Quarterly Report for Quarter Ending March 28, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Dollars stated in thousands, except per-share amounts.

Forward-Looking and Cautionary Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of Exchange Act, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as ''believes,'' ''expects,'' ''may,'' ''will,'' ''should,'' ''seeks,'' ''approximately,'' ''intends,'' ''plans,'' ''estimates'' or ''anticipates'' or similar expressions that concern our strategy, plans or intentions. Any statements we make relating to our future operations, performance and results, and anticipated liquidity are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, including, without limitation, in conjunction with the forward-looking statements included in this Quarterly Report on Form 10-Q, are disclosed in "Item 1-Business, Item 1A - Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025, and Part II, Item 1A of this Report.

We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Our MD&A should be read in conjunction with our Annual Report on Form 10-K (including the information presented therein under the caption Risk Factors), together with our Quarterly Reports on Forms 10-Q and other publicly available information. All amounts herein are unaudited.

Our Company

Through our Fintech segment, we provide next generation blockchain-powered technologies to enable a migration to a new global financial paradigm, and, through our Biotechnology segment, we are focused on finding treatments for conditions that cause chronic pain and bringing to market drugs with non-addictive and non-sedative pain-relieving properties.

During the periods disclosed in this Quarterly Report, we operated three reportable segments:

Fintech

Our Fintech segment provides next generation blockchain-powered technologies for tokenization, trading, clearing, settlement, payment, and safe-keeping of digital assets

Biotechnology

Our Biotechnology segment is focused on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties. We have previously announced our intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for to decouple it from us so that it would operate on a stand-alone basis. The Biotech segment is being presented as discontinued operations for the 13 weeks ended March 28, 2026 and March 29, 2025 (see Note 4 of our Condensed Consolidated Financial Statements).

Corporate and Other

In August 2025, the Company closed a $1.5 billion registered direct offering and concurrent private placement to launch our WLFI Treasury Strategy. This "capital with a purpose" financing positioned the Company as one of the most significant institutional holders of WLFI, securing a meaningful stake in the native governance token of the World Liberty Financial ecosystem.

Our policy remains a committed long-term "HODL" approach, with future acquisitions funded through operating cash flows, structured debt, and selective capital raises. Sales are restricted to liquidity requirements or material portfolio rebalancing events.

Our Corporate and Other segment consists of WLFI assets, including any additions, redemptions, or mark-to-market changes in value, are recorded within the Company's Corporate and Other segment.

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

For the Thirteen Weeks Ended March 28, 2026 and March 29, 2025

Results of Operations

The following table sets forth certain statement of operations items and as a percentage of revenue, for the periods indicated (in $000's):

		13 Weeks Ended				13 Weeks Ended
		March 28, 2026				March 29, 2025
Statement of Operations Data:
Revenues		$	4,712			$	4,849
Cost of revenues			1,138				2,923
Gross profit			3,574				1,926
Selling, general and administrative expenses			6,317				3,872
Operating loss			(2,743	)			(1,946	)
Interest expense, net			(506	)			(720	)
Unrealized loss on cryptocurrency assets			(348,301	)			-
Unrealized gain on exchange transactions			(41	)			87
Realized gain on exchange transactions			(6,082	)			973
Other income, net			1,277				(81	)
Net loss before provision of income taxes			(356,396	)			(1,687	)
Income tax provision (benefit)			85,080				(225	)
Net loss from continuing operations			(271,316	)			(1,912	)
Loss from discontinued operations			(177	)			(540	)
Income tax (expense) benefit from discontinued operations			-				60
Net (loss) from discontinued operations			(177	)			(480	)
Net loss		$	(271,493	)		$	(2,392	)

The following tables set forth revenues for key product and service categories, percentages of total revenue and gross profits earned by key product and service categories and gross profit percent as compared to revenues for each key product category indicated (in $000's):

		13 Weeks Ended								13 Weeks Ended
		March 28, 2026								March 29, 2025
		Net Revenue				Percent of Total				Net Revenue				Percent of Total
Revenue
Fintech		$	4,712				100.0	%		$	4,849				100.0	%
Biotech (Discontinued operations)			-				-	%			-				-	%
Corporate and other			-				-	%			-				-	%
Total revenue		$	4,712				100.0	%		$	4,849				100.0	%

		13 Weeks Ended								13 Weeks Ended
		March 28, 2026								March 29, 2025
		Gross Profit				Gross Profit Percentage				Gross Profit				Gross Profit Percentage
Gross Profit
Fintech		$	3,574				75.9	%		$	1,926				47.0	%
Biotech			-				-	%			-				-	%
Corporate and other			-				-	%			-				-	%
Total gross profit		$	3,574				75.9	%		$	1,926				47.0	%

Revenue

Revenue decreased by approximately $0.1 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025. The decrease is due to volume of transactions processed for customers.

Gross Profit

Gross profit increased by approximately $1.6 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025. The increase is due to the loss of a large low margin customer.

