AI Financial Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Description Page Reports of Independent Registered Public Accounting Firm Report of LJ Soldinger Associates, LLC (PCAOB ID ( 318 ) F-1 Consolidated Financial Statements Consolidated Balance Sheets as of December 27, 2025 and December 28, 2024 F-4 Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended December 27, 2025 and December 28, 2024 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the fiscal years ended December 27, 2025 and December 28, 2024 F-6 Consolidated Statements of Cash Flows for the fiscal years ended December 27, 2025 and December 28, 2024 F-7 Notes to Consolidated Financial Statements F-9 33 Table of Contents 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 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. Emphasis of Matter - Restatement of Financial Statements As 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. 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 audits 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. 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. F- 1 Table of Contents 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. Rights and valuation of WLFI tokens obtained by the Company As 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. How we addressed the matter in our audit: Our audit procedures related to the rights and valuation of the WLFI tokens obtained by the Company included, among others: ● We 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. ● We 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. ● We 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. ● We evaluated whether the related disclosures in the consolidated financial statements appropriately describe the nature of the WLFI tokens. F- 2 Table of Contents Valuation of consideration transferred and identifiable intangible assets in the Alt5 Sigma, Inc. business combination The 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. How we addressed the matter in our audit: Our audit procedures related to the valuation of the consideration transferred and identifiable intangible assets acquired included, among others: ● We evaluated the appropriateness of the valuation methodologies applied by management for both the consideration transferred and the identifiable intangible assets acquired. ● We tested the mathematical accuracy of the valuation models used by management. ● We compared the significant assumptions used by management to current and projected financial information, historical performance of the acquired business, market data and relevant industry trends. ● We assessed the sensitivity of the fair value measurements to changes in significant assumptions. ● We evaluated whether the related disclosures in the financial statements were appropriate. /s/ L J Soldinger Associates, LLC We have served as the Company’s auditor since 2025. Deer Park, IL PCAOB ID: 318 April 10, 2026 F- 3 Table of Contents ALT5 SIGMA CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) December 27, 2025 December 28, 2024 (As restated) Assets Cash and cash equivalents $ 6,222 $ 7,177 Trade and other receivables, net 2,292 330 Digital assets receivable 17,997 23,776 Prepaid expenses 2,369 883 Other current assets 381 — Current assets from discontinued operations 205 2,200 Total current assets 29,466 34,366 Property and equipment, net 28 — Right of use assets 102 121 Intangible assets, net 23,040 18,674 Cryptocurrency assets at fair value 1,054,663 — Deferred income taxes, net 83,876 — Goodwill 12,297 3,880 Other assets from discontinued operations 15,983 18,692 Total assets $ 1,219,455 $ 75,733 Liabilities, Mezzanine Equity, and Stockholders’ Equity (Deficit) Liabilities: Accounts payable $ 5,102 $ 3,230 Accrued liabilities 8,538 2,522 Digital assets payable 28,693 30,918 Convertible debentures 563 563 Operating lease liabilities 5 9 Notes payable 5,944 — Related party notes payable and advances — 812 Notes payable — 812 Current liabilities from discontinued operations 2,554 2,850 Total current liabilities 51,399 40,904 Deferred income taxes, net — 2,808 Notes payable 8,747 11,845 Operating lease liabilities 107 113 Other noncurrent liabilities — 108 Noncurrent liabilities from discontinued operations — — Total liabilities 60,253 55,778 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 27, 2025 and December 28, 2024 3,856 3,856 Stockholders’ equity: 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 717 717 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 — 67 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 725 1,321 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 28, 2024 7,993 7,993 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, value — — 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 126 15 Additional paid in capital 1,551,301 62,856 Accumulated deficit ( 402,710 ) ( 58,203 ) Accumulated other comprehensive loss ( 6,306 ) ( 2,317 ) Equity attributable to ALT5 Sigma Corporation shareholders 1,151,846 12,449 Noncontrolling interest 3,500 3,650 Total stockholders’ equity 1,155,346 16,099 Total liabilities, mezzanine equity, and stockholders’ equity $ 1,219,455 $ 75,733 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Table of Contents ALT5 SIGMA CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Dollars in thousands, except per share amounts) December 27, 2025 December 28, 2024 Fiscal Years Ended December 27, 2025 December 28, 2024 (As restated) Revenues $ 24,840 $ 11,887 Cost of revenues 14,652 6,238 Gross profit 10,188 5,649 Operating expenses: Selling, general and administrative expenses 33,039 12,572 Total operating expenses 33,039 12,572 Operating loss ( 22,851 ) ( 6,923 ) Other income (expense): Interest expense, net ( 3,869 ) ( 1,159 ) Realized gain on exchange transactions 374 1,019 Unrealized loss on cryptocurrency assets ( 402,054 ) — Unrealized gain on exchange transactions 768 — Unrealized loss on marketable securities — ( 1,238 ) Other expense, net ( 596 ) ( 160 ) Total other expense, net ( 405,377 ) ( 1,538 ) Loss before benefit from income taxes ( 428,228 ) ( 8,461 ) Income tax benefit ( 86,742 ) ( 160 ) Net loss from continuing operations ( 341,486 ) ( 8,301 ) Loss from discontinued operations ( 3,898 ) ( 2,148 ) Income tax benefit for discontinued operations ( 877 ) ( 2,881 ) Net (loss) income from discontinued operations ( 3,021 ) 733 Net loss $ ( 344,507 ) $ ( 7,568 ) Loss per share: Net loss per share from continuing operations, basic and diluted $ ( 5.86 ) $ ( 0.74 ) Net loss per share, basic and diluted $ ( 5.91 ) $ ( 0.68 ) Weighted average common shares outstanding: Basic and diluted 58,303,947 11,198,493 Net loss $ ( 344,507 ) $ ( 7,568 ) Effect of foreign currency translation adjustments ( 3,989 ) ( 2,317 ) Total other comprehensive loss, net of tax ( 3,989 ) ( 2,317 ) Comprehensive (loss) income $ ( 348,496 ) $ ( 9,885 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 Table of Contents ALT5 SIGMA CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Dollars in thousands) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Interest Total 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 Paid in Accumulated Accumulated Other Comprehensive Noncontrolling Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Deficit Interest Total Balance, December 30, 2023 193,730 $ — 100,000 $ — — $ — — $ — — $ — — $ — — $ — 4,957,647 $ 3 $ 47,323 $ ( 50,634 ) $ — — $ ( 3,308 ) Reclassification of Series S S-1 Preferred Stock to liability — — — — — — — — — — — — — — — — ( 339 ) — — — ( 339 ) Reclassification of Series S S-1 Preferred Stock to permanent equity — — — 7,993 — — — — — — — — — — — — — — — — 7,993 Share based compensation — — — — — — — — — — — — — — 1,250,027 1 2,310 — — — 2,311 Common stock issued for equity financing — — — — — — — — — — — — — — 1,030,478 2 1,031 — — — 1,033 Common stock issued for consulting agreement — — — — — — — — — — — — — — 477,923 2 1,020 — — — 1,022 Common stock issued in lieu of notes payable obligation — — — — — — — — — — — — — — 2,031,595 2 2,022 — — — 2,024 Common stock issued for acquisition of Alt5 Subsidiary — — — — — — — — — — — — — — 1,799,115 2 7,445 — — — 7,447 Preferred stock issued for acquisition of Alt5 Subsidiary — — — — 34,207 717 17,000 — 3,200 67 — — — — — — — — — — 784 Conversion of Series A-1 Preferred to common stock ( 170,250 ) — — — — — — — — — — — — — 3,055,000 3 ( 3 ) — — — — Preferred stock issued for property and equipment — — — — — — — — — — — — 5,000 — — — — — — — — Conversion of note receivable to common stock — — — — — — — — — — — — — — — — — — — Common stock issued for property and equipment — — — — — — — — — — — — — — 300,000 — 1,170 — — — 1,170 Preferred stock issued for Qoden asset acquisition — — — — — — — — — — 925,212 1,321 — — — — — — — — 1,321 Common stock issued for prepaid interest — — — — — — — — — — — — — — 225,000 — 380 — — — 380 Common stock issued for warrants exercised — — — — — — — — — — — — — — 290,908 — 497 — — — 497 Foreign currency adjustment — — — — — — — — — — — — — — — — — — ( 2,317 ) — ( 2,317 ) Net loss — — — — — — — — — — — — — — — — — ( 7,569 ) — 3,650 ( 3,919 ) Balance, December 28, 2024 23,480 — 100,000 7,993 34,207 717 17,000 — 3,200 67 925,212 1,321 5,000 — 15,417,693 15 62,856 ( 58,203 ) ( 2,317 ) 3,650 16,099 Balance 23,480 — 100,000 7,993 34,207 717 17,000 — 3,200 67 925,212 1,321 5,000 — 15,417,693 15 62,856 ( 58,203 ) ( 2,317 ) 3,650 16,099 Common stock issued for consulting agreement — — — — — — — — — — — — — — 315,499 — 1,782 — — — 1,782 Common stock issued for warrants exercised — — — — — — — — — — — — — — 1,275,006 2 232 — — — 234 Common stock issued for Series V Preferred converted — — — — — — — — — — — — ( 5,000 ) — 600,000 — — — — — — Series A-1 adjustment 20,770 — — — — — — — — — — — — — — — — — — — — Conversion of Series A-1 Preferred ( 44,250 ) — — — — — — — — — — — — — 885,000 — — — — — — Share based compensation — — — — — — — — — — — — — — 1,355,000 2 5,900 — — — 5,902 Common stock issued in lieu of notes payable obligation — — — — — — — — — — — — — — 3,624,332 4 2,221 — — — 2,225 ALT5 Sigma Corp common stock issued for Mswipe acquisition — — — — — — — — — — — — — — 1,000,000 1 5,183 — — — 5,184 ALT5 Sigma Corp common stock warrants for Mswipe acquisition — — — — — — — — — — — — — — — — 1,652 — — — 1,652 Alyea common stock warrants for Mswipe acquisition — — — — — — — — — — — — — — — — 1,668 — — — 1,668 Common stock issued for Series Q convertible stock converted — — — — — — — — — — ( 289,128 ) ( 596 ) — — 289,128 — 596 — — — — ALT5 Sigma Corp common stock issued for professional services — — — — — — — — — — — — — — 17,511 — 165 — — — 165 ALT5 Sigma Corp Common stock issued for Series M convertible stock converted — — — — — — — — ( 3,200 ) ( 67 ) — — — — 90,000 — 67 — — — — Common stock issued for equity financing — — — — — — — — — — — — — — 100,330,000 100 