AI Financial Corp

Note 1: Background

The accompanying consolidated financial statements include the accounts of AI Financial Corporation, a Nevada corporation, and its subsidiaries (collectively, the “Company” or “AIFC”). Effective April 28, 2026, the Company changed its name to “AI Financial Corporation” from “Alt5 Sigma Corporation”. The Company also changed its Nasdaq common stock symbol to “AIFC” from “ALTS.” Previously, effective July 15, 2024, the Company had changed its corporate name to “ALT5 Sigma Corporation” from “JanOne Inc.” and also changed its Nasdaq common stock ticker symbol to “ALTS” from “JAN”. In each instance, the corporate name changes were effected through a parent/subsidiary short-form merger of Company’s wholly-owned Nevada subsidiary formed solely for the purpose of effectuating the name change, whereby that “name change subsidiary” subsidiary merged with and into the Company, with the Company being the surviving entity, albeit with its new name.

The Company hadthree operating segments – Fintech, Biotechnology, and Corporate and Other. We have previously announced our intention to capitalize Alyea Therapeutics Corporation (“Alyea”) as a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. In connection with that potential series of transactions, the accounts for the Biotechnology segment have been presented as discontinued operations in the accompanying consolidated financial statements.

Fintech

On May 15, 2024, the Company acquired ALT5 Sigma, Inc. (“ALT5 Subsidiary”). ALT5 Subsidiary is a fintech company that provides next generation blockchain-powered technologies to enable a migration to a new global financial paradigm. ALT5 Subsidiary, through its respective subsidiaries, offers two main platforms to its customers: “ALT5 Pay” and “ALT5 Prime.” ALT5 Pay is a crypto-currency payment gateway that enables registered and approved global merchants to accept and make crypto-currency payments or to integrate the ALT5 Pay payment platform into their application or operations using the plugin with WooCommerce and/or ALT5 Pay’s checkout widgets and APIs. Merchants have the option to convert to fiat currency (US Dollars, Canadian Dollars, Euros, and British Pounds Sterling) automatically or to receive their payment in digital assets (see Note 3).

On May 9, 2025, the Company acquired Fortress II Holdings Ltd. d/b/a Mswipe. Mswipe is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa® and Mastercard® networks, allows users to seamlessly spend traditional and digital currencies worldwide (see Note 3).

Biotechnology

During September 2019, the Company, through its biotechnology segment, broadened its business perspectives to become a pharmaceutical company focused on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties. Effective December 28, 2022, the Company acquired Soin Therapeutics LLC, a Delaware limited liability company (“STLLC”), and its product, a patent-pending, novel formulation of low-dose naltrexone (“JAN123”). The product is being developed for the treatment of Complex Regional Pain Syndrome (CRPS), an indication that causes severe, chronic pain generally affecting the arms or legs. At present, there are no truly effective treatments for CRPS. Because of the relatively small number of patients afflicted with CRPS, the FDA has granted Orphan Drug Designation for any product approved for treatment of CRPS. This designation will provide the Company with tax credits for its clinical trials, exemption of user fees, and the potential ofseven years of market exclusivity following approval. In addition, development of orphan drugs currently also involves smaller trials and quicker times to approval, given the limited number of patients available to study. However, there can be no assurance that the product will receive FDA approval or that it will result in material sales. In that regard, 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 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. In connection with the Company’s spinoff of Alyea, accounts for the Biotechnology segment have been presented as discontinued operations in the accompanying consolidated financial statements (see Note 4).

Corporate and Other

Our Corporate and Other segment consists of WLFI assets, including any additions, redemptions, or mark-to-market changes in value, which are recorded within the Company’s Corporate and Other segment.

The WLFI treasury program was initiated on August 12, 2025, with purchases executed intwo tranches at $0.20 per token:

As of June 27, 2026, all 7,283,585,650 WLFI tokens held by AI Financial Corporation are subject to contractual lock-up provisions, with 3,533,585,650 tokens acquired under the Token Purchase Agreement being non-transferable for a 12-month lock-up period (other than limited permitted uses for collateral, staking, or lending that do not involve any sale or permanent transfer) and 3,750,000,000 tokens acquired under the Securities Purchase Agreement remaining locked for 12 months from the Closing Date and only becoming eligible for release upon satisfaction of specified stockholder approval, charter amendment, and resale registration statement effectiveness conditions, with no waivers or early releases granted other than the limited uses described above.

In connection with the WLFI treasury program, the Company entered into lock-up agreements restricting certain equity issuances. Pursuant to the Purchase Agreements, the Company agreed not to issue, or enter into any agreement to issue, shares of Common Stock or Common Stock equivalents, or file any registration statement or amendment thereto, for a period of 30 days following the closing date of the Offerings, subject to customary exceptions including issuances under the ATM Sales Agreement.

In addition, each of the Company’s directors and executive officers is subject to a lock-up agreement prohibiting the sale, pledge, or other transfer or disposition of 50% of their shares of Common Stock, or securities convertible into or exchangeable for Common Stock, for a period of 90 days following the closing date, with the remaining 50% subject to the same restrictions until the later of 90 days following the closing date or the date Stockholder Approval was obtained. Transfers for bona fide estate or tax planning purposes are permitted, provided the transferee agrees to be bound by the same lock-up terms.

WLFI is considered a related party to the Company by virtue of the following relationships. Zachary Witkoff, the Chairman of the Company’s Board of Directors, is a Co-Founder and Chief Executive Officer of WLFI. Zachary Folkman, a member of the Company’s Board of Directors, is also a Co-Founder of WLFI. In addition, WLFI is the record owner of 1,000,000 shares of the Company’s Common Stock and holds pre-funded warrants to purchase up to 99,000,000 additional shares of Common Stock, as well as warrants to purchase up to 20,000,000 shares of Common Stock at exercise prices ranging from $7.50 to $9.75 per share, each acquired in connection with the WLFI treasury program. As a result of these relationships, WLFI is deemed a related party under ASC 850, Related Party Disclosures, and all transactions between the Company and WLFI, including the Token Purchase Agreements pursuant to which the Company acquired its WLFI token holdings and the Master Loan and Security Agreement entered into in January 2026, have been reviewed and approved by the Audit Committee of the Board of Directors in accordance with the Company’s related party transaction policy

All acquisitions of WLFI tokens were executed through on-chain transactions and direct Token Purchase Agreements with the WLFI Foundation. The Company did not hold any WLFI tokens prior to August 12, 2025.

Our Corporate and Other segment consists of certain corporate general and administrative costs.

The Company reports on a 52- or 53-week fiscal year. The Company’s 2025 fiscal year (“2025”) ended on December 27, 2025, and the current fiscal year (“2026”) will end on December 26, 2026.

Liquidity Considerations

The Company has incurred recurring losses from operations, including a net loss from continuing operations of approximately $499.7 million for the 26 weeks ended June 27, 2026. As of June 27, 2026, the Company had a working capital deficit of approximately $9.9 million, reflecting total current liabilities of $24.9 million compared to total current assets of $14.9 million. These conditions raise substantial liquidity concerns.

The Company owns 7,283,585,650 WLFI tokens that it holds and can provide it with significant liquidity, as they are currently available for it to use as collateral for a loan transaction, for it to stake in connection with the WLF Protocol, and for it to use in a lending transaction. Further, these tokens became fully transferable on August 12, 2026.

Based on the current market value of the Company’s WLFI token holdings, the Company believes it possesses sufficient liquidity and financial resources to fund its anticipated operations and satisfy its obligations for at least the next 12 months.

Note 2: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information and notes required for complete financial statements prepared in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. However, the Company’s results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in our Form 10-K for the fiscal year ended December 27, 2025.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Financial Statement Reclassification

Certain prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications relate primarily to the presentation of the Biotechnology segment as discontinued operations.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumption that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates made in connection with the accompanying consolidated financial statements include the fair value in connection with the Series S convertible preferred stock issued in the December 28, 2022 acquisition of STLLC, valuation allowance against deferred tax assets, and estimated useful lives for intangible assets.

Financial Instruments

Financial instruments consist primarily of cash, trade and other receivables, and obligations under accounts payable, accrued expenses and notes payable. The carrying amounts of trade and other receivables, accounts payable, accrued expenses and short-term notes payable approximate fair value because of the short maturity of these instruments. The fair value of the long-term debt is calculated based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements, unless quoted market prices were available (Level 2 inputs). The carrying amounts of long-term debt at June 27, 2026 and December 27, 2025 approximate fair value.

Cryptocurrency Assets

The Company’s cryptocurrency assets consist of World Liberty Financial (“WLFI”) tokens, 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.

