ALT5 Sigma Corp

Note 1: Background

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

The Company hadtwo operating segments – Fintech, Biotechnology, and Corporate and Other. In connection with a partial or complete spinoff of its subsidiary, Alyea Therapeutics Corporation (“Alyea”), 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 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 certain corporate general and administrative costs.

The Company reports on a 52- or 53-week fiscal year. The Company’s 2024 fiscal year (“2024”) ended on December 28, 2024, and the current fiscal year (“2025”) will end on December 27, 2025.

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 28, 2024.

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.

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 Soin merger, 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.

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 28, 2025 and December 28, 2024, the outstanding balances of digital assets and other receivables was approximately $14.4 million and $23.8 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 28, 2025, the outstanding balance of digital assets and other payables was approximately $23.6 million, of which approximately $14.4 million was digital assets and $9.2 million was cash deposits. As of December 28, 2024, the outstanding balance of digital assets and other payables was approximately $30.9 million, of which approximately $23.8 million was digital assets and $7.1 million was 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:

1. Executed contracts with the Company’s customers that it believes are legally enforceable;

2. Identification of performance obligations in the respective contract;

3. Determination of the transaction price for each performance obligation in the respective contract;

4. Allocation of the transaction price to each performance obligation; and

5. Recognition of revenue only when the Company satisfies each performance obligation.

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

1. Product sales – revenue is recognized at the time of sale of equipment to the customer.

2. Service sales – revenue is recognized based on when the service has been provided to the customer.

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.

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 November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires, among other updates, enhanced disclosures about significant segment expenses that are regularly provided to the CODM, as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective adoption. Early adoption is permitted. The Company does not anticipate this guidance will have a material impact upon its financial position and results of operations.

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. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

Note 3: Mergers and Acquisitions

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. The business trades 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 seamlessly to spend traditional and digital currencies across the globe. The acquired 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 current solutions, 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 four-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 Therapeutics Corporation,” our biotech business that we are in process of separating from our core business, 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 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) right if the Operating Subsidiaries generate a minimum of $15 million in annualized or actual total revenue from the assets owned by the Operating subsidiaries at May 9, 2025.

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 PMW 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 and June 29, 2024, 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).

(1)Adjustments are related to adjustments made for the following:

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

Qoden

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 purchase price was $2.2 million, consisting of $2.0 million, or 771,010 shares, of the Company’s Series Q Convertible Preferred Stock and $0.2 million in cash. The Series Q Convertible Stock was valued at $2.594 per share on the date issued, and is subject to a mandatory eight-calendar-quarter leak-out, such that no more than twelve-and-one-half percent of the shares may be converted into shares of the Company’s common stock on a trailing quarterly basis over a period oftwo years, and are subject to vesting provisions. The $0.2 million in cash is payable in increments of $10,000 per month for 24 months, commencing on the first day of the month following closing. The acquisition was determined to be an asset acquisition for accounting purposes.

ALT5

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. 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.

As consideration under the acquisition, the Company issued 1,799,100 shares of its common stock to the legacy equity holders of the capital stock of ALT5 Subsidiary. Those shares represented approximately 19.9% of the Company's then-issued and outstanding shares of common stock. Each of the shares of the Company's newly-issued common stock was valued at $4.14, which was the Nasdaq Historical NOCP on Thursday, May 9, 2024, the day immediately prior to the date on which the agreement was executed. The Company also issued 34,207 shares of its newly-designated Series B Preferred Stock (the “Series B Stock”) to the legacy equity holders of the capital stock of ALT5. In connection with the closing of the acquisition of ALT5 Subsidiary, the Company also issued 3,200 shares of its newly-designated Series M Preferred Stock (the “Series M Stock”) totwo entities that acted as finders for the transaction.

