AIxCrypto Holdings, Inc.

Previous wording

The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited financial statements and notes thereto as of and for the twelve months ended December 31, 2024, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on September 30, 2025. As used in this Quarterly Report, unless the context suggests otherwise, “we,” “us,” “our,” or “Qualigen” refer to Qualigen Therapeutics, Inc. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Current wording

The following discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the audited financial statements and notes thereto as of and for the twelve months ended December 31, 2025, which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 30, 2026. As used in this Quarterly Report, unless the context suggests otherwise, “we,” “us,” “our,” or “AIxC” refer to AIxCrypto Holdings, Inc. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Previous wording

On April 11, 2024, we entered into a Co-Development Agreement with Marizyme. Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Current wording

On April 11, 2024, the Company entered into a Co-Development Agreement (the “Co-Development Agreement”) with Marizyme. Under the Co-Development Agreement (as amended), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment, we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Previous wording

On July 15, 2024, the Company advanced to Marizyme $1,250,000 against which Marizyme had previously delivered its demand promissory note to the Company of like principal amount dated July 12, 2024 (the “Marizyme Note”). During the nine month periods ending September 30, 2025 and the year ended December 31, 2024, the Company advanced additional funds of $1.8 million and $2.3 million, respectively. The Marizyme Note bears interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Note at any time and from time to time, in whole or in part, without premium or penalty.

Current wording

In addition, during the year ended December 31, 2025, the Company advanced a total of $4,166,900 to Marizyme, against which Marizyme had previously delivered demand promissory notes to the Company of like principal amounts (the “Marizyme Notes”). No additional funds were advanced during the three months ended March 31, 2026. The Marizyme Notes bear interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest of the Marizyme Notes at any time and from time to time, in whole or in part, without premium or penalty, until its maturity on August 21, 2026. Throughout the fourth quarter of 2025, the Board reassessed its interest in further pursuing a transaction with Marizyme given the Faraday Investment (as described further below) and Marizyme’s continued need for funding support, and, as such, management updated its expected credit loss (“CECL”) estimate under ASC 326 as of March 31, 2026.

Previous wording

In September 2025 we consummated a Subscription Agreement (the “Subscription Agreement”) with certain investors including Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI)(the “Lead Investor” or “Faraday”) pursuant to which the investors purchased $41.0 million (the “Offering”) of our common stock and shares of a newly created Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”). Up to $6.8 million of the net proceeds from the Offering will be used to pay existing debt and fund our existing business operations, and the balance of the cash proceeds and contributed currency will be used for the establishment of our cryptocurrency treasury operations, using AlxCrypto. AIxCrypto (AIxC) is committed to building a world-leading ecosystem that integrates Artificial Intelligence (AI) and blockchain, bridging Web2 and Web3. This ecosystem unites a decentralized protocol, distributed network, AI DePIN and EAI RWA value regeneration, and a DeAI Agent product and technology platform designed to achieve optimal trading performance. Its core products include the BesTrade DeAI Agent and the AIxC ecosystem products.

Current wording

In September 2025 we consummated a Subscription Agreement (the “Subscription Agreement”) with certain investors including Faraday Future Intelligent Electric Inc. (NASDAQ: FFAI)(the “Lead Investor” or “Faraday”) pursuant to which the investors purchased $40.7 million (the “Offering”) of our Common Stock and shares of a newly created Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”). Up to $6.8 million of the net proceeds from the Offering were used to pay existing debt and fund our existing business operations, and the balance of the cash proceeds and contributed currency will be used for the establishment of our cryptocurrency treasury operations, using AlxCrypto.

Previous wording

General and administrative expenses increased from $3.2 million for the nine months ended September 30, 2024, to $5.7 million for the nine months ended September 30, 2025, an increase of $2.5 million or 78%. This is primarily due to an increase in investor relation fees of $1.2 million as we paid consultants to help raise capital, plus $2.4 million increase in consultant fees offset by a decrease in payroll expenses of $1.0 million and decrease in insurance expense of $0.2 million.