Cryptocurrency assets acquired are initially recorded at cost, which represents the cash, cash equivalents, or other financial assets paid to acquire the asset, including transaction fees. Cryptocurrency assets are subsequently measured in accordance with ASC 350-60, Intangibles—Goodwill and Other—Accounting for and Disclosure of Cryptocurrency Assets, at fair value in the statement of financial position with unrealized gains and losses resulting from changes in fair value recognized in net income. The Company determines and records at each reporting period the fair value of its cryptocurrency assets in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices. Changes in the fair value are recognized in net income within “Unrealized gain on crypto assets”, while realized gains and losses from the derecognition of crypto assets are included in “Realized gain on crypto assets, net” in the Company’s condensed consolidated statements of operations. Purchases and redemptions of cryptocurrency assets are reflected as cash flows from investing activities in the consolidated statements of cash flows.

Digital Assets and other Receivables

Digital assets and other receivables are the Company’s digital assets and its customer prepayments in the form of digital assets. The Company holds all digital assets in secure non-custodial wallets through the wallet services from Fireblocks. As of June 27, 2026 and December 27, 2025, the outstanding balances of digital assets and other receivables was approximately $4.3 million and $18.0 million, respectively.

Digital Assets and other Payables

Digital assets and other payables are liabilities that represent the Company’s obligation to deliver the settlement of transactions in the form of digital assets and or cash. The Company safeguards these digital assets and/or cash for customers and is obligated to safeguard them from loss, theft, or other misuse. The Company recognizes digital assets and other payables, on initial recognition and at each reporting date, at fair value of the digital assets. Any loss, theft, or other misuse would impact the measurement of digital assets and other payables. As of June 27, 2026, the outstanding balance of digital assets and other payables was approximately $10.1 million, of which approximately $4.3 million were digital assets and $5.8 million were cash deposits. As of December 27, 2025, the outstanding balance of digital assets and other payables was approximately $28.7 million, of which approximately $18.0 million were digital assets and $4.0 million were cash deposits.

Revenue Recognition

Revenue recognition applies to the Company’s Fintech segment only, as the Company’s Biotech segment has not recognized revenue to date. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:

These five elements, as applied to each of the Company’s revenue category, are summarized below:

The Company’s service is comprised of a single performance obligation to buy and sell or convert digital assets to currencies. That is, the Company is the counter-party to all transactions between customers and liquidity providers and presents revenue for the fees earned on a net basis.

The Company is acting as principal in all transactions, and control the digital assets being provided before it is transferred to the buyer, and has risk related to the digital assets, and is responsible for the fulfillment of the digital asset transactions. The Company sets the price for the digital assets by aggregating prices from several liquidity providers and displays them on the Company’s platform. As a result, the Company acts as a price discovery service and acts as a principal facilitating the ability for a customer to purchase or sell digital assets.

The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time that the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided.

The Company charges a fee at the transaction level. The transaction price, represented by the trading fee, is calculated based on volume and varies depending on payment type and the value of the transaction. Digital asset purchases or sale transactions executed by a customer on the Company’s platform is based on tiered-pricing that is driven primarily by transaction volume processed for a specific historical period. The Company has concluded that this volume-based pricing approach does not constitute a future material right since the discount is within a range typically offered to a class of customers with similar volume. The transaction fee is collected from the customer at the time the transaction is executed. In certain instances, the transaction fee can be collected in digital assets, with revenue measured based on the amount of digital assets received and the fair value of the digital assets at the time of the transaction. The Company also marks up or down the digital asset prices and earns revenue from the spread between the buying and selling price. The Company also earns a fee from transfers of currencies and or digital assets. The transfer fees are nominal and are set to offset the fees associated with banking and/or blockchain mining fees.

The Company receives consideration in the form of digital assets as payment for commissions and other fees and utilizes these assets as part of its working capital. In accordance with ASC 606, the fair value of digital assets received is measured based on quoted prices in active markets on the date control of the related goods or services transfers to the customer. Subsequent to initial recognition, the Company measures digital assets at fair value using quoted prices obtained from active, highly liquid exchanges that the Company has determined to be its principal market. Because these valuations are based on unadjusted quoted prices for identical assets in active markets, the fair value measurements are classified within Level 1 of the fair value hierarchy. The Company presents these assets within other current assets on its consolidated balance sheets. As of June 27, 2026, the balance of digital assets included in other current assets was approximately $4.3 million.

Stock-Based Compensation

The Company from time to time grants restricted stock units, warrants, and stock options to employees, non-employees, and Company executives and directors. Such awards are valued based on the grant date fair-value of the instruments. The value of each award is amortized on a straight-line basis over the vesting period.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis. The Company adopted this pronouncement effective with its fiscal year ending December 27, 2025.

Note 3: Mergers and Acquisitions

Block Street

On April 20, 2026, the Company entered into, a Stock Exchange Agreement (the “SEA”) with the four stockholders of Block Street Corp., a Nevada corporation (“Block Street”), pursuant to which the Company acquired 100% of the issued and outstanding equity interests of Block Street in a share-for-share exchange, and Block Street became a wholly-owned subsidiary of the Company. Block Street operates a platform designed to support token issuances aligned with applicable regulatory frameworks and the tokenization of real-world assets. Block Street’s capabilities have not yet been deployed commercially and Block Street has not generated revenues to date.

The Company evaluated the acquired set under ASC 805 and concluded that it did not meet the definition of a business. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50 rather than as a business combination.

The purchase price for this transaction consisted of 12,670,257 shares of the Company’s common stock issued at closing, valued at approximately $12.0 million. We also granted the sellers the right to two earn-out payments in the amount of the first earnout of $15.0 million (payable infive (5)-year pre-funded warrants exercisable for up to 15,837,821 shares of common stock with an initial aggregate exercise price of $15.0 million) at the point in time if, or when, Block Street generates US GAAP-compliant net revenues, applied consistently with the Company’s historical accounting policies, of not less than $20.0 million on a trailing four-quarter reporting basis. The second earnout of approximately $16.0 million payable infive (5)-year pre-funded warrants exercisable for up to 16,893,675 shares of common stock with an initial aggregate exercise price of $16.0 million) at the point in time if, or when, Block Street generates US GAAP-compliant Modified Operating Income, defined in the SEA as Net Operating Income plus realized gains minus realized losses from token sale operations, of not less than $8.0 million on a trailing four-quarter reporting basis.

The fair value of the purchase price components outlined above was $11.7 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

The table below outlines the purchase price allocation of the purchase for Block Street to the acquired identifiable intangible assets (in $000’s):

Mswipe

Effective on May 9, 2025, the Company and our indirect, wholly-owned second-tier Canadian subsidiary entered into an agreement to purchase all of the outstanding capital stock of Fortress II Holdings Ltd. d/b/a Mswipe, an entity that, through its subsidiaries, offers multi-currency, fiat- and crypto-enabled payment card services of Mswipe. The company conducts business under the name Mswipe. Through a suite of physical and virtual cards that are available on both the Visa® and Mastercard® networks, the acquired operations enable users to seamlessly spend traditional and digital currencies across the globe. The platform is built with robust compliance frameworks, advanced security protocols, and real-time exchange capabilities, which allow for fast, secure, and borderless transactions. This is a B2B solution, which, when combined with our other product offerings, bridges the gap between the crypto economy and traditional financial systems—while ensuring regulatory alignment, interoperability with existing payment networks, and a seamless user experience for institutional partners and their end-users.

The purchase price for this transaction consisted of our (i) issuingone million restricted shares of our common stock to thethree sellers, valued at the Historical NOCP on May 9, 2025 of $6.10, (ii) granting five hundred thousand (500,000) four(4)-year common stock warrants to thethree sellers, with a per-share exercise price of $5.50 (which was the approximate market price at the time that we reached an agreement in principal for this transaction), (iii) issuing shares totwo of the sellers in Alyea, which shares we valued at $4.8 million, and (iv) issuingtwo 14-month straight promissory notes in the aggregate initial principal balance of approximatelyone million dollars with an interest rate at the AFR for quarterly compounded notes of 3.99% per annum and all principal and interest due at the maturity date. We also are acknowledging an equivalent 14-month term straight promissory note at the acquired company level that pre-dated our acquisition. The principal balance of this note, as of May 9, 2025, was approximately $5.1 million and the interest was reset to match that of thetwo notes that we issued. We also granted the sellers the right toone earn-out payment in the amount of $20 million (payable in cash or unregistered shares of our common stock) at the point in time if, or when, Mswipe generates a minimum of $15 million in annualized or actual total revenue from Mswipe’s operations.

The fair value of the purchase price components outlined above was $14.2 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s):

Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $6.4 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of May 9, 2025, as calculated by an independent third-party firm. Because the transaction was considered a stock purchase for tax purposes, none of the goodwill arising from the acquisition will deductible for tax purposes. The table below outlines the purchase price allocation of the purchase for Mswipe to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

Proforma Information

The table below presents selected proforma information for the Company for the 13 and 26 weeks ended June 28, 2025, assuming that the acquisition had occurred on December 31, 2023 (the beginning of the Company’s 2024 fiscal year), pursuant to ASC 805-10-50. This proforma information does not purport to represent what the actual results of operations of the Company would have been had the acquisition occurred on that date, nor does it purport to predict the results of operations for future periods (in $000’s).

● Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date.

Note 4: Discontinued Operations

As of December 27, 2025, the Company has characterized its Biotechnology segment as a discontinued operation on its financial statements, as follows: on May 21, 2025, the Company announced the planned formal separation of its healthcare assets, known as Alyea, and noted that the scope and method of a partial or full disposition, whatever the methodology, would be determined and announced at a later date.

In accordance with the provisions of ASC 360-10 and ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheet, as of June 27, 2026 and December 28, 2025, and consists of the following (in $000s):

No depreciation expense has been recorded for the 13 weeks ended June 27, 2026 and June 28, 2025, or the 26 weeks ended June 27, 2026 and June 28, 2025.

Amortization expense was $1.0 million and $0.5 million for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and $1.0 million and $1.1 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Soin Intangible Assets

Effective as of December 28, 2022, the Company acquired Soin Therapeutics LLC, a Delaware limited liability company (“STLLC”), and its product, a patent-pending, novel formulation of low-dose naltrexone. The assets acquired by the Company consist of 1)three pending patents related to the methods of using low-dose Naltrexone to treat chronic pain, 2) final formula for Naltrexone, and 3) orphan drug designation as approved by the FDA. The Company reviewed the assets acquired and determined that no in-process research and development costs were acquired as part of the transaction, and, thus, all assets acquired represent intellectual property and should be capitalized. The Company will amortize the intangible assets ratably over a ten (10)-year period.

3 The Company’s accrued liabilities consisted of the following (in $000s):

In accordance with the provisions of ASC 360-10 and ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive income (loss). The results of operations for this entity for the 26 weeks ended June 27, 2026 and June 28, 2025 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive income (loss) and consist of the following (in $000s):

In accordance with the provisions of ASC 360-10 and ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations in the consolidated statements of cash flows. The cash flow activity from discontinued operations for the 26 weeks ended June 27, 2026 and June 28, 2025 have been reflected as discontinued operations in the consolidated statements of cash flows and consist of the following (in $000s):

Note 5: Trade and other receivables

The Company’s trade and other receivables as of June 27, 2026 and December 27, 2025, respectively, were as follows (in $000’s):

Note 6: Prepaids and other current assets

Prepaids and other current assets as of June 27, 2026 and December 27, 2025 consist of the following (in $000’s):

Note 7: Property and Equipment

Property and equipment as of June 27, 2026 and December 27, 2025 consist of the following (in $000’s):

Note 8: Leases

In connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company leases commercial office space. These assets and properties are leased under non-cancellable agreements that expire at various future dates. The agreements, which have been classified as operating leases, provide for minimum rent and require the Company to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for leases with lease terms greater than 12 months. The amounts recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

The following table details the Company’s right of use assets and lease liabilities as of June 27, 2026 and December 27, 2025 (in $000’s):

As of June 27, 2026, the weighted average remaining lease term for operating leases is 3.3 years. The Company’s weighted average discount rate for operating leases is 12.8%. Total cash payments for operating leases for the six month’s ended June 27, 2026 and June 28, 2025 were approximately $22,875 and $10,941, respectively. Additionally, the Company recognized approximately no right of use assets and liabilities during the fiscal quarter ended June 27, 2026.

Total present value of future lease payments of operating leases as of June 27, 2026 (in $000’s):

Note 9: WLFI Treasury Program

The WLFI treasury program was initiated on August 12, 2025, with purchases executed intwo tranches at $0.20 per token:

All acquisitions were executed through on-chain transactions and direct Token Purchase Agreements with the WLFI Foundation. The Company did not hold any WLFI tokens prior to August 12, 2025.

The outstanding units, cost basis, and fair value as of June 27, 2026 were as follows (in $000’s, except for units):

The following table presents a reconciliation of WLFI assets to fair value as of June 27, 2026 (in $000’s):

During the 26 weeks ended June 27, 2026, the Company recognized an unrealized loss of approximately $633.4 million related to the change in fair value of the tokens.

Note 10: Intangible Assets

Intangible assets as of June 27, 2026 and December 27, 2025 consist of the following (in $000’s):

Intangible amortization expense was $1.6 million and $0.8 million for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and $1.8 million and $1.6 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

Block Street

Effective on April 20, 2026, the Company entered into an agreement to purchase all of the outstanding capital stock of Block Street which operates a platform designed to support token issuances aligned with applicable regulatory frameworks and the tokenization of real-world assets. Block Street’s capabilities have not yet been deployed commercially and Block Street has not generated revenues to date. The Company will amortize the intangible assets over a ten (10)-year period when the assets are placed in service (see Note 3).

Mswipe

Effective on May 9, 2025, the Company and our indirect, wholly-owned second tier Canadian subsidiary entered into an agreement to purchase all of the outstanding capital stock of an entity that, through its subsidiaries, offers multi-currency, fiat- and crypto-enabled payment card services (see Note 3).

Qoden Intangible Assets

On November 8, 2024, the Company acquired the Qodex Cryptocurrency Exchange Software platform and other related assets from Qoden Technologies, LLC, a provider of technology solutions for the blockchain industry. The Company will amortize the intangible assets over a two(2)-year period (see Note 3).

ALT5 Subsidiary Intangible Assets

On May 14, 2024, the Company acquired its ALT5 Subsidiary, which is a fintech company that provides next generation blockchain-powered technologies to enable a migration to a new global financial paradigm. As part of the acquisition, the Company acquired trade names, customer relationships, and developed technology, which will be amortized over a period ofseven years,10 years, andfive years, respectively (see Note 3).

Note 11: Goodwill

The following table details the Company’s goodwill as of June 27, 2026 and December 27, 2025 (in $000’s):

The Company accounts for purchased goodwill and intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. Goodwill recognized during the 39 weeks ended September 27, 2025 was approximately $8.4 million, and was due to the acquisition of Mswipe (see Note 3).

Note 12: Accrued Liabilities

Accrued liabilities as of June 27, 2026 and December 27, 2025 consist of the following (in $000’s):

Note 13: Debentures

Debentures outstanding as of June 27, 2026 and December 27, 2025 consisted for the following (in $000’s):

ALT5 Subsidiary issued seven debentures over a period from October 2018 through September 2019. The debentures bear interest at 12% per annum and matured on June 30, 2025.

During March 2026, six of the debentures, representing approximately $0.5 million of the aggregate principal amount, were settled through the issuance of 114,328 shares of the Company’s common stock. The remaining balance is currently being negotiated for settlement with the sole remaining holder.

Note 14: Debt

Long-term debt as of June 27, 2026 and December 27, 2025 consisted of the following (in $000’s):

Fixed Deposits

The Company entered into several Corporate Fixed Deposit Agreements with otherwise unaffiliated third-parties, pursuant to which the Company became obligated for an aggregate of $5.5 million, as set forth in the respective agreements. Each obligation bears interest at a rate of 13% or 15% per annum and has a maturity date range of April 2026 to March 2027. As of June 27, 2026 and December 27, 2025, the outstanding aggregate obligations totaled approximately $7.9 million and $7.9 million, respectively.

WLFI Loan Agreement

On January 29, 2026, we, through our indirect, wholly-owned subsidiary, ALT5 Digital Holdings, Inc. (“ALT5 Digital” or the “Borrower”), entered into a Master Loan and Security Agreement (the “Loan Agreement”) with WLFI. Zachary Witkoff, Chairman of our Board, is the Chief Executive Officer and Co-Founder of WLFI, and Zachary Folkman, a member of our Board, is the Co-Founder of WLFI.

The Loan Agreement provides for collateralized loans in the aggregate principal amount of $15 million. Pursuant to the Loan Agreement, the loan will accrue interest at a rate of 4.50% per annum, payable annually in advance beginning on the applicable closing date. The principal amount and any accrued but unpaid interest under the loan are due on the maturity date, which is 24 months from the closing date of the initial loan under the Loan Agreement. The Loan Agreement is a secured, non-recourse facility to the Borrower and to us. As security for the obligations under the loan, we granted WLFI a security interest in, and transferred legal title and custody of, $WLFI tokens owned by the Borrower (the “Collateral”). The loan-to-value ratio is 65% of the pledged Collateral, which, for a $15 million loan, would consist of approximately $23 million in value of free-trading, unrestricted WLFI tokens. There are no origination, management, or prepayment fees, although the Borrower is responsible for WLFI’s expenses. Events of default include, among others, failure to pay interest when due, failure to satisfy margin top-up requirements after a margin call, breaches of covenants or representations that remain uncured after notice and certain insolvency events. Following an event of default, the entirety of the Collateral for the loan will be forfeited to WLFI.

