AVAX ONE TECHNOLOGY LTD.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
AVX$4.29+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-07.
0001641172-25-002955
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001493152-26-014138
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 47 previous paragraphs and 91 current paragraphs.
12 unchanged; 5 reworded; 74 added; 30 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (74)
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s Discussion and Analysis of Financial Condition and Results of Operations
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BUSINESS OVERVIEW
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For a complete discussion of our business, see Part I, Item 1. “Business” of this Annual Report.
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RECENT DEVELOPMENTS
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Validator Infrastructure
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In January 2026, we launched our proprietary validator infrastructure, enabling third-party delegators to stake AVAX at competitive costs while generating revenue through delegation fees. This infrastructure strengthens operational control, improves capital efficiency and creates an incremental, protocol-native revenue stream.
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Share Repurchase Program
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In November 2025, the Company’s board of directors authorized a share repurchase program (the “Repurchase Program”) under which the Company may repurchase up to $40 million of its outstanding common shares, for a period of 12 months, subject to contractual requirements. The board of directors will periodically review the Company’s Repurchase Program and may decide to extend its term or increase the authorized amount. As of December 31, 2025, the Company has repurchased 183,346 shares in the open market for a total cost of $257,964 pursuant to the Repurchase Program. From January 1, 2026 to March 24, 2026, the Company repurchased 3,090,038 of common shares in the open market for a total cost of $2,868,398.
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Acquisitions and Dispositions
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In January 2025, we acquired the assets of Bald Eagle Mining, LLC (“Bald Eagle”), located in Columbiana Country, Ohio, for a total purchase price of $4,765,000. Bald Eagle is a Bitcoin Mining facility, powered by 5MW of flared natural gas energy, which at the time of the acquisition supported over 900 Bitcoin Mining units. Subsequent to the acquisition, we increased the number of mining units from 900 to 1,662.
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In December 2025, we entered into a letter of intent, with an unrelated third party, to sell the Manna IP for a purchase price of $1,550,000 (the “Purchase Price”). Based on the Purchase Price, we determined the Manna IP asset was impaired as of December 31, 2025 and recorded an impairment charge totalling $5,110,592 which is reflected in the accompanying consolidated statements of comprehensive loss as intangible asset impairment.
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Reverse Stock Splits
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In July 2025, the Company effected a one-for-nine reverse stock split of the Company’s issued and outstanding common shares (the “2025 Reverse Split”). As a result of the 2025 Reverse Split, every nine shares of the Company’s old common shares were converted into one share of the Company’s new common shares. Fractional shares resulting from the 2025 Reverse Split were sold at the then-prevailing price on the open market, with the proceeds being distributed on a pro rata basis to the impacted shareholders. The 2025 Reverse Split automatically and proportionately adjusted all issued and outstanding shares of the Company’s common shares, as well as convertible debentures, convertible features, pre-funded warrants, options and warrants outstanding at the time of the date of the 2025 Reverse Split. The exercise price on outstanding equity-based grants was proportionately increased, while the number of shares available under the Company’s equity-based plans was proportionately reduced. Share and per share data (except par value) for the periods presented reflect the effects of the 2025 Reverse Split. References to numbers of common shares and per share data in the accompanying financial statements and notes thereto for periods ended prior to July 28, 2025, have been adjusted to reflect the 2025 Reverse Split on a retroactive basis.
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Foreign Currency Transactions
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The financial statements of the Company and its subsidiaries whose functional currencies are the local currencies are translated into USD for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive loss” as equity in the consolidated balance sheets. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the reporting currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within non-operating expenses.
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As of April 1, 2025, the functional currency of the Company was changed from Canadian dollars (“CAD”) to USD due to a change in the primary economic environment in which the Company operates. The majority of the Company’s executive leadership and operations are located in the United States. The majority of revenue generation, expenditures, cash flows, financing, and contractual terms are denominated in USD.
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STATUS AS AN EMERGING GROWTH COMPANY
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On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies.
