ALT5 Sigma's Audit Crisis: How an Expired License Deepens Nasdaq Delisting Fears

The Auditor License Problem Nobody Saw Coming

ALT5 Sigma, a Nasdaq-listed company, recently made headlines for all the wrong reasons—its newly appointed auditor operates without a valid firm license. According to regulatory filings, the Texas-based accounting firm Victor Mokuolu CPA PLLC has been functioning with an expired license since August, and as of late December, no reinstatement had occurred. This isn’t a minor administrative hiccup; under Texas regulations, an inactive firm license explicitly prohibits the issuance of audit opinions.

The timing couldn’t be worse. While the firm’s founder successfully renewed his personal CPA credentials on August 31, the company’s registration remained dormant. ALT5 Sigma acknowledged the situation, confirming that no audits or financial reviews will proceed until the license is restored. Management disclosed that a peer review process is underway, with expected completion by end of January.

A Track Record of Regulatory Lapses

This crisis didn’t emerge in a vacuum. The audit firm carries a troubling history of compliance failures that should raise eyebrows among investors. In 2023, the Public Company Accounting Oversight Board (PCAOB) penalized the firm for missing regulatory notification deadlines on six public company audits. Compounding these issues, the Texas State Board of Accountancy imposed additional fines in 2024 for similar violations—repeated failures to meet regulatory timelines.

This pattern suggests systemic dysfunction within the firm, not isolated oversights. For ALT5 Sigma shareholders, it means their company’s financial statements rest on the shoulders of an auditor with demonstrated compliance weakness.

Financial Reporting in Crisis Mode

ALT5 Sigma’s governance troubles extend far beyond the audit firm selection. The company has yet to file its quarterly results for the period ending September, a delay that places it squarely in delisting territory on Nasdaq. The firm previously pivoted from appliance recycling to biotech and then fintech, and its recent strategy shift toward acquiring and holding crypto-related tokens on its balance sheet has created additional transparency concerns.

Stock performance tells the story: shares have plummeted over 77% since January 2025, reflecting market skepticism about the company’s direction and credibility. Equally troubling, board member David Danziger resigned recently, leaving ALT5 Sigma non-compliant with Nasdaq audit committee requirements regarding staffing levels and accounting expertise.

What This Means for Market Confidence

The convergence of three factors—a non-licensed auditor, delayed SEC filings, and board governance gaps—creates a perfect storm for delisting risk. Nasdaq doesn’t tolerate these issues lightly, and the regulatory pressure will intensify as deadlines approach. For traders watching from the sidelines, whether this is a recovery opportunity or a warning sign remains hotly debated; some see “sigma” contrarian plays in overlooked stocks, while others view ALT5 Sigma as a cautionary tale of governance failure catching up with market enthusiasm.