Avalanche Treasury (Nasdaq: AVAT) closes SPAC deal and unveils AVAX strategy
Avalanche Treasury Corporation completed its business combination with Mountain Lake Acquisition Corp., creating a publicly traded AVAX-focused vehicle now listed on Nasdaq under the symbol AVAT. The deal was structured as a reverse recapitalization, with Avalanche Treasury Company (AVAT) treated as the accounting acquirer.
AVAT raised approximately $216 million through Company Unit Investments at $10.00 per unit, and the Avalanche Foundation sold at least $200 million of AVAX tokens to AVAT under a Token Sale Agreement, receiving 3,000,000 Pubco Class A shares and cash/USDC. Astral received 4,000,000 Pubco Class A shares, half subject to price-based earnout escrows, while 1,600,000 Sponsor earnout shares are also tied to AVAT share price milestones.
Following redemptions of 22,846,470 MLAC public shares for about $10.62 per share, 37,914,826 Pubco Class A shares and 5,805,639 Pubco Class B shares were outstanding. Pro forma net losses of $53.6 million for the three months ended March 31, 2026 and $148.0 million for 2025 reflect large non-cash fair value and digital asset remeasurement charges as AVAT implements a strategy centered on accumulating and staking AVAX tokens.
Positive
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Insights
AVAT completes a complex de-SPAC, emerging as a leveraged AVAX exposure vehicle with significant non-cash volatility.
The transaction converts Mountain Lake Acquisition Corp. into Avalanche Treasury Corporation, accounted for as a reverse recapitalization with AVAT as acquirer. AVAT’s members hold the majority of voting power, and operations continue AVAT’s AVAX-centered strategy.
Funding combines a roughly $216 million Company Unit Investment with a Foundation deal selling at least $200 million of AVAX tokens for cash, USDC and 3,000,000 Class A shares. Heavy SPAC redemptions removed most trust cash, leaving $1.6 million but significantly concentrating the float.
Pro forma results show substantial net losses—about $53.6 million for the March 2026 quarter and $148.0 million for full-year 2025—driven largely by fair value changes, impairments and realized losses on AVAX holdings. Earnout and lock-up structures around Astral and the Sponsor tie additional equity outcomes to AVAT’s Class A trading price, while the 2026 Omnibus Incentive Plan reserves 9,000,000 shares plus an annual rolling increase.
8-K Event Classification
Key Figures
Key Terms
reverse recapitalization financial
Token Sale Agreement financial
earnout liability financial
digital assets - AVAX technical
staking revenue financial
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 17, 2026 (June 11, 2026)
Avalanche Treasury Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-43345 | 39-4863126 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
11 W. 42nd Street 2nd Floor
New
York, NY 10036
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (332) 240-1155
Not
Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Class A common stock, par value $0.01 per share | AVAT | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Introductory Note
Terms used in this Current Report on Form 8-K (this “Report”) but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the meaning given to such terms in the definitive proxy statement/prospectus (as supplemented or amended, the “Proxy Statement/Prospectus”), filed pursuant to Rule 424(b)(3) with the Securities and Exchange Commission (the “SEC”) on May 14, 2026 by Avalanche Treasury Corporation (“Pubco”), and which forms a part of the Registration Statement on Form S-4 (Registration No. 333-294684).
The Business Combination
On June 11, 2026 (the “Closing Date”), Pubco consummated its previously announced business combination (the “Closing”) pursuant to that certain Business Combination Agreement, dated October 1, 2025 (as amended, modified, supplemented modified and/or restated from time to time, the “Business Combination Agreement”), by and among Pubco, Mountain Lake Acquisition Corp., at that time a Cayman Islands exempted company (“MLAC”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“MLAC Merger Sub”), Avalanche Company Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”, and together with MLAC Merger Sub, the “Pubco Subsidiaries”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company” or “AVAT”), Dragonfly Digital Management, LLC, a Delaware limited liability company (“Seller”) , Dragonfly Ventures L.P., a Cayman Islands exempted limited partnership (“DV”), Dragonfly Ventures II, L.P., a Cayman Islands exempted limited partnership (“DV II” and, DV II together with DV, the “Funds” or “DVs” and, the DVs together with the Seller, the “Seller Related Parties”) and Astral Horizon, L.P., a Delaware limited partnership (“Astral”). On January 13, 2026 and on March 17, 2026, MLAC, Pubco, the Pubco Subsidiaries, the Company, the Seller Related Parties and Astral entered into certain amendments to the Business Combination Agreement, effective as of October 1, 2025.
Pursuant to the terms of the Business Combination Agreement and as described in the sections titled “The Business Combination Proposal” and “The Domestication and Organizational Documents Proposal” of the Proxy Statement/Prospectus, immediately prior to the Closing on June 11, 2026, MLAC effected a domestication under Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”) and Section 206 of the Cayman Act (the “Domestication”), pursuant to which MLAC transferred by way of continuation to and became a Delaware corporation. On June 11, 2026, two hours after the Domestication, MLAC Merger Sub merged with and into MLAC in accordance with the applicable provisions of the DGCL and Limited Liability Company Act of the State of Delaware (the “DLLCA”), with MLAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “MLAC Merger”) and with MLAC Shareholders receiving one share of non-voting Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Stock”) for each Class A ordinary share, par value $0.0001 per share, of MLAC (the “MLAC Class A Ordinary Shares”) or Class B ordinary share, par value $0.0001 per share, of MLAC (the “MLAC Class B Ordinary Shares”) held by such shareholder, and with each holder of a right to receive one-tenth (1/10th) of an MLAC Class A Ordinary Share (an “MLAC Right”) receiving one share of Pubco Class A Stock in exchange for every ten (10) MLAC Rights held by such holder.
At the Company Merger Effective Time, Company Merger Sub merged with and into the Company in accordance with the applicable provisions of the DLLCA, with the Company continuing as the surviving company (the “Company Merger” and, together with the MLAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement, the “Transactions”), and with (i) each Company Member other than the Seller Related Parties receiving one share of Pubco Class A Stock for each Company Unit held immediately prior to the effective time of the Company Merger, (ii) each Seller Related Parties receiving one share of Pubco Class A Stock and one share of Pubco Class B common stock, par value $0.01 per share (“Pubco Class B Stock” and, together with the Pubco Class A Stock, the “Pubco Stock”), for each Company Unit held, and (iii) Astral receiving 4,000,000 shares of Pubco Class A Stock as additional consideration (the “Additional Merger Consideration Shares”), out of which 2,000,000 shares of Pubco Class A Stock (the “Astral Earnout Shares”) issued and placed into an escrow account held with Continental Stock Transfer & Trust Company (the “Escrow Agent”) (the “Astral Escrow Account”) at the Company Merger Effective Time and the remaining 2,000,000 shares of Pubco Class A Stock (the “Astral Post-Closing Shares”) will be issued and placed into Astral’s securities account on the 30th day after Closing.
Company Unit Subscription
Concurrently with the signing of the Business Combination Agreement, Pubco, the Company and MLAC entered into the Company Unit Subscription Agreements with the Company Unit Investors, pursuant to which the Company Unit Investors agreed to purchase, payable in cash, USDC or AVAX (or a combination of cash, USDC and/or AVAX), and the Company agreed to issue and sell, approximately $216 million worth of Company Class A units (the “Company Units”) at a price of $10.00 per Company Unit, in a private placement, upon the terms and subject to the conditions set forth therein (the “Company Unit Investment”). Company Unit Investors received a number of Company Units equal to, (a) if the Company Unit Investor elected to purchase Company Units by contributing AVAX, the stated AVAX amount multiplied by the applicable signing AVAX price, or, (b) if the Company Unit Investor elected to purchase the Company Units by contributing cash or USDC, the stated dollar amount or the stated USDC amount (as applicable), in each case divided by $10.00 (the “Per Unit Price”). At the Company Merger Effective Time, each Company Unit held by Company Unit Investors converted automatically into one share of Pubco Class A Stock, for a total of 21,855,658 shares of Pubco Class A Stock.
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Contribution Agreement and Token Sale Agreement
Concurrently with the execution of the Business Combination Agreement, Seller, Company, Pubco, Avalanche (BVI), Inc., a company incorporated in the British Virgin Islands (“Avalanche BVI”) and Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman” and together with Avalanche BVI, the “Foundation”) entered into an asset purchase and contribution agreement (the “Contribution Agreement”), pursuant to which, on the date of the Business Combination Agreement: (a) the Foundation agreed to sell a minimum of $200 million of AVAX tokens on a pre-discount basis to Company on the terms and subject to the conditions set forth in a Token Sale Agreement (the “TSA”) by and between Company and the Foundation (the “Foundation Transaction”) in exchange for 3,000,000 shares of Pubco Class A Stock issued at Closing, and (b) Seller agreed to contribute, directly and indirectly through the Funds and together with other Seller controlled vehicles (the “Seller Related Parties”), 1,960,040 AVAX in exchange for 5,805,639 Company Units at the Per Unit Price, with an approximate value of $58 million (the “Dragonfly Contribution”).
Astral Additional Merger Consideration Shares
On the Closing Date, the 2,000,000 Pubco Class A Stock Astral Earnout Shares were issued to Astral of the 4,000,000 Pubco Class A Stock Additional Merger Consideration Shares, and were deposited into the Astral Escrow Account to be released in tranches, all as provided in the Business Combination Agreement and the Astral Escrow Agreement. Unless released earlier, in accordance with the Astral Escrow Agreement and Business Combination Agreement, the Astral Earnout Shares will be held in escrow for a period commencing on the Closing Date and ending on fifth (5th) anniversary of the Closing Date (such period, the “Escrow Period”). The Astral Earnout Shares, together with any shares received upon equitable adjustment of the Astral Earnout Shares, will vest and be released from the Astral Escrow Account to Astral, in the amounts specified below, upon Pubco meeting the following price milestones: (i) on the last day of any twenty (20) consecutive trading day period after the Closing Date in which the VWAP of the Pubco Class A Stock is greater than or equal to $13.00 per share, 666,667 shares of Pubco Class A Stock (“Triggering Event I”); (ii) on the last day of any twenty (20) consecutive trading day period after the Closing Date in which the VWAP of the Pubco Class A Stock is greater than or equal to $15.00 per share, 666,667 shares of Pubco Class A Stock (“Triggering Event II”); and (iii) on the last day of any twenty (20) consecutive trading day period after the Closing Date in which the VWAP of the Pubco Class A Stock is greater than or equal to $17.00 per share, 666,666 shares of Pubco Class A Stock (“Triggering Event III” together the “Triggering Events” and each a “Triggering Event”).
The other 2,000,000 Pubco Class A Stock Astral Post-Closing Shares to be issued to Astral as part of the Additional Merger Consideration Shares will be issued to Astral on the thirtieth calendar day following the Closing Date.
Sponsor Earnout Shares
Pursuant to that certain Sponsor Support Agreement, dated October 1, 2025, entered into by and among Pubco, the Sponsor and MLAC (the “Sponsor Support Agreement”), and certain joinders to the Sponsor Support Agreement, dated June 3, 2026, entered into by and among Pubco, the Sponsor and each of the Sponsor and certain MLAC shareholders agreed to effect certain security cancellations and to deposit certain Pubco Class A Stock issued to it at Closing into escrow in connection with the Closing. Specifically, immediately prior to the MLAC Merger Effective Time, the Sponsor and certain MLAC shareholders delivered to MLAC for cancellation, 495,000 MLAC private placement shares and 4,387,500 MLAC Class B Ordinary Shares. An aggregate of 1,600,000 Pubco Class A Stock (the “Sponsor Earnout Shares”) were deposited into an escrow account with Continental Stock Transfer and Trust Company to be released in tranches as provided in the Sponsor Support Agreement. The Sponsor and certain MLAC shareholders agreed that all of the Sponsor Earnout Shares, together with any shares received upon equitable adjustment of the Sponsor Earnout Shares, shall be subject to potential transfer to Pubco (the “Sponsor Transfer”) at the end of the Escrow Period in the event that not all of the Triggering Events are achieved. The Sponsor Earnout Shares shall vest, no longer be subject to the Sponsor Transfer and shall be released from the escrow account to the Sponsor, in the amounts specified below, upon Pubco meeting the price milestones specified here: (i) upon the occurrence of Triggering Event I, 533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor; (ii) upon the occurrence of Triggering Event II, 533,333 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor; and (iii) upon the occurrence of Triggering Event III, 533,334 Sponsor Earnout Shares shall be released from the escrow account to the Sponsor. Pursuant to that certain Sponsor Escrow Agreement, dated June 11, 2026, entered into by and among Pubco, the Seller, the Escrow Agent and Paul Grinberg and Doug Horlick, as the representatives of the recipients (the “Sponsor Transferees”) of the Sponsor Earnout Shares (the “Sponsor Escrow Agreement”), each of Paul Grinberg and Doug Horlick will issue joint instructions with Pubco and the Seller to release the Sponsor Earnout Shares to the Sponsor Transferees upon the price milestones being met. Paul Grinberg and Doug Horlick were appointed to act as representatives of the Sponsor Transferees under the Sponsor Escrow Agreement pursuant to that certain Letter Agreement, dated June 1, 2026, among the Sponsor, Paul Grinberg and Doug Horlick and the Sponsor Transferees.
