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Item 8. Financial Statements and Supplementary Data

2026-04-13 compared with 2025-03-28 · 2270 added, 1255 removed, 218 unchanged (94% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Description Page

Reports of Independent Registered Public Accounting Firm

Report of Hudgens CPA, PLLC (PCAOB ID 6849 )

Consolidated Financial Statements

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

Report of LJ Soldinger Associates, LLC (PCAOB ID ( 318 )

Financial Statements

Consolidated Balance Sheets as of December 27, 2025 and December 28, 2024

Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended December 27, 2025 and December 28, 2024

Consolidated Statements of Changes in Stockholders’ E q u i t y (Deficit) for the fiscal years ended December 28 , 202 4 and December 3 0 , 202 3

Consolidated Statements of Changes in Stockholders’ Equity for the fiscal years ended December 27, 2025 and December 28, 2024

Consolidated Statements of Cash Flows for the fiscal years ended December 27, 2025 and December 28, 2024

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

and Stockholders of ALT5 Sigma Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of ALT5 Sigma Corporation (the Company) as of December 28, 2024 and December 30, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the the years in the two-year period ended December 28, 2024, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the years in the two-year period December 28, 2024, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has negative working capital, an accumulated deficit, a history of significant operating losses from continuing operations, and a history of negative operating cash flow.

These factors raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

Stockholders of Alt5 Sigma Corporation

on the Financial Statements

have audited the accompanying balance sheets of Alt5 Sigma Corporation (the Company) as of December 27, 2025 and December 28, 2024, and

the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and

the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations

and its cash flows for each of the fiscal years in the two-year period ended December 27, 2025, in conformity with accounting principles

generally accepted in the United States of America.

of Matter - Restatement of Financial Statements

discussed in Note 23 to the financial statements, the accompanying financial statements as of December 28, 2024 and for the year then

ended, have been restated to correct misstatements as described in that note.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Intangible Assets associated with the business combination in accordance with ASC 805

Description of the matter:

The Company closed its acquisition of the assets of its ALT5 Subsidiary on May 14, 2024.

The Company accounted for the acquisitions under the acquisition method of accounting for business combination.

Accordingly, the purchase price was primarily allocated to the assets acquired based on their respective fair values, including related intangible assets.

The fair value determination of the intangible assets required management to make significant assumptions related to the forecasted

revenue growth rates and the selection of the discount rates.

We identified the intangible assets for the business combination as a critical audit matter because of the significant assumptions management makes to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions related to the revenue growth rates and the selection of the discount rates utilized to value these intangible assets.

How we addressed the matter in our audit:

Our audit procedures related to the revenue growth rates and the selection of the assumptions for the intangible assets acquired included the following, among others:

• We assessed the reasonableness of the revenue growth rates by comparing the assumptions used in the projections to external market sources, historical data, and results from other areas of the audit.

• We performed qualitative and quantitative analyses to assess the assumptions that would significantly impact the overall valuation of the intangible assets acquired.

• We evaluated the completeness of the financial statement presentation and disclosure of the acquisitions.

/s/ Hudgens CPA, PLLC

www.hudgenscpas.com

We have served as the Company’s auditor since 2023.

Houston, Texas

March 28, 2025

ALT5 SIGMA CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

December 28, 2024 December 30, 2023

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

and valuation of WLFI tokens obtained by the Company

discussed in Note 8 to the consolidated financial statements, the Company holds WLFI tokens obtained in 2025, pursuant to the registered

direct offering and private placement offering discussed in Note 15 to the consolidated financial statements.

The Company evaluated the

rights and obligations associated with the WLFI tokens, including their underlying terms, transferability, and economic characteristics,

in order to determine the appropriate classification and measurement in the consolidated financial statements.

Auditing the rights and

valuation of the WLFI tokens was complex and involved significant auditor judgment because the accounting analysis and fair value measurements

depended on evolving digital asset market practices, the interpretation of contractual provisions, and management’s significant

estimates and assumptions.

These included, among others, assessments of the legal and contractual rights attached to the WLFI tokens,

market participant assumptions regarding trading activity and liquidity, the selection of valuation techniques, and the use of pricing

inputs derived from markets and exchanges where the WLFI tokens are traded.

we addressed the matter in our audit:

audit procedures related to the rights and valuation of the WLFI tokens obtained by the Company included, among others:

read and evaluated the relevant agreements and documentation governing the WLFI tokens to

understand the rights and obligations conferred, including restrictions, redemption terms,

and other key contractual provisions.

confirmed the existence of the WLFI tokens by obtaining third-party confirmations from the

Company’s custodian and verified the tokens’ existence on the blockchain.

evaluated the appropriateness of the valuation methodologies applied by management for the

WLFI tokens, considering the availability and quality of observable market data, and tested

the mathematical accuracy of the valuation remeasurement as of December 27, 2025.

evaluated whether the related disclosures in the consolidated financial statements appropriately

describe the nature of the WLFI tokens.

of consideration transferred and identifiable intangible assets in the Alt5 Sigma, Inc.

business combination

Company completed the acquisition of Alt5 Sigma, Inc.

during the year ended December 28, 2024, which was accounted for as a business

combination under ASC 805, “Business Combinations.” As discussed in Note 3 to the consolidated financial statements,

the Company measured the consideration transferred and the identifiable intangible assets acquired at their estimated fair values as

of the acquisition date.

Auditing the valuation of the consideration transferred and identifiable intangible assets acquired was complex

and involved significant auditor judgment because the fair value measurements relied on various unobservable inputs and management’s

significant estimates and assumptions.

These included, among others, forecasted revenue and profitability, customer attrition rates,

expected useful lives, discount rates, and probability-weighted outcomes for key scenarios.

we addressed the matter in our audit:

audit procedures related to the valuation of the consideration transferred and identifiable intangible assets acquired included, among

evaluated the appropriateness of the valuation methodologies applied by management for both

the consideration transferred and the identifiable intangible assets acquired.

tested the mathematical accuracy of the valuation models used by management.

compared the significant assumptions used by management to current and projected financial

information, historical performance of the acquired business, market data and relevant industry

assessed the sensitivity of the fair value measurements to changes in significant assumptions.

evaluated whether the related disclosures in the financial statements were appropriate.

L J Soldinger Associates, LLC

have served as the Company’s auditor since 2025.

SIGMA CORPORATION

BALANCE SHEETS

in thousands, except per share amounts)

(As restated)

Cash and cash equivalents

1 unchanged sentence

Digital assets receivable

Prepaid expenses and other current assets 1,518 75

Prepaid expenses

Other current assets

Current assets from discontinued

Total current assets

2 unchanged sentences

Intangible assets, net

Marketable securities — 286

Deposits and other assets — 9

Goodwill 11,714 —

Total assets $ 82,436 $ 18,487

Liabilities, Mezzanine Equity, and Stockholders' Equity (Deficit)

Cryptocurrency assets at fair value

Deferred income taxes, net

Other assets from discontinued

Liabilities, Mezzanine

Equity, and Stockholders’ Equity (Deficit)

Accounts payable

1 unchanged sentence

Digital assets payable

Due to Soin 2,850 —

Convertible debentures

Operating lease liabilities

Related party notes payable and advances 812 —

Total current liabilities 40,937 5,905

Deferred income taxes, net 1,041 639

Notes payable

Related party notes payable

Notes payable

liabilities from discontinued operations

Total current liabilities

Deferred income taxes,

Notes payable

Operating lease liabilities

Other noncurrent liabilities

Total liabilities 53,769 7,285

liabilities from discontinued operations

Commitments and Contingencies (Note 21)

Mezzanine equity

Convertible preferred stock, series S - par value $ 0.001 per share 200,000 authorized, 100,000 shares issued and outstanding at December 28, 2024 and December 30, 2023

Convertible preferred stock,

series S - par value $ 0.001 per share 200,000 authorized, 100,000 shares issued and outstanding at December 27, 2025 and December

Stockholders’ equity:

Convertible preferred stock, series A-1 - par value $ 0.001 per share 2,000,000 authorized, 23,480 and 193,730 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Preferred stock, series B - par value $ 0.001 per share, 34,250 authorized, 34,207 and 0 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Convertible preferred stock, series I - par value $ 0.001 per share, 2,000,000 authorized, 17,000 and 0 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Preferred stock, series M - par value $ 0.001 per share, 3,200 authorized, 3,200 and 0 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Convertible Preferred stock, series Q - par value $ 0.001 per share, 2,000,000 authorized, 925,212 and 0 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Convertible preferred stock, series S - par value $ 0.001 per share, 200,000 authorized, 100,000 and 100,000 shares issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Convertible preferred stock, series V - par value $ 0.001 per share, 125,000 authorized, 5,000 shares and 0 issued and outstanding at December 28, 2024 and December 30, 2023, respectively

Common stock, par value $ 0.001 per share, 200,000,000 shares authorized, 15,417,693 and 2,827,410 shares issued and outstanding at December 28, 2024 and at December 30, 2023, respectively

Convertible preferred stock,

series A-1 - par value $ 0.001 per share 2,000,000 authorized, 0 and 23,480 shares issued and outstanding at December 27, 2025 and

December 28, 2024, respectively

Preferred stock, series

B - par value $ 0.001 per share, 34,250 authorized, 34,207 issued and outstanding at December 27, 2025 and December 28, 2024

Convertible preferred stock,

series I - par value $ 0.001 per share, 2,000,000 authorized, 0 and 17,000 shares issued and outstanding at December 27, 2025 and

December 28, 2024, respectively

Preferred stock, series

M - par value $ 0.001 per share, 3,200 authorized, 0 and 3,200 shares issued and outstanding at December 27, 2025 and December 28,

2024, respectively

Convertible Preferred stock,

series Q - par value $ 0.001 per share, 2,000,000 authorized, 636,084 and 925,212 shares issued and outstanding at December 27, 2025

and December 28, 2024, respectively

Convertible preferred stock,

series S - par value $ 0.001 per share, 200,000 authorized, 100,000 shares issued and outstanding at December 27, 2025 and December

Convertible preferred stock,

series V - par value $ 0.001 per share, 125,000 authorized, 0 shares and 5,000 issued and outstanding at December 27, 2025 and December

28, 2024, respectively

Preferred stock,

Common stock, par value

$ 0.001 per share, 2,000,000,000 shares authorized, 126,474,169 and 15,417,693 shares issued and outstanding at December 27, 2025

and at December 28, 2024, respectively

Additional paid in capital

Accumulated deficit

Accumulated other comprehensive loss ( 2,317 ) —

Equity attributable to ALT5 Sigma Corporation shareholders 20,886 ( 3,308 )

Noncontrolling interest 3,925 —

Total stockholders' equity 24,811 ( 3,308 )

Total liabilities, mezzanine equity, and stockholders' equity $ 82,436 $ 18,487

The accompanying notes are an integral part of these consolidated financial statements.

ALT5 SIGMA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Dollars in thousands, except per share amounts)

Fiscal Years Ended

December 28, 2024 December 30, 2023

Revenues $ 12,532 $ —

other comprehensive loss

attributable to ALT5 Sigma Corporation shareholders

Noncontrolling

stockholders’ equity

liabilities, mezzanine equity, and stockholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

SIGMA CORPORATION

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

in thousands, except per share amounts)

(As restated)

Cost of revenues

Gross profit 6,294 —

Operating expenses:

Selling, general and administrative expenses 13,856 4,746

Impairment charges — 15,100

Total operating expenses 13,856 19,846

Selling, general and administrative

operating expenses

Operating loss

Other income:

Interest (expense) income, net ( 879 ) 2,250

Realized gain on exchange transactions 374 —

Unrealized loss on marketable securities ( 1,058 ) ( 926 )

Other income, net ( 161 ) 998

Total other (expense) income, net ( 1,724 ) 2,322

Other income (expense):

Interest expense, net

Realized gain on

exchange transactions

Unrealized loss on cryptocurrency

Unrealized gain on exchange

Unrealized loss on marketable

other expense, net

Loss before benefit from income taxes

1 unchanged sentence

Net loss from continuing operations

Income from discontinued operations — 10,254

Income tax provision for discontinued operations — 971

Net income from discontinued operations — 9,283

Net loss $ ( 6,245 ) $ ( 7,812 )

(Loss) income per share:

Net loss per share from continuing operations, basic and diluted $ ( 0.56 ) $ ( 4.27 )

Net income per share from discontinued operations, basic $ — $ 2.32

Net income per share from discontinued operations, diluted $ — $ 2.09

Net loss per share, basic and diluted $ ( 0.56 ) $ ( 1.95 )

Loss from discontinued operations

Income tax benefit for

discontinued operations

Net (loss) income from

discontinued operations

$ ( 344,507 )

Loss per share:

Net loss per share from

continuing operations, basic and diluted

Net loss per share, basic

Weighted average common shares outstanding:

Basic 11,148,493 4,005,334

Diluted 11,148,493 4,444,361

The accompanying notes are an integral part of these consolidated financial statements.

ALT5 SIGMA CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

(Dollars in thousands)

Series A-1 Preferred Series S-1 Preferred Series B Preferred Series I Preferred Series M Preferred Series Q Preferred Series V Preferred Common Stock Additional

Capital Accumulated

Deficit Accumulated

Basic and diluted

$ ( 344,507 )

Effect of foreign currency

translation adjustments

other comprehensive loss, net of tax

Comprehensive (loss)

$ ( 348,496 )

accompanying notes are an integral part of these consolidated financial statements.

SIGMA CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

in thousands)

Series M Preferred

Comprehensive

Deficit Noncontrolling Interest Total

Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount

Balance, December 31, 2022 222,588 $ — 100,000 $ — — $ — — $ — — $ — — $ — — $ — 3,150,230 $ 2 $ 45,748 $ ( 42,822 ) $ ( 621 ) — $ 2,307

Other comprehensive loss — — — — — — — — — — — — — — — — — — 621 — 621

Common stock issued for equity financing — — — — — — — — — — — — — — 779,000 1 792 — 793

Share based compensation — — — — — — — — — — — — — — — — 14 — — — 14

Series A-1 preferred converted for legal settlement ( 27,353 ) — — — — — — — — — — — — — 547,069 — 510 — — — 510

Series A-1 preferred forfeited ( 1,505 ) — — — — — — — — — — — — — — — — — — —

Common stock issued for warrants exercised — — — — — — — — — — — — — — 481,348 — 259 — — — 259

Net loss — — — — — — — — — — — — — — — — — ( 7,812 ) — — ( 7,812 )

Noncontrolling

Balance, December 30, 2023

9 unchanged sentences

Preferred stock issued for property and equipment

Conversion of note receivable to common stock

Common stock issued for property and equipment

3 unchanged sentences

Foreign currency adjustment

Net loss — — — — — — — — — — — — — — — — — ( 6,245 ) — 3,925 ( 2,320 )

Balance, December 28, 2024

The accompanying notes are an integral part of these consolidated financial statements.

ALT5 SIGMA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Fiscal Years Ended

December 28, 2024 December 30, 2023

Common stock issued for consulting agreement

Common stock issued for warrants exercised

Common stock issued for Series V Preferred converted

Series A-1 adjustment

Conversion of Series A-1 Preferred

Share based compensation

Common stock issued in lieu of notes payable obligation

ALT5 Sigma Corp common stock issued for Mswipe acquisition

ALT5 Sigma Corp common stock warrants for Mswipe acquisition

Alyea common stock warrants for Mswipe acquisition

Common stock issued for Series Q convertible stock converted

ALT5 Sigma Corp common stock issued for professional services

ALT5 Sigma Corp Common stock issued for Series M convertible stock converted

Common stock issued for equity financing

Common stock issued for prefunded warrants granted

Common stock issued for settlement agreement

Placement fees for equity raise

Foreign currency adjustment

Balance, December 27, 2025

$ ( 402,710 )

The accompanying

notes are an integral part of these consolidated financial statements.

SIGMA CORPORATION

STATEMENTS OF CASH FLOWS

in thousands)

(As restated)

OPERATING ACTIVITIES:

Net loss from continuing operations

Adjustments to reconcile net loss to net cash provided by operating activities:

$ ( 341,486 )

Adjustments to reconcile net loss to net cash

provided by operating activities:

Depreciation and amortization

Change in reserve for uncollectible accounts 254 —

Accretion of note receivable discount — ( 1,223 )

Stock based compensation expense 1,657 14

Bad debt expense — 617

Noncash expense for consulting services 271 —

Related party notes issued for shared services 800 —

Write off of VM7 note receivable — 5,320

Write off of SPYR note receivable — 9,780

Unrealized loss on marketable securities 1,058 926

Amortization of right-of-use assets 32 —

Unrealized gain on digital assets — —

Change in deferred income taxes ( 3,229 ) 444

Change in reserve for uncollectible

Accretion of seller note

Stock based compensation

Common stock issued for

settlement agreement

Noncash expense for stock issuances

Related party notes issued

for shared services

Unrealized loss on cryptocurrency

Realized loss on digital

Unrealized loss on marketable

Amortization of right-of-use

Unrealized gain on digital

Change in deferred income

Changes in assets and liabilities:

1 unchanged sentence

Digital assets receivable

Prepaid expenses and other current assets 780 320

Other assets 12 8

Accounts payable and accrued expenses 1,648 ( 1,052 )

Prepaid expenses

Other current assets

Accounts payable and accrued

Digital assets payable

Operating cash flows provided by discontinued operations — 2,319

Net cash provided by operating activities 1,777 1,463

cash flows provided by discontinued operations

cash (used in) provided by operating activities

INVESTING ACTIVITIES:

Cash acquired in ALT5 Subsidiary acquisition 5,853 —

Investing cash flows used in discontinued operations — ( 155 )

Net cash provided by (used in) investing activities 5,853 ( 155 )

Purchases of property and

Cash acquired in ALT5 Subsidiary

Cash acquired in Mswipe

Cryptocurrency assets purchased

Cryptocurrency assets redeemed

cash flows used in discontinued operations

cash (used in) provided by investing activities

FINANCING ACTIVITIES:

Proceeds from issuance of notes payable 7,237 —

Payments on related party notes payable ( 248 ) —

Proceeds from the issuance of related party note payable 603 —

Proceeds from equity financings, net 851 792

Proceeds from issuance

of notes payable

Payments on related party

notes payable

Proceeds from the issuance

of related party note payable

Proceeds from equity financings,

Warrants exercised

Payments on short term notes payable ( 2,847 ) ( 274 )

Financing cash flows used in discontinued operations — ( 2,212 )

Net cash provided by (used in) financing activities 6,093 ( 1,435 )

Effect of changes in exchange rate on cash and cash equivalents ( 6,551 ) 17

Payments on notes payable

Proceeds from equity financing

Payments of placement fees

cash flows used in discontinued operations

cash provided by financing activities

Effect of changes in exchange

rate on cash and cash equivalents

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period

LESS CASH OF DISCONTINUED OPERATIONS, end of period — $ —

CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS, end of period $ 7,177 $ 5

Fiscal Years Ended

December 28, 2024 December 30, 2023

LESS CASH OF DISCONTINUED

OPERATIONS, end of period

CASH AND CASH EQUIVALENTS

OF CONTINUING OPERATIONS, end of period

Supplemental cash flow disclosures:

Noncash recognition of new leases $ 121 $ —

Noncash recognition

of new leases

Interest paid

Income tax refunds received, net $ 17 $ —

Income tax refunds received,

Noncash financing and investing activities:

Stock issued for the acquisition of Alt5 Subsidiary $ 16,000 $ —

Common stock issued for consulting services 853 —

Common stock issued for liability obligations 367 —

Notes payable converted to common stock 1,660 —

Common stock issued for interest obligations 380 —

Common stock issued for property and equipment 1,170 —

Preferred stock issued for intangible assets 1,321 —

The accompanying notes are an integral part of these consolidated financial statements.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common stock issued for

prefunded warrants

Common stock issued for

the acquisition of Mswipe

Common stock warrants issued

for the acquisition of Mswipe

Alyea common stock issued

for the acquisition of Mswipe

Convertible preferred Series

Q shares converted to common stock

Convertible preferred Series M shares converted to common stock

Stock issued for the acquisition

of Alt5 Subsidiary

Common stock issued for

consulting services

Common stock issued for

liability obligations

Notes payable converted

to common stock

Common stock issued for

interest obligations

Common stock issued for

property and equipment

Preferred stock issued

for intangible assets

accompanying notes are an integral part of these consolidated financial statements.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Background and Basis of Presentation

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 had three operating segments – Fintech, Biotechnology, and Corporate and Other.

