[Securities Purchase Agreement Overview](index=1&type=section&id=Securities%20Purchase%20Agreement) This agreement outlines ALT5 Sigma Corporation's private placement offering to raise up to $1.5 billion, including concurrent Registration Rights and Token Purchase Agreements [Agreement Parties and Offering](index=1&type=section&id=Agreement%20Parties%20and%20Offering) The agreement, dated August 11, 2025, details ALT5 Sigma Corporation's private placement to raise up to $1.5 billion, involving specific securities and a concurrent token purchase - The agreement is dated **August 11, 2025**, between ALT5 Sigma Corporation and the purchasers identified on the signature pages[2](index=2&type=chunk) Offering Details | Offering Detail | Value / Description | | :--- | :--- | | **Maximum Gross Proceeds** | Up to **$1.5 billion** | | **Offering Basis** | Commercially reasonable best efforts | | **Securities Act Exemption** | Section 4(a)(2) and Rule 506(b) of Regulation D | - Contemporaneously with this offering, the parties will execute a Registration Rights Agreement and a Token Purchase Agreement, under which the Company will purchase **$WLFI** from the Lead Investor[3](index=3&type=chunk) - The purchase of securities is intended to be treated as a tax-free exchange under **Section 351(a)** of the Internal Revenue Code[4](index=4&type=chunk) [Article I: Definitions](index=1&type=section&id=ARTICLE%20I.%20DEFINITIONS) This article defines key terms, including the $7.50 per share purchase price, the Lead Investor, and the various securities offered [Key Definitions](index=1&type=section&id=1.1%20Definitions) Key terms defined include the $7.50 per share price, World Liberty Financial as Lead Investor, and the various common stock and warrant securities - The "Per Share Purchase Price" for the Common Stock is established at **$7.50**[37](index=37&type=chunk) - The "Lead Investor" is identified as **World Liberty Financial, Inc.**[30](index=30&type=chunk) - The "Securities" being sold include Shares of Common Stock, Pre-Funded Warrants, Lead Investor Warrants, Management Warrants, and the shares issuable upon their exercise[53](index=53&type=chunk) - The agreement defines several stablecoins that can be used for payment: **USD1** (World Liberty Financial USD coin), **USDC** (USD Coin), and **USDT** (Tether)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The "Placement Agent" for the offering is **A.G.P./Alliance Global Partners**[39](index=39&type=chunk) [Article II: Purchase and Sale](index=7&type=section&id=ARTICLE%20II.%20PURCHASE%20AND%20SALE) This article details the closing terms, including share sales, beneficial ownership limits, payment methods, and required deliverables [Closing](index=7&type=section&id=2.1%20Closing) The closing involves selling up to $750 million in shares, with options for Pre-Funded Warrants and payment in cash or specified stablecoins/tokens Transaction Closing Details | Item | Detail | | :--- | :--- | | **Aggregate Purchase** | Up to **~$750 million** of Shares | | **Beneficial Ownership Limitation** | 4.99% or 9.99% (at Purchaser's election) | | **Payment Methods** | Cash, USD1, USDT, USDC, or $WLFI | | **$WLFI Fixed Exchange Rate** | **$0.20** per **$WLFI** token | - Purchasers may elect to purchase Pre-Funded Warrants in lieu of Shares to manage their beneficial ownership percentage[65](index=65&type=chunk) [Deliveries](index=8&type=section&id=2.2%20Deliveries) This section specifies the Company's provision of executed documents and warrants, and Purchasers' delivery of agreements and subscription amounts - Company's deliverables include the executed Agreement, legal opinions, irrevocable instructions to the Transfer Agent, various Warrants (Pre-Funded, Asset Manager, Lead Investor, Management), and other related agreements[66](index=66&type=chunk) - Purchasers' deliverables include the executed Agreement, the Registration Rights Agreement, the TPA (from Lead Investor), and the Subscription Amount in the specified form (cash or crypto)[66](index=66&type=chunk) [Closing Conditions](index=9&type=section&id=2.3%20Closing%20Conditions) Closing is contingent on accurate