751,144 — — — 751,244 Common stock issued for prefunded warrants granted — — — — — — — — — — — — — — 1,000,000 1 749,999 — — — 750,000 Common stock issued for settlement agreement — — — — — — ( 17,000 ) — — — — — — — 275,000 1 381 — — — 382 Placement fees for equity raise — — — — — — — — — — — — — — — — ( 32,545 ) — — — ( 32,545 ) Foreign currency adjustment — — — — — — — — — — — — — — — — — — ( 3,989 ) — ( 3,989 ) Net loss — — — — — — — — — — — — — — — — — ( 344,507 ) — ( 150 ) ( 344,657 ) Balance, December 27, 2025 — $ — 100,000 $ 7,993 34,207 $ 717 — $ — — $ — 636,084 $ 725 — $ — 126,474,169 $ 126 $ 1,551,301 $ ( 402,710 ) $ ( 6,306 ) $ 3,500 $ 1,155,346 Balance — $ — 100,000 $ 7,993 34,207 $ 717 — $ — — $ — 636,084 $ 725 — $ — 126,474,169 $ 126 $ 1,551,301 $ ( 402,710 ) $ ( 6,306 ) $ 3,500 $ 1,155,346 The accompanying notes are an integral part of these consolidated financial statements. F- 6 Table of Contents ALT5 SIGMA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) December 27, 2025 December 28, 2024 Fiscal Years Ended December 27, 2025 December 28, 2024 (As restated) OPERATING ACTIVITIES: Net loss from continuing operations $ ( 341,486 ) $ ( 8,301 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,339 1,316 Change in reserve for uncollectible accounts — 254 Accretion of seller note discount 249 — Stock based compensation expense 5,901 2,285 Common stock issued for settlement agreement 382 — Noncash expense for stock issuances — 365 Related party notes issued for shared services — 800 Unrealized loss on cryptocurrency assets 402,054 — Realized loss on digital assets 291 — Unrealized loss on marketable securities — 1,238 Amortization of right-of-use assets 53 32 Unrealized gain on digital assets ( 827 ) — Change in deferred income taxes ( 86,955 ) ( 1,781 ) Changes in assets and liabilities: Accounts receivable ( 949 ) 3,896 Digital assets receivable 5,779 ( 14,694 ) Prepaid expenses 1,496 1,415 Other current assets ( 381 ) ( 2,191 ) Accounts payable and accrued expenses 6,122 2,988 Digital assets payable ( 2,225 ) 14,155 Operating cash flows provided by discontinued operations — — Net cash (used in) provided by operating activities ( 7,157 ) 1,777 INVESTING ACTIVITIES: Purchases of property and equipment ( 11 ) — Cash acquired in ALT5 Subsidiary acquisition — 5,853 Cash acquired in Mswipe acquisition 122 — Cryptocurrency assets purchased ( 718,717 ) — Cryptocurrency assets redeemed 12,000 — Investing cash flows used in discontinued operations — — Net cash (used in) provided by investing activities ( 706,606 ) 5,853 FINANCING ACTIVITIES: Proceeds from issuance of notes payable 4,032 7,237 Payments on related party notes payable ( 159 ) ( 248 ) Proceeds from the issuance of related party note payable — 603 Proceeds from equity financings, net — 851 Warrants exercised — 497 Payments on notes payable ( 4,530 ) ( 2,847 ) Proceeds from equity financing 750,000 — Payments of placement fees ( 32,546 ) — Financing cash flows used in discontinued operations — — Net cash provided by financing activities 716,797 6,093 Effect of changes in exchange rate on cash and cash equivalents ( 3,989 ) ( 6,551 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 955 ) 7,172 CASH AND CASH EQUIVALENTS, beginning of period 7,177 5 LESS CASH OF DISCONTINUED OPERATIONS, end of period — $ — CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS, end of period $ 6,222 $ 7,177 F- 7 Table of Contents Fiscal Years Ended December 27, 2025 December 28, 2024 Supplemental cash flow disclosures: Noncash recognition of new leases $ 918 $ 121 Interest paid $ 1,392 $ 296 Income tax refunds received, net $ — $ 17 Noncash financing and investing activities: Common stock issued for prefunded warrants $ 750,000 $ — Common stock issued for the acquisition of Mswipe $ 5,184 $ — Common stock warrants issued for the acquisition of Mswipe $ 1,652 $ — Alyea common stock issued for the acquisition of Mswipe $ 1,668 $ — Convertible preferred Series Q shares converted to common stock $ 596 $ — Convertible preferred Series M shares converted to common stock $ 67 $ — Stock issued for the acquisition of Alt5 Subsidiary $ — $ 8,231 Common stock issued for consulting services — 853 Common stock issued for liability obligations — 367 Notes payable converted to common stock 2,222 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. F- 8 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: 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 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. Fintech On May 15, 2024, the Company acquired ALT5 Sigma, Inc. (“ALT5 Subsidiary”). ALT5 Subsidiary is a fintech company that provides next generation blockchain-powered technologies to enable a migration to a new global financial paradigm. ALT5 Subsidiary, through its respective subsidiaries, offers two main platforms to its customers: “ALT5 Pay” and “ALT5 Prime.” ALT5 Pay is a 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). On May 9, 2025, the Company acquired Fortress II Holdings Ltd. d/b/a Mswipe. Mswipe is a next-generation payment solutions provider offering multi-currency, fiat payment card services, along with crypto-enabled capabilities through its existing integration with the ALT5 Subsidiary platform. Its suite of physical and virtual cards, available on both the Visa ® and Mastercard® networks, allows users to seamlessly spend traditional and digital currencies worldwide (see Note 3). Biotechnology During September 2019, the Company, through its biotechnology segment, broadened its business perspectives to 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 properties. Effective December 28, 2022, the Company acquired Soin Therapeutics LLC, a Delaware limited liability company (“STLLC”), and its product, a patent-pending, novel formulation of low-dose naltrexone (“JAN123”). The product is being developed for the treatment of Complex Regional Pain Syndrome (CRPS), an indication that causes severe, chronic pain generally affecting the arms or legs. At present, there are no truly effective treatments for CRPS. Because of the relatively small number of patients afflicted with CRPS, the FDA has granted Orphan Drug Designation for any product approved for treatment of CRPS. This designation will provide the Company with tax credits for its clinical trials, exemption of user fees, and the potential 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). F- 9 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Corporate and Other Our 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. The WLFI treasury program was initiated on August 12, 2025, with purchases executed in two tranches at $ 0.20 per token: ● Tranche 1: 3,750,000,000 WLFI tokens; and ● Tranche 2: 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. Our Corporate and Other segment also consists of certain corporate general and administrative costs. The Company reports on a 52- or 53-week fiscal year. The Company’s 2024 fiscal year (“2024”) ended on December 28, 2024, and the current fiscal year (“fiscal 2025”) ended on December 27, 2025. Liquidity and Going Concern Considerations The 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. In evaluating its ability to meet its obligations, management has considered the following: On 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. In 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. Note 2: 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 prior-period amounts have been reclassified to conform to the current period presentation. These reclassifications relate primarily to the presentation of the Biotechnology segment as discontinued operations. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. 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 available (Level 2 inputs). The carrying amounts of long-term debt at December 27, 2025 and December 28, 2024 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. Approximately $ 3.5 million of cash has been fully reserved in connection with a legal matter, as further described in Note 20. F- 10 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Cryptocurrency Assets The 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. Digital Assets and other Receivables Digital assets and other receivables are the Company’s digital assets and its customer prepayments in the form of digital assets. The Company holds all digital assets in secure non-custodial wallets through the wallet services from fireblocks. As of 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. 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. 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 does not charge interest on past due receivables. The Company had no allowance for doubtful accounts for the years ended December 27, 2025 and December 28, 2024. The following table details the Company’s trade and other receivables as of December 27, 2025 and December 28, 2024 (in $000’s): Schedule of Trade and Other Receivables December 27, 2025 December 28, 2024 December 30, 2023 Other receivables 2,292 330 266 Other receivables, net $ 2,292 $ 330 $ 266 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; 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: domain name and marketing – 3 -to- 20 years; software – 3 -to- 5 years; technology intangibles – 7 years; customer relationships – 7 -to- 15 years. F- 11 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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. Revenue Recognition Revenue recognition applies to the Company’s Fintech segment only, as the Company’s Biotech segment has not recognized revenue to date. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: 1. Executed contracts with the Company’s customers that it believes are legally enforceable; 2. Identification of performance obligations in the respective contract; 3. Determination of the transaction price for each performance obligation in the respective contract; 4. Allocation of the transaction price to each performance obligation; and 5. Recognition of revenue only when the Company satisfies each performance obligation. Fintech Revenue The five elements above, as applied to each of the Fintech segment’s revenue categories, are summarized below: 1. Product sales – revenue is recognized at the time of sale of equipment to the customer. 2. Service sales – revenue is recognized based on when the service has been provided to the customer. The Company’s service is comprised of a single performance obligation to buy-and-sell or to 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 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. 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 when the transaction is processed. Contracts with customers are usually open-ended and can be terminated by either party without a termination penalty. Therefore, contracts are defined at the transaction level and do not extend beyond the service already provided. F- 12 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. 