AIxCrypto Holdings, Inc.
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
FFR$0.89+14.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001493152-26-022250
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001493152-26-036658
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 98 current paragraphs.
33 unchanged; 18 reworded; 42 added; 23 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (42)
Current report
In September 2025, the Company completed an approximately $41 million PIPE financing and subsequently rebranded from Qualigen Therapeutics to AIxCrypto Holdings, Inc. (Nasdaq: AIXC). Following a strategic review, in February 2026 the Company realigned its operations to focus on RWA tokenization, EAI infrastructure and AI Agent products. Subsequent to quarter end, in July 2026, the Company designated RoboShare, an on-demand robot sharing and matchmaking platform, as its top operating priority for the second half of 2026 and began executing a Los Angeles go-to-market plan. RoboShare is expected to be the principal near-term commercialization channel for the Company’s physical AI capabilities. The Company’s RWA tokenization initiative and its other physical AI programs continue in development, with resources sequenced behind RoboShare.
Current report
On May 21, 2026, our Board of Directors approved the structured wind-down of our legacy biotechnology business. The wind-down continued during the quarter and subsequent period, and limited residual costs may continue to be incurred. As of June 30, 2026, the biotech component does not satisfy all held-for-sale criteria under ASC 205-20, and all associated operating costs remain classified within continuing operations of our single reportable segment.
Current report
EAI and RoboShare
Current report
The Company’s robotics activities are focused on RoboShare, its commercialization platform through which EAI capabilities are deployed. RoboShare is being developed as an on-demand robot sharing and matchmaking platform intended to connect robot owners with enterprises, educational institutions and other users seeking access to robotic equipment and related services. On June 22, 2026, at Automate 2026, the Company launched RoboShare alongside its Robot Second Life Cycle framework. RoboShare is designed to support on-site robotic service packages, providing customers access to robotic capability without upfront equipment purchases. The broader market for offerings of this type is commonly described as robots-as-a-service; the Company’s initial arrangements are expected to be short-term and individual service engagements rather than recurring subscription contracts. Subsequent to quarter end, the Company elevated RoboShare to its top operating priority for the second half of 2026. The Company’s physical AI technology stack is being designed to allow robotic assets to be discovered, coordinated, monitored and transacted for across their operating life. Faraday Future Intelligent Electric Inc. (“FFAI”), the Company’s majority stockholder, is expected to serve as an initial ecosystem partner; however, no definitive agreement had been executed as of June 30, 2026.
Current report
The revenue opportunity the Company has identified from commercialize its physical AI activities is expected to be realized principally through RoboShare. These arrangements are transactional in nature, and the Company has not established recurring or contracted revenue from them. The Company’s prioritization of RoboShare reflects a change in the commercialization channel and sequencing of its physical AI initiatives, and was not a determination to reduce the scope of those initiatives. The periods in which revenue from these activities may be realized, and the amount of any such revenue, remain subject to significant uncertainty.
Current report
The Company is evaluating and developing software infrastructure to support the digitization and on-chain administration of traditional financial and real-world assets A portion of the Company’s equity investment in FFAI is intended to serve as an asset for the Company’s tokenization initiatives. This initiative remains under technical and regulatory evaluation and has not been executed. The Company expects that any near-term revenue from structuring fees, platform licensing or asset administration services would not be material, and has sequenced resources for this initiative behind RoboShare.
Current report
On May 12, 2026, the Company entered into a Note Purchase Agreement to assign all outstanding Marizyme loan and creditor claims. On May 14, 2026, the Marizyme notes, with a gross balance of approximately $5.2 million including accrued interest and a net carrying value of $475,844 after credit-loss allowances, were extinguished for $100,000 in cash. The Company recorded a $375,844 loss on settlement for the three and six months ended June 30, 2026. The note receivable and related allowance were removed from the balance sheet, eliminating the Company’s remaining Marizyme note exposure. The assignment did not modify the Company’s contingent royalty rights under the 2024 Co-Development Agreement, and no royalty receivable was recorded as of June 30, 2026.
