AI Financial Corp
For the period ended Mar 28, 2026. Filed May 18, 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.
Mar 28, 2026 · Filed May 18, 2026
AIFC$0.17+6.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2026-01-12.
0001628280-26-001793
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-28; filed 2026-05-18.
0001493152-26-024169
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 86 previous paragraphs and 51 current paragraphs.
32 unchanged; 14 reworded; 5 added; 35 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 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 (5)
Current report
Revenue decreased by approximately $0.1 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025. The decrease is due to volume of transactions processed for customers.
Current report
Interest expense, net decreased by approximately $0.3 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025 primarily due to reduction in debt.
Current report
Cash provided by investing activities was $0 million for the 13 weeks ended March 28, 2026 and $0 for the 13 weeks ended March 29, 2025.
Current report
Sources of Liquidity
Current report
We acknowledge that we continue to face a challenging competitive environment as we continue to focus on our overall profitability, including managing expenses. We reported a net loss from continuing operations of approximately $271.3 million for the 13 weeks ended March 28, 2026, and a net loss from continuing operations of approximately $1.9 million for the 13 weeks ended March 29, 2025. Additionally, the Company has total current assets of approximately $32.2 million and total current liabilities of approximately $39.1 million resulting in a net negative working capital of approximately $6.9 million. Cash used in operations was approximately $12.3 million.
Removed paragraphs (35)
Previous report
We view WLFI as a scarce, governance-enabled digital asset with long-term capital preservation and appreciation potential, inflation-hedging characteristics, and embedded productivity through protocol participation and revenue-sharing mechanisms. With a fixed maximum supply of 100 billion tokens, WLFI powers decentralized lending, borrowing, staking, and governance within a rapidly growing DeFi platform.
Previous report
A core driver of WLFI’s value is its economic linkage to USD1, the ecosystem’s flagship U.S. dollar-pegged stablecoin. Issued on a fully reserved, audited, and redeemable basis, USD1 aims to establish itself a a primary medium of exchange for institutions and consumers alike. Increased adoption of USD1 directly accrues value to WLFI holders through protocol fees, governance rights, and ecosystem growth.
Previous report
The Company is uniquely positioned to accelerate real-world utility for WLFI by integrating it into our existing payment and trading infrastructure, which already serves clients in North America, Europe, and Asia. Our vision includes collaborating with WLFI to help enable everyday commerce – such as retailers accepting WLFI or USD1, with instant fiat conversion, cross-border B2B settlements, and tokenized assets settled using WLFI and/or USD1 as the medium of exchange.
Previous report
Adjusted EBITDA
Previous report
We evaluate the performance of our operations based on financial measures such as “Adjusted EBITDA”, which is a non-U.S. GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’ ability to fund acquisitions and other capital expenditures, and to service its debt. Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a company's financial performance, subject to certain adjustments. Adjusted EBITDA does not represent cash flows from operations, as defined by U.S. GAAP, and should not be construed as an alternative to net income or loss and is indicative neither of our results of operations, nor of cash flows available to fund all our cash needs. It is, however, a measurement that the Company believes is useful to investors in analyzing its operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities, and other measures of financial performance prepared in accordance with U.S. GAAP. As companies often define non-U.S. GAAP financial measures differently, Adjusted EBITDA, as calculated by the Company, should not be compared to any similarly titled measures reported by other companies.
Previous report
(a)See reconciliation of net income to Adjusted EBITDA below.
Previous report
Revenue increased by approximately $2.6 million for the 13 weeks ended September 27, 2025, as compared to the 13 weeks ended September 28, 2024. The increase is due to increased business activity at ALT5 Subsidiary, as well as the acquisition of Mswipe during May 2025.
Previous report
Interest expense, net increased by approximately $1.1 million for the 13 weeks ended September 27, 2025, as compared to the 13 weeks ended September 28, 2024 primarily reflecting higher debt‑related costs incurred during the period.
Previous report
Unrealized Loss on Marketable Securities
Previous report
Unrealized loss on marketable securities for the 13 weeks ended September 28, 2024 was approximately $180,000. An unrealized gain or loss on marketable securities was recorded to mark to fair value securities received in connection to the sale of GeoTraq. No such unrealized gain or loss on marketable was recorded during the 13 weeks ended September 27, 2025.
Previous report
For the Thirty-Nine Weeks Ended September 27, 2025 and September 28, 2024
Previous report
Results of Operations
Previous report
(a)See reconciliation of net income to Adjusted EBITDA below.
