Lender Excludes AVAX From $3.5M Liquidity Test
AVAX One holds nearly 14 million AVAX tokens, about $88 million, but its lender will not count them toward a new $3.5 million minimum liquidity requirement, the company disclosed in an Aug. 5 SEC filing.
An institutional lender will not accept AVAX One’s Avalanche tokens as collateral for a newly imposed $3.5 million minimum liquidity requirement, according to an Aug. 5 Securities and Exchange Commission filing. The filing shows the company holds nearly 14 million AVAX tokens, valued at about $88 million by CoinGecko prices referenced in the document.
The amended debt covenant raised AVAX One’s minimum liquidity threshold from $100,000 to $3.5 million. The test recognizes only bank cash and Bitcoin held in custody; AVAX tokens are explicitly excluded from the calculation.
The changes followed the July departure of CEO Jolie Kahn, which triggered a key-person covenant breach. The lender waived the default after AVAX One made a $1.3 million payment, but required stricter terms. Peter Wylie Jr. is serving as interim chief executive, and the agreement requires the company to name a permanent CEO acceptable to the lender within 180 days of Kahn’s exit. Since her departure, AVAX One’s stock price has fallen about 42% to $3.20.
The restructuring altered the company’s outstanding debentures. The filing records an increase in remaining principal to $8.47 million from $7.7 million before applying the $1.3 million payment; after that payment, about $7.42 million remained outstanding. The filing does not provide a specific explanation for the $770,000 increase. AVAX One noted the broader restructuring included repayment premiums but did not directly link those premiums to the principal adjustment.
The lender also accelerated capital recovery by raising monthly redemptions to one-tenth of the original principal from one-twenty-fifth. The conversion price on remaining debt was reduced to 82.5% from 85% of a benchmark calculated from the three lowest trading prices over the prior 10 trading days.
The filing states AVAX One previously retired $6.8 million in outstanding principal debentures as part of the restructuring. The document lays out the amended terms between the company and the unnamed institutional investor and the requirements AVAX One must meet under the new covenant.
Articles by this author
