Avax One (AVX) Q1 2026 Earnings Transcript

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DATE

Thursday, May 14, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Jolie Kahn
• Chief Financial Officer — Christopher Polimeni

TAKEAWAYS

• Total Revenue -- $2.5 million, up from approximately $300,000, driven by $1.9 million in staking rewards and $600,000 from Bitcoin mining.
• Operating Expenses -- $47.1 million, including $43.3 million in noncash charges such as a $36.3 million unrealized loss on digital assets, $5.3 million loss from Avax tokens in TreeHouse, $1.1 million impairment on liquid staking tokens, $300,000 in depreciation and amortization, and $300,000 for advisor and executive share vesting; also included $200,000 in one-time back office restructuring costs.
• Adjusted Operating Loss -- $1.1 million after noncash and one-time items.
• Net Loss -- $46.4 million, or $0.48 per diluted share; adjusted net loss $2.9 million, or $0.03 per diluted share.
• Liquidity -- $16.5 million in cash and equivalents, $5.4 million in restricted cash, and $5 million in escrow receivable, totaling $26.9 million versus $27.5 million at prior period end.
• tAVAX Holdings -- Approximately 14 million tokens valued at $125 million as of March 31, 2026.
• Staking Revenue -- $2.7 million generated since November, with an annualized yield of roughly 6%.
• Data Center Project -- 10-megawatt Tier 3-ready Alberta facility on track for deployment readiness in Q1 2027, with ASCENT Consulting leading engineering.
• Digital Asset Treasury Strategy -- Actively using Avalanche blockchain assets for validator staking and “TreeHouse” DeFi deployment to diversify yield opportunities.
• NASDAQ Compliance -- Exception granted to regain minimum price compliance by July 6, with a reverse stock split proposed and a ten-day, $1 bid price required for compliance.
• Bitcoin Mining -- 300 PH/s mining capacity in Alberta supporting legacy cash flow during infrastructure transition.
• Expansion Approach -- Modular, behind-the-meter AI/HPC centers in energy-advantaged regions, enabling incremental, capital-light scaling aligned with customer demand.

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RISKS

• Chief Executive Officer Kahn said, "As previously disclosed, we had received a deficiency notice related to our minimum stock price," highlighting risk to NASDAQ listing if compliance is not achieved by July 6.
• Chief Financial Officer Polimeni reported an operating loss and a net loss driven primarily by noncash charges from unrealized losses and digital asset impairment, indicating current profitability remains challenged.
• The need to secure tenants and timely permitting for the new Alberta data center, as described by Kahn, may affect execution timelines and project economics.

SUMMARY

Avax One Technology Ltd. (NASDAQ:AVX) reported a significant year-over-year increase in revenue, primarily driven by digital asset staking and legacy Bitcoin mining. The company initiated a transition toward modular AI and high-performance computing infrastructure, with engineering for its 10-megawatt Alberta facility underway and first deployment targeted for early 2027. Cash holdings and an Avalanche-based digital asset treasury, valued at $125 million, support over three years of projected operating runway without raising external capital. Management addressed a NASDAQ minimum price compliance issue by proposing a reverse stock split and outlined clear milestones for AI data center project advancement.

• Chief Executive Officer Kahn stated, "We are still in the early stages of executing this vision but believe the groundwork established over the past few months and into the next quarter represents an important step in positioning Avax One for the opportunities ahead."
• The company is actively integrating on-chain DeFi yield strategies alongside its physical infrastructure expansion.
• Leadership described a disciplined shift from legacy mining toward broader infrastructure and digital finance, emphasizing both capital-light scaling and regulated public market access.
• Management acknowledged that Bitcoin mining operations serve as interim cash flow sources as new data centers are developed.

INDUSTRY GLOSSARY

• tAVAX: A derivative token representing staked Avalanche (AVAX) tokens, used in DeFi protocols for yield strategies and liquidity provision.
• TreeHouse: A decentralized finance (DeFi) platform utilized for generating additional yield on digital assets via interest rate arbitrage within the Avalanche blockchain ecosystem.
• Behind-the-meter: Infrastructure facilities that generate and use electricity on-site, bypassing the public grid to improve efficiency and cost control, often critical for high-performance computing centers.
• PH/s: Petahashes per second, a measurement of computational power in cryptocurrency mining.
• BESS: Battery Energy Storage System, providing backup power and grid resilience for critical infrastructure sites.