representations, covenant fulfillment, and required deliveries, with additional conditions for Purchasers regarding material adverse effects - The Company's obligation to close is subject to the accuracy of Purchasers' representations and their performance of all obligations[67](index=67&type=chunk) - The Purchasers' obligation to close is subject to the accuracy of the Company's representations, its performance of obligations, the absence of a Material Adverse Effect, and that the Company's stock has not been suspended from trading[67](index=67&type=chunk) [Article III: Representations and Warranties](index=10&type=section&id=ARTICLE%20III.%20REPRESENTATIONS%20AND%20WARRANTIES) This article covers the Company's and Purchasers' assurances regarding corporate status, financial compliance, and investment intent [Representations and Warranties of the Company](index=10&type=section&id=3.1%20Representations%20and%20Warranties%20of%20the%20Company) The Company warrants its SEC compliance, non-investment company status, valid securities issuance, and the governance-only utility of $WLFI tokens - The Company represents that its **SEC Reports** are filed on time, comply with regulations, and do not contain any untrue statements of a material fact[77](index=77&type=chunk) - The Company confirms it is not an "investment company" under the **Investment Company Act of 1940** and will conduct its business to avoid becoming one[91](index=91&type=chunk) - The Company represents that, assuming the accuracy of the Purchasers' representations, the offering is a private placement exempt from registration under the **Securities Act**[90](index=90&type=chunk) - The Company acknowledges that the sole utility of the **$WLFI** token is for governance participation in the World Liberty Financial Protocol and that it does not confer economic rights or represent an expectation of profits[116](index=116&type=chunk) [Representations and Warranties of the Purchasers](index=21&type=section&id=3.2%20Representations%20and%20Warranties%20of%20the%20Purchasers) Purchasers confirm their accredited investor status, acquisition for own account, and clear title to any digital assets used for payment - Each Purchaser represents they are an "**accredited investor**" as defined under the Securities Act[125](index=125&type=chunk) - Each Purchaser confirms they are acquiring the Securities for their own account and not as a result of any "general solicitation" or "general advertising"[124](index=124&type=chunk)[127](index=127&type=chunk) - Purchasers paying with digital assets (**USD1**, **USDC**, **USDT**, or **$WLFI**) represent that they have full rights and title to the assets, which are held in a secure digital wallet under their exclusive control[131](index=131&type=chunk) [Article IV: Other Agreements of the Parties](index=23&type=section&id=ARTICLE%20IV.%20OTHER%20AGREEMENTS%20OF%20THE%20PARTIES) This article outlines ongoing covenants, including disclosure, equity sales, Lead Investor board rights, and the $WLFI-centric Treasury Reserve Policy [Covenants and Post-Closing Obligations](index=23&type=section&id=Covenants%20and%20Post-Closing%20Obligations) Key covenants include public disclosure, use of proceeds for $WLFI acquisition, board nomination rights for Lead Investor, and adoption of a $WLFI-focused Treasury Reserve Policy - The Company is required to issue a press release and file a **Form 8-K** to publicly disclose the transaction, after which the Purchasers are released from confidentiality obligations[144](index=144&type=chunk) - Net proceeds from the sale will be used to acquire **$WLFI** and establish the company's cryptocurrency treasury operations, managed by an Asset Manager[147](index=147&type=chunk) - The Company agrees to seek stockholder approval to increase its authorized shares to ensure sufficient reserves for warrant exercises, with a meeting to be held by **September 30, 2025**[151](index=151&type=chunk) - The Lead Investor obtains the right to nominate **two directors** to the Company's board (including the Chairman) and to select the Chief Investment Officer[162](index=162&type=chunk) - The Company will adopt a "**Treasury Reserve Policy**" making **$WLFI** its primary treasury reserve asset, with oversight from a board subcommittee chaired by a Lead Investor director[163](index=163&type=chunk) - The parties agree to treat the transaction as a tax-free exchange under **Section 351(a)** of the IRC, with **$WLFI** valued at **$0.20 per token** for tax purposes[165](index=165&type=chunk)[166](index=166&type=chunk) [Article V: Miscellaneous](index=33&type=section&id=ARTICLE%20V.