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 – 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. The 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): Schedule of Fair Value on Recurring Basis Level 1 Level 2 Level 3 As of December 27, 2025 Assets: Cryptocurrency assets (WLFI tokens) $ 1,054,663 $ — $ — Total assets measured at fair value $ 1,054,663 $ — $ — Liabilities: No liabilities measured at fair value on a recurring basis — — — As of December 28, 2024 (as restated) Assets: No assets measured at fair value on a recurring basis — — — Liabilities: No liabilities measured at fair value on a recurring basis — — — The 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. The 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. Income Taxes 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 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. F- 13 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 segments. The Recycling segment has been presented as discontinued operations (see Note 22). Concentration of Credit Risk The Company maintains cash balances at banks in Nevada and Minnesota. The accounts are insured by the Federal Deposit Insurance Corporation up to $ 250,000 per account. At times, balances may exceed federally insured limits. Recently Issued Accounting Pronouncements In 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 has adopted ASU 2023-09 for the year ended December 27, 2025. Note 3: Mergers and Acquisitions Mswipe Effective on May 9, 2025, the Company and our indirect, wholly-owned, second-tier Canadian subsidiary entered into an agreement to purchase all of the outstanding capital stock of 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. The 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. We also 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 $ 15 million in annualized or actual total revenue from Mswipe’s operations. F- 14 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value of the purchase price components outlined above was $ 14.2 million due to fair value adjustments for the contingent consideration, cash acquired, and working capital adjustments, as detailed below (in $000’s): Schedule of Business Acquisition ALT5 Common stock $ 5,185 Common stock warrants 1,652 Seller notes 5,695 Alyea Common Stock 1,668 Total purchase price $ 14,200 Under the preliminary purchase price allocation, the Company recognized goodwill of approximately $ 6.4 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed as compared to the fair value of the identifiable assets acquired. The values assigned to the assets acquired and liabilities assumed are based on their estimates of fair value available as of May 9, 2025, as calculated by an independent third-party firm. Because the transaction was considered a stock purchase for tax purposes, none of the goodwill arising from the acquisition will 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): Schedule of Assets Liabilities Assumed Goodwill Total purchase price $ 14,200 Accounts payable 1,400 Total liabilities assumed 1,400 Total consideration 15,600 Cash 124 Accounts receivable 1,218 Property and equipment 20 Intangible assets Customer relationships 6,525 Trade names 500 Developed technology 675 Subtotal intangible assets 7,700 Other 160 Total assets acquired 9,222 Total goodwill 6,378 F- 15 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Proforma Information The 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): Schedule of Proforma Operations for Future Periods As Reported Adjustments Proforma ALT5 Sigma Corporation Audited Year Ended December 27, 2025 Mswipe (Unaudited) December 27, 2025 Adjustments 1 ALT5 Sigma Corporation December 27, 2025 Net revenue $ 24,840 $ 1,660 $ 26,500 Net income $ ( 344,507 ) $ 210 $ ( 266 ) $ ( 344,563 ) Earnings per basic common share $ ( 5.91 ) $ ( 5.91 ) Earnings per basic diluted share $ ( 5.91 ) $ ( 5.91 ) As Reported Adjustments Proforma ALT5 Sigma Corporation Audited Year Ended December 28, 2024 Mswipe (Unaudited) December 28, 2024 Adjustments 1 ALT5 Sigma Corporation December 28, 2024 Net revenue $ 11,887 $ 6,386 $ 18,273 Net loss $ ( 7,568 ) $ ( 216 ) $ ( 708 ) $ ( 8,492 ) Earnings per basic common share $ ( 0.68 ) $ ( 0.76 ) Earnings per basic diluted share $ ( 0.68 ) $ ( 0.76 ) (1) Adjustments are related to adjustments made for the following: ● Amortization expense of definite-lived intangible assets has been adjusted based on the preliminary fair value at the acquisition date. Qoden On November 8, 2024, the Company acquired the Qodex Cryptocurrency Exchange Software platform and other related assets from Qoden Technologies, LLC, a provider of technology solutions for the blockchain industry. The purchase price was $ 2.2 million, consisting of $ 2.0 million, or 771,010 shares, of the Company’s Series Q Convertible Preferred Stock and $ 0.2 million in cash. The Series Q Convertible 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 $ 0.2 million in cash is payable in increments of $ 10,000 per month for 24 months, commencing on the first day of the month following closing. The acquisition was determined to be an asset acquisition for accounting purposes. ALT5 Subsidiary On May 14, 2024, the Company acquired its ALT5 Subsidiary, which is a fintech company that provides next generation blockchain-powered technologies to enable a migration to a new global financial paradigm. ALT5 Subsidiary, through its respective subsidiaries, offers two main platforms to its customers: “ALT5 Pay” and “ALT5 Prime.” ALT5 Pay is a 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 assets. F- 16 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 Historical NOCP on Thursday, May 9, 2024, the day immediately prior to the date on which the agreement was executed. The Company also issued 34,207 shares of its newly-designated Series B Preferred Stock (the “Series B Stock”) to the legacy equity holders of the capital stock of ALT5. In connection with the closing of the acquisition of ALT5 Subsidiary, the Company also issued 3,200 shares of its newly-designated Series M Preferred Stock (the “Series M Stock”) to two entities that acted as finders for the transaction. The 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): Schedule of Business Acquisition Common stock $ 7,448 Series B preferred stock 717 Total purchase price 717 Total purchase price $ 8,165 Under 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): Schedule of Assets Liabilities Assumed Goodwill Total purchase price $ 8,165 Accounts payable 267 Accrued liabilities 7,866 Digital assets payable 16,763 Debt 7,613 Total liabilities assumed 32,509 Total consideration 40,674 Cash 5,853 Accounts receivable 2,917 Digital assets receivable 9,082 Intangible assets Customer relationships $ 13,925 Trade names 2,675 Developed technology 1,850 Subtotal intangible assets 18,450 Other 492 Total assets acquired 36,794 Total goodwill $ 3,880 F- 17 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Proforma Information The 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. Schedule of Proforma Operations for Future Periods As Reported Adjustments Proforma Fiscal Year Ended December 28, 2024 ALT5 Sigma Corporation (1) ALT5 Subsidiary (2) Adjustments (3) Total Net revenue $ 11,887 $ 2,918 $ 14,805 Net income $ ( 7,568 ) $ 71 $ ( 806 ) $ ( 8,303 ) Earnings per basic common share $ ( 0.68 ) $ ( 0.74 ) Earnings per basic diluted share $ ( 0.68 ) $ ( 0.74 ) (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. Soin Pharmaceuticals Effective January 24, 2024, the Company, Amol Soin M.D. (“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 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; ($ 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. 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. Dr. 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 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. As 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. Soin. 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 27, 2025, the outstanding balance in mezzanine equity relates to the $ 17.0 million convertible tranche originally valued at approximately $ 3.9 million. F- 18 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 4: Discontinued Operations As of December 27, 2025, the Company has characterized its Biotechnology segment as a discontinued operation on its financial statements, as follows: on May 21, 2025, the Company announced the planned formal separation of its healthcare assets, known as Alyea, and noted that the scope and method of a partial or full disposition, whatever the methodology, would be determined and announced at a later date. In accordance with 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 December 27, 2025 December 28, 2024 Assets from discontinued operations Trade and other receivables, net — 2,200 Other current assets 205 — Total current assets from discontinued operations 205 2,200 Property and equipment, net 1 1,170 1,170 Intangible assets, net 2 13,826 15,756 Deferred income taxes 776 1,766 Other assets 211 — Total other assets from discontinued operations 15,983 18,692 Total assets from discontinued operations $ 16,188 $ 20,892 Liabilities from discontinued operations Accounts payable $ 54 $ — Accrued liabilities - other 3 2,500 2,850 Related party note — — Total current liabilities from discontinued operations 2,554 2,850 Total noncurrent liabilities from discontinued operations — — Total liabilities from discontinued operations $ 2,554 $ 2,850 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: December 27, 2025 December 28, 2024 Buildings and improvements $ — $ — Equipment — — Projects under construction 1,170 1,170 Property and equipment 1,170 1,170 Property and equipment, gross 1,170 1,170 Less accumulated depreciation — — Total property and equipment, net, from discontinued operations $ 1,170 $ 1,170 No depreciation expense has been recorded for the years ended December 27, 2025 or December 28, 2024. F- 19 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2 The Company’s intangible assets consisted of the following: December 27, 2025 December 28, 2024 Soin intangible $ 19,293 $ 19,293 Intangible assets 19,293 19,293 Less accumulated amortization ( 5,467 ) ( 3,537 ) Total intangible assets $ 13,826 $ 15,756 Amortization expense was $ 1.9 million and $ 2.1 million for the years ended December 27, 2025 or December 28, 2024, respectively. Soin Intangible Assets Effective as of December 28, 2022, the Company acquired Soin Therapeutics LLC, a Delaware limited liability company (“STLLC”), and its product, a patent-pending, novel formulation of low-dose naltrexone. The assets acquired by the Company consist of 1) three pending patents related to the methods of using low-dose Naltrexone to treat chronic pain, 2) final formula for Naltrexone, and 3) orphan drug designation as approved by the FDA. The Company reviewed the assets acquired and determined that no in-process research and development costs were acquired as part of the transaction, and, thus, all assets acquired represent intellectual property and should be capitalized. The Company will amortize the intangible assets ratably over a 10 -year period. 