Avax One Technology Ltd. Common Shares 2026 Q2 Earnings Call

Pete? Thank you, operator, and thank you all for joining us today.

We are seeing continued development across the Avalanche ecosystem that has reinforced our conviction in the network's long-term potential and the strategic value of AVAX One's position within it. That progress is becoming increasingly visible across a broad range of applications, including institutional settlement, tokenized assets, validator participation, and large-scale commercial platforms. In our view, the growing breadth and sophistication of these use cases demonstrate that Avalanche is moving beyond experimentation and toward real-world deployment. That evolution is particularly significant in financial services, where institutions are increasingly focused on the practical applications of blockchain technology in payments, tokenization, settlement, and other financial workflows. We believe Avalanche is well-positioned to support that transition. Its architecture enables institutions to build purpose-built blockchain environments tailored to their operational, regulatory, and performance requirements while remaining connected to the broader Avalanche ecosystem.

Tassat's recent migration of Link provides a clear example of how that model can work in practice. Tassat is a financial technology company that provides blockchain-based payment and settlement infrastructure to regulated financial institutions. Link is its real-time settlement network designed to help institutional participants transfer value and complete transactions more efficiently. Tassat moved Link onto a dedicated Avalanche Layer 1, effectively giving the network its own customized blockchain environment. This allows Tassat to control how the network is configured, who validates transactions, and how data is managed while still benefiting from Avalanche's speed and scalability. Tassat's broader infrastructure has processed more than $2.5 trillion in transactions, and we believe this migration demonstrates Avalanche's ability to support secure, institutionally oriented financial infrastructure at scale. Beyond institutional finance, Avalanche is demonstrating its ability to support large-scale consumer applications.

During the 2026 FIFA World Cup, FIFA Collect, the organization's digital collectibles platform, operated on an Avalanche-powered blockchain. While the use case is distinct from payments and settlement, it provides another example of Avalanche supporting a globally recognized platform with a broad consumer audience. Avalanche is also continuing to improve the network's underlying infrastructure. Helicon, a recent protocol upgrade, has been activated on the Fuji testnet, where new features are evaluated before potential deployment to Avalanche's live mainnet. Among other changes, Helicon introduces automatic renewal for validator staking and proposes reducing the minimum primary network staking period from 2 weeks to 48 hours. While these changes are not yet live on mainnet, we believe they could provide validators with greater flexibility and make participation more accessible to institutional operators.

The combination of these deployments illustrates the breadth of activity emerging in the Avalanche ecosystem, from institutional settlement and tokenized assets to validator participation in large-scale consumer applications. For AVAX One, the continued expansion of the network reinforces our conviction in Avalanche's long-term potential and, in turn, the strategic rationale for maintaining and growing our AVAX digital asset treasury. Turning to our operations, AVAX One is organized around three core pillars: our Avalanche digital asset treasury, Bitcoin mining, and the selective development of AI and high-performance computing opportunities. Our Avalanche treasury is central to the strategy. We currently own more than 14 million AVAX tokens and equivalents, including approximately 800,000 which have been deployed into Treehouse, providing us with meaningful exposure to the continued growth of the Avalanche ecosystem.

By staking a significant portion of these holdings directly through the network, we participate in network validation and earn protocol-native rewards, creating an ongoing source of revenue while increasing our AVAX holdings over time. Our second pillar is Bitcoin mining, which continues to provide recurring operating revenue across our facilities in Alberta and Ohio. Over the past year, we have expanded the platform through additional mining equipment, including 220 machines added to our Alberta operations, while continuing to operate our 5 megawatt Bald Eagle facility in Ohio, which is powered by flared natural gas. These operations also provide valuable experience managing power generation, equipment deployment, and energy-intensive infrastructure. We will continue to manage each site with a focus on operating performance, energy efficiency, capital discipline, and the productive use of our existing assets. Our third pillar is AI and high-performance computing.

We believe our experience operating power intensive infrastructure, managing energy costs, and deploying modular equipment provides a practical foundation for this developing strategy. In Alberta, we are advancing a power first deployment model centered on behind-the-meter natural gas generation, modular construction, and energy advantage sites, with the goal of delivering reliable compute capacity on a faster and more capital efficient basis than traditional grid dependent projects. We will continue to evaluate infrastructure opportunities selectively with a focus on technical feasibility, customer demand, capital requirements, and the potential to generate durable recurring revenue. During the second quarter, we announced an initial AI inference pilot at our Redwater facility, involving the potential conversion of approximately 100 kilowatts of excess mining capacity to AI workloads. The pilot is designed to assess the technical requirements and potential economics of inference computing using infrastructure already within our operating footprint.

Alberta remains an area of interest given our existing presence and familiarity with the regional power market. Although we will pursue opportunities selectively based on economics, capital requirements, and strategic fit. In addition to executing across our three operating pillars, we are evaluating strategic opportunities that could strengthen and expand the platform. These opportunities may arise within our Avalanche treasury and ecosystem strategy, Bitcoin mining operations, or AI and high performance computing initiatives. Our focus is on accretive opportunities that can build durable revenue and cash flow while enhancing the productivity of existing assets. This includes potential acquisitions, partnerships, infrastructure investments, and operational initiatives that complement our capabilities and improve the long-term economics of the business. We carefully evaluate each opportunity based on the quality of the underlying business or asset, its strategic fit, expected financial contribution, and capital requirements.

Our objective is to pursue transactions, strategic relationships, and other opportunities that strengthen AVAX One's operating foundation and create sustainable long-term value for shareholders. Looking ahead, we are intently focused on building a stronger, more durable operating platform. We will continue to allocate capital selectively across our three pillars, pursue opportunities that can expand recurring revenue and cash flow, and remain active under our share repurchase program when we believe our shares trade below the intrinsic value of the business. We believe these initiatives, coupled with our prudent approach to capital allocation, will enable us to deliver long-term shareholder value. With that, I will now turn the call over to our Chief Financial Officer, Chris Polimeni, to review our second quarter financial results.

Chris? Thank you, Pete. As a quick reminder, as we review our second quarter 2026 financial results, all comparisons and variance commentary will refer to the prior year quarter unless otherwise specified.

Total revenue for our second quarter of 2026 was $2.8 million, which represents a significant increase compared to approximately $500,000 in the second quarter of 2025. This increase primarily reflects our transition to the Avalanche digital asset treasury strategy in Q4 of 2025. Our revenue in the second quarter of 2026 consisted of approximately $2.1 million in staking rewards revenue from our digital asset treasury strategy, as well as approximately $700,000 in revenue from our Bitcoin mining operations. Our total operating expenses for the second quarter of 2026 were $36.2 million, compared to $1.8 million in the second quarter of 2025.

The operating expenses for the second quarter of 2026 included $33 million of non-cash charges related to, A, $29.8 million unrealized loss in the change in market value of our digital assets. B, a $2.6 million impairment of our Treehouse liquid staking tokens. And C, a $600,000 share-based compensation depreciation expense. Excluding these non-cash charges, our adjusted operating expenses for the second quarter of 2026 were $3.2 million. We reported a net loss for the second quarter of 2026 of $35.1 million or $4.41 per diluted share, compared to a net loss of $8.1 million or greater than $35.88 per diluted share in the second quarter of 2025.