AIxCrypto Holdings, Inc.

Greetings. Welcome to AIX Crypto Holdings, Inc. Second Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Andrew Grossman, Head of Legal for AIXC. Thank you. You may begin.

Good afternoon. My name is Andrew Grossman, and I'd like to welcome you to the AIX Crypto Holdings second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. As a reminder, a replay of this call will be available on the company's investor relations website. On today's call are Jerry Wang, the company's CEO, and Jay Sheng, the company's president and CFO. Mr. Wang will cover the company's strategy, business operations, and capital matters, and Mr. Shang will cover the financial results and outlook. Before we begin, please note that today's discussion contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1985. These statements include, among other things, statements regarding the company's strategy, product plans, and timelines, targeted milestones, expected expenses, liquidity, and capital resources, and anticipated business developments. Forward-looking statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including the risk factors described in the company's annual report on Form 10-K and its quarterly reports on Form 10-Q filed with the SEC. The company's financial statements have been prepared on a going concern basis, and the related disclosures in the Form 10-Q describe conditions that raise substantial doubt about the company's ability to continue as a going concern. The company undertakes no obligation to update forward-looking statements except as required by law. All figures discussed today are unaudited. I would now like to turn the call over to Jerry Wang, AIXC's CEO.

Thank you, Andrew, and thank you to everyone joining us. The second quarter and the weeks that followed marked an important transition for AIXC from strategic planning toward focused execution. We designated Roboshare as the company's top priority for the second half of 2026, and preparations for its Los Angeles launch are now underway. Our focus is on transitioning the strategy introduced during the quarter into tangible commercial progress. We have established a clear go-to-market plan, defined measurable operating priorities, and align our resources around the initiatives we believe offer the strongest path towards commercialization. In parallel, evaluating strategic opportunities that may strengthen the business remains a standing part of our long-term planning. I will cover our strategy and business together, followed by capital, and Jay will close with the financials. Q2, 2026 Operational Highlights First, RoboShare Marketplace Launch and Los Angeles Pilot Our core thesis is that the binding constraint in the robotic economy is the user layer, not the hardware. Operation, transport, and service still depend on scarce specialists, which keeps access costly and limits adoption. RoboShare is a vehicle for addressing that constraint, and Uber plus Toro for robots, designated to connect robot owners with enterprises, educational institutions, and other users seeking flexible access to robotic equipment and services. at Automate 2026, we launched RoboShare as an on-demand robot sharing and matchmaking marketplace, supporting both whole machine and service-based rental, and made the platform available at RoboShare.com. We also introduced the City Partner Program for local network operators. Preparations for the Los Angeles pilot are underway across local sales, customer service, dispatch, operating capabilities, warehouse and delivery logistics, operating training, and standardized operating procedures. We are also onboarding robots from third-party owners and the existing installed bays for listing through the marketplace. Initial marketplace-facilitated rental activity is currently targeted to begin in August 2026, subject to operational readiness and execution, and we anticipate initial revenue opportunities in beginning of the third quarter, subject to applicable revenue recognition requirements. Los Angeles will serve as the initial market for evaluating the model. During approximately the first 90 days, we intend to monitor cumulative rental days, repeat consumer activity, per-order economics, and overall operational readiness. Decisions regarding expansion in traditional markets, including Silicon Valley and New York, and further development of the City Partner Program will depend on pilot performance, partner readiness, and local market conditions.

2.