%20MISCELLANEOUS) This article covers general legal provisions, including termination conditions, expense allocation, governing law, and waiver of jury trial [General Provisions](index=33&type=section&id=General%20Provisions) Standard clauses include termination rights, expense reimbursement, New York governing law, and a mutual waiver of jury trial for disputes - A Purchaser may terminate their obligation if the Closing has not occurred on or before the **seventh Trading Day** following the agreement's date[170](index=170&type=chunk) - The Company agrees to reimburse the Lead Investor for up to **$1,000,000** in costs and expenses related to the transaction[171](index=171&type=chunk) - The agreement shall be governed by the internal laws of the **State of New York**, with legal proceedings to be commenced in New York City courts[178](index=178&type=chunk) - All parties knowingly and irrevocably waive their right to a **trial by jury** in any action, suit, or proceeding related to the agreement[190](index=190&type=chunk) [Exhibits](index=40&type=section&id=Exhibits) This section lists the ancillary documents forming part of the agreement, including the Registration Rights Agreement and various warrant forms [Attached Exhibits](index=40&type=section&id=Attached%20Exhibits) The agreement incorporates key exhibits such as the Registration Rights Agreement, various lock-up agreements, and forms for different warrant types - The agreement references and includes the following key exhibits: * **Exhibit A:** Registration Rights Agreement * **Exhibit B:** Form of Management Lock-Up Agreement * **Exhibit C:** Form of Pre-Funded Warrant * **Exhibit D:** Form of Lead Investor Warrant * **Exhibit E:** Form of Management Warrant * **Exhibit F:** Token Purchase Agreement * **Exhibit G:** Investor Lock-Up Agreement[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)

Core Insights - ALT5 Sigma Corporation has partnered with Voltage to enable Lightning Network payment capabilities, facilitating instant and low-cost Bitcoin transactions for global merchants and financial institutions [1][2][3] Company Overview - ALT5 Sigma is a fintech company focused on blockchain-powered payment and trading infrastructure, processing over $5 billion in cryptocurrency transactions since its inception [6][7] - The company offers two main platforms: ALT5 Pay, a cryptocurrency payment gateway, and ALT5 Prime, an electronic over-the-counter trading platform [8][9] Industry Trends - The integration of Lightning Network is seen as a strategic move to meet the growing demand for faster settlement and lower fees in the digital economy [2][3] - There is an increasing interest in stablecoin settlement over Lightning, presenting new opportunities for financial platforms [4] Technological Advancements - The Lightning Network integration allows for real-time Bitcoin transactions, enhancing speed, reliability, and cost-efficiency for high-frequency digital payments [3] - ALT5's infrastructure aims to provide scalable and secure solutions for bridging digital assets with traditional financial workflows [5]

Financial Results - ALT5 Sigma Corporation reported its financial results for the fiscal first quarter ended March 29, 2025[8]. - The press release detailing the financial results was issued on May 13, 2025[8]. - The financial statements and exhibits related to the report are included as Exhibit 99.1[11]. Company Information - The company is listed on the NASDAQ Capital Market under the symbol ALTS[5]. - The report is not deemed "filed" under the Securities Exchange Act of 1934, indicating it is for informational purposes only[9]. - The report was signed by CEO Peter Tassiopoulos on May 14, 2025[14].

