On August 3, 2026, AI Financial Corporation, a Nevada corporation ("we" or "us"), sold its indirect, wholly-owned subsidiary, ALT 5 Sigma Canada, Inc., a Quebec corporation, to Prime Delta Corp., a Delaware corporation ("Prime"). The sale price consisted of two components: a Secured $12 million Promissory Note (the "Note") and 11,551,750 restricted shares of Prime’s common stock (the "Stock").
The initial principal balance of the Note is $12 million. One million dollars in principal of the Note is due and payable to us on August 11, 2026. The remaining $11 million of principal is due and payable to us in an amount equivalent to 20% of Prime’s post-closing equity financings, and, in any event, otherwise in four equal annual installments of $2.75 million, commencing on August 3, 2027. In the context of the 20% financing-equivalent payments, or otherwise, Prime may prepay outstanding principal of the Note in whole or in part at any time or from time to time without penalty, provided that it concurrently pays all accrued but unpaid interest on the amount of principal being prepaid. The Note bears interest at the annual rate of four percent and is payable monthly on the unpaid principal, commencing on August 10, 2026. The Note is secured by all of Prime’s assets. We also received three third-party personal or entity guarantees of Prime’s obligations to us under the Note.