In connection with the sale of ARCA Recycling, Inc.

(“ARCA Recycling”), the accounts for the Recycling segment have been presented as discontinued operations in the accompanying consolidated financial statements (See Note 4).

On May 15, 2024, the Company acquired ALT5 Sigma, Inc.

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”

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.

Company had three operating segments – Fintech, Biotechnology, and Corporate and Other.

In connection with effectuating the formal separation 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.

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).

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 cryptocurrency payment gateway that enables registered and approved global merchants to accept and make cryptocurrency 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, or British Pounds

Sterling) automatically or to receive their payment in digital assets (see Note 3).

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

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, ALT5 Sigma Corporation, 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.

September 2019, the Company, through its biotechnology segment, broadened its business perspectives to expand its pharmaceutical

operations and focus on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving

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

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 of seven 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.

The Recycling Subsidiaries constituted the Company’s Recycling segment and provided turnkey recycling services for electric utility energy efficiency programs in the United States.

ARCA Recycling and ARCA Canada recycled major household appliances in North America by providing turnkey appliance recycling and replacement services for utilities and other sponsors of energy efficiency programs.

Connexx provided call center services for ARCA Recycling and ARCA Canada.

On March 9, 2023, retroactive to March 1, 2023, the Company entered into a Stock Purchase Agreement (the “Recycling Purchase Agreement” with VM7 Corporation (“VM7”), under which it agreed to acquire all of the outstanding equity interests of the Recycling Subsidiaries.

The principal of VM7 is Virland A.

Johnson, our Chief Financial Officer.

The sale of all of the outstanding equity interests of the Recycling Subsidiaries to VM7 under the Recycling Purchase Agreement was consummated simultaneously with the execution of the Recycling Purchase Agreement (see Note 4).

The Company’s Board of Directors unanimously approved the Recycling Purchase Agreement and the Disposition Transaction.

In connection with the disposition of the Recycling Subsidiaries, accounts for the Recycling segment have been presented as discontinued operations in the accompanying consolidated financial statements (See Note 4).

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 our fiscal year (“2022”) ended on December 30, 2023.

Going concern

The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern.

Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business, however, the issues described below raise substantial doubt about the Company’s ability to do so.

The Company currently faces a challenging competitive environment and is focused on improving its overall profitability, which includes managing expenses.

The Company reported a net loss from continuing operations of approximately $ 6.2 million for the year ended December 28, 2024, and net loss from continuing operations of approximately $ 17.1 million for the fiscal year ended December 30, 2023.

Additionally, as of December 28, 2024, the Company has total current assets of approximately $ 35.0 million and total current liabilities of approximately $ 40.9 million resulting in a net negative working capital of approximately $ 5.9 million.

Cash provided by operations was approximately $ 1.0 million.

The Company intends to raise funds to support future development of JAN 123 and JAN 101 and through a combination of cash flows derived from its acquisition of ALT5 (see Note 3), capital raises, and/or structured arrangements.

However, the success of such funding cannot be assured.

We currently expect that the biotechnology subsidiary transaction discussed above will allow us to finance our Phase III clinical trial for JAN123.

No assurance can be given any financing obtained may not further dilute or otherwise impair the ownership interest of our existing stockholders or our ownership interest in the to-be-effectuated biotechnology subsidiary.

The short-term intended result of that transaction 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.

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 of seven 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 our subsidiary Alyea 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 a potential to effectuate a formal separation of Alyea, accounts for the Biotechnology segment

have been presented as discontinued operations in the accompanying consolidated financial statements (see Note 4).

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Corporate and Other segment consists of World Liberty Financial, Inc.

(“WLFI”) assets, including any additions, redemptions, or mark-to-market changes in value, which

are recorded within the Company’s Corporate and Other segment.

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

3,750,000,000 WLFI tokens;

3,584,000,000 WLFI tokens (adjusted slightly from initial 3,750,000,000 to reflect final

settlement after expenses from the proceeds of the financing completed in August 2025.

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

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 (“fiscal 2025”) ended on December 27, 2025.

and Going Concern Considerations

Company has incurred recurring losses from operations, including a net loss from continuing operations of approximately $ 341.5 million

for the fiscal year ended December 27, 2025, and a net loss from continuing operations of approximately $ 8.3 million for the fiscal year

ended December 28, 2024.

As of December 27, 2025, the Company had a working capital deficit of approximately $ 21.9 million, reflecting

total current liabilities of $ 51.4 million compared to total current assets of $ 29.5 million.

These conditions raise substantial doubt

about the Company's ability to continue as a going concern within one year after the date these financial statements are issued.

evaluating its ability to meet its obligations, management has considered the following:

January 29, 2026, the Company, through its indirect wholly-owned subsidiary ALT5 Digital Holdings, Inc., drew down $ 15.0 million under

the Master Loan and Security Agreement with WLFI, receiving net proceeds of approximately $ 14.2 million after prepayment of interest

and reimbursement of lender expenses.

The Company intends to use these proceeds to fund a share repurchase program as approved by the

Board of Directors, to acquire additional WLFI tokens, and for general corporate purposes.

addition, management believes that the Company's holdings of approximately 7.3 billion WLFI tokens, carried at a fair value of approximately

$ 1.05 billion as of December 27, 2025, represent a significant financial resource available to support the Company's liquidity position.

The Company may, subject to market conditions and its stated long-term treasury policy, redeem or monetize a portion of its token holdings

to fund operations, satisfy obligations, or pursue strategic initiatives.

The Company's treasury policy permits sales of WLFI tokens

in connection with liquidity requirements or material portfolio rebalancing events.

Notwithstanding

the foregoing, the WLFI tokens are subject to significant market price risk, and there can be no assurance that the tokens will retain

their current value or that the Company will be able to monetize them on favorable terms or at all.

The Company's ability to continue

as a going concern is dependent upon its ability to manage its liquidity position, including through the sources described above, achieve

revenue growth in its Fintech segment, and, if necessary, raise additional capital through debt or equity financing.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Summary of Significant Accounting Policies

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 account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S.

generally accepted accounting principles 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 values in connection with the GeoTraq promissory note, analysis of other intangibles and long-lived assets for impairment, valuation allowance against deferred tax assets, lease terminations, and estimated useful lives for intangible assets and property and equipment.

Financial Instruments

Financial instruments consist primarily of cash equivalents, trade and other receivables, notes receivables, and obligations under accounts payable, accrued expenses and notes payable.

The carrying amounts of cash equivalents, trade receivables 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

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

available (Level 2 inputs).

The carrying amounts of long-term debt at December 28, 2024 and December 30, 2023 approximate fair value.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with a maturity of three months or less at the time of purchase.

Fair value of cash equivalents approximates carrying value.

Digital Assets and other Receivable s

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 December 28, 2024, the outstanding balance of digital assets and other receivables was approximately $ 23.8 million.

Other Receivables and Allowance for Doubtful Accounts

The Company carries unsecured other receivables at the original invoice amount less an estimate made for doubtful accounts based on a monthly review of all outstanding amounts.

Management determines the allowance for doubtful accounts by regularly evaluating receivables based on current economic conditions.

of Consolidation

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.

Statement Reclassification

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.

preparation of the consolidated financial statements in conformity with U.S.

generally accepted accounting principles 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.

results could differ from those estimates.

estimates made in connection with the accompanying consolidated financial statements include the fair values in connection with the GeoTraq

promissory note, analysis of other intangibles and long-lived assets for impairment, valuation allowance against deferred tax assets,

lease terminations, and estimated useful lives for intangible assets and property and equipment.

instruments consist primarily of cash equivalents, trade and other receivables, notes receivables, and obligations under accounts payable,

accrued expenses and notes payable.

The carrying amounts of cash equivalents, trade receivables 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 December

27, 2025 and December 28, 2024 approximate fair value.

and Cash Equivalents

and cash equivalents consist of highly liquid investments with a maturity of three months or less at the time of purchase.

of cash equivalents approximates carrying value.

Approximately $ 3.5 million of cash has been fully reserved in connection with a legal

matter, as further described in Note 20.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Cryptocurrency

Company’s cryptocurrency assets consist of 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, the native token of the Ethereum blockchain.

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.

Assets and other Receivables

assets and other receivables are the Company’s digital assets and its customer prepayments in the form of digital assets.

holds all digital assets in secure non-custodial wallets through the wallet services from fireblocks.

As of December 27, 2025 and December

28, 2024, the outstanding balance of digital assets and other receivables was approximately $ 18.0 million and $ 23.8 million, respectively.

Receivables and Allowance for Doubtful Accounts

Company carries unsecured other receivables at the original invoice amount less an estimate made for doubtful accounts based on a monthly

review of all outstanding amounts.

Management determines the allowance for doubtful accounts by regularly evaluating receivables based

on current economic conditions.

The Company writes off receivables when it deems them to be uncollectible.

The Company records recoveries of receivables previously written off when payment is received.

The Company considers a receivable to be past due if any portion of the receivable balance is outstanding for more than ninety days.

The Company records recoveries

of receivables previously written off when payment is received.

The Company considers a receivable to be past due if any portion of the

receivable balance is outstanding for more than ninety days.

The Company does not charge interest on past due receivables.

The Company had no allowance for doubtful accounts for the years ended December 28, 2024 and December 30, 2023.

The following table details the Company's trade and other receivables as of December 28, 2024 and December 30, 2023 (in $000’s):

2024 December 30,

2023 December 31, 2022

had no allowance for doubtful accounts for the years ended December 27, 2025 and December 28, 2024.

following table details the Company’s trade and other receivables as of December 27, 2025 and December 28, 2024 (in $000’s):

of Trade and Other Receivables

Other receivables

Trade and other receivables, net $ 2,530 $ 266 $ 106

As of December 28, 2024, other receivables includes approximately $ 2.2 million in subscriptions receivable (see Note 18).

Intangible Assets

The Company’s intangible assets consist of customer relationship intangibles, favorable leases, trade names, licenses for the use of internet domain names, Universal Resource Locators, or URL’s, software, patents, and marketing and technology related intangibles.

Upon acquisition, estimates are made in valuing acquired intangible assets, which include but are not limited to, future expected cash flows from customer contracts, customer lists, and estimating cash flows from projects when completed;

tradename and market position, as well as assumptions about the period of time that customer relationships will continue;

Other receivables, net

Company’s intangible assets consist of customer relationship intangibles, favorable leases, trade names, licenses for the use of

internet domain names, Universal Resource Locators, or URL’s, software, patents, and marketing and technology related intangibles.

Upon acquisition, estimates are made in valuing acquired intangible assets, which include but are not limited to, future expected cash

flows from customer contracts, customer lists, and estimating cash flows from projects when completed;

tradename and market position,

as well as assumptions about the period of time that customer relationships will continue;

and discount rates.

Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from the assumptions used in determining the fair values.

All intangible assets are capitalized at their original cost and amortized over their estimated useful lives as follows:

Management’s estimates

of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result,

actual results may differ from the assumptions used in determining the fair values.

All intangible assets are capitalized at their original

cost and amortized over their estimated useful lives as follows:

domain name and marketing – 3 -to- 20 years;

software – 3 -to- 5 years;

software – 3 -to- 5

technology intangibles – 7 years;

customer relationships – 7 -to- 15 years.

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 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 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.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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:

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

Identification of performance obligations in the respective contract;

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

Allocation of the transaction price to each performance obligation;

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

Fintech Revenue

The five elements above, as applied to each of the Fintech segment's revenue categories, is summarized below:

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

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 the transaction is processed.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and other Payables

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 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 December 27, 2025, the outstanding balance of digital assets and other payables was approximately $ 28.7 million,

of which approximately $ 18.0 million was digital assets and $ 4.0 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.

recognition applies to the Company’s Fintech segment only, as the Company’s Biotech segment has not recognized revenue to

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:

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

Identification

of performance obligations in the respective contract;

Determination

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

of the transaction price to each performance obligation;

of revenue only when the Company satisfies each performance obligation.

five elements above, as applied to each of the Fintech segment’s revenue categories, are summarized below:

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

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

Company’s service is comprised of a single performance obligation to buy-and-sell or to convert digital assets to currencies.

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.

Company is acting as principal in all transactions, and controls the digital assets being provided before they are transferred

to the buyer, has risk related to the digital assets, and is responsible for the fulfillment of the digital asset transactions.

sets the price for the digital assets by aggregating prices from several liquidity providers and displays them on the Company’s

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.

Company considers its performance obligation satisfied, and recognizes revenue, at the point in time when the transaction is

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.

Biotechnology Revenue

The Company currently generates no revenue from its Biotechnology segment.

Discontinued Operations Revenue

On March 9, 2023, retroactive to March 1, 2023, the Company entered into the Recycling Purchase Agreement with VM7, under which VM7 agreed to acquire all of the outstanding equity interests of the Recycling Subsidiaries.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

previously, the accounts for the Recycling segment have been presented as discontinued operations in the accompanying consolidated financial statements.

Fair Value Measurements

ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company.

ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures.

The three levels of valuation hierarchy are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

Level 2 – to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company accounts for income taxes using the asset and liability method.

The asset and liability method requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company's assets and liabilities.

Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is provided on deferred taxes if it is determined that it is more likely than not that the asset will not be realized.

The Company recognizes penalties and interest accrued related to income tax liabilities in the provision for income taxes in its Consolidated Statements of Income.

Significant management judgment is required to determine the amount of benefit to be recognized in relation to an uncertain tax position.

The Company uses a two-step process to evaluate tax positions.

The first step requires an entity to determine whether it is more likely than not (greater than 50% chance) that the tax position will be sustained.

The second step requires an entity to recognize in the financial statements the benefit of a tax position that meets the more-likely-than-not recognition criterion.

The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements of the Company in future periods.

Stock-Based Compensation

The Company from time to time grants stock options to employees, non-employees and Company executives and directors.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

Biotechnology

Company currently generates no revenue from its Biotechnology segment.

Value Measurements

Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held

by the Company.

ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy

for disclosures of fair value measurement that enhances disclosure requirements for fair value measures.

The three levels of valuation

hierarchy are defined as follows:

Level 1 – inputs to the valuation methodology are quoted prices for

identical assets or liabilities in active markets.

Level 2 – inputs to the valuation methodology include quoted prices for similar

assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for

substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and significant

to the fair value measurement.

following table presents the Company’s financial instruments that are measured at fair value on a recurring basis as of December

27, 2025 and December 28, 2024 (in $000’s):

of Fair Value on Recurring Basis

As of December 27, 2025

Cryptocurrency assets (WLFI tokens)

Total assets measured at fair value

No liabilities measured at fair value on a recurring basis

As of December 28, 2024 (as restated)

No assets measured at fair value on a recurring basis

No liabilities measured at fair value on a recurring basis

Company’s cryptocurrency assets consist entirely of WLFI tokens.

Fair value is determined using quoted (unadjusted) prices in accordance

with ASC 350-60, Accounting for and Disclosure of Cryptocurrency Assets , and classified as Level 1 within the fair value hierarchy.

There were no transfers between levels during the fiscal years ended December 27, 2025 or December 28, 2024.

Company also measures certain assets at fair value on a nonrecurring basis, including goodwill, intangible assets, and long-lived assets

evaluated for impairment.

No impairment charges were recognized on such assets during the fiscal year ended December 27, 2025 based on

management’s assessment.

Company accounts for income taxes using the asset and liability method.

The asset and liability method requires recognition of deferred

tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial

reporting bases of the Company’s assets and liabilities.

Deferred income tax assets and liabilities are measured using enacted

tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment

A valuation allowance is provided on deferred taxes if it is determined that it is more likely than not that the asset will not

The Company recognizes penalties and interest accrued related to income tax liabilities in the provision for income taxes

in its Consolidated Statements of Income.

management judgment is required to determine the amount of benefit to be recognized in relation to an uncertain tax position.

uses a two-step process to evaluate tax positions.

The first step requires an entity to determine whether it is more likely than not

(greater than 50% chance) that the tax position will be sustained.

The second step requires an entity to recognize in the financial statements

the benefit of a tax position that meets the more-likely-than-not recognition criterion.

The amounts ultimately paid upon resolution

of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements

of the Company in future periods.

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.

Earnings Per Share

Earnings per share is calculated in accordance with ASC 260, “ Earnings Per Share ”.

Under ASC 260 basic earnings per share is computed using the weighted average number of common shares outstanding during the period except that it does not include unvested restricted stock subject to cancellation.

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the incremental common shares issuable upon the exercise of warrants, options, restricted shares and convertible preferred stock.

The dilutive effect of outstanding restricted shares, options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

Convertible preferred stock is reflected on an if-converted basis.

Segment Reporting

ASC Topic 280, “ Segment Reporting ,” requires use of the “management approach” model for segment reporting.

The management approach model is based on the way a Company’s management organizes segments within the Company for making operating decisions and assessing performance.

The Company determined it had three reportable segments.

The Recycling segment has been presented as discontinued operations (see Note 23).

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentration of Credit Risk

The Company maintains cash balances at banks in Nevada and Minnesota.

The account is insured by the Federal Deposit Insurance Corporation up to $250,000.

The value of each award is amortized on

a straight-line basis over the vesting period.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

per share is calculated in accordance with ASC 260, “ Earnings Per Share ”.

Under ASC 260 basic earnings per share is

computed using the weighted average number of common shares outstanding during the period except that it does not include unvested restricted

stock subject to cancellation.

Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive,

potential common shares outstanding during the period.

Potential common shares consist of the incremental common shares issuable upon

the exercise of warrants, options, restricted shares and convertible preferred stock.

The dilutive effect of outstanding restricted shares,

options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

Convertible preferred stock

is reflected on an if-converted basis.

Topic 280, “ Segment Reporting ,” requires use of the “management approach” model for segment reporting.

The management approach model is based on the way a Company’s management organizes segments within the Company for making operating

decisions and assessing performance.

The Company determined it had three segments.

The Recycling segment has been presented as discontinued

operations (see Note 22).

