AI Financial Corp 10-K

ITEM 1. BUSINESS General ALT5 Sigma Corporation (formerly known as JanOne Inc.) and subsidiaries (collectively, “we,” “us,” the “Company,” or “ALT5”). Through our Fintech segment, the Company provides next-generation blockchain-powered technologies for digital asset trading, payments processing and related payment card services. On May 15, 2024, the Company acquired ALT5 Sigma, Inc., and on July 15, 2024, changed its corporate name from JanOne Inc. to ALT5 Sigma Corporation. ALT5 Sigma, Inc., is a financial services and Fintech holding company. ALT5 Sigma, Inc. was created by financial industry specialists to provide the digital asset economy with the best practices of the industry and state of the art over-the-counter trading. On May 9, 2025, the Company acquired Fortress II Holdings Ltd. d/b/a Mswipe. Mswipe is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa ® and Mastercard ® networks, allows users seamlessly to spend traditional and digital currencies worldwide (see Note 3). Through March 8, 2023, the Company operated its legacy businesses, which are now discontinued operations, through its Recycling Subsidiaries, consisting of: (a) ARCA Recycling, Inc., a California corporation (“ARCA Recycling”), (b) ARCA Canada Inc., a corporation organized under the laws of Ontario, Canada (“ARCA Canada”), and (c) Customer Connexx, LLC, a Nevada limited liability company (“Connexx”). 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 was a company that provided call center services for recycling businesses. On March 9, 2023, we 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. The principal of VM7 is Virland A. Johnson, our former Chief Financial Officer. The information contained in or accessible from our website is not incorporated into this Annual Report on Form 10-K (the “Form 10-K”), and it should not be considered part of this Form 10-K. We have included our website address in this Form 10-K solely as an inactive textual reference. The Company’s principal executive offices are is located at 8958 Rozita Lee Ave., #305, Las Vegas, Nevada 89113, with subsidiary offices in Newmarket and Montreal, Canada Fintech Overview ALT5 Sigma, Inc., through its subsidiaries, offers three main platforms to its customers: “ALT5 Pay”, “ALT5 Prime”, and “StrataCarte”. 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 plugins with WooCommerce and/or ALT5 Pay’s checkout widgets and APIs. Merchants have the option to convert to fiat currency (U.S. Dollars, Canadian Dollars, Euros, and British Pounds Sterling) automatically or to receive their payment in digital assets. ALT5 Prime is an electronic over-the-counter trading platform that enables registered and approved customers to buy and sell digital assets. Customers can purchase digital assets with fiat and, equally, sell digital assets and receive fiat. ALT5 Prime is available through a browser-based application, a mobile phone application named “ALT5 Pro” that can be downloaded from the Apple App Store, and Google Play, through ALT5 Prime’s FIX API, as well as through Broadridge Financial Solutions’ NYFIX gateway for approved customers. StrataCarte is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa ® and Mastercard ® networks, allows users to seamlessly spend traditional and digital currencies worldwide. 1 Table of Contents ALT5 Sigma, Inc., has two wholly-owned subsidiaries, ALT5 Sigma Canada, Inc., and ALT5Sigma Markets, Inc. ALT5 Sigma Canada, Inc. has three wholly-owned subsidiaries, ALT5 AI, Inc. (Canada), ALT5 Pro, LLC. (Saint Vincent and the Grenadines), and ALT5 ATM, Inc. (Canada). ALT5 Sigma develops and commercializes products and services based on four key fundamental principles of (i) Safety, Security, and Trust, (ii) Accessibility (iii) Regulations, and (iv) Transparency: Safety, Security and Trust Develop and deploy products and services that increase our clients and customer’s trust in our organization. Accessibility Develops and deploys products and services that are easy to use, accessible everywhere, and with no barriers. Regulations Develops and deploys best practices to comply with know-your-customer (“KYC”), know-your-transaction (“KYT”), and anti-money laundering (“AML”) requirements. Transparency Develops best practices in financial reporting, as well as best practices in