AI Financial Corp Debt Disclosure

Note 14: Related Party Debt

 

Long-term debt payable to related parties (see Note 20) as of December 27, 2025 and December 28, 2024 consisted of the following (in $000’s):

 

Schedule of Long Term Debt Payable

		December 27, 2025				December 28, 2024
Isaac Capital Group, 10% interest rate, matures December 31, 2024		$	—			$	327
Live Ventures Incorporated, 10% interest rate, matures December 31, 2024			—				327
Isaac Capital Group short-term demand advance			—				48
Novalk Apps SAA, LLP short-term demand advance			—				110
Total notes payable, related parties			—				812
Less current portion			—				(812	)
Total long-term notes payable, related parties		$	—			$	—

 

Isaac Capital Group LLC

 

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “ICG Note”) in favor of ICG to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its approvals of the amendments on February 7, 2024. On March 6, 2024, ICG entered into a Note Purchase Agreement with an otherwise unaffiliated third party, under which the third party acquired the ICG Note. The terms and conditions of the ICG Note were not modified in connection with its acquisition by the third party. The principal amount of the ICG Note on the date of acquisition was approximately $1.2 million. During the year ended December 27, 2025, the third party converted approximately $329,000 of the Company’s obligation under the ICG Note into 516,016 shares of the Company’s common stock. As of December 27, 2025 and December 28, 2024, the amount outstanding on the ICG Note was $0 and $327,000, respectively (see Note 19).

 

 

ALT5 SIGMA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $100,000. The advance bears interest at a rate of 10% per annum until repaid. As of December 27, 2025 and December 28, 2024, the principal amount outstanding was $0 and $48,000, respectively (see Note 19).

 

Live Ventures Incorporated

 

On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “Live Note”) in favor of Live Ventures to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price for each obligation, as amended, was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its final approvals of the amendments on February 7, 2024. On March 6, 2024, Live Ventures entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which under which the third party acquired the Live Note. The terms and conditions of the acquired Live Note were not modified in connection with its acquisition by the third party. The principal amount of the Live Note on the date of acquisition was approximately $1.0 million. During the fiscal year ended December 27, 2025, the third party converted approximately $347,000 of the Company’s obligation under the Live Note into 568,470 shares of the Company’s common stock. As of December 27, 2025 and December 28, 2024, the amount outstanding on the Live Note was $0 and $327,000, respectively (see Note 19).

 

Novalk Apps SAA, LLP

 

On May 28, 2024 and June 3, 2024, Novalk Apps SAA, LLP (“Novalk”) made short-term demand advances in the amount of $120,000 and $100,000, respectively, to the Company. The advances bears interest at a rate of 10% per annum until repaid. As of December 27, 2025 and December 28, 2024, the principal amount outstanding was $0 and $110,000, respectively (see Note 19).