AI Financial agrees to sell Canadian unit for $12 million note and 11.6 million shares

AI Financial Corp. has completed the sale of ALT5 Sigma Canada to Prime Delta in exchange for a $12 million secured promissory note and 11,551,750 restricted Prime Delta shares, leaving only $1 million of note principal due in the near term and most of the consideration deferred. The unit was sold on Aug. 3 and terms were disclosed Aug. 7. Prime Delta must pay the first $1 million on Aug. 11, while the remaining $11 million is to be funded from 20% of post-closing equity financings; if that does not retire the balance, four annual installments of $2.75 million begin Aug. 3, 2027. The note carries 4% annual interest, is secured by all of Prime Delta's assets and is guaranteed by three third parties. The transaction comes as AI Financial faces liquidity pressure after reporting $10.5 million of cash, $12.3 million of operating cash use for the quarter ended March 28, a $271.3 million loss from continuing operations, a working-capital deficit and substantial doubt about its ability to continue as a going concern. Management said on June 10 that 3,583,585,650 WLFI could become transferable on Aug. 12, but only if a required resale registration statement becomes effective. AI Financial said transferability should not be read as an intention to sell, and as of Aug. 8 no public SEC filing showed that condition had been met.

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