DEF 14C: Alpha Modus Approves Major Stock Issuances

Alpha Modus Holdings, Inc. announces majority stockholder approval for significant common stock issuances to service providers and convertible noteholders, impacting potential dilution and NASDAQ compliance.

Summary

• Majority stockholders, holding approximately 74.1% of the outstanding voting stock, approved the issuance of common stock for various agreements and financing instruments.
• Maxim Group, LLC will receive 400,000 shares of Common Stock as a non-refundable advisory fee for a prior business combination completed in December 2024.
• Rucus Holdings LLC and Leron Group LLC will receive 250,000 and 4,000,000 shares of Common Stock, respectively, for marketing and sales services related to the rollout of financial services kiosks with a major US retailer.
• Black Marble LP will receive 1,628,664 restricted shares of Common Stock for sales and application development services, vesting in four equal installments on January 1, April 1, July 1, and October 1, 2026, contingent on the company generating at least $1,000,000 in EBITDA or $5,000,000 in gross revenues attributable to Black Marble's efforts.
• The company settled over $1,100,000 in outstanding payables with its counsel, Loeb & Loeb LLP, by paying $425,000 in cash and issuing a $325,000 interest-free promissory note, convertible into Common Stock at 90% of the 5-day VWAP at conversion.
• A securities purchase agreement with the Haase-Dubosc Trust resulted in the issuance of a $400,000 convertible promissory note (7% interest, matures October 15, 2026, convertible at 80% of 5-day VWAP) and warrants to purchase 363,636 shares of Common Stock at an exercise price of $1.10/share.
• A securities purchase agreement with AIFirst Ventures LLC resulted in the issuance of a $250,000 convertible promissory note (no interest, matures October 30, 2026, convertible at 80% of 5-day VWAP, or $0.617/share based on December 3, 2025 VWAP) and warrants to purchase 1,000,000 shares of Common Stock at an exercise price of $1.00/share.
• These issuances were approved to ensure compliance with NASDAQ Listing Rules 5635(c) and (d), which require stockholder approval for equity compensation arrangements and significant issuances at prices below market.

Sentiment

Score: 5

Explanation: The filing details necessary corporate actions for compensation and financing, which are neutral in nature. While it addresses NASDAQ compliance and secures services/capital, the significant potential for dilution from various issuances and low conversion prices introduces a negative aspect, balancing the overall sentiment.

Positives

• Secured essential marketing, sales, and application development services from Rucus, Leron, and Black Marble, which are critical for the rollout of financial services kiosks with a major US retailer.
• Successfully settled over $1,100,000 in legal payables with Loeb & Loeb LLP, managing cash outflow by utilizing a convertible promissory note for a portion of the settlement.
• Raised $650,000 in capital through the issuance of convertible notes and warrants to the Haase-Dubosc Trust ($400,000) and AIFirst Ventures LLC ($250,000), providing funding for operations.
• The vesting of Black Marble's 1,628,664 shares is performance-based, contingent on achieving specific financial targets ($1,000,000 EBITDA or $5,000,000 gross revenues) attributable to their efforts, aligning incentives with company performance.

Negatives

• The various issuances of common stock, convertible notes, and warrants will lead to significant potential dilution for existing shareholders.
• Convertible notes issued to Loeb & Loeb LLP (90% of 5-day VWAP), Haase-Dubosc Trust (80% of 5-day VWAP), and AIFirst Ventures LLC (80% of 5-day VWAP) have conversion prices tied to market rates, which could result in substantial dilution if the stock price is low.
• The AIFirst Note's fixed conversion price of $0.617 per share is notably lower than the $1.00 per share exercise price of the associated warrants, indicating a potentially low valuation for the convertible debt component.
• The total number of shares to be issued (Advisory Shares, Note Shares, and Warrant Shares) represents a substantial increase relative to the 41,959,958 shares of Common Stock outstanding as of December 17, 2025.