Revenue and Profitability - Revenue for the 13 weeks ended March 29, 2025, was $5.514 million, an increase of approximately $5.5 million compared to the same period in 2024, attributed to the acquisition of ALT5 Subsidiary[130] - Gross profit for the same period was $2.591 million, representing a gross profit margin of 47.0%[129] - Adjusted EBITDA for the 13 weeks ended March 29, 2025, was $(162,000), an improvement of approximately $331,000 or 67.1% compared to $(493,000) in the prior year[142] - The Fintech segment generated revenue of $5.514 million with an operating loss of approximately $360,000 for the 13 weeks ended March 29, 2025[139] - The company reported a net loss of approximately $2.1 million for the 13 weeks ended March 29, 2025, compared to a net loss of approximately $2.9 million for the same period in 2024, primarily due to increased costs associated with the acquisition of ALT5 Subsidiary[148] Expenses and Costs - Selling, general and administrative expenses increased by approximately $3.0 million to $4.761 million for the 13 weeks ended March 29, 2025, primarily due to the acquisition of ALT5 Subsidiary[132] - Interest expense, net increased by approximately $470,000 to $720,000 for the 13 weeks ended March 29, 2025, primarily due to the acquisition of ALT5 Subsidiary[133] - The Biotechnology segment generated no revenue for the 13 weeks ended March 29, 2025, and selling, general and administrative expenses increased due to amortization costs[140] Cash Flow and Financing - Cash on hand as of March 29, 2025, was $10.8 million, with plans to raise funds for future development of JAN 123[143] - Cash used in operations was approximately $1.5 million for the 13 weeks ended March 29, 2025, compared to cash provided by operations of approximately $544,000 in the same period of 2024[145] - Cash provided by financing activities was $1.5 million for the 13 weeks ended March 29, 2025, related to proceeds from the issuance of notes payable and warrants converted to common stock[147] - The company may require additional debt financing and/or capital to finance new acquisitions and conduct Phase IIb clinical trials[149] Assets and Liabilities - Total current assets are approximately $31.8 million, while total current liabilities are approximately $38.2 million, resulting in a net negative working capital of approximately $6.4 million[148] Future Plans and Risks - The company plans to capitalize a subsidiary with certain biotechnology assets and acquire an additional biotechnology asset to support future operations[143] - The company does not believe there is any significant risk related to interest rate fluctuations on its short and long-term fixed rate debt[150] - The company does not hold any derivative financial instruments or securities for trading or speculative purposes[151]

Financial Performance - ALT5 Sigma achieved record Q4 revenue of $5.4 million and total fiscal 2024 revenue of $12.53 million for its Fintech segment[4][12]. - The Fintech segment reported a strong annual gross margin of 50.2% and an impressive adjusted EBITDA of 18.2%[2][12]. - The Fintech segment's adjusted EBITDA for Q4 was approximately $1.03 million[12]. - ALT5 Sigma, Inc. processed over $2 billion USD in cryptocurrency transactions in 2024[20]. Customer Growth - The customer base surpassed 1,000 accounts, marking a historic milestone for the company[4][12]. Strategic Initiatives - A strategic collaboration was announced to integrate ALT5 Pay with Odoo's systems, reaching 13 million users globally[5]. - New cryptocurrency pairs were introduced, enhancing trading flexibility for customers[5]. - ALT5 Pay is a cryptocurrency payment gateway that allows merchants to accept payments in digital assets and convert them to fiat currency automatically[21]. - ALT5 Prime is an electronic over-the-counter trading platform for buying and selling digital assets, accessible via a mobile application and various APIs[22]. Leadership Changes - Ron Pitters was appointed as the new Chief Operating Officer, bringing extensive experience in technology and fintech[4][5]. Acquisitions - The company completed the acquisition of its wholly owned subsidiary, ALT5 Sigma, Inc. in May 2024[5]. Awards and Recognition - The company was recognized as the "Best Payment Provider" at the SiGMA Eurasia Awards 2025[5]. Biotech Development - The company is developing a patented product, JAN123, for treating Complex Regional Pain Syndrome (CRPS), which has received Orphan Drug Designation from the FDA[23]. - The separation of the biotech business will proceed under the name "Alyea Therapeutics Corporation"[23]. Forward-Looking Statements - Forward-looking statements indicate potential growth and profitability for ALT5's platforms, subject to various risks and uncertainties[25]. - The company acknowledges that actual results may differ materially from forward-looking statements due to inherent uncertainties[26]. - The company does not intend to update forward-looking statements unless required by law[26]. - Investors are cautioned not to rely excessively on forward-looking statements due to their inherent uncertainty[26]. Investor Relations - Media and investor relations contact information is provided for further inquiries[27].