Concentration

of Credit Risk

Company maintains cash balances at banks in Nevada and Minnesota.

The accounts are insured by the Federal Deposit Insurance

Corporation up to $ 250,000

At times, balances may exceed federally insured limits.

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 is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets.

The amendments in ASU No.

2023-08 are intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income.

The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period.

The amendments are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

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

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.

Issued Accounting Pronouncements

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The standard requires enhanced

annual disclosures related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after

December 15, 2024, and may be applied prospectively or retrospectively.

Early adoption is permitted.

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

The Company has adopted ASU 2023-09

for the year ended December 27, 2025.

Mergers and Acquisitions

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 of two 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.

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:

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

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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”) to two 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):

Common stock $ 7,448

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.

Through a suite of physical and virtual cards that are

available on both the Visa ® and Mastercard ® networks, the acquired operations enable users to spend traditional

and digital currencies across the globe seamlessly.

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.

purchase price for this transaction consisted of our (i) issuing one

million restricted shares of our common stock to the three

sellers, valued at the Historical NOCP on May 9, 2025 of $ 6.10 ,

(ii) granting five

hundred thousand four 4 -year

common stock warrants to the three

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 to two

of the sellers in Alyea, which shares we valued at $ 4.8

million, and (iv) issuing two 14 -month

straight promissory notes in the aggregate initial principal balance of approximately one

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 acknowledged 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 the two

notes that we issued.

Effective January 2026, we agreed to commence prepayments of the acquired note on the following schedule:

February 4, 2026 ($ 600,000 );

March 2, 2026 ($ 600,000 );

March 31, 2026 ($ 150,000 );

April 30, 2026 ($ 150,000 );

and June 2, 2026

($ 150,000 ) in connection with the obligee thereof providing assistance to us in connection with our ALT5 Subsidiary’s

operations $600,000);

March 2, 2026 ($600,000);

March 31, 2026 ($150,000);

April 30, 2026 ($150,000);

and June 2, 2026 ($150,000) in

connection with the obligee thereof providing assistance to us in connection with our ALT5 Subsidiary’s operations.

granted the sellers the right to one

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

million in annualized or actual total revenue from Mswipe’s operations.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

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):

of Business Acquisition

ALT5 Common stock

Common stock warrants

Alyea Common Stock

Total purchase price

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 be deductible for income 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):

of Assets Liabilities Assumed Goodwill

Total purchase price

Accounts payable

Total liabilities assumed

Total consideration

Accounts receivable

Property and equipment

Intangible assets

Customer relationships

Developed technology

Subtotal intangible assets

Total assets acquired

Total goodwill

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

table below presents selected proforma information for the Company for the fiscal years ended December 27, 2025 and December 28, 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):

of Proforma Operations for Future Periods

Sigma Corporation Audited Year Ended December 27, 2025

(Unaudited) December 27, 2025

Sigma Corporation December 27, 2025

$ ( 344,507 )

$ ( 344,563 )

Earnings per basic common share

Earnings per basic diluted share

Sigma Corporation Audited Year Ended December 28, 2024

(Unaudited) December 28, 2024

Sigma Corporation December 28, 2024

Earnings per basic common share

Earnings per basic diluted share

(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.

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 Preferred 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 of two

years , and are subject to vesting provisions.

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 Subsidiary

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 cryptocurrency payment gateway that enables registered

and approved global merchants to accept and make cryptocurrency 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

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

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

Each of the shares of the Company’s newly-issued common stock was valued at $ 4.14 , which was the 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

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”) to two entities that acted as finders for the transaction.

fair value of the purchase price components outlined above was $ 8.2 million due to fair value adjustments for the shares of Series B

Stock and Series M Stock, as detailed below (in $000’s):

of Business Acquisition

Series B preferred stock

Total purchase price

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 thirteen weeks ended September 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):

Total purchase price

the preliminary purchase price allocation, the Company recognized goodwill of approximately $ 3.9 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.

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.

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):

of Assets Liabilities Assumed Goodwill

Total purchase price

Accounts payable

7 unchanged sentences

Customer relationships

Trade names 2,675

Developed technology

2 unchanged sentences

Total goodwill

Proforma Information

The table below presents selected proforma information for the Company for the years ended December 28, 2024 and December 30, 2023, 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

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Fiscal Year Ended

December 28, 2024 As Reported Adjustments Proforma

ALT5 Sigma Corporation (1) ALT5 Subsidiary (2) Adjustments (3) Total

Net revenue $ 12,532 $ 2,918 $ 15,450

Net income $ ( 6,245 ) $ 71 $ ( 1,343 ) $ ( 7,517 )

Earnings per basic common share $ ( 0.56 ) $ ( 0.11 )

Earnings per basic diluted share $ ( 0.56 ) $ ( 0.11 )

Fiscal Year Ended

December 30, 2023 As Reported Adjustments Proforma

ALT5 Sigma Corporation (4) ALT5 Subsidiary (5) Adjustments (3) Total

Net revenue $ — $ 7,145 $ 7,145

Net income $ ( 7,812 ) $ 3,359 $ ( 2,148 ) $ ( 6,601 )

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

table below presents selected proforma information for the Company for the year ended December 28, 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.

of Proforma Operations for Future Periods

Year Ended December 28, 2024

Sigma Corporation (1)

Subsidiary (2)

Earnings per basic common share

Earnings per basic diluted share

(1) ALT5 Sigma Corporation for the year ended December 28, 2024.

Includes ALT5 Subsidiary from May 15, 2024 through December 28, 2024.

(2) ALT5 Subsidiary from December 31, 2023 through the acquisition date of May 14, 2024.

(3) Reflects adjustments for amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date..

(4) ALT5 Sigma Corporation for the year ended December 30, 2023.

(5) ALT5 Subsidiary for the year ended December 30, 2023.

Soin Pharmaceuticals

Effective January 24, 2024, the Company, Amol Soin (“Dr.

Soin”), and Soin Therapeutics LLC, a wholly-owned subsidiary of the Company that we had acquired from Dr.

Soin, entered into an amendment (the “Soin Amendment”) to the parties’ Agreement and Plan of Merger that was dated as of December 28, 2022 (the “Soin Agreement”).

With reference to the Soin Agreement, the parties to the Soin Amendment agreed that the $ 3.0 million convertible tranche (the first of the three original conversion tranches under the Soin Agreement) would be payable to Dr.

Soin in cash rather than through his conversion of shares of the Series S Convertible Preferred Stock (the “Soin Preferred”) that constituted the consideration under the Soin Agreement.

We tendered the first $ 0.1 million amended tranche cash payment to Dr.

Sigma Corporation for the year ended December 28, 2024.

Includes ALT5 Subsidiary from May

15, 2024 through December 28, 2024.

Subsidiary from December 31, 2023 through the acquisition date of May 14, 2024.

adjustments for amortization expense of definite-lived intangible assets has been adjusted

based on the preliminary fair value at the acquisition date.

Pharmaceuticals

January 24, 2024, the Company, Amol Soin M.D.

Soin”), and Soin Therapeutics LLC, a wholly-owned subsidiary of the

Company that we had acquired from Dr.

Soin, entered into an amendment (the “Soin Amendment”) to the parties’

Agreement and Plan of Merger that was dated as of December 28, 2022 (the “Soin Agreement”).

With reference to the Soin

Agreement, the parties to the Soin Amendment agreed that the $ 3.0

million convertible tranche (the first of the three

original conversion tranches under the Soin Agreement) would be payable to Dr.

Soin in cash rather than through his conversion of

such tranche of shares of the Series S Convertible Preferred Stock (the “Soin Preferred”) that constituted the

consideration under the Soin Agreement.

The Company tendered the first $ 0.1

million amended tranche cash payment to Dr.

Soin in March 2024;

the second amended tranche cash payment to Dr.

Soin, also in the amount of $ 0.1 million, was due on July 1, 2024;

Soin, also in the

amount of $ 0.1

million, was due on July 1, 2024;

($ 50,000 of which was tendered in July 2024);

and the third amended tranche cash payment to Dr.

Soin, in the amount of $ 2.8 million, was due on December 31, 2024.

During the pendency of the amended cash tranche period, Dr.

Soin, in the amount of $ 2.8 million,

was due on December 31, 2024.

We tendered $ 350,000 of the amended tranches to Dr.

Soin in March 2025.

During the pendency of the

amended cash tranche period, Dr.

Soin agreed that he would not convert any of his shares of Soin Preferred.

After we have tendered the second and third amended tranche cash payments to Dr.

Soin, his conversion rights for the second and third original conversion tranches will remain convertible under the original provisions of the Soin Agreement and the related Certificate of Designation for the Soin Preferred.

Soin, his conversion rights for the second and third original

conversion tranches remain convertible under the original provisions of the Soin Agreement and the related Certificate of Designation

for the Soin Preferred.

If we do not tender the second and third amended tranche cash payments to Dr.

Soin, we agreed that we will transfer to him the membership interests of Soin Therapeutics LLC, and he will transfer to us the shares of Soin Preferred for cancellation.

During the year ended December 28, 2024, we tendered an aggregate of $ 150,000 to Dr.

Soin and during February 2025, we tendered an additional $ 350,000 .

In connection with the Soin Amendment, the Company reclassified the $ 3.0 million convertible tranche, originally valued at approximately $ 2.7 million on our balance sheet, from mezzanine equity to current liabilities, and reclassified the $ 10.0 million convertible tranche, originally valued at approximately $ 8.0 million on our balance sheet, to permanent equity.

As of December 28, 2024, the outstanding balance in mezzanine equity relates to the $ 17.0 million convertible tranche originally valued at approximately $ 3.9 million.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sale of Recycling Subsidiaries

On March 9, 2023, the Company entered into a Stock Purchase Agreement (the “Recycling Purchase Agreement”) with VM7 Corporation, a Delaware corporation (“VM7”), under which it agreed to acquire all of the outstanding equity interests of the Recycling Subsidiaries, consisting of:

(a) ARCA Recycling, (b) ARCA Canada, and (c) Connexx.

The principal of VM7 is Virland A.

Johnson, our Chief Financial Officer.

The Recycling Purchase Agreement is retroactive to March 1, 2023 (see Note 4).

The valuation, factoring in the discount rate that the Company used, yielded a present value of approximately $ 6.0 million, which, in addition to the $ 3,000 paid at close, comprised the approximately 6.0 million of net consideration.

The amount of the revised discount amount, or approximately $ 18.0 million, was recorded as an offset to the principal amount of the Note, and was to have been accreted ratably to interest income over the term of the Note.

During the year ended December 30, 2023, approximately $ 720,000 of the discount was recorded as interest income.

During the fourth quarter of fiscal 2023, VM7 determined that, after expending significant amounts of time and resources, it was unable to obtain sufficient equity or debt financing to continue the operations of the Recycling Subsidiaries.

Accordingly, the Company was advised that the operations of the Recycling Subsidiaries were wound down and, ultimately, ceased.

For a variety of related reasons, the Company determined fully to impair the $ 5.3 million carrying value of the Disposition Transaction on its balance sheet and determined not to exercise any of its remedies under the Recycling Purchase Agreement so that it could maintain its focus on its clinical-stage biopharmaceutical activities.

The preliminary calculation of the gain on sale was approximately $ 15.8 million.

The following table details the final calculation of the gain on sale of the Recycling Subsidiaries, as shown on the income statement (in $000’s):

Total minimum consideration $ 6,023

Payment from buyer 3

Net consideration $ 6,026

Soin, we had agreed to transfer

to him the membership interests of Soin Therapeutics LLC, and he would transfer to us the shares of Soin Preferred for cancellation.

of the date of this Report, Dr.

Soin and the Company have a verbal agreement not to effectuate either such transfer.

As of the year ended

December 27, 2025, the Company has tendered an aggregate of $ 0.5

million to Dr.

connection with the Soin Amendment, the Company reclassified the $ 3.0 million convertible tranche, originally valued at approximately

$ 2.7 million on our balance sheet, from mezzanine equity to current liabilities, and reclassified the $ 10.0 million convertible tranche,

originally valued at approximately $ 8.0 million on our balance sheet, to permanent equity.

As of December 27, 2025, the outstanding balance

in mezzanine equity relates to the $ 17.0 million convertible tranche originally valued at approximately $ 3.9 million.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Discontinued Operations

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.

accordance with ASC 360-10 and ASC 205-20, the Company has separately reported the assets and liabilities of all of its discontinued

operations in the consolidated balance sheets.

These assets and liabilities have been reflected as discontinued operations as of December

27, 2025 and December 28, 2024, and consist of the following (in $000s):

Schedule Of Discontinued Operations

Assets from discontinued

Trade and other receivables, net

Other current assets

Total current assets from discontinued operations

Property and equipment, net

Intangible assets, net 2

Deferred income taxes

Total other assets from discontinued operations

Total assets from discontinued operations

Liabilities from discontinued

Accounts payable

Accrued liabilities 1,857

Accrued liabilities - California state sales tax 6,320

Lease liabilities 5,285

Accumulated other comprehensive loss ( 604 )

Total disposal of liabilities 20,320

Total consideration 26,346

Accounts receivable 4,884

Property, plant and equipment 2,767

Accrued liabilities - other

Related party note

Total current liabilities from discontinued

Total noncurrent liabilities from discontinued

Total liabilities from discontinued operations

1 The Company’s

property and equipment consisted of the following (in $000s):

2 The Company’s

intangible assets consisted of the following:

3 The Company’s

accrued liabilities consisted of the following:

Buildings and improvements

Projects under construction

Property and equipment

Property and equipment, gross

Less accumulated depreciation

Total property and equipment, net, from discontinued

depreciation expense has been recorded for the years ended December 27, 2025 or December 28, 2024.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

2 The Company’s

intangible assets consisted of the following:

Soin intangible

Intangible assets

Right-of-use assets 5,075

Other assets 574

Total disposal of assets 14,244

Total gain on sale $ 12,102

Discontinued Operations

As of December 30, 2023, the Company discontinued operations of its Recycling segment as follows:

On March 9, 2023, the Company executed a Recycling Purchase Agreement with VM7, under which, as of March 1, 2023, it agreed to acquire all of the outstanding equity interests of the Recycling Subsidiaries, consisting of (a) ARCA Recycling,

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) ARCA Canada, and (c) Connexx.

The principal of VM7 is Virland A.

Johnson, our Chief Financial Officer.

In accordance with the provisions of 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 these entities for the year ended December 28, 2024 and December 30, 2023, respectively, have been reflected as discontinued operations in the consolidated statements of operations and comprehensive income (loss) and consist of the following (in $000’s):

December 28, 2024 December 30, 2023

Revenues $ — $ 3,795

Less accumulated amortization

Total intangible assets

expense was $ 1.9 million and $ 2.1 million for the years ended December 27, 2025 or December 28, 2024, respectively.

Intangible Assets

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:

Total accrued expenses

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).

results of operations for this entity for the years ended December 27, 2025 and December 28, 2024 have been reflected as discontinued

operations in the consolidated statements of operations and comprehensive income (loss) and consist of the following:

Cost of revenues

Gross profit — ( 197 )

Operating expenses from discontinued operations:

Selling, general and administrative expenses — 1,467

Gain on sale of ARCA — ( 12,102 )

Total operating expenses from discontinued operations — ( 10,635 )

Operating income from discontinued operations — 10,438

Other expense from discontinued operations

Interest expense, net — ( 181 )

Selling, general

and administrative expenses

Total operating expenses

from discontinued operations

Operating income from

discontinued operations

Other income (expense) from discontinued operations

other expense, net

Total other expense, net — ( 184 )

Income before provision for income taxes from discontinued operations — 10,254

Income before provision for income taxes from

discontinued operations

Income tax provision

Net income from discontinued operations $ — $ 9,283

In accordance with the provisions of 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 year ended December 28, 2024 and December 30, 2023 have been reflected as discontinued operations in the consolidated statements of cash flows and consist of the following (in $000’s):

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 28, 2024 December 30, 2023

Net income from discontinued

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

accordance with the provisions of 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 year ended December 27, 2025

and December 28, 2024 have been reflected as discontinued operations in the consolidated statements of cash flows and consist of the

following (in $000’s):

DISCONTINUED OPERATING ACTIVITIES:

1 unchanged sentence

Depreciation and amortization

Amortization of debt issuance costs — 11

Amortization of right-of-use assets — 52

Gain on sale of ARCA, net of cash — ( 12,248 )

Changes in assets and liabilities:

Accounts receivable — 2,932

Inventories — 299

Prepaid expenses and other current assets — 56

Accounts payable and accrued expenses — 1,837

Other assets — 1

Net cash provided by operating activities from discontinued operations $ — $ 2,319

DISCONTINUED INVESTING ACTIVITIES:

Purchases of property and equipment — ( 123 )

Purchase of intangible assets — ( 32 )

Net cash used in investing activities from discontinued operations $ — $ ( 155 )

DISCONTINUED FINANCING ACTIVITIES:

Proceeds from note payable — 5,162

Payments on related party note — ( 38 )

Payments on notes payable — ( 7,336 )

Net cash used in financing activities from discontinued operations $ — $ ( 2,212 )

Effect of changes in exchange rate on cash and cash equivalents — ( 5 )

Noncash expense (benefit) funded by parent

Change in deferred taxes

Net cash provided by operating

activities from discontinued operations

DISCONTINUED INVESTING

Net cash used in investing

activities from discontinued operations

DISCONTINUED FINANCING

Net cash used in financing

activities from discontinued operations

Effect of changes in exchange

rate on cash and cash equivalents

DECREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, beginning of period — 53

CASH AND CASH EQUIVALENTS, end of period $ — $ —

CASH AND CASH EQUIVALENTS,

beginning of period

CASH AND CASH EQUIVALENTS,

end of period

Prepaids and other current assets

Prepaids and other current assets as of December 28, 2024 and December 30, 2023 consist of the following (in $000’s):

December 28, 2024 December 30, 2023

Prepaids and Other Current Assets

and other current assets as of December 27, 2025 and December 28, 2024 consist of the following (in $000’s):

Schedule of Other Current Assets

Prepaid licensing

Prepaid consulting

Prepaid legal

Prepaid purchase commitments

Prepaid insurance

Prepaid other

Total prepaids and other current assets $ 1,518 $ 75

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total prepaid expenses

and other current assets

Property and Equipment

Property and equipment as of December 28, 2024 and December 30, 2023 consist of the following (in $000’s):

December 28, 2024 December 30, 2023

Projects under construction $ 1,170 $ —

Total property and equipment, net $ 1,170 $ —

The Company recorded no depreciation expense from continuing operations for the years ended December 28, 2024 and December 30, 2023.

In connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company leases commercial office space.

These assets and properties are leased under noncancelable 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 December 28, 2024 and December 30, 2023 (in $000’s):

December 28, 2024 December 30, 2023

Right of use asset - operating leases $ 121 $ —

and equipment as of December 27, 2025 and December 28, 2024 consist of the following (in $000’s):

of Property and Equipment

Furniture and fixtures

Computer equipment

Property and equipment

Property and equipment gross

Accumulated depreciation

Total property and equipment,

expense was approximately $ 40 and $ 0

the fiscal years ended December 27, 2025 and December 28, 2024, respectively.

connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company leases commercial office space.

