S-1: Alpha Modus Files S-1 for Resale, Faces Going Concern Doubt

Alpha Modus Holdings, Inc. files an S-1 registration statement for the resale of up to 11.29 million common shares and 8.83 million warrants, while facing significant financial challenges including recurring losses and a going concern qualification.

Summary

• Alpha Modus Holdings, Inc. has filed an S-1 registration statement for the resale of up to 11,292,615 shares of common stock and 8,833,635 warrants to purchase common stock by various Selling Securityholders.
• The company will not receive any proceeds from these sales, except for amounts received upon the exercise of warrants, which is deemed unlikely in the near future as exercise prices ($1.00, $1.10, $11.50) significantly exceed the current common stock trading price of $0.75 and warrant price of $0.08 as of December 3, 2025.
• Alpha Modus completed a business combination with Insight Acquisition Corp. on December 13, 2024, and now operates as Alpha Modus Holdings, Inc., focusing on AI-powered retail intelligence technologies and financial services for the underbanked.
• The company reported a net loss of $4,259,599 for the three months ended September 30, 2025, a substantial increase from a net loss of $315,746 for the same period in 2024.
• For the nine months ended September 30, 2025, the net loss was $7,354,742, compared to $725,479 for the nine months ended September 30, 2024.
• Operating expenses increased significantly, reaching $1,217,858 for Q3 2025 (vs. $286,131 in Q3 2024) and $3,725,869 for 9M 2025 (vs. $597,595 in 9M 2024).
• As of September 30, 2025, the company's cash balance was $75,705, down from $735,814 at December 31, 2024, and it had a working capital deficit of $10,406,476.
• The independent registered public accounting firm has issued a 'going concern' qualification, expressing substantial doubt about the company's ability to continue operations due to recurring losses, lack of current revenues, and net capital deficiency.
• The company requires a minimum of $2,500,000 in additional funding to sustain its growth plan.
• William Alessi, the CEO, beneficially owns over 74.3% of the common stock and 90% of the preferred stock, classifying Alpha Modus as a 'controlled company' under Nasdaq rules.
• The company is actively involved in multiple patent infringement lawsuits, with several settled and others in initial pleading or discovery stages.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by substantial and increasing net losses, negative cash flow, and critically low liquidity. The 'going concern' qualification from its auditors highlights significant doubts about its ability to continue operations without substantial, unassured additional funding. The potential for massive dilution from preferred stock conversion and warrant exercises, coupled with a low stock price, indicates a highly precarious financial position. Material weaknesses in internal controls further compound these concerns.

Positives

• Possesses a robust patent portfolio in AI-driven retail intelligence, covering computer vision, behavioral analytics, contextual advertising, pricing, promotions, and closed-loop measurement.
• Formed strategic alliances, including with GZ6G Technologies Corp. for AI-driven advertising solutions in stadiums and event management, and with VSBLTY for data and AI in retail to enhance customer experience.
• Entered into a confidential patent license and authorized reseller agreement in November 2025 with a U.S.-based technology integrator, which includes a 10% royalty on gross revenues from licensed products.
• Developing a financial services division, Alpha Modus Financial Services, LLC, targeting national deployment of kiosks and a mobile application to serve underbanked populations with services like check cashing, money transfer, and bill payments.
• Reported patent infringement income of $95,000 for the three months ended September 30, 2025, and $108,096 for the nine months ended September 30, 2025.
• Achieved a net income of $4,103,067 for the year ended December 31, 2024, primarily driven by a gain in the fair value of earnout shares liability.

