AIxCrypto Holdings, Inc. ($AIXC)

Good afternoon, and welcome to the First Quarter 2026 Earnings Conference Call of AIxCrypto 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 Gerry Wang, Co-Chief Executive Officer.

Thank you, Andrew, and good afternoon to everyone joining us today. Welcome to AIxCrypto's first quarter earnings call as the company currently transition into operation towards web and AI infrastructure. our inaugural earnings call earlier this year, we laid out our 2026 execution priorities, user growth and platform expansion tokenization, operating the infrastructure that enables the programmatic delivery of data assets and digital assets future management. The first quarter of 2026 is our first reporting period executing against those priorities. Koji will walk through the financial picture in detail. But the business signal underneath those numbers is clear. In Q1, our product pipeline progress from concept to documented designs, internal testing and preliminary contract conversations with counterparties, Q1 2026 operational highlights. First, data platform, project kickoff with very future. embody AI sits within the broader physical category. Both rely fundamentally on multimodal data produced by robots performing real work and real-world operational data is among the scarcest training inputs for AI foundation models. The data collaboration between AX crypto and our majority shareholder for the future, is centered on turning the [indiscernible] asset into a recurring operating workstream. On March 25, 26 in we formally kicked off the EAI data collaboration project with for the future, moving that relationship from strategic alignment into operating execution. Within the quarter, we established the core project team initiated drafting of the FSI ASC data collaboration contract and define the data rights, boundaries and commercialization road map. The collaboration is structured as a dual truck platform, a B2B enterprise data platform for institution buyers and B2C decentralized crowd-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 AIxC's digital factory together with the EEI and singular data accumulated to that operation. into on chain agents available to end users. This is a consumer graded EI agent product line, growingly plan we start of the future and operated by AIxCrypto. 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 Asian network that users can participate in. Second, agent here AI agent arena platform. Agents here is consumer-facing designed to bring agent infrastructure into a daily use environment. During Q1, we completed initial development of the platforms for core game models and finalized a commercial model centered on across past economic and arena fees. By early May, the platform reached an internal review milestone, and we're preparing for a safe public launch with last time to be announced when finalized. Three, RWA equity tokenization for the future as proof of concept assets. Q1 was a period in which we converted our RWA equity tokenization strategy into a defined execution path. The proof-of-concept asset is the far future Class A common stock that will 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 commissions rates interpretations on digital securities. On comments, 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 be a 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 defy integration. 2026 outlook. Our 2026 execution priorities remain unchanged. Our objective over the next 2 quarters is to transition from the Q1 foundation towards initial product delivery and revenue generation. that conversion runs along 3 revenue rails. First, AI data platform. We're targeting the end of [indiscernible] 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 1 day buyer transaction per month. The consumer grid AI 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. Agent here's first limited public launch is targeted within the near-term window with potential post loans revenue arising from Genesis and recurring access pass sales arena fees and functional platform usage fees. Third, Reorganization. Subject to definitive agreements, we're targeting a large 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'll turn the call over to Koti 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 3 months ended March 31, 2026. The full statements are in our 10-Q and the speak of reference tables in the appendix provide complete line item detail as context for the year-over-year comparisons, the Q1 2025 period, dates, the 30-day investment and the strategic transformation, and we held no digital assets in the prior year period. Crypto generated no revenue in the first quarter of 2026. A consistent with our status as a pre-revenue company in the early stage of building our web 3 and AI infrastructure platform, as Jerry described. our near-term revenue streams are tied to the launch of our RWA tokenization product, the Agente launch program, the data platform, commercialization road map and functional service fees. 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 to the execution sequence Jerry described and the framework, I will walk through Total operating expenses for $4.3 million in Q1 2026 compared to $2.7 million in Q1 2025. The increase is concentrated in general and administrative expense which grows 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, which represented a small adjustment on accrued interest on the Merizyme nodes. The larger collectibility 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 the quarter and reflects mark-to-market movements on our C10 treasury under the fair value model effective with our adoption of ASU2023-08. 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 movement to continue affecting our quarterly reported results as long as we hold the C10 treasury. Partially offsetting that loss was $303,000 of interest income, primarily accrue interest on the Maresi 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 Far day 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 their day 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 10-Q, the company entered into first and second amendment to its previously disclosed interested investment agreement on April 10, 2026, expanding the scope of interested assets to include preferred equity of Fair day and modifying certain governance and option provisions. The framework rests on 3 things: revenue ramp operating expense normalization and disciplined treasury management. Initial revenue is targeted to begin in the third quarter from Ed and tier platform 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 year-over-year decline in investor relations expense disclosed in our MD&A 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, Koti. [indiscernible] to Q1 in 1 center, the products, the contracts and the partnerships that drive our 2026 revenue streams advanced meaningfully during the quarter. Looking back across Q1 and the period since, we delivered against 4 operational anchors. We brought agents here into active development reaching an internal review milestone in early May. We initiated our data collaboration with Firth future supporting the broader physical AI category that the industry is converging around. We progressed our RDA equity organization initiatives through structural and regulatory review and continue to work towards a launch later this year. And in April, we expanded our fair future investment position to aggregate $12 million, building on the $10 million prepared in Q1 and deepened the proof of concept assets that anchors our RW infrastructure. We'll 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 EDGAR via the link posted on our Investor Relations page. -- investor inquiries may be directed to IR at aixcrypto.ai. This wraps us to 2026 AIxCrypto Holdings, Inc. 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.