Robot Second Lifecycle At AUTOMATE 2026, we also introduce the Robot Second Lifecycle, the concept that a robot can continue creating value after its initial sale through utilization value, extended user value, and network value. This model is intended to be as a light. Previously sold robots and robots supplied by third-party owners are being onboarded as rental supply, allowing the marketplace to expand without requiring the company to invest additional resources. Rental activity can generate machine identity, usage records, service history, and multi-party transaction data, creating a foundation for the supporting digital infrastructure and future residual value standards. Alongside Roboshare, we are developing the inspection, valuation, and recirculation standards required for future robotic resale market. Over time, marketplace activity is intended to support residual value assessments based on data, including demonstrated utilization, earning potential, and service history, in addition to age and depreciation. We plan to launch a pre-owned robot business in the future to provide more predictable resale information for owners and better purchase information for buyers. 3. AI Agent and Ecosystem Development During the quarter, we continued to advance our broader AI agent strategy. In April, we began initial internal enterprise testing of certain AI agent capabilities, evaluating workflow integration, identifying optimization opportunities, and refining vertical use cases within our own operating environment. AIXC is also developing the marketplace and supporting digital infrastructure intended to connect robot owners, operators, and customers while capturing usage and transaction data generated through the platform. We continue to advance selected proof-of-concept initiatives through strategic partnerships. including our collaboration with Faraday Future as a lead ecosystem partner. These long-term initiatives remain under development, while our immediate commercial focus remains Roboshare and ground-based robotics. Second Half 2026 Execution Priorities For the second half of 2026, Roboshare remains the company's Thank you for your attention. and developed selectively with resources prioritized toward Roboshare. Additional milestones and timing will be communicated as appropriate. Before I concluded this overview, let me also update you on two of the initiatives we described in May. Our EAI platform and RWA tokenization work continues, but both are sequenced behind RoboShare and are moving on longer timelines. We're not attaching new days today, and the timelines we indicated in May should no longer be relied upon. This change reflects our decision to concentrate the company's resources and operating efforts. We launched RoboShare at Automate in June, and in July, we designated it as the company's top operating priority for the second half of 2026. We believe it represents our nearest past revenue and that the operating record it produced, including use data, machine identity, and transaction history, will provide the foundation for the rest of our infrastructure work. Everything I have just described is an operating plan, and sustaining an operating plan is a capital question. Before Jay reviews the financial results, let me address the capital dimension, how we engage the market this quarter, our commitment on communication, and our capital discipline. First, strategic opportunities. We continue to evaluate strategic opportunities that may complement or expand beyond our existing business and support the company's long-term growth across AI, robotics, and real-world connectivity. We will provide further information regarding any material developments. Second, investor relations and capital discipline. During the quarter, we continued engaging with investors and industry stakeholders as the company advanced its strategy in AI, robotics, and digital infrastructure. This included activities surrounding AutoMix 2026 and the launch of RoboShare, which marked an important step in moving our strategy toward commercial execution. Consistent and timely communication with shareholders remains an important part of our operating plan. We intend to continue providing updates tied to material milestones and verified operating progress while ensuring that our public statements remain accurate. During the second quarter, The company issued no new shares, and common shares outstanding at June 30th were unchanged from March 31st. With that, I will turn the call over to Jay, who will review the second quarter financial results and outlook in greater detail.