The fair value of the purchase price components outlined above was $16.0 million due to fair value adjustments for the shares of Series B Stock and Series M Stock, as detailed below (in $000’s):

Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $11.7 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 10, 2024, 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 be deductible for tax purposes. During the year ended December 28, 2024, the Company recorded a noncash fair value adjustment related to deferred tax liabilities and other liabilities acquired in the aggregate amount of approximately $7.9 million, which was recorded to goodwill. The table below outlines the purchase price allocation of the purchase for ALT5 Subsidiary to the acquired identifiable assets, liabilities assumed and goodwill (in $000’s):

The table below presents selected proforma information for the Company for the thirteen and twenty-six week periods ended June 29, 2024, assuming that the acquisition had occurred on January 1, 2023 (the beginning of the Company’s 2023 fiscal year), pursuant to ASC 805-10-50 (in $000's). 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.

(1)Adjustments are related to adjustments made for the following:

•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 June 28, 2025, the Company discontinued operations of its Biotechnology segment as follows:

On May 21, 2025, the Company disclosed that June 2, 2025 would be the record date for a transaction involving the Company’s formal separation of its healthcare assets, known as Alyea, and that the scope and method of a partial or full disposition of its interests in Alyea, whether as a split-off or a spin-off or another related transaction, would be subsequently announced.

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 December 28, 2024, and consists of the following:

1 The Company’s property and equipment consisted of the following:

No depreciation expense has been recorded for the 13 weeks ended June 28, 2025 and June 29, 2024, or the 26 weeks ended June 28, 2025 and June 29, 2024.

2 The Company’s intangible assets consisted of the following:

Amortization expense was $0.5 million and $0.5 million for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, and $1.1 million and $1.1 million for the 26 weeks ended June 28, 2025 and June 29, 2024, 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 10-year period.

3 The Company’s accrued liabilities consisted of the following:

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 28, 2025 and

June 29, 2024 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive income (loss) and consist of the following:

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 28, 2025 and June 29, 2024 have been reflected as discontinued operations in the consolidated statements of cash flows and consist of the following:

Note 5: Trade and other receivables

The Company’s trade and other receivables as of June 28, 2025 and December 28, 2024, respectively, were as follows (in $000’s):

Note 6: Prepaids and other current assets

Prepaids and other current assets as of June 28, 2025 and December 28, 2024 consist of the following (in $000’s):

Note 7: Property and Equipment

Property and equipment as of June 28, 2025 and December 28, 2024 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 28, 2025 and December 28, 2024 (in $000’s):

As of June 28, 2025, the weighted average remaining lease term for operating leases is 4.4 years. The Company’s weighted average discount rate for operating leases is 12.8%. Total cash payments for operating leases for the 13 weeks ended June 28, 2025 was approximately $11,000. No cash payments for operating leases were made during the 13 weeks ended June

29, 2024. Additionally, the Company recognized approximatelyno right of use assets or lease liabilities during the 13 weeks ended June 28, 2025.

Total present value of future lease payments of operating leases as of June 28, 2025 (in $000’s):

Note 9: Intangible Assets

Intangible assets as of June 28, 2025 and December 28, 2024 consist of the following (in $000’s):

Intangible amortization expense was $0.8 million and $0.2 million for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, and $1.6 million and $0.2 million for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively.

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 atwo-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).

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 10-year period.

Note 10: Goodwill

The following table details the Company's goodwill as of June 28, 2025 and December 28, 2024 (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 26 weeks ended June 28, 2025 was approximately $6.4 million, and was due to the acquisition of Mswipe (see Note 3).

Note 11: Accrued Liabilities

Accrued liabilities as of June 28, 2025 and December 28, 2024 consist of the following (in $000’s):

Note 12: Debentures

Debentures outstanding as of June 28, 2025 and December 28, 2024 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 mature as of June 30, 2025.

Note 13: Debt

Long-term debt as of June 28, 2025 and December 28, 2024 consisted of the following (in $000’s):

Legacy Subsidiary Fixed Deposits

ALT5 Subsidiary 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. Several of these unaffiliated third-parties agreed to convert their respective investments into Future Equity Agreements for shares of the Company’s subsidiary, Alyea Therapeutic and, consequently, approximately $125,000 of these deposits were reclassified as non-controlling interest. As of June 28, 2025 and December 28, 2024, the outstanding aggregate obligations totaled approximately $7.9 million and $4.2 million, respectively.