The Loan Agreement includes customary representations, warranties, covenants, risk disclosures relating to digital asset collateral, and other terms and conditions customary for transactions of this type, including provisions regarding public disclosure, successor and assignment rights, modification and waiver, notices, and interpretation. The governing law for the Loan Agreement and related documents (other than UCC matters) is the law of the State of Delaware, and disputes are subject to binding arbitration administered by the International Centre for Dispute Resolution seated in Miami, Florida.

On January 29, 2026, the Borrower drew down the entire $15 million under the Loan Agreement in one tranche and received net proceeds of approximately $14.2 million, after prepaying interest and reimbursing WLFI for its expenses. The intended use of proceeds is to pursue a stock buyback program as approved by our Board.

As of March 28, 2026, the Company pledged 220,620,679 , with an additional 157,689,435 pledged in the 13 weeks ended June 27, 2026, for a total of 378,310,114 WLFI tokens as collateral as of June 27, 2026.

Unaffiliated Third-Party Loans

ICG Note

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “ICG Note”) in favor of Isaac Capital Group LLC (“ICG”) to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its approvals of the amendments on February 7, 2024. On March 6, 2024, ICG entered into a Note Purchase Agreement with an otherwise unaffiliated third party, under which the third party acquired the ICG Note. The terms and conditions of the ICG Note were not modified in connection with its acquisition by the third party. The principal amount of the ICG Note on the date of acquisition was approximately $1.2 million. As of June 28, 2025, the third party had converted $872,000 of the Company’s obligations under the ICG Note into 1.4 million shares of the Company’s common stock. As of June 27, 2026 and December 27, 2025, the amount outstanding on the ICG Note was approximately $0 and $26,000, respectively.

Big/Small Debentures

On August 20, 2024, the Company entered into three Purchase Agreements with three otherwise unaffiliated third-party investors (the “Investors”), pursuant to which (1) one Investor agreed to purchase a unit (the “Unit”), consisting of (i) a non-convertible debenture in the principal amount of up to approximately $1.8 million (the “Big Debenture”), and (ii) a warrant (the “Big Warrant”) for the purchase of up to 400,000 shares of the Company’s Common Stock and (2) the two other Investors each agreed to purchase a Unit, consisting of (i) a non-convertible debenture in the principal amount of up to $404,454 (the “Small Debenture”, and, together with the Big Debenture, the “Debentures”) and (ii) a warrant (the “Small Warrant”, and, together with the Big Warrant, the “Warrants”) for the purchase of up 90,909 shares of Common Stock.

The Debentures are unsecured and subordinated to any existing or future debt. The Debentures bear interest at a rate of (i)1% per month from and after August 20, 2024 (“Original Issue Date”) through and including October 31, 2024, (ii)3% per month from and after November 1, 2024 through and including January 29, 2025, and (iii)4% per month from and after January 30, 2025 through and including the date of repayment.

The Big Debenture was issued with an original issue discount (an “OID”) initially of $171,000, which OID can be expanded with up totwo potential additions, the first in the amount of $171,000 and, thereafter, in the amount of $342,000, which OIDs will increase the principal amount owing on the Big Debenture. With the original OID, the initial principal amount owing under the Big Debenture is approximately $1.3 million; if, expanded, the principal amount would increase to approximately $1.4 million and, thereafter, potentially to approximately $1.8 million. The first potential increase in the Big Debenture OID would occur if the initial principal amount and interest accrued thereon is not paid in full on or before October 31, 2024. The second potential increase in the OID would occur if the initial principal amount (including the first potential increase in the OID) and interest accrued thereon is not paid in full on or before January 29, 2025.

The Small Debentures were issued with an OID initially of $38,863, which OID can be expanded with up totwo potential additions, the first in the amount of $38,863 and, thereafter, in the amount of $77,728, which OIDs will increase the principal amount owing on the Small Debentures. With the original OID, the initial principal amount owing under a Small Debenture is $288,864; if, expanded, the principal amount would increase to $327,726 and, thereafter, potentially to $404,454. The first potential increase in the Small Debenture OID would occur if the initial principal amount and interest accrued thereon is not paid in full on or before October 31, 2024. The second potential increase in the OID would occur if the initial principal amount (including the first potential increase in the OID) and interest accrued thereon is not paid in full on or before January 29, 2025.

As of November 1, 2024, the first of thetwo additional OIDs was effective. The final maturity date for each of the Debentures is April 28, 2025.

The Big Warrant is exercisable, at an exercise price of $1.71 per share, as follows: (i)100,000 shares of Common Stock as of Original Issue Date, (ii) contingently for an additional 100,000 shares of Common Stock as of October 31, 2024, if, as of such date, the Company has not repaid in full its obligations under the Big Debenture, and (iii) contingently for an additional 200,000 shares of Common Stock as of January 29, 2025, if, as of such date, the Company has not repaid in full its obligations under the Big Debenture. The Company and the holder of the Big Warrant reached an agreement, pursuant to which the term of the final tranche of the Big Warrant was extended to August 20, 2027, the number of underlying shares was reduced to 192,982 shares of Common Stock, and the exercise price of $1.71 per share was unchanged.

The Small Warrant is exercisable, at an exercise price of $1.71 per share, as follows: (i)22,727 shares of Common Stock as of Original Issue Date, (ii) contingently for an additional 22,727 shares of Common Stock as of October 31, 2024, if, as of such date, the Company has not repaid in full its obligations under the Small Debenture, and (iii)45,455 shares of Common Stock as of January 29, 2025, if, as of such date, the Company has not repaid in full its obligations under the Small Debenture.

As of November 1, 2024, the contingent second tranche of the Warrants vested.

Except as disclosed with respect to the final tranche of the Big Warrant, each Investor is required to exercise the initial tranche of each Warrant within 15 days of the Original Issue Date. Upon the vesting of each contingent tranche of a Warrant vest, each Investor shall exercise such vested, contingent tranche within 15 days of the vesting of such contingent tranche. If the Company consummates any equity or debt financing before satisfying in full its obligations under the Debentures, then 50% of every net dollar received by the Company from any such financing transaction shall be paid by the Company to the holders of the Debentures, on a pro rata basis, as a mandatory pre-payment thereof. In the event the Company has repaid all sums owing under a Debenture to the Investor, except for an amount equal to any non-conditional OID, the Company has the right, not the obligation, to exercise the vested portion of the Warrant held by the Debenture holder through a set-off of any or all such unpaid OID, on a dollar-for-dollar basis. The Warrants also feature a “cashless” exercise provision. In lieu of making the cash payment otherwise contemplated to be made to the Company upon exercise of a Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Warrant.

During the quarter ended June 28, 2025, one of the two non-affiliated Investors exercised the remainder of the Small Warrant for a total of 45,455 shares (see Note 17). During the fourth quarter of the year ended December 28, 2024, the non-affiliated Investor exercised the Big Warrant for a total of 200,000 shares of the Company’s common stock, and the other two non-affiliated Investors exercised the Small Warrant for a total of 90,908 shares. Additionally, during the fourth quarter of the year ended December 28, 2024, these unaffiliated third-parties agreed to convert a portion their respective investment into Future Equity Agreements of the Company’s subsidiary, Alyea Therapeutics and, consequently, approximately $1.3 million was reclassified as non-controlling interest. During the 13 weeks ended June 28, 2025, the Company paid approximately $0.2 million, in principal and accrued interest, to one of the two non-affiliated Investors in settlement of its debt. As of June 27, 2026 and December 27, 2025, the outstanding balance due on the debentures was approximately $0 and $0.3 million, respectively, consisting of principal and accrued interest.

Note 15: Commitments and Contingencies

Litigation

SEC Complaint

On August 2, 2021, the U.S. Securities and Exchange Commission (“SEC”) filed a civil complaint (the “SEC Complaint”) in the United States District Court for the District of Nevada naming the Company and one of its executive officers, Virland Johnson, the Company’s Chief Financial Officer, as defendants (collectively, the “Defendants”). Pursuant to an agreed-upon Order of the Court, on May 28, 2024, the Company settled its litigation with the SEC. The Settlement Agreement provided, in pertinent part: “Without admitting or denying the allegations of the complaint (except as provided herein in paragraph 12 and except as to personal and subject matter jurisdiction, which [the Company] admits), [the Company] hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things: “(a) permanently restrains and enjoins [the Company] from violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder [15 U.S.C. § 78j(b) and 17 C.F.R. §§ 240.10b-5]; and (c)[sic] orders [the Company] to pay a civil penalty in the amount of $250,000 under Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)).” The SEC has agreed to accept four quarterly payments from the Company, each in the amount of $62,500. The Settlement Agreement is attached to the Order as Exhibit 1, both of which documents may be viewed at https://ecf.nvd.uscourts.gov/doc1/115110470966.