These assets and properties

are leased under noncancelable 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.

following table details the Company’s right of use assets and lease liabilities as of December 27, 2025 and December 28, 2024 (in

Schedule of Right of Use Assets and Lease Liabilities

Right of use asset - operating

Lease liabilities:

1 unchanged sentence

Long term - operating

As of December 28, 2024, the weighted average remaining lease term for operating leases is 4.9 years.

The Company’s weighted average discount rate for operating leases is 12.8 %.

No cash payments for operating leases were made during the years ended December 28, 2024 and December 30, 2023.

Additionally, the Company recognized approximately $ 123,000 in right of use assets and liabilities upon commencement of operating leases during the year ended December 28, 2024.

Total present value of future lease payments of operating leases as of September 28, 2024 (in $000’s):

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

of December 27, 2025, the weighted average remaining lease term for operating leases is 3.9 years.

The Company’s weighted average

discount rate for operating leases is 12.8 %.

Total cash payments for operating leases for the years ended December 27, 2025 and December

28, 2024 were approximately $ 27,000 and $ 0 , respectively.

Additionally, the Company recognized approximately no right of use assets and

liabilities upon commencement of operating leases during the fiscal year ended December 27, 2025.

present value of future lease payments of operating leases as of December 27, 2025 (in $000’s):

Schedule of Lease Payments of Operating Leases

Twelve months ended:

1 unchanged sentence

Present value of payments

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Notes receivable

On May 24, 2022, the Company entered into an Asset Purchase Agreement with SPYR Technologies Inc.

(“SPYR”), pursuant to which the Company sold to SPYR substantially all of the assets and none of the specified liabilities of GeoTraq.

In connection with the Purchase Agreement, SPYR delivered to the Company a five-year Promissory Note in the initial principal amount of $ 12.6 million.

The Promissory Note bears simple interest at the rate of 8.0 % per annum, provides quarterly interest payments due on the first day of each calendar quarter, and may be prepaid at any time without penalty.

Interest payments may be remitted in either restricted shares of common stock or restricted shares of Series G Convertible Preferred Stock of SPYR, or in cash.

The Promissory Note matures on May 24, 2027.

The Company had received restricted shares of Series G Convertible Preferred Stock of SPYR equivalent to approximately 26,253,900,000 shares of its common stock during the year ended December 28, 2024, and 922,442,000 shares of SPYR's common stock during the year ended December 30, 2023.

As of December 30, 2023, the Company had no accrued receivables related to the Promissory Note.

At December 30, 2023, the Company performed a qualitative analysis of the SPYR note receivable and concluded that, due to a number of triggering factors, it was probable that SPYR would be unable to fulfill its obligation to repay the principal amount under the promissory note on or before the maturity date.

Consequently, the Company recorded an impairment charge of approximately $ 9.8 million for the fiscal year ended December 30, 2023.

During the fiscal years ended December 28, 2024 and December 30, 2023, approximately $ 0 and $ 806,000 , respectively, of the discount was recorded as interest income.

As of December 28, 2024 and December 30, 2023, no principal balance on the Note was outstanding.

(a) ARCA Recycling, (b) ARCA Canada, and (c) Connexx.

The principal of VM7 is Virland A.

Johnson, our Chief Financial Officer.

The Recycling Purchase Agreement is retroactive to March 1, 2023 (see Note 4).

During the year ended December 30, 2023, approximately $ 720,000 of the discount was recorded as interest income.

Accordingly, the Company was advised that the operations of the Recycling Subsidiaries were wound down and, ultimately, ceased.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WLFI Treasury Program

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

3,750,000,000 WLFI tokens

3,584,000,000 WLFI tokens (adjusted slightly from initial 3,750,000,000 to reflect final

settlement after expenses from the proceeds of the financing completed in August 2025 (~ 7.3 %

As of December 27, 2025, all 7,283,585,650 WLFI tokens held by Alt5

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 shareholder approval, charter amendment, and

resale registration statement effectiveness conditions, with no waivers or early releases granted other than the limited uses described

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.

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

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.

outstanding units, cost basis, and fair value as of December 27, 2025 were as follows:

Schedule of Outstanding Units, Cost Basis and Fair Value

Balance, September 27, 2025:

7,283,585,650

$ 1,456,717,130

$ 1,054,663,202

7,283,585,650

$ 1,456,717,130

$ 1,054,663,202

following table presents a reconciliation of WLFI assets to fair value as of December 27, 2025:

Schedule of Reconciliation of WLFI Assets to Fair Value

Fair value, December 28, 2024

Fair value, beginning balance

1,468,717,130

( 11,995,371 )

1,456,717,130

Unrealized loss

( 402,053,928 )

Fair value, December 27, 2025

$ 1,054,663,202

Fair value, ending balance

$ 1,054,663,202

the fiscal year ended December 27, 2025, the Company recognized an unrealized loss of approximately $ 402.1 million related to the change

in fair value of the tokens.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets

Intangible assets as of consist of the following (in $000’s):

December 28, 2024 December 30, 2023

Soin intangibles $ 19,293 $ 19,293

Intangible Assets

assets as of consist of the following (in $000’s):

Schedule of Intangible Assets

Qoden intangible

Patents and domains

Trade names 2,675 —

Customer relationships

1 unchanged sentence

Total intangible assets

Total intangible assets gross

Less accumulated amortization

Total intangible assets, net $ 34,430 $ 17,846

Intangible amortization expense for continuing operations was approximately $ 3.4 million and $ 1.5 million, respectively, for the fiscal years ended December 28, 2024 and December 30, 2023.

Qoden Intangible Assets

The Company will amortize the intangible assets over a two-year period (see Note 3).

ALT5 Subsidiary Intangible Assets

As part of the acquisition, the Company acquired trade names, customer relationships, and developed technology, which will be amortized over a period of seven years , 10 years, and five 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.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Marketable Securities

Marketable securities consist of the following (in $000’s, except shares):

Series G Convertible Preferred Shares Common Shares Equivalent Amount

Beginning balance, December 31, 2022 — 30,000,000 $ 315

Securities received 9,224 922,442,000 897

Mark-to-market — ( 926 )

Beginning balance, December 30, 2023 9,224 952,442,000 286

Securities received 33,876 26,253,900,000 $ 518

Mark-to-market — $ ( 370 )

Write-off marketable securities ( 43,100 ) ( 27,206,342,000 ) $ ( 434 )

Ending balance, December 28, 2024 — — $ —

Marketable securities reflect shares of SPYR stock received by the Company in connection with the sale of GeoTraq.

Quarterly interest payments may be remitted in either restricted shares of common stock or restricted shares of Series G Convertible Preferred Stock of SPYR, or in cash.

Shares of Series G Convertible Preferred Stock are convertible into the SPYR’s common shares at a ratio of 1:100,000.

Shares held are marked to fair market value as of each balance sheet date, with the resulting change recorded as an unrealized gain or loss.

For the year ended December 28, 2024, the Company received 33,876 shares of Series G Convertible Preferred Stock, which are convertible into approximately 26,253,900,000 shares of SPYR’s common stock.

For the year ended December 30, 2023, the Company received 9,224 shares of Series G Convertible Preferred Stock, which are convertible into approximately 922,442,000 shares of SPYR’s common stock.

Unrealized loss was approximately $ 1.1 million and $ 926,000 for the years ended December 28, 2024 and December 30, 2023, respectively.

During the year ended December 28, 2024, the Company was notified that SPYR Technologies, Inc.

(“SPYR”) had ceased operations, and that no future quarterly interest payments on the promissory note, which may be remitted in either restricted shares of common stock or restricted shares of Series G Convertible Preferred Stock of SPYR, or in cash, would be made.

Consequently, the Company recorded a full write-off of approximately $ 434,000 of its Series G Convertible Preferred shares of SPYR.

Deposits and other assets

Deposits and other assets consist of the following (in $000’s):

December 28, 2024 December 30, 2023

Deposits and other assets $ — $ 9

Total deposits and other assets $ — $ 9

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total intangible assets,

amortization expense for continuing operations was approximately $ 3.3 million and $ 1.3 million, respectively, for the fiscal years ended

December 27, 2025 and December 28, 2024.

on May 9, 2025, the Company and its 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).

Intangible Assets

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).

Subsidiary Intangible Assets

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 of seven years , 10 years, and five years , respectively (see Note 3).

following table details the Company’s goodwill as of December 27, 2025 and December 28, 2024 (in $000’s):

Schedule of Goodwill

Balance, December 28, 2024

Balance, Beginning Balance

Mswipe acquisition

Mswipe tax adjustment

Balance, December 27, 2025

Balance, Ending Balance

Company accounts for purchased goodwill and intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other .

The Company recognized approximately $ 8.4 million of goodwill during the year ended December 27, 2025 related to the acquisition of Mswipe

and the associated deferred tax liability (see Note 3).

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued liabilities

Accrued liabilities of continuing consist of the following (in $000’s):

December 28, 2024 December 30, 2023

liabilities as of December 27, 2025 and December 28, 2024 consist of the following (in $000’s):

of Accrued Liabilities

Compensation and benefits

2 unchanged sentences

Accrued interest

Accrued professional fees

Accrued settlements

Accrued Qoden payments

Accrued litigation/legal 50 397

Accrued legal

Customer deposits

Total accrued liabilities

Debentures outstanding as of December 28, 2024 and December 30, 2023 consisted for the following (in $000’s):

December 28, 2024 December 30, 2023

Interest rate of 15 %, maturity date of June 30, 2025

outstanding as of December 27, 2025 and December 28, 2024 consisted for the following (in $000’s):

of Debenture Outstanding

Interest rate of 12 %, maturity

date of June 30, 2025

Total debentures

ALT5 Subsidiary issued 39 debentures over a period from October 2018 through September 2019.

The debentures bear interest at 12 % per annum and mature as of June 30, 2024 or June 30, 2025.

During the year ended December 28, 2024, ALT5 Subsidiary repaid 33 of the debentures in the amount of approximately $ 1.1 million.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Subsidiary issued seven debentures over a period from October 2018 through September 2019.

The debentures bore interest at 12 % per annum

and matured on of 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.

Long-Term Debt

Long-term debt as of December 28, 2024 and December 30, 2023 consisted of the following (in $000’s):

December 28, 2024 December 30, 2023

debt as of December 27, 2025 and December 28, 2024 consisted of the following (in $000’s):

of Long-Term Debt

Legacy subsidiary fixed deposits

3 unchanged sentences

Less current portion

Total long-term notes payable, related parties $ 11,570 $ —

Legacy Subsidiary Fixed Deposits

During the year ended December 28, 2024, 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 $ 4.7 million, as set forth in the respective agreements.

Total long-term notes

payable, related parties

Subsidiary Fixed Deposits

the year ended December 27, 2025, 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 $ 4.7 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 March 18, 2026 to March 13, 2027.

During the year ended December 28, 2024, 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 $ 475,000 of these deposits were reclassified as non-controlling interest.

As of December 28, 2024, the outstanding aggregate obligations totaled approximately $ 4.2 million.

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 29, 2025.

The promissory note bears interest at 15 % per annum.

As of December 28, 2024, the outstanding balance of the note was approximately $ 3.8 million.

Unaffiliated Third-Party Loans

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.

During the year ended December 28, 2024, the third party converted $ 548,900 of the Company’s obligations under the ICG Note into 900,000 shares of the Company’s common stock.

As of December 28, 2024, the amount outstanding on the ICG Note was approximately $ 0.7 million.

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.

During the year ended

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 28, 2024, the third party converted $ 243,900 of the Company’s obligations under the Live Note into 400,000 shares of the Company’s common stock.

As of December 28, 2024, the amount outstanding on the Live Note was approximately $ 0.8 million.

Skybridge Obligation

On April 10, 2024, Skybridge Americas, Inc.

(“SA”) sold its judgment to an otherwise unaffiliated third party for the face value of the judgment and the interest accrued thereon through that date (an aggregate of $ 433,920 ), plus accrued legal fees (in the amount of $ 18,124 ) to which SA was entitled in accordance with the terms of the underlying agreement with the Company and with the judgment.

The purchaser agreed to forbear from enforcing the judgment, subject to the Company’s repayment or his conversion thereof.

In connection with the third-party’s forbearance, the Company issued its promissory note to such person in the initial principal amount of $ 147,956 , which bears interest at the rate of 10 % per annum, and, as with the underlying judgment, is convertible into shares of the Company’s common stock at a fixed per-share conversion price of $ 2.60 (see Note 21).

On December 23, 2024, pursuant to the terms of the agreement, the unaffiliated third party converted the obligation, plus accrued interest under the agreements, in the amount of approximately $ 691,000 , into 265,842 shares of the Company’s common stock (see Note 18).

As of December 28, 2024, there was no balance outstanding.

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 to two 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 to two 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.

During the year ended December 27, 2025, several of these unaffiliated third-parties agreed to convert their respective investments into

Future Equity Agreements for shares of the Company’s subsidiary, Alyea and, consequently, approximately $ 475,000 of

these deposits were reclassified as non-controlling interest.

As of December 27, 2025 and December 28, 2024, the outstanding aggregate

obligations totaled approximately $ 7.9 million and $ 4.5 million, respectively.

Subsidiary Loan

August 10, 2023, ALT5 Subsidiary entered into a Bitcoin-denominated promissory note with an otherwise unaffiliated third party.

is remeasured to fair value each reporting period.

Although an extension agreement was contemplated, no such agreement was executed.

The promissory note had an original maturity date of August 2025 and was fully repaid during the year ended December 27, 2025.

The promissory

note bore interest at 15 % per annum.

As of December 27, 2025 and December 28, 2024, the outstanding balance of the note was approximately

$ 0 and $ 3.8 million, respectively.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Third-Party Loans

February 7, 2024, the Company amended its related-party promissory note in favor of Isaac Capital Group LLC (“ICG”) (the

“ICG Note”) to add a conversion feature.

In accordance with Nasdaq rules, the per-share conversion price was set at $ 0.61 ,

subject to customary adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions.

The Company’s board of directors approved the amendment 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 of the ICG Note were

not modified in connection with the transfer.

The principal amount outstanding on the date of acquisition was approximately $ 1.2 million.

During the year ended December 27, 2025, the third party converted approximately $ 1.2 million of the Company’s obligations under

the ICG Note into 1.9 million shares of the Company’s common stock.

As of December 27, 2025 and December 28, 2024, the amount outstanding

on the ICG Note was approximately $ 26,000 and $ 0.7 million, respectively.

February 7, 2024, the Company amended its related-party promissory note in favor of Live Ventures Incorporated (“Live”) (the

“Live Note”) to add a conversion feature.

In accordance with Nasdaq rules, the per-share conversion price for each amended

obligation was set at $ 0.61 , subject to customary adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and

(iii) pro rata distributions.

The Company’s board of directors approved the amendments on February 7, 2024.

On March 6, 2024, Live

entered into a Note Purchase Agreement with an otherwise unaffiliated third party, under which the third party acquired the Live Note.

The terms of the Live Note were not modified in connection with the transfer.

The principal amount outstanding on the date of acquisition

was approximately $ 1.0 million.

During the year ended December 27, 2025, the third party converted $ 1.0 million of the Company’s

obligations under the Live Note into approximately 1.6 million shares of the Company’s common stock.

As of September 27, 2025 and

December 28, 2024, the amount outstanding on the Live Note was $ 0 and $ 0.8 million.

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 $ 405,454 (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.

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.

Big Debenture was issued with an original issue discount (an “OID”) initially of $ 171,000 , which OID can be expanded with

up to two 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.

Small Debentures were issued with an OID initially of $ 38,863 , which OID can be expanded with up to two 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

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.

As of November 1, 2024, the first of the two 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

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

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 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 (see Note 18).

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.

As of December 28, 2024, the outstanding balance due on the debentures was approximately $ 500,000 , 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.

if, expanded, the principal

amount would increase to $ 327,726 and, thereafter, potentially to $ 405,454 .

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.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

of November 1, 2024, the first of the two

additional OIDs was effective for each of the Big Debenture and the two Small Debentures.

The final maturity date for each of the Debentures was April 28, 2025.

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

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.

of November 1, 2024, the contingent second tranche of each of the Big Warrant and the two Small the Warrants vested.

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.

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 Warrants for a total of 90,908 shares (see Note 17).

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 in Alyea and, consequently, approximately $ 1.3 million was reclassified as non-controlling interest.

year ended December 27, 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 December 27, 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.

Fixed Deposit Agreement

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 December 28, 2024, the outstanding balance was $ 1.5 million.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The principal

may be repaid in full, but not in part, with a pre-payment penalty equivalent to three months of interest.

During the year ended

December 27, 2025, all outstanding principal and accrued interest was repaid in full.

As of December 27, 2025 and December 28, 2024,

the outstanding balance was $ 0 and $ 1.5 million, respectively.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Fixed Deposit Agreement

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 months of interest.

As of December 27, 2025, the outstanding

balance was $ 0 .

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 Mswipe, 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 two of the three sellers

of Mswipe in the amounts of $ 0.7 million

and $ 0.4 million,

respectively, and acknowledged an equivalent 14 -month term straight promissory note at the acquired company level that pre-dated our

acquisition in the amount of $ 5.1 million.

The fair values assigned to the promissory notes, as calculated by a third-party firm,

were approximately $ 0.6 million,

$ 0.3 million,

and $ 4.7 million, respectively.

Each note bears interest at 3.99 %

per annum, and matures on June 29, 2026.

As of December 27, 2025, the outstanding balances on the three notes were $ 0.6 million,

$ 0.4 million, and $ 4.9 million,

respectively.

Related Party Debt

Long-term debt payable to related parties (see Note 20) as of December 28, 2024 and December 30, 2023 consisted of the following (in $000’s):

December 28, 2024 December 30, 2023

Isaac Capital Group $ — $ 707

Isaac Capital Group, 10 % interest rate, matures December 31, 2024

Live Ventures Incorporated, 10 % interest rate, matures December 31, 2024

debt payable to related parties (see Note 20) as of December 27, 2025 and December 28, 2024 consisted of the following (in $000’s):

of Long Term Debt Payable

Isaac Capital Group, 10 % interest

rate, matures December 31, 2024

Live Ventures Incorporated, 10 % interest rate,

matures December 31, 2024

Isaac Capital Group short-term demand advance

Novalk Apps SAA, LLP short-term demand advance 110 —

Novalk Apps SAA, LLP short-term

demand advance

Total notes payable, related parties

Less current portion

Total long-term notes payable, related parties $ — $ 707

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

Twelve months ending September 30,

Total future maturities of long-term debt, related parties $ 812

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.

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 December 28, 2024, the third party converted $ 183,000 of the Company’s obligation under the ICG Note into 300,000 shares of the Company’s common stock.

As of December 28, 2024, the amount outstanding on the ICG Note was approximately $ 0.3 million (see Note 20).

On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $ 100,000 .

The advance bears interest at a rate of 10 % per annum until repaid.

As of December 28, 2024, the principal amount outstanding was $ 48,000 (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.

Total long-term notes

payable, related parties

Capital Group LLC

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.

During the year ended December 27, 2025, the third party converted approximately $ 329,000 of the Company’s

obligation under the ICG Note into 516,016 shares of the Company’s common stock.

