engages third-party service providers to facilitate staking activities on its blockchain nodes. While the Company determines the amount of AVAX staked and the timing of staking and unstaking, the third-party service providers control the underlying infrastructure critical to the staking process, including node availability and the ability to meet the network’s uptime requirements necessary to earn staking rewards. Accordingly, the Company has determined that it is the agent in these arrangements and recognizes staking rewards on a net basis as revenue. For the three and six months ended June 30, 2026, the Company recognized revenue from staking rewards of $1,545,470 and$2,691,557, respectively, net of fees paid to third-party service providers of $102,038 and $138,311, respectively, in the accompanying unaudited condensed consolidated statements of operations.

Liquid Staking Activities

Separately, the Company participates in liquid staking by staking AVAX through third-party liquid staking protocols rather than operating its own validators. In connection with these activities, the Company receives liquid staking tokens, including stAVAX and sAVAX, representing claims on underlying staked AVAX and accumulated staking rewards. Unlike the Company’s traditional staking activities, liquid staking rewards are not distributed separately while the liquid staking tokens are held. Instead, staking rewards accrue through increases in the respective AVAX-to-stAVAX and AVAX-to-sAVAX exchange rates and are realized upon redemption of the liquid staking tokens for AVAX. For the six months ended June 30, 2026, the Company recognized $910,987 of revenue from liquid staking rewards upon redemption, consisting of $660,693 for approximately 33,133 tokens related to stAVAX and $250,294 for approximately 26,971 tokens related to sAVAX, in the accompanying unaudited condensed consolidated statements of operations.

Service Fees

Validator node operators are compensated based on a percentage of staking rewards earned, generally ranging from 2.5% to 3.0%. Fees under the Chorus One and Tarmac arrangements are settled in AVAX and measured at fair value at contract inception. Fees under the ParaFi arrangement are invoiced monthly and settled in fiat currency. Fees paid to third-party node operators are netted against gross staking rewards, with the resulting net amount recognized as revenue in the period the staking rewards are earned.

Note 11. Digital Assets

Digital assets — AVAX

The following table summarizes the Company’s total digital assets — AVAX holdings, as shown on the accompanying balance sheet as of June 30, 2026 and December 31, 2025:

The cost basis for the AVAX represents the cost at the time the Company received or purchased the AVAX.

As of June 30, 2026, the Company classified approximately 2.9 million AVAX for $19.0 million as current assets on the condensed consolidated balance sheet. Substantially the remaining 12.4 million AVAX are restricted as either pledged collateral or locked tokens (see Note 4).

The following table presents a roll forward of the Company’s AVAX as of June 30, 2026:

Digital assets — stAVAX

The following table presents a roll forward of the Company’s stAVAX as of June 30, 2026:

As of June 30, 2026 the Company didnot hold any stAVAX.

Digital assets — sAVAX

The following table presents a roll forward of the Company’s sAVAX as of June 30, 2026:

As of June 30, 2026 the Company didnot hold any sAVAX.

Note 12. Earnings per share

The Company has two classes of common stock, Class A common stock and Class B common stock. The Company has determined that Class B common stock is not a participating security for purposes of calculating earnings per share. Accordingly, basic and diluted net income (loss) per share is presented only for Class A common stock.

Basic net income (loss) per share attributable to holders of Class A common stock is computed by dividing net income (loss) attributable to holders of Class A common stock by the weighted-average number of shares of Class A common stock outstanding during the period.

Diluted net income (loss) per share attributable to holders of Class A common stock is computed by adjusting basic net income (loss) per share for the potentially dilutive effect of securities or other contracts that may result in the issuance of Class A common stock, using the applicable methods prescribed by U.S. GAAP. Potential common shares are excluded from the calculation of diluted net income (loss) per share when their effect would be anti-dilutive.

For the three and six months ended June 30, 2026, diluted weighted-average shares of Class A common stock outstanding were equal to basic weighted-average shares of Class A common stock outstanding because the Company reported a net loss for each period. Accordingly, potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive.

Note 13. Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to August 19, 2026, the date the financial statements are issued. Based on this review, other than below, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

Stock Option Awards

On July 12, 2026, the Compensation Committee of the Board of Directors approved stock option awards under the Company’s 2026 Omnibus Incentive Plan to Gerald Bartholomew Smith, the Company’s Chief Executive Officer, and Laine Mihalchick Moljo, the Company’s Chief Operating Officer. The awards consist of options to purchase 2,700,000 shares and 1,100,000 shares, respectively, of the Company’s Class A common stock at an exercise price of $0.54 per share.