Previous report
Revenue
Previous report
Revenue increased by approximately $12.4 million for the 39 weeks ended September 27, 2025, as compared to the 39 weeks ended September 28, 2024. The increase is due to the acquisition of ALT5 Subsidiary during May 2024, as well as the acquisition of Mswipe during May 2025.
Previous report
Gross Profit
Previous report
Gross profit increased by approximately $4.5 million for the 39 weeks ended September 27, 2025, as compared to the 39 weeks ended September 28, 2024. The increase is due to the acquisition of ALT5 Subsidiary during May 2024, as well as the acquisition of Mswipe during May 2025.
Previous report
Selling, General and Administrative Expense
Previous report
Selling, general and administrative expenses increased by approximately $22.1 million for the 39 weeks ended September 27, 2025, as compared to the 39 weeks ended September 28, 2024, The increase is primarily due increased bad debt, stock-based compensation expenses, and professional fees, as well as the acquisition of ALT5 Subsidiary during May 2024, and the acquisition of Mswipe during May 2025.
Previous report
Interest Expense, net
Previous report
Interest expense, net increased by approximately $2.1 million for the 39 weeks ended September 27, 2025, as compared to the 39 weeks ended September 28, 2024 primarily due to the acquisition of ALT5 Subsidiary during May 2024.
Previous report
Unrealized Loss on Cryptocurrency Assets
Previous report
Unrealized gain on cryptocurrency assets for the 39 weeks ended September 27, 2025 was approximately $72.8 million. An unrealized gain was recorded to mark our WLFI tokens to fair value. No such unrealized gain or loss was recorded during the 39 weeks ended September 28, 2024.
Previous report
Segment Performance
Previous report
Fintech Segment
Previous report
Corporate and Other Segment
Previous report
Our Corporate and Other segment generated no revenue for the for the 39 weeks ended September 27, 2025 and the 39 weeks ended September 28, 2024. Selling, general and administrative expenses increased primarily due to increased costs for stock-based compensation and legal expenses, as well as other professional services.
Previous report
Biotechnology Segment
Previous report
During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 39 weeks ended September 27, 2025 and September 28, 2024. Our Biotech segment generated no revenue for the for the 39 weeks ended September 27, 2025 and the 39 weeks ended September 28, 2024. Selling, general and administrative expenses increased over the prior year period primarily due to increases in professional fees and research and development costs.
Previous report
Adjusted EBITDA (Non-GAAP) Reconciliation
Previous report
The following table presents a reconciliation of net income to Adjusted EBITDA for the 13 and 39 weeks ended September 27, 2025 and September 28, 2024 (in 000's):
Previous report
Adjusted EBITDA decreased by approximately $11.2 million for the 13 weeks ended September 27, 2025, as compared to the prior year period. The decrease was primarily due to the results of operations, as discussed above.
Previous report
Adjusted EBITDA decreased by approximately $11.7 million for the 39 weeks ended September 27, 2025, as compared to the prior year period. The decrease was primarily due to the results of operations, as discussed above.
Previous report
Our ability to continue as a going concern is dependent upon the success of future capital raises or structured settlements and cash flows from the acquisition of ALT5 Subsidiary to fund the required testing to obtain FDA approval of JAN 123, as well as to fund our day-to-day operations. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. While we will actively pursue these additional sources of financing, management cannot make any assurances that such financing will be secured. Please review the transaction
Previous report
Cash used investing activities for continued operations was $711.3 million for the 39 weeks ended September 27, 2025, compared to cash provided by investing activities of $5.9 million for the 39 weeks ended September 28, 2024. Cash used in investing activities for the 39 weeks ended September 27, 2025 was primarily the purchase of WLFI tokens, partially offset by tokens redeemed during the period, and the cash provided by investing activities for the 39 weeks ended September 28, 2024 was related to cash acquired in the acquisition of ALT5 Subsidiary. There was no cash used in investing activities for discontinued operations during the 39 weeks ended September 27, 2025 or September 28, 2024.
Reworded paragraphs (14)
Previous wording
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as ‘‘believes,’’ ‘‘expects,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates’’ or ‘‘anticipates’’ or similar expressions that concern our strategy, plans or intentions. Any statements we make relating to our future operations, performance and results, and anticipated liquidity are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, including, without limitation, in conjunction with the forward-looking statements included in this Form 10-Q, are disclosed in “Item 1-Business, Item 1A – Risk Factors” of our Form 10-K and Part II, Item 1A of this Form 10-Q.