As of December 27, 2025 and December 28, 2024,

the amount outstanding on the ICG Note was $ 0 and $ 327,000 , respectively (see Note 19).

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $ 100,000 .

The advance bears interest at a rate of

10 % per annum until repaid.

As of December 27, 2025 and December 28, 2024, the principal amount outstanding was $ 0 and $ 48,000 , respectively

(see Note 19).

Ventures Incorporated

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 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.

On March 6, 2024, Live Ventures entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which 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 December 28, 2024, the third party converted $ 183,000 of the Company’s obligation under the Live Note into 300,000 shares of the Company’s common stock.

As of December 28, 2024, the amount outstanding on the Live Note was approximately $ 0.3 million (see Note 20).

On March 4, 2024, the Company entered into a two-year Consulting Agreement with Jon Isaac, pursuant to which he will provide to the Company (the “Services”):

(i) strategic financial advice, including growth strategies, capital allocation, and financial restructuring;

(ii) sales and business development advice, including for the acquisition of new clients and new products through networking, referrals, and marketing efforts for our prospective products;

(iii) in-depth research and

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

market intelligence on specific industries, sectors, and market trends;

(iv) financial models and financial analysis to support strategic decision-making;

(v) assistance, through site visits, in the preparation of new client offers and bids for proposed projects;

(vi) weekly update calls with management to align on progress of objectives and goals;

(vii) enhanced non-confidential materials;

(viii) business risk management support;

and (ix) other services to which the Company and he may agree that will be memorialized in writing if, when, and as needed during the two-year term.

In connection with the Consulting Agreement, the Company entered into a a two-year , straight 10 % convertible promissory note in the initial principal amount of $ 500,000 , and a per-share conversion price equivalent to the per-share value of the restricted common stock that he was granted ($ 1.16 ).

The maturity date of the promissory note is March 4, 2026.

On December 23, 2024, pursuant to the terms of his Consulting Agreement, Mr.

Isaac converted the principal and accrued interest on the convertible promissory note, in the amount of approximately $ 540,000 , into 465,753 shares of the Company’s common stock.

As of December 28, 2024, there was no principal balance outstanding on the promissory note (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 December 28, 2024, the principal amount outstanding was $ 110,000 (see Note 20).

During June 3, 2024, Tony Isaac made a number of short-term demand advances in the aggregate amount of $ 62,000 to the Company.

During the fiscal year ended December 27, 2025, the third party converted approximately $ 347,000 of the Company’s obligation under

the Live Note into 568,470 shares of the Company’s common stock.

As of December 27, 2025 and December 28, 2024, the amount outstanding

on the Live Note was $ 0 and $ 327,000 , respectively (see Note 19).

Apps SAA, LLP

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 December 28, 2024, the principal amount outstanding was fully repaid (see Note 20).

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 27, 2025

and December 28, 2024, the principal amount outstanding was $ 0 and $ 110,000 , respectively (see Note 19).

Registered Direct Offering

Direct Offering

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.

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.

Placement Offering

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.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

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, subject to certain contractual beneficial ownership limitations.

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

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

Annual Report, the registration statement has not yet been filed.

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.

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.

Agency Agreements

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.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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.

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.

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

offerings, including all equity linked financings, through December 31, 2026, on terms customary to the Placement Agent.

tail period, as provided in the Placement Agent Agreements, was also extended from August 12, 2026 through December 31, 2026.

connection with such extensions, the Placement Agent (i) paid the Company the sum of one 1

million dollars and (ii) agreed that, once it has received one 1

million dollars in fees paid to it by the Company with respect to any financing consummated during the right of first refusal

period, as extended, or in respect of the fee tail period, as extended, 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.

connection with the Placement Agent Subsequent Agreement, on December 26, 2025, the Company also 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 of

three million dollars, one-third of which was paid on or about December 31, 2025 and the remaining amounts are to be paid 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

Rights Agreement

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 Annual Report,

the registration statement has not yet been filed.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Management Agreement

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.

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.

addition, each of the Company’s directors and executive officers is 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.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock

Series A-1 Convertible Preferred Stock

On August 18, 2017, the Company acquired GeoTraq by way of merger.

In connection with this transaction, the Company tendered to the owners of GeoTraq $ 200,000 , issued to them an aggregate of 288,588 shares (number of shares specific – not rounded) of the Company’s Series A Convertible Preferred Stock valued at $ 12.3 million, including the beneficial conversion feature of $ 2.6 million, and entered into one-year unsecured promissory notes in the aggregate principal amount of $ 800,000 .

The “Conversion Ratio” per share of the Series A-1 Convertible Preferred Stock in connection with any conversion shall be at a ratio of 20 :1, one share of Series A-1 Convertible Preferred Stock, if and when converted into shares of Common Stock, shall convert into twenty shares Common Stock.

Each holder shall have the right, exercisable at any time and from time to time (unless otherwise prohibited by law, rule, or regulation, or as restricted below), to convert any or all of such holder’s shares of Series A-1 Convertible Preferred Stock into shares of Common Stock at the Conversion Ratio.

During the years ended December 28, 2024 and December 30, 2023, 0 and 27,353 shares of the Company’s Series A-1 Convertible Preferred Stock were converted into 0 and 547,069 shares, respectively, of the Company’s common stock.

Additionally, during the year ended December 28, 2024, 0 shares of the Company’s Series A-1 Convertible Preferred Stock were forfeited.

As of December 28, 2024 and December 30, 2023, there were 23,480 and 193,730 shares, respectively, of Series A-1 Convertible Preferred Stock outstanding.

The Company cannot declare, pay or set aside any dividends on shares of any other class or series of our capital stock unless (in addition to the obtaining of any consents required by our Articles of Incorporation) the holders of the Series A Convertible Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend in the aggregate amount of one dollar, regardless of the number of then-issued and outstanding shares of Series A Convertible Preferred Stock.

Any remaining dividends allocated by the Board of Directors shall be distributed in an equal amount per share to the holders of outstanding common stock and Series A-1 Convertible Preferred Stock (on an as-if-converted to common stock basis pursuant to the Conversion Ratio as defined below).

Voting Rights

Each holder of a share of Series A Convertible Preferred Stock has a number of votes as is determined by multiplying (i) the number of shares of Series A Preferred Stock held by such holder, and (ii) 17.

The holders of Series A-1 Convertible Preferred Stock vote together with all other classes and series of common and preferred stock of the Company as a single class on all actions to be taken by the common stockholders of the Company, except to the extent that voting as a separate class or series is required by law.

The Series A-1 Convertible Preferred Stock has no redemption rights by the Company, or any other entity.

Preemptive Rights

Holders of the Series A-1 Convertible Preferred Stock and holders of ALT5 Sigma Corporation’s common stock are not entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company, except as set forth in the Amended and Restated Series A-1 Certificate of Designation or in any other document agreed to by ALT5 Sigma Corporation.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series A-1 Convertible Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A-1 Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series A-1 Convertible Preferred Stock, but excluding a stock split or

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series A-1 Convertible Preferred Stock;

or (iv) alter or change the rights, preferences or privileges of the shares of Series A-1 Convertible Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series A-1 Convertible Preferred Stock, make technical, corrective, administrative or similar changes to the Amended and Restated Series A-1 Certificate of Designation that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series A-1 Convertible Preferred Stock.

Series B Preferred Stock

On May 15, 2024 the Company acquired acquired its ALT5 Subsidiary by way of merger (see Note 3).

the Company tendered to the owners of ALT5 Subsidiary 34,250 shares of the Company’s Series B Preferred Stock valued at approximately $ 8.6 million.

Series B Preferred Stock are not be convertible into any class or series of capital stock of the Company.

As of the year ended December 28, 2024, 34,207 shares of Series B Preferred Stock were outstanding.

The Company shall not declare, pay, or set aside any dividends on shares of Series B Preferred Stock.

Voting Rights

Except as required by the General Corporation Law of the State of Nevada, the Series B Preferred Stock shall not have any voting rights.

The Series B Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

Holders of Series B Preferred Stock and holders of Common Stock are not be entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series B Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series B Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series B Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series B Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of Series B Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series B Preferred Stock,

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

make technical, corrective, administrative or similar changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series B Preferred Stock.

Series I Convertible Preferred Stock

In connection with its acquisition of ALT5 Subsidiary (see Note 3), on December 2, 2024, the Company tendered 17,000 shares of Series I Convertible Preferred Stock to two consultants of ALT5 Subsidiary.

The Series I Convertible Preferred Stock 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 of two years , and are subject to vesting provisions.

The conversion ratio per share of the Series I Convertible Preferred Stock shall be one hundred shares of the Company’s common stock for each share of Series

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

I Convertible Preferred Stock subject to certain adjustments.

As of the year ended December 28, 2024, 17,000 shares of Series I Convertible Preferred Stock were outstanding.

Following the Original Issue Date, the holders of this series of Preferred Stock shall be entitled to receive dividends on an as-converted into-Common Stock basis contemporaneously with the declaration and payment to the holders of Common Stock.

Voting Rights

Except as required by the General Corporation Law of the State of Nevada, the Series I Convertible Preferred Stock shall not have any voting rights.

The Certificate of Designation for the Series I Convertible Preferred Stock does not provide any redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

The Certificate of Designation for the Series I Convertible Preferred Stock does not provide the holders thereof with any preemptive, subscription, or similar rights in respect of any securities of the Company.

Protective Provisions

The Certificate of Designation for the Series I Convertible Preferred Stock does not provide the holders thereof with any protective provisions in their favor for so long as shares of such series remain outstanding.

Series M Preferred Stock

In connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company issued 3,200 shares of Series M Preferred Stock to two entities that acted as finders for the transaction.

Series M Preferred Stock shall not be convertible into any class or series of capital stock of the Company.

As of the year ended December 28, 2024, 3,200 shares of Series M Preferred Stock were outstanding.

The Company shall not declare, pay, or set aside any dividends on shares of Series M Preferred Stock.

Voting Rights

Except as required by the General Corporation Law of the State of Nevada, the Series M Preferred Stock shall not have any voting rights.

The Series M Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

Holders of Series M Preferred Stock and holders of Common Stock shall not be entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series M Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series M Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Series M Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series M Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of Series M Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series M Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series M Preferred Stock, make technical, corrective, administrative or similar changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series M Preferred Stock.

Series Q Convertible Preferred Stock

On November 6, 2024 acquired the Qodex Cryptocurrency Exchange Software platform and other related assets from Qoden Technologies, LLC by way of an asset purchase agreement (see Note 3).

The Company tendered to the owners of Qoden Technologies, LLC 771,010 shares of the Company’s Series Q Convertible Preferred Stock valued at approximately $ 1.3 million.

Additionally, the Company tendered and additional 154,202 shares of the Company’s Series Q Convertible Preferred Stock to a third-party contractor to act as a consultant in implementing and enhancing the platform.

The Series Q Convertible Preferred 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 of two years, and are subject to vesting provisions.

The conversion ratio per share of the Series Q Convertible Preferred Stock shall be one share of the Company’s common stock for each share of Series Q Convertible Preferred Stock subject to certain adjustments.

As of the year ended December 28, 2024, 925,212 shares of Series Q Convertible Preferred Stock were outstanding.

Following the Original Issue Date, holders of Series Q Convertible Preferred Stock shall not be entitled to receive any dividends.

Voting Rights

Except as required by the General Corporation Law of the State of Nevada, the Series Q Convertible Preferred Stock shall not have any voting rights.

The Series Q Convertible Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

Holders of Series Q Convertible Preferred Stock and holders of Common Stock shall not be entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series Q Convertible Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series Q Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series Q Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series Q Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of Series B Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series Q Convertible Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series Q Convertible Preferred Stock, make technical, corrective, administrative or similar

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series Q Convertible Preferred Stock.

Series V Convertible Preferred Stock

On May 4, 2024, entered into an Asset Purchase Agreement for the purchase of specified assets of an unaffiliated third-party (see Note 18).

In connection with this transaction, the Company tendered 5,000 shares of the Company's Series V Convertible Preferred Stock.

The conversion ratio per share of the Series V Convertible Preferred Stock in connection with any Conversion shall be at a ratio of 1:1, meaning every one share of Series V Convertible Preferred Stock, if and when converted into shares of Common Stock, shall convert into one share of Common Stock.

Each Holder shall have the right, exercisable at any time and from time to time, unless otherwise prohibited by law, rule, or regulation, to convert any or all of such Holder’s shares of Series V Convertible Preferred Stock into shares of Common Stock at the Conversion Ratio.

As of the year ended December 28, 2024, 5,000 shares of Series Q Convertible Preferred Stock were outstanding.

Shares of Series V Convertible Preferred Stock do not have dividend rights.

A-1 Convertible Preferred Stock

August 18, 2017, the Company acquired GeoTraq by way of merger.

In connection with this transaction, the Company tendered to the owners

of GeoTraq $ 200,000 , issued to them an aggregate of 288,588 shares of the Company’s

Series A Convertible Preferred Stock valued at $ 12.3 million, including the beneficial conversion feature of $ 2.6 million, and entered

into 1 one-year unsecured promissory notes in the aggregate principal amount of $ 800,000 .

shares of the Series A Convertible Preferred Stock were later exchanged on a share-for-share basis for shares of the Company’s

Series A-1 Convertible Preferred Stock, the rights, privileges, preferences, and restrictions of which were substantially similar.

The “Conversion Ratio” per share of the Series A-1 Convertible Preferred Stock in connection with any conversion was at

a ratio of 20 :1 ,

one share of Series A-1 Convertible Preferred Stock, if and when converted into shares of Common Stock, converted into 20 shares of

Common Stock.

Each holder had the right, exercisable at any time and from time to time (unless otherwise prohibited by law,

rule, or regulation, or as restricted below), to convert any or all of such holder’s shares of Series A-1 Convertible

Preferred Stock into shares of Common Stock at the Conversion Ratio.

the years ended December 27, 2025 and December 28, 2024, 44,250 and 170,250 shares of the Company’s Series A-1 Convertible Preferred

Stock were converted into 885,000 and approximately 3.1 million shares, respectively, of Common Stock.

Additionally,

during the year ended December 27, 2025, the Company determined that the calculation of available Series A-1 Convertible Preferred Stock

as of December 28, 2024 had been understated and increased the available amount by 20,770 shares.

As of December 27, 2025 and December

28, 2024, there were 0 and 23,480 shares, respectively, of Series A-1 Convertible Preferred Stock outstanding.

Company cannot declare, pay or set aside any dividends on shares of any other class or series of its capital stock unless (in addition

to the obtaining of any consents required by our Articles of Incorporation) the holders of the Series A Convertible Preferred Stock then

outstanding shall first receive, or simultaneously receive, a dividend in the aggregate amount of one dollar, regardless of the number

of then-issued and outstanding shares of Series A Convertible Preferred Stock.

Any remaining dividends allocated by the Board of Directors

shall be distributed in an equal amount per share to the holders of outstanding Common Stock and Series A-1 Convertible Preferred Stock (on

an as-if-converted to Common Stock basis pursuant to the Conversion Ratio).

holder of a share of Series A-1 Convertible Preferred Stock has a number of votes as is determined by multiplying (i) the number of

shares of Series A-1 Preferred Stock held by such holder, and (ii) 17.

The holders of Series A-1 Convertible Preferred Stock vote

together with all other classes and series of common stock and preferred stock of the Company as a single class on all actions to be

taken by the common stockholders of the Company, except to the extent that voting as a separate class or series is required by

Series A-1 Convertible Preferred Stock has no redemption rights by the Company, or any other entity.

of the Series A-1 Convertible Preferred Stock and holders of Common Stock are not entitled to any preemptive, subscription, or similar

rights in respect of any securities of the Company, except as set forth in the Amended and Restated Series A-1 Certificate of Designation

or in any other document agreed to by the Company.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

first obtaining the affirmative approval of the holders of a majority of the shares of Series A-1 Convertible Preferred Stock, the Company

may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares

of Series A-1 Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series

A-1 Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series

A-1 Convertible Preferred Stock;

or (iv) alter or change the rights, preferences or privileges of the shares of Series A-1 Convertible

Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however,

that we may, without any vote of the holders of shares of the Series A-1 Convertible Preferred Stock, make technical, corrective, administrative

or similar changes to the Amended and Restated Series A-1 Certificate of Designation that do not, individually or in the aggregate, materially

adversely affect the rights or preferences of the holders of shares of the Series A-1 Convertible Preferred Stock.

B Preferred Stock

May 15, 2024 the Company acquired its ALT5 Subsidiary by way of merger (see Note 3).

The Company tendered to the owners of ALT5

Subsidiary 34,250 shares of the Company’s Series B Preferred Stock valued at approximately $ 0.7 million.

B Preferred Stock was not convertible into any class or series of capital stock of the Company.

As of the years ended December 27,

2025 and December 28, 2024, 34,207 shares of Series B Preferred Stock were outstanding.

Company shall not declare, pay, or set aside any dividends on shares of Series B Preferred Stock.

as required by the General Corporation Law of the State of Nevada, the holders of the Series B Preferred Stock did not have any voting rights.

Effective in August 2025, each share of Series B Preferred Stock was allocated one vote per share on any matters for which the holders

of Common Stock could vote.

Series B Preferred Stock has no redemption rights by the Company, or any other entity.

of Series B Preferred Stock and holders of Common Stock are not be entitled to any preemptive, subscription, or similar rights in respect

of any securities of the Company.

first obtaining the affirmative approval of the holders of a majority of the shares of Series B Preferred Stock, the Company may not

directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series

B Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series B Preferred Stock, but excluding

a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right

of exchange, of all or part of the shares of another class of shares into shares of Series B Preferred Stock;

(iv) permit the convertibility,

whether mandatory or permissible, of some or all of the then-outstanding shares of Series B Preferred Stock, or (v) alter or change the

rights, preferences or privileges of the shares of Series B Preferred Stock so as to affect adversely the shares of such series, including

the rights set forth in this Designation;

provided, however, that the Company may, without any vote of the holders of shares of the Series B Preferred

Stock, make technical, corrective, administrative or similar changes that do not, individually or in the aggregate, materially adversely

affect the rights or preferences of the holders of shares of the Series B Preferred Stock.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

I Convertible Preferred Stock

connection with, but not specifically required for, its acquisition of

its ALT5 Subsidiary (see Note 3), on December 2, 2024, the Company tendered 17,000 shares of Series I

Convertible Preferred Stock to two consultants of ALT5 Subsidiary.

Series I Convertible Preferred Stock was subject to an eight-calendar-quarter mandatory leak-out, limiting conversions to no more

than 12.5% of the shares on a trailing quarterly basis over a 2 two-year

period, and was also subject to vesting provisions.

Each share of Series I Convertible Preferred Stock was convertible into 100

shares of the Company’s common stock, subject to customary adjustments.

On December 8, 2025, all outstanding shares of Series

I Convertible Preferred Stock were cancelled pursuant to a settlement agreement between the Company and the holders and, in connection therewith, the Company issued an aggregate of 275,000 shares of its Common Stock to such individuals.

As of December

27, 2025 and December 28, 2024, 0

shares of Series I Convertible Preferred Stock were outstanding, respectively.