3 The Company’s accrued liabilities consisted of the following: December 27, 2025 December 28, 2024 Due to Dr. Soin $ 2,500 $ 2,850 Other — — Total accrued expenses $ 2,500 $ 2,850 In accordance with the provisions of ASC 360-10 and ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive income (loss). The results of operations for this entity for the 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: December 27, 2025 December 28, 2024 Revenues $ — $ — Cost of revenues — — Gross profit — — Operating expenses from discontinued operations: Selling, general and administrative expenses 3,898 2,148 Total operating expenses from discontinued operations 3,898 2,148 Operating income from discontinued operations ( 3,898 ) ( 2,148 ) Other income (expense) from discontinued operations Total other expense, net — — Income before provision for income taxes from discontinued operations ( 3,898 ) ( 2,148 ) Income tax provision ( 877 ) ( 2,881 ) Net income from discontinued operations $ ( 3,021 ) $ 733 F- 20 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 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): December 27, 2025 December 28, 2024 DISCONTINUED OPERATING ACTIVITIES: Net income from discontinued operations ( 3,021 ) 733 Depreciation and amortization 1,930 2,087 Noncash expense (benefit) funded by parent 1,867 ( 2,820 ) Change in deferred taxes ( 776 ) — Net cash provided by operating activities from discontinued operations $ — $ — DISCONTINUED INVESTING ACTIVITIES: Net cash used in investing activities from discontinued operations $ — $ — DISCONTINUED FINANCING ACTIVITIES: 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 — — CASH AND CASH EQUIVALENTS, end of period $ — $ — Note 5: Prepaids and other current assets Prepaids and Other Current Assets Prepaids 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 December 27, 2025 December 28, 2024 Prepaid licensing $ 1,412 $ — Prepaid consulting 63 610 Prepaid legal 68 54 Prepaid purchase commitments 503 — Prepaid rent 16 83 Prepaid insurance 162 — Prepaid other 145 136 Total prepaid expenses and other current assets $ 2,369 $ 883 Note 6: Property and Equipment Property and equipment as of December 27, 2025 and December 28, 2024 consist of the following (in $000’s): Schedule of Property and Equipment December 27, 2025 December 28, 2024 Furniture and fixtures $ 43 $ — Computer equipment 22 — Property and equipment 65 — Property and equipment gross 65 — Accumulated depreciation ( 37 ) — Total property and equipment, net $ 28 $ — Depreciation expense was approximately $ 40 and $ 0 for the fiscal years ended December 27, 2025 and December 28, 2024, respectively. Note 7: Leases In connection with its acquisition of ALT5 Subsidiary (see Note 3), the Company leases commercial office space. These assets and properties are leased under 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 27, 2025 and December 28, 2024 (in $000’s): Schedule of Right of Use Assets and Lease Liabilities December 27, 2025 December 28, 2024 Right of use asset - operating leases $ 102 $ 121 Lease liabilities: Current - operating 5 9 Long term - operating 107 113 F- 21 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As 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. Total 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: 2026 $ 34 2027 36 2028 37 2029 36 Total 143 Less implied interest ( 31 ) Present value of payments $ 112 Note 8: WLFI Treasury Program The WLFI treasury program was initiated on August 12, 2025, with purchases executed in two tranches at $ 0.20 per token: ● Tranche 1: 3,750,000,000 WLFI tokens ● Tranche 2: 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 % of supply). As of December 27, 2025, all 7,283,585,650 WLFI tokens held by Alt5 Sigma Corp. 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 above. In connection with the WLFI treasury program, the Company entered into lock-up agreements restricting certain equity issuances. Pursuant to the Purchase Agreements, the Company agreed not to issue, or enter into any agreement to issue, shares of Common Stock or Common Stock equivalents, or file any registration statement or amendment thereto, for a period of 30 days following the closing date of the Offerings, subject to customary exceptions including issuances under the ATM Sales Agreement. In addition, each of the Company’s directors and executive officers is subject to a lock-up agreement prohibiting the sale, pledge, or other transfer or disposition of 50% of their shares of Common Stock, or securities convertible into or exchangeable for Common Stock, for a period of 90 days following the closing date, with the remaining 50% subject to the same restrictions until the later of 90 days following the closing date or the date Stockholder Approval was obtained. Transfers for bona fide estate or tax planning purposes are permitted, provided the transferee agrees to be bound by the same lock-up terms. WLFI is considered a related party to the Company by virtue of the following relationships. Zachary Witkoff, the Chairman of the Company’s Board of Directors, is a Co-Founder and Chief Executive Officer of WLFI. Zachary Folkman, a member of the Company’s Board of Directors, is also a Co-Founder of WLFI. In addition, WLFI is the record owner of 1,000,000 shares of the Company’s Common Stock and holds pre-funded warrants to purchase up to 99,000,000 additional shares of Common Stock, as well as warrants to purchase up to 20,000,000 shares of Common Stock at exercise prices ranging from $7.50 to $9.75 per share, each acquired in connection with the WLFI treasury program. As a result of these relationships, WLFI is deemed a related party under ASC 850, Related Party Disclosures, and all transactions between the Company and WLFI, including the Token Purchase Agreements pursuant to which the Company acquired its WLFI token holdings and the Master Loan and Security Agreement entered into in January 2026, have been reviewed and approved by the Audit Committee of the Board of Directors in accordance with the Company’s related party transaction policy All acquisitions were executed through on-chain transactions and direct Token Purchase Agreements with the WLFI Foundation. The Company did not hold any WLFI tokens prior to August 12, 2025. The outstanding units, cost basis, and fair value as of December 27, 2025 were as follows: Schedule of Outstanding Units, Cost Basis and Fair Value Units Cost Basis Fair Value Balance, September 27, 2025: WLFI 7,283,585,650 $ 1,456,717,130 $ 1,054,663,202 Total 7,283,585,650 $ 1,456,717,130 $ 1,054,663,202 The 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 December 27, 2025 Fair value, December 28, 2024 $ — Fair value, beginning balance $ — Additions 1,468,717,130 Redemptions ( 11,995,371 ) Fees paid ( 4,629 ) Subtotal 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 During 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. F- 22 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9: Intangible assets Intangible Assets Intangible assets as of consist of the following (in $000’s): Schedule of Intangible Assets December 27, 2025 December 28, 2024 Qoden intangible $ 1,536 $ 1,536 Patents and domains 4 4 Trade names 3,175 2,675 Customer relationships 20,450 13,925 Developed technology 1,819 1,850 Non-competes 675 - Total intangible assets 27,659 19,990 Total intangible assets gross 27,659 19,990 Less accumulated amortization ( 4,619 ) ( 1,316 ) Total intangible assets, net $ 23,040 $ 18,674 Intangible 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. Mswipe Effective 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). Qoden Intangible Assets On November 8, 2024, the Company acquired the Qodex Cryptocurrency Exchange Software platform and other related assets from Qoden Technologies, LLC, a provider of technology solutions for the blockchain industry. The Company will amortize the intangible assets over a two 2 -year period (see Note 3). ALT5 Subsidiary Intangible Assets On May 14, 2024, the Company acquired its ALT5 Subsidiary, which is a fintech company that provides next-generation blockchain-powered technologies to enable a migration to a new global financial paradigm. As part of the acquisition, the Company acquired trade names, customer relationships, and developed technology, which will be amortized over a period of seven years , 10 years, and five years , respectively (see Note 3). Note 10: Goodwill The following table details the Company’s goodwill as of December 27, 2025 and December 28, 2024 (in $000’s): Schedule of Goodwill Fintech Biotech Corporate and Other Total Balance, December 28, 2024 3,880 — — 3,880 Balance, Beginning Balance 3,880 — — 3,880 Mswipe acquisition 6,378 — — 6,378 Mswipe tax adjustment 2,039 2,039 Balance, December 27, 2025 $ 12,297 $ — $ — $ 12,297 Balance, Ending Balance $ 12,297 $ — $ — $ 12,297 The 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). F- 23 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 11: Accrued liabilities Accrued liabilities as of December 27, 2025 and December 28, 2024 consist of the following (in $000’s): Schedule of Accrued Liabilities December 27, 2025 December 28, 2024 Compensation and benefits $ 332 $ 204 Accrued guarantees 300 309 Accrued taxes — 362 Accrued interest 917 789 Accrued professional fees 86 — Accrued settlements 4,002 — Accrued Qoden payments 106 109 Accrued legal 660 50 Customer deposits 1,200 — Other 935 699 Total accrued liabilities $ 8,538 $ 2,522 Note 12: Debentures Debentures outstanding as of December 27, 2025 and December 28, 2024 consisted for the following (in $000’s): Schedule of Debenture Outstanding December 27, 2025 December 28, 2024 Interest rate of 12 %, maturity date of June 30, 2025 563 563 Total debentures $ 563 $ 563 ALT5 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. Note 13: Long-Term Debt Long-term debt as of December 27, 2025 and December 28, 2024 consisted of the following (in $000’s): Schedule of Long-Term Debt December 27, 2025 December 28, 2024 Legacy subsidiary fixed deposits $ 7,937 $ 4,522 Legacy subsidiary loan — 3,782 Unaffiliated third-party 810 3,508 Seller notes 5,944 — Other — 33 Total notes payable, related parties 14,691 11,845 Less current portion ( 5,944 ) — Total long-term notes payable, related parties $ 8,747 $ 11,845 Legacy Subsidiary Fixed Deposits During 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 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. Legacy Subsidiary Loan On August 10, 2023, ALT5 Subsidiary entered into a Bitcoin-denominated promissory note with an otherwise unaffiliated third party. The note 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. F- 24 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaffiliated Third-Party Loans ICG Note On 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. Live Note On 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. 