Thank you, Jerry. And if that's new, everyone, I'm pleased to join you for my first earnings call with XSEED. and appreciate the opportunity to speak directly with our shareholders. The financial results for the second quarter mirror the operating narrative and can be summarized in three points. Skewed advancements in robotics, decline of cost base, and the share count was unchanged. Together, those three points provided the time and the credibility to execute the delivery calendar Jerry outlined, and I will be equally direct about the constraint we are managing against, which is the liquidity. And last noted, comparisons are to the second quarter of 2025, and all figures are unaudited. Total operating expenses for the second quarter were $2.96 million, compared to $1.2 in the prior year quarter, and more importantly for the communist trajectory, down subsequently from $4.33 million in the first quarter. General and administrative expenses were $2.87 million, which included a non-recurring director resignation fee of $394,000 and $99,000 of fees and their the Smart Service Agreement with Friday Future, our majority stockholder. Sales and marketing expenses were $86,000, down from $638,000 in the first quarter. The first quarter carried the front-loaded brand launch investment, and second quarter expenditure reflects the deliberate reallocation of resources to Roboshare operations. credit loss expenses was zero compared to $271,000 in the prior year quarter. Total other expenses, net, was $1.23 million. The largest component was an unrealized loss on digital assets of $984,000, which compares to a $1.95 million net loss in the first quarter. Changes in the unrealized net loss and gain in the digital assets are due to crypto price fluctuations. Net loss for the quarter was $4.19 million, compared to $1.69 million in the prior year quarter, and an improvement from the first quarter of $6.08 million. Net loss per share, basic and diluted, was minus 0.21 for the quarter and minus 0.73 for the six months. Our weighted average shares are standing off 20.28 million and 14.03 million, respectively. The loss reflects continued advancements in platform commercialization, software development, Professional Services, Governance Transition Activities, and Strategic Growth Initiatives. For the six months, total operating expense was $7.29 million and net loss was $10.27 million. The entire second quarter change in our digital assets treasury were a result of fair value re-measurement. We neither purchased now sold digital assets during the quarter. All dispositions this year occurred in the first quarter. Holdings at June 30th were a fair value of $5.21 million against a cost base of $10.43 million. Turning to the balance sheet, we have $12 million of the parent economy equity held in stockholders' equity. This balance reflects the counting treatment of the Communist Friday Future Related Secretariat's position following the completion of amended GKA-FFAI investment transition, which converted approximately $12 million of prepaid investments into parent Communist equity hold. This transition is purely a balance sheet reclassification and does not alert the existence or substance of the company's underlying position. For the balance sheet at June 30, we reported cash and cash equivalents of $577,000 and digital assets with a fair value of $5.2 million, bringing the combined carrying value of cash and digital assets to approximately $5.8 million. Total assets were 7.4 million and included 685,000 of capitalized software development in progress. During the second quarter, we capitalized approximately 279,000 of development costs related to Roboshare, AI applications, and broader ecosystem initiatives. Total current liabilities were 1.7 million, down significantly from 3.3 million at year-end. A major driver of that improvement was the reduction in related party payables, which declined from 1.65 million at December 31, 2025 to approximately 237,000 at June 30. Shares outstanding at June 30 were 20.23 million shares and changed from March 31. There were no conversions, warrant, exercise, or share issuance of any cans during the second quarter. Turning to the cash flow, operating activities used 7.9 million during the first six months of the year. compared with $4.5 million used in the first quarter, as previously reported in our first quarter form 10Q. Investing activities primarily reflect our $12 million investments in Friday future, including $10 million funded in first quarter and an additional $2 million funded in the second quarter. Investing activities also included $553,000 of capitalized software development costs. For the first half of the year, the only financing activity was the final repayment of $132,000 of convertible debt in the first quarter. As of today, August 7, we had no outstanding debt. Turning to liquidity, We ended the quarter with cash and cash equivalents of $577,000. As discussed more fully in our Form 10Q, we continue to manage our liquidity carefully and evaluate available capital resources to support ongoing operations and commercialization. Our priorities remain expense discipline, focused capital deployment, and the advancement of our near-term commercial initiatives. Let me provide you the complete picture of our resources and our plan. First, cash and digital assets with an aggregating carrying value of approximately $5.8 million. The digital assets treasury is held in exchange-traded assets. Although its value fluctuates, Second, total operating expense that declined to $2.96 million from $4.33 million in the first quarter, with further normalization in progress, and total current liabilities that declined to $1.72 million from $3.32 million at year-end. And third, our nearest stated commercial milestones, a first robo-share delivery target within August. Our capital priorities are unchanged. Commercialization of robo-share, maintain expense discipline, management remains focused on advancing commercialization efforts, expand recurring revenue streams, and strengthen long-term shareholder value. while maintaining disciplined liquidity and capital allocation. Those are the results. I will now turn to the framework for the remainder of the year, our objectives, and how expenditures is managed against them. Our objective over the next two quarters is to convert the First Club Foundation into initial product delivery and revenue, Objective number one, RoboShare commercialization. We strive towards the commercialization of RoboShare through the robot sharing marketplace service and robot deployment and operation services. Objective number two, robot service revenue. As RoboShare grows its base of customers, the company aims to develop the platform revenue by matching customers with robot merchandise, driving repeat service engagements, and enabling other usage-based transactions across the marketplace. Intended to build a long-term customer relationship, the financial framework we manage against has three components, revenue ramp, operating expense normalization, and disciplined treasury management. Recurring revenue from the robo-share and development of software and infrastructure monetization represents the largest forecasted revenue contributors for financial year 2026. With the forecast assuming initial revenue generation in August and continued month-over-month growth of sales and platform activity scale, we also anticipate Initial revenue generation begins in the third quarter through agent year products. We have also strengthened internal control to improve financial discipline and support our financial year 2026 budget projects. Consistent with our practice to date, we are not providing specific full-year revenue, net loss, or operating plan guidance figures. Our 2026 execution prioritized remain unchanged. With the near-term focus on initial revenue generation, the company expects its strategic relation with Friday Future to support Axis' robotic strategy through potential collaboration in the robot research and development, commercialization, and accept robotic assets that may support RoboShare and the second lifecycle module. The quarter's balance sheet initiative leaves us with approximately 7.4 million of the total assets, including approximately 5.2 million of the digital assets. Future operating results are expected to be increasingly influenced by global share deployment, platform commercialization, ecosystem participation, and utilization-based revenue module, and the robotics ecosystem, mobile share and its supporting infrastructure, adding utilization value, extended use value, and network value revenue, potentially across the robot operating life. With that, I will hand the call back to Jerry.