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Redemption
In connection with the closing of the Business Combination, holders of 22,846,470 MLAC Class A Ordinary Shares sold in MLAC’s initial public offering properly exercised their right to have their shares redeemed for a pro rata portion of the trust account holding the proceeds from MLAC’s initial public offering, and on June 11, 2026, prior to the Closing, MLAC redeemed 22,846,470 Class A ordinary shares for approximately $10.62 per share (the “Public Share Redemptions”). As a result, on June 11, 2026, after giving effect to the Public Share Redemptions and before paying expenses, there was $1,634,507 remaining in the trust account.
As of the Closing Date, following the Public Share Redemptions and the consummation of the Business Combination, there were (i) 37,914,826 shares of Pubco Class A Stock issued and outstanding and 5,805,639 shares of Pubco Class B Stock issued and outstanding. Pubco Class A Stock commenced trading on The Nasdaq Capital Market (“Nasdaq”) under the symbol “AVAT” on June 11, 2026.
A description of the Business Combination and the terms of the Business Combination Agreement, Company Unit Subscription Agreements, Contribution Agreement and TSA are included in the Proxy Statement/Prospectus in the section entitled “The Business Combination Proposal” beginning on page 112.
The foregoing descriptions of the Business Combination, the Company Unit Investment, the Foundation Transaction and the Dragonfly Contribution do not purport to be complete and are qualified in their entirety by the full text of the Business Combination Agreement, including the first amendment to the Business Combination Agreement dated as of January 13, 2026 and the second amendment to the Business Combination Agreement dated as of March 17, 2026, the form of LLC Subscription Agreement, the Asset Purchase and Contribution Agreement and the TSA copies of which are filed hereto as Exhibits 2.1, 2.2, 2.3, 10.6, 10.7 and 10.8, respectively, and are incorporated herein by reference.
Item 1.01. Entry into a Material Definitive Agreement.
The disclosures set forth in in the “Introductory Note” above are incorporated and made a part of this Item 1.01 by reference.
Amended and Restated Registration Rights Agreement
In connection with the Closing, Pubco, MLAC, the Seller Related Parties, Astral, the Foundation, the Sponsor and certain MLAC insiders including Paul Grinberg, Douglas Horlick, Jaime Vieser, John Norton, SPAC Sponsor Capital Access, Michael Marquez and Jeffrey Lager (together the “MLAC Insiders”) entered into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) amending and restating the existing Registration Rights Agreement, dated as of December 12, 2024, by and between MLAC, Sponsor and the MLAC Insiders, which provides for customary demand registration rights, piggyback registration rights and shelf registration rights for the benefit of the holders of Pubco Stock named therein, including the Sponsor, the Seller Related Parties, Astral, the Foundation, and the MLAC Insiders, subject to customary cutbacks and issuer suspension rights. The Amended and Restated Registration Rights Agreement also includes customary provisions relating to underwriting participation, registration expenses, indemnification and coordination of sales in underwritten offerings.
The foregoing summary of the A&R Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R Registration Rights Agreement, a copy of which is attached as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.
Indemnification of Directors and Officers
Concurrently with the Closing, Pubco entered into indemnification agreements with its directors and executive officers. Each indemnification agreement provides that, subject to limited exceptions, Pubco will indemnify the applicable indemnified person to the fullest extent permitted by law for claims arising in his or her capacity as a director or officer of Pubco, as applicable.
The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the indemnification agreements, a form of which is filed as Exhibit 10.15 to this Current Report on Form 8-K and is incorporated herein by reference.
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Lock-Up Agreements
Concurrently with the Closing, (i) MLAC, Sponsor, and the MLAC Insiders entered into with Pubco the Sponsor Lock-Up Agreement and (ii) the Seller Related Parties and Astral entered into with Pubco the Seller Lock-Up Agreement in substantially the same form as the Sponsor Lock-Up Agreement, pursuant to which, in each case, the parties agreed that the shares of Pubco Stock received by such parties in connection with the Business Combination, amounting in total to approximately 10,605,639 shares of Pubco Class A Stock and 5,805,639 Pubco Class B Stock, and any other securities convertible into or exercisable or exchangeable for Pubco Stock (the “Lock-Up Shares”), are subject to transfer restrictions, subject to certain customary exceptions (together, the “Lock-Up Agreements”).
Pursuant to the Lock-Up Agreements, the Lock-Up Shares are subject to transfer restrictions until the earlier of (i) 180 days following the date of the Closing (the “Anniversary Release”); provided, that if the VWAP of Pubco Class A Stock equals or exceeds $12.50 per share for any 20 consecutive trading days following the Closing, the Anniversary Release will be deemed to occur at 11:59 p.m. New York City time on such 20th consecutive trading day, and (ii) the date on which Pubco consummates a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all Pubco shareholders having the right to exchange their shares of Pubco Stock for cash, securities or other property.
The foregoing description of the Lock-Up Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Lock-Up Agreements, copies of which are filed as Exhibits 10.3 and 10.4 to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. On June 4, 2026, the Business Combination was approved by the shareholders of MLAC at an extraordinary general meeting of its shareholders. The Business Combination was completed on June 11, 2026. The material terms of the Business Combination are described in greater detail in the section of the Proxy Statement/Prospectus titled “The Business Combination Proposal” beginning on page 112, which is incorporated herein by reference.
Holders of 22,846,470 MLAC Class A Ordinary Shares exercised their right to redeem such shares for cash at a price of approximately $10.62 per share for aggregate payments of approximately $243,227,458, resulting in $1,634,507 from the Trust Account being available to the Company following the Closing, before expenses.
Immediately after Closing, there were outstanding:
| · | 37,914,826 shares of Pubco Class A Stock; and | |
| · | 5,805,639 shares of Pubco Class B Stock. |
Form 10 Information
Item 2.01(f) of Form 8-K states that if the predecessor registrant was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as MLAC was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, Pubco is providing the information below that would be included in a Form 10. Please note that unless otherwise specifically indicated or the context otherwise requires, the information provided below relates to Pubco as the combined company following the Business Combination.
Forward-Looking Statements
Certain statements contained in this Current Report on Form 8-K may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Rule 175 promulgated thereunder, and Section 21E of the Exchange Act, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties.
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Examples of forward-looking statements include, but are not limited to, statements with respect to the expectations, hopes, beliefs, intentions, plans, prospects, financial results or strategies regarding Pubco, statements regarding the plans and use of proceeds, future financial condition of Pubco and performance and expected financial impacts of the Business Combination on Pubco’s business, and Pubco’s expectations, intentions, strategies, assumptions or beliefs about future events, results of operations or performance that do not solely relate to historical or current facts. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “potential,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” and similar expressions. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions, include, but are not limited to:
| · | the failure to realize the anticipated benefits of the Business Combination and any transactions contemplated thereby; |
| · | the outcome of any potential legal proceedings that may be instituted against AVAT, Pubco, MLAC or others following Closing of the Business Combination; |
| · | the failure of Pubco to maintain the listing of its securities on Nasdaq; |
| · | ongoing costs related to the Business Combination and as a result of Pubco becoming a public company; |
| · | changes in business, market, financial, political and regulatory conditions; |
| · | the ability of Pubco to grow and manage growth profitably; |
| · | risks relating to Pubco’s anticipated operations and business, including the success of any future acquisitions; |
| · | Pubco’s ability to retain its management and key employees; |
| · | the risk that issuances of equity or debt securities, including issuances of equity securities in connection with Pubco’s acquisition strategy, may adversely affect the value of Pubco’s common stock and dilute its stockholders; |
| · | the risk that Pubco experiences difficulties managing its growth and expanding operations following the Closing of the Business Combination; |
| · | the price and volatility of AVAX; |
| · | AVAX’s prominence as a digital asset and Avalanche’s ability to serve as part of a new financial system; |
| · | the ability to develop and maintain effective internal controls and procedures or correct the previously identified material weaknesses; |
| · | the macro and political conditions surrounding AVAX, Avalanche and digital assets generally; |
| · | the planned business strategy, including Pubco’s ability to raise capital to continue to acquire additional AVAX, to secure participation and contribution from AVAX holders through in-kind investments, to successfully deploy and apply financial trading strategies or risk-management techniques in its active management of its AVAX holdings; |
| · | generation of AVAX yield through the delegation or staking of AVAX to validators and the deployment of AVAX, digital assets or fiat to traders, market makers, asset managers and other crypto market participants to with the goal of adopting conservative approaches focused on preservation and consistent returns; |
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| · | potential growth avenues organically through (i) expanding the talent base, potential product offering and partnerships, and (ii) inorganically through selective minority investments, joint ventures and acquisitions where AVAT believes such transactions have the potential to accelerate the expansion of Avalanche-related capabilities and AVAX accumulation; |
| · | Pubco’s ability to provide its shareholders with differentiated AVAX exposure, including plans and use of proceeds as well as any potential future capital raises; and |
| · | other risks and uncertainties described in this Current Report on Form 8-K, including those under the section entitled “Risk Factors.” |
There may be other risks not presently known to Pubco or that Pubco presently believes are not material that could also cause actual results to differ materially. Analysis and opinions contained in this Report may be based on assumptions that, if altered, can change the analysis or opinions expressed. In light of the significant uncertainties inherent in the forward-looking statements included in this Report, the inclusion of such forward-looking statements should not be regarded as a representation by Pubco that the objectives and plans set forth in this Report will be achieved, and you are cautioned not to place substantial weight or undue reliance on these forward-looking statements. These forward-looking statements speak only as of the date they are made and Pubco disclaims any obligation, except as required by law, to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.
Business
The business of Pubco is described in the Proxy Statement/Prospectus in the section titled “Information Related to AVAT” on page 207, and such information is incorporated herein by reference.
Risk Factors
The risks associated with Pubco are described in the Proxy Statement/Prospectus in the section titled “Risk Factors” beginning on page 40 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Financial Information
The audited consolidated financial statements of Avalanche Treasury Company, LLC as of December 31, 2025 and for the period from August 20, 2025 (inception) to December 31, 2025 are included in the Proxy Statement/Prospectus on pages F-21 through F-44, and are incorporated herein by reference. The unaudited financial statements of Avalanche Treasury Company, LLC as of and for the three months ended March 31, 2026 are set forth herein as Exhibit 99.1 and are incorporated herein by reference.
The audited consolidated financial statements of Pubco as of December 31, 2025 and for the period from September 22, 2025 (inception) to December 31, 2025 are included in the in the Proxy Statement/Prospectus on pages F-43 through F-58 and are incorporated herein by reference. The unaudited financial statements of Pubco as of and for the three months ended March 31, 2026 are set forth herein as Exhibit 99.2 and are incorporated herein by reference.
The audited consolidated financial statements of MLAC as of and for the years ended December 31, 2025 and December 31, 2024 are included in the Proxy Statement/Prospectus on pages F-2 through F-21, and are incorporated herein by reference. The unaudited financial statements of MLAC as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 are set forth herein as Exhibit 99.3 and are incorporated herein by reference.
Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information required of Pubco as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025 is incorporated by reference to Exhibit 99.4 hereto.
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Management’s Discussion and Analysis of Financial Conditions and Results of Operations
The Management’s Discussion and Analysis of Financial Condition and Results of Operations of Avalanche Treasury Company, LLC as of and for the three months ended March 31, 2026 is incorporated by reference to Exhibit 99.5.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial ownership of shares of Pubco Stock, as of the Closing Date, following the consummation of the Business Combination, by:
| · | each person known by Pubco to be the beneficial owner of more than 5% of a class of Pubco securities on the Closing Date; |
| · | each of Pubco’s officers and directors; and |
| · | all executive officers and directors of Pubco as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within sixty (60) days.