Full Conference Call Transcript

Jolie Kahn: Thank you, operator, and thank you all for joining us today. The first quarter represented an important transition period for Avax One as we laid the groundwork for our evolution into a power first digital infrastructure company. Over the past few months, we have formally expanded into AI and high-performance computing infrastructure, laying the groundwork for our continued transformation. Broadens our Bitcoin mining platform and oriented business around scalable behind-the-meter power assets that we believe can support long-term growth and profitability. Additionally, we furthered our Avalanche treasury strategy, which continues to provide a differentiated source of yield generation, ecosystem alignment and strategic optionality.

The combination of these initiatives reflects deliberate repositioning of our business around the physical and digital infrastructure, we believe will define the next phase of artificial intelligence and the on chain financial economy. Over the past several years, the investment narrative around AI infrastructure has largely centered on hyperscale data centers and multi-gigawatt campuses. While that matter is critical for 4 tier model training, we believe a significant and increasingly important segment of AI demand is emerging outside and smaller than the hyperscale ecosystem. Enterprise inference workloads, edge AI applications, regulated industries and midsized computer operators increasingly require dedicated, reliable and geographically distributed infrastructure that hyperscale providers are not structurally optimized to deliver.

These customers are constrained by latency requirements and data sovereignty considerations, operational resilience standards and access to power. Across North America, utility interconnection cues and transmission constraints continue to extend time lines for new compute deployments by multiple years. We believe the market is entering a period where access to dedicated cost-efficient power becomes the defining competitive advantage in AI and computer infrastructure. That is the opportunity we are positioning Avax One address. Our strategy is centered on modular behind the meter AI/HPC infrastructure deployed in energy advantage regions.

We are currently advancing our first 10-megawatt Tier 3 ready critical power facility in Alberta, Canada which is designed around dedicated flared natural gas generation, battery, energy storage integration and modular microgrid architecture. Over the past several weeks, we have continued to make tangible progress on that deployment initiative. We previously engaged BlueFlare Energy Systems to support front-end engineering and design activities for the site. And earlier this month announced the selection of ASCENT Consulting as our engineer for the project. ASCENT will lead engineering and design is to project advances from conceptual planning into detailed engineering and AESO-ready deliverables. The project is on schedule for incline deployment readiness during the first quarter of 2027.

We believe these milestones are important because they demonstrate prompt execution against our stated strategy. Our Board represents one of the most attractive power and infrastructure markets in North America with significant demand emerging around AI and high-performance computing deployments. Our objective is to position Avax One within what we believe is a multibillion-dollar infrastructure opportunity developing across the region. We believe this approach creates several advantages. First, materially shortens deployment time lines relative to traditional grid depend in hyperscale deployment. Second, it enables us to target the growing missing middle of AI demand, workloads typically ranging from 1 to 50 megawatts that require dedicated capacity but are underserved by hyperscale economics, and conventional colocation providers.

And finally, our approach enables disciplined incremental scaling rather than pursuing multibillion-dollar campuses, we can deploy capacity in modular phases line with customer demand and capital efficiency in the tens of millions of dollars instead. Importantly, we believe this strategy aligns directly with where AI infrastructure demand is heading. As AI applications move from centralized metal training towards inference, real-time decision-making and enterprise deployment, infrastructure increasingly needs to be distributed resilient and regionally positioned. Our existing footprint provides a meaningful foundation for this transition through our Bitcoin mining and digital interest structure, operations in Alberta and Ohio, including approximately 300 PH/s of mining capacity in Alberta. We already have experienced operating power-intensive infrastructure in energy advantage markets.

