AVAX ONE TECHNOLOGY LTD.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended June 30, 2026 and 2025 (unaudited)

(Expressed in US Dollars, except where noted)

1. NATURE OF OPERATIONS

Business Overview

The Company was incorporated under the name AgriForce Growing Systems, Ltd. as a private company by Articles of Incorporation issued pursuant to the provisions of the Business Corporations Act (British Columbia) on December 22, 2017. The Company’s registered and records office address is at 800 – 525 West 8 th Avenue, Vancouver, BC, Canada, V5Z 1C6. Effective as of November 13, 2025, the Company changed its name to AVAX One Technology Ltd. (“AVAX One,” “AVX,” “AgriFORCE,” the “Company,” “we” and “our”).

AgriFORCE ceased its legacy “ag-tech” operations in early 2025 except that it maintained its Manna business involving the deployment of certain patented technologies. The Company is currently in the process of selling the Manna business and anticipates closing on the transaction during the fourth quarter of 2026.

AVAX One is a digital infrastructure company accelerating the transition to an onchain financial economy. The Company maintains a strategic Avalanche digital asset treasury, accumulating AVAX tokens and generating onchain yield through native staking and ecosystem participation. In addition, the Company operates Bitcoin Mining facilities in Alberta and Ohio and is developing modular data centers. Together, these three pillars give public market investors exposure to both the onchain economy and the digital infrastructure layer.

The Company is developing power-first, modular data centers in energy-advantaged regions — leveraging behind-the-meter generation and microgrid design to deliver reliable, cost-efficient compute capacity for artificial intelligence and high-performance computing workloads. The Company’s powered land model eliminates grid dependency and delivers pre-energized, Tier 3-ready sites on accelerated timelines unavailable through traditional utility-connected development.

Principles of Consolidation

Our consolidated financial statements include the accounts of our wholly owned subsidiaries. Although we have none at the present time, we consolidate variable interest entities when we have variable interests and are the primary beneficiary.

Use of Estimates

The preparation of our financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Significant estimates reflected in these financial statements include, but are not limited to, accounting for share-based compensation, valuation of derivative liabilities, valuation of warrants and convertible debt at issuance, business combination, impairment as well as depreciation method. Actual results could differ from these estimates, and those differences could be material.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the reported financial position, results of operations, or cash flows. The impact of such reclassifications on any prior period disclosures were immaterial.

Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and assess performance. The Company’s CODM group is composed of the Chief Executive Officer and Chief Financial Officer.

The Company has chosen to organize its operating segments based on products or services offered. Each operating segment is also a reportable segment (i.e., operating segments have not been aggregated). The Company’s operating and reportable segments at June 30, 2026, include Avalanche Protocol and Bitcoin Mining. All other activities, including financing, are carried out through the corporate segment. At June 30, 2026, Bitcoin Mining operations were conducted at several locations in Alberta, Canada, and the Bald Eagle Property in Ohio, USA, which reflects the manner in which the Company’s CODM reviews and assesses the performance of the business and allocates resources. Additionally, the Company’s CODM regularly reviews the Company’s expenses on a consolidated basis. The financial metrics used by the CODM help make key operating decisions, such as determination of digital asset purchases and significant acquisitions and allocation of budget between operating costs, general and administrative expenses and research and development expenses. See Note 16, “Segment Information” for further details.

Reverse Stock Split

On June 15, 2026, the Company effected a one-for-twelve reverse stock split of the Company’s issued and outstanding common shares (the “2026 Reverse Split”). As a result of the 2026 Reverse Split, every 12 common shares in the capital of the Company then outstanding were converted into one common share in the capital of the Company. Fractional shares resulting from the 2026 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 stockholders. The 2026 Reverse Split automatically and proportionately adjusted all of the Company’s issued and outstanding common shares, as well as convertible debentures, convertible features, prefunded warrants, stock options and warrants outstanding at the time of the date of the 2026 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 2026 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 June 15, 2026 have been adjusted to reflect the 2026 Reverse Split on a retroactive basis.

On July 28, 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 9 shares of the Company’s then outstanding common shares were converted into one common share in the capital of the Company. 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 stockholders. The 2025 Reverse Split automatically and proportionately adjusted all of the Company’s issued and outstanding common shares, as well as convertible debentures, convertible features, prefunded warrants, stock 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.

Nasdaq Compliance

On March 13, 2026, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) that it no longer complied with Rule 5550(a)(2) of Nasdaq’s Listing Rules, which requires listed securities to maintain a minimum bid price of $1 per share. Based upon the closing bid price for the last 30 consecutive business days (January 29, 2026 to March 12, 2026), the Company no longer met this requirement.

The Company presented its appeal to the Hearing Panel (“Panel”), and the hearing was held on April 21, 2026. On May 8, 2026, the Company received from the Panel an exception to cure its listing deficiencies and provides for the continued listing on The Nasdaq Stock Market subject to certain conditions. The conditions include, among other things, that the Company must demonstrate compliance with the minimum bid price of $1 per share for a minimum of 10 consecutive trading days on or before July 6, 2026.

On July 8, 2026, the Company received formal notice from Nasdaq confirming the Company has regained compliance with Nasdaq’s Listing Rule 5550(a)(2). According to the notification, Nasdaq determined that, for the ten consecutive trading days from June 15, 2026 through June 29, 2026, the closing bid price of AVAX One’s common shares was at or above the required minimum of $1.00 per share. As a result, Nasdaq concluded that the Company satisfied the minimum bid price requirement, and the matter is now closed.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Preparation

The accompanying unaudited condensed consolidated financial statements and related financial information of AVAX One Technology Ltd. should be read in conjunction with the audited financial statements and the related notes thereto for the years ended December 31, 2025 and 2024 included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on March 31, 2026. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements.

