AVAX ONE TECHNOLOGY LTD. - 10-Q Summary (Q3 2025)
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended September 30, 2025. AVAX One Technology Ltd. (formerly AgriFORCE Growing Systems Ltd.) is a British Columbia corporation trading on the NASDAQ Capital Market under the symbol AVX. The Company has transitioned from a legacy agricultural technology business to a sustainable Bitcoin mining and digital asset treasury company. It operates three mining facilities (one in Alberta, Canada; two in Ohio, USA) powered by flared natural gas. The Company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|
| Revenue | $525,915 | $1,251,124 | $0 |
| Net Loss | $(8,351,326) | $(16,557,023) | $(13,407,164) |
| Operating Loss | $(2,611,527) | $(5,957,647) | $(7,980,356) |
| Cash and Cash Equivalents | $894,701 | $894,701 | $1,373,294 |
| Digital Assets (Bitcoin) | $1,079,429 | $1,079,429 | $0 |
| Total Debt (Current + Long-term) | $1,689,415 | $1,689,415 | $1,484,908 |
| Accumulated Deficit | $(77,339,142) | $(77,339,142) | $(60,782,119) |
Note: Total Debt includes Debentures ($1,372,679), Loan Payable ($275,000), and Long-term Debt ($41,736).
Material Changes vs. Prior Period
- Revenue Generation: The Company generated revenue for the first time in 2025, driven entirely by Bitcoin mining operations ($525,915 in Q3). There was no revenue in the comparable 2024 periods.
- Operating Expenses: Total operating expenses decreased by 43% in Q3 2025 compared to Q3 2024 ($3.1M vs $5.5M). This reduction is primarily due to the absence of a $4.1M intangible asset impairment charge recorded in 2024 and reduced consulting fees. However, expenses related to mining (Cost of Revenue, Repairs & Maintenance, Depreciation) increased significantly as operations scaled.
- Debt Extinguishment: The Company recorded a significant loss on debt extinguishment of $5.4M in Q3 2025 (and $10.1M YTD) due to the conversion of convertible debentures into equity. This non-cash charge significantly impacted the net loss.
- Discontinued Operations: The Company disposed of its Radical Clean Solutions (RCS) business in Q3 2025, recording a loss on disposal of $880,482. These operations are now classified as discontinued.
- Share Capital: The Company effected a 1:9 reverse stock split on July 28, 2025. As of September 30, 2025, there were 4,128,089 shares issued and outstanding (post-split basis).
Guidance, Outlook, and Risks
- Strategic Pivot: Management announced a transition to a "digital asset treasury" strategy. Following a PIPE transaction closed in November 2025 (subsequent to the reporting period), the Company intends to hold AVAX tokens as its primary treasury reserve asset while continuing Bitcoin mining operations.
- Liquidity: The Company holds approximately $0.9M in cash. Management states that proceeds from the recent PIPE transaction (up to $10M for working capital) and projected cash flows are expected to fund operations for at least 12 months.
- Debt Structure: The Company has significant convertible debentures outstanding with "down-round" provisions. Recent issuances triggered price adjustments on existing debt, leading to substantial extinguishment losses. Future conversions may continue to impact earnings.
- Risks: Key risks include volatility in cryptocurrency prices (Bitcoin and AVAX), the ability to secure low-cost energy for mining, regulatory changes regarding digital assets, and ongoing litigation (including a claim by a former CEO alleging wrongful termination).
Investor Verification Checklist
- PIPE Transaction Details: Verify the final terms and closing of the November 2025 PIPE transaction described in Note 18, specifically the amount of cash vs. AVAX tokens received and the dilution impact on existing shareholders.
- Debt Conversion Terms: Review the specific conversion prices and "down-round" triggers for the outstanding debentures to assess potential future dilution and accounting impacts on the income statement.
- Bitcoin Treasury Policy: Confirm the formal adoption of the AVAX treasury strategy and the specific policies governing the sale or borrowing against digital assets.
- Legal Proceedings: Monitor the status of the litigation filed by former CEO Ingo Wilhelm Mueller and the legal dispute with BV Peeters Advocaten-Avocats regarding unpaid legal fees.
- Going Concern: Assess the sufficiency of the $0.9M cash balance against the $1.8M in principal debt payments due in 2026 and ongoing operational burn rate.