The operational experience matters in the market where execution permitting entity procurement and uptime are becoming increasingly important differentiators. In parallel with our infrastructure strategy, we continue to build what we believe is one of the most differentiated digital asset treasury models in the public markets. Our Avalanche treasury remains a strategic pillar of our business. Avalanche has firmly established itself as the leading institutional blockchain system. Tokenized real world assets on the network grew more than 10x in 2025, surpassing $1.3 billion in total value locked, a clear signal that tokenization on Avalanche has moved from experimentation to real financial infrastructure.

From an institutional standpoint, JPMorgan's Onyx division, Apollo Global and WisdomTree leveraged an Avalanche Evergreen L1 under Singapore's mass project, Guardian, to demonstrate tokenized alternative investment portfolio management. BlackRock expanded its BYDL fund tokenization to $500 million at Avalanche, and these are formerly named Avalanche as a supported blockchain for stablecoin settlement. On the public sector side, the California DMV digitized 42 million vehicle titles on Avalanche putting transfer times from weeks to minutes. We view our treasury position of strategic exposure to what is becoming a foundational layer of global institutional finance. That foundation is built on Avalanche's core technical advantages, scalability, customizable architecture and regulatory-oriented design.

Within our treasury, the majority of our AX holdings are actively stake to generate yields, creating an operating flywheel where treasury assets contribute to funding operations and infrastructure development. We have also expanded into DeFi enabled taking strategies such as our TreeHouse deployment designed to enhance the productivity of our holdings and diversify yield generation opportunities. We see this as an important evolution of the treasury strategy. Rather than simply holding digital assets on our balance sheet, we are focused on maximizing the productivity of those assets through taking validator anticipation and carefully selected on chain yields opportunities.

Over time, we believe this creates a differentiated model that combines exposure to the long-term growth of the advanced system with recurring yield generation and strategic ecosystem participation. More broadly, we believe the conversion of AI infrastructure and on-chain finance on its nascent stages. AI agents to centralized applications, tokenized financial systems and machine native economies will require both compute infrastructure and programmable financial rails. We believe Avax One is uniquely positioned because we are building exposure to both sides the debt infrastructure stack, physical interest structure through modular AI/HPC data centers and digital infrastructure through our average treasury and ecosystem participation.

Avax One was purpose-built to be a scalable regulated public market gateway for investors seeking exposure to the growth of the on-chain economy and next-generation digital infrastructure. We believe regulation, operational discipline and real cash flow generating infrastructure will matter increasingly over time as these industries mature. Importantly, we are not building a business dependent solely on token participation. We will own and operate low infrastructure assets capable of generating diverse supply cash flow across AI infrastructure digital assets, mining operations and non-chain yield generation. We believe that combination of our infrastructure operational cash flow and strategic exposure to Avalanche and the unchain economy positions Avax One differently from both traditional treasury companies and conventional infrastructure developers.

We are still in the early stages of executing this vision but believe the groundwork established over the past few months and into the next quarter represents an important step in positioning Avax One for the opportunities ahead. Before I turn the call over to Chris, I want to address our NASDAQ listing status directly. As previously disclosed, we had received a deficiency notice related to our minimum stock price. We subsequently requested a hearing, and I am pleased to report that the NASDAQ Listing Qualifications Panel has granted us the exception with a period of time to regain compliance. This gives us a defined runway to execute on the business plan I just outlined.

As we've been given until July 6 of this year, to have a closing bid price for 10 consecutive days of over $1. We are taking concrete steps to meet the conditions of that extension, which is why we've asked our shareholders to approve a reverse stock split at our annual meeting at the end of this month. We remain committed to maintaining our NASDAQ listing and believe the operational and strategic progress we are making positions us well to achieve compliance within the time frame provided. With that, I will now turn the call over to Chris to review our first quarter financial results. Chris?

Christopher Polimeni: Thank you, Jolie. As a quick reminder, as we review our first quarter 2026 financial results, all comparisons and various commentary refers to prior year quarter, unless otherwise specified. Total revenue for our first quarter 26 increased materially to $2.5 million compared to approximately $300,000 in last year's first quarter. primarily driven by our average digital asset treasury strategy, which generated approximately $1.9 million in staking rewards in Q1 '26, coupled with the revenue from our Bitcoin mining business which generated approximately $600,000 in revenue this year. Our total operating expenses for the first quarter of '26 were $47.1 million which is compared to $2.1 million in the first quarter of '25.