Negatives

• Reported significant net losses of $4,259,599 for Q3 2025 and $7,354,742 for 9M 2025, indicating a worsening financial performance compared to prior periods.
• Experienced negative cash flow from operating activities of $2,055,673 for the nine months ended September 30, 2025.
• The independent registered public accounting firm issued a 'going concern' qualification, highlighting substantial doubt about the company's ability to continue operations due to recurring losses, lack of current revenues, and a net capital deficiency.
• Maintains a critically low cash balance of $75,705 as of September 30, 2025, insufficient to effectuate its business plans.
• Unlikely to receive proceeds from warrant exercises in the near future as exercise prices ($1.00, $1.10, $11.50) are significantly higher than the current common stock trading price of $0.75.
• Operating expenses increased dramatically from $597,595 in 9M 2024 to $3,725,869 in 9M 2025, indicating a high burn rate without corresponding revenue generation.
• Incurred substantial interest expense of $2,817,337 for Q3 2025 and $3,523,515 for 9M 2025.
• Recognized a loss on settlement of debt of $598,324 for the nine months ended September 30, 2025.
• Identified material weaknesses in internal control over financial reporting as of December 31, 2024, and December 31, 2023, raising concerns about financial reporting accuracy and fraud prevention.
• The resale of up to 20,126,250 shares (approximately 34.4% of outstanding common stock) by Selling Securityholders, many of whom acquired shares at very low prices or for services, could lead to significant dilution and negative impact on the stock price.
• The Series C Preferred Stock has a liquidation preference of $10.00 per share (aggregate $75,000,000) and conversion terms that could result in substantial dilution if the common stock price is low or a 'Trigger Event' occurs.
• As a 'controlled company,' Alpha Modus can rely on exemptions from certain Nasdaq corporate governance requirements, potentially reducing protections for minority shareholders.

Risks

• The number of shares of common stock that the Selling Securityholders can sell into the public markets pursuant to this prospectus may exceed our public float. As a result, the resale of shares of our common stock pursuant to this prospectus could have a significant negative impact on the trading price of our common stock.
• Alpha Modus had net losses and negative cash flows from operating activities in the past, and it may not achieve or sustain profitability.
• If Alpha Modus is unable to continue as a going concern, its securities will have little or no value.
• The artificial intelligence (AI) technology market in which Alpha Modus participates is competitive.
• If Alpha Modus fails to adapt to changes in the AI industry, its business may be harmed.
• Alpha Modus may fail to protect its intellectual property rights and proprietary information.
• Alpha Modus will likely become subject to intellectual property disputes.
• Alpha Modus patent portfolio is subject to evolving legislation, regulations, and rules associated with patent law in the United States and other jurisdictions, which may adversely affect its business.
• Patent litigation is inherently risky, and the USPTO, or other relevant patent offices, may either invalidate Alpha Modus patents or materially narrow the scope of their claims.
• Alpha Modus may experience delays in successful enforcement and licensing of its patent portfolio.
• Because Alpha Modus patents are expected to expire in 2034-2037, its continued operations beyond those dates will depend on its ability to obtain additional patents with later expiration dates.
• Alpha Modus lack of patent enforcement and licensing experience could adversely affect its operations.
• Alpha Modus will incur increased costs as a result of operating as a public company.
• Alpha Modus management team has limited experience managing a Nasdaq-listed public company.
• Alpha Modus is a controlled company under Nasdaqs listing rules and can rely on exemptions from certain corporate governance requirements.
• Alpha Modus may issue additional shares of common or preferred stock, which would dilute the interests of stockholders and likely present other risks.
• We may amend the terms of our Public Warrants in a manner that may be adverse to holders of Public Warrants without the approval of all holders.
• Alpha Modus may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to holders, thereby making Public Warrants worthless.
• Alpha Modus may be subject to the excise tax included in the Inflation Reduction Act of 2022 in connection with redemptions of our common stock after December 31, 2022.
• We do not expect that we will pay dividends in the foreseeable future.
• If Alpha Modus fails to develop or maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results or prevent financial fraud.
• Alpha Modus outstanding Series C Preferred Stock, and the future issuances of other debt securities and equity securities, may adversely affect the Company, including the market price of the Companys common stock, and be dilutive to existing stockholders.
• There can be no assurance that Alpha Modus will continue to be listed on the Nasdaq in the future.
• The market price of Alpha Moduss common stock may decline.
• Alpha Moduss failure to meet the continued listing requirements of Nasdaq could result in a delisting of its securities.
• Alpha Modus is as an emerging growth company as well as a smaller reporting company within the meaning of the Securities Act, and if the Company takes advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make the Companys securities less attractive to investors and may make it more difficult to compare the Companys performance with other public companies.
• The future exercise of registration rights may adversely affect the market price of our common stock.

Future Outlook

Alpha Modus intends to continue its intellectual property licensing and enforcement efforts in 2026, with plans to expand event venue service offerings in late 2025 and into additional industries. The company is targeting a national deployment of kiosks and a mobile application to support underbanked populations. Management believes its 571 patent family could become an acquisition target for larger competitors and anticipates generating licensing revenue in 2025 and 2026 with a steady growth rate. The company expects to remain an emerging growth company at least through the end of the 2026 fiscal year.

