ALT5 Sigma Corp 8-K

What Happened ALT5 Sigma Corporation (ALTS) announced on April 20, 2026 that it entered a Stock Exchange Agreement (SEA) with the four owners of Block Street Corp. As part of that transaction the company issued 12,670,257 shares of common stock (valued at $12.0M at Nasdaq minimum price), granted two sets of five‑year pre‑funded warrants covering up to 15,837,821 shares (Set One) and 16,893,675 shares (Set Two), and entered into employment agreements with two Block Street principals (Derek Peterson and Matthew Morgan). Vesting of the warrants is tied to Block Street achieving specific financial targets certified by ALT5’s CFO. Separately, ALT5 executed a binding letter of intent to acquire Decentralized Technologies Inc. (“Dectec”), under which ALT5 will issue 4,000,000 shares at closing plus up to 4,000,000 additional shares over 36 months based on Dectec gross profit milestones. The issuances were treated as private placements under Section 4(a)(2) of the Securities Act.

Key Details

• Issued stock: 12,670,257 shares to Block Street owners (valued at $12M at Nasdaq minimum price).
• Warrants: Two five‑year pre‑funded warrant series: Set One for up to 15,837,821 shares (initial aggregate exercise price $15M at Nasdaq minimum price; remaining exercise price $0.001/share) and Set Two for up to 16,893,675 shares (initial aggregate exercise price $16M; remaining exercise price $0.001/share). Both allow cashless exercise.
• Vesting triggers: Set One vests when Block Street posts ≥ $20,000,000 in trailing four‑quarter GAAP net revenue (consistent with ALT5 accounting); Set Two vests when Block Street posts ≥ $8,000,000 trailing four‑quarter “Modified Operating Income” (defined in the filing). Both vestings require CFO certification.
• Lock-up / leak-out: All issued and warrant shares subject to a 24‑month lock‑up with 25% release every six months (issued stock releases begin April 20, 2026). Daily “leak‑out” sales limited to 10% of the 20‑day average trading volume (non‑cumulative) and sales must be at or above the best bid.
• Dectec LOI: 4,000,000 shares at closing plus up to 4,000,000 contingent shares (1M shares per $5M of Dectec “Gross Profit”) over 36 months; “Gross Profit” and related cost definitions are set in the LOI.

Why It Matters These agreements create immediate and potential future dilution: the Block Street transaction involved ~12.7M shares issued now plus the potential issuance of ~32.7M shares via warrants (15.8M + 16.9M) if vesting conditions are met, and the Dectec deal could add up to 8M shares (4M now, up to 4M earned). The Block Street warrants are performance‑based (revenue and operating income hurdles) and the lock‑up/leak‑out provisions restrict large immediate sales by legacy holders. ALT5 has no obligation to register these shares, and all of these securities were placed in private offerings under Section 4(a)(2). Investors should note the timing and the performance contingencies (vests only after certified financial targets) and consider the potential impact on share count and liquidity when assessing ALTS common stock.