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments which are necessary to state fairly the Company’s financial position as of June 30, 2026 and December 31, 2025, and the results of its operations and cash flows during the six months ended June 30, 2026 and 2025. Such adjustments are of a normal and recurring nature. The results for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2026, or for any future period.

Cash and Cash Equivalents

The Company’s cash and cash equivalents consists of cash that is not restricted as to withdrawal or use, stablecoins, and from time to time may also include interest-bearing highly liquid investments with original maturities of three months or less at the date of purchase. The Company acquires and holds stablecoins primarily to facilitate crypto asset transactions and are typically held in secure digital wallets or on crypto asset exchanges.

As of June 30, 2026 and December 31, 2025, stablecoins consisted primarily of USD Coin (“USDC”), which is readily convertible to known amounts of cash, allowing for near-instant, one-to-one redemption of USDC for U.S. dollars. Additionally, the underlying reserves backing USDC, comprising cash in segregated accounts titled for benefit of USDC holders and a government money market fund that holds cash, short-duration U.S. Treasuries, and overnight U.S. Treasury repurchase agreements, exhibit the risk and liquidity characteristics of cash equivalents as defined in Accounting Standards Codification (“ASC”) 230,Statement of Cash Flows. As of June 30, 2026 and December 31, 2025, the Company held approximately $11.1 million in USDC.

Restricted Cash and Escrow Receivable

Restricted cash as of June 30, 2026, represents funds held in a deposit account control agreement (“DACA”), related to the sale of debentures in October 2025. Escrow receivable as of June 30, 2026 and December 31, 2025, represents funds held in escrow, in anticipation of being held in a DACA, related to the sale of debentures in January 2026 and October 2025, respectively. The release of funds to the Company is in the sole discretion of the investors. See Note 9, “Debentures” for further information.

Liquid Staking Tokens

The liquid staking tokens represent the deployment by the Company in March 2026 of approximately 829,989 AVAX tokens for tAVAX (also known as “Treehouse AVAX”), which is a liquid staking token on the Avalanche blockchain, issued by Treehouse Finance (the “Transaction”). The Transaction is part of the Company’s treasury yield-enhancement strategy which seeks to increase yield while maintaining liquidity. The tAVAX tokens do not qualify as digital assets that should be remeasured at fair value each reporting period under ASC 350-60,Intangibles - Goodwill and Other - Crypto Assets, because they create enforceable claims on underlying staked assets and rewards, and are measured at historical cost less accumulated impairment losses and tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recovered. In March 2026 in connection with the Transaction, the Company recognized a realized loss of approximately $5.3 million based on the fair value of AVAX tokens on the date of the Transaction.

The tAVAX tokens provide an enforceable claim because, rather than holding the staked assets itself, tAVAX operates as a liquid staking receipt token backed by the BENQI protocol and deployed across Treehouse Finance’s DeFi. When the AVAX tokens are deposited in the Treehouse vault, the protocol automatically stakes the tokens into BENQI, minting sAVAX in return. sAVAX serves as the fundamental receipt, representing the Company’s claim on the deposited AVAX token and the related native staking rewards. The Company’s holdings in sAVAX are immaterial. The Company’s holdings in tAVAX are redeemable on demand, for AVAX tokens, which redemption process takes approximately 14 days. The DeFi protocol interactions carry substantial risk, such as smart contract vulnerabilities, market and liquidation risks from extreme asset volatility, governance attacks and bridge failures. If an adverse event occurs, typically the Company will absorb the losses.

The Company recorded an impairment charge of approximately $3.7 million, during the six months ended June 30, 2026, based on the fair value of the tAVAX tokens held as of June 30, 2026.

The Company’s digital assets consist primarily of the native cryptocurrency of the Avalanche Network, referred to as AVAX tokens, and Bitcoin. These assets are held in either custodial or non-custodial wallets under the Company’s control through secure private keys. The primary custodians are BitGo and Coinbase, with whom the Company has multiyear custodian agreements. The Company seeks to generate returns on its digital assets and actively pursues risk-adjusted return opportunities to generate cash flows that supports its operating expenses. The majority of the Company’s AVAX tokens are deployed in staking arrangements with lock-up periods of less than 30 days.

Digital assets are reflected as non-current assets on the unaudited condensed consolidated balance sheets due to the Company’s intent to retain and hold its digital assets for long-term investment purposes. Digital assets, if any, held with the intent to fund operating expenses are included in current assets on the unaudited condensed consolidated balance sheet.

The Company accounts for its digital assets under ASC 350-60,Intangibles - Goodwill and Other - Crypto Assets, and measures such assets at fair value in accordance with ASC 820,Fair Value Measurement. Fair value represents the price that would be received for an asset in a current sale, assuming an orderly transaction between market participants on the measurement date. Market participants are considered to be independent, knowledgeable, and willing and able to transact. Fair value is measured using quoted crypto asset prices within the Company’s principal market at the time of measurement. It requires the Company to assume that its digital assets are sold in their principal market or, in the absence of a principal market, the most advantageous market to which it has access.

Proceeds from the sales of digital assets are included within investing activities in the accompanying unaudited condensed consolidated statement of cash flows (unless they are converted to cash nearly immediately after they are received, in which case they are included within operating activities). In accordance with Accounting Standards Update (“ASU”) 2023,08,Accounting for and Disclosures of Crypto Assets (“ASU 2023-08”), the Company measures digital assets at fair value with changes recognized on the consolidated statements of comprehensive loss, in accordance with ASC 350-60. The Company tracks its cost basis of digital assets in accordance with the first-in-first-out (“FIFO”) method of accounting.