Current wording

General and administrative expenses increased from $2.5 million for the three months ended March 31, 2025 to $3.5 million for the three months ended March 31, 2026. This is primarily due to an increase in transaction service agreement fees of $0.5 million as we paid our parent company for management services and $0.7 million increase in payroll as we hired new employees and paid signing bonuses to executives, plus $0.2 million increase in accounting fees, $0.2 million increase in insurance expense, and $0.3 million in legal fees, offset by a $1.3 million decrease in investor relation expenses. The increase in general and administrative expenses is primarily a result of the deployment of the Company’s change in strategy following the Faraday investment.

Previous wording

Research and development expenses decreased from approximately $123,000 for the three months ended September 30, 2024, to approximately $105,000 for the three months ended September 30, 2025, a decrease of $18,000 million or 15%. This was primarily due to all research and development being slowed down in 2025, resulting in decreases in QN-302 clinical trail expenses of approximately $97,000 and License Fees of approximately $22,000, offset by increased billing for lab services of approximately $104,000.

Current wording

Research and development expenses decreased from approximately $33,000 for the three months ended March 31, 2025, to approximately $5,000 for the three months ended March 31, 2026. This was primarily due to all research and development being slowed down in 2025 due to lack of funding, resulting in minimal expenses incurred in 2026.

Previous wording

During the three months ended September 30, 2025 we experienced an approximately $198,000 loss on change in fair value of convertible debt, compared to no change for the three months ended September 30, 2024. We did not hold any convertible debt in 2024.

Current wording

During the three months ended March 31, 2026 we experienced an approximately $10,000 gain on change in fair value of convertible debt as a result of repayment of the outstanding debt, compared to no change for the three months ended March 31, 2025. We did not hold any convertible debt in the period ended March 31, 2025.

Previous wording

During the nine months ended September 30 2025 we experienced an approximately $160,000 loss on change in fair value of convertible debt, compared to no change for the nine months ended September 30, 2024. We did not hold any convertible debt in 2024.

Current wording

During the three months ended March 31, 2026 we experienced an approximately $1.9 million loss on digital assets, compared to no change for the three months ended March 31, 2025. We did not hold any digital assets in the three months ended March 31, 2025.

Previous wording

Our financial position is weak. As of September 30, 2025 we had approximately $38.8 million in cash and net accounts payable of approximately $1.3 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations, and have an accumulated deficit of $129.6 million at September 30, 2025. We expect to continue to incur losses subsequent to the balance sheet date of September 30, 2025. For the nine months ended September 30, 2025 and year ended December 31, 2024, we used cash of $4.8 million and $6.4 million, respectively, in operations.

Current wording

Our financial position is weak. As of March 31, 2026, we had approximately $6.2 million in cash and accounts payable of $1.5 million. We are in arrears on accounts payable to important partners. We have incurred recurring losses from operations and have an accumulated deficit of $146.1 million at March 31, 2026. We expect to continue to incur losses subsequent to the unaudited condensed consolidated balance sheet date of March 31, 2026. For the three months ended March 31, 2026 and the year ended December 31 2025, we used cash of $4.5 million and $7.0 million, respectively, in operations.

Previous wording

We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. While we are establishing cryptocurrency treasury operations, it is newly established and there are no guarantees it will generate revenue. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Quarterly Report were issued.

Current wording

We expect to continue to have net losses and negative cash flow from operations, which will challenge our liquidity. While we are establishing cryptocurrency treasury operations, it is newly established and there are no guarantees it will generate revenue. These factors raise substantial doubt regarding our ability to continue as a going concern for the one-year period following the date that the financial statements in this Annual Report were issued.

Previous wording

We have no material contractual obligations that are not fully recorded on our condensed consolidated balance sheets or fully disclosed in the notes to the financial statements.