The options vest inthree equal annual installments on January 12, 2027, 2028 and 2029, subject to the continued employment of the respective executive through each applicable vesting date. The awards provide for accelerated vesting upon certain qualifying termination events in connection with a change in control. The options expire on the tenth anniversary of the grant date. As the awards were granted subsequent to June 30, 2026, they are not reflected in the accompanying financial statements.

Loan Agreement with Galaxy Digital LLC (“Galaxy Digital”)

On July 2, 2026, AVAT signed a Master Digital Currency Loan Agreement (the “Galaxy Digital Master Digital Currency Loan Agreement”) with Galaxy Digital LLC (the “Galaxy Digital”) to facilitate the potential future execution of collateralized loans in which Galaxy Digital may lend to AVAT certain Digital Currency or cash (dependent on the loaned asset specified in the relevant executed loan term sheet) and AVAT would pay a borrow fee as well as pledge collateral on or prior to the date of any drawdown pursuant to such future loan term sheet, as applicable. The loans under the Master Digital Currency Loan Agreement may be open loans without a maturity date, whereby AVAT may repay and Galaxy Digital may recall the loan at any time, or term loans with a predetermined maturity date.

On July 10, 2026, AVAT and Galaxy Digital executed a loan term sheet, pursuant to which AVAT agreed to borrow from Galaxy Digital, and Galaxy Digital agreed to lend to AVAT, a loan of $10 million pursuant to a term loan with a maturity date of January 10, 2027 (the “July 2026 Collateralized Term Loan”). The borrow fee is 10.5% per annum. AVAT will pledge approximately 2.9 million AVAX pursuant to the July 2026 Collateralized Term Loan, which is based on an initial collateral level of 180%. The collateral will be held in a segregated custody account with Anchorage pursuant to an Account Control Agreement among Anchorage, AVAT and Galaxy Digital. The proceeds were used to pay down the FalconX Principal (Note 7).

Nasdaq Minimum Bid Price Notification

On August 6, 2026, the Company received a written notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (the “Nasdaq Staff”) notifying the Company that, for the preceding 33 consecutive business days, the closing bid price of the Company’s Class A Common Stock was below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The notification letter has no immediate effect on the listing or trading of the Company’s Class A Common Stock, which continues to trade on The Nasdaq Capital Market under the symbol “AVAT.” In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until February 2, 2027, to regain compliance. Compliance may be achieved if the closing bid price of the Company’s Class A Common Stock is at least $1.00 per share for a minimum of ten consecutive business days during the compliance period. If the Company does not regain compliance by February 2, 2027, it may be eligible for an additional 180-calendar-day compliance period, provided it meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (other than the bid price requirement) and provides written notice of its intention to cure the deficiency, by effecting a reverse stock split if necessary. If the Company is not eligible or it appears to Nasdaq that the Company will not be able to cure the deficiency, Nasdaq will provide notice that the Company’s Class A Common Stock is subject to delisting, at which time the Company may appeal the determination to a hearing panel. The Company intends to monitor the closing bid price of its Class A Common Stock and may, if appropriate, consider available options to regain compliance with Nasdaq’s listing requirements, including initiating a reverse stock split.

Nasdaq Market Value of Listed Securities Requirement

On August 6, 2026, the Company also received a written notification letter from the Nasdaq Staff notifying the Company that, for the preceding 33 consecutive business days, the market value of listed securities (“MVLS”) of the Company’s Class A Common Stock was below the minimum $35 million threshold required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the “MVLS Requirement”). Similar to the Minimum Bid Price Requirement, the MVLS Requirement notification letter has no immediate effect on the listing or trading of the Company’s Class A Common Stock and in accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided 180 calendar days, or until February 2, 2027, to regain compliance. To regain compliance, the Company’s MVLS must close at $35 million or more for a minimum of ten consecutive business days during the 180 calendar day compliance period. If the Company does not regain compliance by February 2, 2027, it may be eligible for an additional 180 calendar day compliance period. Similar to the Minimum Bid Price Requirement, if the Company is not eligible or it appears to Nasdaq that the Company will not be able to cure the deficiency, Nasdaq will provide notice that the Company’s Class A Common Stock is subject to delisting, at which time the Company may appeal the determination to a hearing panel. The Company intends to monitor the market value of its listed securities and may, if appropriate, consider implementing available options to regain compliance with the MVLS Requirement.

Astral Post-Closing Shares - Side-Letter

Astral and the Company executed a side-letter agreement on August 13, 2026 and agreed that the issuance of the 2,000,000 Astral Post-Closing Shares shall be delivered on a date identified by Astral but in any event by September 11, 2026. The post-closing liability associated with those 2,000,000 Astral shares were initially valued at $1.85 per share, or approximately $3.7 million (See Note 3).