The SEC Complaint’s remaining allegations relate to financial, disclosure and reporting violations against the executive officer under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5. The SEC Complaint also alleges various claims against the executive officer under Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, 13a-14, 13b2-1, and 13b2-2. The SEC continues to seek a permanent injunction, civil penalties, and an officer-and-director bar against the executive officer. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

Sieggreen

In a matter pending in the United States District Court for the District Of Nevada, Case No. 2:21-cv-01517-CDS-EJY, styled asSieggreen, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. Live Ventures Incorporated, Jon Isaac, and Virland A. Johnson, Defendants, the Company was added as a defendant on March 6, 2023, and was served on March 23, 2023. Plaintiff has alleged causes of action against the Company for (i) violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and (ii) violation of Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c) promulgated thereunder. In June 2023 the Company filed a Motion to Dismiss, which the Court granted with leave for Plaintiffs to file a second amended complaint. Plaintiffs filed their Second Amended Complaint on October 31 2024. On December 16, 2024, the Company filed a Motion to Dismiss, which the Court denied. Thereafter, the Company filed an answer to the Second Amended Complaint. The Company strongly disputes and denies all of the allegations contained therein and will continue to defend itself vigorously against the claims.

Main/270

The Company is a defendant in an action filed on April 11, 2022, in the U.S. District Court Southern District of Ohio, Eastern Division, styled,Trustees Main/270, LLC, Plaintiff, vs ApplianceSmart, Inc. and JANONE, Inc., Defendant, Case No.: 2:22-cv-01938-ALM-EPD. The Company was a guarantor of the lease between the Plaintiff and ApplianceSmart, Inc. Plaintiff alleged a cause of action against the Company in respect of the guaranty and seeks approximately $90,000 therefor. Plaintiff also seeks approximately $1,420,000 against ApplianceSmart and the Company on a joint and several basis. Trial has already been conducted in this case. The Company does not believe that it is obligated to Plaintiff in that amount and the parties continue to negotiate a potential settlement. On October 3, 2025, the Court entered a final judgment against the Company for $1.3 million plus pre- and post-judgment interest. On November 3, 2025, the Company timely filed an appeal with the United States Court of Appeals for the Sixth Circuit, and that appeal remains pending. Plaintiff has initiated the process to domesticate to judgment (which, as noted above, is currently under appeal) in Nevada. The Company has filed a motion to stay the process with the Ohio courts. In connection with that motion, the Company may be required to obtain a bond.

Gulf Coast Bank and Trust vs. ALT5 Sigma Corporation, et al.

In a matter in the United States District Court for the State of Minnesota, Hennepin County, Case No. 27-CV-24-340, styled asGulf Coast Bank and Trust Company, Plaintiffs, v ARCA Recycling, Inc., JanOne Inc., and Virland A. Johnson, Defendants; plaintiff sought the payment of approximately $1.6 million (inclusive of principal, interest, and attorneys’ fees) related to the Company’s guarantee of certain obligations of ARCA Recycling Inc., a prior subsidiary of the Company. In the context of the collection litigation, the Company posted a $900,000 cash bond with the Court. In connection with Gulf Coast Bank’s foreclosure on the assets of ARCA Recycling, the Company asserted that Gulf Coast did not act in a commercially reasonable manner regarding its monetizing ARCA’s accounts receivable, inventory, and equipment, which actions resulted in substantial loss of collateral value. The parties reached a settlement agreement under which the Company agreed to pay the Plaintiff a total of $975,000, funded through the $900,000 cash bond and a $75,000 cash payment that was tendered completed on December 1, 2025.

Virland Johnson Bankruptcy

On August 14, 2025, the Company received a Summons and Complaint in an Adversary Proceeding (the “Complaint”) filed on August 6, 2025 in connection with the Chapter 7 bankruptcy proceeding titledIn re Virland Johnson, No. 2:24-bk-00226-BKM, pending in the United States Bankruptcy Court for the District of Arizona and involving the Company’s former Chief Financial Officer, Virland Johnson. The Complaint alleges that Mr. Johnson had been awarded in October 2023 restricted stock units entitling him to receive 329,294 shares of the Company’s common stock under the Company’s 2023 Equity Incentive Plan. According to the Complaint, Mr. Johnson did not disclose the existence of the stock award in his January 11, 2024 Chapter 7 bankruptcy petition or accompanying disclosure schedules. The Complaint alleges that the common stock may not have been delivered to Mr. Johnson, may have been assigned by Mr. Johnson to the Company or another unknown assignee, may have been sold by Mr. Johnson, or may even continue to be held by Mr. Johnson. Through the Complaint, the U.S. Trustee seeks to recover the common stock or, if it is no longer available, the equivalent value from the Company on behalf of the bankruptcy estate. On September 30, 2025 the Company filed its Answer to the Complaint and denied the allegations of any wrongdoing by the Company. The Company disputes the allegations concerning the Company and will continue to defend itself vigorously against the claims.

First Capital Consulting, Inc. DBA Trusaic vs. ALT5 Sigma Corporation

In a matter in the Los Angeles, California Superior Court Case No. 24STCV02261, styled asFirst Capital Consulting, Inc., Plaintiff v ALT5 Sigma Corporation, ARCA Recycling, Inc., Customer Connexx LLC; and DOES 3 through 10, inclusive, Defendants; plaintiff is seeking $97,696, plus costs and interest, against the Company for unpaid obligations of entities that no longer exist or do not have any assets, i.e., ARCA Recycling Inc. and Customer Connexx LLC. Plaintiff alleges that ALT5 Sigma, as the parent company at the time, should be responsible for the fees. Plaintiff filed a motion for summary judgment on March 5, 2026, which the Court granted on June 2, 2026. Due to certain procedural issues, judgment has not yet been entered against the Company. When entered, the judgment will be $97,690 plus interest in the amount of $52,887. Once entered, plaintiff has advised that it will seek to recover its attorneys’ fees.

Judgment in Rwanda

ALT 5 Sigma Canada Inc., our indirect-, wholly-owned second-tier Canadian subsidiary, is the subject of certain legal proceedings in the Rwanda judicial system stemming from issues that allegedly occurred in 2023, prior to the Company’s acquisition of the ALT 5 Subsidiary (and, indirectly, the Canadian subsidiary). At stake in those proceedings is US$3.5 million of the Canadian subsidiary’s funds that are held on deposit in its account at I&M Bank in Rwanda. On May 7, 2025, the Intermediate Court of Nyarugenge, Rwanda, rendered findings and a decision that the Canadian subsidiary was guilty of the offense of inability to justify the origin of assets (the US$3.5 million) and money laundering, but not guilty of forming or joining a criminal association and that the US$3.5 million be permanently forfeited and deposited into the Rwandan State Treasury. The Intermediate Court also ordered that the Canadian subsidiary be dissolved. A co-defendant in those proceedings is Mr. Andre Beauchesne, who was that entity’s principal in 2023. The Intermediate Court sentenced Mr. Beauchesne to seven years of imprisonment because he did not attend the court proceedings and did not present a defense, along with fining him the equivalent sum of USD $517,131.5625. On June 6, 2025, Mr. Beauchesne and the Canadian subsidiary appealed the Intermediate Court’s decision to the High Court of Kigali, Rwanda, and, as of the date of this Quarterly Report, the matter remains under judicial review. In the appeal, both appellants dispute the findings of the Intermediate Court, reiterate and continue to maintain that each was a victim of fraud, and that the Canadian subsidiary should regain access to the funds that belong to it (US$3.5 million). None of the Canadian subsidiary’s customers was impacted by the Intermediate Court’s decision for confiscation of the funds. Although no assurance can be given as to the outcome of the appeal, the Company and its Canadian subsidiary are actively pursuing all available legal remedies to protect their interests and those of their stakeholders. In connection with the Intermediate Court’s Rwanda decision and pending the outcome of the appeal, the Company has recorded a US$3.5 million allowance on its condensed consolidated balance sheets.

Other Commitments

On December 30, 2017, the Company disposed of its retail appliance segment and sold ApplianceSmart to Live Ventures Incorporated (“Live Ventures”), a related party. In connection with that sale, as of January 1, 2022, the Company accrued an aggregate amount of future real property lease payments of approximately $767,000 which represented amounts guaranteed or which may have been owed under certain lease agreements to three third party landlords in which the Company either remained the counterparty, was a guarantor, or had agreed to remain contractually liable under the lease (“ApplianceSmart Leases”). A final decree was issued by the court on February 28, 2022, upon the full satisfaction of the Plan, at which time ApplianceSmart emerged from Chapter 11. During the year ended December 28, 2024, the Company reversed approximately $637,000 of the accrual, as the Company is no longer liable for two of these guarantees upon ApplianceSmart’s emergence from bankruptcy. As of December 28, 2024, a balance of approximately $130,000 remains as an accrued liability due to an ongoing dispute concerning one of the leases. The Company and Live Ventures have agreed to divide in half between them any ultimate balance owing thereunder and any attorneys’ fees expended in relation thereto.