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We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions from, without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (PCAOB) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (a) the last day of our fiscal year following the 5th anniversary of the closing of our initial public offering, (b) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (c) the last day of our fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, or Exchange Act (which would occur if the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter), or (d) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.
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TRENDS AND UNCERTAINTIES IMPACTING OUR BUSINESS AND INDUSTRY
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We generate revenue from blockchain-based operations, comprised of two primary sources: (i) staking rewards earned from delegating and validator node operations, primarily Avalanche blockchain (“Avalanche Protocol”) and (ii) the production of digital assets through mining activities, primarily Bitcoin (“Bitcoin Mining”). We commenced our digital asset strategy with regards to the Avalanche Protocol in the fourth quarter of 2025 with our transition to AVAX One and with regards to Bitcoin Mining in the fourth quarter of 2024 with the acquisition of our first Bitcoin Mining facility. We currently own and operate three Bitcoin Mining facilities.
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Our digital assets were comprised of the following as of December 31, 2025 and 2024, which value may be materially impacted as the market value of digital assets fluctuates.
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Management believes, given our recent investments, coupled with our relative position and liquidity, we are well-positioned to execute on our long-term growth strategy.
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Energy Cost
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Energy cost is one of the most significant cost drivers for Bitcoin Mining operations and these costs can be highly volatile and sensitive to geopolitical events and weather conditions, such as winter storms and earthquakes, which impact supply and demand for power regionally. We believe these costs are effectively managed through our power purchase agreement which allow us to obtain natural gas required to generate power at our mining facilities at favorable prices. Though energy prices are less predictable, our power purchase agreement gives us greater flexibility and ability to actively manage the energy we consume with the goal of increasing energy efficiency and profitability.
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Concentrations and Current Vulnerability
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Our principal activities consist primarily from investing, staking and evaluating digital tokens technologies that run on the Avalanche public blockchain network. Due to the current nature of our operations and the scale of business transacted on the Avalanche Network, a concentration could potentially result in a vulnerability. The concentration and potential associated vulnerabilities include, but are not limited to:
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The AVAX token performs 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 possible that there could be events outside of our control that may result in a severe impact in the near term.
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As a result, of the foregoing, we believe a concentration exists as of the date of these financial statements, and a dissolution of the Avalanche Foundation or an inability of the Avalanche public blockchain network and/or AVAX tokens to function as expected, could result in near-term severe impacts to our business.
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Total revenue was comprised of the following during the years ended December 31, 2025 and 2024 -
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We generate revenue from blockchain-based operations and comprises two primary sources: (i) staking rewards earned from delegating and validator node operations, primarily through our Avalanche Protocol and (ii) the production of digital assets through mining activities, primarily Bitcoin Mining.
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Our Avalanche Protocol operations commenced in the fourth quarter of 2025 in connection with our transition to AVAX One and the implementation of our digital asset strategy. Our Avalanche Protocol revenues are generated through network-based smart contracts. We stake our crypto assets on our own validator nodes and nodes from third-party operators. Through these contracts, we provide crypto assets to stake to a node for the purpose of validating transactions and adding blocks to a respective blockchain network. We define the duration of our smart contracts, typically lasting from a few days to several weeks, and these contracts require that the crypto assets staked remain locked up for the duration.
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Pursuant to our Bitcoin Mining, we earn revenue from the production of certain digital assets through mining activities. Our Bitcoin Mining operations commenced in December 2024 with the acquisition of first mining facility in Alberta, Canada (the “Redwater acquisition”) and then in January 2025 we added an additional mining facility with the Bald Eagle acquisition.
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Operating expenses were comprised of the following during the years ended December 31, 2025 and 2024 -
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Total operating expenses increased primarily due to the following:
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The increase in cost of revenue, excluding depreciation of $1.4 million is directly related to our Bitcoin Mining operations which commenced in the fourth quarter of 2024.
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Depreciation and amortization increased $0.5 million, or 85%, primarily due to the increase in our Bitcoin Mining equipment from both the Redwater acquisition in late 2024 and the Bald Eagle acquisition in early 2025.