communication of all material events for all stakeholders, i.e. , customers, shareholders, suppliers, and employees. Background Corporate History and Organizational Structure ALT5 Sigma, Inc. was incorporated in the State of Delaware on March 5, 2018 under the name Buttonwood ARCA Inc. On March 21, 2018, it entered into a Share Exchange and Reorganization Agreement with Société AVA Inc., a Canadian corporation, and, as a result, Société AVA Inc. became a wholly-owned subsidiary of ALT5 Sigma. On March 28, 2018, ALT5 Sigma, Inc,. filed a Certificate of Amendment with the Secretary of State of the State of Delaware changing its name from Buttonwood ARCA Inc. to ALT5 Sigma, Inc. Also, on March 28, 2018, in connection with the Société AVA Inc. transaction, the name of that entity was changed to ALT5 Sigma Canada Inc. On August 14, 2019, ALT5 Sigma Canada Inc., acquired 100% of Miningcrypt Inc., a Canadian cryptocurrency mining company, and, on November 25, 2019, Miningcrypt Inc., changed its name to ALT5 AI Inc. On October 31, 2020, due to a severe storm, the mining equipment suffered catastrophic damage and all mining operations ceased. ALT5 AI Inc. is intended to hold intellectual property and develop machine learning and/or artificial intelligence software. ALT5 AI Inc. does not currently have any assets and is not currently in operation. On February 21, 2020, ALT5 Sigma Canada Inc., formed a wholly owned limited liability company named ALT5 Pro LLC in the country of Saint-Vincent and the Grenadines. On March 16, 2023, ALT5 Sigma, Inc., formed a wholly-owned corporation in the State of New York, named ALT5 Sigma Markets Inc. 2 Table of Contents On May 10, 2024, ALT5 Sigma, Inc. was acquired by JanOne Inc. On April 8, 2025, Alt5 Sigma, Inc., formed a wholly-owned corporation in the State of Wyoming, named Alt5, Inc. On August 5, 2025, Alt5, Inc. formed a wholly-owned corporation in the State of Wyoming, named Alt5 Digital Holdings, Inc. Alt 5 Digital Holdings, Inc. is the custodian of the Company’s WLFI tokens. On October 10, 2025, Alt5, Inc. formed a wholly-owned corporation in the State of Wyoming named Alt 5 Sigma Digital Asset Treasury Company, Inc. This entity has no assets or operations. On May 9, 2025, the Company acquired Fortress II Holdings Ltd. d/b/a Mswipe. Mswipe is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa ® and Mastercard ® networks, allows users to seamlessly spend traditional and digital currencies worldwide (see Note 3). In February 2026, Mswipe changed its name to StrataCarte. Organizational Structure Chart Executive Summary ALT5 Sigma, Inc., is a financial services and Fintech holding company. ALT5 Sigma, Inc. was created by financial industry specialists to provide the digital asset economy with the best practices of the industry and state-of-the-art over-the-counter trading of technology and services. ALT5 Sigma, Inc., operates two distinct wholly-owned subsidiaries, ALT5 Sigma Canada Inc., and ALT5 Securities Inc. ALT5 Sigma Canada Inc. provides next-generation, blockchain-powered technologies for tokenization, trading, clearing, settlement, payment, and custodianship of digital assets through its wholly-owned subsidiaries. ALT5 Sigma Canada has three wholly-owned subsidiaries, ALT5 AI Inc., ALT5 Pro LLC, and ALT 5 ATM Inc. 3 Table of Contents ALT5 Sigma Canada group of companies’ products and services are targeted to business two business (“B2B”) customers and not retail customers. The global target market for ALT5 Sigma Canada group of companies are banks, broker-dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, and merchants. Business Model/ Revenue Model ALT5 Sigma Canada obtains its revenue from initial installation fees or setup fees, monthly maintenance fees, spreads, and transaction commissions fees. Our Clients Our products and services are marketed to banks, broker-dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, payment processing partners, and merchants. The Company has approximately 1,900 corporate customers located in 50 countries. Product Overview ALT5 Prime ALT5 Prime is an electronic over-the-counter trading platform, enabling registered and approved customers to buy and sell digital assets. Customers can purchase digital assets with US dollars, Canadian dollars, Euros, and British Pounds and customers may sell digital