Management Comments

• "Alpha Modus intends to continue its intellectual property licensing and enforcement efforts in 2026."
• "Alpha Modus believes the 571 patent family covers a wide range of use cases in its domain and will serve as a cornerstone for gaining market share."
• "Alpha Modus believes that there are numerous companies practicing the 571 patents, and that in order to practice the technology claimed by the 571 patent, these companies will have no alternative but to become licensees of the 571 patent family."
• "Alpha Modus anticipates that it will be able to operate with a small operations team of no more than 6-10 professionals, which will allow Alpha Modus to not burn significant cash resources and instead focus on results-driven R&D efforts."

Industry Context

The company operates within the rapidly evolving AI technology market, specifically targeting retail media advertising and financial services for the underbanked. The U.S. retail media advertising spend is projected to grow from approximately $62.35 billion in 2025 to over $97 billion in 2028. Digitally influenced U.S. retail sales are expected to reach $3.8 trillion in 2027, with 75% of in-store sales tied to digital engagement. AI-powered signage, kiosks, and in-store targeting are deployed by 53% of retailers, and financial service kiosks for the underbanked are growing at a 16% CAGR (2025-2030). AI personalization is expected to influence $1.3 trillion in retail spend by 2025, indicating a significant market opportunity for Alpha Modus's patented solutions.

Comparison to Industry Standards

• The filing highlights industry growth rates and adoption percentages for AI in retail, such as the projected $97 billion U.S. retail media advertising spend by 2028 and 53% of retailers deploying AI-powered signage. However, it does not provide specific comparable companies, projects, or results to directly assess Alpha Modus's performance against global benchmarks or direct competitors in terms of market share, revenue generation, or profitability within these trends.

Management Changes

Corporate Governance

Legal Proceedings

• January 16, 2024: Patent infringement lawsuit against The Kroger Company (settled).
• November 12, 2024: Patent infringement lawsuit against Brookshire Grocery Co. (in claim construction and discovery stages).
• December 17, 2024: Patent infringement lawsuit against Wakefern Food Corporation and Shelf Nine LLC (settled).
• February 3, 2025: Patent infringement lawsuit against Walgreen Co. (settled).
• April 15, 2025: Patent infringement lawsuit against Optisigns, Inc. (settled).
• August 21, 2025: Patent infringement lawsuit against Cooler Screens, Inc. (initial pleading stage).
• August 25, 2025: Patent infringement lawsuit against A2Z Cust2Mate Solutions Corp. (initial pleading stage).
• August 29, 2025: Patent infringement lawsuit against The Kroger Company (initial pleading stage).
• September 4, 2025: Patent infringement lawsuit against Creative Realities, Inc. (initial pleading stage).
• September 10, 2025: Patent infringement lawsuit against MNTN, Inc. (initial pleading stage).
• September 12, 2025: Patent infringement lawsuit against Allerin Tech Pvt. Ltd. (initial pleading stage).
• September 18, 2025: Patent infringement lawsuit against Mood Media LLC (initial pleading stage).
• September 24, 2025: Patent infringement lawsuit against RetailNext Inc. (initial pleading stage).
• October 2, 2025: Patent infringement lawsuit against Navori SA and meldCX Pty Ltd. (initial pleading stage).
• October 3, 2025: Patent infringement lawsuit against Sensormatic Electronics, LLC and Johnson Controls International, PLC (initial pleading stage).
• October 8, 2025: Patent infringement lawsuit against Lowes Companies, Inc. and Lowes Home Centers, LLC (initial pleading stage).
• October 22, 2025: Patent infringement lawsuit against 7-Eleven, Inc. (initial pleading stage).
• November 3, 2025: Patent infringement lawsuit against Adroit Worldwide Media, Inc. (initial pleading stage).
• November 12, 2025: Patent infringement lawsuit against Atliq Technologies Pvt. Ltd. (initial pleading stage).
• November 14, 2025: Patent infringement lawsuit against Industria De Diseo Textil, S.A., and Zara USA, Inc. (initial pleading stage).
• November 21, 2025: Patent infringement lawsuit against V-Count Global Holding Ltd. (initial pleading stage).
• November 21, 2025: Patent infringement lawsuit against Stratacache, Inc. (initial pleading stage).
• December 1, 2025: Patent infringement lawsuit against H&M Fashion USA, Inc. (initial pleading stage).