Risks

• Dilution Risk: The issuance of a large number of common shares to service providers, and upon conversion of convertible notes and exercise of warrants, will dilute the ownership percentage of existing stockholders.
• NASDAQ Listing Compliance Risk: While majority stockholder approval was obtained, ongoing compliance with NASDAQ listing standards is a continuous requirement, and any future non-compliance could jeopardize the company's listing.
• Performance-Based Vesting Risk: The vesting of Black Marble's shares is contingent on achieving specific financial targets ($1,000,000 EBITDA or $5,000,000 gross revenues). Failure to meet these targets could impact the effectiveness of the consulting arrangement or the company's financial performance.
• Variable Conversion Price Risk: Convertible notes with variable conversion prices (e.g., 90% or 80% of VWAP) can lead to greater dilution if the stock price declines, as more shares would be issued upon conversion.

Future Outlook

The company anticipates the rollout of its financial services kiosks with a major US retailer, supported by new marketing, sales, and application development services. The vesting of certain shares is contingent on achieving specific financial performance targets related to these efforts.

Management Comments

• We are not asking you for a proxy and you are requested not to send us a proxy.
• The actions taken by written consent of the Majority Stockholders will not become effective until the date that is twenty (20) calendar days after this Information Statement is first mailed or otherwise delivered to holders of our Common Stock as of the Record Date.

Industry Context

The company is actively expanding its financial services offerings, specifically through the rollout of kiosks with a major US retailer. This strategy aligns with broader trends in financial technology and retail integration, aiming to increase accessibility and market penetration for financial services. The engagement of specialized consulting firms for marketing, sales, and application development suggests a focused effort to capitalize on these market opportunities.

Comparison to Industry Standards

• The use of equity compensation for advisory and consulting services is a common practice, particularly for growth-stage companies or those with limited cash flow, similar to many tech startups.
• Convertible notes and warrants are standard financing instruments for companies seeking capital without immediate equity dilution or at a potentially higher future valuation. The conversion prices at a discount to VWAP (90% or 80%) are typical for such instruments, offering an incentive to investors.
• Performance-based vesting for consultants, as seen with Black Marble, is a best practice to align incentives and ensure value delivery, comparable to performance share units in larger corporations.
• The settlement of legal payables through a combination of cash and a convertible note is a common strategy to manage liquidity while addressing liabilities, often seen in companies managing cash flow.

Corporate Governance

Related Party Transactions

• William Alessi, CEO and Director, is deemed the beneficial owner of shares held by various trusts and Janbella Group, LLC, which collectively constitute the Majority Stockholders who approved the actions. This indicates that the approval came from entities controlled by or related to the CEO.

Stakeholder Impact

• Shareholders: Potential significant dilution due to the issuance of new common shares for services, convertible note conversions, and warrant exercises.
• Service Providers (Maxim, Rucus, Leron, Black Marble): Will receive common stock as compensation, aligning their interests with the company's performance.
• Creditors (Loeb & Loeb LLP, Haase-Dubosc Trust, AIFirst Ventures LLC): Will receive cash, convertible notes, and/or warrants, settling debts and providing financing.
• NASDAQ: Compliance with listing rules maintained through majority stockholder approval.

Next Steps

• The actions approved by written consent of the Majority Stockholders will become effective 20 calendar days after the mailing/delivery of this Information Statement (on or about December 30, 2025).
• Black Marble LP shares will vest in four equal installments on January 1, 2026, April 1, 2026, July 1, 2026, and October 1, 2026, contingent on performance metrics.
• The Haase-Dubosc Note matures on October 15, 2026.
• The AIFirst Note matures on October 30, 2026.
• Loeb Note principal is generally required to be repaid $25,000 per month.

Key Dates

Recommendation

The filing details necessary corporate actions to compensate service providers and secure financing, which are generally positive for operational continuity and growth initiatives like the financial services kiosks rollout. However, the significant potential for dilution from the various stock issuances, convertible notes, and warrants, particularly those with variable conversion prices at a discount to market, introduces considerable downside risk for existing shareholders. While the company is addressing its capital needs and compliance, the dilutive nature of these transactions warrants a cautious 'hold' recommendation until the full impact on share structure and future financial performance can be assessed.

Keywords

Alpha Modus Holdings, stock issuance, convertible notes, warrants, dilution, NASDAQ compliance, financial services kiosks, equity compensation, corporate governance, SEC filing, DEF 14C, capital raise