Asset Management Agreement

In September 2025, the Company entered into an asset management agreement (the “Asset Management Agreement”) with Hivemind Capital Partners, LLC (the “Asset Manager”) pursuant to which the Asset Manager provides discretionary asset management services with respect to, among other things, the Company’s digital asset strategies, in accordance with the terms of the Asset Management Agreement. The custodians under the Asset Management Agreement will consist of cryptocurrency wallet providers agreed to by the Company and the Asset Manager. The Asset Manager is entitled to receive an annual management fee (the “Management Fee”) equal to 1.25% of the account size (as defined in the Asset Management Agreement). The Management Fee is calculated and payable quarterly in advance, as of the first business day of each calendar quarter. In addition to the Management Fee, the Company will reimburse the Asset Manager for all documented out-of-pocket expenses incurred by the Asset Manager in connection with the performance of the Asset Manager’s duties under the Asset Management Agreement.

The Asset Management Agreement will, unless earlier terminated, continue in effect until the tenth anniversary of the effective date (as defined in the Asset Management Agreement) and, unless a party to the agreement elects not to continue the effectiveness of the Asset Management Agreement, will continue for successive five-year renewal periods upon the mutual agreement of the Asset Manager and the Company. The Asset Management Agreement may be terminated at any time for cause (i) by the Company upon at least 30 days’ prior written notice to the Asset Manager and (ii) by the Asset Manager upon at least 60 days’ prior written notice to the Company. The Asset Manager may immediately terminate the Asset Management Agreement upon written notice to the Company if the Asset Manager reasonably determines that the continuation of its services or the Asset Management Agreement would result in a violation of any applicable law, regulation, or regulatory guidance.

See Note 14, “Related Party Transactions,” for additional information regarding the Asset Manager and Management Fees.

Subscriptions Receivable - Digital Assets

As of June 30, 2026 and December 31, 2025, the Company held certain AVAX tokens that remain in investor wallets to which the Company does not have the private keys because the tokens are subject to restrictions, such as lock-up agreements or pledges as collateral pursuant to UCC-1 financing statements. As a result, management believes the Company does not have control of these digital assets and has presented these AVAX tokens as subscriptions receivable - digital assets within the unaudited condensed consolidated statements of stockholders’ equity, as contra-equity. After each individual restriction lapses and the Company thus obtains control, the AVAX tokens will be reclassified to digital assets.

While the restrictions remain, the Company has the right and the ability to use the AVAX tokens in staking arrangements in accordance with its revenue recognition policy.

During the six months ended June 30, 2026, the restrictions lapsed on 460,034 of AVAX tokens. See Note 3, “Digital Assets” for additional information.

Fair Value Measurement

Coinbase serves as the principal market for the Company’s digital assets. This determination results from a comprehensive evaluation considering various factors, including compliance, trading activity, and price stability. While Coinbase is designated as the primary exchange, the Company retains flexibility to conduct cryptocurrency transactions on other exchanges where it maintains accounts. This flexibility allows the Company to adapt to changing market conditions and explore alternative platforms when necessary to ensure cost-effective execution and fair value measurement using the most advantageous market.

The selection of Coinbase as the principal market reflects the Company’s commitment to informed decision-making and achieving the most accurate representation of fair value for its digital assets. Regular reviews ensure alignment with the Company’s objectives and cryptocurrency market dynamics.

The Company measures its digital assets at fair value in accordance with ASC 820,Fair Value Measurement, using the last closing price of the day in the UTC time zone at each reporting period end with changes recognized in operating expenses in the unaudited condensed consolidated statement of comprehensive loss.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and impairment as applicable. Property and equipment acquired through business combinations are measured at fair value at the date of acquisition. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The Company’s property and equipment is primarily comprised of digital asset mining equipment, which are largely homogenous and have approximately the same useful lives. Accordingly, the Company utilized the group method of depreciation for its digital asset mining equipment. The Company will update the estimated useful lives of its digital assets mining equipment periodically if information on the operations of the mining equipment indicates a change is required. The Company will assess and adjust the estimated useful lives of its mining equipment when there are indicators that the productivity of the mining assets is longer or shorter than the assigned estimated useful life.

Definite Lived Intangible Assets

Definite lived intangible assets consist of a granted patent and intangible assets acquired from an acquisition. Amortization is computed using the straight-line method over the estimated useful life of the asset.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value can be determined using a market approach, income approach or cost approach. The reversal of impairment losses is prohibited.

Goodwill

Goodwill is not amortized; however, the Company reviews goodwill for impairment annually or whenever events or changes in circumstances indicate that the fair value of the reporting unit less than its carrying value. To determine if goodwill has been impaired, the Company performs a qualitative assessment to determine if more likely than not the fair value of the reporting unit is below its carrying value. If it is determined that more likely than not there is impairment, a quantitative impairment assessment is performed to identify potential goodwill impairment. An impairment loss is recognized when the fair value as at the measurement date is less than the carrying value. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the reporting unit.

Convertible Instruments

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:

ASC 815 also provides an exception to this rule when the host instrument is indexed to the Company’s common stock. ASC 815 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

Revenue Recognition

The Company recognizes revenue under ASC 606,Revenue from Contracts with Customers (“ASC 606”). The core principle of the revenue standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

In order to identify the performance obligations in a contract with a customer, an entity must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met:

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

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 under the accounting contract will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis.

The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time, as appropriate.

The Company’s revenues are generated from blockchain-based operations and comprises two primary sources: (i) staking rewards earned from delegating and validator node operations, primarily Avalanche blockchain (“Avalanche Protocol”) and (ii) the production of Bitcoin mining activities (“Bitcoin Mining”).