The expenses '26 1st quarter included $43.3 million of noncash charges, related to several items: One, $36.3 million unrealized loss on the change in the market value of our digital assets; two, a $5.3 million loss on digital asset transactions attributable to the deployment of our Avax tokens in the TreeHouse network is the tAVAX tokens. Three, we had a $1.1 million impairment of liquid staking tokens for, we had $300,000 of depreciation and amortization expense. And finally, a $300,000 charge incurred as a result of the vesting of shares issued in 2025 to several Board advisers, Board members and certain executives. So there's noncash charges totaled $43.3 million, up the $47.1 million operating expenses.

In addition to these noncash charges, we also incurred certain onetime nonrecurring charges for costs related to reorganizing and restructuring our back office operations, including severance, stay bonuses and certain duplicative costs totaling approximately $200,000. Adjusting for these noncash charges and onetime nonrecurring costs, the adjusted operating loss for the first quarter was $1.1 million. Our net loss for the quarter was $46.4 million, or $0.48 per diluted share compared to net loss of approximately $145,000 or $10.57 per diluted share in the first quarter of '25. Adjusting for the noncash and onetime costs discussed previously. Our adjusted net loss for Q1 '26 was $2.9 million or only $0.03 per diluted share.

As of March 31, 2026, our cash-on-cash equivalents were $16.5 million. That, coupled with our restricted cash of $5.4 million and an Escrow receivable balance of $5 million result in total liquidity available to the company of $26.9 million. This is compared to approximately $27.5 million in total liquidity at the end of December '25. We believe this cash balance provides us with approximately 3 years of operating runway without the need to raise any external capital and without taking into account any revenue generated by the company. As of March 31, the last day of our first quarter, Avax One held approximately 14 million tAVAX tokens with a net value of approximately $125 million.

Since the inception of our digital acid treasury strategy last November, we've generated approximately $2.7 million in staking revenue, representing an annualized yield of approximately 6%. Looking ahead, we'll maintain -- we'll continue to maintain a prudent approach to capital allocation as we execute on the next phase of AVAX One's growth strategy. We believe the market opportunity around AI/HPC infrastructure is substantial and we are positioning the business to participate in that growth through a capital-light modular power first approach. We continue to believe that our shares are trading at a meaningful discount to the intrinsic value of the business to the long-term earnings potential of our platform.

As a result, we will deploy capital in ways we believe will maximize long-term shareholder value, such as the repurchases of our shares while preserving flexibility to execute on the opportunities we have in front of us. We believe Avax One is uniquely positioned at the intersection of two powerful secular trends: The rapid growth of AI infrastructure demand; and the continued institutional adoption of digital assets and once financial systems. With a growing infrastructure platform, exposure to energy advantage markets and strategic alignment with the Avalanche ecosystem, we believe we have established a strong foundation to scale the business and compound value over time. This concludes our prepared remarks.

I will now open it up for questions from those participating in the call. Operator, back to you.

Operator: [Operator Instructions]. The first question we have is from Devin Ryan of Citizens Bank.

Noah Katz: This is Noah Katz on for Devin. Lot of developments here to dive into. You're evolving your business into a power first digital infrastructure company. As we think about the company over the next few years, how should we think about the connection between the Avalanche treasury and the data center build out. More specifically, are these two parallel opportunities? Or do you see a path where you can more deeply and directly integrate them over time?

Jolie Kahn: Thanks for the question. I believe that the answer is we can do both. Obviously, we can run them in parallel. But what's particularly interesting to us is to take advantage of some of the unique features of the Avalanche blockchain such as the compute, which is done with relatively small amounts of power compared to protocols that are built on Ethereum or Solana. So what that means is we can run powerful protocols on our 10 megawatts microgrid data centers rather than having to use the much larger data center. So we believe that over time, we will be able to integrate these strategies and that we'll be able to dovetail them in a very efficient manner.

