10-Q: AVAX One Shifts to Digital Assets, Reports Q3 Loss

AVAX One Technology Ltd. (formerly AgriFORCE) completed a major strategic pivot to digital asset treasury and Bitcoin mining, raising $219 million in a PIPE transaction, despite reporting increased net losses for Q3 and YTD 2025.

Summary

• AVAX One Technology Ltd. (formerly AgriFORCE Growing Systems Ltd.) officially changed its name and NASDAQ ticker to AVX on November 13, 2025, signaling a strategic pivot.
• The company has transitioned its primary business focus to sustainable Bitcoin mining and a digital asset treasury reserve strategy, with AVAX Tokens as its primary treasury reserve asset.
• A private investment in public equity (PIPE) transaction closed on November 5, 2025, raising an aggregate of $219.0 million, consisting of $145.4 million in cash/stablecoins and $73.7 million in AVAX Tokens.
• For the three months ended September 30, 2025, the company reported revenue of $525,915, a significant increase from $0 in the prior year, primarily from Bitcoin mining.
• Net loss for the three months ended September 30, 2025, increased to $(8,351,326) from $(5,847,365) in the same period last year.
• For the nine months ended September 30, 2025, revenue was $1,251,124, up from $0 in the prior year, driven by Bitcoin mining operations.
• Net loss for the nine months ended September 30, 2025, widened to $(16,557,023) from $(13,407,164) in the comparable prior year period.
• Operating expenses decreased by $2.3 million (43%) for the three months and $0.8 million (8%) for the nine months ended September 30, 2025, largely due to the absence of intangible asset impairment charges seen in 2024.
• Other expenses significantly increased due to a $5.39 million loss on debt extinguishment in Q3 2025 and a $10.12 million loss for the nine months ended September 30, 2025.
• Cash balance increased to $894,701 as of September 30, 2025, from $489,868 at December 31, 2024.
• Digital assets grew substantially to $1,079,429 as of September 30, 2025, from $26,282 at December 31, 2024, reflecting Bitcoin mining activities.
• The company acquired the Redwater Bitcoin Mining Facility in Alberta, Canada, in November 2024 for approximately $1.5 million and the Bald Eagle Mining facility in Ohio in January 2025 for $4.765 million.
• The Radical Clean Solutions (RCS) business was discontinued, with assets returned to the seller on July 1, 2025, resulting in an $880,482 loss on disposal.
• The company entered into an Asset Management Agreement with Hivemind Capital Partners, LLC for discretionary asset management of its digital asset strategies, with an annual fee of 1.25% of Account Size.
• Strategic Advisor Agreements were signed with Anthony Scaramucci and Brett Tejpaul, who received 928,145 restricted Common Shares vesting over 36 months.
• The functional currency of the company changed from Canadian dollars (CAD) to USD effective April 1, 2025.

Sentiment

Score: 6

Explanation: The company is undergoing a significant strategic transformation with a substantial capital infusion, which is a positive. However, the increased net losses and large debt extinguishment losses indicate ongoing financial challenges and the inherent risks of a major business pivot. The future success hinges on the effective execution of the new digital asset strategy and Bitcoin mining operations.

Positives

• Successfully completed a significant strategic pivot to digital asset treasury and sustainable Bitcoin mining, which is expected to drive future growth.
• Generated first-time revenue from Bitcoin mining operations, totaling $525,915 for Q3 2025 and $1,250,592 for YTD 2025.
• Completed a substantial PIPE transaction, raising $219.0 million, significantly bolstering capital resources.
• Cash balance increased to $894,701 as of September 30, 2025, from $489,868 at December 31, 2024.
• Digital assets increased to $1,079,429 as of September 30, 2025, from $26,282 at December 31, 2024, indicating successful accumulation of Bitcoin.
• Acquired two Bitcoin mining facilities (Redwater and Bald Eagle), expanding operational capacity to 1,662 mining units.
• Established an Asset Management Agreement with Hivemind Capital Partners, LLC to manage digital asset strategies.
• Engaged prominent strategic advisors, Anthony Scaramucci and Brett Tejpaul, to guide digital asset and financial services sector initiatives.
• Operating expenses decreased year-over-year for both the three and nine months ended September 30, 2025, primarily due to the absence of a large intangible asset impairment charge from the prior year.

