AIxCrypto Holdings, Inc. Q1 FY2026 Earnings Call

Good afternoon, and welcome to the first quarter 2026 earnings conference call of AIX Crypto Holdings, Inc. My name is Andrew Grossman, and I will be your moderator today. Before we begin, please note that today's discussion may contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those discussed today. For a more detailed description of these and other risks and uncertainties, please refer to our quarterly report on Form 10-Q for the period ending March 31, 2026, and our other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of today, and the company undertakes no obligation to update them except as required by law. I will now turn the call over to Jerry Wang, Co-Chief Executive Officer.

Thank you, Andrew, and good afternoon to everyone joining us today. Welcome to AIX Crypto's first quarterly earnings call as the company currently transitioned into operation towards Web3 and AI infrastructure. On our inaugural earnings call earlier this year, we laid out our 2026 execution priorities, user growth and platform expansion, RWA tokenization, operating the infrastructure that enables the program-rentic delivery of data assets, and digital asset treasury management. The first quarter of 2026 is our first reporting period executing against those priorities. COTI will walk through the financial picture in detail, but the business signal underneath those numbers is clear. In Q1, our product pipeline progressed from concept to documented designs, internal testing, and preliminary contract conversations with counterparties. Q1-2026 Operational Highlights First, data platform, project kickoff with very the future. Embodied AI sits within the broader physical AI category. Both rely fundamentally on multi-modal data produced by robots performing real work, and real-world operational data is among the scariest training inputs for AI foundation models. The data collaboration between AIX Crypto and our majority shareholder Fair the Future is centered on turning the scarce asset into a recurring operating workstream. On March 25, 2006, we formally kicked off the EAI data collaboration project with Fair the Future, moving that relationship from strategic alignment into operating execution. Within the quarter, we established the core project team, initiated drafting of the FFAI-AXC data collaboration contract, and defined the data rights, boundaries, and commercialization roadmap. The collaboration is structured as a dual-track platform, a B2B enterprise data platform for institution buyers, and a B2C decentralized cross-sourced data collaboration platform for the broader development and contributor community. Beyond the data business itself, we're also preparing a consumer-facing extension, packaging the robotic capability operated within AIXYS Digital Factory, together with the EAI and physical AI data accumulated through that operation into on-chain agents available to end users. This is a consumer-graded EIA agent product line, jointly planned with Fair to Future and operated by AIX crypto. Initiation was completed during this quarter. Specific product form, pricing, and launch cadence will be disclosed separately when finalized. This line carries the Q1 B2B data foundation forward into a seaside agent network that users can participate in. Second, Agentier, AI Agent Arena Platform. Agentier is consumer-facing, designed to bring agent infrastructure into a daily use environment. During Q1, we completed initial development of the platform's four core game models and finalized a commercial model centered on across-paths, economic, and arena fees. By early May, the platform reached an internal review milestone and were preparing for a phased public launch with launch time to be announced when finalized. 3. RWA Equity Tokenization Fair the future as proof of concept asset. Q1 was the period in which we converted our RWA equity tokenization strategy into a defined execution path. The proof-of-concept asset is the Faraday Future Class A common stock that we hold through a designated third-party structure. During the quarter, we completed the structural and regulatory review necessary to align our RWA initiative with the Commission's latest interpretations on digital securities. On counterparties, we conducted a structured comparison of the principal tokenization platforms in the market across near-term execution and longer-term standardization considerations. That evaluation remains in progress and specific partners will be disclosed once definitive agreements are executed. Beyond the launch itself, the broader objective is to build AIX crypto into compliant on-chain infrastructure for tokenized equity designated to operate within applicable regulatory frameworks with potential applications including non-U.S. distribution and DeFi integration. integration. Our 2026 execution priorities remain unchanged. Our objective over the next two quarters is to transition from the Q1 foundation towards initial product delivery and revenue generation. That conversion runs along three revenue rails. First, EI data platform. We're targeting the end of Juwen for the first end-to-end transaction test and the first data delivery, the proof-of-concept milestone, alongside the closed beta launch of the B2B platform and product completion plus public participation on the B2C platform. We're working towards a sustained transaction cadence in the second half of the year of one data buyer transaction per month. The consumer-grade EAI agent product line that extends from this layer is in initiation. Specific product form and launch cadence will be disclosed separately when finalized. Second, AI agent product. Agenteer's first limited public launch is targeted within the near-term window, with potential post-launch revenue arriving from Genesis and recurring access pass sales, arena fees, and functional platform usage fees. Third, RWA tokenization. Subject to definitive agreements, we're targeting a launch window later this year, subject to the execution of definitive agreements for the company's first tokenized equity instruments, with distribution and exchange listing anticipated to follow. With that, I will turn the call over to Cody to walk through the Q1 financial results in detail.