The holders of Series I Convertible Preferred Stock are entitled to receive dividends on an as-converted into-Common

Stock basis contemporaneously with the declaration and payment to the holders of Common Stock.

as required by the General Corporation Law of the State of Nevada, the

holders of the Series I Convertible Preferred Stock did not have any voting rights.

Effective in August 2025, each share of Series I Preferred

Stock was allocated one vote per share on any matters for which the holders of Common Stock could vote.

Certificate of Designation for the Series I Convertible Preferred Stock

does not provide any redemption rights by the Company, or any other entity.

The holders of Series I Convertible Preferred Stock are not entitled to

any preemptive, subscription, or similar rights in respect of any securities of the Company.

Certificate of Designation for the Series I Convertible Preferred Stock does not provide the holders thereof with any protective provisions

in their favor for so long as shares of such series remain outstanding.

M Preferred Stock

connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company issued 3,200 shares of Series M Preferred Stock to two entities

that acted as finders for the transaction.

M Preferred Stock was not convertible into any class or series of capital stock of the Company.

During the year ended December 27,

2025, all 3,200

shares of Series M Preferred Stock were exchanged for 90,000

shares of Common Stock valued at approximately $ 0.1 million.

As of the fiscal years ended December 27, 2025 and December 28, 2024, 0

shares of Series M Preferred Stock were outstanding, respectively.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Company shall not declare, pay, or set aside any dividends on shares of Series M Preferred Stock.

as required by the General Corporation Law of the State of Nevada, the Series M Preferred Stock did not have any voting rights.

Series M Preferred Stock has no redemption rights by the Company, or any other entity.

The holders of Series M Preferred Stock were not entitled to any preemptive, subscription, or similar rights in respect

of any securities of the Company.

first obtaining the affirmative approval of the holders of a majority of the shares of Series M Preferred Stock, the Company may not

directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series

M Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series M Preferred Stock, but excluding

a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right

of exchange, of all or part of the shares of another class of shares into shares of Series M Preferred Stock;

(iv) permit the convertibility,

whether mandatory or permissible, of some or all of the then-outstanding shares of Series M Preferred Stock, or (v) alter or change the

rights, preferences or privileges of the shares of Series M Preferred Stock so as to affect adversely the shares of such series, including

the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series M Preferred

Stock, make technical, corrective, administrative or similar changes that do not, individually or in the aggregate, materially adversely

affect the rights or preferences of the holders of shares of the Series M Preferred Stock.

Q Convertible Preferred Stock

November 6, 2024 acquired the Qodex Cryptocurrency Exchange Software platform and other related assets from Qoden Technologies, LLC by

way of an asset purchase agreement (see Note 3).

The Company tendered to the owners of Qoden Technologies, LLC 771,010 shares of the

Company’s Series Q Convertible Preferred Stock valued at approximately $ 1.3 million.

Additionally, the Company tendered an additional

154,202 shares of the Company’s Series Q Convertible Preferred Stock to a third-party contractor to act as a consultant in implementing

and enhancing the platform.

Series Q Convertible Preferred 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 of two years, and subject to vesting provisions.

The conversion ratio per share

of the Series Q Convertible Preferred Stock shall be one share of the Company’s common stock for each share of Series Q Convertible

Preferred Stock subject to certain adjustments.

During the fiscal year ended December 27, 2025, 289,128 shares of Series Q Convertible

Preferred Stock were converted into 289,128 shares of the Common Stock.

As of the fiscal years ended December 27, 2025

and December 28, 2024, 636,084 and 925,212 shares of Series Q Convertible Preferred Stock were outstanding, respectively.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

The Company shall not declare, pay, or set aside any dividends on shares of Series Q Convertible Preferred Stock.

as required by the General Corporation Law of the State of Nevada, the holders of the Series Q Convertible Preferred Stock did not have any

voting rights.

The Holder of each share of Series V Convertible Preferred Stock shall have such number of votes as is determined by multiplying (a) the number of shares of Series V Convertible Preferred Stock held by such Holder by (b) one.

Such voting calculation is hereby authorized by the Company and the Company acknowledges such calculation may result in the total number of possible votes cast by the Series V Convertible Preferred Stock Holders and all other classes of the Company’s Common Stock in any given voting matter exceeding the total aggregate number of shares that this Company shall have authority to issue.

The Series V Convertible Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

Holders of Series V Convertible Preferred Stock and holders of Common Stock shall not be entitled to any preemptive, subscription, or similar rights in respect of any securities of the Company.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series V Convertible Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series V Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series V Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series V Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of Series V Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series V Convertible Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series V Convertible Preferred Stock, make technical, corrective, administrative or similar

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series V Convertible Preferred Stock.

Series S Convertible 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.

Initially, Dr.

Soin was entitled to convert up to three million dollars of value of the Series S Stock into shares of the Company’s common stock commencing one year from the closing and may also convert up to an additional $ 10 million of value of the Series S Stock into shares of the Company's common stock from and after the sooner of (y) the issuance by the FDA of New Drug Approval for low-dose naltrexone for treating pain or (z) 10 years from the closing.

Effective in August 2025, each share of Series Q Preferred Stock was allocated one vote per share on any matters for which

the holders of Common Stock could vote.

Series Q Convertible Preferred Stock has no redemption rights by the Company, or any other entity.

The holders of Series Q Convertible Preferred Stock are not entitled to any preemptive, subscription, or similar

rights in respect of any securities of the Company.

first obtaining the affirmative approval of the holders of a majority of the shares of Series Q Convertible Preferred Stock, the Company

may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares

of Series Q Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series Q

Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series

Q Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of

Series B Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series Q Convertible Preferred

Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that

the Company may, without any vote of the holders of shares of the Series Q Convertible Preferred Stock, make technical, corrective, administrative

or similar changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders

of shares of the Series Q Convertible Preferred Stock.

V Convertible Preferred Stock

May 4, 2024, the Company entered into an Asset Purchase Agreement for the purchase of specified assets of an unaffiliated

third-party (see Note 18).

In connection with this transaction, the Company tendered 5,000

shares of the Company’s Series V Convertible Preferred Stock.

conversion ratio per share of the Series V Convertible Preferred Stock in connection with any Conversion shall be at a ratio of 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.

Each Holder shall have the right, exercisable at any time and from time to time, unless otherwise prohibited

by law, rule, or regulation, to convert any or all of such Holder’s shares of Series V Convertible Preferred Stock into shares

of Common Stock at the Conversion Ratio.

During the fiscal year ended December 27, 2025, all 5,000 shares of Series V Convertible Preferred

Stock were converted into 600,000 shares of the Company’s common stock.

As of the year ended December 27, 2025 and December 28,

2024, 0 and 5,000 shares of Series V Convertible Preferred Stock were outstanding, respectively.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

of Series V Convertible Preferred Stock did not have dividend rights.

Holder of each share of Series V Convertible Preferred Stock had such number of votes as is determined by multiplying (a) the

number of shares of Series V Convertible Preferred Stock held by such Holder by (b) one.

Such voting calculation is hereby authorized

by the Company and the Company acknowledges such calculation may result in the total number of possible votes cast by the Series V Convertible

Preferred Stock Holders and Common Stock in any given voting matter exceeding the total aggregate

number of shares that this Company shall have authority to issue.

Series V Convertible Preferred Stock had no redemption rights by ALT5 Sigma Corporation, or any other entity.

the holders of Series V Convertible Preferred Stock were not entitled to

any preemptive, subscription, or similar rights in respect of any securities of the Company.

first obtaining the affirmative approval of the holders of a majority of the shares of Series V Convertible Preferred Stock, the Company

may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares

of Series V Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series V

Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series

V Preferred Stock;

(iv) permit the convertibility, whether mandatory or permissible, of some or all of the then-outstanding shares of

Series V Preferred Stock, or (v) alter or change the rights, preferences or privileges of the shares of Series V Convertible Preferred

Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that

the Company may, without any vote of the holders of shares of the Series V Convertible Preferred Stock, make technical, corrective, administrative

or similar changes that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders

of shares of the Series V Convertible Preferred Stock.

S Convertible Preferred Stock

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.

Soin was entitled to convert up to 3 three million dollars of value of the Series S Stock into shares of the Company’s common

stock commencing one year from the closing and may also convert up to an additional $ 10 million of value of the Series S Stock into shares

of the Company’s common stock from and after the sooner of (y) the issuance by the FDA of New Drug Approval for low-dose naltrexone

for treating pain or (z) 10 years from the closing.

Further, during the 10 -year period following the closing, Dr.

Soin may convert up to an additional $ 17 million of value at a rate of five percent of the gross revenues that the Company receives in connection with sales or license revenue from the product.

Soin further agreed to certain restrictions on the maximum number of shares of Series S Stock that he may ultimately keep or that he may convert into shares of our common stock or sell into the public markets at any given time:

Soin may not convert shares of Series S Stock into shares of the Company's common stock in an amount such that, upon any such conversion, he beneficially own shares of the Company's common stock in excess of 4.99 % of the Company's then-outstanding common stock and (ii) during the five-year period that commences on the date that Dr.

Soin is first eligible to convert any shares of Series S Stock into shares of the Company's common stock, he will not dispose of any of such shares into the public markets in an amount that exceeds five percent of the daily trading volume of the Company's common stock during any trading day.

Shares of Series S Convertible Preferred Stock are convertible into the Company’s common shares at a ratio of 1:1.

During the year ended December 28, 2024, in connection with the amended agreement disclosed in Note 3, the Company reclassified approximately $ 2.7 million from mezzanine equity to current liabilities, and approximately $ 8.0 million from mezzanine equity to permanent equity (see Note 3).

As of December 28, 2024 and December 30, 2023, there were 100,000 shares of Series S Convertible Preferred Stock outstanding, as reflected in the following (dollars in $000’s):

Series S Preferred Stock

Shares Amount

Balance, December 31, 2022 100,000 $ 14,510

Soin may convert up

to an additional $ 17 million of value at a rate of 5 five percent of the gross revenues that the Company receives in connection with sales

or license revenue from the product.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Soin further agreed to certain restrictions on the maximum number of shares of Series S Stock that he may ultimately keep or that he

may convert into shares of our common stock or sell into the public markets at any given time:

Soin may not convert shares of

Series S Stock into shares of the Company’s common stock in an amount such that, upon any such conversion, he beneficially own

shares of the Company’s common stock in excess of 4.99 % of the Company’s then-outstanding common stock and (ii) during the

five-year period that commences on the date that Dr.

Soin is first eligible to convert any shares of Series S Stock into shares of the

Company’s common stock, he will not dispose of any of such shares into the public markets in an amount that exceeds five percent

of the daily trading volume of the Company’s common stock during any trading day.

of Series S Convertible Preferred Stock are convertible into shares of Common Stock that is dependent on the NOCP at the time of

conversion with a floor of $ 1.66 per share.

During the year ended

December 27, 2025, in connection with the amended agreement disclosed in Note 3, the Company reclassified approximately $ 2.7 million

from mezzanine equity to current liabilities, and approximately $ 8.0 million from mezzanine equity to permanent equity (see Note 3).

As of December 27, 2025 and December 28, 2024, there were 100,000 shares of Series S Convertible Preferred Stock outstanding, as reflected

in the following (dollars in $000’s):

Schedule of Series S Convertible Preferred Stock Outstanding

S Preferred Stock

Balance, December 30, 2023

Reclassification to permanent equity

Reclassification to current liabilities 0 $ ( 2,661 )

Reclassification to current

Balance, December 28, 2024

Shares of Series S Convertible Preferred Stock do not have dividend rights.

Voting Rights

The Holder of each share of Series S Convertible Preferred Stock shall have one vote for such share.

With respect to any stockholder vote, the Holder shall have full voting rights and powers equal to the voting rights and powers of the Common Stock stockholders, and shall be entitled to notice of any stockholders' meeting in accordance with the Bylaws of the Company, and shall be entitled to vote, together with Common Stock stockholders, with respect to any question upon which the Common Stock stockholders have the right to vote.

The Holders of Series S Convertible Preferred Stock shall vote together with all other classes and series of common and preferred stock of the Company as a single class on all actions to be taken by the Common Stock stockholders, except to the extent that voting as a separate class or series is required by law.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Series S Convertible Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

Preemptive Rights

Holders of the Series S Convertible Preferred Stock and holders of ALT5 Sigma Corporation common stock are not entitled to any preemptive, subscription, or similar rights in respect of any securities of ALT5 Sigma Corporation, except as set forth in the Amended and Restated Series A-1 Certificate of Designation or in any other document agreed to by ALT5 Sigma Corporation.

Protective Provisions

Without first obtaining the affirmative approval of a majority of the holders of the shares of Series S Convertible Preferred Stock, the Company may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series S Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series S Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series S Convertible Preferred Stock;

(iv) issue additional shares of Series S Convertible Preferred Stock other than in connection with the merger agreement, or (v) alter or change the rights, preferences or privileges of the shares of Series S Convertible Preferred Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that we may, without any vote of the holders of shares of the Series S Convertible Preferred Stock, make technical, corrective, administrative or similar changes to the Amended and Restated Series S Certificate of Designation that do not, individually or in the aggregate, materially adversely affect the rights or preferences of the holders of shares of the Series S Convertible Preferred Stock.

Balance, December 27, 2025

of Series S Convertible Preferred Stock do not have dividend rights.

Holder of each share of Series S Convertible Preferred Stock has one vote for each such share.

With respect to any stockholder vote,

the Holder has full voting rights and powers equal to the voting rights and powers of the Common Stock stockholders, and

shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company, and shall be entitled

to vote, together with Common Stock stockholders, with respect to any question upon which the Common Stock stockholders have the

right to vote.

The Holders of Series S Convertible Preferred Stock shall vote together with all other classes and series of Common Stock

and preferred stock of the Company as a single class on all actions to be taken by the Common Stock stockholders, except to the

extent that voting as a separate class or series is required by law.

Series S Convertible Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity.

The holders of the Series S Convertible Preferred Stock and the holders

of Common Stock are not entitled to any preemptive, subscription, or similar rights in respect of any securities of ALT5 Sigma Corporation,

except as set forth in the Amended and Restated Series A-1 Certificate of Designation or in any other document agreed to by the Company.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

first obtaining the affirmative approval of a the holders of a majority of the shares of Series S Convertible Preferred Stock, the Company

may not directly or indirectly (i) increase or decrease (other than by redemption or conversion) the total number of authorized shares

of Series S Convertible Preferred Stock;

(ii) effect an exchange, reclassification, or cancellation of all or a part of the Series S

Convertible Preferred Stock, but excluding a stock split or reverse stock split or combination of the common stock or preferred stock;

(iii) effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into shares of Series

S Convertible Preferred Stock;

(iv) issue additional shares of Series S Convertible Preferred Stock other than in connection with the

merger agreement, or (v) alter or change the rights, preferences or privileges of the shares of Series S Convertible Preferred Stock

so as to affect adversely the shares of such series, including the rights set forth in this Designation;

provided, however, that the Company may,

without any vote of the holders of shares of the Series S Convertible Preferred Stock, make technical, corrective, administrative or

similar changes to the Amended and Restated Series S Certificate of Designation that do not, individually or in the aggregate, materially

adversely affect the rights or preferences of the holders of shares of the Series S Convertible Preferred Stock.

Stockholders’ Equity

Common Stock :

The Company's 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.

As of December 28, 2024, and December 30, 2023, there were 15,417,687 and 4,957,647 shares, respectively, of common stock issued and outstanding.

Equity Offerings:

On March 22, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors for the sale by the Company in a registered direct offering of 361,000 shares of the Company’s common stock, par value $ 0.001 per share, at a purchase price per share of Common Stock of $ 1.17 .

The offering closed on March 24, 2023.

The aggregate gross proceeds for the sale of the shares of Common Stock were approximately $ 422,000 , before deducting the placement agent fees and related expenses.

The Company utilized the net proceeds for working capital and general corporate purposes.

On August 18, 2023, the Company entered into a Securities Purchase Agreement with a certain institutional investor for the sale by the Company in a registered direct offering of:

(i) 418,000 shares of the Company’s common stock, par value $ 0.001 per share, at an offering price of $ 0.8811 per share and (ii) pre-funded warrants exercisable for up to 481,348 shares of Common Stock to the Investor at an offering price equal to $ 0.8801 per pre-funded Warrant.

In connection with the Securities Purchase Agreement, during the year ended December 28, 2024, the Company issued 27,738 shares of its common stock to three third-parties in exchange for brokerage services.

On February 23, 2024, the Company entered into Unit Purchase Agreements with two otherwise unaffiliated third-party investors, pursuant to which each Investor agreed to purchase 408,163 units of securities from the Company, at a price per Unit of $ 0.7350 , for an aggregate purchase price of $ 300,000 per investor for an aggregate price of $ 600,000 .

Each Unit consists of one share of the Company’s common stock and one warrant to purchase an additional share of common stock.

The per-Unit price is allocated as follows:

$ 0.61 per share of common stock and $ 0.125 per Warrant.

The Warrant has a three-year term and will be immediately exercisable.

Each Warrant is exercisable at $ 0.61 per share.

The Company utilized the proceeds from the Unit Purchases for its working capital needs.

Further, the Company issued an additional 81,632 shares of its common stock to another party in exchange for brokerage services rendered.

On March 4, 2024, the Company entered into a two-year Consulting Agreement (the “Consulting Agreement”) with Jon Isaac, pursuant to which he will provide a variety of services to the Company.

In connection with the Consulting Agreement, the Company issued to Mr.

Isaac 200,000 restricted shares of its common stock (see Note 20).

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 22, 2024, pursuant to the terms and conditions of a promissory note, the Company converted $ 183,000 of obligations into 300,000 shares of the Company’s common stock (see Note 20).

On March 25, 2024, pursuant to the terms and conditions of a promissory note, the Company converted $ 183,000 of obligations into 300,000 shares of the Company’s common stock (see Note 20).

On April 10, 2024, pursuant to the terms and conditions of a promissory note, the Company converted $ 60,900 of obligations into 100,000 shares of the Company’s common stock (see Note 20).

On April 12, 2024, pursuant to the terms and conditions of a promissory note, the Company converted $ 60,900 of obligations into 100,000 shares of the Company’s common stock (see Note 20).

On May 1, 2024, the Company entered into a Securities Purchase Agreement with two institutional investors for the sale by the Company of 79,782 units of the Company’s securities at a purchase price of $ 3.775 per unit, each unit consisting of one share of the Company’s common stock and one common stock purchase warrant for the purchase of an additional share of Common Stock.

Each three-year warrant is exercisable immediately at an exercise price of $ 3.63 per share.

The gross proceeds were approximately $ 300,000 , before deducting related expenses.

On May 4, 2024, the Company entered into an Asset Purchase Agreement for the purchase of specified assets of an unaffiliated third-party.

For the purchase of the assets, the Company (i) issued 300,000 restricted shares of its common stock, (ii) issued 5,000 shares of its Series V Convertible Preferred Stock, and (iii) granted a three-year warrant for the purchase of up to 125,000 shares of its common stock at an exercise price of $ 1.25 per share.

On May 15, 2024, the Company acquired ALT5 Subsidiary.

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 (see Note 3).

On June 3, 2024, the Company entered into a six-month marketing agreement with a non-affiliated third-party, pursuant to which the third-party will provide a variety of marketing-related services to the Company.