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 $ 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. 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. 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 $ 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. F- 25 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As 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. The Big Warrant is exercisable, at an exercise price of $ 1.71 per share, as follows: (i) 100,000 shares of Common Stock as of Original Issue Date, (ii) contingently for an additional 100,000 shares of Common Stock as of October 31, 2024, if, as of such date, the Company has not repaid in full its obligations under the Big Debenture, and (iii) contingently for an additional 200,000 shares of Common Stock as of January 29, 2025, if, as of such date, the Company has not repaid in full its obligations under the Big Debenture. The Company and the holder of the Big Warrant reached an agreement, pursuant to which the term of the final tranche of the Big Warrant was extended to August 20, 2027, the number of underlying shares was reduced to 192,982 shares of Common Stock, and the exercise price of $ 1.71 per share was unchanged The Small Warrant is exercisable, at an exercise price of $ 1.71 per share, as follows: (i) 22,727 shares of Common Stock as of Original Issue Date, (ii) contingently for an additional 22,727 shares of Common Stock as of October 31, 2024, if, as of such date, the Company has not repaid in full its obligations under the Small Debenture, and (iii) 45,455 shares of Common Stock as of January 29, 2025, if, as of such date, the Company has not repaid in full its obligations under the Small Debenture. As of November 1, 2024, the contingent second tranche of each of the Big Warrant and the two Small the Warrants vested. Except as disclosed with respect to the final tranche of the Big Warrant, each Investor is required to exercise the initial tranche of each Warrant within 15 days of the Original Issue Date. Upon the vesting of each contingent tranche of a Warrant vest, each Investor shall exercise such vested, contingent tranche within 15 days of the vesting of such contingent tranche. If the Company consummates any equity or debt financing before satisfying in full its obligations under the Debentures, then 50 % of every net dollar received by the Company from any such financing transaction shall be paid by the Company to the holders of the Debentures, on a pro rata basis, as a mandatory pre-payment thereof. In the event the Company has repaid all sums owing under a Debenture to the Investor, except for an amount equal to any non-conditional OID, the Company has the right, not the obligation, to exercise the vested portion of the Warrant held by the Debenture holder through a set-off of any or all such unpaid OID, on a dollar-for-dollar basis. The Warrants also feature a “cashless” exercise provision. In lieu of making the cash payment otherwise contemplated to be made to the Company upon exercise of a Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Warrant. During the quarter ended June 28, 2025, one of the two non-affiliated Investors exercised the remainder of the Small Warrant for a total of 45,455 shares (see Note 17). During the fourth quarter of the year ended December 28, 2024, the non-affiliated Investor exercised the Big Warrant for a total of 200,000 shares of the Company’s common stock, and the other two non-affiliated Investors exercised the Small 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. During the 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. Corporate Fixed Deposit Agreement On September 19, 2024, ALT5 Subsidiary and an investor entered into a 12 -month Corporate Fixed Deposit Agreement, pursuant to which ALT5 Subsidiary borrowed $ 1.5 million at an interest rate of 12 % per annum, payable monthly, calculated on the then-unpaid principal amount. Upon maturity, ALT5 Subsidiary is obligated to repay the principal amount in full and any accrued and unpaid interest. The principal may be repaid in full, but not in part, with a pre-payment penalty equivalent to three 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. F- 26 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Personal Fixed Deposit Agreement On February 1, 2025, ALT5 Subsidiary and an investor entered into a 24 -month Personal Fixed Deposit Agreement, pursuant to which ALT5 Subsidiary borrowed $ 0.5 million at an interest rate of 13 % per annum, payable monthly, calculated on the then-unpaid principal amount. Upon maturity, ALT5 Subsidiary is obligated to repay the principal amount in full and any accrued and unpaid interest. The principal may be repaid in full, but not in part, with a pre-payment penalty equivalent to three months of interest. As of December 27, 2025, the outstanding balance was $ 0 . Seller Notes Effective on May 9, 2025, the Company and our indirect, wholly-owned second tier Canadian subsidiary entered into an agreement to purchase all of the outstanding capital stock of 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. Note 14: Related Party Debt Long-term debt payable to related parties (see Note 20) as of December 27, 2025 and December 28, 2024 consisted of the following (in $000’s): Schedule of Long Term Debt Payable December 27, 2025 December 28, 2024 Isaac Capital Group, 10 % interest rate, matures December 31, 2024 $ — $ 327 Live Ventures Incorporated, 10 % interest rate, matures December 31, 2024 — 327 Isaac Capital Group short-term demand advance — 48 Novalk Apps SAA, LLP short-term demand advance — 110 Total notes payable, related parties — 812 Less current portion — ( 812 ) Total long-term notes payable, related parties $ — $ — Isaac Capital Group LLC On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “ICG Note”) in favor of ICG to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price was set at $ 0.61 , subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its approvals of the amendments on February 7, 2024. On March 6, 2024, ICG entered into a Note Purchase Agreement with an otherwise unaffiliated third party, under which the third party acquired the ICG Note. The terms and conditions of the ICG Note were not modified in connection with its acquisition by the third party. The principal amount of the ICG Note on the date of acquisition was approximately $ 1.2 million. 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). F- 27 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 27, 2025 and December 28, 2024, the principal amount outstanding was $ 0 and $ 48,000 , respectively (see Note 19). Live Ventures Incorporated On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “Live Note”) in favor of Live Ventures to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price for each obligation, as amended, was set at $ 0.61 , subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its final approvals of the amendments on February 7, 2024. On March 6, 2024, Live Ventures entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which 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 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). 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 27, 2025 and December 28, 2024, the principal amount outstanding was $ 0 and $ 110,000 , respectively (see Note 19). Note 15: Registered Direct Offering Registered Direct Offering On or about August 12, 2025, the Company entered into securities purchase agreements (the “Registered Offering Purchase Agreements”) with certain institutional investors, pursuant to which the Company agreed to issue to the Purchasers (as defined therein), in a registered direct offering (the “Registered Offering”), an aggregate of 100,000,000 shares of the Company’s common stock, par value $ 0.001 per share (“Common Stock”), at a purchase price of $ 7.50 per share. The Company intends to use up to $ 10.0 million of the net proceeds from the Registered Offering to settle existing litigation, pay existing debt, and fund the Company’s existing business operations. The balance of the net proceeds was used to fund the acquisition of $WLFI tokens from World Liberty Financial, Inc. (the “Lead Investor”), pursuant to a Token Purchase Agreement, and the establishment of the Company’s cryptocurrency treasury operations. The shares of Common Stock issued in the Registered Offering were issued pursuant to a prospectus supplement, which was filed with the SEC on August 11, 2025, in connection with a takedown from the Company’s shelf registration statement on Form S-3, as amended, (File No. 333-289176), which was declared effective by the SEC on August 8, 2025. Private Placement Offering In addition, 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. F- 28 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pursuant to the Private Placement Purchase Agreement, the Lead Investor was issued Common Stock Purchase Warrants (the “Lead Investor Warrants”) to purchase up to 10 % of the number of shares of Common Stock or pre-funded warrants sold in the offering, or 20 million shares of Common Stock. The Lead Investor Warrants are exercisable for (i) 8,000,000 shares of Common Stock at an exercise price of $ 7.50 per share of Common Stock; (ii) 4,000,000 shares of Common Stock at an exercise price of $ 8.25 per share of Common Stock; (iii) 4,000,000 shares of Common Stock at an exercise price of $ 9.00 per share of Common Stock; and (iv) 4,000,000 shares of Common Stock at an exercise price of $ 9.75 per share of Common Stock, subject to adjustment. The issuance of the shares of Common Stock underlying the Lead Investor Warrants (the “Lead Warrant Shares”) was also subject to stockholder approval of the Exchange Cap and the Amendment, which, as noted above, occurred in October 2025, subject to certain contractual beneficial ownership limitations. The issuance and sale of the PIPE Shares, the PIPE Pre-Funded Warrants, the Lead Investor Warrants, and the Lead Investor Shares (collectively, the “PIPE Securities”) were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The PIPE Securities were, or will be, as relevant, issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act and/or Regulation D promulgated thereunder for transactions not involving a public offering. Pursuant to the terms of the Registration Rights Agreement (as defined herein), the Company is required to file a registration statement