Related Party Transactions

• William Alessi (CEO, Director) had an informal, unsecured loan to the company of $89,929 in 2021, which was fully repaid by April 17, 2024.
• Janbella Group, LLC (controlled by William Alessi) has multiple secured promissory notes with the company, including a $453,750 note (amended from $412,500) and several 0% Senior Secured Promissory Notes totaling $921,941 as of December 31, 2024. These notes were renegotiated on August 18, 2025, due to default, resulting in an adjusted balance of $2,747,038, an 8.00% interest rate, and a fixed conversion price of $1.10, with maturity extended to February 1, 2026.
• On March 29, 2024, 1,400,000 shares of common stock were issued to Janbella Group, LLC as part of a note extension, valued at $35,000.
• Jeffrey J. Gary (a related party) was issued an unsecured promissory note for $35,000 on July 25, 2024, for prior transfers.
• The Alessi 2023 Irrevocable Trust (a family trust of William Alessi) issued promissory notes to the company for $2,142,857 on July 15, 2025, and $714,286 on September 16, 2025, both with 8.00% interest and convertible at $5.00 per share.
• On May 27, 2025, William Alessi's four family trusts exchanged an aggregate of 3,200,000 shares of Series C Preferred Stock for 26,079,868 shares of Class A common stock, effective June 29, 2025.
• On April 28, 2025, the company entered into a Patent Monetization Agreement and an Option Agreement with Alpha Modus Ventures, LLC (AMV), an entity controlled by William Alessi. The company agreed to provide litigation funding to AMV and received an option to acquire AMV, though it has not made payments or assisted with funding under the agreement and does not expect to exercise the option.

Stakeholder Impact

• Shareholders face significant dilution risk from the large number of shares being registered for resale by Selling Securityholders, potential future equity raises, and the highly dilutive conversion terms of the Series C Preferred Stock. The low stock price and 'going concern' warning pose substantial risk to investment value.
• Employees may face job insecurity due to the company's recurring losses and uncertain ability to continue as a going concern. Management compensation includes stock awards, linking their incentives to stock performance, which is currently low.
• Customers and partners, particularly those involved in strategic alliances and national deployments (e.g., financial services kiosks), face uncertainty regarding the company's ability to deliver on its commitments due to its financial challenges and need for additional funding. The termination of the CashX agreement highlights potential instability in partnerships.
• Creditors, including holders of convertible notes and other debt, face elevated credit risk given the company's substantial debt, recurring losses, and 'going concern' qualification. Security interests granted to Streeterville Capital, LLC (including intellectual property) and subordination agreements with related parties affect creditor priority.
• Regulatory authorities, including the SEC and Nasdaq, are monitoring the company's compliance with reporting requirements and internal controls, especially given the identified material weaknesses, which could lead to further scrutiny or penalties.

Next Steps

• Continue intellectual property licensing and enforcement efforts in 2026.
• Expand event venue service offerings in late 2025.
• Target national deployment of kiosks and a mobile application for underbanked populations.
• Seek shareholder approval for issuances to Streeterville Capital, LLC under the note and equity line of credit in excess of the Exchange Cap.
• Develop and implement internal control and reporting procedures to address public company regulatory requirements.
• Remediate identified material weaknesses in internal control over financial reporting.
• Obtain additional patents with later expiration dates to ensure continued operations beyond 2034-2037.

Key Dates

Recommendation

The company is in a dire financial state, characterized by substantial and escalating net losses, persistent negative cash flow, and a critically low cash balance. The 'going concern' qualification from its independent auditors underscores severe doubts about its operational viability without significant, unassured external funding. The current stock price is significantly below warrant exercise prices, making warrant-based capital infusion improbable. The registration of a large volume of shares for resale by existing securityholders, many of whom acquired shares at minimal cost or for services, presents a substantial risk of further dilution and downward pressure on the stock price. The complex and potentially highly dilutive terms of the Series C Preferred Stock further exacerbate this risk. Additionally, identified material weaknesses in internal controls raise concerns about financial reporting reliability. Given these profound financial and operational challenges, the stock represents an extremely high-risk investment with significant downside potential, warranting a strong sell recommendation.

Keywords

AI, Retail Technology, Patent Licensing, Financial Services, Underbanked, SPAC, Nasdaq, Computer Vision, Behavioral Analytics, Digital Advertising, Fintech, Intellectual Property