Legacy Subsidiary Loan

On August 10, 2023, ALT5 Subsidiary entered into an extension agreement for a Bitcoin promissory note with an otherwise unaffiliated third-party. The Bitcoin promissory note is denominated in Bitcoin and, thus, is adjusted to its fair value each period. Pursuant to the terms of an extension agreement, the maturity date is August 2025. The promissory note bears interest at 15% per annum. As of June 28, 2025 and December 28, 2024, the outstanding balance of the note was approximately $4.3 million and $3.8 million, respectively.

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 28, 2025 and December 28, 2024, the amount outstanding on the ICG Note was approximately $0.4 million and $0.7 million, respectively.

Live Note

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “Live Note”) in favor of Live Ventures Incorporated (“Live”) to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price for each obligation, as amended, 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 final approvals of the amendments on February 7, 2024. On March 6, 2024, Live entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which the third party acquired the Live Note. The terms and conditions of the acquired Live Note were not modified in connection with its acquisition by the third party. The principal amount of the Live Note on the date of acquisition was approximately $1.0 million. As of June 28, 2025, the third party had converted $335,500 of the Company’s obligations under the Live Note into 550,000 shares of the Company’s common stock. As of June 28, 2025 and December 28, 2024, the amount outstanding on the Live Note was approximately $0.8 million and $0.8 million.

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 14). 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 28, 2025 and December 28, 2024, the outstanding balance due on the debentures was approximately $0.3 million and $0.5 million, respectively, consisting of principal and accrued interest.

Corporate Fixed Deposit Agreement

On September 19, 2024, ALT5 Subsidiary and an investor entered into a 12-month Corporate Fixed Deposit Agreement, pursuant to which ALT5 Subsidiary borrowed $1.5 million at an interest rate of 12% per annum, payable monthly, calculated on the then-unpaid principal amount. Upon maturity, ALT5 Subsidiary is obligated to repay the principal amount in full and any accrued and unpaid interest. The principal may be repaid in full, but not in part, with a pre-payment penalty equivalent to three month’s of interest. As of June 28, 2025 and December 28, 2024, the outstanding balance was approximately $1.6 million and $1.5 million, respectively, consisting of principal and accrued interest.

Personal Fixed Deposit Agreement

On February 1, 2025, ALT5 Subsidiary and an investor entered into a 24-month Personal Fixed Deposit Agreement, pursuant to which ALT5 Subsidiary borrowed $0.5 million at an interest rate of 13% per annum, payable monthly, calculated on the then-unpaid principal amount. Upon maturity, ALT5 Subsidiary is obligated to repay the principal amount in full and any accrued and unpaid interest. The principal may be repaid in full, but not in part, with a pre-payment penalty equivalent to three month’s of interest. As of June 28, 2025, the outstanding balance was approximately $0.5 million.

Seller Notes

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). In connection with this transaction, the Company entered into promissory notes with the three sellers of Mswipe in the amount of $5.1 million, $676,000, and $376,000, respectively. The fair values assigned to the promissory notes, as calculated by a third-party firm, was approximately $4.7 million, $621,000, and $346,000, respectively. Each note bears interest at 3.99% per annum, and matures on June 29, 2026. As of June 28, 2025, the outstanding balance on the three notes was $4.8 million, $634,000, and $353,000, respectively.

Note 14: Related Party Debt

Long-term debt payable to related parties as of June 28, 2025 and December 28, 2024 consisted of the following (in $000’s):

Total future maturities of long-term debt to related parties is as follows (in $000’s):

Isaac Capital Group LLC

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “ICG Note”) in favor of 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 approximately $307,000 of the Company’s obligation under the ICG Note into 502,852 shares of the Company’s common stock. As of June 28, 2025 and December 28, 2024, the amount outstanding on the ICG Note was approximately $30,000 and $0.3 million, respectively (see Note 20).

On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $0.1 million. The advance bears interest at a rate of 10% per annum until repaid. As of June 28, 2025 and December 28, 2024, the principal amount outstanding was $23,000 and $48,000, respectively (see Note 20).

Live Ventures Incorporated

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “Live Note”) in favor of Live Ventures to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price for each obligation, as amended, 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 final approvals of the amendments on February 7, 2024. On March 6, 2024, Live Ventures entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which the third party acquired the Live Note. The terms and conditions of the acquired Live Note were not modified in connection with its acquisition by the third party. The principal amount of the Live Note on the date of acquisition was approximately $1.0 million. As of June 28, 2025 and December 28, 2024, the amount outstanding on the Live Note was approximately $0.3 million and $0.3 million, respectively (see Note 20).