providing for the resale of the PIPE Securities within 15 days of the closing of the Private Placement. As of the date of this Annual Report, the registration statement has not yet been filed. The Registered Offering resulted in gross proceeds of $ 750 million and the Private Placement resulted in the receipt of $ 750 million of WLFI tokens, in each case before deducting placement agent commissions and other offering expenses. The closing of the Offerings occurred on August 12, 2025. Pursuant to the Purchase Agreements, the Company has agreed not to issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of thirty (30) days after the initial registration statement was declared effective, subject to certain customary exceptions, including the use of the Sales Agreement (as defined herein), without the consent of the Purchasers, the Lead Investor, and the Placement Agent. Placement Agency Agreements The Company entered into a Placement Agency Agreement with A.G.P./Alliance Global Partners (the “Placement Agent”), dated August 11, 2025, pursuant to which the Placement Agent acted as the exclusive placement agent for the Company in connection with the Registered Offering (the “RD Placement Agency Agreement”). Pursuant to the RD Placement Agency Agreement, the Company paid the Placement Agent a cash fee of 3 % of the gross proceeds from the Registered Offering and issued to the Placement Agent (or its designees) warrants to purchase that number of shares of Common Stock equal to 3 % of the securities sold in the Registered Offering, which are exercisable beginning 180 days following the closing date, and have an initial exercise price per share of Common Stock of $ 8.25 (the “Placement Agent Warrants”). In addition, the Company reimbursed the Placement Agent for up to $ 475,000 of its fees and expenses, and up to $ 10,000 in non-accountable expenses, in connection with the Registered Offering. F- 29 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company also entered into a Placement Agency Agreement with the Placement Agent, dated August 11, 2025, pursuant to which the Placement Agent acted as the exclusive placement agent for the Company in connection with the Private Placement (the “PIPE Placement Agency Agreement”). Pursuant to the PIPE Placement Agency Agreement, the Company paid the Placement Agent (or its designees) a cash fee of (i) $ 6.5 million for all tokens paid for the securities sold in the Private Placement in excess of $ 500 million and (ii) 3 % of the gross proceeds of cash paid for the securities sold in the Private Placement Offering by the Placement Agent, and issued to the Placement Agent, Placement Agent Warrants equal to 3 % of the securities sold in the Private Placement, which are exercisable beginning 180 days following the closing date, and have an initial exercise price per share of Common Stock of $ 8.25 . In addition, the Company reimbursed the Placement Agent for up to $ 475,000 of its fees and expenses, and up to $ 10,000 in non-accountable expenses, in connection with the Private Placement. The issuance of the Placement Agent Warrants and the shares of Common Stock underlying the Placement Agent Warrants (the “Placement Agent Warrant Shares”) will not be registered under the Securities Act or any state securities laws. The Placement Agent Warrant Shares will be issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act and/or Regulation D promulgated thereunder for transactions not involving a public offering. The Placement Agency Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions. On December 30, 2025, the Company entered into an agreement (the “Placement Agent Subsequent Agreement”) with the Placement Agent that modified certain of the terms of the Placement Agent Agreements. The parties agreed, subject to certain limitations, to extend the Placement Agent’s irrevocable right of first refusal to act as sole investment banker, sole book-runner, sole sales agent, and/or sole placement agent, at its sole discretion, for the Company’s future public and private equity and debt offerings, including all equity linked financings, through December 31, 2026, on terms customary to the Placement Agent. The fee tail period, as provided in the Placement Agent Agreements, was also extended from August 12, 2026 through December 31, 2026. In connection with such extensions, the Placement Agent (i) paid the Company the sum of one 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. In 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 thereto. Registration Rights Agreement On or about August 11, 2025, the Company and the Lead Investor entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement (the “Resale Registration Statement”), providing for the resale of the PIPE Securities within 15 days of the closing of the Private Placement, to have such registration statement declared effective with 30 days of the filing date (or 60 days, if the SEC conducts a full review) (the date of such effectiveness, the “Effective Date”), and to maintain the effectiveness of such registration statement. As of the date of this Annual Report, the registration statement has not yet been filed. F- 30 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Asset Management Agreement Further, on or about August 11, 2025 (the “AMA Commencement Date”), the Company entered into an Asset Management Agreement (the “Asset Management Agreement”) with Kraken (the “Asset Manager”), pursuant to which the Asset Manager agreed to provide discretionary investment management services with respect to the Company’s cryptocurrency treasury. The term of the Asset Management Agreement was for thirty (30) days renewable upon the mutual consent of the parties. The Asset Manager received a nominal fee as compensation for its services under the Asset Management Agreement, which was not renewed. Lock-Up Agreements Pursuant to the Purchase Agreements, the Company will not issue, enter into any agreement to issue, or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents, or file any registration statement or any amendment or supplement thereto, for a period of 30 days after the Effective Date, subject to certain customary exceptions, including the use of the Sales Agreement (as defined herein), without the consent of the Purchasers, the Lead Investor and the Placement Agent. In addition, each of the Company’s directors and executive officers 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. F- 31 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 16: Preferred Stock Series A-1 Convertible Preferred Stock History 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 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 . Conversion The 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. During 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. Dividends The 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). Voting Rights Each 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 law. Redemption 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 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. F- 32 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Protective Provisions Without 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. Series B Preferred Stock History On 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. Conversion Series 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. Dividends 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 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. Redemption The Series B Preferred Stock has no redemption rights by the Company, 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 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. F- 33 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Series I Convertible Preferred Stock History In 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. Conversion The 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 and 17,000 shares of Series I Convertible Preferred Stock were outstanding, respectively. Dividends 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. Voting Rights Except 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. Redemption The Certificate of Designation for the Series I Convertible Preferred Stock does not provide any redemption rights by the Company, or any other entity. Preemptive Rights 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. 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 History 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. Conversion Series 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 and 3,200 shares of Series M Preferred Stock were outstanding, respectively. F- 34 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dividends 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 did not have any voting rights. Redemption The Series M Preferred Stock has no redemption rights by the Company, or any other entity. Preemptive Rights 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. Protective Provisions Without 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. Series Q Convertible Preferred Stock History 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 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. Conversion 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 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. F- 35 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dividends The Company shall not declare, pay, or set aside any dividends on shares of Series Q Convertible Preferred Stock. Voting Rights Except 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. 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. Redemption The Series Q Convertible Preferred Stock has no redemption rights by the Company, or any other entity. Preemptive Rights 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. Protective Provisions Without 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. Series V Convertible Preferred Stock History On 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 The 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. F- 36 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dividends Shares of Series V Convertible Preferred Stock did not have dividend rights. Voting Rights The 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. Redemption The Series V Convertible Preferred Stock had no redemption rights by ALT5 Sigma Corporation, or any other entity. Preemptive Rights 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. Protective Provisions Without 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. Series S Convertible Preferred Stock History 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. Conversion Initially, Dr. 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 5 five percent of the gross revenues that the Company receives in connection with sales or license revenue from the product. F- 37 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Dr. 