Avax One Technology Ltd.

Good afternoon, everyone, and thank you for participating in today's conference call to discuss AVEX 1's financial and operating results for the first quarter ended March 31, 2026. Joining us today are the company's Chief Executive Officer, Jolie Kahn, and Chief Financial Officer, Chris Polimeni. By now, everyone should have access to AVEX 1's first quarter 2026 earnings press release. which was issued earlier this afternoon at approximately 4.05 p.m. Eastern Time. The release is available in the investor relations section of the company's website at www.avex-1.com. This call will also be available for webcast replay on the company's website. Following management's remarks, we'll open up the call for your questions. Please be advised this conference call will contain statements that are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties. as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements. For important risks and assumptions associated with such forward-looking statements, please refer to the company's SEC filings. Now over to you, Jolie.

Thank you, Operator, and thank you all for joining us today. The first quarter represented an important transition period for AVEX1 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, broadened our Bitcoin mining platform, and oriented the 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 model is critical for frontier 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 midsize compute 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 timelines 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 AVEX 1 to address. Our strategy is centered on modular behind the meter AI and 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've continued to make tangible progress on that deployment initiative. We previously engaged Blue Flare 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. ASEN will lead engineering and design as the project advances from conceptual planning into detailed engineering and AESO-ready deliverables. The project is on schedule for inclined deployment readiness during the first quarter of 2027. We believe these milestones are important because they demonstrate prompt execution against our stated strategy. Alberta 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 AVEX 1 within what we believe is a multibillion-dollar infrastructure opportunity developing across the region. We believe this approach creates several advantages. First, it materially shortens deployment timelines relative to traditional grid-dependent hyperscale deployment. 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 collocation providers. And finally, our approach enables disciplined incremental scaling. Rather than pursuing multibillion-dollar campuses, we can deploy capacity in modular phases aligned with customer demand 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 model training toward 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 petahash per second of mining capacity in Alberta, we already have experience operating power intensive infrastructure in energy advantage markets. The operational experience matters in a market where execution permitting G procurements 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 a leading institutional blockchain system Tokenized real-world assets on the network grew more than 10 times 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 in Avalanche. And these are formally named Avalanche as a supported blockchain for stablecoin settlement. On the public sector side, the California DMV, digitized 42 million vehicle titles on Avalanche, cutting transfer times from weeks to minutes. We view our treasury position as 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 AVEX holdings are actively staked to generate yield, creating an operating flywheel where treasury assets contribute to funding operations and infrastructure development. We have also expanded into DeFi-enabled staking 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're focused on maximizing the productivity of those assets through staking validator participation and carefully selected on-chain yield opportunities. Over time, we believe this creates a differentiated model that combines exposure to the long-term growth of the AVA and Chica system with recurring yield generation and strategic ecosystem participation. More broadly, we believe the conversion of AI infrastructure and on-chain finance is only in its nascent stages. AI agents, decentralized applications, tokenized financial systems, and machine-native economies will require both computer infrastructure and programmable financial rails. We believe AVEX1 is uniquely positioned because we are building exposure to both sides of that infrastructure stack. Physical interest structure through modular AI and HPC data centers and digital infrastructure through our avalanche treasury and ecosystem participation. AVEX1 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 real infrastructure assets capable of generating diversified cash flow across AI infrastructure, digital assets, mining operations, chain yield generation. We believe that combination of power infrastructure, operational cash flow, and strategic exposure to Avalanche and the on-chain economy positions AVEX 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 if that's 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 6th 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 timeframe provided. With that, I will now turn the call over to Chris to review our first quarter financial results.

Chris? Thank you, Jolie. As a quick reminder, as we review our first quarter 2026 financial results, All comparisons and variance commentary refers to prior year quarter unless otherwise specified. Total revenue for our first quarter of 26 increased materially to $2.5 million compared to approximately $300,000 in last year's first quarter, primarily driven by our Avalanche Digital Asset Treasury Strategy, which generated approximately $1.9 million in staking rewards in Q1 of 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 operating expenses in the 26 first quarter included $43.3 million of non-cash 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 AVEX tokens in the Treehouse network into TAVEX tokens. Three, we had a $1.1 million impairment of liquid staking tokens. Four, we had $300,000 of depreciation amortization expense. And finally, a $300,000 charge incurred as a result of the vesting of shares issued in 2025 to several board advisors, board members, and certain executives. So those non-cash charges totaled $43.3 million of the $47.1 million operating expenses. In addition to these non-cash charges, we also incurred certain one-time non-recurring 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 non-cash charges and one-time non-recurring costs, the adjusted operating loss for the first quarter was 1.1 million. Our net loss for the quarter was 46.4 million, or 48 cents per diluted share, compared to net loss of approximately $145,000 or $10.50 per diluted share in the first quarter of 25. Adjusting for the non-cash and one-time costs discussed previously, our adjusted net loss for Q1 of 26 was 2.9 million or only 3 cents per diluted share. As of March 31st, 2026, our cash and 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 of 25. We believe this cash balance provides us with approximately three 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 31st, last day of our first quarter, Avex One held approximately 14 million Avex tokens with a net value of approximately 125 million. Since the inception of our digital asset 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 continue to maintain a prudent approach to capital allocation as we execute on the next phase of AVEX One's growth strategy. We believe the market opportunity around the AI and 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 and 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 AVEX 1 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 on-chain financial systems. With a growing infrastructure platform, exposure to energy-advantaged 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, and we'll now open it up for questions from those participating in the call. Operator, back to you.