S-1: Alpha Modus Holdings Files for Resale of 4.25 Million Shares Amid Financial Uncertainty

Alpha Modus Holdings registers for the resale of up to 4.25 million shares of common stock by a selling securityholder, amidst concerns about the company's ability to continue as a going concern.

Summary

• Alpha Modus Holdings has filed a registration statement for the resale of up to 4,250,000 shares of its Class A common stock.
• The shares are to be offered by Streeterville Capital, LLC, a Utah limited liability company, consisting of shares issuable upon conversion of a Secured Convertible Promissory Note and pre-delivery shares.
• Alpha Modus will not receive any proceeds from the sale of these shares.
• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern due to recurring losses and a net capital deficiency.
• Alpha Modus is an emerging growth company and a smaller reporting company, which allows it to take advantage of certain reduced disclosure requirements.
• The company faces risks related to its intellectual property, competition in the AI market, and its ability to achieve profitability.
• The resale of these shares could significantly negatively impact the trading price of Alpha Modus' common stock.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive aspects such as license agreements and patent enforcement efforts, the going concern qualification and potential negative impact on the stock price due to the resale of shares raise significant concerns.

Positives

• Alpha Modus has entered into license agreements with GZ6G Technologies Corp. and Xalles Holdings Inc. to utilize its patented intellectual property.
• The company settled a patent infringement action against The Kroger Company.
• Alpha Modus has been recognized by IBM Watson as a thought leader in technology.
• The company has a comprehensive end-to-end patented solutions for retailers and consumer brands.

Negatives

• The company's independent auditor has expressed substantial doubt about its ability to continue as a going concern.
• Alpha Modus had an operating loss of $834,895 in 2024 and a net loss of $501,295 in 2023.
• The resale of 4,250,000 shares could significantly negatively impact the trading price of Alpha Modus' common stock.
• The company has limited patent enforcement and licensing experience.
• The company's management team has limited experience managing a Nasdaq-listed public company.

Risks

• 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, 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 throughout 2025 and expects to begin generating licensing revenue in 2024 with a steady growth rate in parallel to the current projected industry growth rate cited by Insider Intelligence.

Industry Context

The document highlights Alpha Modus' position within the rapidly evolving retail advertising market, emphasizing the increasing adoption of in-store digital marketing and inventory management technologies. The company aims to capitalize on the projected growth of the retail media industry, estimated to reach $106 billion in 2027, by leveraging its patented solutions and establishing strategic partnerships.

Comparison to Industry Standards

• The document does not provide a direct comparison to industry standards or specific competitors.
• However, it mentions that Alpha Modus believes its 571 patent family covers a wide range of use cases and will serve as a cornerstone for gaining market share.
• The document also states that the company believes 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.

Legal Proceedings

• Alpha Modus initiated a patent infringement lawsuit against Brookshire Grocery Co. alleging infringement of several Alpha Modus patents.
• Alpha Modus filed a patent infringement lawsuit against Walgreen Co. alleging infringement of several Alpha Modus patents.

Related Party Transactions

• The Company issued an unsecured promissory note in the aggregate principal amount of $35,000 to a related party, Jeffrey J. Gary.
• The Company issued various notes payable to related parties, including Janbella Group, LLC.

Stakeholder Impact

• The resale of shares could negatively impact the trading price, affecting shareholders.
• The company's ability to continue as a going concern impacts employees and creditors.
• The success of licensing agreements and patent enforcement affects the company's revenue and potential for growth, impacting stakeholders.

Next Steps

• Alpha Modus intends to continue its intellectual property licensing and enforcement efforts throughout 2025.
• The company intends to expand the use of its patent family as a lever to develop a sales team to drive potential partnerships authorized under the 571 patent family.
• The Company will hold a stockholder meeting within 60 days to approve the issuances to the Investor under the Note and under an equity line of credit agreement with the Investor in excess of the Exchange Cap.

Key Dates

Keywords

Alpha Modus, Streeterville Capital, common stock, resale, Secured Convertible Promissory Note, patent infringement, going concern, financial results, AI technology, intellectual property, licensing, emerging growth company, smaller reporting company, risk factors, S-1 filing