Quarterly Report for Quarter Ending June 27, 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 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 and 26 weeks ended June 27, 2026 and June 28, 2025.

Corporate and Other

In August 2025, we 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 consists of certain corporate general and administrative costs.

For the Thirteen Weeks Ended June 27, 2026 and June 28, 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
		June 27, 2026				June 28, 2025
Statement of Operations Data:
Revenue		$	2,414			$	6,378
Gross profit			2,355				2,775
Selling, general and administrative expenses			3,063				4,870
Interest (expense), net			(570	)			(550	)
Unrealized loss on cryptocurrency assets			(285,149	)			-
Unrealized gain on exchange transactions			41				211
Realized gain (loss) on exchange transactions			520				(3,485	)
Other (expense), net			376				(15	)
Net loss from continuing operations before provision of income taxes			(285,490	)			(5,934	)
Income tax provision (benefit) from continuing operations			57,143				(432	)
Net loss from continuing operations			(228,347	)			(5,502	)
Net loss from discontinued operations before provision of income taxes		$	(1,210	)		$	(657	)
Income tax expense from discontinued operations			-				2,956
Net loss from discontinued operations		$	(1,210	)		$	(3,613	)
Net loss		$	(229,557	)		$	(9,115	)

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
		June 27, 2026								June 28, 2025
		Net Revenue				Percent of Total				Net Revenue				Percent of Total
Revenue
Fintech		$	2,414				100.0	%		$	6,378				100.0	%
Corporate & Other			-				-	%			-				-	%
Discontinued operations			-				-	%			-				-	%
Total revenue		$	2,414				100.0	%		$	6,378				100.0	%

		13 Weeks Ended								13 Weeks Ended
		June 27, 2026								June 28, 2025
		Gross Profit				Gross Profit Percentage				Gross Profit				Gross Profit Percentage
Gross Profit
Fintech		$	2,355				97.6	%		$	2,775				43.5	%
Corporate & Other			-				-	%			-				-	%
Discontinued operations			-				-	%			-				-	%
Total gross profit		$	2,355				97.6	%		$	2,775				43.5	%

Revenue

Revenue decreased by approximately $4.0 million for the 13 weeks ended June 27, 2026, as compared to the 13 weeks ended June 28, 2025. The decrease is due to the loss of a large customer.

Gross Profit

Gross profit decreased by approximately $0.4 million for the 13 weeks ended June 27, 2026, as compared to the 13 weeks ended June 28, 2025. The decrease is primarily due to the loss of a large customer.

Selling, General and Administrative Expense

Selling, general and administrative expenses decreased by approximately $1.8 million for the 13 weeks ended June 27, 2026, as compared to the 13 weeks ended June 28, 2025, primarily due to lower labor costs and the higher costs due to the acquisition of Mswipe in 2025.

Unrealized Loss on Cryptocurrency Assets

Unrealized loss on cryptocurrency assets for the 13 weeks ended June 27, 2026 was approximately $285.1 million. An unrealized gain or loss on cryptocurrency assets was recorded to mark the fair value of the WLFI tokens.

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. Consequently, the Biotech segment is being presented as discontinued operations for the 13 weeks ended June 27, 2026 and June 28, 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 June 27, 2026																13 Weeks Ended June 28, 2025
		Fintech				Corporate and Other				Biotech (Discontinued Operations)				Total				Fintech				Corporate and Other				Biotech (Discontinued Operations)				Total
Revenue		$	2,414			$	-			$	-			$	2,414			$	6,378			$	-			$	-			$	6,378
Cost of revenue			59				-				-				59				3,603				-				-				3,603
Gross profit			2,355				-				-				2,355				2,775				-				-				2,775
Selling, general and administrative expense			(263	)			3,326				1,210				4,273				3,854				1,016				657				5,527
Operating income (loss)		$	2,618			$	(3,326	)		$	(1,210	)		$	(1,918	)		$	(1,079	)		$	(1,016	)		$	(657	)		$	(2,752	)

Fintech Segment

Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024, as well as Mswipe, which was acquired during May 2025. Revenue for the 13 weeks ended June 28, 2026 was approximately $2.4 million, and gross margin percentage was 97.6%. Operating income for the fiscal year ended 13 weeks ended June 27, 2026 was approximately $2.6 million.

Corporate and Other Segment

Our Corporate and Other segment generated no revenue for the for the 13 weeks ended June 27, 2026 and the 13 weeks ended June 28, 2025. Selling, general and administrative expenses increased primarily due to increased labor costs.

Biotechnology Segment

During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. Consequently, the Biotech segment is being presented as discontinued operations for the 13 weeks ended June 27, 2026 and June 28, 2025. Our Biotech segment generated no revenue for the 13 weeks ended June 27, 2026 and the 13 weeks ended June 28, 2025. Selling, general and administrative expenses increased $0.5 million due to increased research and development expenses.