Current report
Pursuant to amended investment documents executed on April 10 and April 14, 2026, the aggregate investment consideration for the Company’s Faraday Future securities position was increased to $12,002,192, and the transaction closed on April 15, 2026. At closing, GKA received 1,926,337 shares of FFAI Class A common stock, 11,502 shares of FFAI Series C Convertible Preferred Stock and a four-year warrant to purchase up to 1,000,000 shares of FFAI Class A common stock on the Company’s behalf. The securities held indirectly through GKA were classified as parent company equity held at cost at cost within stockholders’ equity as of June 30, 2026. The position is intended to serve as a proof-of-concept asset for the Company’s RWA tokenization strategy; partial tokenization remains subject to technical and regulatory evaluation and had not been executed as of June 30, 2026.
Current report
Sales and Marketing expenses increased from zero for the three months ended June 30, 2025, to approximately $86,000 for the three months ended June 30, 2026. This increase was primarily driven by brand-building and commercialization expenditures in support of the Company’s RWA and EAI initiatives, including resource reallocation toward RoboShare operations, as no sales or marketing activities were conducted during the three months ended June 30, 2025.
Current report
Credit loss expense – short-term note receivable decreased from $271,000 for the three months ended June 30, 2025, to zero for the three months ended June 30, 2026. This decrease was attributable to the settlement of all outstanding Marizyme notes effective May 14, 2026. The Company measures its allowance for credit losses related to Marizyme’s promissory notes under the CECL model based on the expected collectability of outstanding debt balances. Following the full settlement of the Marizyme notes in May 2026, the Company held no remaining exposure to this debt asset during the current quarter, resulting in no credit loss expense recognized for the three months ended June 30, 2026.
Current report
The Company recorded no gain or loss on change in fair value of convertible debt for the three months ended June 30, 2026. All outstanding convertible debt instruments were fully settled and extinguished in the prior fiscal quarter.
Current report
Loss on settlement of short-term note receivable
Current report
The Company recorded a $375,844 loss on settlement of short-term note receivable in the three months ended June 30, 2026. In May 2026, all Marizyme promissory notes were fully settled for $100,000 cash. After CECL credit allowances, the net carrying amount of the notes totaled $475,844. The loss represents the gap between the asset’s net carrying value and settlement proceeds. This was a one-time loss arising from the complete divestment of the Marizyme debt position.
Current report
Interest expense decreased from $0.1 million for the three months ended June 30, 2025 to zero for the three months ended June 30, 2026. This change was driven by the full settlement of all convertible debt obligations in the prior quarter.
Current report
Interest income decreased from $142.5 thousand for the three months ended June 30, 2025 to $127.0 thousand for the three months ended June 30, 2026. The decrease was primarily attributable to the full settlement of the Marizyme Notes in May 2026.
Current report
Loss on issuance of convertible debt
Current report
Loss on issuance of convertible debt decreased from $0.1 million for the three months ended June 30, 2025 to zero for the three months ended June 30, 2026. The loss was attributable to the issuance of the 2025 Convertible Note during the three months ended June 30, 2025. No new convertible debt instruments were issued during the three months ended June 30, 2026, resulting in no loss on issuance of convertible debt for the current period.
Current report
During the three months ended June 30, 2026 the Company experienced an approximately $1.0 million loss on digital assets, compared to no change for the three months ended June 30, 2025. The Company did not purchase or sell digital assets during the three months ended June 30, 2026; the change in the digital asset treasury during the quarter was attributable to fair value movements. The Company did not hold any digital assets in the three months ended June 30,2025.
Current report
Comparison of the six months ended June 30, 2026 and 2025:
Current report
Expenses
Current report
General and Administrative Expenses
Current report
General and administrative expenses increased from $3.9 million for the six months ended June 30, 2025 to $6.4 million for the six months ended June 30, 2026. This was primarily due to a $1.2 million increase in gross wages, a $712,000 increase in seminar and marketing fees, and a $553,000 increase in master service fees. The increase in general and administrative expenses was primarily a result of the deployment of the Company’s change in strategy following the Faraday investment.
Current report
Sales and Marketing Costs
Current report
Research and Development Costs
Current report
Research and development expenses decreased from approximately $51,000 for the six months ended June 30, 2025, to approximately $10,000 for the six months ended June 30, 2026. Legacy biotechnology research and development activities were already scaled back in 2025 due to insufficient funding. The Board-approved wind-down of such development work in fiscal 2026 contributed to minimal residual R&D expenses for the six months ended June 30, 2026.