The Company is party from time to time to other ordinary course disputes that we do not believe to be material to our financial condition as of June 27, 2026.

Note 16: Registered Direct Offering

Registered Direct Offering

On or about August 12, 2025, the Company entered into securities purchase agreements (the “Registered Offering Purchase Agreements”) with certain institutional investors, pursuant to which the Company agreed to issue to the Purchasers (as defined therein), in a registered direct offering (the “Registered Offering”), an aggregate of 100,000,000 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), at a purchase price of $7.50 per share.

The Company intends to use up to $10.0 million of the net proceeds from the Registered Offering to settle existing litigation, pay existing debt, and fund the Company’s existing business operations. The balance of the net proceeds was used to fund the acquisition of $WLFI tokens from World Liberty Financial, Inc. (the “Lead Investor”), pursuant to a Token Purchase Agreement, and the establishment of the Company’s cryptocurrency treasury operations. The shares of Common Stock issued in the Registered Offering were issued pursuant to a prospectus supplement, which was filed with the SEC on August 11, 2025, in connection with a takedown from the Company’s shelf registration statement on Form S-3, as amended, (File No. 333-289176), which was declared effective by the SEC on August 8, 2025.

Private Placement Offering

Also, on August 12, 2025, the Company consummated transactions resulting from a Securities Purchase Agreement (the “Private Placement Purchase Agreement” and, together with the Registered Offering Purchase Agreements, the “Purchase Agreements”), with the Lead Investor, pursuant to which the Company received $750 million of $WLFI tokens and issued to the Lead Investor, in a concurrent private placement (the “Private Placement” and together with the Registered Offering, the “Offerings”),1,000,000 shares of Common Stock at a purchase price of $7.50 per share (the “PIPE Shares”), and pre-funded warrants (the “PIPE Pre-Funded Warrants”) to purchase up to 99,000,000 shares of Common Stock at a purchase price of $7.499 per PIPE Pre-Funded Warrant (the “PIPE Pre-Funded Warrant Shares”). Each of the PIPE Pre-Funded Warrants is exercisable for one share of Common Stock at an exercise price of $0.001 per share. The PIPE Pre-Funded Warrants were not exercisable until the Company had (i) obtained stockholder approval to allow the issuance of shares underlying the PIPE Pre-Funded Warrant in excess of 19.99% of the shares of common stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”) and (ii) filed an amendment to its Articles of Incorporation to increase the number of authorized shares of common stock (the “Amendment”), both of which occurred in October 2025. Accordingly, the PIPE Pre-Funded Warrants may be exercised at any time until all have been exercised in full, subject to certain contractual beneficial ownership limitations.

Pursuant to the Private Placement Purchase Agreement, the Lead Investor was issued Common Stock Purchase Warrants (the “Lead Investor Warrants”) to purchase up to 10% of the number of shares of Common Stock or pre-funded warrants sold in the offering, or 20 million shares of Common Stock. The Lead Investor Warrants are exercisable for (i)8,000,000 shares of Common Stock at an exercise price of $7.50 per share of Common Stock; (ii)4,000,000 shares of Common Stock at an exercise price of $8.25 per share of Common Stock; (iii)4,000,000 shares of Common Stock at an exercise price of $9.00 per share of Common Stock; and (iv)4,000,000 shares of Common Stock at an exercise price of $9.75 per share of Common Stock, subject to adjustment. The issuance of the shares of Common Stock underlying the Lead Investor Warrants (the “Lead Warrant Shares”) was also subject to stockholder approval of the Exchange Cap and the Amendment, which, as noted above, occurred in October 2025.

The issuance and sale of the PIPE Shares, the PIPE Pre-Funded Warrants, the Lead Investor Warrants, and the Lead Investor Shares (collectively, the “PIPE Securities”) were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The PIPE Securities were, or will be, as relevant, issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act and/or Regulation D promulgated thereunder for transactions not involving a public offering. Pursuant to the terms of the Registration Rights Agreement (as defined herein), the Company is required to file a registration statement providing for the resale of the PIPE Securities within 15 days of the closing of the Private Placement. As of the date of this Quarterly Report, the registration statement has not yet been filed.

The Registered Offering resulted in gross proceeds of $750 million and the Private Placement resulted in the receipt of $750 million of WLFI tokens, in each case before deducting placement agent commissions and other offering expenses. The closing of the Offerings occurred on August 12, 2025.

Pursuant to the Purchase Agreements, the Company has agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of thirty (30) days after the initial registration statement was declared effective, subject to certain customary exceptions, including the use of the Sales Agreement (as defined herein), without the consent of the Purchasers, the Lead Investor, and the Placement Agent.

Placement Agency Agreements

The Company entered into a Placement Agency Agreement with A.G.P./Alliance Global Partners (the “Placement Agent”), dated August 11, 2025, pursuant to which the Placement Agent acted as the exclusive placement agent for the Company in connection with the Registered Offering (the “RD Placement Agency Agreement”). Pursuant to the RD Placement Agency Agreement, the Company paid the Placement Agent a cash fee of 3% of the gross proceeds from the Registered Offering and issued to the Placement Agent (or its designees) warrants to purchase that number of shares of Common Stock equal to 3% of the securities sold in the Registered Offering, which are exercisable beginning 180 days following the closing date, and have an initial exercise price per share of Common Stock of $8.25 (the “Placement Agent Warrants”). In addition, the Company reimbursed the Placement Agent for up to $475,000 of its fees and expenses, and up to $10,000 in non-accountable expenses, in connection with the Registered Offering.

The Company also entered into a Placement Agency Agreement with the Placement Agent, dated August 11, 2025, pursuant to which the Placement Agent acted as the exclusive placement agent for the Company in connection with the Private Placement (the “PIPE Placement Agency Agreement”). Pursuant to the PIPE Placement Agency Agreement, the Company paid the Placement Agent (or its designees) a cash fee of (i) $6.5 million for all tokens paid for the securities sold in the Private Placement in excess of $500 million and (ii)3% of the gross proceeds of cash paid for the securities sold in the Private Placement Offering by the Placement Agent, and issued to the Placement Agent, Placement Agent Warrants equal to 3% of the securities sold in the Private Placement, which are exercisable beginning 180 days following the closing date, and have an initial exercise price per share of Common Stock of $8.25. In addition, the Company reimbursed the Placement Agent for up to $475,000 of its fees and expenses, and up to $10,000 in non-accountable expenses, in connection with the Private Placement.

The issuance of the Placement Agent Warrants and the shares of Common Stock underlying the Placement Agent Warrants (the “Placement Agent Warrant Shares”) will not be registered under the Securities Act or any state securities laws. The Placement Agent Warrant Shares will be issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act and/or Regulation D promulgated thereunder for transactions not involving a public offering.

The Placement Agency Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

On December 30, 2025, the Company entered into an agreement (the “Placement Agent Subsequent Agreement”) with the Placement Agent that modified certain of the terms of the Placement Agent Agreements. The parties agreed, subject to certain limitations, to extend the Placement Agent’s irrevocable right of first refusal to act as sole investment banker, sole book-runner, sole sales agent, and/or sole placement agent, at its sole discretion, for the Company’s future public and private equity and debt offering, including all equity linked financings, through December 31, 2026, on terms customary to the Placement Agent. The fee tail period, as provided in the Placement Agent Agreements, was also extended from August 12, 2026 through December 31, 2026. In connection with such extensions, the Placement Agent (i) paid the Company the sum of one million dollars and (ii) agreed that, once it has received one million dollars in fees paid to it by the Company with respect to any financing consummated during the extended right of first refusal period or in respect of the extended fee tail period, the Company may allocate 35% of the fees otherwise to be associated therewith to another bank and/or broker-dealer or, if no other bank or broker-dealer would be entitled to any such fees, then the Placement Agent will reduce its customary and reasonable fees associated therewith during such periods by 35%. The Company also generally released the Placement Agent from all claims or other obligations through the date of the Placement Agent Subsequent Agreement.

In connection with the Placement Agent Subsequent Agreement, on December 26, 2025, the Company entered into an agreement with Keefe, Bruyette & Woods, Inc. (“KBW”), that superseded and terminated the parties’ May 14, 2025 and June 16, 2025, agreements, which provided that KBW would render certain financial advisory and investment banking services to the Company. Under this agreement, the Company agreed to pay to KBW the sum ofthree million dollars, one-third of which was paid on or about December 31, 2025 and the remaining amounts in equal payments on or before March 31, 2026 and May 31, 2026. KBW had asserted that it was due $37.8 million in advisory fees connection with the Registered Offering and the Private Placement. The parties also generally released each other from all claims or other obligations in respect of the May 14, 2025 and June 16, 2025 agreements and any transactions related thereto.

