Avalanche Treasury Corp
For the period ended Jun 30, 2026. Filed Aug 19, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 19, 2026
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our chief executive officer and chief financial officer, whom we refer to as our Certifying Officers, the effectiveness of our disclosure controls and procedures as of June 30, 2026, pursuant to Rule 13a-15(b) or Rule 15d-15(b) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the material weaknesses in internal control over financial reporting described below under “Internal Control Over Financial Reporting.”
Changes in Internal Control Over Financial Reporting
During the preparation of our financial statements, we identified material weaknesses in our internal control over financial reporting. The PCAOB defines a material weakness as “a deficiency, or a combination of deficiencies, in internal control over financial.
Internal Control Over Financial Reporting
During the preparation of our financial statements, we identified material weaknesses in our internal control over financial reporting. The PCAOB defines a material weakness as “a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”
We did not design or maintain an effective control environment commensurate with the financial reporting requirements applicable to U.S. listed companies, including adequate business processes, systems, personnel and related internal controls. As a result, we identified the following material weaknesses:
| o | We did not design and maintain effective controls over the financial reporting process, including segregation of duties related to journal entries and account reconciliations; including the accounting for digital assets and the application of U.S. GAAP related to the measurement and valuation of digital asset transactions and balances; and |
| o | We did not design and maintain effective controls related to the accounting for complex and non-routine transactions, including the accounting for the Company’s reverse recapitalization transaction and related entries |
We recognize that the material weaknesses described above could result in misstatements to one or more account balances or disclosures, including substantially all financial statement accounts and disclosures, that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.
We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses:
| ● | Financial reporting and segregation of duties. We will continue to formalize and enhance policies and procedures related to the financial reporting process, including the preparation, review and approval of journal entries and account reconciliations. We plan to design and implement additional control activities to address segregation-of-duties risks and enhance general controls over information systems supporting financial reporting. We also intend to clearly define responsibility and accountability for the timely performance and review of these controls and continue to design, implement and refine controls over the financial consolidation and reporting process to support the accuracy, completeness and timeliness of our financial statements. |
| ● | Digital assets. We plan to enhance and formalize controls over the accounting for digital asset transactions and balances, including controls over the completeness and accuracy of transaction data, classification of digital assets, application of the appropriate U.S. GAAP accounting model, valuation and impairment assessments, and the recording and review of realized and unrealized gains and losses. These remediation efforts will also include enhanced review procedures over staking and liquid staking activities, including the accounting for AVAX, stAVAX and sAVAX, staking rewards, liquid staking rewards, redemptions and related transactions, as applicable. |
| ● | Complex and non-routine transactions. We plan to design and implement enhanced controls for the identification, evaluation, documentation and review of complex and non-routine transactions. These controls are expected to include formal accounting analyses of significant transactions, consideration of applicable U.S. GAAP and relevant accounting guidance, review and approval by personnel with appropriate technical accounting expertise, and timely evaluation of the related financial statement presentation and disclosures. These remediation efforts include controls responsive to the accounting matters identified in connection with the Company’s reverse recapitalization transaction and related accounting entries. |
We intend to continue evaluating and enhancing our internal control over financial reporting and may implement additional measures as appropriate. The material weaknesses will not be considered remediated until the applicable controls have been designed and implemented and have operated effectively for a sufficient period of time, and management has concluded, through testing, that the controls are operating effectively.
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