The beneficial ownership of shares of Pubco Stock immediately following completion of the Business Combination is based on the following: (i) an aggregate of 37,914,826 shares of Pubco Class A Stock issued and outstanding immediately following the completion of the Business Combination, (ii) 5,805,639 shares of Pubco Class B Stock issued and outstanding immediately following the completion of the Business Combination.
| Pubco Class A | Pubco Class B | |||||||||||||||
| Stock, (non-voting) | Stock, (voting) | |||||||||||||||
| Number of | Number of | |||||||||||||||
| Shares | Approximate | Shares | Approximate | |||||||||||||
| Beneficially | Percentage of | Beneficially | Percentage of | |||||||||||||
| Name and Address of Beneficial Owner(1) | Owned | Class | Owned | Class | ||||||||||||
| Named Executive Officers and Directors | ||||||||||||||||
| Gerald Bartholomew Smith | 1 | 0 | % | - | - | |||||||||||
| Paul Grinberg | 478,010 | 1.2 | % | - | - | |||||||||||
| Sarkees John Nahas | 50,481 | 0.1 | % | - | - | |||||||||||
| Robert Hadick(2) | 2,000,000 | 5.1 | % | - | - | |||||||||||
| Laine Mihalchick Moljo | - | - | - | - | ||||||||||||
| Sean Ostrower | - | - | - | - | ||||||||||||
| All officers and directors as a group (6 individuals) | 2,528,491 | 6.4 | % | 0 | % | |||||||||||
| Other 5% Shareholders | ||||||||||||||||
| Seller Related Parties(3) | 5,805,639 | 15.3 | % | 5,805,639 | 100 | % | ||||||||||
| Astral(4) | 2,000,000 | 5.1 | % | - | - | |||||||||||
| Foundation(5) | 3,000,000 | 7.9 | % | - | - | |||||||||||
| ParaFi Capital LP(6) | 3,011,909 | 7.9 | % | - | - | |||||||||||
| Emin Gün Sirer(7) | 2,609,176 | 6.9 | % | - | - | |||||||||||
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is 11 W. 42nd Street, 2nd Floor, New York, NY 10036. |
| (2) | Includes the 2,000,000 shares of Pubco Class A Stock issued to Astral. Astral is managed by its general partner, Astral Horizon GP, LLC, which is governed by a board of managers consisting of four natural persons, including Mr. Hadick. The managers of Astral Horizon GP, LLC collectively have the authority to manage and control the affairs of Astral Horizon Fund, including voting and investment decisions relating to its portfolio securities. Actions by the managers require approval of a majority of the managers, and no individual manager has authority to act unilaterally on behalf of the entity. Mr. Hadick disclaims beneficial ownership of the securities held by Astral Horizon Fund, except to the extent of his pecuniary interest therein, if any. |
| (3) | Includes 2,547,252 shares of Pubco Class A Stock issued to DV, 3,258,386 shares of Pubco Class A Stock issued to DV II, and one share of Pubco Class A Stock issued to the Seller. Includes 2,547,252 shares of Pubco Class B Stock issued to DV, 3,258,386 shares of Pubco Class B Stock issued to DV II, and one share of Pubco Class B Stock issued to the Seller. The principal business address of the DVs is PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands. The principal business address of the Seller is 66 Franklin Street, Suite 300, Oakland, CA 94607. |
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| (4) | The primary business address of Astral Horizon, L.P. is 66 Franklin Street, Suite 300, Oakland, California 94607. |
| (5) | In the event the Pubco Class A Stock cease to be nonvoting securities, the Foundation will forfeit a number of its Pubco Class A Stock and will receive from Pubco a number of pre-funded warrants convertible into Pubco Class A Stock prior to the time the Pubco Class A Stock cease to be nonvoting securities so that the Foundation’s beneficial ownership in Pubco does not exceed the Maximum Percentage. The primary business address of the Foundation is Floor 4, Banco Popular Building, British Virgin Islands, VG1110. The Board of Directors of Avalanche (“BVI”) Investments, Inc. has voting and investment control over the Pubco Class A Stock. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting and dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. This is the situation with regards to Avalanche (“BVI”) Investment Inc. |
| (6) | Ben Forman, the Founder and Managing Partner of ParaFi Capital LP, may be deemed to have beneficial ownership over the Pubco Stock beneficially owned by ParaFi Capital. The primary business address of ParaFi Capital LP is 500 West Putnam Ave., Suite 400, Greenwich, CT 06830. |
| (7) | The primary address of Emin Gün Sirer is 511 W. Bay Street, Ste. 320, Tampa, FL 336606. |
Directors and Executive Officers
Pubco’s directors and executive officers after the Closing are described in the Proxy Statement/Prospectus in the section titled “Management of Pubco Following the Business Combination” on page 233 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Committees of the Board of Directors
Reference is made to the disclosure in the subsections entitled “Board of Directors” in Item 5.02 of this Current Report, which is incorporated herein by reference. Further reference is made to the section of the Proxy Statement/Prospectus entitled “Management of Pubco Following the Business Combination - Board Committees,” on page 236 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Director and Executive Compensation
Information regarding the compensation of the named executive officers and directors of Pubco before the Business Combination is set forth in the Proxy Statement/Prospectus in the section titled “Executive and Director Compensation” beginning on page 244 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Reference is made to the disclosure in Item 5.02 of this Current Report is incorporated herein by reference.
The information set forth in this Current Report on Form 8-K under Item 5.02 is incorporated in this Item 2.01 by reference.
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Certain Relationships and Related Transactions, and Director Independence
Certain relationships and related person transactions of MLAC and Pubco are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions,” beginning on page 250 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our board of directors.
Legal Proceedings
Reference is made to the disclosure regarding legal proceedings in the sections of the Proxy Statement/Prospectus titled “Information Related to AVAT — Legal Proceedings” on page 225, which is incorporated herein by reference.
Market Price of and Dividends on the Registrant’s Common Equity and Related Shareholder Matters
The information set forth in the section of the Proxy Statement/Prospectus entitled “Description of Pubco Securities” beginning on page 254, “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 226 and “Ticker Symbol, Market Price and Dividends” beginning on page 265 are incorporated herein by reference.
Following the Closing of the Business Combination, Pubco Class A Stock began trading on The Nasdaq Global Market under the symbol “AVAT” on June 11, 2026. Pubco has not paid any cash dividends on the Pubco Stock to date.
The board of directors of Pubco (the “Board”), in its sole discretion, will make any determination from time to time with respect to the use of any excess cash accumulated, which may include, among other uses, the payment of dividends on Pubco Stock. It is not contemplated that Pubco will pay cash dividends for the foreseeable future.
Recent Sales of Unregistered Securities
The information set forth in Item 3.02 of this Current Report on Form 8-K is incorporated herein by reference.
Description of Registrant’s Securities to be Registered
The description of Pubco’s securities is contained in the Proxy Statement/Prospectus in the section titled “Description of Pubco Securities,” beginning on page 254 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Indemnification of Directors and Officers
The description of the indemnification arrangements with Pubco’s directors and officers is contained in Item 1.01 of this Current Report on Form 8-K, which is incorporated herein by reference.
Financial Statements and Supplementary Data
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning Pubco’s financial statements and supplementary information.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
The information set forth in Item 4.01 of this Current Report on Form 8-K is incorporated herein by reference.
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Financial Statements and Exhibits
Reference is made to the disclosure set forth under Item 9.01 of this Current Report on Form 8-K concerning the financial information of Pubco.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in the Introductory Note and Item 2.01 is incorporated into this Item 3.02 by reference. Pubco issued certain securities to the Foundation described in the Introductory Note under Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving a public offering.
Item 3.03. Material Modification to Rights of Security Holders.
In connection with the Business Combination, on June 11, 2026, Pubco filed the First Amended and Restated Certificate of Incorporation with the Delaware Secretary of State, and also adopted the First Amended and Restated Bylaws, which replaced the respective governing documents in effect as of such time.
The material terms of the First Amended and Restated Certificate of Incorporation and the First Amended and Restated Bylaws and the general effect upon the rights of holders of Pubco Class A Stock are discussed in the Proxy Statement/Prospectus in the section titled “The Domestication and Organizational Documents Proposals” beginning on page 149, which is incorporated herein by reference. Reference is also made to the sections of the Proxy Statement/Prospectus titled “Description of Pubco Securities” and “Comparison of Shareholders’ Rights” beginning on pages 254 and 258 respectively, which are incorporated herein by reference.
The foregoing descriptions of the First Amended and Restated Certificate of Incorporation and the First Amended and Restated Bylaws do not purport to be complete and are qualified in their entirety by the full text of each of the First Amended and Restated Certificate of Incorporation and the First Amended and Restated Bylaws, which are filed as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K.
Item 5.01. Changes in Control of Registrant.
Reference is made to the section of the Proxy Statement/Prospectus entitled “The Business Combination Proposal” beginning on page 112 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Further reference is made to disclosure in the section entitled “Introductory Note” and in Item 2.01 of this Current Report, each of which is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Board of Directors
On the Closing Date, the Pubco Board consisted of four directors, Paul Grinberg, Robert Hadick, Sarkees John Nahas and Gerald Bartholomew Smith.
On the Closing Date, the Audit Committee consisted of Paul Grinberg, Gerald Bartholomew Smith and Robert Hadick, with Paul Grinberg serving as chair of the committee. Paul Grinberg is an “independent director” as defined in the Nasdaq Rules and the rules and regulations of the SEC. Under applicable Nasdaq Rules, Pubco will be permitted to “phase-in” compliance with the independence requirements for its audit committee. The phase-in periods with respect to director independence allow Pubco to have (i) only one independent member on its audit committee upon the consummation of the Business Combination, (ii) a majority of independent members on its audit committee within 90 days of the consummation of the Business Combination and (iii) a fully independent audit committee within one year of the consummation of the Business Combination. Pubco has taken advantage of these phase-in rules with respect to each of Gerald Bartholomew Smith’s and Robert Hadick’s service on the audit committee. Pubco expects that by the first anniversary of its initial listing on Nasdaq, the audit committee will comply with the applicable independence requirements. Paul Grinberg qualifies as an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K, and which member or members possess financial sophistication, as defined under the rules of Nasdaq.
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On the Closing Date, Pubco’s Compensation Committee consisted of Gerald Bartholomew Smith, Robert Hadick and Paul Grinberg, with Gerald Bartholomew Smith serving as chair of the committee.
On the Closing Date, the Pubco’s Nominating and Corporate Governance Committee consisted of Sarkees John Nahas, Paul Grinberg and Gerald Bartholomew Smith, with Sarkees John Nahas serving as chair of the committee.
Executive Officers
On the Closing Date, the following individuals were appointed to serve as executive officers of Pubco:
| Name | Position | |
| Gerald Bartholomew Smith | Chief Executive Officer and President | |
| Laine Mihalchick Moljo | Chief Operating Officer and Secretary | |
| Sean Ostrower | Chief Financial Officer |
Biographical Information
For biographical information regarding Pubco’s directors and officers, reference is made to the section of the Proxy Statement/Prospectus entitled “Management of Pubco Following the Business Combination,” beginning on page 233 of the Proxy Statement/Prospectus, which is incorporated herein by reference.
Pubco 2026 Omnibus Incentive Plan
The Board and shareholders adopted the 2026 Omnibus Incentive Plan (the “Incentive Plan”) prior to the Closing, which became effective on June 11, 2026. A description of the 2026 Omnibus Incentive Plan is included in the Proxy Statement/Prospectus in the section titled “Executive and Director Compensation — Material Terms of the Incentive Plan” on page 246 thereof, which is incorporated by reference herein.
Pubco has reserved the sum of (i) 9,000,000 Pubco Class A Stock and (ii) an annual increase on the first day of each year during the term of the Incentive Plan, beginning on January 1, 2027 and ending on and including January 1, 2036, equal to the lesser of (x) 5% of the aggregate number of fully diluted Pubco Class A Stock issued and outstanding on December 31 of the immediately preceding year and (y) such number of Pubco Class A Stock as may be determined by the Incentive Plan administrator for issuance pursuant to the Incentive Plan, subject to certain adjustments set forth in the Incentive Plan.
The foregoing description of the Incentive Plan and the information incorporated by reference does not purport to be complete and is qualified in its entirety by the terms and conditions of the Incentive Plan, which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item 5.05. Amendment to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
On June 11, 2026, the Board adopted a Code of Ethics and Business Conduct applicable to Pubco’s employees, officers and directors.
The above description of the Code of Ethics and Business Conduct does not purport to be complete and is qualified in its entirety by reference to the full text of the Code of Ethics and Business Conduct, a copy of which is filed as Exhibit 14.1 hereto and incorporated herein by reference.
A copy of Pubco’s Code of Ethics and Business Conduct is also available on our website at https://www.avat.com/. The information on Pubco’s website does not constitute part of this Current Report and is not incorporated herein by reference.
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Item 5.06. Change in Shell Company Status.
As a result of the Business Combination, MLAC ceased to be a shell company upon the Closing. The material terms of the Business Combination are described in the section of the Proxy Statement/Prospectus titled “The Business Combination Proposal,” beginning on page 112 of the Proxy Statement/Prospectus, and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses or Funds Acquired.
The audited consolidated financial statements of Avalanche Treasury Company, LLC as of December 31, 2025 and for the period from August 20, 2025 (inception) to December 31, 2025 are included in the Proxy Statement/Prospectus on pages F-21 through F-44, and are incorporated herein by reference. The unaudited financial statements of Avalanche Treasury Company, LLC as of and for the three months ended March 31, 2026 are set forth herein as Exhibit 99.1 and are incorporated herein by reference.
The audited consolidated financial statements of Pubco as of December 31, 2025 and for the period from September 22, 2025 (inception) to December 31, 2025 are included in the in the Proxy Statement/Prospectus on pages F-43 through F-58 and are incorporated herein by reference. The unaudited financial statements of Pubco as of and for the three months ended March 31, 2026 are set forth herein as Exhibit 99.2 and are incorporated herein by reference.
The audited consolidated financial statements of MLAC as of and for the years ended December 31, 2025 and December 31, 2024 are included in the Proxy Statement/Prospectus on pages F-2 through F-21, and are incorporated herein by reference. The unaudited financial statements of MLAC as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 are set forth herein as Exhibit 99.3 and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of Pubco, MLAC and AVAT as of and for the year ended December 31, 2025 and for the three months ended March 31, 2026 is filed as Exhibit 99.4 hereto and is incorporated herein by reference.
(c) Exhibits.