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The increase in impairment of assets of $1.4 million, or 34%, is primarily due to the year over year increase in the impairment of Manna IP of $0.9 million coupled with the impairment of certain equipment in the Bitcoin Mining division of $0.4 million.
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Share-based compensation increased $1.1 million, or 293%, due to common shares issued to certain executives, directors and consultants in connection with the transition to AVAX One and the Offering.
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The increase in office and administrative costs of $0.4 million, or 71%, is primarily due to insurance costs.
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Removed paragraphs (30)
Previous report
During the year, the Company sold and delivered its first shipment of hydroxyl generating devices. The shipment consisted of 5 units for gross sales of $40,845.
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The Company sells its products directly to customers and indirectly to customers through sales brokers.
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During the fourth quarter of 2024, the Company generated $26,572 of digital assets from its crypto asset production operations.
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Operating Expenses
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Operating expenses primarily consist of wages and salaries, professional fees, consulting, office and administration, investor and public relations, research and development, and share-based compensation. Operating expenses decreased in the year ended December 31, 2024 as compared to December 31, 2023 by $774,813 or 6.95% primarily due to the following:
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Other expense for the year ended December 31, 2024 increased due to the following:
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Critical Accounting Estimates
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While there was no single determinative event or factor, the consideration in totality of several factors that developed during the third quarter of 2024 led us to conclude that it was possible that the fair value of our intangible asset was below their carrying amounts. These factors included: (i) a sustained decrease in our share price in 2024, which reduced our market capitalization below the book value of net assets; (ii) lack of financing raised during 2024 due to the economic environment (iii) delays in the launch of the sale of our UN(THINK) flour;
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Accordingly, we performed an impairment test on our intangible assets as of September 30, 2024 based on the asset’s fair value based discounted future cash flows. As a result of our impairment test, we determined that an intangible asset was impaired as of September 30, 2024. We recorded impairment on the intangible asset.
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Equity-linked instruments
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The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”), which provides that if three criteria are met, the Company is required to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which;
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(a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract;
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(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur; and
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(c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
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ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”
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The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.”
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The debenture conversion features are categorized as a Level 3 financial instrument. The Company utilized the Monte Carlo option-pricing for valuing the convertible features.
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The First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche of Debenture Warrants, collectively (the “Debenture Warrants”) are categorized as a Level 3 financial instrument. The Company utilized the Monte Carlo option-pricing model to value the Debenture Warrants.
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The most subjective assumptions in such option pricing models include the implied volatility, expected term, risk-free rate and the probability of triggering the down-round provisions.
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Share Based Compensation
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The Company uses the straight-line method to allocate compensation cost to reporting periods over each optionee’s requisite service period, which is generally the vesting period, and estimates the fair value of stock-based awards to employees and directors using the Black-Scholes option-valuation model (the “Black-Scholes model”). This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life, and expected volatility in the market value of the underlying common stock. The Company recognizes any forfeitures as they occur.
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The Company had $489,868 in cash as at December 31, 2024 as compared to $3,878,578 as at December 31, 2023.
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Our future capital requirements will depend on many factors, including:
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The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. The Company is at an early stage of development. As such it is likely that additional financing will be needed by the Company to fund its operations and to develop and commercialize its technology. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Previous report
For the next twelve months from issuance of these financial statements, the Company will seek to obtain additional capital through the sale of debt or equity financings or other arrangements to fund operations; however, there can be no assurance that the Company will be able to raise needed capital under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares. Issued debt securities may contain covenants and limit the Company’s ability to pay dividends or make other distributions to shareholders. If the Company is unable to obtain such additional financing, future operations would need to be scaled back or discontinued. Due to the uncertainty in the Company’s ability to raise capital, management believes that there is substantial doubt in the Company’s ability to continue as a going concern for twelve months from the issuance of these financial statements.