Noah Katz: Interesting. Okay. And then as a follow-up also on the infrastructure side. We've announced a data center in Alberta in the speed proposal with BlueFlare. Can you walk us through the development process from here, starting with engineering and permitting and construction to eventually get to contracting? And as you look towards 1Q '27, what are the most important milestones you need to hit to get to your target?

Jolie Kahn: Well, obviously, we're looking at two different potential scenarios. One is one more we would start from ground zero and the other is the potential opportunities to purchase the facility that already has the initial permitting and engineering complete if we're able to do that, that would save us approximately 2 to 4 months in the time line. But the way this is going to work is we have a sense in place. They're based in Calgary and they specialized in engineering for data center build-out. Now the permitting is obviously, if we go starting from square one, the permitting is the first part of the process. the engineering happens at the same time.

Then we go into the construction phase and at the same time as completing the initial construction is when we'll bring in potential tenants and there's a lot of demand for this microgrid strategy. So all in all, we see this working and being able to have our first microgrid center up and running with the tenant by the end of Q1 of next year. The interesting thing is that these can be done in parallel. So as we find sites, if we're able to finance it, we could potentially arguably run 2 or 3 of these in parallel on time.

Noah Katz: Got it. Makes sense. If I could fit one more in. It's just how are you guys thinking about the resource allocation, I guess, across all three areas? And what would push you to allocate more capital to the data center or the treasury or the Bitcoin mining?

Jolie Kahn: So the Bitcoin mining is the legacy business. And while we're building out the data center, we will continue to mine Bitcoins and possibly take advantage of power and available machines for short-term cash flow. Right now, that makes a lot of sense to us because we are able on a project basis to be cash flow positive on our status on our -- excuse me, on our Bitcoin mining. But the capital allocation will really depend on in the short term getting the first data center up and running as a priority for us.

But we're also, as everybody knows, looking at various opportunities to bring cash flowing businesses on chain that would benefit from being on the Avalanche blockchain. So we will look at it with our Board, and we'll look at it on a case-by-case basis.

Operator: The next question we have is from Allen Klee of Maxim Group.

Allen Klee: As you -- so the project in Alberta here or 10 megawatts, if this is moving to -- if it's an AI-powered data center, it's going to be more demanding on power and water how -- what type of things will you have to do to address that in the construction and all the stuff you do.

Jolie Kahn: Thanks for the question, Allen. I think a lot of those details will come out with the due diligence and the initial work that sense is doing. I don't think that at this point, I can really address all those questions. Except to say on the tower side, we will be behind the meter, basically starting with flared natural gas. We'll also have redundancies built in. We'll have the BESS system, which is the battery-operated backup. And we'll also have the ability in a rare case scenario if we had to disconnect to the grid. As far as any requirements for water, I haven't specifically been made aware of any issues there.

So I assume that there won't be any problem. But again, that sort of detail we're going to rely on the engineers to brief us.

Allen Klee: Got it. And as you get to construction and everything becomes power-ready and it becomes a very attractive asset. When you think about tenants, does -- does it make sense to try to find one for tenants?

Jolie Kahn: The unit focus...

Allen Klee: I have a follow-up to that.

Jolie Kahn: I think that, that will depend on who we see. Obviously, we're going to look for financially solid creditworthy tenants. So since we're starting out with microgrid centers to 10-megawatts. I can't imagine that we'd want a piecemeal with lots of small tenants. So my guess, although this is just a guess at this point because where it's a little premature. My guess is that each microgrid facility would have 1 or maybe 2 or 3 tenants max and that would be about it.

Allen Klee: Okay. That makes sense. And then also just in terms of the use of what is being used for now? And can you talk about what the current use is in Alberta.

Christopher Polimeni: The current use of what? The data centers?

Allen Klee: Yes.

Christopher Polimeni: But we're going to be building it so it's not being used at all. when we started from scratch unless we find as Jolie mentioned something to acquire that's already got some sort of support already built in. And if we do find some that has power and is permitted as Jolie mentioned, we would mine Bitcoin for a little while here while we build out the rest of the 10-megawatt data center.