Registration Rights Agreement

On or about August 11, 2025, the Company and the Lead Investor entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed to file a registration statement (the “Resale Registration Statement”), providing for the resale of the PIPE Securities within 15 days of the closing of the Private Placement, to have such registration statement declared effective with 30 days of the filing date (or 60 days, if the SEC conducts a full review) (the date of such effectiveness, the “Effective Date”), and to maintain the effectiveness of such registration statement. As of the date of this Quarterly Report, the registration statement has not yet been filed.

Asset Management Agreement

Further, on or about August 11, 2025 (the “AMA Commencement Date”), the Company entered into an Asset Management Agreement (the “Asset Management Agreement”) with Kraken (the “Asset Manager”), pursuant to which the Asset Manager agreed to provide discretionary investment management services with respect to the Company’s cryptocurrency treasury. The term of the Asset Management Agreement was for thirty (30) days renewable upon the mutual consent of the parties. The Asset Manager received a nominal fee as compensation for its services under the Asset Management Agreement, which was not renewed.

Lock-Up Agreements

Pursuant to the Purchase Agreements, the Company will not issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of 30 days after the Effective Date, subject to certain customary exceptions, including the use of the Sales Agreement (as defined herein), without the consent of the Purchasers, the Lead Investor and the Placement Agent.

In addition, each of the Company’s directors and executive officers are subject to a lock-up agreement, which prohibits them from offering for sale, pledging, announcing the intention to sell, selling, contracting to sell, granting any option, right or warrant to purchase, or otherwise transferring or disposing of,50% of their shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock for a period of 90 days following the Effective Date and the remaining 50% upon the later of ninety (90) days after the Effective Date or the effective date of the Stockholder Approval. It is contemplated that the lock-up agreements will not prohibit our directors and executive officers and the selling stockholder from transferring shares of our common stock for bona fide estate or tax planning purposes, subject to certain requirements, including that the transferee be subject to the same lock-up terms.

Note 17: Stockholders’ Equity

Common Stock: Our Articles of Incorporation authorize 2.0 billion shares of common stock that may be issued from time to time having such rights, powers, preferences and designations as the Board of Directors may determine. During the 13 weeks ended June 28, 2026 and June 28, 2025, no shares of common stock were issued in lieu of professional services.

During the quarter ended June 27, 2026, the Company issued 12,670,257 shares of its common stock for the acquisition of Block Street.

During the quarter ended June 28, 2025, the Company issued 100,000 shares of its common stock to one individual under the Company’s 2023 Equity Incentive Plan. The aggregate value of the shares at issuance was approximately $605,000.

During the quarter ended June 28, 2025, the Company issued 17,511 shares of its common stock to a non-affiliated third-party in exchange for brokerage services rendered.

During the quarter ended June 28, 2025, the Company issued an aggregate of 700,000 restricted stock units to Tony Isaac, the Company’s President.350,000 of the restricted stock units were issued from the Company’s 2024 Plan and 350,000 were issued from the Company’s 2023 Plan. The aggregate value of the shares at issuance was approximately $1.4 million.

During the quarter ended June 28, 2025, pursuant to the terms and conditions of a related party promissory note, the Company converted approximately $323,000 of obligations into 529,161 shares of the Company’s common stock (see Note 14).

During the quarter ended June 28, 2025, pursuant to the terms and conditions of a related party promissory note, the Company converted approximately $306,000 of obligations into 502,852 shares of the Company’s common stock (see Note 14).

On May 15, 2025, pursuant to the terms and conditions of a promissory note, the Company converted approximately $91,500 of obligations into 150,000 shares of the Company’s common stock (see Note 14).

On May 9, 2025, the Company acquired Mswipe. As consideration under the acquisition, the Company issued 1,000,000 shares of its common stock to the sellers of Mswipe (see Note 3).

On May 2, 2025, the Company entered into a licensing agreement with a non-affiliated third-party, pursuant to which the third-party will provide software licensing and support to the Company. In connection with the agreement, the Company issued to the third-party 300,000 shares of its common stock.

During the quarter ended March 29, 2025, the Company issued 45,455 shares of its common stock related to the exercise of warrants under the Small Debenture (see Note 14).

On May 4, 2024, the Company entered into an Asset Purchase Agreement for the purchase of specified assets of an unaffiliated third-party. In connection with this transaction, the Company tendered 5,000 shares of the Company’s Series V Convertible Preferred Stock. The conversion ratio of the Series V Convertible Preferred Stock is 1:120, meaning every one share of Series V Convertible Preferred Stock, if and when converted into shares of Common Stock shall convert into 120 shares of Common Stock. On March 12, 2025, the unaffiliated third-party exercised all tendered shares of Series V Convertible Preferred Stock into 600,000 shares of the Company’s common stock.

On January 15, 2025, the Company entered into a six-month consulting agreement with a non-affiliated third-party, pursuant to which the third-party will provide a variety of corporate advisory services related to investment banking matters to the Company. In connection with the agreement, on January 15, 2025, the Company issued to the third-party 15,499 shares of its common stock.

As of June 27, 2026, and December 27, 2025, there were 139,836,511 and 126,474,169 shares, respectively, of common stock issued and outstanding, net of shares held in Treasury of 674,651 as of June 27, 2026.

Equity Offerings: The Company’s 2024 Plan, which was adopted by the Board in November 2024 and approved by the stockholders at the 2024 annual meeting of stockholders, replaces the 2023 Plan, which replaced the 2016 Plan, which replaced the 2011 Plan. Under the 2024 Plan, the maximum aggregate number of shares, which may be subject to or delivered under Awards granted under the Plan is 2,800,000 shares. Awards may be in the form of a Stock Award, Option, Stock Appreciation Right, Stock Unit, or Other Stock-based Award granted in accordance with the terms of the respective Plan. During the 13 weeks ended June 28, 2026, there were no grants under the 2024 Plan.

The Company’s 2023 Plan, which was adopted by the Board in August 2023 and approved by the stockholders at the 2023 Annual Meeting of Stockholders, replaces the 2016 Plan, which replaced the 2011 Plan. Under the 2023 Plan, the maximum aggregate number of shares, which may be subject to or delivered under Awards granted under the Plan is two million (2,000,000) shares. Awards may be in the form of a Stock Award, Option, Stock Appreciation Right, Stock Unit, or Other Stock-based Award granted in accordance with the terms of the respective Plan. During the 13 weeks ended June 28, 2026 and June 28, 2025, the Company recognized $0 and $0 in share-based compensation expense related to the 908,852 RSU’s that were awarded and immediately vested.

The Company’s 2016 Plan authorizes the granting of awards in any of the following forms: (i) incentive stock options, (ii) nonqualified stock options, (iii) restricted stock awards, and (iv) restricted stock units, and expires on the earlier of October 28, 2026, or the date that all shares reserved under the 2016 Plan are issued or no longer available. On November 4, 2020, the Company amended the 2016 Plan to increase the issuance of common shares from 400,000 to 800,000. The vesting period is determined by the Board of Directors at the time of the stock option grant. As of June 28, 2026 and December 27, 2025,100,000 options were outstanding under the 2016 Plan.

The Company’s 2011 Plan authorizes the granting of awards in any of the following forms: (i) stock options, (ii) stock appreciation rights, and (iii) other share-based awards, including but not limited to, restricted stock, restricted stock units or performance shares, and expired on the earlier of May 12, 2021, or the date that all shares reserved under the 2011 Plan are issued or no longer available. As of June 28, 2026 and December 27, 2025,8,000 were outstanding under the 2011 Plan. No additional awards will be granted under the 2011 Plan.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. There were no stock options granted during the 13 weeks ended June 27, 2026.

Additional information relating to all outstanding stock options is as follows:

The Company recognized $0 and $0 in share-based compensation expense related to restricted stock units for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and $0 and $0 for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively.

As of June 27, 2026, the Company hadno unrecognized share-based compensation expense associated with equity awards.

Series I Convertible Preferred Stock

Shares of Series I Preferred Stock are convertible into the Company’s common shares at a ratio of 100:1. No shares were converted during the 13 weeks ended June 27, 2026. As of June 27, 2026 and December 27, 2025, there were 12,500 shares and 17,000 shares of Series I Convertible Preferred Stock outstanding.

Series Q Convertible Preferred Stock

Shares of Series Q Preferred Stock are convertible into the Company’s common shares at a ratio of 1:1. No shares were converted during the 13 weeks ended June 27, 2026. As of June 27, 2026 and December 27, 2025, there were 867,387 shares and 925,212 shares of Series Q Convertible Preferred Stock outstanding.