Current wording

We have no material contractual obligations that are not fully recorded on our unaudited condensed consolidated balance sheets or fully disclosed in the notes to the financial statements.

Previous wording

We have obligations under various license and sponsored research agreements to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing for product approval with the FDA or other regulatory agencies, product approval by the FDA or other regulatory agencies, product launch or product sales) or on the sublicense of our rights to another party. We have not included these commitments on our balance sheet because the achievement and timing of these events is not determinable. Certain milestones are in advance of receipt of revenue from the sale of products and, therefore, we may require additional debt or equity capital to make such payments.

Current wording

We have obligations under various license agreements to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing for product approval with the FDA or other regulatory agencies, product approval by the FDA or other regulatory agencies, product launch or product sales) or on the sublicense of our rights to another party. We have not included these commitments on our balance sheet because the achievement and timing of these events is not determinable. Certain milestones are in advance of receipt of revenue from the sale of products and, therefore, we may require additional debt or equity capital to make such payments.

Previous wording

In January 2022, we entered into a License Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a genomic quadruplex (G4)-selective transcription inhibitor drug development program which had been developed at University College London, including lead and back-up compounds, preclinical data and a patent estate. (UCL Business Limited is the commercialization company for University College London.) We are further developing the program’s lead compound under the name QN-302. The License Agreement requires (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone payments, and sharing of a percentage of any non-royalty sublicensing consideration paid to the Company. In November 2023, we became obligated to pay $100,000 to UCL Business Limited upon the first patient dosing of QN-302, which was paid in January 2024.

Current wording

In January 2022, we entered into a License Agreement with UCL Business Limited to obtain an exclusive worldwide in-license of a genomic quadruplex (G4)-selective transcription inhibitor drug development program which had been developed at University College London, including lead and back-up compounds, preclinical data and a patent estate. (UCL Business Limited is the commercialization company for University College London.) We are further developing the program’s lead compound under the name QN-302, and this work is currently still underway. The License Agreement requires (if and when applicable) tiered royalty payments in the low to mid-single digits, clinical/regulatory/sales milestone payments, and sharing of a percentage of any non-royalty sublicensing consideration paid to the Company. In November 2023, we became obligated to pay $100,000 to UCL Business Limited upon the first patient dosing of QN-302, which was paid in January 2024.

Previous wording

On April 11, 2024, we entered into a Co-Development Agreement with Marizyme, Inc. (“Marizyme”). Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Current wording

On April 11, 2024, we entered into a Co-Development Agreement with Marizyme, Inc. (“Marizyme”). Under the Co-Development Agreement (as amended on August 6, 2024), we agreed to pay Marizyme a Funding Payment of up to $1,750,000 and an Exclusivity Fee of $200,000. The Exclusivity Fee of $200,000 and a Funding Payment of $500,000 was paid to Marizyme on April 12, 2024. The Exclusivity Fee entitled us to an exclusivity period until May 31, 2024 for purposes of proposing and outlining a broader strategic relationship with Marizyme with regard to Marizyme’s DuraGraft business. The Funding Payment is designed to provide financial support for commercialization of Marizyme’s DuraGraft™ vascular conduit solution, which is indicated for adult patients undergoing coronary artery bypass grafting surgeries and is intended for the flushing and storage of the saphenous vein grafts used in coronary artery bypass grafting surgery. This work is still currently underway. In return for the Funding Payment we will receive quarterly a 33% payment in the nature of royalties on any Net Sales (as defined with a meaning tantamount to gross profit on net sales) of DuraGraft, capped at double the amount of the Funding Payment cash provided. No such payments-in-the-nature-of-royalties would accrue until after DuraGraft has been launched in the United States and a cumulative total of $500,000 of DuraGraft Net Sales have been made in the United States.