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: (i) Dr. 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 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 Series S Preferred Stock Shares Amount Balance, December 30, 2023 100,000 14,510 Reclassification to permanent equity 0 ( 7,993 ) Reclassification to current liabilities 0 ( 2,661 ) Balance, December 28, 2024 100,000 3,856 Balance, December 27, 2025 100,000 3,856 Dividends 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 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. Redemption The Series S Convertible Preferred Stock has no redemption rights by ALT5 Sigma Corporation, or any other entity. Preemptive Rights 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. F- 38 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Protective Provisions Without 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. Note 17: Stockholders’ Equity Common Stock : 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. Equity Offerings: During the fiscal year ended December 27, 2025, the Company completed the following stock issuances: Preferred stock conversions The 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). Registered Direct Offering and related issuances The 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). Debt conversions The 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). Equity incentive awards The 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. Issuances for services and other agreements The Company issued 645,499 shares of its Common Stock to non-affiliated third parties for brokerage, consulting, and licensing services. Warrant-related issuances The Company issued approximately 1.3 million shares of its Common Stock in connection with warrant exercises. F- 39 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Acquisition consideration The Company issued 1,000,000 shares of its Common Stock as consideration for the Mswipe acquisition (see Note 3). 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 number of shares of Common Stock that 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 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). 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 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 Plan. 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). 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 27, 2025 and December 28, 2024, 20,000 and 100,000 options were outstanding under the 2016 Plan, respectively. The Company’s 2011 Plan authorizes the granting of awards in any of the following forms: (i) stock options, (ii) stock appreciation rights, and (iii) other share-based awards, including but not limited to, restricted stock, restricted stock units or performance shares, and expired on the earlier of May 12, 2021, or the date that all shares reserved under the 2011 Plan are issued or no longer available. As of 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 27, 2025, and December 28, 2024 (Aggregate Intrinsic Value in $000’s): Schedule of Stock Options Activity Options Outstanding Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life Outstanding at December 30, 2023 114,000 $ 5.68 $ — 6.1 Cancelled/expired ( 6,000 ) Outstanding at December 28, 2024 108,000 5.03 68 5.5 Cancelled/expired ( 88,000 ) — Outstanding at December 27, 2025 20,000 $ 3.83 $ — 4.7 Exercisable at December 27, 2025 20,000 $ 3.83 $ — 4.7 The exercise price for stock options outstanding and exercisable outstanding at December 27, 2025 is as follows: Schedule of Exercise Price for Stock Options Outstanding and Exercisable Outstanding Outstanding Exercisable Number of Options Exercise Price ($) Number of Options Exercise Price ($) 20,000 $ 3.54 to $ 5.25 20,000 $ 3.54 to $ 5.25 20,000 20,000 The 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. The following table summarizes warrant activity for the fiscal years ended December 27, 2025, and December 28, 2024: Warrants Outstanding Weighted Average Exercise Price Outstanding at December 30, 2023 959,834 $ 0.78 Granted 2,583,612 Exercised (290,908 ) Outstanding at December 28, 2024 3,252,538 $ 1.63 Granted 126,300,000 Exercised (1,134,565 ) — Outstanding at December 27, 2025 128,417,973 $ 1.79 Exercisable at December 27, 2025 128,417,973 $ 1.79 The weighted average remaining contractual term of warrants outstanding and exercisable as of December 27, 2025 was approximately 9.4 years. F- 40 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 18: Income taxes For 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 December 27, 2025 December 28, 2024 Fiscal Years Ended December 27, 2025 December 28, 2024 Current tax (benefit) expense: State $ — $ ( 102 ) Federal — ( 44 ) Foreign — 334 Current tax (benefit) expense — 188 Deferred tax benefit ( 87,619 ) ( 3,229 ) Total benefit of income taxes $ ( 87,619 ) $ ( 3,041 ) A 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 December 27, 2025 December 28, 2024 Fiscal Years Ended December 27, 2025 December 28, 2024 U.S. statutory rate 21.0 % 21.0 % State tax rate — % 0.9 % Foreign rate differential — % 4.4 % Permanent differences — % - 6.7 % Temporary differences - 20.0 % — % Change in valuation allowance - 1.0 % 12.9 % Other — % 0.2 % Income tax benefit provision — % 32.7 % Income (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 December 27, 2025 December 28, 2024 Fiscal Years Ended December 27, 2025 December 28, 2024 United States $ ( 432,126 ) $ ( 14,148 ) Canada — 3,539 Total $ ( 432,126 ) $ ( 10,609 ) The 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 December 27, 2025 December 28, 2024 Deferred tax assets (liabilities): Accrued expenses $ — $ 152 Allowance for bad debts ( 53 ) 53 Accrued compensation — 35 Section 174 expenses 26 43 Prepaid expenses ( 599 ) ( 128 ) Net operating loss 7,299 5,819 Lease liability — 33 Share-based compensation — 114 Intangibles — ( 6,909 ) Right-of-use assets — ( 33 ) Unrealized losses 86,943 794 Section 163(j) interest — 138 Deferred Tax Assets Liabilities 93,616 111 Less: valuation allowance ( 8,964 ) ( 2,919 ) Net deferred tax assets (liabilities) $ 84,652 $ ( 2,808 ) F- 41 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As 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. The Company has recorded a valuation allowance of approximately $ 9.0 million as of December 27, 2025, and December 28, 2024. The Company annually conducts an analysis of its uncertain tax positions and has concluded that it has no uncertain tax positions as of December 27, 2025. The Company’s policy is to record uncertain tax positions as a component of income tax expense. The Company files U.S. and state income tax returns in jurisdictions with differing statutes of limitations. 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 audit. Note 19: Related parties Shared Services Tony 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. 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 (see Note 14). Short-Term Advances On May 28, 2024 and June 3, 2024, Novalk made short-term demand advances in the amount of $ 120,000 and $ 100,000 , respectively, to the Company. Juan Yunis, an employee of Live Ventures, is the managing member of Novalk. The advances bears interest at a rate of 10 % per annum until repaid. As of December 27, 2025 and December 28, 2024, the principal amount outstanding was $ 0 and $ 110,000 , respectively. Note 20: Commitments and Contingencies Litigation SEC Complaint On 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 part: “Without admitting or denying the allegations of the complaint (except as provided herein in paragraph 12 and except as to personal and subject matter jurisdiction, which [the Company] admits), [the Company] hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things: “(a) permanently restrains and enjoins [the Company] from violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder [15 U.S.C. § 78j(b) and 17 C.F.R. §§ 240.10b-5]; and (c)[sic] orders [the Company] to pay a civil penalty in the amount of $ 250,000 under Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)).” The SEC has agreed to accept four quarterly payments from the Company, each in the amount of $ 62,500 . The 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. F- 42 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The 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. Sieggreen In a matter pending in the United States District Court for the District Of Nevada, Case No. 2:21-cv-01517-CDS-EJY, styled as Sieggreen, Individually and On Behalf of All Others Similarly Situated, Plaintiff, v. Live Ventures Incorporated, Jon Isaac, and Virland A. Johnson, Defendants , the Company was added as a defendant on March 6, 2023, and was served on March 23, 2023. Plaintiff has alleged causes of action against the Company for (i) violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and (ii) violation of Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c) promulgated thereunder. In June 2023 the Company filed a Motion to Dismiss, which the Court granted with leave for Plaintiffs to file a second amended complaint. Plaintiffs filed their Second Amended Complaint on October 31 2024. On December 16, 2024, the Company filed a Motion to Dismiss the Second Amendment Complaint, which the Court denied by Order dated September 30, 2025. 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. Main/270 The Company is a defendant in an action filed on April 11, 2022, in the U.S. District Court Southern District of Ohio, Eastern Division, styled, Trustees Main/270, LLC, Plaintiff, vs ApplianceSmart, Inc. and JANONE, Inc., Defendant , Case No.: 2:22-cv-01938-ALM-EPD. The Company was a guarantor of the lease between the Plaintiff and ApplianceSmart, Inc. Plaintiff alleged a cause of action against the Company in respect of the guaranty and seeks approximately $ 90,000 therefor. Plaintiff also seeks approximately $ 1,420,000 against ApplianceSmart and the Company on a joint and several basis. 