Allen Klee: Okay. I'm sorry. But are there some areas where you're looking at -- areas where they're currently mining but Bitcoin that could be transitioned over?

Jolie Kahn: I think for the most part, we're looking at starting from scratch, although if we find an opportunity where there is some initial infrastructure in place, we'll do that. But the mine Bitcoin, it's a lot easier. You get a connection to the power, you throw up a generator and a container and plug the machines in and you can mine Bitcoin. The data center obviously requires more steps. And that's why we said that the Bitcoin were feasible would be an interim revenue generator, where it makes economic sense.

Allen Klee: And then you mentioned the Treehouse deployment for enhancing yield. Could you just expand on what you're doing there?

Christopher Polimeni: Yes. TreeHouse is a DeFI protocol, where we deployed 830,000 Avalanche tokens, and it works through the [ Vinci ] platform. There's an interest arbitrage game that takes place where these collateral and lending and borrowing using the AVX, which is the VEX tokens under the Vinci platform, and we deployed the tokens there in anticipation of getting some interest rate arbitrage on the lending, which would add to the data staking mills to improve the overall yield.

Allen Klee: Can you use the same Avalanche coin for staking and for this?

Christopher Polimeni: Once you deploy them into TreeHouse, TreeHouse then uses what they call tAVAX to mint sAVAX into the Vinci platform. And then if you wanted to unwind it or at the end of the program, you unwind it back out into Avalanche tokens again and you get the incremental tokens that you earned through the TreeHouse and Vinci deals that you would get on the interest arbitrage. So you do convert it back to Avalanche tokens on the way out.

Operator: [Operator Instructions]. The next question we have is from Alex [ Handon ] of Sidoti & Company.

Unknown Analyst: Congrats on the quarter. So on the AI/HPC aspect, if the initial 10-megawatt site is successful, which it sounds like you've made a lot of progress towards. What's the ability and opportunity for the team in terms of repeatable or expandable playbook? Are you trying to focus on developing sites or owning and operating them for your own mining and beyond that or more of a partner to hyperscalers and GPU cloud providers?

Jolie Kahn: We see this as an alternative to the hyperscalers. We will not own sites for own purposes, the pointed to develop them and then get tenants in and the tenants will use them for AI/HPC for compute, whatever use they have that can be managed with the 10-megawatt site is our goal.

Unknown Analyst: Okay. And then just on the legacy business. I'm seeing more institutions launching Avalanche based L1 for tokenization for payments, stable coins. I was curious where do you see Avax sitting in that value chain going forward? Is it a treasury holder, validator, liquidity provider infrastructure partner to be bill interested in M&A in that space? Or is it really now fully transitioning to the AI data center space?

Christopher Polimeni: On the Avalanche side, it's all of the above. We are still looking at M&A opportunities to bring financial companies on chain to build that business. We are -- we do have a validator on our own as well. So we're doing all of those things to promote and continue to build the Avalanche ecosystem.

Operator: Ladies and gentlemen, we have reached the end of the question-and-answer session. I'd now like to turn the call back to Jolie Kahn for any closing remarks.

Jolie Kahn: Okay. First of all, I'd like to thank everybody who participated today. and for the continued support and interest in our story. And thanks very much for those who support the questions. I really do value your acquisition and our ability to provide more information. As we look ahead, our focus remains on disciplined execution as we continue scaling Avax One at the intersection of AI/HPC infrastructure and the on-chain economy through Avalanche. We believe the combination of modular power first infrastructure a productive digital asset treasury and regulated public market structure positions us to participate in some of the most important long-term trends shaping digital infrastructure and financial technology.

And we believe that the combination of these facets is our greatest differentiator. We are still in the early stages of executing our combined strategy. Look, we believe the foundation we've established over the past several months positioned tAVAX One well for the opportunities ahead. On behalf of the entire team and our Board of Directors and advisers, thank you for your continued support and confidence in Avax One. We look forward to updating you on our progress in the quarters ahead. We look forward to speaking with you again on our next earnings call in August. Have a good evening.

Christopher Polimeni: Thank you, everybody.

Operator: This concludes today's conference. Thank you for joining us. You may now disconnect your lines.

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