assets and receive US dollars, Canadian dollars, Euros and British Pounds. ALT5 Prime is available through a browser-based access, mobile phone application named ALT5 Pro that can be downloaded from the Apple store and Google Play store, or through the company’s FIX API as well as through Broadridge’s NYFIX gateway to approved customers. Depending on their geographic location, registered and approved customers may buy and sell a number of digital assets including, but not limited to: Symbol Name Symbol Name Symbol Name AAVE Aave DASH Dash SNX Synthetix APE Apecoin DOGE Dogecoin SOL Solana ADA Cardano DOT Polkadot SUSHI Sushiswap ALGO Algorand ETH Ethereum TRUMP Official Trump ATOM Cosmos FTM Fantom / Sonic TRX Tron AU AutoCrypto HKD HongKongDollar UNI Uniswap AVAX Avalanche LINK Chainlink USDC USD Coin BCH Bitcoin-Cash LTC Litecoin USDT Tether USD BNB BNB MANA Decentraland UST TerraClassicUSD BSV Bitcoin SV MATIC Polygon XLM Stellar BTC Bitcoin MKR Maker XRP Ripple BTCN BitcoinNote MXN Moneta Digital XTZ Tezos COMP Compound QNT Quant YFI Yearn.finance DAI Dai SHIB Shiba-inu 4 Table of Contents ALT5 Prime screen sample: ALT5 Pay ALT5 Pay is a cryptocurrency payment gateway enabling registered and approved global merchants to accept and make cryptocurrency payments or integrate the payment platform into their application or operations using plugins for WooCommerce and/or the company’s checkout widgets and APIs. Merchants have the option to automatically convert to US dollars, Canadian Dollars, Euros and/or British Pound. ALT5 Pay screen sample: Technology ■ Ability to offer multiple digital assets ■ Accept fiat deposits (USD, CAD, EUR and GBP). ■ Support 24/7 ■ Supported order types including market, limit and stop ■ Complete backend control through customizable administration dashboard. ■ Endpoints supporting connections to trading interfaces, API, and related user-directed systems ■ Audit trades for clients ■ Integrated system to document customer KYC for onboarding process 5 Table of Contents ■ Automated trade confirmation email and customized Monthly statements ■ Connect to FIX, Binary, WebSocket, REST and custom APIs. ■ Ability to place edit and cancel limit orders into order book via API ■ Run reports, transactions, treasury ■ Unlimited Accounts per user ■ Unlimited user profile Security ■ Global setting protections in force to prevent unauthorized account activity, including unusual withdrawal requests. ■ Internal Service interaction utilize separate authentication contexts and are not exposed to the Internet ■ All platform data is replicated and backed up in real-time. ■ All website data is transmitted via encrypted transport layer security (TLS) connections (i.e. HTTPS) ■ Built in protection against brute force denial of service (DoS) and distributed denial of service (DDoS) attacks and active whitelist/blacklist management control. ■ Cold Storage Wallet Management ■ Encrypted User Information ■ Two Factor authentication Trading Features ■ Multiple available views, including price chart, depth chart, order book and recent trades ticker. ■ 11 available trendlines styles including rays, angles and arrows ■ Live order book displays buy and sell orders with live spread calculation. ■ 18 available pitchforks styles including pitchforks, Gann boxes, and Fibonacci’s ■ Six chart styles including line, bar, area and candles. ■ 9 available brushes including ellipses, triangles and rectangles ■ Ability to set custom chart durations ranging from one minute to years ■ 12 available test box styles including flag marks, arrows and price labels ■ Ability to customize color and styles of bars, borders, wicks, price lines, backgrounds and grid ■ 14 available pattern descriptors including cypher, ABCD and Elliott formations ■ Multiple scale styles including auto, percentage and logarithmic ■ 9 available forecasting markers including bars, ghosts, spreads and areas ■ Ability to report block trade Integrated ability to save current chart view to jpeg ■ 300+ available icons to markup charts. ■ 58 available indicators including linear ■ Custom area measurement tool to find duration percentage change and price change Automatic calculation of fees included in order price ■ Regression curves, moving averages and oscillators ■ Multiple custom user reports including trade activity, transaction activity, and treasury activity ■ Ability to draw custom trendlines, pitchforks, and more that scales and move with chart. 