Business Context and Reporting Period
Company: AIxCrypto Holdings, Inc. (AIXC)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Business Overview: The Company has pivoted from a clinical therapeutics business to a technology infrastructure company focused on Real-World Asset (RWA) tokenization and Embodied Artificial Intelligence (EAI). Following a $40.7 million financing in September 2025 led by Faraday Future Intelligent Electric Inc. (Faraday), the Company adopted a cryptocurrency treasury strategy and appointed new executive leadership. As of March 31, 2026, the Company holds significant digital assets and has advanced $10.0 million to Faraday for an equity investment recorded as a prepaid related-party asset.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(6,079,016) | $(2,646,172) |
| Loss Per Share (Basic & Diluted) | $(0.79) | $(1.82) |
| Cash and Cash Equivalents (End of Period) | $6,201,121 | $30,210 |
| Digital Assets (Fair Value) | $6,197,267 | $0 |
| Total Assets | $23,901,682 | $2,679,036 |
| Total Current Liabilities | $2,030,089 | $3,329,237 |
| Accumulated Deficit | $(146,106,466) | $(125,707,745) |
| Net Cash Used in Operating Activities | $(4,495,354) | $(1,589,396) |
Material Changes vs. Prior Period
- Net Loss Increase: Net loss increased by approximately $3.4 million compared to Q1 2025. This was driven by a $1.9 million net loss on digital assets, increased General and Administrative (G&A) expenses ($3.5M vs $2.5M), and the initiation of Sales and Marketing expenses ($638k vs $0).
- Digital Asset Volatility: The Company began holding digital assets in late 2025. In Q1 2026, it recorded a $1.9 million unrealized loss on these assets, reducing the portfolio value from $10.25 million to $6.2 million.
- Expense Structure: G&A expenses rose due to new executive compensation, transition service fees paid to Faraday ($0.5M), and increased legal/accounting fees. R&D expenses decreased significantly ($5k vs $33k) as legacy therapeutics development was slowed.
- Liquidity Position: Cash balances improved significantly from $30k in Q1 2025 to $6.2M in Q1 2026, primarily due to the September 2025 financing. However, cash decreased by $13.1M during the quarter due to operating losses and a $10M prepaid investment in Faraday.
- Debt Repayment: The Company fully repaid its $132,000 convertible debt balance during the quarter, resulting in zero outstanding convertible debt as of March 31, 2026.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern for the next 12 months. The Company has no committed sources of additional financing, incurs recurring losses, and relies on the success of its new cryptocurrency treasury strategy, which has not yet generated revenue.
- Strategic Focus: The Company is focusing on RWA tokenization and EAI infrastructure. It has discontinued the BesTrade DeAI Agent platform and C10 portfolio management tools. It is evaluating strategic alternatives for legacy therapeutics assets.
- Related Party Transactions: A significant $10.0 million advance was made to Faraday (a related party) for an equity investment. As of March 31, 2026, the shares were not issued, and the amount is recorded as a prepaid investment. Additionally, $0.5 million in transition service fees were paid to Faraday.
- Legal Proceedings: Co-CEO Jerry Wang and Chief Advisor YT Jia received Wells Notices from the SEC in June 2025 regarding alleged anti-fraud violations related to Faraday's 2021 transactions. In March 2026, the SEC Division of Enforcement stated it did not intend to recommend an enforcement action, though this does not constitute exoneration.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, citing material weaknesses including insufficient accounting personnel, lack of IT general controls, and absence of formalized documentation.
Investor Verification Checklist
- Settlement of Faraday Investment: Verify the status of the $10.0 million prepaid investment in Faraday. The filing notes the underlying securities were issued in April 2026 (subsequent event); confirm receipt and valuation of these assets.
- Digital Asset Valuation: Review the specific composition and fair value methodology of the $6.2 million digital asset portfolio, given the $1.9 million unrealized loss recorded in the quarter.
- Liquidity Runway: Assess the Company's cash burn rate ($4.5M operating cash outflow in Q1) against the $6.2M cash balance to determine the runway without additional financing.
- Related Party Fees: Scrutinize the $0.5 million transition service fees and other related party payables ($448k outstanding) to Faraday and its affiliates for arm's-length terms.
- Remediation of Controls: Monitor the Company's plan to remediate material weaknesses in internal controls, which currently cites a lack of funding and personnel.