In connection with the marketing agreement, the Company issued to the third-party 47,923 shares of its common stock.

On June 6, 2024, the Company entered into a one-year consulting agreement with a non-affiliated third-party, pursuant to which the third party will provide a variety of finance and investor-related services to the Company.

In connection with the marketing agreement, the Company issued to the third-party 150,000 shares of its common stock.

On September 18, 2024, the Company entered into a six-month marketing agreement with a non-affiliated third-party, pursuant to which the third-party will provide a variety of marketing-related services to the Company.

In connection with the marketing agreement, the Company issued to the third-party 20,000 shares of its common stock.

During October 2024, the Company issued 225,000 shares of its common stock as prepayment of one year’s interest on its Bitcoin loan.

In connection with the Big/Small Debenture (see Note 15), on October 18, 2024, the Company issued an additional 25,000 shares of its common stock to another party in exchange for brokerage services rendered.

During the fourth quarter of the fiscal year ended December 28, 2024, the Company issued 290,908 shares of its common stock related to the exercise of warrants under Big/Small Debenture (see Note 15).

On July 1, 2024, the Company entered into a one-year consulting agreement with a non-affiliated third-party, pursuant to which the third-party will provide a variety of communication-related consulting services to the Company.

In connection with the marketing agreement, on December 3, 2024 , the Company issued to the third-party 60,000 shares of its common stock.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On December 23, 2024, pursuant to the terms of his Consulting Agreement, Mr.

Isaac converted the existing obligation on the convertible promissory note, in the amount of approximately $ 540,000 , into 465,753 shares of the Company’s common stock (see Note 16).

On December 23, 2024, pursuant to the terms of the judgment and forbearance agreements, a non-affiliated third-party converted the existing obligation plus accrued interest due under the agreements, in the amount of approximately $ 691,000 , into 265,842 shares of the Company’s common stock (see Note 15).

During the year ended December 28, 2024, the Company issued an aggregate of 341,175 shares of its common stock to four individuals under the Company’s 2023 Equity Incentive Plan.

The aggregate value of the shares at issuance was approximately $ 1.3 million.

Equity Incentives :

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 year ended December 28, 2024, 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 year ended December 28, 2024, the Company recognized $ 1.2 million and in share-based compensation expense related to the 908,852 RSU’s that were awarded and immediately vested, as well as 295,000 shares of the Company’s common stock issued (see above).

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 December 28, 2024 and December 30, 2023, 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.

The Company’s Articles of Incorporation authorize 2,000,000,000 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.

As of December 27, 2025, and

December 28, 2024, there were 126,474,169 and 15,417,693 shares, respectively, of Common Stock issued and outstanding.

During the fiscal year ended December 27, 2025, the Company completed the following stock issuances:

stock conversions

Company issued 90,000

shares of its Common Stock related to its Series M Preferred Stock, 600,000

shares of its Common Stock related to its Series V Preferred Stock, 885,000

shares of its Common Stock related to its Series A-1 Preferred Stock, 275,000 shares of its Common Stock related to its Series I

Preferred Stock, and 289,128

shares of its Common Stock related to its Series Q Preferred Stock (see Note 16).

Direct Offering and related issuances

Company issued 100 million shares of its Common Stock in the Registered Direct Offering and 1,000,000 shares to the Lead Investor pursuant

to the Private Placement Purchase Agreement (see Note 15).

Company issued approximately 3.4

million shares of its Common Stock in connection with the conversion of related-party promissory note obligations (see Note 14) and 150,000

shares of its Common Stock in connection with the conversion of a non-related-party promissory note (see Note 15).

incentive awards

Company issued or granted 450,000 equity awards under the 2023 Equity Incentive Plan and 905,000 equity awards under the 2024 Equity

Incentive Plan.

for services and other agreements

Company issued 645,499 shares of its Common Stock to non-affiliated third parties for brokerage, consulting, and licensing services.

Warrant-related

Company issued approximately 1.3 million shares of its Common Stock in connection with warrant exercises.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

consideration

Company issued 1,000,000 shares of its Common Stock as consideration for the Mswipe acquisition (see Note 3).

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.

2024 Plan, the maximum number of shares of Common Stock that may be subject to or delivered under Awards granted under the Plan is 2,800,000

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 year ended December 27, 2025, the Company recognized approximately $ 4.6

million related to the 905,000 RSUs that were awarded and immediately vested under the 2024 Plan (see above).

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 of Common Stock that may be subject to or delivered under Awards granted under the Plan is ( 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

During the year ended December 27, 2025, the Company recognized $ 1.3 million in share-based compensation expense related to the

450,000 RSUs that were awarded and immediately vested (see above).

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 December 27, 2025 and December 28, 2024, 20,000 and 100,000 options were outstanding under

the 2016 Plan, respectively.

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 December 27, 2025 and December 28, 2024, 0 and 8,000 options, respectively, were outstanding under the 2011 Plan.

No additional awards will be granted under the 2011 Plan.

The following table summarizes stock option activity for the fiscal years ended December 28, 2024, and December 30, 2023 (Aggregate Intrinsic Value in $000’s):

Outstanding Weighted

Price Aggregate

Value Weighted

No additional

awards will be granted under the 2011 Plan.

following table summarizes stock option activity for the fiscal years ended December 27, 2025, and December 28, 2024 (Aggregate Intrinsic

Value in $000’s):

Schedule of Stock Options Activity

Outstanding at December 30, 2023

Granted 10,000 1.53

Cancelled/expired

3 unchanged sentences

Exercisable at December 27, 2025

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The exercise price for stock options outstanding and exercisable outstanding at December 28, 2024 is as follows:

Outstanding Exercisable

Number of Options Exercise Price ($) Number of Options Exercise Price ($)

42,000 $ 5.70 to $ 9.90

10,000 $ 5.70 to $ 9.90

66,000 $ 3.54 to $ 5.25

50,000 $ 3.54 to $ 5.25

108,000 60,000

The Company recognized share-based compensation expense related to equity incentive awards of approximately $ 1.7 million and approximately $ 14,000 for the fiscal years ended December 28, 2024, and December 30, 2023, respectively.

As of December 28, 2024, the Company had no unrecognized share-based compensation expense, and there were no non-vested shares associated with stock option awards.

For fiscal years ended December 28, 2024, and December 30, 2023, the Company recorded an income tax benefit from continuing operations of approximately $ 3.0 million and an income tax benefit of $ 0.4 million, respectively, and an income tax provision from discontinued operations of $ 0 and approximately $ 1.0 million, respectively, which consisted of the following (in $000’s):

Fiscal Years Ended

December 28, 2024 December 30, 2023

Current tax expense:

State $ ( 102 ) $ —

Federal ( 44 ) 98

Foreign 334 —

Current tax expense 188 98

Deferred tax (benefit) provision ( 3,229 ) 444

Total (benefit) provision of income taxes $ ( 3,041 ) $ 542

A reconciliation of the Company's income tax benefit (provision) with the federal statutory tax rate for the fiscal years ended December 28, 2024, and December 30, 2023, respectively, is shown below:

Fiscal Years Ended

December 28, 2024 December 30, 2023

exercise price for stock options outstanding and exercisable outstanding at December 27, 2025 is as follows:

of Exercise Price for Stock Options Outstanding and Exercisable Outstanding

Company recognized share-based compensation expense related to equity incentive awards of approximately $ 5.9 million and $ 1.7 million

for the fiscal years ended December 27, 2025, and December 28, 2024, respectively.

As of December 27, 2025, the Company had no unrecognized

share-based compensation expense, and there were no non-vested shares associated with stock option awards.

following table summarizes warrant activity for the fiscal years ended December 27, 2025, and December 28, 2024:

Outstanding at December 30, 2023

Outstanding at December 28, 2024

Outstanding at December 27, 2025

Exercisable at December 27, 2025

weighted average remaining contractual term of warrants outstanding and exercisable as of December 27, 2025 was approximately 9.4 years.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

fiscal years ended December 27, 2025, and December 28, 2024, the Company recorded an income tax benefit from continuing operations of

approximately $ 87.6 million and $ 0.2 million, respectively, and an income tax benefit from discontinued operations

of $ 0.9 million and approximately $ 2.9 million, respectively, which consisted of the following (in $000’s):

Schedule of Income Tax Provision Benefit

Current tax (benefit) expense:

Current tax (benefit) expense

Deferred tax benefit

Total benefit of income taxes

reconciliation of the Company’s income tax benefit (provision) with the federal statutory tax rate for the fiscal years ended December

27, 2025, and December 28, 2024, respectively, is shown below:

Schedule of Reconciliation of Income Tax Benefit Provision with the Federal Statutory Tax Rate

statutory rate

2 unchanged sentences

Permanent differences

Impact of sale of ARCA Recycling and Canada — % - 4.4 %

Temporary differences

Change in valuation allowance

Other 0.2 % - 0.1 %

32.7 % - 7.3 %

Income (loss) before provision of income taxes was derived from the following sources for fiscal years December 28, 2024 and December 30, 2023, respectively, as shown below (in $000’s):

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Years Ended

December 28, 2024 December 30, 2023

Income tax benefit provision

(loss) before provision of income taxes was derived from the following sources for fiscal years December 27, 2025 and December 28, 2024,

respectively, as shown below (in $000’s):

Schedule of Income (Loss) Before Provision of Income Taxes

United States

Canada 3,539 ( 657 )

Total $ ( 9,286 ) $ ( 7,270 )

The components of net deferred tax assets (liabilities) as of December 28, 2024 and December 30, 2023, respectively, are as follows (in $000’s):

December 28, 2024 December 30, 2023

$ ( 432,126 )

components of net deferred tax assets (liabilities) as of December 27, 2025 and December 28, 2024, respectively, are as follows (in $000’s):

Schedule of Components of Net Deferred Tax Assets Liabilities

Deferred tax assets (liabilities):

6 unchanged sentences

Lease liability

Tax credits — 3

Share-based compensation

Intangibles ( 6,909 ) ( 3,747 )

Right-of-use assets

Installment sale — —

Unrealized losses

Section 163(j) interest 138 —

163(j) interest

Deferred Tax Assets Liabilities

valuation allowance

Net deferred tax liabilities $ ( 1,041 ) $ ( 639 )

As of December 28, 2024, the Company has net operating loss carryforwards of approximately $ 19.5 million for federal income tax purposes, and approximately $ 11.8 million for state income tax purposes, which will be available to offset future taxable income.

Due to recent tax legislation, the federal net operating losses are eligible for indefinite carryforward, limited by certain taxable income limitations.

Net deferred tax assets

(liabilities)

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

of December 27, 2025, the Company has net operating loss carryforwards of approximately $ 16.5 million for federal income tax purposes,

and approximately $ 11.8 million for state income tax purposes, which will be available to offset future taxable income.

Due to recent

tax legislation, the federal net operating losses are eligible for indefinite carryforward, limited by certain taxable income limitations.

State net operating losses begin to expire in 2033.

The Company evaluates all available evidence to determine if a valuation allowance is needed to reduce its deferred tax assets.

During the fourth quarter of fiscal year 2023, management concluded that a valuation allowance is necessary for the state net operating loss carryforward and a portion of the federal net operating loss carryforward.

Due to the 2023 sale of ARCA Canada (as part of the Recycling Subsidiaries transaction), the valuation allowance was released.

The Company has recorded a valuation allowance of approximately $ 2.9 million as of December 28, 2024, and December 30, 2023.

The Company annually conducts an analysis of its uncertain tax positions and has concluded that it has no uncertain tax positions as of December 28, 2024.

The Company evaluates all available evidence to determine if a valuation allowance

is needed to reduce its deferred tax assets.

The Company has recorded a valuation allowance of approximately $ 9.0 million as of December

27, 2025, and December 28, 2024.

Company annually conducts an analysis of its uncertain tax positions and has concluded that it has no uncertain tax positions as of December

The Company’s policy is to record uncertain tax positions as a component of income tax expense.

The Company files U.S.

Company files U.S.

and state income tax returns in jurisdictions with differing statutes of limitations.

The 2021 through 2024 tax years remain subject to selection for examination as of December 28, 2024.

None of the Company’s income tax returns are currently under audit.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 2022 through 2025 tax years

remain subject to selection for examination as of December 27, 2025.

None of the Company’s income tax returns is currently under

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 ICG.

Tony Isaac and Richard Butler, Board of Directors members of the Company, are members 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 $ 144,000 and approximately $ 203,000 for fiscal years ending December 28, 2024 and December 30, 2023, respectively.

Customer Connexx rented approximately 9,900 square feet of office space from Live Ventures in Las Vegas, Nevada.

Effective August 2023, due to the winding down of operations of the Recycling Subsidiaries, the Company ceased leasing office space in the Las Vegas, Nevada facility.

The total rent and common area expenses for Connexx at the Las Vegas, Nevada office were approximately $ 17,000 and approximately $ 103,000 for fiscal years ending December 28, 2024 and December 30, 2023, respectively.

During Q4 2023, operations of the Recycling Subsidiaries were wound down and, ultimately, ceased.

Consequently, outstanding liabilities for shared rent and services for the Recycling Subsidiaries reverted to the Company.

As such, the Company has recorded a liability in the amount of approximately $ 258,000 , which was offset against the gain on sale of the Recycling Subsidiaries.

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.

Pursuant to an amendment to each note, $ 100,000 of principal, and accrued interest thereon, is due on September 7, 2024 for each note, and the balance of each note is due on December 31, 2024.

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 December 28, 2024, the principal balances outstanding on each of the promissory notes was $ 327,000 .

Isaac Consulting Agreement

On March 4, 2024, the Company entered into a two-year Consulting Agreement with Jon Isaac, pursuant to which he will provide to the Company (the “Services”):

(i) strategic financial advice, including growth strategies, capital allocation, and financial restructuring;

(ii) sales and business development advice, including for the acquisition of new clients and new products through networking, referrals, and marketing efforts for our prospective products;

(iii) in-depth research and market intelligence on specific industries, sectors, and market trends;

(iv) financial models and financial analysis to support strategic decision-making;

(v) assistance, through site visits, in the preparation of new client offers and bids for proposed projects;

(vi) weekly update calls with management to align on progress of objectives and goals;

(vii) enhanced non-confidential materials;

(viii) business risk management support;

and (ix) other services to which the Company and he may agree that will be memorialized in writing if, when, and as needed during the two-year term.

As compensation for the Services, the Company (i) assigned to him two universal life insurance policies that relate to the life of one of the founders of our now-disposed legacy recycling business (as of March 4, 2024, the first policy had an accumulated value/surrender value of approximately $ 3,854 and the second had an accumulated value/surrender value of approximately $ 468 );

(ii) agreed to tender to him funds in our Canadian counsel’s trust account in the event that the prospective Order of the Court of Appeal for Ontario Canada in the matter styled, Amtim Capital Inc.

and Appliance Recycling Centers of America , Case No.

COA-23-CV-0156, became the final Order of the Court, which amount we received during the reporting period and tendered to Mr.

Isaac $ 220,000 ;

(iii) issued to him 200,000 restricted shares of our common stock with the per-share value being the average of the Nasdaq Historical NOCP closing price during the five trading days prior to our board approving the Consulting Agreement, which shares were awarded from our 2023 Equity Incentive Plan;

and (iv) issued to him a two-year , straight 10.0 % convertible promissory note in the initial principal amount of $ 500,000 , with an interest rate of 10.0 % and a per-share conversion price equivalent to the per-share value of the restricted common stock that he was granted ($ 1.16 ).

The maturity date of the promissory note is March 4, 2026.

The value of the restricted shares was $ 232,000 on the date issued.

As of December 28, 2024, there was no principal balance outstanding on the promissory note.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Short-Term Advances

On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $ 100,000 .

The advance bears interest at a rate of 10 % per annum until repaid.

As of December 28, 2024, the principal amount outstanding was $ 48,000 .

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.

Isaac, the Company’s President and acting Chief Executive Officer, is the father of Jon Isaac, President and Chief Executive Officer of Live Ventures and

managing member of ICG.

Tony Isaac is also a member of the Board of Directors of Live Ventures.

The Company shares certain

executive, accounting, and legal services with Live Ventures.

The Company also subleases office space from, and shares certain

executive, accounting, and legal services with, Live Ventures.

Total rent paid and shared-services costs were approximately $ 216,000

and $ 144,000

for fiscal years ending December 27, 2025 and December 28, 2024, respectively.

with Live Ventures and ICG

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.

Pursuant to an amendment to each note, $ 100,000 of principal, and accrued interest

thereon, is due on September 7, 2024 for each note, and the balance of each note is due on December 31, 2024.

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 (see Note 14).

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 December 28, 2024, the principal amount outstanding was $ 110,000 .

During June 3, 2024, Tony Isaac made a number of short-term demand advances in the aggregate amount of $ 62,000 to the Company.

The advances bears interest at a rate of 10 % per annum until repaid.

As of December 28, 2024, the Company had repaid the advance in full (see Note 20).

Sale of Recycling Subsidiaries

(a) ARCA Recycling, Inc., (b) ARCA Canada, and (c) Connexx.

The principal of VM7 is Virland A.

Johnson, our Chief Financial Officer.

The Company's Board of Directors unanimously approved the Recycling Purchase Agreement and the Disposition Transaction.

The Recycling Purchase Agreement is retroactively effective as of March 1, 2023.

Accordingly, the Company was advised that the operations of the Recycling Subsidiaries were wound down and, ultimately, ceased.

Because the Company did not receive all of the economic benefits of the Disposition Transaction and understands that it will not receive any future benefits of the Disposition Transaction, the Company determined to fully impair the $ 5.3 million carrying value of the Disposition Transaction on its balance sheet.

The Company also determined not to exercise any of its remedies under the Recycling Purchase Agreement so that the Company could maintain its focus on its clinical-stage biopharmaceutical activities.

On August 28, 2019, ARCA Recycling entered into and delivered to ICG a secured revolving line of credit promissory note, whereby ICG agreed to provide ARCA Recycling with a $ 2.5 million revolving credit facility (the “ICG Note”).

Jon Isaac is the manager and sole member of ICG, and the son of Tony Isaac, the President of ALT5 Sigma Corporation and, previously, ARCA Recycling.

ICG is a record and beneficial owner of 13.6 % of the outstanding common stock of the Company.

The ICG Note was originally a component of the sale of the Recycling Subsidiaries in March 2023;

however, because of the winding down of operations of the Recycling Subsidiaries during Q4 2023, and because the ICG Note was guaranteed by the Company, it recorded a liability in the amount of approximately $ 690,000 for the principal balance due on the note, which was offset against the gain on sale of the Recycling Subsidiaries (see Note 4).

Additionally, effective February 2024, the ICG Note was amended to reflect the Company as co-maker on the ICG Note (see Note 20).

The ICG Note matures in March 2026, and bears interest at 8.75 % per annum.

Monthly payments on the note are approximately $ 24,767 .

As of December 28, 2024 and December 30, 2023, the balance outstanding was $ 0 and $ 706,000 , respectively.

The advances bears

interest at a rate of 10 %

per annum until repaid.

As of December 27, 2025 and December 28, 2024, the principal amount outstanding was $ 0

and $ 110,000 , respectively.