Current wording
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of Exchange Act, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as ‘‘believes,’’ ‘‘expects,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates’’ or ‘‘anticipates’’ or similar expressions that concern our strategy, plans or intentions. Any statements we make relating to our future operations, performance and results, and anticipated liquidity are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, including, without limitation, in conjunction with the forward-looking statements included in this Quarterly Report on Form 10-Q, are disclosed in “Item 1-Business, Item 1A – Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, and Part II, Item 1A of this Report.
Previous wording
We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Our MD&A should be read in conjunction with our Form 10-K (including the information presented therein under the caption Risk Factors), together with our Quarterly Reports on Forms 10-Q and other publicly available information. All amounts herein are unaudited.
Current wording
We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Our MD&A should be read in conjunction with our Annual Report on Form 10-K (including the information presented therein under the captionRisk Factors), together with our Quarterly Reports on Forms 10-Q and other publicly available information. All amounts herein are unaudited.
Previous wording
Our Biotechnology segment is focused on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties. We have previously announced our intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for to decouple it from us so that it would operate on a stand-alone basis. The Biotech segment is being presented as discontinued operations for the 13 and 26 weeks ended September 27, 2025 and September 28, 2024 (see Note 4 of our Condensed Consolidated Financial Statements).
Current wording
Our Biotechnology segment is focused on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties. We have previously announced our intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for to decouple it from us so that it would operate on a stand-alone basis. The Biotech segment is being presented as discontinued operations for the 13 weeks ended March 28, 2026 and March 29, 2025 (see Note 4 of our Condensed Consolidated Financial Statements).
Previous wording
In August 2025, the Company closed a transformative $1.5 billion registered direct offering and concurrent private placement – led by World Liberty Financial, Inc. – specifically to launch our WLFI Treasury Strategy. This "capital with a purpose" financing positioned ALT5 as one of the most significant institutional holders of WLFI, securing a meaningful stake in the native governance and utility token of the World Liberty Financial ecosystem.
Current wording
In August 2025, the Company closed a $1.5 billion registered direct offering and concurrent private placement to launch our WLFI Treasury Strategy. This “capital with a purpose” financing positioned the Company as one of the most significant institutional holders of WLFI, securing a meaningful stake in the native governance token of the World Liberty Financial ecosystem.
Previous wording
Gross profit increased by approximately $0.3 million for the 13 weeks ended September 27, 2025, as compared to the 13 weeks ended September 28, 2024. The increase is primarily due to the acquisition of Mswipe during May 2025.
Current wording
Gross profit increased by approximately $1.6 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025. The increase is due to the loss of a large low margin customer.
Previous wording
Selling, general and administrative expenses increased by approximately $17.6 million for the 13 weeks ended September 27, 2025, as compared to the 13 weeks ended September 28, 2024, primarily due to higher bad debt expense, increased stock‑based compensation from RSU grants during the quarter, and the acquisition of Mswipe in May 2025.
Current wording
Selling, general and administrative expenses increased by approximately $2.4 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025, primarily due increased professional fees.
Previous wording
Unrealized gain on cryptocurrency assets for the 13 weeks ended September 27, 2025 was approximately $72.8 million. An unrealized gain was recorded to mark our WLFI tokens to fair value. No such unrealized gain or loss was recorded during the 13 weeks ended September 28, 2024.
Current wording
Unrealized gain on cryptocurrency assets for the 13 weeks ended March 28, 2026 was approximately $348.3 million. An unrealized loss on crypto tokens was recorded to mark to fair value WLFI tokens purchased in August of 2025.
Previous wording
Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024, as well as Mswipe, which was acquired during May 2025. Revenue for the 13 weeks ended September 27, 2025 was approximately $7.6 million, and gross margin percentage was 34.6%. Operating loss for the fiscal year ended 13 weeks ended September 27, 2025 was approximately $4.4 million.
Current wording
Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024. Revenue for the 13 weeks ended March 28, 2026 was approximately $4.7 million, and gross margin percentage was 75.8%. Operating loss for the fiscal quarter ended 13 weeks ended March 28, 2026 was approximately $1.6 million.
Previous wording
Our Corporate and Other segment generated no revenue for the for the 13 weeks ended September 27, 2025 and the 13 weeks ended September 28, 2024. Selling, general and administrative expenses increased primarily due to increased costs for stock-based compensation expense, legal and other professional services.
Current wording
Our Corporate and Other segment generated no revenue for the for the 13 weeks ended March 28, 2026 and the 13 weeks ended March 29, 2025. Selling, general and administrative expenses increased primarily due to increased costs for legal and other professional services.