Current report
Credit loss expense – short-term note receivable decreased from $468,000 for the six months ended June 30, 2025, to approximately $143,000 for the six months ended June 30, 2026. This decrease is attributable to the settlement of all outstanding Marizyme notes effective May 14, 2026. The Company measures its allowance for credit losses related to Marizyme’s promissory notes under the CECL model based on the expected collectability of outstanding debt balances. The Company recorded incremental credit loss expense in the early portion of the current six-month period prior to the May 14, 2026 settlement. Once the Marizyme notes were fully settled mid-period, no additional credit loss accruals were required for the remainder of the six months ended June 30, 2026, lowering total credit loss expense for the six months ended June 30, 2026.
Current report
Other Expense (Income), Net
Current report
Loss on settlement of short-term note receivable
Current report
The Company recorded a $375,844 loss on settlement of short-term note receivable in the six months ended June 30, 2026. In May 2026, all Marizyme promissory notes were fully settled for $100,000 cash. After CECL credit allowances, the net carrying amount of the notes totaled $475,844. The loss represents the gap between the asset’s net carrying value and settlement proceeds. This is a one-time loss arising from the complete divestment of the Marizyme debt position.
Current report
Interest Expense
Current report
Interest expense decreased from $0.2 million for the six months ended June 30, 2025 to zero for the six months ended June 30, 2026. This change was driven by the full settlement of all convertible debt obligations in the prior quarter.
Current report
Interest Income
Current report
Loss on issuance of convertible debt
Current report
Loss on issuance of convertible debt decreased from $0.1 million for the six months ended June 30, 2025 to zero for the six months ended June 30, 2026. The loss was attributable to the issuance of the 2025 Convertible Note during the six months ended June 30, 2025. No new convertible debt instruments were issued during the six months ended June 30, 2026, resulting in no loss on issuance of convertible debt for the current period.
Current report
Net Loss on Digital Assets
Current report
The Company’s financial position remains weak. It has incurred recurring operating losses, with an accumulated deficit of $150.3 million as of June 30, 2026, and expects to continue incurring losses subsequent to the balance sheet date. Net cash used in operating activities was $7.9 million for the six months ended June 30, 2026 and $7.0 million for the year ended December 31, 2025.
Current report
As of June 30, 2026, the Company had approximately $0.6 million in cash and cash equivalents. In addition to cash and cash equivalents, the Company held exchange-traded digital assets with an aggregate carrying value of approximately $5.2 million. These exchange-traded digital assets may be monetized over time to support operations, but are subject to significant market price volatility and are not classified as cash equivalents.
Current report
Total current liabilities decreased to approximately $1.7 million as of June 30, 2026 from approximately $3.3 million as of December 31, 2025. The balance consists of approximately $1.3 million in accounts payable — primarily $700,000 owed to the University of Louisville Research Foundation, $140,000 to Faraday Futures, and $100,000 to FF Global Partners LLC, with the remainder relating to professional services and other vendors — plus approximately $0.2 million of related-party payables, approximately $129,000 of accrued expenses and other current liabilities, and approximately $67,000 in warrant liabilities. Total operating expenses declined to approximately $3.0 million for the three months ended June 30, 2026 from approximately $4.3 million in the first quarter of 2026, as management continues to execute cost normalization measures to preserve liquidity. The Company had no outstanding indebtness for borrowed money at June 30, 2026.
Current report
We expect to continue to have net losses and negative cash flow from operations, which will challenge our near-term liquidity. Our digital-asset treasury strategy and RoboShare operations are newly established, and there are no guarantees that either will generate revenue or provide sufficient liquidity. Notwithstanding the June 22, 2026 public launch of RoboShare, the Company has not yet generated operating revenue from the platform. Our nearest commercial milestone is the first RoboShare rental delivery, targeted for August 2026; the timing of delivery and associated revenue recognition remain subject to execution risk.
Current report
During the six months ended June 30, 2026, the Company fully repaid the remaining $132,000 principal balance of its convertible debt. There were no new financing activities during the three months ended June 30, 2026, and the Company issued no new common shares during the quarter.
Showing the first 40 of 42 passages. Open the source sections for the rest.
Removed paragraphs (23)
Previous report
In September 2025, the Company completed a $41 million PIPE financing and rebranded from Qualigen Therapeutics to AIxCrypto Holdings, Inc. (Nasdaq: AIXC). Following a strategic review, in February 2026 the Company realigned its operations to focus exclusively on RWA tokenization and EAI infrastructure. As part of this realignment, the Company discontinued development of the BesTrade DeAI Agent platform and the C10 digital asset portfolio management tools, which were early-stage initiatives that did not align with our enterprise and institutional infrastructure objectives. We did not incur material additional impairment charges related to these initiatives beyond amounts previously disclosed.