6 Table of Contents StrataCarte StrataCarte is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa® and Mastercard® networks, allows users to seamlessly spend traditional and digital currencies worldwide. Competition The digital assets market for our ALT5 Prime, ALT5 Pay, and StrataCarte products and services is a relatively new industry and only a handful of companies have emerged as recognized brands providing retail focused exchange or trading platforms, such as Coinbase, Gimini, Crypto.com, Kraken, and Binance. These platforms primarily target the retail digital asset investors but currently account for the largest trading volume in dollar equivalent and number of coins traded. The digital assets market for our ALT5 Prime, ALT5 Pay, and StrataCarte products and services is a relatively new industry and only a handful of companies have emerged as recognized brands providing retail focused exchange or trading platforms, such as Coinbase, Gimini, Crypto.com, Kraken, and Binance. These platforms primarily target the retail digital asset investors but currently account for the largest trading volume in dollar equivalent and number of coins traded. Our services are aimed at business-to-business customers. Our interface, speed, customer service and feature set are aimed at this market, enabling us to tailor our product to the B2B market, thus providing us with a competitive advantage. We offer a white-label product that can be seamlessly integrated with a customer’s existing systems. Market Size ALT5 Sigma Canada’s products and services are designed for banks, broker-dealers, funds, family offices, proprietary trading firms, liquidity providers, financial information providers, and merchants. Our main target market and focus are FINRA-registered broker dealers, banks, and global merchants. According to the most recent information from FINRA, there are 3,249 broker-dealers registered and under FINRA’s supervision, representing approximately 628,000 registered representatives. As of December 2025, the U.S. equity markets remain the largest globally, with a market capitalization of approximately $72 trillion, accounting for over 50% of the global equity market’s value ( Siblis Research) . This reflects significant growth from previous years, with the U.S. market adding nearly $9 trillion in value in 2025 alone. In comparison, the global digital assets market experienced substantial growth in 2024, with its market capitalization nearly doubling to approximately $3.91 trillion by mid-December, before consolidating at $3.0 trillion ( Coingecko) . Bitcoin continues to lead the digital assets market, maintaining a significant share of the total market capitalization. ALT5 Sigma Canada projects that 3% of assets currently allocated to U.S. equities will transition to digital assets over the next 36-to-60 months. Based on the current U.S. equity market capitalization of $72 trillion, this 3% shift represents approximately $2.16 trillion. Such reallocation could increase the global digital assets market capitalization to approximately $5.16 trillion. Worldwide average trading volume of all assets is approximately $12-$14 trillion per day. Given that average daily trading volumes of digital assets have been around $162 billion, the digital asset market represents approximately 1.2% of global volume. Global trading volume is growing at a compounded annual growth rate of approximately 9%, while digital assets trading volume is growing at a compounded annual growth rate of approximately 17%. ALT5 Sigma Canada further believes that retail and institutional investors will continue to seek advice, trade execution, and safekeeping of their assets, including digital assets such as Bitcoin, through their FINRA-registered broker-dealers. Therefore, we anticipate that our main target market, FINRA broker-dealers, will aggregate 90% of the daily trading volume, representing $342 billion of daily trading volume or $124.8 trillion in annual trading volume and potential revenues of $8.64 billion. According to a McKinsey report, the global payments industry revenue reached $2.5 trillion in 2025. If calculated at an annualized growth rate of 7%, global payments industry revenue is