AI Financial Corp., a World Liberty Financial token treasury company, said its working capital deficit and liabilities are casting significant doubt on its ability to continue over the next year.
The company, which has World Liberty CEO Zach Witkoff as its chairman, reported a net loss of $271.5 million in its first-quarter results on Monday, compared to losses of $2.4 million a year ago.
The firm, formerly known as ALT5 Sigma, said that as of March 28, it had a working capital deficit of around $5.5 million, with $39.1 million in liabilities against $32.2 million in assets.
“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.
AI Financial was one of the many companies swept up in the craze of crypto-buying public firms, becoming a buyer of World Liberty Financial (WLFI), the token of the Trump family-backed crypto platform of the same name.
To meet its obligations, AI Financial said it held 7.3 billion WLFI tokens at a value of $703.4 million as of March 28, which it could use to firm up its liquidity.
However, the value of AI Financial’s WLFI holdings has fallen by a third since late December, when the fair value of the tokens was at over $1 billion, leading to an unrealized loss of $348.3 million. The company paid nearly $1.46 billion to acquire its WLFI holdings.
AI Financial added that it also borrowed nearly $15 million from World Liberty in January, drawing down the cash under a loan agreement with the Trump-linked firm, which it said it could use in a share repurchase program and to buy more WLFI tokens.
Shares in AI Financial (AIFC) ended trading down nearly 6.3% on Tuesday at 85 cents, extending its 10% drawdown over trading on Monday.
Source: Google Finance
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The company’s stock has fallen by nearly 87.5% over the past 12 months. It first looked to become a WLFI treasury company in early August after closing a $1.5 billion direct offering and private placement led by World Liberty Financial.
At the time of the deal closing, Witkoff became AI Financial’s chairman, while World Liberty co-founder Zak Folkman became a board observer.
US President Donald Trump’s son, Eric Trump, joined the company’s board, but was quietly removed from the leadership section of its website late last month.
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