Previous report
The Company continues to evaluate strategic alternatives for its legacy therapeutics assets, including continued development, licensing, or disposition.
Previous report
AIxC is developing software infrastructure to support the digitization and on chain administration of traditional financial and real world assets, with compliance logic and ownership records encoded directly into programmable smart contracts. As an initial reference implementation, pursuant to an Entrusted Investment Agreement, in February 2026 the Company advanced $10.0 million in connection a contractually committed equity investment in Faraday Future Intelligent Electric Inc. (Nasdaq: FFAI), which is recorded as a prepaid investment to a related party as of March 31, 2026, as the underlying shares had not been issued or settled as of that date. Tokenization of this investment has not yet occurred and remains subject to further technical development and regulatory considerations. The Company expects to pursue revenue through structuring fees, platform licensing, and asset administration services.
Previous report
Embodied AI Infrastructure
Previous report
The Company is developing the AIxC Hub, a decentralized application ecosystem intended to support the registration, validation, and economic coordination of AI enabled physical systems, with transaction settlement and incentive mechanisms encoded on chain. AIxC is engaged in an early stage collaboration with FFAI Robotics Inc., a subsidiary of Faraday Future Intelligent Electric Inc., as a potential initial deployment environment. No definitive commercial agreements have been executed, and there can be no assurance that any such arrangements will be completed.
Previous report
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 report
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 report
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 report
Credit loss expense – short-term note receivable decreased from $0.2 million for the three months ended March 31, 2025, to $0.1 million for the three months ended March 31, 2026. The methodology used to Marizyme’s credit allowance is based on the collectability of the receivable, and during the year ended December 31, 2025 a significant decrease in collectability assessed caused us to record significant increases to the credit allowance, so for the three months ended March 31, 2026, only a small adjustment was required due to interest being recorded on the outstanding balance.
Previous report
There was $1.0 million in interest expense during the three months ended March 31, 2025 compared to no interest expense recorded during the three months ended March 31, 2026. The promissory notes we held during the three months ended March 31, 2025 were repaid prior to the three months ended March 31, 2026.
Previous report
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 report
Our current liabilities at March 31, 2026 include approximately $1.5 million of accounts payable, $0.5 million of related party payables, approximately $33,000 of accrued expenses and other current liabilities, and approximately $72,000 in warrant liabilities.
Previous report
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 report
During the three months ended March 31, 2026, the Company fully repaid the remaining $132,000 principal balance of the 2025 Convertible Note, resulting in no outstanding balance as of March 31, 2026, and paid $10.0 million to Faraday pursuant to an entrusted investment agreement under which Gold King Arthur Holding Limited was engaged to acquire equity securities of Faraday. There were no financing activities during the three months ended March 31, 2026.
Previous report
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through third-party funding, commercialization, marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
Previous report
License and Sponsored Research Agreements
Previous report
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 report
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 report
Marizyme
Previous report
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 report
Other Service Agreements
Previous report
We enter into contracts in the normal course of business, including with clinical sites, contract research organizations, and other professional service providers for the conduct of clinical trials, contract manufacturers for the production of our product candidates, contract research service providers for preclinical research studies, professional consultants for expert advice and vendors for the sourcing of clinical and laboratory supplies and materials. These contracts generally provide for termination on notice, and therefore are cancelable contracts.
Previous report
Net cash provided by financing activities for the three months ended March 31, 2025 was $0.8 million, all of which resulted from the issuance of short term debt.
Reworded paragraphs (18)
Previous wording
By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics, and healthcare, regulatory and scientific developments and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent in some future periods with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in other future periods. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of this Quarterly Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Quarterly Report, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Current wording
By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent in some future periods with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in other future periods. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of this Quarterly Report, and we disclaim any intent or obligation to update these forward-looking statements beyond the date of this Quarterly Report, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Previous wording
We are a technology infrastructure company focused on developing programmable systems at the intersection of real-world asset (“RWA”) tokenization and Embodied Artificial Intelligence (“EAI”). Our objective is to provide regulated, auditable software infrastructure that enables traditional assets and AI-enabled physical systems to interact with blockchain-based networks.
