Nasdaq-Listed ALT5 Sigma Faces Critical Delisting Risk Over Auditor License Failure

Key Issues - The newly appointed audit firm’s operating license has been expired since August, creating legal barriers to financial attestation - The auditor carries a problematic compliance record, including prior peer review failures and regulatory penalties - Delayed quarterly filings and board vacancies have put ALT5 Sigma out of step with Nasdaq listing requirements

A Nasdaq-listed company is grappling with a serious corporate governance crisis that threatens its market standing. The firm recently switched to an auditor operating without an active license, compounding existing concerns about financial transparency and regulatory compliance.

Critical Compliance Gap in Auditor Credentials

ALT5 Sigma announced its auditor replacement after failing to meet filing deadlines for its quarterly financial statements. However, investigation revealed that Victor Mokuolu CPA PLLC—the Texas-based accounting firm now serving as the company’s auditor—lacks the legal authorization to perform audit work.

The firm’s operating license has remained inactive since August, according to state regulatory filings reviewed by financial media outlets. Under Texas regulations, this status bars the firm from issuing audit opinions. While Victor Mokuolu, the firm’s principal, restored his personal CPA credentials on August 31, the company registration itself has not been reactivated as of late December.

ALT5 Sigma acknowledged the constraint, stating that no audits or financial reviews can be formally issued until the licensing issue is resolved. The company indicated the auditor is undergoing a mandatory peer review process with an expected completion date in late January.

Track Record of Regulatory Enforcement

The audit firm’s licensing problem reflects deeper compliance concerns. Beyond the expired credential, the firm has accumulated a history of regulatory violations:

• In 2023, the Public Company Accounting Oversight Board imposed sanctions for failing to report six public company audits within required notification periods
• During 2024, the Texas State Board of Accountancy levied additional penalties tied to comparable filing failures
• Previous peer review inspections have resulted in failing assessments

These violations demonstrate a pattern of missing regulatory deadlines and procedural lapses that undermine auditor credibility.

ALT5 Sigma’s Deteriorating Financial Position

The company’s challenges extend beyond audit mechanics. ALT5 Sigma has faced mounting pressure since pivoting toward acquiring and holding certain blockchain tokens as a balance sheet strategy—a shift that introduced significant valuation and reporting complexity.

The firm remains behind on its quarterly financial disclosures for the September reporting period, putting it in technical violation of Nasdaq requirements and raising delisting risk. Investor confidence has evaporated alongside equity values: shares have declined more than 77% since the year began.

Governance gaps have worsened the situation. A board member’s recent resignation has left ALT5 Sigma without sufficient staffing on its audit committee—specifically lacking the accounting expertise that Nasdaq rules mandate for listed companies.

Market Reaction and Path Forward

The convergence of licensing failures, delayed filings, and structural board deficiencies has created a perfect storm for ALT5 Sigma’s Nasdaq status. Until the audit firm resolves its licensing status and completes peer review validation, the company cannot file audited financial statements—a prerequisite for maintaining compliance and preventing delisting.

The January deadline for peer review completion marks a critical juncture. Failure to restore auditor credibility by that point could accelerate Nasdaq enforcement actions, potentially forcing the company to face suspension or removal from the exchange.