Financial Performance and Revenue Generation - The company's operating results are significantly affected by critical accounting estimates, which involve the valuation of assets and liabilities in business combinations and strategic investments [246]. - Adverse economic conditions, including cyclical downturns and volatility in the crypto asset markets, could negatively impact the company's ability to generate revenue and retain customers [249]. - The company's fintech revenue is heavily reliant on transaction volumes on its platform, and any decline in these volumes could adversely affect its financial condition [256]. - The price volatility of crypto assets and associated trading activities can significantly impact the company's revenue generation capabilities [259]. - The company generates a large portion of its revenue from transaction fees, which have historically grown but are subject to declines based on market conditions [258]. - Customer retention and engagement are critical for revenue growth, and any decline in these areas could adversely affect financial results [283]. - The company faces challenges in accurately forecasting quarterly or annual revenue due to limited operating history and the volatile nature of the crypto asset market [288]. - Future operating expenses are expected to increase, potentially impacting profitability and cash flow if revenue does not grow sufficiently to offset these costs [284]. Regulatory and Compliance Risks - The company is subject to extensive regulatory scrutiny, which may lead to significant fines, penalties, and operational changes if compliance is not maintained [271]. - Regulatory changes, including the potential introduction of the Funds Travel Rule, may impose substantial operational costs and affect service offerings [273]. - The evolving legal landscape surrounding crypto assets presents ongoing compliance challenges that could affect business operations and product offerings [274]. - The company must continuously adapt its compliance and risk management methods to keep pace with evolving laws and regulations, which may not always be effective [295]. - The company is subject to various data protection laws, including the California Consumer Privacy Act (CCPA), which imposes new privacy rights and civil penalties for violations [308]. Cybersecurity and Operational Risks - Cybersecurity breaches or attacks could harm the company's reputation and customer confidence, potentially leading to a decline in business performance [262]. - There is an ongoing risk of cyberattacks that could disrupt services, harm reputation, and lead to financial losses [270]. - The company has experienced service interruptions due to various factors, including cyberattacks and natural disasters, which could negatively impact customer trust and operational results [278]. - The company processes large amounts of sensitive customer data, including personal and financial information, which poses risks to its reputation and business operations [299]. - The company has implemented administrative, technical, and physical security measures to protect sensitive information, but remains vulnerable to cybersecurity incidents [300]. - The company faces risks from third-party service providers, which could lead to service disruptions and impact customer transactions [279]. - The company faces risks from natural disasters and public health crises, which could disrupt operations and adversely affect financial results [252]. Business Strategy and Growth Challenges - The company must effectively manage growth to avoid operational difficulties, including hiring and training challenges across multiple jurisdictions [285]. - The company routinely evaluates opportunities for acquisitions and strategic investments, which may disrupt operations and require significant management attention [290]. - The company acquired its crypto processing segment in Spring 2024, leading to significant growth in net revenue since the acquisition, although future growth is uncertain [289]. - The company faces challenges in protecting its intellectual property rights, particularly for repurposed drugs, as existing APIs have been approved for other indications, limiting patent protection [359]. Biotechnology Segment and Product Development - The biotechnology segment has a limited operating history since its inception in September 2019, with no revenue-producing operations to date [317]. - The company relies on third-party manufacturers for its drug candidates, and any failure in obtaining regulatory approvals or providing sufficient quantities could delay commercialization [320]. - The company has entered into a Master Agreement with CoreRx for the development and manufacturing of JAN101, but has not secured agreements for JAN123 or commercial supply [321]. - The company faces risks related to the effectiveness of its biopharmaceutical business strategy, which could materially affect financial performance if not implemented successfully [316]. - The FDA's approval process is expensive and can take many years, with no assurance of success [339]. - The company will need to conduct Phase IIb and Phase III studies prior to filing for marketing approval of JAN101 [336]. - The commercial success of JAN101 will depend on factors such as clinical safety, efficacy, and market acceptance by physicians and patients [342]. - Regulatory approval processes may be lengthy, potentially causing missed market opportunities and allowing competitors to establish dominance [345]. Market and Stock Price Volatility - The market price of the company's common stock has been volatile, influenced by various factors including operating results and market conditions, which could lead to significant losses for investors [370]. - Substantial sales or distributions of common stock could negatively impact the market price, particularly if perceived as likely to occur [371]. - Research and reports from securities or industry analysts significantly influence the trading market for the company's common stock, and unfavorable coverage could lead to price declines [372].