Avalanche Protocol

The Company engages in network-based smart contracts by staking (or “delegating”) crypto assets on nodes run by third-party operators or its own validator node. Through these contracts, the Company provides crypto assets to stake to a node for the purpose of validating transactions and adds blocks to a respective blockchain network. The terms of a smart contract vary based on the rules of the respective blockchain and typically lasts from a few days to several weeks after it is cancelled (or “un-staked”) by the delegator and requires that the crypto assets staked remain locked up during the duration of the smart contract.

In exchange for the foregoing services, the Company is entitled to receive non-cash consideration in the form of native crypto assets (primarily AVAX). For purposes of revenue recognition under ASC 606, the Company measures this non-cash consideration based on its fair value at contract inception. Subsequent changes in its fair value are recognized in unrealized or realized gains and losses.

In exchange for staking the crypto assets and validating transactions on blockchain networks, the Company is entitled to all of the fixed crypto asset award earned from the network when delegating to the Company’s own node and is entitled to a fractional share of the network-determined crypto asset awarded a third-party node operator receives (less crypto asset transaction fees payable to the node operator, which are immaterial and are recorded as a deduction from revenue), for successfully validating or adding a block to the blockchain. The Company’s fractional share of awards received from delegating to a third-party validator node is proportionate to the crypto assets staked by the Company compared to the total crypto assets staked by all delegators to the node at that time. If the validators do not achieve an uptime requirement of 90% (previously 80%), they will not receive any staking awards, and accordingly neither will their delegators. As a result, the Company accounts for these awards as variable consideration under ASC 606. When measuring the transaction price used to determine the amount of revenue recognized, the Company estimates the value of this variable consideration using either the most likely method or the expected value method, depending on which method it expects to better predict the amount of consideration to which it will be entitled. The Company only includes this variable consideration in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

On certain blockchain networks on which the Company operates a validator node, the Company earns a validator node fee (“Validator Fee”), determined as a node operator’s published percentage of the crypto asset rewards earned on crypto assets delegated to its node. Token rewards earned from staking, as well as tokens earned as Validator Fees, are calculated and distributed directly to the Company’s digital wallets by the blockchain networks as part of their consensus mechanism.

The provision of validating blockchain transactions is an output of the Company’s ordinary activities. Each separate block creation or validation under a smart contract with a network represents a performance obligation. The satisfaction of the performance obligation for processing and validating blockchain transactions occurs over time, since the customer simultaneously receives and consumes the benefit provided by our performance as we perform. Accordingly, we recognize the transaction price for revenue related to our AVAX tokens ratably over the staking period.

Expenses associated with providing validating blockchain transactions, such as staking fees, asset management fees, and other related fees are recorded as cost of revenues when we are using nodes under the Company’s control. Digital assets received are recorded as digital assets. Cash flows from selling digital assets, if any, are included within the investing activities on the unaudited condensed consolidated statements of cash flows (unless they are converted to cash nearly immediately after they are received, in which case they are included within operating activities).

Bitcoin Mining

The Company earns revenue from the production of certain digital assets through mining activities. The Company provides transaction verification services to a mining pool. Transaction verification services are an output of the Company’s ordinary activities. The Company views the mining pool as a customer and recognizes the share of block rewards and transaction fees it is entitled to receive from the pool as revenue from contracts with customers under ASC 606. The Company assessed the following factors in the determination of the inception and duration of each individual contract as follows:

In accordance with ASC 606-10-32-21, the Company measures the estimated fair value of the non-cash consideration (the Company’s share of the block reward and transaction fees) at contract inception, which is the beginning of each day. The Company measures the non-cash consideration using the quoted spot rate for bitcoin determined using the Company’s primary trading platform for bitcoin. The customer receives and consumes the benefits provided by the Company’s performance as the Company performs. Accordingly, the Company recognizes revenue over the term of the contract (over the day).

Expenses associated with providing Bitcoin transaction verification services, such as hosting fees, electricity costs, and other related fees are recorded as cost of revenues. Digital assets received are recorded as digital assets. Cash flows from selling digital assets, if any, are included within the investing activities on the unaudited condensed consolidated statements of cash flows (unless they are converted to cash nearly immediately after they are received, in which case they are included within operating activities).

The Company evaluates and accounts for its digital assets in accordance with ASU 2023-08,Accounting for and Disclosure of Crypto Assets, the Company measures digital assets at fair value with changes recognized in operating expenses. The Company applies the first-in-first-out method of accounting to its digital assets and tracks the cost basis of the crypto asset by wallet.

Concentrations and Current Vulnerability

The Company’s principal activities consist primarily of investing, staking and evaluating digital tokens 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 a vulnerability as of the reporting date. The concentration and potential associated vulnerabilities include, but are not limited to:

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.

As a result, of the foregoing, the Company believes 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.

Loss per Common Share

The Company presents basic and diluted loss per share data for its common shares. Basic loss per common share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. The number of common shares used in the loss per shares calculation includes all outstanding common shares plus all common shares issuable for which there are no conditions to issue other than time. Diluted loss per common share is calculated by adjusting the weighted average number of common shares outstanding to assume conversion of all potentially dilutive share equivalents, such as options and warrants and assumes the receipt of proceeds upon exercise of the dilutive securities to determine the number of shares assumed to be purchased at the average market price during the year.

Loss per common share calculations for all periods have been adjusted to retroactively reflect the 2026 Reverse Split and the 2025 Reverse Split.

Fair Value Measurement

The Company measures fair value in accordance with Financial Accounting Standard Board (“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:

The Company measures and records its digital assets at fair value using quoted crypto asset prices within the Company’s principal market at the time of measurement which is deemed a level 1 input. See Note 3, “Digital Assets” for further details.