Current wording
We are a technology company focused on the commercialization of embodied artificial intelligence (“EAI”), also referred to as physical AI - robots and AI-enabled systems that perceive and act in the physical world, together with software infrastructure for the tokenization of real-world assets (“RWA”). Our objective is to provide compliance-oriented software across the infrastructure, protocol and application layers of our platform.
Previous wording
This discussion and analysis is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements. While the Company’s significant accounting policies and estimates are further outlined in Note 1 - Business and Summary of Significant Accounting Policies and Estimates of the unaudited condensed consolidated financial statements, Management believes that none of these give rise to critical accounting policies or estimates in these unaudited condensed consolidated financial statements.
Current wording
This discussion and analysis is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the unaudited condensed consolidated financial statements. While the Company’s significant accounting policies and estimates are further outlined in Note 1 - Business and Summary of Significant Accounting Policies and Estimates of the unaudited condensed consolidated financial statements, management considers the accounting for digital assets at fair value, the valuation of warrant liabilities, and the going concern assessment to be critical accounting estimates. These areas involve significant judgments and assumptions about inherently uncertain matters, and changes in these estimates could materially impact the Company’s condensed consolidated financial position and results of operations.
Previous 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.
Current wording
General and administrative expenses increased from $1.4 million for the three months ended June 30, 2025 to $2.9 million for the three months ended June 30, 2026. This was primarily due to a $529,000 increase in gross wages resulting from increased headcount, a $395,000 increase in director resignation fees, a $393,000 increase in consulting fees, and a $134,000 increase in legal fees. The increase in general and administrative expenses was 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 $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.
Current wording
Research and development expenses decreased from approximately $18,000 for the three months ended June 30, 2025, to approximately $5,000 for the three months ended June 30, 2026. This decrease was primarily driven by the Board-approved wind-down of legacy biotechnology research and development activities during fiscal 2026, which left only minimal residual expenses recorded for the three months ended June 30, 2026.
Previous wording
Sales and Marketing expenses increased from zero for the three months ended March 31, 2025, to approximately $638,000 for the three months ended March 31, 2026. In 2026 we began marketing campaigns related to increasing brand awareness for its real-world asset tokenization and embodied AI Infrastructure activities. while in 2025 we were not marketing any products.
Current wording
Sales and Marketing expenses increased from zero for the six months ended June 30, 2025, to approximately $724,000 for the six months ended June 30, 2026. In 2026 the Company began marketing campaigns related to increasing brand awareness for its real-world asset tokenization and embodied AI Infrastructure activities, including commercialization support for RoboShare, whereas no sales or marketing activities were conducted during the six months ended June 30, 2025.
Previous wording
During the three months ended March 31, 2026 we experienced a $0.1 million gain in other income due to the change in fair value of the warrant liabilities described above, compared to a gain of approximately $39,000 during the three months ended March 31, 2025. This was primarily due to changes in our stock price and expiration of warrants during the prior period.
Current wording
During the six months ended June 30, 2026 the Company experienced a $0.1 million gain in other income due to the change in fair value of the warrant liabilities described above. The estimated fair value of warrant liabilities decreased to approximately $67,000 as of June 30, 2026 from $142,000 as of December 31, 2025 primarily due to changes in our stock price and expiration of warrants during the prior period.
Previous 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.
Current wording
During the six months ended June 30, 2026 the Company experienced an approximately $10,000 gain on change in fair value of convertible debt as a result of repayment of the outstanding debt, compared an approximately $38,000 gain for the six months ended June 30, 2025.
Previous wording
There was approximately $183,000 in impairment of intangible assets during the three months ended March 31, 2026 compared to no impairment recorded during the three months ended March 31, 2025. During 2026 we wrote off some software development costs that had been capitalized, which did not occur in 2025.
Current wording
There was approximately $183,000 in impairment of intangible assets during the six months ended June 30, 2026 compared to no impairment recorded during the six months ended June 30, 2025. During 2026 the Company wrote off some software development costs that had been capitalized, which did not occur in 2025.
Previous wording
There was $0.3 million in interest income during the three months ended March 31, 2026 compared to $0.1 million in interest income during the three months ended March 31, 2025. The increase was due to interest accrued on the Marizyme Notes, which increased significantly in the year ended December 31, 2025, as well as interest recorded on our money market accounts.
Current wording
There was $0.4 million in interest income during the six months ended June 30, 2026 compared to $0.3 million in interest income during the six months ended June 30, 2025. The increase was due to interest accrued on the Marizyme Notes, which increased significantly in the year ended December 31, 2025, as well as interest recorded on our money market accounts.
