ALT5 Sigma Corporation(ALTS) - 2024 Q3 - Quarterly Report

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].