NOTE 6 —SHORT-TERM NOTES RECEIVABLE

Short term notes receivable - consisted of the following at June 30, 2026 and December 31, 2025:

SCHEDULE OF SHORT-TERM NOTE RECEIVABLE 

As of December 31, 2025, the Company had advanced an aggregate of $4,166,900 to Marizyme, Inc., against which Marizyme delivered demand promissory notes to the Company of like principal amounts (the “Marizyme Notes”). The Marizyme Notes bear at interest the rate of eighteen percent (18%) per annum. Marizyme may pre-pay all or any part of the outstanding principal or interest at any time and from time to time, in whole or in part, without premium or penalty. The total amortized cost consisting of principal and accrued interest was $4,898,060 as of December 31, 2025. For the six months ended June 30, 2026, interest income of $275,358 was recognized within other income in the unaudited condensed consolidated statement of operations.

Under ASC 326-20, known as the current expected credit loss (“CECL”) model, the Company was required to estimate credit losses expected over the life of an exposure (or pool of exposures) based on historical information, current information, and reasonable and supportable forecasts. The Company is unable to use its historical data to estimate losses as it has no relevant loss history to date. To determine the estimate of expected credit losses, the Company used a probability-weighted approach that incorporates multiple settlement scenarios, including recovery of amounts due upon an acquisition of the debtor, and recovery in different liquidation scenarios, and determines the expected recoverable amount of the loan in each scenario. This model requires management to make certain assumptions including the likelihood of each outcome, the estimated value of the debtor’s assets, and the Company’s expected claim and recovery rate on the debtor’s assets in the event of an insolvency or a liquidation proceeding. During the six months ended June 30, 2026, the Company recorded an additional allowance for credit losses of $142,574 and the total carrying value of the notes amounted to $475,844 prior to full settlement.

On May 12, 2026, the Company entered into a Note Purchase Agreement with CABG Acquisition Corp., pursuant to which the Company sold all of its right, title, and interest in certain loans and related creditor rights relating to Marizyme, Inc. In consideration, the Company received $100,000 in cash, contingent royalty rights, and a 4.99% membership interest in CABG SPV. CABG SPV is a dedicated New York limited liability company established solely by CABG to acquire and commercialize Marizyme’s operating assets and commercialize DuraGraft, from which AIxC receives a 4.99% minority membership interest and tiered royalty rights tied to product sales. The Company received a one-time cash settlement of $100,000 from Marizyme in full satisfaction of all outstanding principal and accrued interest under the Marizyme Notes and recognized a loss on settlement of short-term note receivable of $375,844, which was classified within loss on settlement of short-term note receivable on the unaudited condensed consolidated statements of operations for the six months ended June 30, 2026. The Company did not record any asset on its condensed consolidated balance sheet related to the royalty right or CABG SPV membership interest because royalties only activate after cumulative DuraGraft net revenue surpasses $20 million, the CABG SPV membership interest’s value depends on unproven commercialization, capital structure and dilution risks, and the Company no longer funds Marizyme’s biotech pipeline, making material future inflows highly unlikely under market-participant assumptions. No recurring impairment testing or third-party valuation assessments are required for these contingent upside interests, as their recoverable value is deemed zero at period end. Any royalty proceeds received in future periods will be recognized as other income upon actual cash receipt.

The Company is also party to a Co-Development Agreement with Marizyme, the divestiture of debt claims does not alter the Company’s contractual rights under the Co-Development Agreement, including its right to future royalty-style payments once the contractual sales and launch milestones are met. (see Note 13 - Research and License Agreements).