Assets and liabilities measured and recorded at fair value on a non-recurring basis

The Company’s non-financial assets, such as property and equipment, intangible assets and goodwill are measured at fair value when there is an indicator of impairment and are recorded at fair value when an impairment charge is recognized. There were no indications of impairment during the six months ended June 30, 2026 and 2025.

Assets and liabilities not measured and recorded at fair value

Certain of the Company’s financial instruments are not measured and recorded at fair value but their carrying values approximate fair value due to their liquid or short-term nature such as current assets, accounts payable and accrued expenses, debentures and other current liabilities.

Income Taxes

Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted at period-end.

Deferred tax assets, including those arising from tax loss carryforwards, require management to assess the likelihood that the Company will generate sufficient taxable earnings in future periods in order to utilize recognized deferred tax assets. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted.

The Company operates in various tax jurisdictions and is subject to audit by various tax authorities.

The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions. There were no material uncertain tax positions as of June 30, 2026 and December 31, 2025.

Share-Based Compensation

The Company generally 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 share-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 shares, expected option life, and expected volatility in the market value of the underlying common shares. The Company recognizes any forfeitures as they occur.

Recent Accounting Pronouncements

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Start-ups Act of 2012, (the “JOBS Act”). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

In November 2024, the FASB issued ASU No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The requires additional disclosures of certain expenses in the notes of the financial statements, to provide enhanced transparency into the expense captions presented on the Consolidated Statements of Comprehensive Loss. Additionally, in January 2025, the FASB issued ASU 2025-01,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. The new standard is effective for the Company for its annual periods beginning January 1, 2027, and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

3. DIGITAL ASSETS

The following table presents the Company’s digital assets held as of June 30, 2026 and December 31, 2025, which are measured at fair value in accordance in ASC 350-60,Intangibles - Crypto Assets. Measurement is based on quoted prices in active markets (Level 1 input under ASC 820,Fair Value Measurement) (in thousands, except quantity):

Activity Rollforward

The following table summarizes the activity in the Company’s digital assets for the six months ended June 30, 2026 (in thousands):

The Company recognized realized losses of $5.3 million on the disposition of digital assets during the six months ended June 30, 2026. There wereno realized gains on dispositions of digital assets during the six months ended June 30, 2026 and 2025.

Investor Contributions - Subscriptions Receivable

The Company holds certain AVAX tokens that remain in investor wallets to which the Company does not have the private keys because the tokens are subject to restrictions, such as lock-up agreements or pledges as collateral pursuant to UCC-1 financing statements. As a result, management believes the Company does not have control of these digital assets and has presented these AVAX tokens as subscriptions receivable within the unaudited condensed consolidated statements of stockholders’ equity, as contra-equity. After each individual restriction lapses and the Company obtains control, the AVAX tokens are reclassified to digital assets.

The following table summarizes the total AVAX tokens subject to restrictions as of June 30, 2026 and December 31, 2025 (in thousands, except for quantity):

The following table summarizes the restrictions that apply to the AVAX tokens classified as digital assets and the AVAX tokens classified as subscriptions receivables as of June 30, 2026:

In accordance with ASU 2022-03 (Topic 820), these restrictions are not considered a part of the unit of account for the AVAX tokens and, accordingly, were not considered when measuring the AVAX tokens at fair value.

4. ACQUISITIONS AND DISPOSITIONS

In January 2025, the Company consummated the acquisition of assets of Bald Eagle Mining, LLC (“Bald Eagle”), located in Columbiana County, Ohio, for a total purchase price of $4.8 million. 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. During the year ended December 31, 2025, the Company increased the number of mining units at the Bald Eagle mining site to 1,662.

The following pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2024 (in thousands):

The Company did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and net loss position. These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Bald Eagle to reflect the additional amortization that would have been charged assuming the fair value adjustments to the intangible assets had been applied from January 1, 2025, with the consequential tax effects.

The following table summarizes the consideration transferred to acquire Bald Eagle and the amounts of identified assets acquired and liabilities assumed at the acquisition date (in thousands):

As of June 30, 2026 and December 31, 2025, the Company’s goodwill balance was $1,535, which includes foreign currency translation gain of approximately $9. The Company will continue to operate its Bitcoin Mining business alongside its AVAX treasury business.

In August 2024, the Company completed the acquisition of assets of Radical Clean Solutions, Inc. (“RCS”), effectively increasing its interest from 14% to 100%, and providing the Company control over RCS. The RCS technology is a product line consisting of patent-pending “smart hydroxyl generation systems” focused on numerous industry verticals that is proven to eliminate 99.99+% of all major pathogens, virus, mold, volatile organic compounds and allergy triggers. As the Company’s investment in RCS does not have a readily determinable fair value, the Company previously elected to account for its 14% interest in RCS at cost, less impairment.

On July 1, 2025, the Company mutually agreed to return the RCS assets and certain liabilities to the seller, and as a result, the Company has presented the results of operations of the RCS business, for the three and six months ended June 30, 2025, as loss from discontinued operations and accrued a loss on disposal of the RCS business of $0.9 million as reflected in the accompany unaudited condensed consolidated statement of comprehensive loss. Cash used in operating activities from discontinued operations was $0.3 million for the six months ended June 30, 2025. There wereno cash flows related to investing or financing activities of discontinued operations for the six months ended June 30, 2025.

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following for the periods presented (in thousands):

6. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following for the periods presented (in thousands):

Depreciation expense on property and equipment was approximately $0.3 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively and $0.5 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively.