Negatives

• Net loss for the three months ended September 30, 2025, increased to $(8,351,326) from $(5,847,365) in the prior year.
• Net loss for the nine months ended September 30, 2025, increased to $(16,557,023) from $(13,407,164) in the prior year.
• Accumulated deficit significantly increased to $(77,339,142) as of September 30, 2025, from $(60,782,119) at December 31, 2024.
• Incurred a substantial loss on debt extinguishment of $5,389,071 for Q3 2025 and $10,119,711 for YTD 2025 due to conversions of convertible debentures.
• Disposal of the Radical Clean Solutions (RCS) business resulted in an $880,482 loss.
• Increased professional fees, repairs and maintenance, investor and public relations, and share-based compensation contributed to higher costs in certain operating expense categories.
• The company continues to operate on a going concern basis, indicating ongoing financial uncertainty despite recent capital raises.

Risks

• The company's ability to fund operations and meet debt service obligations depends on future operating performance and cash flows, which are subject to economic conditions and financial markets.
• Volatility and other risks associated with cryptocurrencies, including Bitcoin and AVAX Tokens, could significantly impact the company's financial performance and treasury strategy.
• The cost of repairs and maintenance for power generation and mining equipment in Bitcoin mining facilities could be substantial.
• The costs and timing of regulatory activities, including obtaining approvals for intellectual properties in the U.S. and foreign countries, pose a risk.
• The success of R&D activities to further develop technology and the costs of commercialization (sales, marketing, production) are uncertain.
• The company faces litigation risks, including a wrongful termination claim from a former CEO and a claim for unpaid legal services from BV Peeters Advocaten-Avocats.
• The company's share repurchase program may not be fully utilized or may not effectively support share price if market conditions are unfavorable.
• The company's reliance on third-party mining pool operators for Bitcoin mining revenue introduces operational and counterparty risks.
• The company's digital asset treasury reserve strategy, which involves holding AVAX Tokens, exposes it to the specific risks and volatility of the Avalanche Network's native cryptocurrency.

Future Outlook

The company intends to use up to $10 million of the cash net proceeds from the recent PIPE Offering for general corporate purposes and pre-existing working capital commitments, with the remaining cash proceeds allocated to the acquisition of AVAX Tokens. This will establish the company's cryptocurrency treasury operations, with AVAX Tokens as its primary treasury reserve asset. The company also plans to continue substantive operation of its Bitcoin mining business and is developing a plan to capture and redirect waste heat from miners and generators to support sustainable agricultural practices like growing white-legged shrimp, red seaweed, and micro-greens. The working capital from the Offering, combined with projected cash flow from operations, is expected to fund operating expenses and capital expenditures for at least twelve months.

Management Comments

• "The Company intends to use up to $10 million of the cash net proceeds from the Offering for general corporate purposes initiated after closing and for pre-existing working capital commitments or obligations, and the remaining cash net proceeds for the acquisition of AVAX Tokens."
• "The AVAX Tokens acquired, together with the remaining net proceeds, will be used for the establishment of the Companys cryptocurrency treasury operations to the extent consistent with the Companys investment policy as amended or otherwise modified from time to time."
• "The Company also intends to continue substantive operation of its Bitcoin mining business."
• "Our current management team, consisting of Jolie Kahn, as Chief Executive Officer, and Chris Polimeni, as Chief Financial Officer, will continue in their respective roles with the Company after the closing of the Offering."
• "We intend to continue to hold up to 50% of the mined assets as we continue to build upon our treasury strategy."
• "We estimate that the increase in value of the collateral will far exceed the interest costs associated with this loan just as it did with the May 2025 loan."
• "Management is instructing counsel to advance the matter given the relative strength of the Companys case. The likelihood of an unfavorable outcome is not probable given the facts supporting the Companys for cause termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial."

Industry Context

AVAX One Technology Ltd.'s strategic pivot from agriculture technology to digital asset treasury and sustainable Bitcoin mining aligns with a growing trend of companies seeking to capitalize on the burgeoning cryptocurrency market and integrate sustainable energy solutions. The focus on AVAX Tokens as a primary treasury reserve asset positions the company within the Avalanche ecosystem, a competitor to other blockchain networks. Its sustainable Bitcoin mining operations, utilizing flared natural gas, tap into the increasing demand for environmentally conscious crypto mining, potentially offering a competitive advantage by reducing energy costs and generating carbon credits. The company's move into digital infrastructure for AI and edge computing also places it at the intersection of several high-growth technology sectors.