Thank you, Jay. Let me close with our near-term execution priorities. We are preparing to initiate Marketplace facilitated robot share activity in Los Angeles, currently targeted to begin in August. During approximately the first 90 days of the Los Angeles pilot, we intend to monitor key indicators including cumulative usage days, repeat customer activity, per-order economics, and overall operational readiness. The results will inform decisions regarding potential expansion into additional markets and the further development of the City Partner Program. We will also continue to advance Agenteer with additional milestones and timing to be communicated as they are finalized. Across these initiatives, our principal focus remains Deception Execution, Ground Basis Robotic and transparent communication regarding material operating progress. To our shareholders, we recognize that the second quarter required patience. We appreciate your continued support and maintain committed to building the operating foundation required for sustainable growth and long-term shareholder value. Thank you for joining us today. We will now proceed to to the selected questions and responses.

Thank you. We will now begin the question and answer session, addressing several questions and topics that we hear most often. Question one, what is AXC's main operating priority for the rest of 2026?

Roboshare is our primary operating and commercialization priority for the second half of 2026. We are preparing to initiate marketplace facilitated rental activity in Los Angeles, currently targeted for August, subject to operational readiness and execution. Whether and when that activity results in recognized revenue will depend on execution and applicable revenue recognition requirements. We will provide an update. as material operating milestones are achieved.

Question 2. Why did operating expenses decline in the second quarter?

Total operating expenses declined from approximately 4.3 million in Q1 to approximately 3 million in Q2. The decrease was driven by reduction of $563,000 in marketing expenses, $135,000 in legal expenses, and $328,000 in accounting expenses. Prepaid marketing amortization made up the bulk of marketing expenses in Q1, whereas Q2 had only a fraction of the prepaid marketing left to amortize. The significant reduction in accounting and legal expenses is a direct result of the company's strengthened in-house legal and accounting department and the dramatic decrease on its reliance of external legal counsel, SEC reporting, general accounting, and technical accounting.

Question 3. How is the company managing its liquidity positions?

The liquidity remains constrained. As of June 30, the company had approximately $577,000 of cash and $5.2 million of digital assets. The digital assets are volatile and are not cash equivalent. Based on the current financial statement, Operating cash use was approximately $3.4 million in Q2, compared with approximately $4.5 million in Q1, and operating expenses are also declined substantially. Our near-term plan is to prioritize spending on global share commercialization and core operating needs. continuing managed discretionary costs, and evaluate additional sources of capital as needed. The pace of the pilot, hiring, and any broader expansion will be gated by available liquidity, operational readiness, and pilot performance.

Thank you. That will conclude today's conference. You may disconnect at this time. Thank you for your participation.