WLFI treasury firm AI Financial posts $271 million quarterly net loss, flags doubt over survival within one year

AI Financial Corporation, a WLFI (WLFI) treasury firm chaired by World Liberty Financial CEO Zachary Witkoff, reported a wider net loss for the quarter ended March 28, and warned that its financial conditions "raise substantial doubt" about its ability to continue operating within one year.

According to its earnings report released Monday, the Nasdaq-listed firm generated $4.7 million in revenue during the three months ended March 28, 2026, entirely from its fintech business focused on crypto payments.

AI Financial, formerly known as Alt5 Sigma, said its biotechnology segment remained classified as discontinued operations.

The company posted a net loss of $271.5 million for the quarter, compared to a net loss of $2.4 million a year earlier. The company reports on a 52- or 53-week fiscal year, with fiscal 2026 ending on Dec. 26, 2026.

As of March 28, the company had a working capital deficit of roughly $5.5 million. Its total current liabilities stood at $39.1 million, compared to total current assets of $32.2 million.

"These conditions raise substantial doubt about the company’s ability to continue as a going concern within one year after the date these financial statements are issued," AI Financial said in the report.

The firm added that its ability to continue operating would depend on improving liquidity, growing revenue from its fintech segment, and potentially raising additional capital through debt or equity financing. 

WLFI holdings

A major contributor to the company's loss was the decline in value of its WLFI holdings. AI Financial held 7.28 billion WLFI tokens valued at $706 million on March 28, down from a fair value of $1 billion on Dec. 27, 2025, resulting in an unrealized loss of $348.3 million. The cost basis for the tokens was $1.46 billion.

AI Financial warned that the WLFI tokens are subject to significant market price risk, and "there can be no assurance that the tokens will retain their current value or that the company will be able to monetize them on favorable terms or at all."

The company also noted that its WLFI holdings are subject to "contractual lock-up provisions." Of the total, 3.53 billion tokens are non-transferable for 12 months, other than limited use for collateral, staking, or lending. The remaining 3.75 billion tokens may only become eligible for release upon shareholder approval, charter amendment, and resale registration conditions.

World Liberty Financial is considered a related party to AI Financial. AI Financial's chairman, Zachary Witkoff, also serves as co-founder and CEO of World Liberty, per the report. Zachary Folkman, a board member of AI Financial, is also a co-founder of World Liberty.

World Liberty Financial owns 1 million shares of AI Financial common stock and holds pre-funded warrants to purchase up to 99 million additional shares, along with warrants to buy up to 20 million shares at exercise prices ranging from $7.50 to $9.75 per share.

Meanwhile, AI Financial said it has borrowed from World Liberty. In January, the company drew down $15 million under a loan agreement with WLFI, receiving net proceeds of about $14.2 million, according to the report. AI Financial said it intends to use the proceeds to fund a share repurchase program, acquire additional WLFI tokens, and cover general corporate purposes.

AI Financial's Nasdaq-listed shares (AIFC) closed down 9.61% at $0.91 on Monday.