Selling, General and Administrative Expense

Selling, general and administrative expenses increased by approximately $2.4 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025, primarily due increased professional fees.

Interest Expense, net

Interest expense, net decreased by approximately $0.3 million for the 13 weeks ended March 28, 2026, as compared to the 13 weeks ended March 29, 2025 primarily due to reduction in debt.

Unrealized Loss on Cryptocurrency Assets

Unrealized gain on cryptocurrency assets for the 13 weeks ended March 28, 2026 was approximately $348.3 million. An unrealized loss on crypto tokens was recorded to mark to fair value WLFI tokens purchased in August of 2025.

Segment Performance

We report our business in the following segments: Fintech, Biotechnology and Corporate and Other. During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 13 weeks ended March 28, 2026 and March 29, 2025.

Operating loss by operating segment, is defined as loss before net interest expense, other income and expense, provision for income taxes ($000's).

		13 Weeks Ended March 28, 2026																13 Weeks Ended March 29, 2025
		Fintech				Biotech (Discontinued Operations)				Corporate and Other				Total				Fintech				Biotech (Discontinued Operations)				Corporate and Other				Total
Revenue		$	4,712			$	-			$	-			$	4,712			$	4,849			$	-			$	-			$	4,849
Cost of revenue			1,138				-				-				1,138				2,923				-				-				2,923
Gross profit			3,574				-				-				3,574				1,926				-				-				1,926
Selling, general and administrative expense			5,212				177				1,105				6,317				2,604				540				1,268				3,872
Operating loss		$	(1,638	)		$	(177	)		$	(1,105	)		$	(2,743	)		$	(678	)		$	(540	)		$	(1,268	)		$	(1,946	)

Fintech Segment

Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024. Revenue for the 13 weeks ended March 28, 2026 was approximately $4.7 million, and gross margin percentage was 75.8%. Operating loss for the fiscal quarter ended 13 weeks ended March 28, 2026 was approximately $1.6 million.

Corporate and Other Segment

Our Corporate and Other segment generated no revenue for the for the 13 weeks ended March 28, 2026 and the 13 weeks ended March 29, 2025. Selling, general and administrative expenses increased primarily due to increased costs for legal and other professional services.

Biotechnology Segment

During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotechnology segment is presented as discontinued operations for the 13 weeks ended March 28, 2026 and March 29, 2025. Our Biotech segment generated no revenue for the for the 13 weeks ended March 28, 2026 and the 13 weeks ended March 29, 2025. Selling, general and administrative expenses increased primarily due to research and development expenses.

Liquidity and Capital Resources

Overview

As of March 28, 2026, our cash on hand was $10.5 million. Approximately $3.5 million of cash has been fully reserved in connection with the legal matter, further described in Note 20 to the consolidated financial statements. We intend to raise funds either through capital raises or structured arrangements, which would include effectuating our previously announced intention to capitalize a subsidiary with certain of our biotechnology assets, acquire an additional biotechnology asset, and then engage in a financing of that subsidiary. The short-term intended result of that series of transactions would be for us to own a controlling interest in that subsidiary, but to decouple it from us so that it would operate on a stand-alone basis, although its financial statements would continue to be consolidated with ours for as long as we have a controlling interest.

Cash Flows

During the 13 weeks ended March 28, 2026, cash used in operations was approximately $12.3 million, compared to cash provided by operations of approximately $1.5 million during the 13 weeks ended March 29, 2025. The increase in cash was primarily due to results of operations as discussed above.

Cash provided by investing activities was $0 million for the 13 weeks ended March 28, 2026 and $0 for the 13 weeks ended March 29, 2025.

Cash provided by financing activities was $8.5 million for the 13 weeks ended March 28, 2026, and relates primarily to the new WLFI loan. Cash used in financing activities was approximately $1.5 million for the 13 weeks ended March 29, 2025, and relates to proceeds received from the issuance of notes payable, as well as warrants converted to our common stock, partially offset by cash paid for notes payable.

Sources of Liquidity

We acknowledge that we continue to face a challenging competitive environment as we continue to focus on our overall profitability, including managing expenses. We reported a net loss from continuing operations of approximately $271.3 million for the 13 weeks ended March 28, 2026, and a net loss from continuing operations of approximately $1.9 million for the 13 weeks ended March 29, 2025. Additionally, the Company has total current assets of approximately $32.2 million and total current liabilities of approximately $39.1 million resulting in a net negative working capital of approximately $6.9 million. Cash used in operations was approximately $12.3 million.

Future Sources of Cash; Phase 2b Trials, New Acquisitions, Products, and Services

We may require additional debt financing and/or capital to finance new acquisitions, conduct our Phase IIb clinical trials for our Biotechnology segment, or consummate other strategic investments in our business. No assurance can be given any financing obtained may not further dilute or otherwise impair the ownership interest of our existing stockholders.