Management Changes

Corporate Governance

Legal Proceedings

• Former CEO Ingo Wilhelm Mueller filed a Notice of Civil Claim alleging wrongful termination and seeking damages of $473,367 CAD per annum in base salary and $468,313 CAD in common stock. The company asserts termination for just cause due to breach of fiduciary duty, misrepresentation, and forgery.
• Stronghold filed a Complaint for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered. The company settled the complaint on January 17, 2025, agreeing to pay $20,833 monthly for 12 months, with the balance paid in full on October 31, 2025.
• BV Peeters Advocaten-Avocats summoned the company seeking payment for €467,249 of unpaid legal bills plus penalties and interest. The company disputes the claim, believing services were not in its best interest, and intends to vigorously defend its position. Parties are in mediation.
• A former General Counsel filed a Notice of Civil Claim alleging wrongful termination. The company settled the claim on January 6, 2025, agreeing to pay $160,000 CAD, which has been paid in full.

Stakeholder Impact

• Shareholders: Significant dilution from the PIPE transaction (86.7 million common shares and 6.1 million pre-funded warrants issued) and ongoing debenture conversions. However, the capital raise and strategic pivot aim to create long-term value. Reverse stock splits were implemented to maintain listing compliance.
• Employees: Changes in management roles (new CFO, COO) and potential shifts in staffing needs as the company transitions from agriculture technology to digital assets and Bitcoin mining.
• Creditors: Convertible debenture holders have seen their debt converted into equity, leading to significant debt extinguishment losses for the company but potentially providing equity upside for the holders. New loans secured by Bitcoin collateral have been obtained.
• Customers: The discontinuation of the Radical Clean Solutions business and the shift away from 'UN(THINK) Foods' means former customers in those segments will no longer be served by AVAX One. New 'customers' are Bitcoin mining pools and potentially future clients for AI/edge computing services.

Next Steps

• Use up to $10 million of cash net proceeds from the PIPE Offering for general corporate purposes and pre-existing working capital commitments.
• Acquire AVAX Tokens with the remaining cash net proceeds to establish the company's cryptocurrency treasury operations.
• Continue substantive operation of the Bitcoin mining business.
• Develop and deploy mobile modular gas-to-power units for off-grid scalability.
• Build a strategic digital reserve, accumulating up to 50% of Bitcoin mined and allocating up to 50% of new capital raised toward Bitcoin and potentially other purchases.
• Develop a plan to capture and redirect waste heat from miners and generators to support sustainable agricultural practices (e.g., shrimp, seaweed, micro-greens cultivation).
• Establish a DACA account with investors to deposit escrowed funds from the October 24, 2025 debenture purchase.
• Advance legal proceedings related to the former CEO's wrongful termination claim and the BV Peeters Advocaten-Avocats dispute.

Key Dates

Recommendation

AVAX One Technology Ltd. is undergoing a transformative strategic pivot, moving from agriculture technology to digital asset treasury and Bitcoin mining, backed by a substantial $219 million capital raise. This shift, while promising, introduces significant execution risk and the inherent volatility of the cryptocurrency market. The company reported increased net losses for Q3 and YTD 2025, largely due to substantial debt extinguishment losses, indicating ongoing financial challenges during this transition. While the capital infusion and new strategic direction offer potential for future growth, the company's financial performance is currently weak, and the long-term success of its new ventures is yet to be proven. Given the high risk associated with a major business model change and current losses, a 'hold' recommendation is appropriate for investors to observe the execution of the new strategy and its impact on financial results before making further investment decisions. The recent capital raise provides a lifeline, but the path to profitability in the new business segments remains uncertain.

Keywords

Bitcoin mining, AVAX Tokens, Digital assets, Cryptocurrency, Sustainable energy, SEC filing, 10-Q, Financial results, Strategic pivot, Capital raise, Corporate governance, AgriFORCE, AVAX One Technology