projected to reach $2.7 trillion in 2026. Specifically, the crypto payment gateway market size is expected to reach $3.5 billion by 2030, growing at a CAGR of 15.6% from $1.5 billion in 2024, according to ResearchandMarkets.com. Looking ahead, the Boston Consulting Group (BCG) projects that global payments revenues will continue to grow, albeit at a moderated pace. BCG’s Global Payments Report 2025 forecasts an annual growth rate of 4.0%, with revenues expected to reach $2.35 trillion by 2029 ( BCG Global) . This adjustment reflects a combination of market dynamics and macroeconomic factors influencing the industry. This growth is driven by increasing adoption of cryptocurrencies and advancements in payment technologies. 7 Table of Contents Sales and Marketing ALT5 Sigma Canada has outsourced a portion of its sales and business development to resellers. It is our strategy to target its primary market through conferences, tradeshows, direct mailing, and other digital advertising. ALT5 Sigma Canada intends on concentrating its marketing efforts in the United States and Canada as well as establish partnerships in other markets such as Europe, and Asia. Revenue Model ALT5 Sigma Canada generates revenue through three main line items. 1. Installation or a onetime setup fee, which may vary depending on size and depth of installation. 2. Monthly maintenance, which may also vary depending on the size and depth of installation. 3. Transaction fees, which range from 0.25% to 5% on all transactions, buy and or sell or payment processing depending on industry and volume. Historical Transaction Volume, Revenue, Profit ALT5 Sigma Canada’s, transaction volume reached $8.0 billion cumulatively since inception and more specifically was $39.0 million in 2020, $442.0 million in 2021, $743.0 million in 2022, $1.1 billion in 2023, $2.2 billion in 2024, and $3.5 billion in 2025, with corresponding consolidated revenue of $12.5 million and profit of $0.7 million in revenue and $4.3 million in net loss for 2020, $3.5 million in revenue and $12.3 million in net loss for 2021, $9.1 million and $0.5 million in net profit for 2022, $11.9 million in revenue and $3.4 million in profit for 2023, $15.5 million in revenues and $0.6 million in profit for 2024 and $23.5 million in revenues and $3.3 million in net loss for 2025. Biotechnology Overview We also hold clinical-stage biopharmaceutical assets focused on novel, non-opioid, and non-addictive therapies to address the large, unmet medical need for the treatment of pain and addiction. JAN101 (formerly known as TV1001SR) is a potential treatment for PAD, a vascular disease that affects more than 8.5 million people in the U.S. and more than 60 million people worldwide. We expect to commence Phase IIb/III clinical trials for the treatment of PAD in 2026. We are also working with a novel formulation of Low-dose naltrexone (“LDN”) that we call JAN123, which includes a biphasic release of the drug candidate. The release properties of JAN123 provide for an immediate release of a portion of the product with a slow, sustained release of the remaining drug candidate. Importantly, the rapid release of LDN has been reported to lead to vivid and lucid unpleasant dreams, which should be eliminated with the formulation of JAN123. Initially, we expect that a single tablet of JAN123 will be administered orally, once a day before sleep, with eventual titration up to two tablets before sleep. In the fourth quarter of our 2024 fiscal year, our board of directors (the “Board”) determined that we would form a new subsidiary and capitalize it with JAN123 and certain of our other biopharma assets. Accordingly, we incorporated a Nevada corporation known as Alyea Therapeutics Corporation (“Alyea”). During fiscal 2025, the Company announced its intent formally to separate Alyea into a separate company, although we continue to expend corporate resources for Alyea and have not made any decision as to how the separation will be effectuated. As a result, our financial statements show our biopharmaceutical segment as a discontinued operation. Corporate and Other Our Corporate and Other segment consists of certain corporate general and administrative costs. 8 Table of Contents Employees As of December 27, 2025, the Company had 16 employees, 15 of whom were full-time, and one was part-time.