Avax One Technology Ltd Q1 FY2026 earnings call

Strategic Transformation

• AVEX 1 is transitioning to a power-first digital infrastructure company positioned at the intersection of AI/high-performance computing (HPC) infrastructure and on-chain digital finance via the Avalanche ecosystem.
• The company targets the underserved 'missing middle' of AI demand: 1 to 50 megawatt enterprise inference, edge AI, and regulated industry workloads that require distributed, dedicated infrastructure, which hyperscale providers are not optimized to serve.
• The strategy focuses on modular behind-the-meter microgrid infrastructure deployed in energy-advantaged regions to shorten deployment timelines relative to traditional grid-dependent hyperscale projects, enable disciplined incremental scaling aligned with customer demand, and leverage existing power access amid widespread utility interconnection and transmission constraints across North America.

AI Infrastructure Project Progress

• The company is advancing its first 10 megawatt Tier 3 ready critical power facility in Alberta, Canada, designed with dedicated flared natural gas generation, battery energy storage integration, and modular microgrid architecture.
• Front-end engineering and design is completed; Ascent Consulting was recently selected to lead detailed engineering to deliver AESO-ready project documentation, and the facility remains on track for deployment readiness in Q1 2027.
• The company already has experience operating power-intensive digital infrastructure in Alberta, including ~300 petahash per second of existing Bitcoin mining capacity, providing operational expertise in energy-advantaged markets.

Avalanche Treasury Strategy

• The Avalanche digital asset treasury remains a core strategic pillar, providing yield generation, ecosystem alignment, and strategic optionality. Tokenized real-world assets on Avalanche grew 10x in 2025 to surpass $1.3 billion in total value locked, with growing institutional adoption from major financial firms and public sector use cases like the California DMV's vehicle title digitization.
• The majority of AVAX holdings are actively staked to generate recurring yield that funds operations and infrastructure development. The company recently expanded into DeFi-enabled staking via the Treehouse deployment to enhance asset productivity and diversify yield sources.

NASDAQ Compliance Update

• The NASDAQ Listing Qualifications Panel granted AVEX 1 an extension to regain compliance with the minimum bid price requirement, giving the company until July 6, 2026 to achieve a closing bid price above $1 for 10 consecutive trading days.
• The company is seeking shareholder approval for a reverse stock split at its upcoming annual meeting to meet compliance requirements and maintain its NASDAQ listing.

Liquidity and Capital Allocation

• Total available liquidity of $26.9 million provides approximately three years of operating runway without requiring external capital, excluding any future revenue generation.
• Management believes shares trade at a meaningful discount to intrinsic value, and will prioritize capital allocation to share repurchases while retaining flexibility to pursue growth opportunities.

AVEX 1 reported total Q1 2026 revenue of $2.5 million, up from $300,000 in the prior year quarter. 1. Avalanche Digital Asset Treasury: Generated $1.9 million in staking rewards, representing 76% of total Q1 2026 revenue. 2. Bitcoin Mining: Generated $600,000 in revenue, representing 24% of total Q1 2026 revenue. Total operating expenses for Q1 2026 were $47.1 million, compared to $2.1 million in Q1 2025, driven primarily by $43.3 million in non-cash charges including unrealized losses on digital asset market value, losses on digital asset transactions, and token impairment. Net loss for the quarter was $46.4 million (48 cents per diluted share), compared to a $145,000 net loss ($10.50 per diluted share) in Q1 2025. After adjusting for non-cash and one-time restructuring charges, adjusted net loss was $2.9 million (3 cents per diluted share), and adjusted operating loss was $1.1 million. As of March 31, 2026, AVEX 1 held 14 million AVAX tokens with a net value of ~$125 million, and total liquidity of $26.9 million.

• The first 10 megawatt Alberta AI microgrid facility is confirmed to remain on schedule for deployment readiness by Q1 2027, with the potential to advance the timeline by 2-4 months if a permitted pre-existing facility is acquired. • Management reaffirmed confidence that the company has sufficient liquidity to fund three years of operations without external capital, while allowing for incremental modular scaling of AI infrastructure aligned with customer demand. • The company maintains that it will be able to achieve NASDAQ compliance within the granted extension window through a reverse stock split and operational progress. • Management expects that multiple 10 megawatt modular facilities can be developed in parallel as demand and financing allow, building a repeatable scalable playbook for distributed AI infrastructure.

• The company received a NASDAQ minimum bid price deficiency notice, and failure to regain compliance by the July 6, 2026 deadline could result in delisting from the exchange. • AI infrastructure development faces permitting, construction, and interconnection risks that could delay project timelines or increase costs relative to current projections. • The company's financial results include significant volatility from non-cash unrealized gains and losses on digital asset holdings, which can lead to large swings in reported net income even when core operating performance is stable. • Execution of the new dual strategy (AI infrastructure + digital asset treasury) requires successful integration of two new business lines, and there is no guarantee that customer demand for the company's distributed AI infrastructure model will materialize as expected.

Q: How do the Avalanche Treasury strategy and new AI infrastructure business connect long-term, and will they remain parallel or become integrated?

A: Management confirms the two initiatives will run in parallel in the near term, but sees a clear path to deep integration over time. Avalanche blockchain requires relatively low power consumption compared to other major protocols, allowing Avalanche-based protocols to run efficiently on the company's small-scale 10 megawatt microgrid data centers.

Q: What is the development timeline and key milestones for the Alberta 10 megawatt project from engineering through tenant contracting?

A: The process will run permitting and engineering concurrently, with construction following, and tenant engagement starting during the final construction phase, targeting a ready-to-lease facility by the end of Q1 2027. Acquiring an already permitted facility could cut 2-4 months from the timeline, and the company could develop multiple projects in parallel if financing and demand allow. Capital allocation prioritizes getting the first project operational, with Bitcoin mining used for interim cash flow at permitted sites if needed.

Q: How will the company address power and water requirements for the AI-powered Alberta data center, and how will it structure tenant occupancy?

A: Power will be primarily supplied by behind-the-meter flared natural gas generation, with built-in battery backup redundancy and optional grid connection as a rare backup. Water requirements have not identified any issues to date, with details to be finalized during the engineering phase. Management expects each 10 megawatt facility will host 1 to 3 creditworthy tenants max, rather than many small fragmented tenants, to simplify operations.

Q: What is the Treehouse DeFi yield enhancement deployment for Avalanche tokens, and how does it work?

A: The company deployed 830,000 AVAX tokens to the Treehouse DeFi protocol via the Benchy platform to pursue interest rate arbitrage from collateralized lending and borrowing. Tokens are converted during the deployment, converted back to AVAX at unwinding, and the strategy adds incremental yield on top of base staking returns to improve overall portfolio productivity.