7. INTANGIBLE ASSETS

Intangible assets consisted of the following for the periods presented (in thousands):

Manna Intellectual Property

In 2021, the Company acquired intellectual property (the “Manna IP”) pursuant to an asset purchase agreement with an unrelated third party. The Manna IP encompasses various patented technologies to naturally process and convert, among other things, fiber rich baking flour products. The Company accounted for the purchase as an asset acquisition and the Manna IP was estimated to have useful life of 20 years.

In December 2025, the Company entered into a letter of intent, with an unrelated third party, to sell the Manna IP for a purchase price of $1.6 million of which $50.0 thousand was received as a deposit and is reflected in the accompanying unaudited condensed consolidated balance sheets as other liabilities. In connection with the letter of intent, the Manna IP has been classified as asset held for sale and amortization ceased. During the six months ended June 30, 2025 the Company recorded amortization expense totaling $0.3 million.

Power Purchase Agreement

In November 2024, the Company acquired the power purchase agreement (“Power Purchase Agreement”) pursuant to an acquisition. The Power Purchase Agreement allows the Company to obtain natural gas for its Natural Gas Power Plant, which was also acquired pursuant to the acquisition. The Power Purchase Agreement was determined to be a favorable contract asset, and as such was recorded as an intangible asset at the present value of the contractual benefit, estimated to be three years.

Amortization expense was $56.9 thousand and $53.0 thousand for the three months ended June 30, 2026 and 2025, respectively and $114.7 thousand and $114.6 thousand for the six months ended June 30, 2026 and 2025, respectively, which are reflected in cost of revenue in the accompanying unaudited condensed consolidated statement of comprehensive loss.

The estimated annual amortization expense for the Power Purchase Agreement is $0.1 million in 2026 and $0.2 million in 2027.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following for the periods presented (in thousands):

9. DEBENTURES

In June 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with arm’s-length accredited institutional investors (“Investors”) for the sale of debentures, which are convertible into the Company’s common shares in an aggregate principal amount of up to $47.0 million with a 10% original issue discount (“Debentures”).

On June 30, 2022, the Company consummated the closing for the sale of (i) the initial debenture in the principal amount of $14.0 million for gross proceeds of $12.8 million after considering the 10% original issue discount (“First Tranche Debentures”). In addition, the Investors received 8 warrants at a strike price of$146,520, which expired on December 31, 2025 (the “First Tranche Warrants” and the issuance of the First Tranche Debentures and the First Tranche Warrants, the “First Tranche”). The First Tranche Warrants and First Tranche Debentures each have down-round provisions whereby the conversion and strike prices will be adjusted downward if the Company issues equity instruments at lower prices. The First Tranche Warrants strike price, and the First Tranche Debenture conversion price will be adjusted down to the effective conversion price of the issued equity instruments. The transaction costs incurred in relation to first tranche were $1.6 million. The Debentures are senior to all other indebtedness or claims in right of payment, other than indebtedness secured by purchase money security interests.

The Investors had the right to purchase additional tranches of $5.0 million each, up to a total additional principal amount of $33.0 million.

From January 2023 through May 2024, the Investors purchased additional tranches under the Purchase Agreement under similar terms as the First Tranche for an aggregate principal amount of $13.1 million.

The details of each of these seven tranches are summarized in the table below:

Interest rates are 5% for the initial 12 months and 8% thereafter.

These debentures may be extended by six months at the election of the Company by paying a sum equal to six months’ interest on the principal amount outstanding at the end of the 12th month, at the rate of 8% per annum.

In January 2025, the Company entered into a Securities Purchase Agreement (the “2025 Purchase Agreement”) with arm’s-length accredited institutional investors (“Investors”) for the sale of debentures, which are convertible into the Company’s common shares in an aggregate principal amount of up to $50.0 million in debentures with a 10% original issue discount. On January 16, 2025, the Company consummated the closing for the sale of (i) the initial debenture in the principal amount of $7.7 million for gross proceeds of $7.0 million, after considering the 10% original issue discount. In addition, the Investors received 17,688 warrants at a strike price of $311.256. The issuance of the additional tranche triggered the round down provision, adjusting the exercise price of the First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Debentures and First, Second, Third, Fourth, Fifth, Sixth, and Seventh Tranche Warrants to $282.96.

From March 2025 through January 2026, the Investors purchased additional tranches under the 2025 Purchase Agreement under similar terms as the January 2025 Tranche for an aggregate principal amount of $17.5 million. As of June 30, 2026, the Investors had the right to purchase additional tranches in an aggregate principal amount of $24.8 million.

The details of each of these tranches are summarized in the table below:

Interest rates are 5% for the initial 12 months and 8% thereafter.

These debentures may be extended by six months at the election of the Company by paying a sum equal to six months’ interest on the principal amount outstanding at the end of the 12th month, at the rate of 8% per annum.

The funds held in DACA, related to the October 2025 tranche, are reflected as restricted cash and the funds related to the January 2026 tranche are reflected as escrow receivable in the accompanying unaudited condensed consolidated balance sheets.

Debentures consisted of the following for the periods presented (in thousands):

During the six months ended June 30, 2026, the Investors converted $79.4 thousand of principal and interest into the Company’s common shares and the conversion was determined to be a modification of the existing debt. In addition, the Company incurred $3.5 million in accretion interest and made cash repayments totaling $1.2 million during the six months ended June 30, 2026, resulting in a loss on extinguishment of debt of $20.8 thousand.

During the six months ended June 30, 2025, the Investors converted $2.4 million of principal and interest into the Company’s common shares. The conversion was determined to be an extinguishment of the existing debt and issuance of new debt, resulting in a loss on debt extinguishment of $4.7 million. In addition, the Company incurred $1.9 million in accretion interest and made cash repayments totaling $110.0 thousand during the six months ended June 30, 2025.

