8-K: Alpha Modus Holdings CEO's Family Trusts Convert Preferred Stock to Over 26 Million Class A Common Shares

Alpha Modus Holdings, Inc. announced an exchange agreement where family trusts of CEO William Alessi converted 3.2 million Series C Preferred Stock shares into over 26 million Class A Common Stock shares, subject to a lock-up period until June 2026.

Summary

• Alpha Modus Holdings, Inc. (AMOD) entered into an exchange agreement on May 27, 2025, with four family trusts of its CEO, William Alessi.
• The trusts, which are beneficially owned by Mr. Alessi, exchanged a total of 3,200,000 shares of Series C Preferred Stock.
• In return, the Company issued an aggregate of 26,079,868 shares of Class A common stock to these trusts, with each trust receiving 6,519,967 shares.
• The common stock shares issued in the exchange are subject to a lock-up period, prohibiting sale or transfer (except to an affiliate) until June 13, 2026.
• The transaction was conducted under the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as it involved an exchange of securities with no additional consideration or solicitation remuneration.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant dilution from the issuance of over 26 million new common shares, despite the temporary stability provided by the lock-up period and the simplification of the capital structure. The related-party nature of the transaction also introduces a degree of caution.

Positives

• The conversion of Series C Preferred Stock to Class A Common Stock simplifies the company's capital structure by reducing the number of preferred share classes.
• The lock-up agreement until June 13, 2026, provides a period of stability by preventing immediate selling pressure from the newly issued common shares held by the CEO's family trusts.
• The transaction aligns the interests of the CEO's family trusts more directly with common shareholders, as they now hold a significant stake in Class A common stock.

Negatives

• The issuance of 26,079,868 new Class A common shares represents significant potential dilution for existing common shareholders.
• The transaction is a related-party dealing, involving the CEO's family trusts, which can sometimes raise corporate governance concerns regarding fairness and transparency, even if legally compliant.

Risks

• Significant potential future selling pressure on the Class A common stock once the lock-up period expires on June 13, 2026, which could negatively impact the share price.
• Perception risk associated with a large related-party transaction, potentially impacting investor confidence.

Future Outlook

The document primarily details a past event (the exchange agreement) and specifies a future restriction on the newly issued shares, indicating that the shares cannot be sold or transferred until June 13, 2026. No other forward-looking statements regarding company performance or strategic direction are provided.

Management Comments

• "Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. ALPHA MODUS HOLDINGS, INC. Date: May 30, 2025 By: /s/ William Alessi Name: William Alessi Title: President and Chief Executive Officer"

Industry Context

This transaction is a company-specific capital structure adjustment, primarily involving the conversion of preferred equity held by related parties into common equity. While not directly indicative of broader industry trends, such conversions can be part of a strategy to simplify a company's capital structure, particularly for companies that may have used complex equity instruments in earlier financing rounds.

Corporate Governance

Related Party Transactions

• Alpha Modus Holdings, Inc. entered into an exchange agreement with four family trusts (The WRA 2023 Irrevocable Trust, The Janet Alessi 2023 Irrevocable Trust, The Isabella Alessi 2023 Irrevocable Trust, and The Kim Alessi Richter Irrevocable Trust) of the Company's CEO, William Alessi. These trusts are deemed beneficially owned by Mr. Alessi as his spouse is the trustee of each.

Stakeholder Impact

• **Shareholders:** Existing Class A common shareholders face significant potential dilution due to the issuance of over 26 million new shares. While a lock-up period is in place, the future liquidity of these shares could create selling pressure.
• **CEO and Family Trusts:** The trusts convert illiquid Series C Preferred Stock into more liquid Class A common stock, increasing their direct stake in the common equity of the company, albeit with a temporary restriction on sale.

Next Steps

• The lock-up period for the newly issued Class A common stock shares will expire on June 13, 2026, after which the shares held by the CEO's family trusts will become freely tradable (subject to affiliate transfer rules).

Key Dates

Keywords

Alpha Modus Holdings, AMOD, Stock Exchange, Preferred Stock, Class A Common Stock, Series C Preferred, William Alessi, Related Party Transaction, SEC Filing, 8-K, Equity Conversion, Dilution, Lock-up Agreement