Novalk Apps SAA, LLP

On May 28, 2024 and June 3, 2024, Novalk Apps SAA, LLP (“Novalk”) made short-term demand advances in the amount of $120,000 and $100,000, respectively, to the Company. The advances bears interest at a rate of 10% per annum until repaid. As of June 28, 2025 and December 28, 2024, the principal amount outstanding was approximately $0.1 million (see Note 20).

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 andone 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 as Sieggreen, 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, regarding which, as of the date of these financial statements, the Court has not ruled. 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. ALT5 Sigma is awaiting the judge’s decision.The Company does not believe that it is obligated to Plaintiff in that amount and the parties continue to negotiate a potential settlement.

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

Alt5 Sigma posted a $900,000 cash bond with the Court that is earning interest. Plaintiff seeks the payment of outstanding amounts related to a loan guarantee that existed for a prior subsidiary, ARCA Recycling Inc., in the amount of approximately $1.6 million, inclusive of principal, interest, and attorneys’ fees to date. ALT5 Sigma believes that Gulf Coast did not collect accounts receivable, inventory, and equipment of the prior subsidiary, as debtor, in a commercially reasonable manner, which resulted in substantial loss of collateral value. Experts were designated by July 31, 2025, and their depositions are being scheduled for the month of August. Both sides have already taken non-expert depositions. Trial is not yet set, but is expected sometime in 2026. Venue is Hennepin County, Minnesota.

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

Trial is scheduled to start on June 29, 2026. Plaintiff is seeking $97,696.42, plus costs and interest, against ALT5 Sigma 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. ALT5 Sigma believes that it is not responsible for the fees, as the unpaid services were provided for the two subsidiaries and not for the corporate parent. Venue is Los Angeles County, California.

Other Commitments

On December 30, 2017, the Company disposed of its retail appliance segment and sold ApplianceSmart to 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 tothree 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 fortwo 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 28, 2025.

Note 16: Stockholders’ Equity

Common Stock: Our Articles of Incorporation authorize 200,000,000 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, 2025 and June 29, 2024, no shares of common stock were issued in lieu of professional services.

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

During second 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 second 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 second 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 second 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 13).

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 first 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 13).

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 asix-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 28, 2025, and December 28, 2024, there were 20,455,923 and 15,417,693 shares, respectively, of common stock issued and outstanding.

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, 2025, there wereno 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, 2025 and June 29, 2024, the Company recognized $0 and $345,000 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, 2025 and December 28, 2024,100,000 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, 2025 and December 28, 2024,8,000 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 wereno stock options granted during the 13 weeks ended June 28, 2025.

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

The Company recognized $0 and $1.2 million in share-based compensation expense related to restricted stock units for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, and $0 and $1.5 million for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively.

As of June 28, 2025, the Company has the Company hadno unrecognized share-based compensation expense associated with equity awards.

Series A-1 Convertible Preferred Stock

Shares of Series A-1 Preferred Stock are convertible into the Company’s common shares at a ratio of 20:1.44,250 shares were converted during the 13 weeks ended June 28, 2025. As of June 28, 2025 and December 28, 2024, there were 0 and 23,480 shares of Series A-1 Convertible Preferred Stock outstanding, respectively.

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 28, 2025. As of June 28, 2025 and December 28, 2024, there were 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 1:1.192,752 shares were converted during the 13 weeks ended June 28, 2025. As of June 28, 2025 and December 28, 2024, there were 732,460 shares of Series Q Convertible Preferred Stock outstanding.

Series S Preferred Stock

On December 28, 2022 the Company acquired Soin Therapeutics by way of 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 28, 2025. As of June 28, 2025 and December 28, 2024, 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. During the 13 weeks ended June 28, 2025, 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 28, 2025 and December 28, 2024, there were 0 and 5,000 shares of Series V Convertible Preferred Stock outstanding, respectively.