Commitments and Contingencies

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

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

August 2, 2021, the U.S.

Securities and Exchange Commission (the “SEC”)

filed a civil complaint (the “SEC Complaint”) in the United States District Court for the District of Nevada naming the Company

and its former Chief Financial Officer, Virland Johnson, 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

“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:

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 .

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 balance remaining on the payments to the SEC was $ 250,000 as

of December 27, 2025.

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.

On December 29, 2016, the Company served a Minnesota state court complaint for breach of contract on Skybridge Americas, Inc.

(“SA”), the Company’s primary call center vendor throughout 2015 and most of 2016.

On April 10 2024, subsequent to the conclusion of litigation at the trial court and appellate court levels, SA sold its judgment to an otherwise unaffiliated third party for the face value of the judgment and the interest accrued thereon through that date (an aggregate of $ 433,920 ), plus accrued legal fees (in the amount of $ 18,124 ) to which SA was entitled in accordance with the terms of the underlying agreement with the Company and with the judgment.

The purchaser agreed to forbear from enforcing the judgment, subject to the Company’s repayment or his conversion thereof.

As of December 28, 2024, there was no balance outstanding.

On or about April 9, 2021, GeoTraq, Gregg Sullivan, Tony Isaac, and the Company, among others, resolved all of the claims that related to, among other items, the Company's acquisition of GeoTraq in August 2017, all post-acquisition activities, and Mr.

Sullivan’s post-acquisition employment relationship with GeoTraq (all of such claims, the “GeoTraq Matters”).

The resolution was effectuated through the parties’ execution and delivery of a Settlement Agreement and Mutual Agreement of Claims (the “GeoTraq Settlement Agreement”).

The parties to the Settlement Agreement released and forever discharged one another from any and all known and unknown claims that were asserted or could have been asserted arising out of the GeoTraq Litigation Matters.

The accrued liability for payments due to Mr.

Sullivan is $ 0 and $ 510,000 as of December 28, 2024 and December 30, 2023, respectively.

Alixpartners, LLC

On October 19, 2022, Alixpartners, LLC filed a complaint in the Supreme Court of the State of New York, County of New York, styled Alixpartners, LLC, plaintiff/petitioner, against JanOne Inc.

Plaintiff alleged the breach of an agreement and sought damages in the amount of approximately $ 345,000 .

The Company denied that obligation.

After extensive negotiations, the parties reached a settlement, pursuant to which the Company agreed to pay to Alixpartners the sum of $ 125,000 in two tranches and to provide a confession of judgment in its favor in the amount of approximately $ 450,000 , which represented the amount sought in the complaint plus interest thereon.

The confession of judgment will be null and void and the complaint will be dismissed with prejudice upon the Company tendering both tranches timely.

The Company tendered both settlement payments in May 2023, and the complaint was subsequently dismissed.

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,

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Jon Isaac, and Virland A.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

SEC Complaint’s remaining allegations relate to financial, disclosure and reporting violations against the former 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 former 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 former 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.

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, 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.

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.

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 the Second Amendment Complaint, which the Court denied by Order dated September 30,

The Company filed its Answer to the Second Amended Complaint on December 1, 2025.

The litigation is currently in the early

stages of discovery.

The Company strongly disputes and denies the allegations contained in the Second Amended Complaint and will

continue to defend itself vigorously against the claims.

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.:

1 unchanged sentence

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.

The Company does not believe that it is obligated to Plaintiff in that amount and the parties continue to negotiate a potential settlement.

Westerville Square

In an attempt to recover payments due under a lease, in 2022, Westerville Square, Inc., as the landlord, initiated a civil action against the Company, styled Westerville Square, Inc.

Appliance Recycling Centers Of America, Inc., et al., in the Court of Common Pleas of Franklin County, Ohio, Case No.

The case was stayed during the bankruptcy proceedings of ApplianceSmart, Inc., and was reinstated on June 7, 2021.

The landlord is currently seeking $ 120,000 , which amount is disputed by the Company.

Effective June 4, 2023, the parties settled the matter, pursuant to which settlement the Company tendered the sum of $ 110,000 to the landlord, the parties entered into a Settlement Agreement and Release, and the case was dismissed with prejudice.

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 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 December 28, 2024.

Earnings (Loss) per share

Net 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 earnings 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 with respect to restricted share awards, stock options and convertible preferred stock.

Plaintiff alleged a

cause of action against the Company in respect of the guaranty and seeks approximately $ 90,000

Plaintiff also seeks approximately $ 1,420,000

against ApplianceSmart and the Company on a joint and several basis.

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 and the parties continue to negotiate a potential

Coast Bank and Trust vs.

ALT5 Sigma Corporation, et al.

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

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.

to September 27, 2025, 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 completed on December 1, 2025.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Johnson Bankruptcy

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 titled In 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

Johnson to the Company or another unknown assignee, may have been sold by Mr.

Johnson, or may even continue to be held by Mr.

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

vigorously defend itself against the claims.

The matter is in the discovery phase.

Capital Consulting, Inc.

DBA Trusaic vs.

ALT5 Sigma Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

is scheduled to start on June 29, 2026.

Plaintiff is seeking $ 97,696 ,

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 to the

two subsidiaries and not for the corporate parent.

Venue is in Los Angeles County, California.

5 Sigma Canada Inc., an indirect second-tier subsidiary of the Company, 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 ALT 5 Sigma Canada

At stake in those proceedings is US$ 3.5

million of ALT 5 Sigma Canada Inc.’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 ALT 5 Sigma Canada Inc.

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 ALT 5 Sigma

be dissolved.

A co-defendant in those proceedings is Mr.

Andre Beauchesne, who was ALT 5 Sigma Canada Inc.’s

principal in 2023.

The Intermediate Court sentenced Mr.

Beauchesne to seven years of imprisonment, along with fining him USD 517,131.5625 ,

because he did not attend the court proceedings and did not present a defense.

On June 6, 2025, ALT 5 Sigma Canada Inc.

Beauchesne appealed the Intermediate Court’s decision to the High Court of Kigali, Rwanda, and, as of the date of this

Annual Report, the matter remains under judicial review.

In the appeal, ALT 5 Sigma Canada Inc.

Beauchesne dispute the

findings of the Intermediate Court, reiterate and continue to maintain that each was a victim of fraud and that ALT 5 Sigma Canada

should regain access to the funds that belong to it (US$ 3.5

None of ALT 5 Sigma Canada Inc.’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 ALT 5 Sigma Canada Inc.

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.

Bruce Bent litigation

On February 25, 2026, Bruce Bent filed a complaint

in District Court, Clark County Nevada, styled, BRUCE BENT, derivatively, on behalf of ALT5 SIGMA CORPORATION, Plaintiff, vs.

ZACK WITKOFF;

PETER TASSIOPOULOS;

and DAVID DANZIGER, Defendants, and ALT5 SIGMA

CORPORATION, Nominal Defendant .

Plaintiff alleges four causes of action against defendants:

(i) breach of fiduciary duty;

(iii) permanent injunction;

and (iv) declaratory relief and requests the Court award compensatory and equitable relief.

Company has received service of process;

none of the individual defendants has been served.

Although this matter has just been initiated

and the Company has not yet filed a responsive pleading in this matter, the date for which filing is subsequent to the Effective Date

of this letter, the Company

disputes the allegations concerning the Company and

the named individual defendants and will vigorously defend itself and the other parties against the claims.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

December 30, 2017, the Company disposed of its retail appliance segment and sold ApplianceSmart to Live Ventures.

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

(the “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.

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 December 27, 2025.

Earnings (Loss) per share

loss per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period.

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 earnings per share is computed using the

weighted average number of common shares outstanding, and, if dilutive, potential common shares outstanding during the period.

common shares consist of the additional common shares issuable with respect to restricted share awards, stock options and convertible

preferred stock.

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

of Computation of Basic and Diluted Net Loss Per Share

For the Years Ended

December 28, 2024 December 30, 2023

Continuing Operations

Basic and Diluted

Net (loss) income from continuing operations $ ( 6,245 ) $ ( 17,095 )

Weighted average common shares outstanding 11,148,493 4,005,334

Basic and diluted (loss) income per share from continuing operations $ ( 0.56 ) $ ( 4.27 )

Discontinued Operations

Net income from discontinued operations $ — $ 9,283

Weighted average common shares outstanding 11,148,493 4,005,334

Basic income per share from discontinued operations $ — $ 2.32

Net income from discontinued operations $ — $ 9,283

Net loss from continuing operations

$ ( 341,486 )

Weighted average common shares outstanding

Diluted income per share from discontinued operations $ — $ 2.09

Basic and diluted loss per share from continuing operations

Basic and Diluted

Net (loss) income $ ( 6,245 ) $ ( 7,812 )

$ ( 344,507 )

Weighted average common shares outstanding

Basic and diluted (loss) income per share $ ( 0.56 ) $ ( 1.95 )

Potentially dilutive securities totaling approximately 9.0 million and 3.9 million shares, respectively, were excluded from the calculation of diluted net earnings (loss) per share for the years ended December 28, 2024 and December 30, 2023 because the effects were anti-dilutive based on the application of the treasury stock method.

Basic and diluted loss per share

dilutive securities totaling approximately 84.6 million and 9.0 million shares, respectively, were excluded from the calculation of diluted

net earnings (loss) per share for the years ended December 27, 2025 and December 28, 2024 because the effects were anti-dilutive based

on the application of the treasury stock method.

Segment information

The Company operates within targeted markets through three reportable segments for continuing operations:

Fintech, Biotech, and Corporate and Other.

Due the sale of Company’s Recycling segment during March 2023, it is being presented as discontinued operations for the years ended December 28, 2024 and December 30, 2023.

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present our segment information (in $000’s):

For the Years Ended

December 28, 2024 December 30, 2023

Fintech $ 12,532 $ —

Corporate and other — —

is a fintech company providing regulated, institutional-grade Crypto-as-a-Service (CaaS) infrastructure for the digital asset

In accordance with ASC 280, Segment Reporting , the Company has identified two reportable segments:

Fintech and Biotech.

This segmentation aligns with how the Chief Operating Decision Maker (“CODM”), consisting of the Company’s Chief Executive

Officer and Chief Financial Officer, assesses financial performance and allocates resources across the Company’s operations.

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

preserve the integrity of each operating segment’s standalone financial results, all intercompany eliminations, including sales,

cost of goods sold, inventory profit, and intercompany management fees are reported under Intercompany Eliminations.

Total assets are

not utilized by the CODM in evaluating segment performance or allocating resources.

Accordingly, asset information is excluded from the

Company’s segment reporting disclosures.

Discrete financial information is provided for each reportable segment, including comparisons

of actual results to the prior period and current period forecast.

following is description of each of the Company’s reportable segments:

Fintech segment, which provides next generation blockchain-powered technologies for tokenization,

trading, clearing, settlement, payment, and safe-keeping of digital assets.

Biotech segment focuses on developing treatments for conditions that cause severe pain and

on bringing to market drugs with non-addictive pain-relieving properties.

The Company has

previously announced its intention to capitalize a subsidiary with certain of its biotechnology

assets, acquire an additional biotechnology asset, and subsequently finance that subsidiary.

The short-term objective of this series of transactions is to separate the business so it

can operate on a stand-alone basis.

Consequently, the Biotech segment is presented as discontinued

segmentation aligns with the internal reporting structure used by the CODM to evaluate performance and guide strategic decision-making.

The CODM does not review any measures of significant segment expenses beyond those reflected in the tables below:

of Segment Information

For the Fiscal

Year Ended December 27, 2025

(Discontinued Operations)

Total Revenues $ 12,532 $ 3,795

Fintech $ 6,294 $ —

Corporate and other — —

Reportable Segments

Cost of revenue

Gross profit percentage

Operating expenses:

and administrative expenses

operating expenses

Operating income

Other income (expense):

Interest expense, net

Unrealized loss on cryptocurrency

Unrealized gain on exchange

Realized gain on exchange

income (expense), net

Income (loss) before

$ ( 419,918 )

$ ( 432,126 )

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

For the Fiscal

Year Ended December 28, 2024

(Discontinued Operations)

Total Gross profit $ 6,294 $ ( 197 )

Reportable Segments

Cost of revenue

Gross profit percentage

Operating expenses:

and administrative expenses

operating expenses

Operating income

Other income (expense):

Interest expense, net

Unrealized loss on marketable

Realized gain on exchange transactions

income (expense), net

Income (loss) before

Restatement of Previously Issued Financial Statements

Company identified errors in its previously issued consolidated financial statements for the fiscal year ended December 28, 2024 in connection

with the audit of its consolidated financial statements for the fiscal year ended December 27, 2025.

As a result, the Company has restated

its consolidated financial statements for the fiscal year ended December 28, 2024, which are presented as comparative information in

this Annual Report on Form 10-K.

These adjustments represent corrections of errors in the Company’s previously issued consolidated financial

statements for the fiscal year ended December 28, 2024.

Company determined that the Series B Convertible Preferred Stock issued as consideration in connection with the Company’s

acquisition of ALT5 Sigma, Inc.

had been assigned an incorrect fair value in the previously issued fiscal 2024 financial statements.

Because the fair value of consideration transferred is a direct input into the acquisition-date purchase price allocation, the error

resulted in a corresponding misstatement of the goodwill recognized in connection with the acquisition.

addition, the Company identified certain other errors that, while individually less material, the Company has determined to correct in

connection with this restatement, the net income statement impact of which was approximately $ 1.3 million.

Certain reclassifications

have also been made to the previously reported fiscal year 2024 financial statements to conform to the current-period presentation, primarily

reflecting the reclassification of the assets, liabilities, results of operations, and cash flows attributable to the Company's Biotechnology

segment (Alyea) as discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements — Discontinued Operations.

These reclassifications had no effect on previously reported total stockholders' equity or total assets except as described in the restatement

adjustments set forth in the table below.

The nature and quantitative impact of all restatement adjustments on the affected consolidated

financial statement line items, including the restated goodwill balance, are presented below (in $000’s).

Schedule of Restatement Consolidated Financial Statements

Previously Filed

Effect of Restatement

December 28, 2024

Previously Filed

Effect of Restatement

Consolidated balance sheets as of December 28, 2024

Trade and other receivables, net

Prepaid expenses

Current assets from discontinued operations

Total current assets (subtotal of affected lines only)

Property and equipment, net

Intangible assets, net

Other assets from discontinued operations

Total assets (subtotal of affected lines only)

Accounts payable

Accrued liabilities

Operating lease liabilities

Current liabilities from discontinued operations

Total current liabilities (subtotal of affected lines only)

Deferred income taxes, net

Notes payable

Total liabilities (subtotal of affected lines only)

Preferred stock, Series B

Preferred stock, Series M

Preferred stock

Additional paid-in capital

Accumulated deficit

Equity attributable to ALT5 Sigma Corporation shareholders (subtotal of affected lines only)

Noncontrolling interest

Total stockholders’ equity (subtotal of affected lines only)

Total liabilities and

stockholders’ equity (subtotal of affected lines only)

SIGMA CORPORATION

TO CONSOLIDATED FINANCIAL STATEMENTS

Previously Filed

Effect of Restatement

Fiscal Year Ended

December 28, 2024

Previously Filed

Effect of Restatement

Cost of revenues

Selling, general and administrative expenses

Total operating expenses

Operating loss

Fintech $ 905 $ —

Biotech ( 2,148 ) ( 1,531 )

Corporate and other ( 6,319 ) ( 18,315 )

Discontinued operations — 10,438

Total Operating loss $ ( 7,562 ) $ (7,562) $ ( 9,408 )

Depreciation and amortization

Fintech $ 1,316 $ —

Biotech 2,086 1,452

Corporate and other — —

Discontinued operations — 96

Total Depreciation and amortization $ 3,402 $ 1,548

Interest (expense) income, net

Fintech $ ( 499 ) $ —

Corporate and other ( 380 ) 2,250

Discontinued operations — ( 181 )

Total Interest (expense) income, net $ ( 879 ) $ 2,069

Net loss after provision for income taxes

Fintech $ 469 $ —

Biotech ( 2,086 ) ( 1,532 )

Corporate and other ( 4,628 ) ( 15,563 )

Discontinued operations — 9,283

Total net loss after provision for income taxes $ ( 6,245 ) $ ( 7,812 )

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 28, 2024 As of

Interest expense, net

Realized gain on exchange transactions

Unrealized loss on marketable securities

Other expense, net

Total other expense, net

Loss before benefit from income taxes

Income tax benefit

Net loss from continuing operations

Loss from discontinued operations

Income tax benefit for discontinued operations

Net (loss) income from discontinued operations

Loss per share:

Net loss per share from continuing operations, basic and diluted

Net loss per share, basic and diluted

Previously Filed

Effect of Restatement

Fiscal Year Ended

December 28, 2024

Fintech $ 64,217 $ —

Biotech 16,926 17,846

Corporate and other 1,293 641

Discontinue operations — —

Total Assets $ 82,436 $ 18,487

Goodwill and other intangible Assets

Fintech $ 30,385 $ —

Biotech 15,755 17,846

Corporate and other 4 —

Discontinued operations — —

Total goodwill and other intangible Assets $ 46,144 $ 17,846

Previously Filed

Effect of Restatement

OPERATING ACTIVITIES:

Net loss from continuing operations

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Change in reserve for uncollectible accounts

Noncash expense for stock issuances

Stock based compensation expense

Related party notes issued for shared services

Unrealized loss on marketable securities

Amortization of right-of-use assets

Change in deferred income taxes

Changes in assets and liabilities:

Accounts receivable

Digital assets receivable

Prepaid expenses

Other current assets

Accounts payable and accrued expenses

Digital assets payable

Net cash provided by operating activities

restatement did not change the total net cash provided by (used in) operating, investing, or financing activities for the fiscal year

ended December 28, 2024.

Subsequent events

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

Company has evaluated subsequent events through the filing of this Form 10-K, and determined that there have been no events that have

occurred that would require adjustments to disclosures in its consolidated financial statements other than as discussed below:

Loan and Security Agreement with WLFI

January 29, 2026, the Company and its wholly owned subsidiary, ALT5 Digital Holdings,

(“ALT5 Digital”), entered into a Master Loan and Security Agreement with World Liberty Financial LLC (“WLFI”),

providing for

a secured, non-recourse loan facility in the aggregate principal amount of $ 15 million.

The loan bears interest at 4.50 % per annum, payable

annually in advance, and matures 24 months from the initial closing date.

As collateral, ALT5 Digital pledged WLFI tokens with a loan-to-value

ratio of 65 %.

January 29, 2026, ALT5 Digital drew the full $ 15 million and received net proceeds of approximately $ 14.2 million after prepayment of

interest and reimbursement of lender expenses.

The Company intends to use the proceeds for a stock repurchase program, purchases of WLFI

tokens, and general corporate purposes.

previously disclosed, the Company owns approximately 7.3 billion WLFI tokens, and WLFI holds 1,000,000 shares of the Company’s Common Stock and certain warrants.

Zachary Witkoff,

Chairman of the Company’s Board, is the Chief Executive Officer and Co-Founder of WLFI, and Zachary Folkman, a member of the Board,

is a Co-Founder of WLFI.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data