S-1: Alpha Modus Holdings Files for Resale of Common Stock and Warrants Post-Business Combination

Alpha Modus Holdings is registering the resale of over 5 million shares of common stock and over 2 million warrants by selling securityholders following its recent business combination.

Summary

• Alpha Modus Holdings, Inc. has filed a registration statement for the offer and sale of up to 5,189,638 shares of common stock, 2,325,004 warrants, and 2,325,004 shares of common stock underlying those warrants.
• The selling securityholders include those who received shares as consideration in the Business Combination, upon conversion of a secured convertible promissory note, and those who acquired shares and warrants in private placements related to the INAQ IPO.
• The company will not receive any proceeds from the sale of these securities by the selling securityholders, except for amounts received upon the exercise of the warrants.
• The exercise price of the warrants is $11.50 per share, which is substantially higher than the current trading price of the common stock, making it unlikely that the warrants will be exercised in the near future.
• The resale of these shares could have a significant negative impact on the trading price of Alpha Modus common stock, especially since certain selling securityholders acquired their shares at prices well below the current trading price.
• The 7,514,642 shares that may be resold and/or issued represent approximately 60.2% of the shares of common stock outstanding as of January 30, 2025.
• Alpha Modus is an emerging growth company and a smaller reporting company, which allows it to take advantage of reduced public company reporting requirements.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the company's patented technology and licensing agreements, it also acknowledges significant risks, including past losses, a going concern qualification, and potential negative impacts from the resale of shares.

Positives

• The company has comprehensive end-to-end patented solutions for retailers and consumer brands.
• Alpha Modus has entered into license agreements with GZ6G Technologies Corp. and Xalles Holdings Inc. to utilize its patented intellectual property.
• Alpha Modus has initiated patent infringement lawsuits against several companies, including The Kroger Company and Brookshire Grocery Co.

Negatives

• The resale of shares of common stock pursuant to this prospectus could have a significant negative impact on the trading price of our common stock.
• The exercise price of the Private Placement Warrants substantially exceeds the current trading price of our common stock, we are unlikely to receive any proceeds from the exercise of our warrants in the near future, if at all.
• Alpha Modus had net losses and negative cash flows from operating activities in the past, and it may not achieve or sustain profitability.
• The report of its independent registered public accounting firm contains a going concern qualification.

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.
• Alpha Modus may fail to protect its intellectual property rights and proprietary information.
• 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.
• 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.
• 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.
• The future exercise of registration rights may adversely affect the market price of our common stock.

Future Outlook

Alpha Modus intends to deploy services under the license by the end of 2024, expand event venue service offerings in late 2025, and expand service offerings in additional industries in 2024. Alpha Modus intends to continue its intellectual property licensing and enforcement efforts throughout 2025.

Industry Context

The document highlights Alpha Modus's participation in the competitive and rapidly evolving AI technology market, particularly within the retail sector, where there's a growing emphasis on in-store digital marketing and inventory management technologies.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or benchmarks.
• It mentions the company's core technologies have been deployed on IBMs Bluemix platform and earned a Beacon Award by IBM 2016 for Best New Application on IBM Cloud from an Entrepreneur.
• It also mentions Alpha Modus has been recognized by IBM Watson as a thought leader in technology.

Legal Proceedings

• Alpha Modus initiated a patent infringement action against The Kroger Company on January 16, 2024.
• Alpha Modus initiated a patent infringement lawsuit against Brookshire Grocery Co. on November 12, 2024.
• Alpha Modus filed a patent infringement lawsuit against Wakefern Food Corporation and Shelf Nine LLC on December 17, 2024.
• Alpha Modus filed a patent infringement lawsuit against Walgreen Co. on February 3, 2025.

Related Party Transactions

• William Alessi, an officer and director of Alpha Modus, loaned the Company funds and received payments.
• Janbella Group, LLC, controlled by Alessi, provided loans to Alpha Modus.
• The Sponsor provided services to the Company and was reimbursed.
• The Sponsor provided loans to the Company.
• The Company issued shares to Janbella and Michael Singer as required by the Business Combination Agreement.

Stakeholder Impact

• Shareholders may experience a decline in the trading price of the common stock due to the resale of a large number of shares.
• The company's ability to continue as a going concern is uncertain, which could impact the value of securities.
• The company's success depends on its ability to protect its intellectual property, which could affect its competitive position and future revenue.

Next Steps

• Alpha Modus intends to deploy services under the license by the end of 2024.
• Alpha Modus intends to expand event venue service offerings in late 2025.
• Alpha Modus intends to expand service offerings in additional industries in 2024.
• Alpha Modus intends to continue its intellectual property licensing and enforcement efforts throughout 2025.

Key Dates

Keywords

common stock, warrants, Alpha Modus, selling securityholders, business combination, private placement, registration statement, redemption, IPO, securities