Previous wording
During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 13 weeks ended September 27, 2025 and September 28, 2024. Our Biotech segment generated no revenue for the for the 13 weeks ended September 27, 2025 and the 13 weeks ended September 28, 2024. Selling, general and administrative expenses increased due to increased other professional fees.
Current wording
During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 13 weeks ended March 28, 2026 and March 29, 2025. Our Biotech segment generated no revenue for the for the 13 weeks ended March 28, 2026 and the 13 weeks ended March 29, 2025. Selling, general and administrative expenses increased primarily due to research and development expenses.
Previous wording
As of September 27, 2025, our cash on hand was $7.3 million. Approximately $3.5 million of cash has been fully reserved in connection with a legal matter, as further described in Note 16 to the unaudited condensed consolidated financial statements. We intend to raise funds to support future development of JAN 123 either through capital raises or structured arrangements, which would include effectuating our previously announced intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for us to own a controlling interest in that subsidiary, but to decouple it from us so that it would operate on a stand-alone basis, although its financial statements would continue to be consolidated with ours for as long as we have a controlling interest.
Current wording
As of March 28, 2026, our cash on hand was $10.5 million. Approximately $3.5 million of cash has been fully reserved in connection with the legal matter, further described in Note 20 to the consolidated financial statements. We intend to raise funds either through capital raises or structured arrangements, which would include effectuating our previously announced intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for us to own a controlling interest in that subsidiary, but to decouple it from us so that it would operate on a stand-alone basis, although its financial statements would continue to be consolidated with ours for as long as we have a controlling interest.
Previous wording
During the 39 weeks ended September 27, 2025, cash used in continuing operations was approximately $15.5 million, compared to cash provided by operations of approximately $3.7 million during the 39 weeks ended September 28, 2024. The decrease in cash was primarily due to results of operations as discussed above. There was no cash used in operating activities for discontinued operations during the 39 weeks ended September 27, 2025 or September 28, 2024.
Current wording
During the 13 weeks ended March 28, 2026, cash used in operations was approximately $12.3 million, compared to cash provided by operations of approximately $1.5 million during the 13 weeks ended March 29, 2025. The increase in cash was primarily due to results of operations as discussed above.
Previous wording
Cash provided by financing activities was $719.4 million for the 39 weeks ended September 27, 2025, and primarily relates to proceeds received from equity financing and the issuance of notes payable, partially offset by cash paid for fees related to the equity financing, cash paid for notes payable and related party notes payable. Cash provided by financing activities was approximately $2.1 million for the 39 weeks ended September 28, 2024, and relates to proceeds received from warrants converted to our common stock and proceeds received from related parties, partially offset by payments on notes payable, and payment on related party notes payable. There was no cash provided by financing activities during the 39 weeks ended September 27, 2025 or September 28, 2024.
Current wording
Cash provided by financing activities was $8.5 million for the 13 weeks ended March 28, 2026, and relates primarily to the new WLFI loan. Cash used in financing activities was approximately $1.5 million for the 13 weeks ended March 29, 2025, and relates to proceeds received from the issuance of notes payable, as well as warrants converted to our common stock, partially offset by cash paid for notes payable.
Previous wording
We may require additional debt financing and/or capital to finance new acquisitions, conduct our Phase IIb clinical trials, or consummate other strategic investments in our business. No assurance can be given any financing obtained may not further dilute or otherwise impair the ownership interest of our existing stockholders.
Current wording
We may require additional debt financing and/or capital to finance new acquisitions, conduct our Phase IIb clinical trials for our Biotechnology segment, or consummate other strategic investments in our business. No assurance can be given any financing obtained may not further dilute or otherwise impair the ownership interest of our existing stockholders.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The following table sets forth certain statement of operations items and as a percentage of revenue, for the periods indicated (in $000's):
Previous report — wording carried elsewhere
The following tables set forth revenues for key product and service categories, percentages of total revenue and gross profits earned by key product and service categories and gross profit percent as compared to revenues for each key product category indicated (in $000's):
Previous report — wording carried elsewhere
We report our business in the following segments: Fintech, Biotechnology and Corporate and Other. During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 39 weeks ended September 27, 2025 and September 28, 2024.
Previous report — wording carried elsewhere
Operating income (loss) by operating segment, is defined as loss before net interest expense, other income and expense, provision for income taxes ($000’s).
Previous report — wording carried elsewhere
Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024, as well as Mswipe, which was acquired during May 2025. Revenue for the 39 weeks ended September 27, 2025 was approximately $19.5 million, and gross margin percentage was 41.0%. Operating loss for the fiscal year ended 39 weeks ended September 28, 2024 was approximately $5.9 million.