Subsequent to June 30, 2026, the Company completed a restructuring of certain debentures (the “Restructuring”). The Restructuring involved(i) the full repayment, retirement and cancellation of debentures held by two institutional investors and (ii) the reduction in the outstanding principal amount of a debenture held by another institutional investor and the amendment of certain provisions of that investor’s debenture, including a key-person covenant and increasing the covenant governing the minimum amount of cash and bitcoin the Company is required to maintain from $100,000 to $3.5 million. In connection with the Restructuring, the Company reduced the outstanding principal under those debentures by approximately $6.8 million and paid related repayment premiums and accrued interest thereon. The Restructuring was funded with cash on hand and the reduction of the escrow receivable from one of the investors.

10. LOAN

In August 2025, the Company entered into a Master Loan Agreement (the “MLA”) with BitGo Prime, LLC providing the Company the ability to secure U.S. Dollar (“USD”) cash loans secured by Bitcoin (“BTC”) for a total loan under the MLA of $0.3 million, collateralized by four BTC, with an interest rate of 9.99% per annum and an open maturity date (the “BitGo Loan”).

As of June 30, 2026, the aggregate outstanding balance on the BitGo loan, including accrued but unpaid interest was approximately $0.2 million. The loan includes provisions requiring the collateral to be balanced against the outstanding borrowings.

11. DERIVATIVE LIABILITIES

As a result of the change in the Company’s functional currency effective April 1, 2025, the Company’s derivative liabilities, consisting of warrant liabilities and the debenture conversion features were reclassified to equity.

Warrant Liabilities

As of April 1, 2025, the Company utilized the Monte Carlo option-pricing model to value the warrant liabilities. The warrant liabilities reclassified to equity as of April 1, 2025, as well as the assumptions used by the Company to value the warrant liabilities are summarized in the table below (in thousands, except for warrant data):

Debenture Convertible Feature

As of April 1, 2025 the Company utilized the Monte Carlo option-pricing model to value the debenture conversion feature. The liability reclassified to equity as of April 1, 2025, as well as the assumptions used by the Company to value the debenture conversion feature are summarized in the table below (in thousands):

As of April 1, 2025, the IPO warrants, rep warrants, and private placement warrants (the “Equity Warrants”) are classified as equity due to the Company changing its functional currency to USD as of April 1, 2025. The strike prices of the warrants and the Company’s functional currency are both denominated in USD. The Company reassessed the warrants and determined that they met the classification criteria to be recorded as equity, and the warrants were reclassified to additional-paid-in capital.

12. SHARE CAPITAL

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 $40.0 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 June 30, 2026, the Company has repurchased 402,537 common shares in the open market for a total cost of $3.9 million pursuant to the Repurchase Program. Subsequently, the Company repurchased an additional 57,503 common shares in the open market for a total cost of $0.3 million.

As of June 30, 2026 and December 31, 2025, the Company owed $44.0 thousand worth of stock-based compensation to a former officer of the Company which is reflected in the accompanying unaudited condensed consolidated statements of stockholders’ equity as obligation to issue shares.

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the periods presented. Diluted net loss per share is computed by dividing net loss by giving effect to all potential weighted average dilutive common shares. For diluted net loss per share, the dilutive effect of outstanding awards is reflected by application of the treasury stock method and convertible securities by application of the if-converted method, as applicable.

For the three and six months ended June 30, 2026 and 2025, basic net loss per share is the same as diluted net loss per share as the inclusion of outstanding awards and convertible securities would have been anti-dilutive.

**13. REVENUE **

The primary sources of revenue for the periods presented have been from the Company’s digital asset strategy and are as follows (in thousands):

14. RELATED PARTY TRANSACTIONS

Key management personnel include those persons having the authority and responsibility of planning, directing, and executing the activities of the Company. The Company has determined that its key management personnel consist of the Company’s officers and directors.

Under our independent, non-employee director compensation program, each non-employee, independent director receives cash and non-cash compensation. In addition, if the director serves on a committee of the Company’s board, the director receives an additional annual cash fee for each committee the director is a member of. The cash director fees are payable in arrears in quarterly installments. During the six months ended June 30, 2026 and 2025, the Company incurred $0.2 million in cash director fees. Approximately $0.1 million was paid in July 2026 and is reflected in accounts payable and accrued liabilities in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2026.

During the six months ended June 30, 2026, the Company incurred $1.0 million to Hivemind Capital Partners, LLC (“Hivemind”), our Avalanche Protocol asset manager, which is a company controlled by Matt Zhang, the current chairman of the board of the Company. The agreement with Hivemind entitles the asset manager to receive an annual management fee equal to 1.25% of the account size, as defined (the “Management Fee”). The Management Fee is calculated and payable quarterly, in advance, as of the first business day of each calendar quarter. As of June 30, 2026, these fees were paid in full. In addition, Hivemind owns approximately 0.8 million common shares as June 30, 2026.

During the six months ended June 30, 2025, the Company incurred $10.5 thousand to a former U.S. general counsel firm, Enso Law against legal services, a company controlled by a former director of the Company.

During the six months ended June 30, 2025, the Company incurred $45.0 thousand in legal fees and $0.1 million in consulting fees to Jolie Kahn, who is the former chief executive officer of the Company.

There were no other payments to related parties for the six months ended June 30, 2026 and 2025, other than expense reimbursements in the ordinary course of business.

