AI Financial, a Nasdaq-listed digital asset treasury firm tied to Trump-backed World Liberty Financial and formerly known as Alt5 Sigma, warned that its losses and working-capital deficit "raise substantial doubt" about whether it can keep operating over the next year.
The company disclosed the warning in its latest Form 10-Q, saying it had a $271.5 million net loss for the quarter, compared with a $2.4 million loss a year earlier, largely because of a $348.3 million unrealized loss on its crypto holdings.
The firm's position is focused on WLFI, the token of World Liberty Financial, a crypto firm backed by the family of President Donald Trump.
AI Financial held about 7.28 billion WLFI tokens as of March 28. The company listed their cost basis at about $1.4 billion and their fair value at about $706.4 million, meaning the position was worth about 51% less than what the company paid.
- Shortly after the filing, AI Financial shares fell about 8.7% to around $0.91 on May 19, giving the WLFI treasury company a market value of roughly $115 million, down more than 92% from the value implied by its original WLFI treasury deal, per Google Finance.
World Liberty Financial also owns 1 million AI Financial common shares and holds pre-funded warrants to buy up to 99 million more shares, plus warrants to buy up to 20 million shares at exercise prices from $7.5 to $9.75, according to the filing.
The filing also shows AI Financial borrowed from WLFI. On Jan. 29, the company drew $15 million under a loan agreement with WLFI, receiving about $14.2 million after prepaid interest and lender expenses. AI Financial said it planned to use the money for a share repurchase program, more WLFI token purchases and general corporate purposes.