Note 17: 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 28, 2025, the outstanding balance in mezzanine equity was approximately $3.9 million.

Note 18: 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 0.1 million were excluded from the calculation of diluted earnings per share for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, because the effects were anti-dilutive.

Note 19: Income Taxes

The Company recorded an income tax benefit from continuing operations of approximately $0.4 million and $2.8 million for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, and an income tax expense from discontinued operations of $3.0 million and an income tax benefit of $0.1 million for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively. The Company recorded an income tax benefit from continuing operations of approximately $0.1 million and $2.7 million for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively, and an income tax expense from discontinued operations of $3.0 million and an income tax benefit of $0.2 million for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively. The Company’s overall effective tax rate was 3.1% and 65.3% for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively. The effective tax rates and related provisional tax amounts vary from the U.S. federal statutory rate primarily due to state taxes and certain non-deductible expenses.

Note 20: Segment Information

The Company operates within targeted markets throughtwo reportable segments for continuing operations: Fintech, Biotech, and Corporate and Other. On May 21, 2025, the Company disclosed that June 2, 2025 would be the record date for a transaction involving the Company’s formal separation of its Biotech segment, also known as Alyea (see Note 4). Consequently, the Biotech segment is being presented as discontinued operations for the 13 and 26 weeks ended June 28, 2025 and June 29, 2024.

The following tables present the Company's segment information for the 13 weeks ended June 28, 2025 and June 29, 2024 (in $000's):

Note 21: 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 $34,000 for the 13 weeks ended June 28, 2025 and June 29, 2024, respectively, and $58,000 and $109,000 for the 26 weeks ended June 28, 2025 and June 29, 2024, respectively. ALT5 rents approximately 9,900 square feet of office space from Live Ventures in Las Vegas, Nevada.

Notes with Live Ventures and ICG

On February 7, 2024, the Company entered into a promissory notes with each of Live Ventures and ICG. The initial principal amount of each note is $300,000, with an interest rate of 10% per annum. At the Company’s option, the obligation under each note is convertible after the six-month anniversary thereof at a per-share conversion price of $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 approved the issuance of the two notes on February 7, 2024. As of June 28, 2025 and December 28, 2024, the balances outstanding on the Live Ventures and ICG promissory notes were approximately $0.3 million and $30,000, respectively, consisting of principal and accrued interest (see Note 13).

Short-Term Advances

On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $0.1 million. The advance bears interest at a rate of 10% per annum until repaid. As of June 28, 2025 and December 28, 2024, the principal amount outstanding was $23,000 and $48,000, respectively (see Note 13).

On May 28, 2024 and June 3, 2024, Novalk made short-term demand advances in the amount of $120,000 and $100,000, respectively, to the Company. Juan Yunis, an employee of Live Ventures, is the managing member of Novalk. The advances bears interest at a rate of 10% per annum until repaid. As of June 28, 2025 and December 28, 2024, the principal amount outstanding was $0.1 million (see Note 13).

Note 22: Subsequent event

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:

Registered Direct Offering

On or about August 12, 2025, the Company is contemplating the consummation transactions whereby the Company would enter 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 $10,000,000 of the net proceeds from the Registered Offering to settle existing litigation, pay existing debt, and fund the Company’s existing business operations, and the balance of the net proceeds will be 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 to be issued in the Registered Offering will be issued pursuant to a prospectus supplement, which was filed with the Securities and Exchange Commission 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 Securities and Exchange Commission on August 8, 2025.

Private Placement Offering

Also on or about August 12, 2025, the Company is contemplating the consummation of transactions resulting from a the 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 would to receive $750 million of $WLFI tokens and is scheduled to issue 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 contemplated to be exercisable forone share of Common Stock at an exercise price of $0.001 per share. The PIPE Pre-Funded Warrants are not scheduled to be exercisable until the Company has obtained shareholder approval to: (i) 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”). Following the effectiveness of the Amendment, the PIPE Pre-Funded Warrants may be exercised at any time until all of the PIPE Pre-Funded Warrants are exercised in full, subject to certain beneficial ownership limitations and the approval by the Company’s stockholders of the transaction such that the Nasdaq “Exchange Cap” will no longer be applicable.