15. COMMITMENTS AND CONTINGENCIES

Contingencies

Litigation

In August 2023, the Company’s former chief executive officer, Ingo Wilhelm Mueller filed a Notice of Civil Claim in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. Mr. Mueller alleges to have suffered damages including, among other things, a loss of base salary ($473 thousand CAD per annum) and damages from not receiving common shares of the Company ($468 thousand CAD). The Company’s position is that Mr. Mueller was terminated for ‘just cause’ because he breached his fiduciary duty to act in the Company’s best interest by, among other things, submitting a sizeable bid for the acquisition of a company without first obtaining board approval. In doing so, Mr. Mueller misrepresented the Company’s financial standing and forged, or instructed others to forge, a document by affixing the electronic signature of the Company’s chief financial officer.

The parties are in the discovery stage of litigation. The Company has produced relevant documents to Mr. Mueller and is awaiting Mr. Mueller’s production of relevant documents. The parties are also in the process of scheduling examinations for discovery. Management is instructing counsel to advance the matter given the relative strength of the Company’s case.

The likelihood of an unfavorable outcome is not probable given the facts supporting the Company’s ‘for cause’ termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial.

In September 2023, a vendor filed a Complaint with the Superior Court of California for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered in relation to the purchase and sale agreement for vacant land, known as the Coachella property. In January 2025, the Company settled the complaint and agreed to pay $250 thousand in 12 equal monthly installments of approximately $21 thousand commencing on February 1, 2025 (the “Settlement Amount”). The Settlement Amount was paid in full in October 2025.

On March 27, 2024, BV Peeters Advocaten-Avocats (“Peeters”) summoned the Company to appear on May 31, 2024, at the First Chamber of the Dutch-Speaking Division of the Business Court in Brussels. Peeters is seeking payment for €467 thousand of unpaid bills for legal services plus penalties and interest. The Company believes that Peeters performed actions that were not in the Company’s best interest. The Company does not intend to pay the outstanding legal bills and intends to vigorously defend its position in court. The parties are currently in mediation.

On July 11, 2024, the Company’s former general counsel filed a Notice of Civil Claim with the Supreme Court of British Columbia, in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. On January 6, 2025, the Company settled the Civil Claim with the Company’s former general counsel and agreed to pay a settlement amount of $160 thousand CAD to the Company’s former general counsel. This settlement has been paid in full.

16. SEGMENT INFORMATION

The Company has chosen to organize its operating segments based on products or services offered. Each operating segment is also a reportable segment (i.e., operating segments have not been aggregated). As a result of the launch of the digital asset treasury reserve strategy in the fourth quarter of 2025, the Company reorganized the operating and reportable segments to include Avalanche Protocol and Bitcoin Mining All other activities, including financing, are carried out through the corporate segment. The prior period segment information has been recast to conform to the current period presentation.

Our Bitcoin Mining operations are conducted in Alberta, Canada and Ohio, USA, which reflects the manner in which the Company’s CODM group, composed of the Chief Executive Officer and Chief Financial Officer, reviews and assesses the performance of the business and allocates resources.

The information used by the CODM group to assess performance and allocate resources includes various measures of segment profit, however, for the purposes of the disclosures required by ASC 280,Segment Reporting and ASU 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company has determined that the measure most consistent with the measurement principles used in measuring the corresponding amounts in the consolidated financial statements is net income. Segment financial information is used to monitor forecast versus actual results in order to make key operating decisions for each segment. The CODM group evaluates the performance or allocate resources for each segment based on the Company’s assets or liabilities.

The following discloses key financial information including the significant segment expenses, in the context of deriving net income, which are regularly provided to and reviewed by the CODM group reconciled to the segment’s net income:

The following table summarizes the additions to long-lived assets, total long-lived assets, and total assets by segment, used by the CODM to assess segment performance:

The following tables summarize revenue and certain assets, such as cash and cash equivalents, property, plant, and equipment and digital assets by geographic area based on the location of the underlying activity or rendering of services and location of the underlying assets:

17. SUBSEQUENT EVENTS

From July 1, 2026 to August 12, 2026, the Company repurchased an additional 57,503 common shares in the open market for a total cost of $0.3 million pursuant to the Repurchase Program.

On July 3, 2026, by mutual agreement, Jolie Kahn departed from her role as Chief Executive Officer of the Company. In connection with Ms. Kahn’s departure, Ms. Kahn and the Company entered into a separation and release agreement, dated July 5, 2026, (“Kahn Separation Agreement”) that terminates the Consulting Agreement, dated November 1, 2025, as amended, between Ms. Kahn and the Company (“Consulting Agreement”), effective as of July 3, 2026. Pursuant to the Kahn Separation Agreement and in exchange for a general release of claims in favor of the Company and the other released parties, Ms. Kahn received a lump sum cash payment of $0.2 million in lieu of payment of her consulting fees through the end of the term of the Consulting Agreement, reimbursement for certain medical insurance costs, and a grant of unregistered common shares having a fair market value of $0.3 million. As of August 12, 2026, the shares have not been issued. Ms. Kahn will remain subject to certain non-competition, non-solicitation and non-disparagement covenants that survive the termination of the Consulting Agreement.

Ms. Kahn’s departure implicated the key-person provision of the Company’s outstanding Debentures; in connection with the Restructuring, the investors waived any noncompliance arising therefrom and the provision was amended. As discussed in Note 9, “Debentures,” the Company completed the Restructuring, which involved(i) the full repayment, retirement and cancellation of debentures held by two institutional investors and (ii) the reduction in the outstanding principal amount of a debenture held by another institutional investor and the amendment of certain provisions of that investor’s debenture, including a key-person covenant and increasing the covenant governing the minimum amount of cash and bitcoin the Company is required to maintain from $100,000 to $3.5 million. In connection with the Restructuring, the Company reduced the outstanding principal under those debentures by approximately $6.8 million and paid related repayment premiums and accrued interest thereon. The Restructuring was funded with cash on hand and the reduction of the escrow receivable from one of the investors.