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Cash Flows
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The net cash used by operating activities for the year ended December 31, 2024 was $5,271,278 compared to $6,505,072 for the year ended December 31, 2023. The change of $1,233,794 was primarily due to the following:
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The net cash used in investing activities for the year ended December 31, 2024, was used for the purchase of the Redwater property, which consisted of $839,937 for a power plant and equipment; and $673,769 for a power generation agreement. In addition, $356,079 was paid as cash consideration for the RCS business combination, which was completed in the period.
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During the year ended December 31, 2023, net cash used in investing activities was for the purchase of an equity investment in RCS for $225,000.
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Net cash provided by financing activities for the year ended December 31, 2024 represents net proceeds from debentures of $2,250,000, as well as proceeds from common shares issued for cash of $2,775,616. This was offset by $1,331,467 paid for repayment of convertible debentures and $84,463 related to the financing costs of debentures held by the Company. Net cash provided by financing activities for the year ended December 31, 2023, represents net proceeds from debentures of $9,615,385 as well as common shares issued for cash of $1,342,915. This was partially offset by repayments on convertible debentures of $2,143,091, financing costs of debentures of $387,917 and share issuance costs of $153,220.
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Previous wording
Prospective investors should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” You should review the “Risk Factors” section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read together with our historical financial statements and the notes to those statements and other financial information included elsewhere in this Annual Report. Certain statements in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, include forward-looking statements that involve risks and uncertainties. See“Cautionary Note Regarding Forward-Looking Statements.”You should review the“Risk Factors”section of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
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FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
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RESULTS OF OPERATIONS FOR THE YEARS ENDED December 31, 2025 and 2024
Previous wording
The Company’s primary need for liquidity is to fund working capital requirements, capital expenditures, and general corporate purposes. The Company’s ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. We recorded a net loss of $16,274,815 for the year ended December 31, 2024 compared to $11,733,210 for the year ended December 31, 2023; and recorded an accumulated deficit of $60,782,119 as of December 31, 2024 ($44,507,304 – as of December 31, 2023). Net cash used in operating activities for the year ended December 31, 2024 was $5,271,278 compared to $6,505,072 for the year ended December 31, 2023.
Current wording
Our primary need for liquidity is to fund working capital requirements, capital expenditures, and for general corporate purposes. Our ability to fund operations and make planned capital expenditures and debt service obligations depends on future operating performance and cash flows, which are subject to prevailing economic conditions, financial markets, business and other factors. As discussed above, the Offering has provided us with approximately $10.0 million of working capital. The working capital provided by the Offering, coupled with the projected cash flow from operations is expected to be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date these financial statements are issued.
Previous wording
Our intangible asset balance consists of our patented process to develop germinated whole grain wheat flour and hydroxyl generation systems, including the associated R&D, trademark, brand logo, web domain, customer list, device firmware and software, and product blue prints. We test our indefinite-lived intangible assets for impairment annually or more frequently if events or circumstances indicate it is more likely than not that the fair value of our indefinite-lived intangible asset is less than its carrying amount. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections (for example due to regulatory or industry changes), disposals of significant components of our business, unexpected business disruptions, unexpected significant declines in operating results, or significant adverse changes in the markets in which we operate.
Current wording
Our intangible asset balance consists of our patented process to develop germinated whole grain wheat flour and hydroxyl generation systems, including the associated R&D, trademark, brand logo, web domain, customer list, device firmware and software, and product blueprints. We test our indefinite-lived intangible assets for impairment annually or more frequently if events or circumstances indicate it is more likely than not that the fair value of our indefinite-lived intangible asset is less than its carrying amount. Such events and circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections (for example due to regulatory or industry changes), disposals of significant components of our business, unexpected business disruptions, unexpected significant declines in operating results, or significant adverse changes in the markets in which we operate.
Previous wording
The fair value of the Company’s warrants is determined in accordance with FASB ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories:
Current wording
The Company measures fair value in accordance with FASB ASC 820, “Fair Value Measurement,” which establishes a fair value hierarchy that prioritizes the assumptions (inputs) to valuation techniques used to price assets or liabilities that are measured at fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The guidance for fair value measurements requires that assets and liabilities measured at fair value be classified and disclosed in one of the following categories: