Debt |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Debt | |
| Debt | Note 7. Debt FalconX Credit Facility On March 20, 2026 the Company entered into a master lender agreement with FalconX Charlie, Inc. (the “Master Lender Agreement”) and on May 29, 2026, the Company entered into a loan term sheet with FalconX Charlie, Inc. On June 10, 2026, the Company and FalconX Charlie, Inc. entered into an amended loan term sheet, effective June 11, 2026, which amended, restated and superseded the May 29, 2026 loan term sheet in its entirety (the “Loan Term Sheet”), pursuant to which it agreed to borrow $23.0 million, collateralized by certain of the Company’s AVAX holdings. As of June 11, 2026 the Company borrowed $23.0 million under the facility. The loan was open-term with no stated maturity date and bore interest at 7.0% per annum on any outstanding borrowings. Under the terms of the Master Lender Agreement, upon any draw on the facility, the Company was required to pledge AVAX tokens as collateral, the fair value of which must meet or exceed specified collateral coverage ratios at the time of borrowing and on an ongoing basis. Under the Loan Term Sheet, the initial collateral ratio was 200%, the margin call limit was 180%, the liquidation threshold was 160% and the refund limit was 230%, and all of the AVAX collateral was required to remain unstaked and fully liquid at all times. In the event that the fair value of the pledged AVAX declined below certain maintenance thresholds, the Company could be required to post additional collateral or repay a portion of the outstanding balance to restore the required coverage ratio. A further decline below a liquidation threshold could result in the lender liquidating a portion or all of the pledged collateral to satisfy the outstanding obligation. Either party could terminate the agreement in accordance with its terms, and any outstanding principal and accrued interest would become due upon termination. Repayment of the FalconX Credit Facility The Company used the proceeds of the July 2026 Collateralized Term Loan and the cash proceeds from sales of AVAX to the Foundation (see Note 11), together with other available funds, to repay in full all outstanding principal and accrued interest under the FalconX Credit Facility. Repayments during the nine months ended September 30, 2026 totaled $23,000,000 of principal, consisting of $20,000,000 repaid in cash and $3,000,000 repaid in USDC. Upon repayment, the approximately 7.8 million AVAX pledged as collateral were released from the tri-party custody account in two transfers on August 13, 2026 and September 2, 2026, and no amounts remained outstanding under the Master Lender Agreement as of September 30, 2026. Galaxy Digital Credit Facility On July 2, 2026, the Company signed a Master Digital Currency Loan Agreement (the “Galaxy Master Loan Agreement”) with Galaxy Digital LLC (“Galaxy Digital”) to facilitate the potential future execution of collateralized loans in which Galaxy Digital may lend to the Company certain digital currency or cash and the Company would pay a borrow fee and pledge collateral on or prior to the date of any drawdown. Loans under the Galaxy Master Loan Agreement may be open loans without a maturity date or term loans with a predetermined maturity date. On July 10, 2026, the Company and Galaxy Digital executed a loan term sheet pursuant to which the Company borrowed $10.0 million under a term loan with a maturity date of January 10, 2027 (the “July 2026 Collateralized Term Loan”). The borrow fee is 10.5% per annum. The proceeds were used to pay down borrowings under the FalconX Credit Facility. As of September 30, 2026, $10,000,000 of principal was outstanding under the July 2026 Collateralized Term Loan and accrued interest of $87,500 is presented separately on the condensed consolidated balance sheets. As of September 30, 2026, the Company had pledged approximately 3,010,907 AVAX tokens as collateral, with an aggregate fair value of approximately $32.9 million, based on an initial collateral level of 180%. On July 10, 2026, the Company pledged 2,990,005 AVAX with a fair value of $20,128,713 as collateral for the July 2026 Collateralized Term Loan. Under the loan term sheet and an Account Control Agreement executed on July 9, 2026 among the Company, Galaxy Digital and Anchorage Digital Bank N.A. (“Anchorage”), the collateral is held in a segregated custody account in the Company’s name at Anchorage that is subject to a first priority security interest in favor of Galaxy Digital. Withdrawals and transfers from the account require joint instructions from the Company and Galaxy Digital, and staking or unstaking of the collateral requires Galaxy Digital’s prior written consent. Galaxy Digital may direct Anchorage to act solely on its instructions only by delivering a notice of exclusive control following an event of default or termination event, and until then the collateral remains the property of the Company. Neither Galaxy Digital nor Anchorage may rehypothecate, lend or otherwise dispose of the collateral. Up to 75% of the AVAX collateral may be staked, and staking rewards generated by the collateral accrue to the Company. The Company may be required to post additional collateral or repay the loan if the value of the collateral declines below specified levels, and upon an event of default Galaxy Digital may liquidate the collateral to satisfy the Company’s obligations. Because the Company retains title to the pledged AVAX and the economic benefits of the collateral, including staking rewards, and Galaxy Digital may not sell or rehypothecate the collateral absent a default, the pledged AVAX continue to be recognized as digital assets of the Company (see Note 4). The Company recognized interest expense of $388,221 and $472,029 related to its borrowings during the three and nine months ended September 30, 2026, respectively. Cash paid for interest during the nine months ended September 30, 2026 was $384,529. |