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Exhibit Index
| Exhibit No. |
Description | |
| 2.1(1)†** | Business Combination Agreement, dated as of October 1, 2025, by and among MLAC, Pubco, MLAC Merger Sub, AVAT Merger Sub, AVAT and the Seller (incorporated by reference to Exhibit 2.1 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 2.2(1)†** | Amendment No. 1 to the Business Combination Agreement, dated as of January 13, 2026, by and among MLAC, Pubco, MLAC Merger Sub, AVAT Merger Sub, AVAT and the Seller (incorporated by reference to Exhibit 2.2 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 2.3(1)†** | Amendment No. 2 to the Business Combination Agreement, dated as of March 17, 2026, by and among MLAC, Pubco, MLAC Merger Sub, AVAT Merger Sub, AVAT, the Seller and the Seller Related Parties (incorporated by reference to Exhibit 2.3 to Pubco’s Registration Statement on Form S-4/A filed with the SEC on April 14, 2026). | |
| 3.1* | Amended and Restated Certificate of Incorporation of Pubco. | |
| 3.2* | Amended and Restated Bylaws of Pubco. | |
| 10.1* | Pubco 2026 Omnibus Incentive Plan. | |
| 10.2(1)** | Sponsor Support Agreement, dated October 1, 2025, by and among MLAC, Sponsor and Pubco (incorporated by reference to Exhibit 10.9 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.3†** | Form of MLAC Lock-Up Agreement, by and among Pubco, Sponsor, MLAC Insiders and the undersigned holders thereto (incorporated by reference to Exhibit 10.10 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.4†** | Form of Seller Lock-Up Agreement, by and among Pubco and the undersigned holders thereto (incorporated by reference to Exhibit 10.11 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.5* | Amended and Restated Registration Rights Agreement, dated June 11, 2026, by and among Pubco, MLAC, the Seller, the Foundation and certain other undersigned holders thereto. | |
| 10.6(1)†** | Form of LLC Subscription Agreement, dated as of October 1, 2025, by and among MLAC, Pubco, AVAT and certain undersigned subscribers thereto (incorporated by reference to Exhibit 10.13 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.7(1)†** | Asset Purchase and Contribution Agreement, dated as of October 1, 2025, by and among Seller, AVAT, Pubco, Avalanche BVI and Avalanche Cayman (incorporated by reference to Exhibit 10.14 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.8(1)†** | AVAX Token Sale Agreement, dated as of October 1, 2025, by and among AVAT, Pubco, Avalanche BVI and Avalanche Cayman (incorporated by reference to Exhibit 10.15 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.9** | Letter Agreement, dated December 12, 2024, by and among MLAC, its officers, directors and the Sponsor (incorporated herein by reference to Exhibit 10.1 MLAC’s Current Report on Form 8-K filed on December 16, 2024). |
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| 10.10** | Employment Offer Letter, dated as of October 22, 2025, by and between AVAT and Gerald Bartholomew Smith (incorporated by reference to Exhibit 10.16 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026) | |
| 10.11** | Addendum to Employment Offer Letter, dated as of March 16, 2026 by and between AVAT and Gerald Bartholomew Smith (incorporated by reference to Exhibit 10.17 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.12** | Employment Offer Letter, dated as of October 22, 2025, by and between AVAT and Laine Mihalchick Moljo (incorporated by reference to Exhibit 10.18 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.13** | Addendum to Employment Offer Letter, dated as of March 17, 2026 by and between AVAT and Laine Mihalchick Moljo (incorporated by reference to Exhibit 10.19 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.14** | Employment Offer Letter, dated as of February 24, 2026, by and between AVAT and Sean Ostrower (incorporated by reference to Exhibit 10.20 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 10.15** | Form of Indemnification Agreement by and between Avalanche Treasury Corporation and its Directors and Executive Officers (incorporated by reference to Exhibit 10.22 to Pubco’s Registration Statement on Form S-4/A filed with the SEC on April 14, 2026). | |
| 10.16** | Form of Advisory Agreement, by and among AVAT and Members of the Advisory Board (incorporated by reference to Exhibit 10.21 to Pubco’s Registration Statement on Form S-4/A filed with the SEC on April 14, 2026). | |
| 10.17*† | Sponsor Escrow Agreement, dated as of June 11, 2026, by and between Sponsor, Pubco, Seller and Continental Stock Transfer & Trust Company. | |
| 10.18*† | Astral Escrow Agreement, dated as of June 11, 2026, by and between Astral, Pubco, Seller and Continental Stock Transfer & Trust Company. | |
| 14.1* | Code of Ethics and Business Conduct of Avalanche Treasury Corporation. | |
| 21.1** | List of Subsidiaries of Pubco (incorporated by reference to Exhibit 21.1 to Pubco’s Registration Statement on Form S-4 filed with the SEC on March 27, 2026). | |
| 99.1** | Unaudited condensed consolidated financial statements of Avalanche Treasury Company, LLC as of March 31, 2026, and for the three months ended March 31, 2026 and the period from December 31, 2025 to March 31, 2026 (incorporated by reference to Exhibit 99.2 to Pubco’s Current Report on Form 8-K filed with the SEC on May 29, 2026). | |
| 99.2** | Unaudited condensed consolidated financial statements of Pubco as of March 31, 2026, and for the three months ended March 31, 2026 and for the period from December 31, 2025 to March 31, 2026 (incorporated by reference to Exhibit 99.1 to Pubco’s Current Report on Form 8-K filed with the SEC on May 29, 2026). | |
| 99.3** | Unaudited financial statements of MLAC as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 (incorporated by reference to MLAC’s Quarterly Report on Form 10-Q (File No. 001-42436) filed with the SEC on May 15, 2026). | |
| 99.4* | Unaudited pro forma condensed combined financial information of Pubco as of March 31, 2026 and for the year ended December 31, 2025 and three months ended March 31, 2026. | |
| 99.5* | Management’s Discussion and Analysis of Financial Condition and Results of Operations of Avalanche Treasury Company, LLC as of and for the three months ended March 31, 2026. |
| * | Filed herewith. |
| ** | Previously filed. |
| (1) | Certain schedules, exhibits and similar attachments have been omitted in accordance with Regulation S-K Item 601(a)(5). The registrant agrees to furnish supplementally a copy of all omitted information to the SEC upon its request. |
| † | Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVALANCHE TREASURY CORPORATION | |||
| Date: June 17, 2026 | By: | /s/ Gerald Bartholomew Smith | |
| Name: | Gerald Bartholomew Smith | ||
| Title: | Chief Executive Officer and President | ||
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Exhibit 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (the “Form 8-K”) filed with the Securities and Exchange Commission (the “SEC”.)
Introduction
The following unaudited pro forma condensed combined financial information presents the combination of financial information of MLAC, Pubco and AVAT, adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Pubco has elected not to present Management’s Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.
The following unaudited pro forma condensed combined balance sheet as of March 31, 2026 assumes that the Business Combination occurred March 31, 2026. The following unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025, presents pro forma effect to the Business Combination as if it had occurred on January 1, 2025.
The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition or results of operations would have been if the acquisition occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The unaudited pro forma condensed combined balance sheet as of March 31, 2026, has been derived from:
| · | The historical unaudited financial statements of MLAC as of March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K; and |
| · | The historical unaudited consolidated financial statements of Pubco as of March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K. |
| · | The historical unaudited financial statements of AVAT as of March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K. |
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026, has been derived from:
| · | The historical unaudited financial statements of MLAC for the three months ended March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K; and |
| · | The historical unaudited financial statements of Pubco for the three months ended March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K. |
| · | The historical unaudited financial statements of AVAT for the three months ended March 31, 2026, and the related notes thereto included elsewhere in this Form 8-K. |
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025, has been derived from:
| · | The historical audited financial statements of MLAC for the year ended December 31, 2025, and the related notes thereto included elsewhere in this Form 8-K; and |
| · | The historical audited financial statements of Pubco for the period from September 22, 2025 (Inception) to December 31, 2025, and the related notes thereto included elsewhere in this Form 8-K. |
| · | The historical audited financial statements of AVAT for the period from August 20, 2025 (Inception) to December 31,2025, and the related notes thereto included elsewhere in this Form 8-K. |
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as in effect on the date of this Form 8-K which incorporates Transaction Accounting Adjustments. Pubco, AVAT and MLAC have elected not to present any estimates related to potential synergies and other transaction effects that are reasonably expected to occur or have already occurred and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information.
This information should be read together with the financial statements and related notes, as applicable, of each of Pubco, AVAT and MLAC included in this Form 8-K and Pubco’s, AVAT’s and MLAC’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this Form 8-K.
Description of the Transactions
Business Combination
On June 11, 2026 (the “Closing Date”), Pubco consummated its previously announced business combination (the “Closing”) pursuant to that certain Business Combination Agreement, dated October 1, 2025 (as amended, modified, supplemented modified and/or restated from time to time, the “Business Combination Agreement”), by and among Pubco, Mountain Lake Acquisition Corp., at that time a Cayman Islands exempted company (“MLAC” or “SPAC”), Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“MLAC Merger Sub”), Avalanche Company Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”, and together with MLAC Merger Sub, the “Pubco Subsidiaries”), Avalanche Treasury Company LLC, a Delaware limited liability company (the “Company” or “AVAT”), Dragonfly Digital Management, LLC, a Delaware limited liability company (“Seller”) , Dragonfly Ventures L.P., a Cayman Islands exempted limited partnership (“DV”), Dragonfly Ventures II, L.P., a Cayman Islands exempted limited partnership (“DV II” and, DV II together with DV, the “Funds” or “DVs” and, the DVs together with the Seller, the “Seller Related Parties”) and Astral Horizon, L.P., a Delaware limited partnership (“Astral”). On January 13, 2026 and on March 17, 2026, MLAC, Pubco, the Pubco Subsidiaries, the Company, the Seller Related Parties and Astral entered into certain amendments to the Business Combination Agreement, effective as of October 1, 2025.
Pursuant to the terms of the Business Combination Agreement and as described in the sections titled “The Business Combination Proposal” and “The Domestication and Organizational Documents Proposal” of the Proxy Statement/Prospectus, immediately prior to the Closing on June 11, 2026, MLAC effected a domestication under Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”) and Section 206 of the Cayman Act (the “Domestication”), pursuant to which MLAC transferred by way of continuation to and became a Delaware corporation. On June 11, 2026, two hours after the Domestication, MLAC Merger Sub merged with and into MLAC in accordance with the applicable provisions of the DGCL and Limited Liability Company Act of the State of Delaware (the “DLLCA”), with MLAC continuing as the surviving company and a wholly-owned subsidiary of Pubco (the “MLAC Merger”) and with MLAC Shareholders receiving one share of non-voting Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Stock”) for each Class A ordinary share, par value $0.0001 per share, of MLAC (the “MLAC Class A Ordinary Shares”) or Class B ordinary share, par value $0.0001 per share, of MLAC (the “MLAC Class B Ordinary Shares”) held by such shareholder, and with each holder of a right to receive one-tenth (1/10th) of an MLAC Class A Ordinary Share (an “MLAC Right”) receiving one share of Pubco Class A Stock in exchange for every ten (10) MLAC Rights held by such holder.
At the Company Merger Effective Time, Company Merger Sub merged with and into the Company in accordance with the applicable provisions of the DLLCA, with the Company continuing as the surviving company (the “Company Merger” and, together with the MLAC Merger, the “Mergers” and, together with the other transactions contemplated by the Business Combination Agreement, the “Transactions”), and with (i) each Company Member other than the Seller Related Parties receiving one share of Pubco Class A Stock for each Company Unit held immediately prior to the effective time of the Company Merger, (ii) each Seller Related Parties receiving one share of Pubco Class A Stock and one share of Pubco Class B common stock, par value $0.01 per share (“Pubco Class B Stock” and, together with the Pubco Class A Stock, the “Pubco Stock”), for each Company Unit held, and (iii) Astral receiving 4,000,000 shares of Pubco Class A Stock as additional consideration (the “Additional Merger Consideration Shares”), out of which 2,000,000 shares of Pubco Class A Stock (the “Astral Earnout Shares”) issued and placed into an escrow account held with Continental Stock Transfer & Trust Company (the “Escrow Agent”) (the “Astral Escrow Account”) at the Company Merger Effective Time and the remaining 2,000,000 shares of Pubco Class A Stock (the “Astral Post-Closing Shares”) will be issued and placed into Astral’s securities account on the 30th day after Closing.
The following table summarizes the pro forma number of shares of Pubco Common Stock outstanding following the consummation of the Business Combination and the Domestication, discussed further in the sections below.
| Equity Capitalization Summary | Shares | % | ||||||
| AVAT Class A members | 21,855,658 | 57.6 | % | |||||
| Public Shareholders | 2,453,529 | 6.5 | % | |||||
| MLAC Insiders | 2,800,000 | 7.4 | % | |||||
| Seller Related Parties | 5,805,639 | 15.3 | % | |||||
| Astral | 2,000,000 | 5.3 | % | |||||
| Foundation | 3,000,000 | 7.9 | % | |||||
| Total shares of Pubco Class A Stock outstanding | 37,914,826 | 100.0 | % | |||||
| Shares | % | |||||||
| Seller Related Parties Class B members | 5,805,639 | 100.0 | % | |||||
| Total shares of Pubco Class B Stock outstanding | 5,805,639 | 100.0 | % | |||||
The following table shows the per share value of Pubco Common Stock held by non-redeeming holders of Pubco Class A Stock:
| Shares | 37,914,826 | |||
| Book equity per share | $ | 2.44 |
Accounting for the Business Combination
The Business Combination was accounted for as a reverse recapitalization in accordance with U.S GAAP with MLAC being treated as the acquired company for financial reporting purposes and AVAT as the accounting “acquirer.” Accordingly, the financial statements of the combined entity will represent a continuation of the financial statements of AVAT with the business combination treated as the equivalent of AVAT issuing stock for the net assets of MLAC, accompanied by a recapitalization. The net assets of MLAC were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination were those of AVAT.