It is contemplated that the Company will agree to hold an annual or special meeting of stockholders on or prior to September 30, 2025 and to file a Preliminary Proxy Statement with the Commission with the date that is twenty (20)

business days following the closing date for the purpose of obtaining the stockholder approval to the Exchange Cap and the Amendment (the “Stockholder Approval”), with the recommendation of the Company’s Board of Directors that the proposal to approve the Amendment. If the Company does not obtain Stockholder Approval at the first meeting, the Company is obligated to call a meeting every ninety (90) days thereafter to seek Stockholder Approval until the date on which Stockholder Approval is obtained.

Pursuant to the Private Placement Purchase Agreement, it is contemplated that the Lead Investor would be issued Common Stock Purchase Warrants (the “Lead Investor Warrants”) pursuant to which the Lead Investor would be issued 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 would be exercisable (i)8,000,000 shares of Common Stock at an exercise price of $7.50 per share of Common Stock; (ii)8,000,000 shares of Common Stock at an exercise price of $8.25 per share of Common Stock; (iii)8,000,000 shares of Common Stock at an exercise price of $9.00 per share of Common Stock; and (iv)8,000,000 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 exercise of the Lead Investor Warrants (the “Lead Warrant Shares”) are also subject to shareholder approval of the Exchange Cap and the Amendment.

The issuance and sale of the PIPE Shares, the PIPE Pre-Funded Warrants, the Lead Investor Warrants and the Lead Investor Shares, (the “PIPE Securities”) will not be, and are not, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The PIPE Securities 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. 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.

The Registered Offering is expected to result in gross proceeds of $750 million and the Private Placement is expected to result 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 is contemplated to occur on or about August 12, 2025, subject to the satisfaction of customary closing conditions.

Pursuant to the Purchase Agreements, the Company will agree 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 has been 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 will act 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 agreed to pay the Placement Agent a cash fee of 3% of the gross proceeds from the Registered Offering and to issue 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 will be 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 agreed to reimburse 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 will act 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 agreed to pay the Placement Agent (or its designees) a cash fee of (i) $6,500,000 for all tokens paid for the securities sold in the Private Placement in excess of $500,000,000 and (ii)3% of the gross proceeds of cash paid for the securities sold in the Private Placement Offering by the Placement Agent, and to issue to the Placement Agent, Placement Agent Warrants equal to 3% of the securities sold in the Private Placement, which will be 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 agreed to reimburse 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.

Registration Rights Agreement

It is contemplated that on or about August 11, 2025, the Company and the Lead Investor will enter into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company will agree 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 Securities and Exchange Commission conducts a full review) (the date of such effectiveness, the “Effective Date”), and to maintain the effectiveness of such registration statement.

Asset Management Agreement

Further, it is contemplated that, on or about August 11, 2025 (the “AMA Commencement Date”), the Company will enter into an Asset Management Agreement (the “Asset Management Agreement”) with Kraken (the “Asset Manager”), pursuant to which the Asset Manager will agree to provide discretionary investment management services with respect to the Company’s cryptocurrency treasury. The term of the Asset Management Agreement is for thirty (30) days renewable upon the mutual consent of the parties. The Asset Manager will receive a nominal fee as compensation for its services under the Asset Management Agreement.

Lock-Up Agreements

Pursuant to the Purchase Agreements, it is contemplated that 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 contemplated to become 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.

The ATM Agreement

On August 11, 2025, the Company entered into an ATM Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners, as sales agent (the “Agent”) to sell shares of its Common Stock, having an aggregate offering price of up to $1,000,000,000 (the “ATM Shares”) from time to time, through an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), registered pursuant to a prospectus supplement to the Company’s effective Registration Statement on Form S-3, as amended, (File No. 333-289176).

Pursuant to the Sales Agreement, the Agent will be entitled to compensation on the ATM Shares sold in the ATM Offering at a commission rate of 2.5% of the gross sales price per Share on the first $500 million of Shares sold and 2.0% of the gross sales price per Share on all sales of Shares thereafter.

The information in included in this Note 22 shall not constitute an offer to sell or the solicitation of any offer to buy the Shares, nor shall there be any offer, solicitation or sale of the Shares in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state.