Thank you, Jerry. Good afternoon, everyone. I will walk through the headline financial results for the three months ended March 31, 2026. The full statements are in our 10Q and the speaker reference tables in the appendix provide complete line item detail. As context for the year-over-year comparisons, the Q1 2025 period predates the fair day investment and the strategic transformation, and we held no digital assets in the prior year period. AIX crypto generated no revenue in the first quarter of 2026, consistent with our status as pre-revenue company in the early stage of building our Web3 and AI infrastructure platform. As Jerry described, Our near-term revenue streams are tied to the launch of our RWA tokenization product, the Agentier launch program, the data platform, commercialization roadmap, and functional service fee. As disclosed in Note 2, our recurring losses and accumulated deficit raise substantial doubt about our ability to continue as a going concern. We are addressing that condition through the execution sequence Jerry described and the framework I will walk through. Total operating expenses were $4.3 million in Q1-2026 compared to $2.7 million in Q1-2025. The increase is concentrated in general and administrative expense, which rose to $3.5 million from $2.5 million in the comparative period. The G&A increase reflects the cost of operating as a transformed business, including incremental payroll for new hires, executive signing bonuses, the fair day transition services agreement, and other support functional costs, which were partially offset by a $1.3 million year-over-year decline in investor relations expense. The full G&A bridge is presented in Table A in the appendix. R&D expense was de minimis for the quarter, reflecting the suspension of legacy clinical stage activity. Credit loss expense on short-term notes receivable was $142,574, which represented a small adjustment on accrued interest on the Merizyme notes. The larger collectability assessment was made in 2025. Other expense net was $1.7 million in Q1-2026, driven almost entirely by a $1.9 million net loss on digital assets. This is the largest single item in a quarter and reflects mark-to-market movements on our C10 Treasury under the fair value model effective with our adoption of ASU 2023-08. At quarter-end, the C10 portfolio carried a cost basis of $10.4 million against fair value of $6.2 million. Investors should expect digital asset fair value movements to continue affecting our quarterly reported results as long as we hold the C-10 Treasury. Partially offsetting that loss was $303,010 of interest income, primarily accrued interest on the Merizyme notes, as just mentioned, and small fair value gains on warrant liabilities and convertible debt. There was no interest expense in the quarter compared to $73,615 in Q1 2025, reflecting the repayment of the prior period promissory notes. Operating cash burn for Q1 2026 was $4.5 million, driven primarily by the operating loss. Investing activities used $8.5 million, primarily reflecting $10 million prepaid investment in Faraday managed by a designated third-party structure, as Jerry touched on earlier, purchases of digital assets and intangible assets, partially offset by $2.1 million in proceeds from digital asset sales. Financing activities used $132,000 to repay convertible debt. Net change in cash for the quarter was a decrease of $13.1 million, driven principally by the $10 million strategic deployment into Faraday equity position, which was contractually committed during the quarter and subsequently consummated in April 2026 upon issuance of the investment instruments. As fully disclosed in Note 17 of our 10Q, the company entered into First and Second amendments to its previously disclosed entrusted investment agreement on April 10, 2026, expanding the scope of entrusted assets to include preferred equity of Faraday and modifying certain governance and option provisions. The framework rests on three things, revenue ramp, operating expense normalization and disciplined treasury management. Initial revenue is targeted to begin in the third quarter from agentier platform fee and initial data buyer transactions. Each is supported by Q1 foundation work the company completed during the quarter. Our RWA tokenization product is targeted for launch later this year we will provide further detail on its commercial model once definitive agreements are executed on expense normalization the 1.3 million dollars year-over-year decline in investor relations expense disclosed in our mdna is the initial indication that transformation related expenses are beginning to align with our revised operating model we expect that to continue with offsets reflecting investment in payroll software and legal expenses on treasury the c10 portfolio is being managed for market transparency and is exposed to prevailing digital asset market conditions. No digital asset appreciation is built into our operating model. We will continue to provide quarterly updates against this framework. With that, I will turn the call back to Jerry. Thank you, Cody. To put Q1 in one

sentence, the products, the contracts, and the partnerships that drive our 2026 revenue streams advanced meaningfully during the quarter. Looking back across Q1 and PureSense, we delivered against four operational anchors. We brought Agentier into active development, reaching an internal review milestone in early May. We initiated our data collaboration with Ferry the Future, supporting the broader physical AI category that the industry is converging around. We progress our RWA equity organization initiative through structural and regulatory review and continue to work toward a launch later this year. And in April, we expanded our fair to future investment position to an aggregate $12 million, beating under $10 million prepaid in Q1, and deepen the proof-of-concept asset that anchors our RWA infrastructure. We will continue to make ourselves available to investors. Looking ahead, we expect to participate in industry forums on tokenization, AI infrastructure, and digital asset market structure. Detail will be posted on our IR website as they are confirmed. Our SEC filing, investor materials, and corporate updates are available at ir.aixcrypto.ai and on AdGuard via the link posted on our investor relations page. Investor inquiries may be directed to ir.aixcrypto.ai. This wraps up the 2026 AIXC Q1 earnings call for today. Thank you for listening.

Thank you. This does conclude today's conference. You may disconnect at this time, and thank you for your participation.