This determination was primarily based on the assumption that:
· AVAT’s members hold a majority of the voting power of Pubco post Business Combination;
· The Pubco Board consists of one (1) or more members, each of whom are a natural person;
· AVAT’s operations will substantially comprise the ongoing operations of Pubco; and
· AVAT’s senior management will comprise the senior management of Pubco.
Another determining factor was that MLAC does not meet the definition of a “business” pursuant to ASC 805-10-55, and thus, for accounting purposes, the Business Combination was accounted for as a reverse recapitalization, within the scope of ASC 805. The net assets of MLAC will be stated at historical cost, with no goodwill or other intangible assets recorded.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2026(1)
| Pubco (Historical) | AVAT (Historical) | Token
Sale Agreement Transaction Accounting Adjustments | AVAT Pro Forma Adjusted | MLAC (Historical) | Transaction Accounting Adjustments | Pro
Forma Combined | |||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Cash | $ | - | $ | 1,222,052 | $ | - | $ | 1,222,052 | $ | 66,568 | $ | 1,634,507 | A | $ | 10,012,166 | ||||||||||||||
| (14,910,961 | ) | B | |||||||||||||||||||||||||||
| (1,000,000 | ) | F | |||||||||||||||||||||||||||
| 23,000,000 | M | ||||||||||||||||||||||||||||
| USDC | 2,391,023 | 2,391,023 | - | - | 2,391,023 | ||||||||||||||||||||||||
| Prepaid expenses | 96,998 | 96,998 | 85,092 | 182,090 | |||||||||||||||||||||||||
| Prepaid insurance | - | - | - | - | 64,651 | 64,651 | |||||||||||||||||||||||
| Deferred transaction costs | 2,224,203 | 3,537,869 | - | 3,537,869 | - | (5,762,072 | ) | B | - | ||||||||||||||||||||
| Due from related party | 1,578,524 | - | 1,578,524 | - | (1,578,524 | ) | O | - | |||||||||||||||||||||
| Total current assets | 2,224,203 | 8,826,466 | - | 8,826,466 | 216,311 | 1,382,950 | 12,649,930 | ||||||||||||||||||||||
| Non-current assets | |||||||||||||||||||||||||||||
| Cash and marketable securities held in Trust Account | - | - | - | - | 243,344,159 | (1,634,507 | ) | A | - | ||||||||||||||||||||
| 1,517,806 | J | ||||||||||||||||||||||||||||
| (243,227,458 | ) | N | |||||||||||||||||||||||||||
| Digital assets - AVAX | - | 122,758,140 | - | 122,758,140 | - | 122,758,140 | |||||||||||||||||||||||
| Digital assets - stAVAX | 10,187,157 | 10,187,157 | - | - | 10,187,157 | ||||||||||||||||||||||||
| Total non-current assets | - | 132,945,297 | - | 132,945,297 | 243,344,159 | (243,344,159 | ) | 132,945,297 | |||||||||||||||||||||
| Total assets | $ | 2,224,203 | $ | 141,771,763 | $ | - | $ | 141,771,763 | $ | 243,560,470 | $ | (241,961,209 | ) | $ | 145,595,227 | ||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 447,662 | $ | 1,353,029 | - | 1,353,029 | $ | 339,964 | $ | (808,681 | ) | B | $ | 1,377,713 | |||||||||||||||
| 45,739 | B | ||||||||||||||||||||||||||||
| Accrued legal fees | 200,820 | - | - | - | - | (200,820 | ) | B | - | ||||||||||||||||||||
| Due to Sponsor | - | - | - | - | 688 | - | 688 | ||||||||||||||||||||||
| Accrued transaction costs | 282,214 | 1,327,121 | - | 1,327,121 | (1,609,335 | ) | B | - | |||||||||||||||||||||
| Due to related party | 1,578,524 | - | - | - | - | (1,578,524 | ) | O | - | ||||||||||||||||||||
| Note payable | - | - | - | - | - | 23,000,000 | M | 23,000,000 | |||||||||||||||||||||
| Token sale liability | - | 15,203,085 | (15,203,085 | ) | K | - | - | - | - | ||||||||||||||||||||
| Total current liabilities | 2,509,220 | 17,883,235 | (15,203,085 | ) | 2,680,150 | 340,652 | 18,848,379 | 24,378,401 | |||||||||||||||||||||
| Non-current liabilities | |||||||||||||||||||||||||||||
| Deferred underwriting fee payable | - | - | - | - | 1,000,000 | (1,000,000 | ) | F | - | ||||||||||||||||||||
| Post-closing shares liability | - | - | - | - | - | 11,380,000 | L | 11,380,000 | |||||||||||||||||||||
| Earnout liability | - | - | - | - | - | 16,376,000 | L | 16,376,000 | |||||||||||||||||||||
| Total non-current liabilities | - | - | - | - | 1,000,000 | 26,756,000 | 27,756,000 | ||||||||||||||||||||||
| Total liabilities | 2,509,220 | 17,883,235 | (15,203,085 | ) | 2,680,150 | 1,340,652 | 45,604,379 | 52,134,401 | |||||||||||||||||||||
| Class A ordinary shares subject to possible redemption | - | - | - | - | 243,344,159 | (1,634,507 | ) | E | - | ||||||||||||||||||||
| 1,517,806 | J | ||||||||||||||||||||||||||||
| (243,227,458 | ) | N | |||||||||||||||||||||||||||
| EQUITY | |||||||||||||||||||||||||||||
| AVAT Members' capital | - | 215,389,322 | 215,389,322 | - | (215,389,322 | ) | C | - | |||||||||||||||||||||
| Pubco Class A Common Stock | 10 | - | 30,000 | K | 30,000 | - | 296,603 | C | 379,148 | ||||||||||||||||||||
| 23,000 | G | ||||||||||||||||||||||||||||
| 29,535 | I | ||||||||||||||||||||||||||||
| Pubco Class B Common Stock | - | - | - | - | - | 58,056 | C | 58,056 | |||||||||||||||||||||
| MLAC preference shares | - | - | - | - | - | - | - | ||||||||||||||||||||||
| MLAC Class A Ordinary Shares | - | - | - | - | 81 | 15 | E | - | |||||||||||||||||||||
| 280 | H | ||||||||||||||||||||||||||||
| (376 | ) | I | |||||||||||||||||||||||||||
| MLAC Class B Ordinary Shares | - | - | - | - | 719 | (719 | ) | H | - | ||||||||||||||||||||
| Subscription receivable | (10 | ) | (5,125,002 | ) | - | (5,125,002 | ) | - | 10 | C | (5,125,002 | ) | |||||||||||||||||
| Additional paid-in capital | - | - | 15,173,085 | K | 15,173,085 | - | (17,080,048 | ) | B | 212,565,433 | |||||||||||||||||||
| 215,034,653 | C | ||||||||||||||||||||||||||||
| (2,145,029 | ) | D | |||||||||||||||||||||||||||
| 1,634,492 | E | ||||||||||||||||||||||||||||
| (23,000 | ) | G | |||||||||||||||||||||||||||
| 439 | H | ||||||||||||||||||||||||||||
| (29,159 | ) | I | |||||||||||||||||||||||||||
| Accumulated deficit | (285,017 | ) | (86,375,792 | ) | - | (86,375,792 | ) | (1,125,141 | ) | (1,019,888 | ) | B | (114,416,809 | ) | |||||||||||||||
| 2,145,029 | D | ||||||||||||||||||||||||||||
| 1,517,806 | J | ||||||||||||||||||||||||||||
| (1,517,806 | ) | J | |||||||||||||||||||||||||||
| (27,756,000 | ) | L | |||||||||||||||||||||||||||
| Total equity | (285,017 | ) | 123,888,528 | 15,203,085 | 139,091,613 | (1,124,341 | ) | (44,221,429 | ) | 93,460,826 | |||||||||||||||||||
| Total equity and liabilities | $ | 2,224,203 | $ | 141,771,763 | $ | - | $ | 141,771,763 | $ | 243,560,470 | $ | (241,961,209 | ) | $ | 145,595,227 | ||||||||||||||
| (1) | The unaudited pro forma condensed combined balance sheet as of March 31, 2026, combines the historical unaudited balance sheet of AVAT as of March 31, 2026, with the historical unaudited balance sheet of Pubco as of March 31, 2026, and with the historical unaudited balance sheet of MLAC as of March 31, 2026. |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2026(2)
| Pubco (Historical | AVAT (Historical) | Contribution Agreement Transaction Accounting Adjustments | AVAT Subscription Agreements Transaction Accounting Adjustments | AVAT Pro Forma Adjusted | MLAC (Historical) | Transaction Accounting Adjustments | Pro
Forma Combined |
|||||||||||||||||||||||||
| Staking revenue, net of fees | $ | - | $ | 2,057,074 | $ | - | $ | - | $ | 2,057,074 | $ | - | $ | - | $ | 2,057,074 | ||||||||||||||||
| General and administrative expenses | (139,635 | ) | (1,942,410 | ) | - | - | (2,082,045 | ) | (389,571 | ) | 60,000 | BB | (2,411,616 | ) | ||||||||||||||||||
| Change in fair value of digital assets | (46,192,584 | ) | (46,192,584 | ) | - | - | (46,192,584 | ) | ||||||||||||||||||||||||
| Realized loss on digital assets | (477,431 | ) | (477,431 | ) | - | - | (477,431 | ) | ||||||||||||||||||||||||
| Impairment of digital assets | - | (5,059,757 | ) | - | - | (5,059,757 | ) | - | - | (5,059,757 | ) | |||||||||||||||||||||
| Compensation expense | - | - | - | - | - | - | (1,157,813 | ) | CC | (1,157,813 | ) | |||||||||||||||||||||
| Loss from operations | (139,635 | ) | (51,615,108 | ) | - | - | (51,754,743 | ) | (389,571 | ) | (1,097,813 | ) | (53,242,127 | ) | ||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||||||
| Interest income on cash and marketable securities held in the Trust Account | - | - | - | - | - | 2,113,587 | (2,113,587 | ) | AA | - | ||||||||||||||||||||||
| Change in fair value of token sale liability | - | 24,807,903 | - | - | 24,807,903 | - | (24,807,903 | ) | DD | - | ||||||||||||||||||||||
| Other income | - | 21,059 | - | - | 21,059 | - | 21,059 | |||||||||||||||||||||||||
| Interest income | - | 5,904 | - | - | 5,904 | - | 5,904 | |||||||||||||||||||||||||
| Interest expense | - | - | - | - | - | - | (402,500 | ) | EE | (402,500 | ) | |||||||||||||||||||||
| Total other income (expense) | - | 24,834,866 | - | - | 24,834,866 | 2,113,587 | (27,323,990 | ) | (375,537 | ) | ||||||||||||||||||||||
| Net (loss) income | $ | (139,635 | ) | $ | (26,780,242 | ) | $ | - | $ | - | $ | (26,919,877 | ) | $ | 1,724,016 | $ | (28,421,803 | ) | $ | (53,617,664) | ||||||||||||
| Basic and diluted net income (loss) per share | $ | (145.38 | ) | $ | (0.98 | ) | $ | 0.06 | ||||||||||||||||||||||||
| Pro forma weighted average number of shares outstanding - basic and diluted | 37,914,826 | (1) | ||||||||||||||||||||||||||||||
| Pro forma loss per share - basic and diluted | $ | (1.41 | ) | |||||||||||||||||||||||||||||
| (1) | Please refer to Note 3 (“Net Loss per Share”) for details. |
| (2) | The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026, combines the historical unaudited statement of operations of Pubco for the three months ended March 31, 2026, with the unaudited statement of operations of AVAT for the three months ended March 31, 2026, with the historical unaudited statement of operations of MLAC for the three months ended March 31, 2026. |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2025(2)
| Pubco (Historical | AVAT (Historical) | Token
Sale Liability Transaction Accounting Adjustments | AVAT
Pro Forma Adjusted | MLAC (Historical) | Transaction Accounting Adjustments | Pro
Forma Combined |
|||||||||||||||||||||||
| Staking revenue, net of fees | $ | - | $ | 1,434,669 | $ | - | $ | 1,434,669 | $ | - | $ | - | $ | 1,434,669 | |||||||||||||||
| General and administrative expenses | (145,382 | ) | (1,205,832 | ) | - | (1,205,832 | ) | (1,304,773 | ) | (1,019,888 | ) | CC | (3,435,875 | ) | |||||||||||||||
| 240,000 | BB | ||||||||||||||||||||||||||||
| Change in fair value of digital assets | - | (96,338,351 | ) | - | (96,338,351 | ) | - | - | (96,338,351 | ) | |||||||||||||||||||
| Realized loss on digital assets | - | (2,142,985 | ) | - | (2,142,985 | ) | - | - | (2,142,985 | ) | |||||||||||||||||||
| Impairment of digital assets | - | (13,566,758 | ) | - | (13,566,758 | ) | - | - | (13,566,758 | ) | |||||||||||||||||||
| Compensation expense | - | - | - | - | - | (4,631,250 | ) | EE | (4,631,250 | ) | |||||||||||||||||||
| Loss from operations | (145,382 | ) | (111,819,257 | ) | - | (111,819,257 | ) | (1,304,773 | ) | (5,411,138 | ) | (118,680,550 | ) | ||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||
| Interest income on cash and marketable securities held in the Trust Account | - | - | - | - | 9,586,719 | (9,586,719 | ) | AA | - | ||||||||||||||||||||
| Change in fair value of token sale liability | - | 52,150,216 | (52,150,216 | ) | FF | - | - | - | - | ||||||||||||||||||||
| Other income | - | 75,157 | - | 75,157 | - | - | 75,157 | ||||||||||||||||||||||
| Interest expense | - | (1,666 | ) | - | (1,666 | ) | - | (1,610,000 | ) | GG | (1,611,666 | ) | |||||||||||||||||
| Fair value of post-closing shares liability | - | - | - | - | - | (11,380,000 | ) | DD | (11,380,000 | ) | |||||||||||||||||||
| Fair value of earnout liability | - | - | - | - | - | (16,376,000 | ) | DD | (16,376,000 | ) | |||||||||||||||||||
| Other income (expense), net | - | 52,223,707 | (52,150,216 | ) | 73,491 | 9,586,719 | (38,952,719 | ) | (29,292,509) | ||||||||||||||||||||
| Net (loss) income | $ | (145,382 | ) | $ | (59,595,550 | ) | $ | (52,150,216 | ) | $ | (111,745,766 | ) | $ | 8,281,946 | $ | (44,363,857 | ) | $ | (147,973,059 | ) | |||||||||
| Basic and diluted net (loss) income per share | $ | (145.38 | ) | $ | (3.55 | ) | $ | 0.27 | |||||||||||||||||||||
| Pro forma weighted average number of shares outstanding - basic and diluted | 37,914,826 | (1) | |||||||||||||||||||||||||||
| Pro forma loss per share - basic and diluted | $ | (3.90 | ) | ||||||||||||||||||||||||||
| (1) | Please refer to Note 3 — “Net Loss per Share” for details. |
| (2) | The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025, combines the historical audited statement of operations of MLAC for the year ended December 31, 2025 with the historical audited statement of operations of Pubco for the period from September 22, 2025 (Inception) through December 31, 2025, with the historical audited statement of operations of AVAT for the period from August 20, 2025 (Inception) through December 31, 2025. |
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1 — Basis of Presentation and Accounting Policies
The Business Combination was accounted for as a reverse recapitalization in accordance with U.S GAAP with MLAC treated as the acquired company for financial reporting purposes and AVAT as the accounting “acquirer.” Under this method of accounting, although MLAC acquired all the outstanding equity interests of AVAT in the Business Combination, MLAC was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of AVAT issuing stock for the net assets of MLAC, accompanied by a recapitalization. The net assets of MLAC were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination were those of AVAT.