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 settlement. Gulf Coast Bank and Trust vs. ALT5 Sigma Corporation, et al. Alt5 Sigma posted a $ 900,000 cash bond with the Court that is earning interest. Plaintiff seeks the payment of outstanding amounts related to a loan guarantee that existed for a prior subsidiary, ARCA Recycling Inc., in the amount of approximately $ 1.6 million, inclusive of principal, interest, and attorneys’ fees to date. ALT5 Sigma believes that Gulf Coast did not collect accounts receivable, inventory, and equipment of the prior subsidiary, as debtor, in a commercially reasonable manner, which resulted in substantial loss of collateral value. Experts were designated by July 31, 2025, and their depositions are being scheduled for the month of August. Both sides have already taken non-expert depositions. Trial is not yet set, but is expected sometime in 2026. Venue is Hennepin County, Minnesota. Subsequent 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. F- 43 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Virland Johnson Bankruptcy On August 14, 2025, the Company received a Summons and Complaint in an Adversary Proceeding (the “Complaint”) filed on August 6, 2025 in connection with the Chapter 7 bankruptcy proceeding 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 by Mr. Johnson to the Company or another unknown assignee, may have been sold by Mr. Johnson, or may even continue to be held by Mr. Johnson. Through the Complaint, the U.S. Trustee seeks to recover the common stock or, if it is no longer available, the equivalent value from the Company on behalf of the bankruptcy estate. On September 30, 2025 the Company filed its Answer to the Complaint and denied the allegations of any wrongdoing by the Company. The Company disputes the allegations concerning the Company and will vigorously defend itself against the claims. The matter is in the discovery phase. First Capital Consulting, Inc. DBA Trusaic vs. ALT5 Sigma Corporation Trial 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. Judgment in Rwanda ALT 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 Inc. 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 Canada Inc. 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. and Mr. 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. and Mr. 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 Inc. should regain access to the funds that belong to it (US$ 3.5 million). 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. are actively pursuing all available legal remedies to protect their interests and those of their stakeholders. In connection with the Intermediate Court’s Rwanda decision and pending the outcome of the appeal, the Company has recorded a US$ 3.5 million allowance on its condensed consolidated balance sheets. 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. ANTONIOS ISAAC; ZACK WITKOFF; JOHN BITAR; RON PITTERS; NAEL HAJJAR; ZAK FOLKMAN; 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; (ii) unjust enrichment; (iii) permanent injunction; and (iv) declaratory relief and requests the Court award compensatory and equitable relief. The 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. F- 44 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Commitments On 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. 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 27, 2025. Note 21: 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. The following table presents the computation of basic and diluted net loss per share (in $000’s, except per share data): Schedule of Computation of Basic and Diluted Net Loss Per Share December 27, 2025 December 28, 2024 For the Years Ended December 27, 2025 December 28, 2024 Continuing Operations Basic and Diluted Net loss from continuing operations $ ( 341,486 ) $ ( 8,301 ) Weighted average common shares outstanding 58,303,947 11,198,493 Basic and diluted loss per share from continuing operations $ ( 5.86 ) $ ( 0.74 ) Total Basic and Diluted Net loss $ ( 344,507 ) $ ( 7,568 ) Weighted average common shares outstanding 58,303,947 11,198,493 Basic and diluted loss per share $ ( 5.91 ) $ ( 0.68 ) Potentially 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. Note 22: Segment information ALT5 Sigma Inc. is a fintech company providing regulated, institutional-grade Crypto-as-a-Service (CaaS) infrastructure for the digital asset economy. 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. F- 45 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS To 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. The following is description of each of the Company’s reportable segments: ● The Fintech segment, which provides next generation blockchain-powered technologies for tokenization, trading, clearing, settlement, payment, and safe-keeping of digital assets. ● The 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 operations. This 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: Schedule of Segment Information For the Fiscal Year Ended December 27, 2025 Fintech Biotech (Discontinued Operations) Total Reportable Segments Corporate and Other Total Revenue $ 24,840 $ — $ 24,840 $ — $ 24,840 Cost of revenue 14,652 — 14,652 — 14,652 Gross profit 10,188 — 10,188 — 10,188 Gross profit percentage 41.0 % N/A 41.0 % 41.0 % Operating expenses: General and administrative expenses 16,370 3,898 20,268 16,669 36,937 Total operating expenses 16,370 3,898 20,268 16,669 36,937 Operating income ( 6,182 ) ( 3,898 ) ( 10,080 ) ( 16,669 ) $ ( 26,749 ) Other income (expense): Interest expense, net ( 2,754 ) — ( 2,754 ) ( 1,114 ) ( 3,868 ) Unrealized loss on cryptocurrency assets — — — ( 402,054 ) ( 402,054 ) Unrealized gain on exchange transactions 768 — 768 — 768 Realized gain on exchange transactions 374 374 374 Other income, net ( 516 ) — ( 516 ) ( 81 ) ( 597 ) Total income (expense), net ( 2,128 ) — ( 2,128 ) ( 403,249 ) ( 405,377 ) Income (loss) before income taxes $ ( 8,310 ) $ ( 3,898 ) $ ( 12,208 ) $ ( 419,918 ) $ ( 432,126 ) F- 46 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Fiscal Year Ended December 28, 2024 Fintech Biotech (Discontinued Operations) Total Reportable Segments Corporate and Other Total Revenue $ 11,887 $ — $ 11,887 $ — $ 11,887 Cost of revenue 6,238 — 6,238 — 6,238 Gross profit 5,649 — 5,649 — 5,649 Gross profit percentage 47.5 % N/A 47.5 % 47.5 % Operating expenses: General and administrative expenses 5,456 2,148 7,604 7,116 14,720 Total operating expenses 5,456 2,148 7,604 7,116 14,720 Operating income 193 ( 2,148 ) ( 1,955 ) ( 7,116 ) $ ( 9,071 ) Other income (expense): Interest expense, net ( 779 ) — ( 779 ) ( 380 ) ( 1,159 ) Unrealized loss on marketable securities — — — ( 1,238 ) ( 1,238 ) Realized gain on exchange transactions 1,019 — 1,019 — 1,019 Other income, net 390 — 390 ( 550 ) ( 160 ) Total income (expense), net 630 — 630 ( 2,168 ) ( 1,538 ) Income (loss) before income taxes $ 823 $ ( 2,148 ) $ ( 1,325 ) $ ( 9,284 ) $ ( 10,609 ) Note 23: Restatement of Previously Issued Financial Statements The 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. The 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. In 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 As Restated December 28, 2024 Previously Filed Effect of Restatement As Restated Consolidated balance sheets as of December 28, 2024 Trade and other receivables, net $ 2,530 $ ( 2,200 ) $ 330 Prepaid expenses 1,518 ( 635 ) 883 Current assets from discontinued operations — 2,200 2,200 Total current assets (subtotal of affected lines only) 4,048 ( 635 ) 3,413 Property and equipment, net 1,170 ( 1,170 ) — Intangible assets, net 34,430 ( 15,756 ) 18,674 Goodwill 11,714 ( 7,834 ) 3,880 Other assets from discontinued operations — 18,692 18,692 Total assets (subtotal of affected lines only) $ 51,362 $ ( 6,703 ) $ 44,659 Accounts payable $ 3,231 $ ( 1 ) $ 3,230 Accrued liabilities 2,553 ( 31 ) 2,522 Operating lease liabilities 10 ( 1 ) 9 Due to Soin 2,850 ( 2,850 ) — Current liabilities from discontinued operations — 2,850 2,850 Total current liabilities (subtotal of affected lines only) 8,644 ( 33 ) 8,611 Deferred income taxes, net 1,041 1,767 2,808 Notes payable 11,570 275 11,845 Total liabilities (subtotal of affected lines only) 21,255 2,009 23,264 Preferred stock, Series B 8,552 ( 7,835 ) 717 Preferred stock, Series M — 67 67 Preferred stock — 67 67 Common stock 9 6 15 Additional paid-in capital 62,207 649 62,856 Accumulated deficit ( 56,879 ) ( 1,324 ) ( 58,203 ) Equity attributable to ALT5 Sigma Corporation shareholders (subtotal of affected lines only) 13,889 ( 8,437 ) 5,452 Noncontrolling interest 3,925 ( 275 ) 3,650 Total stockholders’ equity (subtotal of affected lines only) 17,814 ( 8,712 ) 9,102 Total liabilities and stockholders’ equity (subtotal of affected lines only) $ 39,069 $ ( 6,703 ) $ 32,366 F- 47 Table of Contents ALT5 SIGMA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Previously Filed Effect of Restatement As Restated Fiscal Year Ended December 28, 2024 Previously Filed Effect of Restatement As Restated Revenues $ 12,532 $ ( 645 ) $ 11,887 Cost of revenues 6,238 — 6,238 Gross profit 6,294 ( 645 ) 5,649 Selling, general and administrative expenses 13,856 ( 1,284 ) 12,572 Total operating expenses 13,856 ( 1,284 ) 12,572 Operating loss ( 7,562 ) 639 ( 6,923 ) Interest expense, net ( 879 ) ( 280 ) ( 1,159 ) Realized gain on exchange transactions 374 645 1,019 Unrealized loss on marketable securities ( 1,058 ) ( 180 ) ( 1,238 ) Other expense, net ( 161 ) 1 ( 160 ) Total other expense, net ( 1,724 ) 186 ( 1,538 ) Loss before benefit from income taxes ( 9,286 ) 825 ( 8,461 ) Income tax benefit ( 3,041 ) 2,881 ( 160 ) Net loss from continuing operations ( 6,245 ) ( 2,056 ) ( 8,301 ) Loss from discontinued operations — ( 2,148 ) ( 2,148 ) Income tax benefit for discontinued operations — ( 2,881 ) ( 2,881 ) Net (loss) income from discontinued operations — 733 733 Net loss $ ( 6,245 ) $ ( 1,323 ) $ ( 7,568 ) Loss per share: Net loss per share from continuing operations, basic and diluted $ ( 0.56 ) $ ( 0.18 ) $ ( 0.74 ) Net loss per share, basic and diluted $ ( 0.56 ) $ ( 0.12 ) $ ( 0.68 ) Previously Filed Effect of Restatement As Restated Fiscal Year Ended December 28, 2024 Previously Filed Effect of Restatement As Restated OPERATING ACTIVITIES: Net loss from continuing operations $ ( 6,245 ) $ ( 2,056 ) $ ( 8,301 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,402 ( 2,086 ) 1,316 Change in reserve for uncollectible accounts 254 — 254 Noncash expense for stock issuances 271 94 365 Stock based compensation expense 1,657 628 2,285 Related party notes issued for shared services 800 — 800 Unrealized loss on marketable securities 1,058 180 1,238 Amortization of right-of-use assets 32 — 32 Change in deferred income taxes ( 3,229 ) 1,448 ( 1,781 ) Changes in assets and liabilities: — Accounts receivable 1,876 2,020 3,896 Digital assets receivable ( 14,694 ) — ( 14,694 ) Prepaid expenses 780 635 1,415 Other current assets 12 ( 2,203 ) ( 2,191 ) Accounts payable and accrued expenses 1,648 1,340 2,988 Digital assets payable 14,155 — 14,155 Net cash provided by operating activities $ 1,777 $ — $ 1,777 The 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. Note 24: 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: Master Loan and Security Agreement with WLFI On January 29, 2026, the Company and its wholly owned subsidiary, ALT5 Digital Holdings, Inc. (“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 %. On 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. As 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. F- 48 Table of Contents ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.