Previous 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.
Current wording
During the six months ended June 30, 2026 the Company experienced an approximately $2.9 million loss on digital assets, compared to no change for the six months ended June 30, 2025. The Company did not hold any digital assets in the six months ended June 30, 2025.
Previous wording
The accompanying financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments that would be necessary should we be unable to continue as a going concern, and therefore, be required to liquidate its assets and discharge its liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying financial statements.
Current wording
The accompanying financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments that would be necessary should we be unable to continue as a going concern, and therefore be required to liquidate our assets and discharge our liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying financial statements.
Previous 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.
Current wording
During the six months ended June 30, 2026, operating activities used approximately $7.9 million of cash, primarily resulting from a net loss of $10.3 million. Cash flows from operating activities were positively impacted by adjustments including $2.9 million net loss on digital assets, an approximately $112,000 decrease in prepaid expenses and other assets, $0.4 million loss on settlement of short-term note receivable, $0.3 million payments made using digital assets, $0.2 million impairment of intangible assets, a $0.1 million provision for credit losses on short-term notes receivable, and an approximately $27,000 increase in accounts payable. Cash flows from operating activities were negatively impacted by adjustments including a $1.4 million decrease in related party payables, accrued interest on short-term notes receivable of $0.3 million, an approximately $75,000 favorable change in the fair value of warrant liabilities, a gain on the change in fair value of convertible debt of approximately $10,000, and a negligible $7,000 decrease in accrued expenses and other liabilities.
Previous 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.
Current wording
During the six months ended June 30, 2025, operating activities used approximately $2.7 million of cash, primarily resulting from a net loss of $4.3 million. Cash flows from operating activities were positively impacted by adjustments including a $1.2 million decrease in prepaid expenses and other assets, a $0.5 million provision for credit losses of short-term notes receivable, a $0.2 million increase in accrued expenses and other current liabilities, $0.2 million amortization of penalty on promissory note, $0.1 million loss on issuance of convertible debt, $20,000 legal expenses related to convertible debt issuance, and immaterial stock-based compensation. Cash flows from operating activities were negatively impacted by adjustments including accrued interest on short-term notes receivable of $0.3 million, a $0.2 million decrease in accounts payable, and a $55,000 gain on change in fair value of warrant liabilities.
Previous wording
During the three months ended March 31, 2026, net cash used investing activities was approximately $8.5 million resulting from the purchase of intangible assets of $0.3 million, prepayments for the purchase of managed assets of $10.0 million, and purchases of digital assets of $0.3 million, offset by $2.1 million in proceeds from the sale of digital assets.
Current wording
During the six months ended June 30, 2026, net cash provided by investing activities was approximately $1.3 million. The inflows were primarily driven by $2.1 million proceeds from sales of digital assets and $0.1 million cash received from settlement of short-term note receivable. These cash inflows were partially offset by $0.6 million spent on the purchase of intangible assets and $0.3 million used to purchase digital assets.
Previous wording
During the three months ended March 31, 2025, net cash used in investing activities resulted from advances to Marizyme of $0.3 million.
Current wording
During the six months ended June 30, 2025, net cash used in investing activities totaled $1.5 million, arising entirely from the issuance of short-term note receivable.
Previous wording
Net Cash Provided by Financing Activities
Current wording
Net Cash (Used in)/Provided by Financing Activities
Previous 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.
Current wording
Net cash used in financing activities for the six months ended June 30, 2026 was approximately $12.1 million, which was primarily driven by $12.0 million parent company equity held at cost and $132,000 the repayment of convertible debt.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
During the three months ended June 30, 2026 the Company experienced a $5.0 thousand gain in other income due to the change in fair value of the warrant liabilities described above. The estimated fair value of warrant liabilities decreased to approximately $67,000 as of June 30, 2026 from approximately $72,000 as of March 31, 2026 primarily due to changes in our stock price and expiration of warrants during the prior period.
Current report — wording carried from elsewhere
Credit Loss Expense – Short-Term Note Receivable
Current report — wording carried from elsewhere
Gain on Change in Fair Value of Warrant Liabilities
Current report — wording carried from elsewhere
Gain on Change in Fair Value of Convertible Debt
Current report — wording carried from elsewhere
Net Cash Provided by/(Used in) Investing Activities
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net Cash Provided By Investing Activities