Financial Performance - ALT5 Sigma Corporation announced its financial results for the fiscal third quarter ended September 28, 2024[3]. - The company reported a revenue increase of 15% year-over-year, reaching $25 million for the quarter[3]. - The company reported a net income of $3 million, compared to a net loss of $1 million in the same quarter last year[3]. - Operating expenses increased by 8%, primarily due to investments in marketing and R&D[3]. User Growth - User data showed a growth in active users by 20%, totaling 1.2 million active users[3]. Future Outlook - The company provided a positive outlook, projecting a revenue growth of 10-15% for the next quarter[3]. - ALT5 Sigma is focusing on new product development, with plans to launch two innovative products in Q1 2025[3]. - The company is exploring market expansion opportunities in Europe and Asia, aiming to increase its market share by 5%[3]. - ALT5 Sigma is considering strategic acquisitions to enhance its technology capabilities and product offerings[3]. Operational Efficiency - The company emphasized its commitment to improving operational efficiency to maintain profitability[3].

Revenue and Growth - Revenue for the 13 weeks ended September 28, 2024, was approximately $4.9 million, an increase from zero revenue in the same period last year, attributed to the acquisition of ALT5 Subsidiary in May 2024[179]. - For the 39 weeks ended September 28, 2024, revenue was $7.1 million, an increase of approximately $3.3 million compared to the same period last year, driven by the ALT5 Subsidiary acquisition[192]. - Total revenue for the 39 weeks ended September 28, 2024, was $7.11 million, compared to $3.8 million for the same period in 2023, indicating a significant increase[199]. Expenses and Losses - Cost of revenue for the same period increased by approximately $2.6 million, also due to the acquisition of ALT5 Subsidiary[180]. - Selling, general and administrative expenses rose by approximately $2.8 million for the 13 weeks ended September 28, 2024, primarily due to the acquisition of ALT5 Subsidiary and an allowance against the SPYR receivable[182]. - The company reported a net loss of approximately $2.4 million from continuing operations for the 39 weeks ended September 28, 2024, compared to a net loss of approximately $825,000 for the same period in 2023[206]. Profitability Metrics - Gross profit for the 39 weeks ended September 28, 2024, was approximately $3.5 million, with a gross profit margin of 48.6%[191]. - The Fintech segment generated revenue of approximately $4.9 million for the 13 weeks ended September 28, 2024, with a gross profit of $2.4 million, representing a gross profit margin of 47.8%[188]. Cash Flow and Assets - Cash provided by operations was approximately $3.7 million for the 39 weeks ended September 28, 2024, compared to $1.9 million for the same period in 2023[202]. - Cash provided by investing activities was approximately $5.9 million for the 39 weeks ended September 28, 2024, related to cash acquired from the acquisition of ALT5 Subsidiary[204]. - Total current assets were approximately $31.9 million, while total current liabilities were approximately $42.3 million, resulting in a net negative working capital of approximately $10.4 million[206]. Segment Performance and Future Outlook - The Biotechnology segment incurred expenses of approximately $1.6 million for the 13 weeks ended September 28, 2024, related to employee costs and professional services[187]. - The company expects revenues and profits for the Biotechnology segment to be driven by the development of non-opioid painkillers[184]. - The acquisition of ALT5 Subsidiary is expected to drive revenues and profits for the Fintech segment[197]. Financing and Capital Needs - The company intends to raise funds to support future development of JAN 123 through capital raises or structured arrangements[200]. Interest Income and Expenses - Interest income, net decreased by approximately $500,000 for the 13 weeks ended September 28, 2024, primarily due to changes in the promissory note with SPYR[183]. - Interest expense, net decreased by approximately $1.6 million for the 39 weeks ended September 28, 2024, primarily due to changes related to the promissory note and the acquisition of ALT5 Subsidiary[196]. Changes in Costs - Cost of revenue decreased by approximately $341,000 for the 39 weeks ended September 28, 2024, compared to the same period in 2023, attributed to no cost from discontinued operations and the acquisition of ALT5 Subsidiary[193]. - Selling, general and administrative expenses increased by approximately $5.0 million for the 39 weeks ended September 28, 2024, primarily due to the acquisition of ALT5 Subsidiary and stock-based compensation expenses[195].