The unaudited pro forma condensed combined balance sheet as of March 31, 2026, assumes that the Business Combination and related transactions occurred on March 31, 2026. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026, and the year ended December 31, 2025, presents pro forma effect to the Business Combination as if it had been completed on January 1, 2025.
The unaudited pro forma condensed combined balance sheet as of March 31, 2026, has been prepared using, and should be read in conjunction with, the following:
| ● | MLAC’s unaudited balance sheet as of March 31, 2026 and the related notes thereto included in this Form 8-K; and |
| ● | Pubco’s unaudited consolidated balance sheet as of March 31, 2026, and the related notes thereto, included in this Form 8-K. |
| ● | AVAT’s unaudited balance sheet as of March 31, 2026, and the related notes thereto included in this Form 8-K. |
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026, has been prepared using, and should be read in conjunction with, the following:
| ● | MLAC’s unaudited statement of operations for the three months ended March 31, 2026, and the related notes thereto, included in this Form 8-K; and |
| ● | Pubco’s unaudited consolidated statement of operations for the three months ended March 31, 2026, and the related notes thereto, included in this Form 8-K. |
| ● | AVAT’s unaudited statement of operations for the three months ended March 31, 2026, and the related notes thereto, included in this Form 8-K. |
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025, has been prepared using, and should be read in conjunction with, the following:
| ● | MLAC’s audited statement of operations for the year ended December 31, 2025, and the related notes thereto, included in this Form 8-K; and |
| ● | Pubco’s audited consolidated statement of operations for the period from September 22, 2025 (Inception) to December 31, 2025, and the related notes thereto, included in this Form 8-K. |
| ● | AVAT’s audited statement of operations for the period from August 20, 2025 (Inception) to December 31, 2025, and the related notes thereto, included in this Form 8-K. |
As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The historical financial statements of Pubco and AVAT have been prepared in accordance with U.S. GAAP. The historical financial statements of MLAC have been prepared in accordance with U.S. GAAP. The unaudited pro forma condensed combined financial information reflects U.S. GAAP, the basis of accounting used by AVAT.
Upon consummation of the Business Combination, management has performed a comprehensive review of the three entities’ accounting policies. As a result of the review, management has not identified differences between the accounting policies of the three entities which have a material impact on the financial statements of the Combined Company. Based on its analysis, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.
Note 2 — Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Pubco has elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to include all necessary Transaction Accounting Adjustments pursuant to Article 11 of Regulation S-X, including those that are not expected to have a continuing impact.
The unaudited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to transaction accounting adjustments that reflect the accounting for the transaction under U.S. GAAP. Pubco and AVAT have had a historical relationship prior to the Business Combination, and a pro forma adjustment was required to eliminate activities between the companies. Pubco and AVAT have not had any historical relationship with MLAC prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of the Combined Company’s shares outstanding, assuming the Business Combination occurred on January 1, 2025.
Transaction Accounting Adjustments to Unaudited Pro Foma Condensed Combined Balance Sheet
The Transaction Accounting Adjustments to the unaudited pro forma condensed combined balance sheet as of March 31, 2026, are as follows:
| A. | Reflects the liquidation and reclassification of $1.6 million of funds held in the Trust Account to cash that became available following the Business Combination. |
| B. | Reflects the payment of $1.3 million of MLAC transaction costs at the Closing of which $0.3 million of these fees were accrued as of March 31, 2026. The remaining amount of $1.0 million is reflected as an adjustment to accumulated losses. |
Reflects the payment of $13.6 million of AVAT transaction costs at the Closing of which $2.3 million of these fees were accrued and $5.8 million were recorded as deferred transaction costs as of March 31, 2026. The remaining amount of $17.1 million has been recorded to additional paid-in capital. $0.05 million of transaction costs were deferred until after the Closing and reflected as an adjustment to accrued expenses and additional paid-in capital.
| C. | Represents the exchange of 21,855,658 AVAT Company Units for 21,855,658 shares of Pubco Class A common stock and the exchange of 5,805,639 AVAT Company Units for 5,805,639 shares of Pubco Class A common stock and 5,805,639 shares of Pubco Class B common stock, par value $0.01, upon the Closing. Represents the issuance of the Additional Merger Consideration shares of 2,000,000 shares of Pubco Class A common stock, par value $0.01, to Astral upon the Closing. Reflects the reversal of the subscription receivable on Pubco. |
| D. | Represents the elimination of MLAC’s historical accumulated losses after recording the transaction costs incurred by MLAC of $2.0 million as described in (B) above, the recording of interest earned in the Trust of $1.5 million as described in (J) below, and the accretion of ordinary shares subject to redemption of $1.5 million as described in (J) below. |
| E. | Reflects the reclassification of 153,530 shares of MLAC Class A ordinary shares subject to possible redemption to permanent equity. |
| F. | Reflects the settlement of the MLAC deferred underwriting commission for $1.0 million at the Closing. |
| G. | Reflects the conversion of Public Rights into 2,299,999 shares of Pubco Class A stock upon the Closing. |
| H. | Reflects the forfeiture of 4,387,500 MLAC Class B Ordinary Shares pursuant to the Sponsor Support Agreement and the conversion of 2,800,000 Class B Ordinary Shares into MLAC Class A Ordinary Shares upon the Closing. |
| I. | Reflects the forfeiture of 495,000 MLAC Private Units owned by the Sponsor pursuant to the Sponsor Support Agreement and the forfeiture of 310,000 MLAC Private Units owned by BTIG pursuant to the agreement with BTIG. Reflects the conversion of the remining MLAC Class A Ordinary Shares into Pubco Class A Stock, par value $0.01 upon the Closing. |
| J. | Reflects the interest earned in the Trust Account subsequent to March 31, 2026 of $1.5 million and the accretion of the Class A ordinary shares subject to redemption of $1.5 million. |
| K. | Reflects the issuance of 3,000,000 shares of Pubco Class A Stock, at $10.00 per share, par value $0.01 per share, pursuant to the Token Sale Agreement. Reflects the reversal of the token sale liability upon the issuance of the shares at Closing. |
| L. | Reflects the recognition of the liability classified contingent consideration under ASC 805-30-25-6 for the Astral earnout, the Sponsor earnout, and the 2,000,000 Astral shares to be issued 30 days after the Closing. The post-closing liability for the 2,000,000 Astral shares was valued at a fair value of $5.69 per share, or $11.4 million. The earnout contingent consideration value was calculated using a Monte Carlo simulation using a Geometric Brownian Motion in a risk-neutral framework. Significant assumptions used in the simulation model included the following: |
| Assumption | Astral Earnout | Sponsor Earnout | ||||||
| Stock Price | $ | 5.69 | $ | 5.69 | ||||
| Simulation Term | 5 years | 3 years | ||||||
| Volatility | 100 | % | 80 | % | ||||
| Risk Free Rate | 3.88 | % | 3.77 | % | ||||
| M. | Reflects the proceeds received from the collateralized loan in the amount of $23.0 million to meet the condition in the Business Combination Agreement that expenses incurred in connection with the transaction be paid at the Closing. The loan has an interest rate of 7% per annum. |
| N. | Reflects the redemption of 22,846,470 MLAC Class A Ordinary Shares at a redemption amount of $10.65 per share, or $243.2 million. |
| O. | Reflects the elimination of the intercompany balances between Pubco and AVAT. |
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
The Transaction Accounting Adjustments included in the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2026, are as follows:
| AA. | Reflects the elimination of the interest income earned on funds in the Trust Account of which such funds were released from the Trust Account upon the Closing . |
| BB. | Reflects the elimination of the administrative service fees that ceased to be paid upon the Closing. |
| CC. | Reflects the recognition of compensation expense for 118,750 AVAT restricted stock units that vest every six months over a two year period, at a fair value of $9.75, giving effect to the Closing as if it had occurred on January 1, 2025. |
| DD. | To reverse the change in fair value of the token sale liability giving effect to the Closing as if it had occurred on January 1, 2025. |
| EE. | Reflects the interest expense on the collateralized loan as described in Adjustment (M) above at an interest rate of 7% per annum. |
Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
The Transaction Accounting Adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025, are as follows:
| AA. | Reflects the elimination of the interest income earned on funds in the Trust Account of which such were released from the Trust Account upon the Closing . |
| BB. | Reflects the elimination of the administrative service fees that ceased to be paid upon the Closing. |
| CC. | Reflects the transaction costs of MLAC. |
| DD. | Reflects the recognition of the liability-classified contingent consideration under ASC 805-30-25-6 for the Astral Earnout shares, the Sponsor Earnout shares, and the shares to be issued to Astral 30 days after the Closing as described in (L) above. |
| EE. | Reflects the recognition of compensation expense for 475,000 AVAT restricted stock units that vest every six months over a two year period, at a fair value of $9.75, upon the Closing. |
| FF. | To reverse the change in fair value of the token sale liability giving effect to the Closing as if it had occurred on January 1, 2025. |
| GG. | Reflects the interest expense on the collateralized loan as described in Adjustment (M) above at an interest rate of 7% per annum. |
Note 3 — Net Loss per Share
Represents the loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025. As the Business Combination is being reflected as if it had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted loss per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire period presented.