Series S Preferred Stock

On December 28, 2022 the Company acquired Soin Therapeutics LLC, by way of a triangular merger. In connection with this transaction, with a potential value of up to $30 million, the Company tendered 100,000 shares of the Company’s Series S Convertible Preferred Stock. Shares of Series S Convertible Preferred Stock are convertible into the Company’s common shares at a ratio of 1:1. No shares were converted during the 13 weeks ended June 27, 2026. As of June 27, 2026 and December 27, 2025, there were 100,000 shares of Series S Convertible Preferred Stock outstanding.

Series V Convertible Preferred Stock

Shares of Series V Preferred Stock are convertible into the Company’s common shares at a ratio of 120:1. All outstanding shares of Series V Preferred Stock were converted into 600,000 shares of the Company’s common stock (see above). As of June 27, 2026 and December 27, 2025, there were 0 and 5,000 shares of Series V Convertible Preferred Stock outstanding, respectively. (See Note 18.)

Note 18: Mezzanine Equity

During the year ended December 28, 2024, the Company reclassified approximately $2.7 million from mezzanine equity to current liabilities, and approximately $8.0 million from mezzanine equity to permanent equity. As of June 27, 2026 and December 27, 2025, the outstanding balance in mezzanine equity relates to the $17.0 million convertible tranche originally valued at approximately $3.9 million.

Note 19: Earnings Per Share

Net income (loss) per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares outstanding do not include shares of restricted stock that have not yet vested, although such shares are included as outstanding shares in the Company’s Consolidated Balance Sheet. Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding and if dilutive, potential common shares outstanding during the period. Potential common shares consist of the additional common shares issuable in respect of restricted share awards, stock options, warrants, and convertible preferred stock.

The following table presents the computation of basic and diluted net income (loss) per share (in $000’s, except share and per–share data):

Potentially dilutive securities totaling approximately 9.2 million and 9.2 million were excluded from the calculation of diluted earnings per share for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and 9.2 million and 9.2 million were excluded from the calculation of diluted earnings per share for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively, because the effects were anti-dilutive.

Note 20: Income Taxes

The Company recorded an income tax benefit from continuing operations of approximately $142.2 million and an income tax benefit in the amount of approximately $0.2 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively, and an income tax expense from discontinued operations of $0.0 million and an income tax expense of $3.0 million for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively. The Company’s overall effective tax rate was(21)% and 31% for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively. The effective tax rates and related provisional tax amounts vary from the U.S. federal statutory rate primarily due to foreign and state taxes and certain non-deductible expenses.

Note 21: Segment Information

The Company operates within targeted markets through three reportable segments for continuing operations: Fintech, Biotech, and Corporate and Other. The Biotech segment is being presented as discontinued operations for the 13 and 26 weeks ended June 27, 2026 and June 28, 2025 (see Note 4).

The following tables present the Company’s segment information for the 13 and 26 weeks ended June 27, 2026 and June 28, 2025 (in $000’s):

Note 22: Related Parties

Shared Services

Tony Isaac, the Company’s President, is the father of Jon Isaac, President and Chief Executive Officer of Live Ventures and managing member of Isaac Capital Group LLC (“ICG”). Tony Isaac is a member of the Board of Directors of Live Ventures. The Company also shares certain executive, accounting and legal services with Live Ventures. The total services shared were approximately $30,000 and $30,000 for the 13 weeks ended June 27, 2026 and June 28, 2025, respectively, and $60,000 and $58,000 for the 26 weeks ended June 27, 2026 and June 28, 2025, respectively. ALT5 rents approximately 9,900 square feet of office space from Live Ventures in Las Vegas, Nevada.

Note 23: Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to disclosures in its condensed consolidated financial statements other than as discussed below:

Sale of ALT5 Sigma Canada, Inc.

On July 29, 2026, the Company and its first tier, wholly -(a Delaware corporation referenced in Note 1 as the “ALT5 Subsidiary”), owned subsidiary, Alt 5 Sigma, Inc., entered into an Acquisition Agreement with Prime Delta Corp., a Delaware corporation (“Prime Delta”), pursuant to which the Alt 5 Subsidiary sold to Prime Delta all of the issued and outstanding shares of Alt 5 Sigma Canada, Inc. (“Alt 5 Canada”; referenced in these Notes as our indirect, wholly-owned second tier Canadian subsidiary), through which the Company conducted its payments business. In exchange, the Company received the following consideration: (i) a four (4)-year secured promissory note (the “Prime Delta Note”) in the initial principal amount of $12.0 million, bearing interest at 4% per annum, with interest payments due on the 10 th day of each month, $1.0 million of principal payable on or before August 11, 2026, and the remaining principal payable in four equal annual installments of $2,750,000 (all subject to early payments in amounts no less than twenty percent (20%) of the net amounts received by Prime Delta from third-party investors of Prime Delta), and (ii)11,551,750 newly issued shares of Prime Delta common stock (“Prime Delta Stock”). The Company valued the Prime Delta Note at its net present value of $9,251,847, using a market interest rate of 18%, less a Current Expected Credit Losses (CECL) discount of $5,876,847, for a net value of $3,375,000. The fair market value of the Prime Delta’s issued common stock is zero, as there is no readily ascertainable market for such shares. Accordingly, the aggregate fair market value of the consideration received is $3,375,000. The combined value of the Company’s investment in Alt 5 Canada through the ALT5 Subsidiary and the and the intercompany loans made to Alt 5 Canada is $17,415,025, resulting in a loss of $14,040,025 on the sale. The transaction closed on August 3, 2026.

The Prime Delta Note is secured by substantially all of the assets of Prime Delta and is guaranteed by certain affiliates of Prime Delta. In connection with the transaction, the Company assigned to Prime Delta the “Alt 5” and “Alt 5 Sigma” trademarks and related rights, agreed to cease use of those names, and agreed to change the names of its subsidiaries whose legal names include “Alt 5” within 90 days following the closing.

Additionally, through counsel for Prime Delta, the Company may offer the holders of its Series B Preferred Stock the opportunity to redeem their shares of Series B Preferred Stock, on a consensual basis, in exchange for their pro rata share of up to 8,551,750 shares of Prime Delta Stock, on a one share of Series B Preferred Stock -for-one share of Prime Delta Stock basis. No such redemption offer has commenced and no documentation has been prepared or filed, as applicable.

Amendments to Promissory Notes and Warrants

Effective July 7, 2026, the Company entered into Extension and First Amendment Agreements with the holders of ten promissory notes with an aggregate principal amount of CAD$2,750,000, pursuant to which the maturity dates of the notes were extended to October 1, 2026 in consideration of the payment of extension fees equal to 1.75% of the principal amount of each note, or CAD$48,125 in the aggregate. In connection with the extensions, the Company amended warrants held by five of the noteholders to purchase an aggregate of 340,000 shares of the Company’s common stock, to reduce the per-share exercise prices of each from $2.25 to $1.00 and to extend their expiration date from May 15, 2027 to December 31, 2027.

Concrete Agreement

On July 30, 2026, Alt5 Digital Holdings, Inc., a Wyoming corporation and indirect, wholly-owned subsidiary of the Company (“Alt5 Digital”), and Concrete Network Services Ltd, a BVI business company (“Concrete”), entered into a two-year Master Services Agreement (the “Agreement”), pursuant to which the parties determined that Concrete would provide certain services to Alt 5 Digital through two separate Statements of Work (the “SOWS”). The services are generally described as vault infrastructure and related services on an exclusive basis in respect of $100,000,000 of WLFI tokens that ALT 5 Digital provided under the SOWS to Concrete. Through a series of steps, Concrete will deposit and deploy $32,000,000 of cash or cash equivalent that it obtains in connection with the provision of its services into specific deployment activities agreed between the parties to generate certain investment returns, through which Concrete will be paid fees for the services referenced above and an otherwise unrelated third party will receive certain remuneration in connection with the tokens and the cash or cash equivalents that Concrete processes. Concrete also delivered $3,000,000 of cash or cash-equivalents to Alt 5 Digital as an advance payment of those certain expected investment returns. Such advance will be due and owing to Concrete and will be repaid by repayments expected to be generated, in full or in part, through such deployment activities. Any shortfall in such repayment of the $3,000,000 is guaranteed by Alt 5 Digital. Upon conclusion of the term and the parties receiving their specified yields, Concrete shall return to Alt 5 Digital the $100,000,000 of WLFI tokens that ALT 5 Digital had deposited with Concrete at the commencement of the parties’ relationship, subject to satisfaction of the applicable secured obligations and release conditions under the Agreement. As of the date of this Quarterly Report, Concrete has deposited and deployed $25,000,000 of the referenced cash or cash equivalents. Lastly, the Agreement provides for mutual indemnification between the parties.