For the Twenty-six Weeks Ended June 27, 2026 and June 28, 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):

		26 Weeks Ended				26 Weeks Ended
		June 27, 2026				June 28, 2025
Statement of Operations Data:
Revenue		$	7,126			$	11,892
Gross profit			5,929				5,366
Selling, general and administrative expenses			9,380				9,091
Interest expense, net			(1,076	)			(1,270	)
Unrealized loss on cryptocurrency assets			(633,450	)			-
Unrealized gain on exchange transactions			-				298
Realized gain on exchange transactions			(5,562	)			(3,177	)
Other income (expense), net			1,654				(96	)
Loss from continuing operations before provision of income taxes			(641,885	)			(7,970	)
Income tax provision (expense) from continuing operations			142,223				(147	)
Net loss from continuing operations		$	(499,662	)		$	(7,823	)
Loss from discontinued operations before provision of income taxes			(1,387	)			(1,197	)
Income tax expense from discontinued operations			-				2,956
Net loss from discontinued operations		$	(1,387	)		$	(4,153	)
Net loss		$	(501,049	)		$	(11,976	)

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):

		26 Weeks Ended								26 Weeks Ended
		June 27, 2026								June 28, 2025
		Net Revenue				Percent of Total				Net Revenue				Percent of Total
Revenue
Fintech		$	7,126				100.0	%		$	11,892				100.0	%
Corporate & Other			-				-	%			-				-	%
Discontinued operations			-				-	%			-				-	%
Total revenue		$	7,126				100.0	%		$	11,892				100.0	%

		26 Weeks Ended								26 Weeks Ended
		June 27, 2026								June 28, 2025
		Gross Profit				Gross Profit Percentage				Gross Profit				Gross Profit Percentage
Gross Profit
Fintech		$	5,929				83.2	%		$	5,366				45.1	%
Corporate & Other			-				-	%			-				-	%
Discontinued operations			-				-	%			-				-	%
Total gross profit		$	5,929				83.2	%		$	5,366				45.1	%

Revenue

Revenue decreased by approximately $4.8 million for the 26 weeks ended June 27, 2026, as compared to the 26 weeks ended June 28, 2025. The decrease is due to the loss of a major customer.

Gross Profit

Gross profit increased by approximately $0.6 million for the 26 weeks ended June 27, 2026, as compared to the 26 weeks ended June 28, 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 $0.3 million for the 26 weeks ended June 27, 2026, as compared to the 26 weeks ended June 28, 2025, the decrease is due an increase in professional fees in 2026 and due to higher costs due to the acquisition of Mswipe in 2025.

Interest Expense, net

Interest expense, net decreased by approximately $0.2 million for the 26 weeks ended June 27, 2026, as compared to the 26 weeks ended June 28, 2025 primarily due to pay down of debt.

Unrealized Loss on Cryptocurrency Assets

Unrealized loss on cryptocurrency assets for the 26 weeks ended June 27, 2026 was approximately $633.5 million. An unrealized gain or loss on cryptocurrency assets was recorded to mark the fair value of the WLFI tokens.

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 Biotech segment is being presented as discontinued operations for the 26 weeks ended June 27, 2026 and June 28, 2025.

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

		26 Weeks Ended June 27, 2026																26 Weeks Ended June 28, 2025
		Fintech				Corporate and Other				Biotech (Discontinued Operations)				Total				Fintech				Corporate and Other				Biotech (Discontinued Operations				Total
Revenue		$	7,126			$	-			$	-			$	7,126			$	11,892			$	-			$	-			$	11,892
Cost of revenue			1,197				-				-				1,197				6,526				-				-				6,526
Gross profit			5,929				-				-				5,929				5,366				-				-				5,366
Selling, general and administrative expense			4,949				4,431				1,387				10,767				5,611				2,283				1,197				9,091
Operating (loss) income		$	980			$	(4,431	)		$	(1,387	)		$	(4,838	)		$	(245	)		$	(2,283	)		$	(1,197	)		$	(3,725	)

Fintech Segment

Our Fintech segment consists of ALT5 Subsidiary, which was acquired during May 2024, as well as Mswipe, which was acquired during May 2025. Revenue for the 26 weeks ended June 27, 2026 was approximately $7.1 million, and gross margin percentage was 83.2%. Operating income for the fiscal year ended 26 weeks ended June 28, 2025 was approximately $1.0 million.

Corporate and Other Segment

Our Corporate and Other segment generated no revenue for the for the 26 weeks ended June 27, 2026 and the 26 weeks ended June 28, 2025. Selling, general and administrative expenses increased primarily due to increased costs for labor, accounting and public company expenses.

Biotechnology Segment

During fiscal 2025, the Company announced its intent to formally separate its Biotechnology segment, also known as Alyea. As a result, the Biotech segment is being presented as discontinued operations for the 26 weeks ended June 27, 2026 and June 28, 2025. Our Biotech segment generated no revenue for the for the 26 weeks ended June 27, 2026 and the 26 weeks ended June 28, 2025. Selling, general and administrative expenses were primarily due to research and development expenses.

Liquidity and Capital Resources

Overview

As of June 27, 2026, our cash on hand net of reserve, was $3.1 million. Approximately $3.5 million of cash has been fully reserved in connection with the legal matter, further described in Note 15 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 26 weeks ended June 27, 2026, cash used in continuing operations was approximately $18.5 million, compared to cash used in continuing operations of approximately $6.7 million during the 26 weeks ended June 28, 2025. The decrease in cash was primarily due an unrealized loss on crypto currency assets offset by a change in deferred tax liability.

Cash used in investing activities for continued operations was $0.5 million for the 26 weeks ended June 27, 2026, compared to cash provided by investing activities of $0.1 million for the 26 weeks ended June 28, 2025. Cash provided by investing activities for the 26 weeks ended June 28, 2025 was related to the purchase of treasury shares offset by the acquisition of Mswipe, in 2025. There was no cash used in investing activities for discontinued operations during the 26 weeks ended June 27, 2026 or June 28, 2025.

Cash provided by financing activities was $10.7 million for the 26 weeks ended June 27, 2026, and relates to proceeds from notes payable, partially offset by purchases of short-term certificates of deposits and cash paid for notes payable. Cash provided by financing activities was approximately $3.7 million for the 26 weeks ended June 28, 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 and related party notes payable. There was no cash provided by financing activities for discontinued operations during the 26 weeks ended June 27, 2026 or June 28, 2025.

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.