The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions of Public Shares by MLAC’s Public Shareholders for the three months ended March 31, 2026, and the year ended December 31, 2025:
| Three Months Ended March 31, 2026 | ||||
| Pro forma net loss | $ | (53,617,664 | ) | |
| Weighted average shares outstanding of Pubco Class A Stock – basic and diluted (1) | 37,914,826 | |||
| Net loss per share – basic and diluted | $ | (1.41 | ) | |
| Excluded securities:(1) | ||||
| AVAT Restricted Stock Units | 950,000 | |||
| AVAT Performance Stock Units | 1,150,000 | |||
| Astral shares | 2,000,000 | |||
| Year Ended December 31, 2025 | ||||
| Pro forma net loss | $ | (147,973,059 | ) | |
| Weighted average shares outstanding of Pubco Class A Stock – basic and diluted (1) | 37,914,826 | |||
| Net loss per share – basic and diluted | $ | (3.90 | ) | |
| Excluded securities:(1) | ||||
| AVAT Restricted Stock Units | 950,000 | |||
| AVAT Performance Stock Units | 1,150,000 | |||
| Astral shares | 2,000,000 | |||
| (1) | The potentially dilutive outstanding securities were excluded from the computation of pro forma net loss per share, basic and diluted, because their effect would have been anti-dilutive. |
Exhibit 99.5
THE COMPANY’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated or the context otherwise requires, references in this Exhibit to “AVAT,” “the Company,” “we,” “us,” “our” and other similar terms refer to Avalanche Treasury Company, LLC prior to the Business Combination and Avalanche Treasury Corporation (“Pubco”) and its consolidated subsidiaries after giving effect to the Business Combination. The following discussion and analysis provides information which AVAT’s management believes is relevant to an assessment and understanding of its results of operations and financial condition. This discussion and analysis should be read together with the section of in the Current Report on Form 8-K to which this Exhibit is attached titled “Business” and AVAT’s financial statements and related notes thereto that are included elsewhere in the Current Report on Form 8-K to which this Exhibit is attached. In addition to historical financial information, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties and assumptions. See the section titled “Cautionary Note Regarding Forward-Looking Statements” in the Current Report on Form 8-K to which this Exhibit is attached. Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” in the Current Report on Form 8-K to which this Exhibit is attached.
Overview
AVAT is a newly formed operating company focused exclusively on business lines relating to Avalanche and AVAX. Our strategy is to offer public-market investors a differentiated, capital-efficient way to gain exposure to Avalanche and AVAX through (i) the targeted accumulation of AVAX; (ii) tailored treasury management geared towards staking yield and other asset management levers intended to compound AVAX per share over time and (iii) the further ecosystem integration including the potential provision of Avalanche-focused infrastructure, such as the operation of validator nodes, L1 activation and other corporate development activities, that we believe will expand our exposure to Avalanche. In connection with the consummation of the Business Combination, the Company merged with and into Avalanche Company Merger Sub LLC, a Delaware limited liability company (“Company Merger Sub”), with the Company continuing as the surviving subsidiary and a wholly owned subsidiary of Pubco.
Business Combination with MLAC
On October 1, 2025, Mountain Lake Acquisition Corp., a Cayman Islands exempted company (“MLAC”), Pubco, Avalanche SPAC Merger Sub LLC, a Delaware limited liability company (“MLAC Merger Sub”), Company Merger Sub, the Company and Dragonfly Digital Management, LLC, a Delaware limited liability company (the “Seller”) entered into a business combination agreement (the “Business Combination Agreement”). In connection with the closing of the Business Combination Agreement, on June 11, 2026, (i) MLAC domesticated by way of continuation out of its jurisdiction of incorporation from the Cayman Islands into the State of Delaware (the “Domestication”), (b) MLAC Merger Sub merged with and into MLAC (the “MLAC Merger”), with MLAC surviving the MLAC Merger as a wholly owned subsidiary of Pubco, and (c) Company Merger Sub merged with and into AVAT (the “Acquisition Merger” and, together with the MLAC Merger, the “Mergers”, and together with the Domestication and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with AVAT surviving the Acquisition Merger as a wholly owned subsidiary of Pubco.
Concurrently with the signing of the Business Combination Agreement, on October 1, 2025, Pubco, Company and MLAC entered into the Company Unit Subscription Agreements with the company unit investors (“Company Unit Investors”), pursuant to which the Company Unit Investors purchased, payable in cash, USDC or AVAX, and the Company issued and sold, approximately $216 million worth of Company Class A units (“Company Units”) at a price of $10.00 per Company Unit the (“Company Unit Subscription”). At Closing, each Company Unit held by Company Unit Investors converted automatically into one share of non-voting Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Stock”).
Concurrently with the execution of the Business Combination Agreement, the Seller, Company, Pubco, Avalanche (BVI), Inc., a company incorporated in the British Virgin Islands (“Avalanche BVI”) and Avalanche Cayman, a Cayman Islands exempted company (“Avalanche Cayman” and together with Avalanche BVI, the “Foundation”) entered into the Contribution Agreement, pursuant to which, (a) the Foundation sold a minimum of $200 million of AVAX tokens on a pre-discount basis to Company and (b) the Seller contributed, directly and indirectly through certain related funds, 1,960,040 AVAX tokens to the Company in exchange for 5,805,638 Company Units.
Concurrently with the execution of the Business Combination Agreement and the Contribution Agreement, the Company, Pubco, Avalanche BVI and Avalanche Cayman entered into the Token Sales Agreement, pursuant to which, in October 2025, the Foundation sold a minimum of $200 million of AVAX tokens on a pre-discount basis to the Company in exchange for, at a 60% discount, (i) $50 million in cash or USDC and (ii) $30 million in the form of up to 3,000,000 shares of Pubco Class A Stock..
Recent Developments
On March 20, 2026, AVAT signed a Master Lender Agreement (the “Master Lender Agreement”) with FalconX Charlie, Inc. (the “Lender”) to facilitate the potential future execution of collateralized loans in which the Lender may lend to AVAT certain digital currency or cash (dependent on the loaned asset specified in the relevant executed loan term sheet) and AVAT would pay a loan fee as well as pledge collateral on or prior to the date of any drawdown pursuant to such future loan term sheet, as applicable. The loans under the Master Lender Agreement may be open loans without a maturity date, whereby AVAT may repay and Lender may recall the loan at any time, or term loans with a predetermined maturity date.
On May 29, 2026, AVAT and the Lender executed a loan term sheet, pursuant to which AVAT agreed to borrow from the Lender, and the Lender agreed to lend to AVAT, a loan of $25 million pursuant to an open loan (the “May 2026 Collateralized Open Loan”). The loan fee is 7% per annum.
At Closing, AVAT pledged approximately 5.6 million AVAX pursuant to the May 2026 Collateralized Open Loan, which is based on an initial collateral ratio of 200%. The collateral will be held in a segregated custody account with Anchorage Digital Bank N.A. (“Anchorage”) pursuant to an Account Control Agreement among Anchorage, AVAT and the Lender.
Principal Factors Affecting Our Results of Operations and Material Trends
AVAT’s future results are expected to be impacted by the highly volatile nature of AVAX’s valuation, as well as conditions and trends relating to demand for AVAX or other digital assets. We also expect AVAT’s future results to be impacted by the successful execution of our business strategies, such as our AVAX acquisition strategy, our support of L1s and validator resources, our fostering of partnerships with respect to our AVAX financial and technological infrastructure solutions, regulatory and technical developments surrounding AVAX and cryptocurrencies, the rapid evolution of the AVAX technology infrastructure landscape and our ability to innovate in and add value to the AVAX ecosystem. The primary factors that are expected to impact our results and present significant opportunities, as well as pose risks and challenges, are described below. We believe that our performance and future success depends on the factors discussed below, as well as those mentioned in the section titled “Risk Factors” in the Current Report on Form 8-K to which this Exhibit is attached.
The following macroeconomic factors and trends as they relate to AVAX may specifically impact our business:
| · | Price of AVAX. Our business is expected to be heavily dependent on the price of AVAX, which has historically experienced significant volatility. We have acquired AVAX, and may in the future acquire additional AVAX, through at-market purchases to build our strategic reserve of AVAX. Under ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), AVAX is revalued at fair value at the end of each reporting period, with changes in fair value recognized in net loss. As a result, fluctuations in the price of AVAX may significantly impact our results of operations. | |
| · | Awareness. We expect the perception of Avalanche as a legitimate and secure blockchain network, and in turn the perception of AVAX as a legitimate and secure asset class, by the general public will plays a crucial role in the success of our business. The pace and effectiveness of continued education and awareness is expected to impact adoption rates. Due to the rapidly evolving nature of digital assets and the volatile price of AVAX, which has experienced and continues to experience significant movements, we expect that our operating results will fluctuate significantly from quarter to quarter in accordance with market sentiments and movements in the broader AVAX economy. |
| · | Regulation. The global regulatory and political landscape for AVAX, including developments concerning legal status, accounting and tax treatment and other compliance-related programs surrounding digital assets will significantly impact the popularity and value of AVAX. Political support or favorable regulations may encourage adoption, while restrictive measures may hinder it, which, in each case, may have a significant impact on our business. | |
| · | Institutional Adoption. Increased participation by institutional investors, including hedge funds, mutual funds, corporations and nation states can drive market confidence and liquidity, supporting continued growth and utility of AVAX and the Avalanche blockchain network. | |
| · | Monetary Policy. Central bank monetary policies, especially those related to interest rates and monetary supply, may influence AVAX adoption. Low-interest rates and expansive monetary policies that lead to currency debasement may lead to a search for alternative investments like AVAX, which may have a positive impact on our business. | |
| · | Technological Innovation. Advances in blockchain technology, improvements in scalability and enhanced security protocols may increase AVAX adoption and integration of AVAX and the Avalanche blockchain network into various financial systems. Conversely, as blockchain technology and digital asset become more widely accept, we expect competition to further intensify in the future. We will compete for capital, and the Avalanche blockchain network will compete for user adoption, with a number of companies and ecosystem participants within the United States and abroad, including those that focus on traditional financial services and those that focus on blockchain or AVAX-focused services and technology infrastructure. |
Plan of Operations and Expected Revenue Sources
AVAT anticipates revenue generation through the following key business lines in this initial period following the Business Combination:
| · | AVAX Accumulation at Scale. AVAT aims to broaden access to AVAX for a wide range of public-market investors with diverse objectives and risk profiles by opportunistically offering a range of capital raising instruments that present varying degrees of Avalanche and AVAX exposure. AVAT intends to accumulate AVAX over time through a blended offering of equity and debt instruments, which may be subscribed with cash or AVAX, as well as the deployment of non-AVAX offering proceeds to acquire additional AVAX in the market. Such offerings and acquisitions will be strategically considered and paced based on market conditions and other factors, including (i) market price of AVAX and related trends, (ii) macroeconomic factors, (iii) market appetite and demand and (vi) the Pubco Class A Stock price, including such price relative to the net asset value of its AVAX holdings. AVAT does not currently intend to hold any other cryptocurrencies as its main treasury asset, however it may, in the execution of its strategy, periodically hold other digital assets. AVAT retains the flexibility to sell AVAX under certain circumstances, such as to meet operational needs, comply with legal or regulatory obligations, pursue certain investment strategies or for general corporate purposes. In addition, where the Pubco Class A Stock trades at a meaningful discount to our estimated mNAV relative to the prevailing AVAX price, we may sell a portion of our AVAX to fund opportunistic share repurchases. We believe this disciplined capital-allocation approach — dynamically arbitraging the relationship between our share price, implied premium/discount to mNAV and the AVAX price — can be accretive to mNAV per share and align with long-term shareholder value. Any such activity would be subject to applicable law, our liquidity and risk parameters, market conditions, internal Board and relevant committee authorization, and there can be no assurance that any repurchases will be undertaken. AVAT does not currently plan to engage in hedging its AVAX exposure. AVAT retains the option to revisit its AVAX accumulation strategy or any related policies periodically as part of its ongoing strategic review and risk management. |
| · | Active AVAX Treasury Management. AVAT’s active AVAX treasury management strategy will initially target (i) the staking of AVAX and (ii) the deployment of AVAX to traders, market makers, asset managers and other crypto market participants to with the goal of adopting conservative yield approaches focused on preservation and consistent returns, in each case subject to market conditions and other factors, intended to generate AVAX for treasury growth or the payment of operating expenses. To optimize staking returns while mitigating risks, we intend to carefully monitor our staking operations. This begins with the selection and oversight of trusted third-party staking providers, and extends to ongoing operational involvement. For example, we intend to conduct independent monitoring of validator performance alongside periodic reports provided by our staking service providers and to reinvest accrued staking rewards into the establishment of additional validators, where practicable. These practices are intended to support compounding yield, safeguard validator performance and promote transparency throughout our AVAX staking process. Determinations with respect to our AVAX management strategy, particularly with regards to the deployment of AVAX, other digital assets or fiat to traders, market makers, asset managers and other crypto market participants to execute any of our trading or yield strategies, will be made from time to time by assessing market factors including, but not limited to, (i) the current market price of AVAX, (ii) price trends and market level analysis, (iii) analysis of the broader macroeconomic environment and (iv) AVAT’s relative stock performance. In pursuit of this strategy, we may utilize AVAX-specific key performance indicators including AVAX reserves per share to assess our performance and guide our operations. These KPIs are intended to efficiently communicate AVAT’s mission of providing the best vehicle for secure, transparent and yield-generating exposure to AVAX at institutional scale. Management’s AVAX strategy does not include any fixed delegation or staking percentages or allocations, and is generally designed to preserve management’s flexibility and business judgment in deploying AVAX and adapting to rapidly changing, fluid market conditions. For example, longer staking durations can amount to less liquidity – in periods where greater liquidity is desired, management may elect to pursue exclusively shorter staking durations. This strategy also contemplates that AVAT may, from time to time, subject to market conditions and other factors, (i) sell AVAX for general corporate purposes or in furtherance of strategies that AVAT believes are accretive to shareholders, (ii) enter into additional capital raising transactions and (iii) consider the pursuit of strategies that monetize or otherwise utilize its AVAX holdings to generate funds or income streams through the development and commercialization of new AVAX-based smart contracts and decentralized applications for services and products. AVAT currently engages in staking via third-party node operators as part of its active treasury management strategy. | |
| · | AVAX Technology and Ecosystem Partner. In addition to aiming to deliver secure, transparent and yield-generating exposure to AVAX at an institutional scale, AVAT may pursue a range of additional Avalanche-related business activities. We intend to evaluate opportunities to operate our own validator nodes independent of third-party service providers to consolidate our staking efforts. We also plan to actively support and engage with Avalanche-native projects via potential ecosystem partnerships with enterprises, asset managers and other participants, and also via early participation in emergent protocols and L1s. We may provide turnkey infrastructure solutions for enterprises, decentralized autonomous organizations and Avalanche-native builders seeking access to Avalanche’s consensus and blockspace economy. We may also pursue on-chain opportunities that offer attractive risk adjusted returns, such as infrastructure solutions for Avalanche-native builders or other staking solutions for enterprises and funds seeking to generate AVAX-denominated revenue. The development and launch of any such activities would require significant organizational, operational and regulatory preparation. These initiatives are subject to various legal and compliance considerations, including oversight by the SEC, the CFTC, FinCEN and state-level regulators such as those in Delaware, as well as compliance with applicable anti-money laundering and other financial laws. Planning for these potential activities has begun, however, there can be no assurance as to the timing or outcome of any such efforts. |
Results of Operations
The following table sets forth our condensed statement of operations for the three months ended March 31, 2026:
| Three Months Ended March 31, 2026 | ||||
| Staking revenue, net of fees | $ | 2,057,074 | ||
| Operating expenses: | ||||
| General and administrative | 1,942,410 | |||
| Change in fair value of digital assets | 46,192,584 | |||
| Realized loss on digital assets | 477,431 | |||
| Impairment of digital assets | 5,059,757 | |||
| Loss from operations | (51,615,108 | ) | ||
| Other income: | ||||
| Change in fair value of token sale liability | 24,807,903 | |||
| Other income | 21,059 | |||
| Interest income | 5,904 | |||
| Total other income, net | 24,834,866 | |||
| Net loss | $ | (26,780,242 | ) | |
Staking Revenue, Net of Fees
Staking revenue, net of fees, for the three months ended March 31, 2026, was $2.1 million. The Company earns staking rewards in exchange for delegating digital assets to support network validation activities on the Avalanche blockchain protocol. Staking rewards consist of block rewards, transaction fees, and, where applicable, supplemental protocol incentives. Rewards are distributed directly by the Avalanche protocol to the Company’s designated wallet.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, professional fees, and other corporate overhead expenses. For the three months ended March 31, 2026, general and administrative expenses totaled $1.9 million. Personnel-related costs included $0.6 million of salary and bonus expense. Professional fees totaled $1.0 million and were primarily attributable to legal, accounting and auditing, advisory, and other professional services, incurred in part due to the Transaction and costs associated with being a public company. The remaining general and administrative expenses consisted of insurance, technology, facilities, and other corporate costs incurred during the period.