Previous wording

During the nine months ended September 30, 2024, operating activities used $4.1 million of cash, primarily resulting from a loss from continuing operations of $5.3 million. Cash flows from operating activities for the nine months ended September 30, 2024 were positively impacted by adjustments for $0.1 million in stock based compensation, a $0.2 loss on monthly redemptions of convertible debt into common stock, accretion of discount of $0.5 million on convertible debt, a loss on issuance of convertible debt of $0.4 million, a $0.3 million loss on change in fair value of derivative liabilities, a $0.5 million decrease in prepaid expenses, and a $0.2 million increase in accrued expenses and other current liabilities. Cash flows from operating activities for the nine months ended September 30, 2024 were negatively impacted by adjustments for a $0.4 million decrease in fair value of warrant liabilities, a $0.1 million gain on voluntary conversion of convertible debt, a $48,000 increase in accrued interest on short-term notes receivable and a $0.6 million decrease in accounts payable.

Current wording

During the three months ended March 31, 2026, operating activities used $4.5 million of cash, primarily resulting from a loss from continuing operations of $6.1 million. Cash flows from operating activities for the three months ended March 31, 2026 were positively impacted by adjustments for a $0.1 million provision for credit losses on short term notes receivable, $1.9 million in losses on the change in fair market value of digital assets, $0.2 million in impairment of intangible assets, $0.3 million in payments made using digital assets, change in prepaid expenses and other assets of $0.3 million, and changes in accounts payable of approximately $0.2 million. Cash flows from operating activities for the three months ended March 31, 2026 were negatively impacted by adjustments for an approximately $70,000 change in the fair value of warrant liabilities, accrued interest on short term notes receivable of $0.2 million, change in accrued expenses and other liabilities of $0.1 million, change in related party payables of $1.2 million, and a gain on the change in fair value of convertible debt of approximately $10,000.

Previous wording

During the nine months ended September 30, 2025, operating activities used $4.8 million of cash, primarily resulting from a loss from continuing operations of $6.5 million. Cash flows from operating activities for the nine months ended September 30, 2025 were positively impacted by adjustments for $0.6 million in amortization of premium on promissory notes, $0.3 million of issuance of common stock to consultants, a $0.4 million loss on change in fair value of warrant liabilities, a $0.2 million loss on change in fair value of convertible debt, a $0.1 million in loss on issuance of convertible debt, and a decrease in prepaid expenses of $1.2 million. Cash flows from operating activities for the nine months ended September 30, 2025 were negatively impacted by adjustments for $99,000 change in provision for credit losses of short-term notes receivable, a $0.4 million increase in accrued interest on short-term notes receivable, a decrease in accrued expenses of $0.1 million and a $0.3 million decrease in accounts payable.

Current wording

During the three months ended March 31, 2025, operating activities used $1.6 million of cash, primarily resulting from a loss from continuing operations of $2.6 million. Cash flows from operating activities for the three months ended March 31, 2025 were positively impacted by adjustments for $0.2 million change in provision for credit losses of short-term notes receivable, $0.1 million in amortization of premium on notes payable, , a decrease in prepaid expenses of $0.9 million, and an increase in accrued expenses of $0.1 million. Cash flows from operating activities for the three months ended March 31, 2025 were negatively impacted by adjustments for a $39,000 gain on change in fair value of warrant liabilities, a $0.1 million increase in accrued interest on short-term notes receivable, and a $40,000 increase in accounts payable.

Previous wording

During the nine months ended September 30, 2025, net cash used in investing activities resulted from advances to Marizyme of $1.8 million.

Current wording

During the three months ended March 31, 2025, net cash used in investing activities resulted from advances to Marizyme of $0.3 million.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $44.2 million, which resulted from the issuance of short-term debt in the amount of $3.3 million, the issuance of convertible debt in the amount of $0.2 million, the issuance of preferred shares in the amount of $38.8 million, the issuance of common stock and warrants in the amount of $3.1 million, offset by repayment of convertible debt of $0.1 million and the repayment of promissory notes of $1 million.

Current wording

Net cash used in financing activities for the three months ended March 31, 2026 was $132,000, all of which resulted from the repayment of convertible debt.