AVAX One debt amendment raises cash and Bitcoin liquidity floor to $3.5 million

An unnamed institutional investor amended AVAX One’s legacy convertible debenture, raising the Nasdaq-listed crypto firm’s minimum liquidity requirement 35-fold to $3.5 million and counting only bank cash and Bitcoin held in custody.

The amendment, detailed in an Aug. 5 SEC filing, followed the July departure of CEO Jolie Kahn. The filing says her departure constituted a breach of the note’s key-person covenant and that the holder waived that specified breach after AVAX One agreed to a $1.3 million partial repayment and other amended terms. The filing does not state that the holder formally declared an Event of Default.

Kahn previously orchestrated the firm’s pivot from agriculture to digital assets under the AgriFORCE moniker. Since her exit, the company’s shares have fallen about 42% to $3.20.

This move comes amid a broader restructuring where AVAX One retired $6.8 million in outstanding principal debentures.

AVAX One’s amended debt terms

Under the amended agreement, the institutional investor waived the specified key-person covenant breach after AVAX One paid $1.3 million and accepted revised financial conditions.

The first change was a 3,400% increase in the company’s minimum liquidity requirement to $3.5 million from $100,000. The amended covenant counts only bank cash and Bitcoin held in custody. AVAX tokens are excluded from this particular liquidity calculation.

That exclusion means AVAX One’s core Avalanche treasury does not count toward satisfying the test regardless of its market value. The covenant language does not indicate that AVAX One offered its AVAX as repayment or collateral and that a lender rejected it. CoinGecko data shows the company holds nearly 14 million AVAX tokens worth about $88 million.

AVAX One also faces a 180-day deadline from Kahn’s departure to appoint a permanent CEO deemed acceptable to the lender. Peter Wylie Jr. currently serves as interim chief executive.

The agreement also raised the remaining debenture’s principal to $8.47 million from $7.7 million before applying the $1.3 million payment.

The filing did not explain the $770,000 increase. AVAX One said the broader restructuring included repayment premiums, but did not directly link them to the adjustment. After the payment, about $7.42 million remained outstanding.

The lender also accelerated its capital recovery by increasing monthly redemptions to one-tenth of the original principal from one-twenty-fifth.

Finally, the accelerated conversion price was reduced to 82.5% from 85% of a benchmark tied to the three lowest trading prices over the previous 10 trading days.

The deeper discount could allow the lender to receive more shares when converting the debt, increasing potential dilution for existing investors.

An AVAX One spokesperson said:

“To clarify, AVAX One did not experience a default under its debt agreements.

There was a technical breach of our covenants following our recent management transition. However, we avoided an event of default by proactively negotiating with and coming to new, agreeable terms with the relevant investors.

Under the new terms, we intentionally excluded our AVAX tokens from the liquidity requirements. Building and maintaining an AVAX treasury is core to our business strategy, and we would not want to put these assets at risk.

All of these measures were designed to protect our core competency and benefit our shareholders.”

Update — Aug. 9, 2026: This article has been updated to clarify the scope of AVAX One’s cash-and-Bitcoin liquidity covenant, distinguish a key-person covenant breach from a formally declared Event of Default, and include a response from an AVAX One spokesperson.