Changes in Fair Value of Digital Assets
An unrealized loss of $46.2 million was recognized during the three months ended March 31, 2026. The unrealized loss is driven by the unfavorable changes in digital asset fair value from December 31, 2025 to March 31, 2026.
Realized Loss on Digital Assets
A realized loss of $0.5 million was recognized during the three months ended March 31, 2026. The realized loss is primarily driven by sales of digital assets at price lower than the balance sheet fair value.
Impairment of Digital Assets
The Company recognized $5.1 million of digital asset impairment during the three months ended March 31, 2026 due to the change in fair value of stAVAX tokens held.
Other Income
Other income, net for the three months ended March 31, 2026, was $24.8 million, primarily driven by changes in fair value of token sale liability. We recognized an unrealized gain of $24.8 million related to changes in the token sale liability. Other income and interest income were less than $0.1 million .
Net Loss
Net loss for the three months ended March 31, 2026, was approximately $26.8 million, primarily driven by an unrealized loss of $46.2 million from changes in the fair value of digital assets, $5.1 million of digital asset impairment, and a $0.5 million realized loss on digital asset sales. These losses were partially offset by $24.8 million of other income from an unrealized gain on the token sale liability and $2.1 million of staking revenue, net of fees. General and administrative expenses of $1.9 million also contributed to the net loss.
Risks and Uncertainties Associated with Future Results of Operations
We have a very limited operating history, which makes it difficult to accurately forecast our future results of operations, and which is subject to a number of uncertainties, including our ability to grow the value of our AVAX holdings, develop and implement our AVAX-focused infrastructure strategy and the market size and growth opportunities in each of our anticipated lines of business.
Our ability to generate cash flow initially will largely be dependent on our ability to raise capital to acquire additional AVAX, secure participation and contribution from AVAX holders through in-kind investments, successfully apply yield generation strategies, financial trading strategies and risk-management techniques in our active management of our AVAX holdings and develop or enter into partnerships for end-to-end AVAX-focused financial and technology infrastructure. Our business strategy may not be realized as quickly as planned, or even at all. Further, even if we achieve growth in the near term, in future periods that growth could slow or decline for a number of reasons, including, but not limited to, AVAX volatility, increased competition, digital assets that compete with and may result in a decline in utilization of AVAX or replace AVAX, our inability to develop, improve or effectively scale AVAX acquisition or to develop or enter into partnerships for AVAX-related infrastructure, government regulation or our failure, for any reason, to continue to take advantage of any growth opportunities. For additional information see the section titled “Risk Factors” in the Current Report on Form 8-K to which this Exhibit is attached.
Liquidity and Capital Resources
Overview
AVAT assesses its liquidity in terms of its ability to generate adequate amounts of cash to meet current and future needs. Its expected primary uses of cash on a short and long-term basis are for working capital requirements, business acquisitions and other liquidity needs. AVAT’s management expects that future operating losses and negative operating cash flows may increase because of additional costs and expenses related to the business operations and the development of market and strategic relationships with other businesses.
As of March 31, 2026, we had cash of approximately $1.2 million and a working capital deficit of $9.1 million.
For the three months ended March 31, 2026, we reported a net loss of approximately $26.8 million. This net loss was primarily driven by factors that are inherently volatile and subject to market conditions, including:
| · | Unrealized losses related to digital asset holdings due to fluctuations in the market price; |
| · | General and administrative expenses associated with operating as a public company. |
Because digital assets and derivative instruments are measured at fair value, our results of operations may fluctuate significantly from period to period.
We do not maintain any committed external sources of liquidity, including credit facilities or other financing arrangements. Our liquidity is derived primarily from cash on hand.
In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") 2014-15, Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern (ASC Subtopic 205-40), management has evaluated whether conditions and events, considered in the aggregate, raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the unaudited condensed financial statements are issued. Based on this assessment, management has determined that the Company's liquidity condition, has materially improved as a result of (1) the successful completion of the Business Combination and (2) the receipt of net loan proceeds at Closing. These events directly address the conditions previously identified as raising substantial doubt including the Company's liquidity condition, recurring losses since inception and lack of committed funding should the Business Combination not be consummated.
As a result of the closing of the Business Combination, the Company received access to the capital and resources associated with the transaction, which management believes will support the Company's operations and liquidity needs for at least the next twelve months from the date of the filing of this Form 8-K.
Accordingly, management concluded that the Company’s primary plan to alleviate substantial doubt, completion of the Business Combination, has now occurred. The uncertainties previously identified, including the risk that the necessary shareholder approvals will be obtained and that the transaction might not be completed, have been resolved. Based on the improved liquidity profile and the removal of the previously identified uncertainties, management has concluded that substantial doubt about the Company's ability to continue as a going concern is alleviated for the twelve-month look-forward period from the date of the filing of this Form 8-K.
Cash Flows
The following table summarizes the Company’s cash flows for the periods indicated:
| For the Three Months
Ended March 31, 2026 | ||||
| CASH USED IN OPERATING ACTIVITIES | $ | (1,059,087 | ) | |
| CASH PROVIDED BY INVESTING ACTIVITIES | $ | 1,000,000 | ||
| CASH FLOWS USED IN FINANCING ACTIVITIES | $ | (477,663 | ) | |
Cash Flows from Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 was $1,059,087 and is primarily related to the net loss of $26.8 million, partially offset by a $24.8 million gain related to the change in fair value of the token sale liability, a $5.1 million impairment charge associated with stAVAX digital assets, a $46.2 million loss from changes in the fair value of AVAX digital assets, and a $0.5 million realized loss on the disposition of AVAX tokens.
Additional non-cash adjustments included digital assets received through staking rewards and USDC received and recognized as other income.
Cash Flows from Investing Activities
Net cash provided by investing activities for the three months ended March 31, 2026, was $1.0 million and was driven by proceeds from the disposal of USDC.
Cash Flows from Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026 was $477,663 and is primarily related to deferred transaction costs incurred in connection with the planned business combination transaction and related capital markets activities.
Critical Accounting Estimates
Our financial statements and the accompanying notes thereto included in the Current Report on Form 8-K to which this Exhibit is attached are prepared in accordance with U.S. GAAP and pursuant to the accounting rules and regulations of the SEC. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited condensed consolidated financial statements that require estimation but are not deemed critical, as defined above
Off-Balance Sheet Arrangements
Other than as otherwise described in the Current Report on Form 8-K to which this Exhibit is attached, we do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” described in Note 3 of our unaudited condensed financial statements included elsewhere in the Current Report on Form 8-K to which this Exhibit is attached.
Internal Control Over Financial Reporting
As a privately held company, we were not required to assess and conclude on the effectiveness of our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404 of the Sarbanes-Oxley Act. However, during the preparation of our financial statements, we identified a material weakness in our internal control over financial reporting. The PCAOB defines a material weakness as “a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”
We did not design or maintain an effective control environment commensurate with the financial reporting requirements applicable to U.S. listed companies, including adequate business processes, systems, personnel and related internal controls. As a result, we identified the following material weakness:
| · | We did not design and maintain effective controls over the financial reporting process, including segregation of duties related to journal entries and account reconciliations. |
We recognize that the material weakness described above could result in misstatements to one or more account balances or disclosures, including substantially all financial statement accounts and disclosures, that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.
We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the control deficiencies that led to the material weakness:
| · | We will continue to formalize and enhance policies and procedures regarding the financial reporting process to support the effective deployment of management’s directives and control activities, including that we plan to design and implement control activities in response to the risks posed as a result of the lack of segregation of duties related to journal entries and account reconciliations, including general controls over information systems. We will clearly define responsibility and accountability for the timely execution of such policies and procedures. In parallel, we will continue to design, implement and refine a comprehensive set of controls over the financial consolidation and reporting process to support the accuracy, completeness and timeliness of our financial statements. |
We will not be able to fully remediate this material weakness until the remediation plan described above has been fully implemented, the applicable controls have been operating for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness in our internal control over financial reporting or that it will prevent or avoid potential future material weaknesses. In addition, our current internal control over financial reporting and disclosure controls and procedures, and any new internal control over financial reporting and disclosure controls and procedures that we develop, may become inadequate because of changes in our business, operations and other factors, some of which may be beyond our control. While we will work to remediate the material weakness as quickly and efficiently as possible, we cannot at this time provide an expected timeline in connection with any remediation plan. These remediation measures may be time-consuming and costly and might place significant demands on our financial and operational resources.
As permitted under the U.S. securities laws, neither we nor our independent registered public accounting firm have performed or are required to perform a formal evaluation of the effectiveness of our internal control over financial reporting pursuant to Section 404. It is possible that, had such an evaluation been performed, additional material weaknesses or significant deficiencies may have been identified, and we may identify further material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain effective internal control over financial reporting could result in misstatements in our financial statements that could lead to a restatement of our financial statements, cause us to fail to meet our reporting obligations or adversely affect investor confidence in our reported financial and other information, which may result in a decline in the market price of our ordinary shares.
See the section titled “Risk Factors — We have identified a material weakness in our internal control over financial reporting. If remediation of this material weakness is not effective, if we experience additional material weaknesses, or if we otherwise fail to maintain an effective system of internal controls in the future, we may not be able to accurately report their financial condition or results of operations.” in the Current Report on Form 8-K to which this Exhibit is attached.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as to those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Quantitative and Qualitative Disclosures about Market Risk
The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements.
AVAX Market Price Risk
Our AVAX treasury assets are measured using observed prices from active exchanges, which could result in volatility in our financial results in future periods. Adjustments are recorded in net income through “gain (loss) on digital assets” on the statements of operations. Therefore, negative swings in the market price of AVAX could have a material impact on our earnings and on the carrying value of our digital assets.
Custodian Risk
Pubco’s AVAX is held with third-party custodians, which we select based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft or misappropriation of our AVAX assets due to operational failures, cybersecurity breaches or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage and security measures of our custodians, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.