ALT5 Sigma Corporation, a Nasdaq-listed blockchain-based fintech firm, is raising $1.5 billion to launch a World Liberty Financial (WLFI) token treasury strategy that will see it hold about 7.5% of the token’s total supply.
The funding, via a registered direct offering and concurrent private placement, is expected to close on or about Aug. 12, subject to customary conditions. ALT5 will issue up to 200 million shares (or equivalents) at $7.50 each, split evenly between the two offerings.
The private placement will be funded with WLFI tokens contributed by World Liberty Financial, the Donald Trump family-backed crypto venture, which is also the lead investor. ALT5 said other participants include some of the “world’s largest institutional investors and prominent crypto venture capital firms,” but did not name them.
The news follows a report last week that World Liberty Financial is seeking to raise around $1.5 billion from investors to set up a publicly traded treasury company holding WLFI tokens, though that report did not identify ALT5 Sigma as the vehicle.
Digital asset treasury companies have surged in recent months, and ALT5 is the first DAT to build one using the WLFI token. Shares of ALT5 fell over 8% in pre-market trading after the announcement and extended losses after the market opened, down 8.3% at $8.22, giving the company a market cap of about $165 million.
As part of the deal, WLFI co-founder and CEO Zach Witkoff will become chairman of ALT5’s board, with Eric Trump joining as a director. WLFI co-founder and COO Zak Folkman will join as a board observer, and Matt Morgan will become chief investment officer.
ALT5 said proceeds will fund the acquisition of WLFI tokens, establish its crypto treasury operations, repay debt, “settle existing litigation”, and support ongoing business and working capital needs. A.G.P./Alliance Global Partners is the sole placement agent, with legal counsel from Sullivan & Worcester LLP, HSF Kramer LLP, Clark Hill PLC, and Lucosky Brookman LLP.
Founded in 2018, ALT5 describes itself as a fintech providing blockchain-powered technology for tokenization, trading, clearing, settlement, payments, and safekeeping. Its subsidiary, ALT5 Sigma, Inc., operates ALT5 Pay (a crypto payment gateway for approved merchants with optional fiat conversion) and ALT5 Prime (an over-the-counter trading platform). The company says it has processed over $5 billion in crypto transactions since its inception.
WLFI tokens, offered alongside World Liberty Financial’s USD1 stablecoin, are not yet tradable, but will be unlocked for early backers following a near-unanimous vote by token holders last month. The release schedule for the remaining tokens from the project’s 100 billion total supply will be determined in a second community vote.
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