10-Q: Alpha Modus Holdings Q2 2026: Net Loss Widens Amidst Operational Challenges

Alpha Modus Holdings reported a net loss of $2.15 million for Q2 2026, with significant increases in operating expenses and ongoing liquidity concerns.

Summary

• Alpha Modus Holdings reported a net loss of $2,149,060 for the three months ended June 30, 2026, compared to a net loss of $2,787,062 for the same period in 2025.
• For the six months ended June 30, 2026, the net loss was $6,169,891, an increase from $3,095,143 in the prior year period.
• Total operating expenses for Q2 2026 were $2,560,210, up from $1,148,810 in Q2 2025, primarily due to increased professional fees and payroll expenses.
• The company had $2,001,007 in cash as of June 30, 2026, but a working capital deficit of $6,253,456, raising substantial doubt about its ability to continue as a going concern.
• The company generated $325,000 in patent infringement income during the six months ended June 30, 2026, compared to $13,096 in the prior year period.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to significant net losses, a substantial working capital deficit, and ongoing concerns about the ability to continue as a going concern, despite some positive developments in patent litigation settlements.

Positives

• The company received $325,000 in patent infringement income during the first six months of 2026, a significant increase from $13,096 in the same period of 2025.
• The company has a cash balance of $2,001,007 as of June 30, 2026.
• Several patent infringement lawsuits filed in late 2024 and 2025 have been settled.
• The company secured a $10,000,000 securities purchase agreement with Streeterville Capital, LLC, which includes a pre-paid purchase facility.

Negatives

• The company incurred a net loss of $2,149,060 for Q2 2026 and $6,169,891 for the first six months of 2026.
• Operating expenses increased significantly, with Q2 2026 expenses at $2,560,210 compared to $1,148,810 in Q2 2025.
• The company has a working capital deficit of $6,253,456 as of June 30, 2026.
• There is substantial doubt about the company's ability to continue as a going concern due to recurring losses and lack of revenue.
• The company estimates it will need to raise a minimum of an additional $2,500,000 to maintain its growth plan.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to recurring losses and lack of revenue.
• The company may be required to delay, reduce, or severely curtail its operations if it cannot generate sufficient cash or raise additional funds.
• The company is subject to claims by third parties under various legal disputes, which could materially affect liquidity, financial condition, and cash flows.
• The company's business is subject to the risks outlined in its Annual Report on Form 10-K and registration statements, including those related to its technology and market adoption.

Future Outlook

The company expects to incur significant expenses in the next twelve months and believes it will need to raise a minimum of an additional $2,500,000 to maintain its growth plan. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

Management Comments

• Management acknowledges that the company has incurred recurring losses since inception and expects to continue to incur losses as the company does not have any revenue stream.
• Management states that there is substantial doubt about the company's ability to continue as a going concern.
• Management intends to remediate the identified material weakness in disclosure controls and procedures by implementing a more timely reporting schedule and incorporating additional reviews of financial statement support for future quarters.

Industry Context

StockSavvy.ai notes that Alpha Modus operates in the data-driven technology sector focused on retail environments. The company's strategy relies heavily on patent protection and licensing, as evidenced by numerous patent infringement lawsuits. The current financial performance, characterized by significant losses and a lack of revenue, is a critical concern within this technology-focused industry where substantial investment is often required before profitability is achieved.

Comparison to Industry Standards

• The company's lack of revenue and significant operating losses are not aligned with industry standards for mature technology companies. However, early-stage technology companies, especially those focused on IP development and licensing, often experience similar financial profiles.
• The significant increase in professional fees ($1,549,769 in Q2 2026 vs. $525,655 in Q2 2025) suggests substantial investment in legal and advisory services, which is common for companies engaged in extensive patent litigation and complex financial restructuring.
• The company's reliance on patent infringement income as a source of 'other income' rather than operating revenue is a unique aspect, differing from typical revenue models in the technology sector.

Corporate Governance

Legal Proceedings

• Alpha Modus has filed multiple patent infringement lawsuits against various companies, including The Kroger Company, Brookshire Grocery Co., Wakefern Food Corporation, Walgreen Co., Optisigns, Inc., Cooler Screens, Inc., A2Z Cust2Mate Solutions Corp., Creative Realities, Inc., MNTN, Inc., Allerin Tech Pvt. Ltd., Mood Media LLC, RetailNext Inc., Navori SA, meldCX Pty Ltd., Sensormatic Electronics, LLC, Johnson Controls International, PLC, Lowes Companies, Inc., 7-Eleven, Inc., Adroit Worldwide Media, Inc., Atliq Technologies Pvt. Ltd., Industria De Diseo Textil, S.A., Zara USA, Inc., H&M Fashion USA, Inc., and Circle-K Stores Inc.
• Several of these patent infringement lawsuits have been settled.
• As of the filing date, some patent infringement lawsuits are in their initial pleading, claim construction, or discovery stages.

Related Party Transactions

• The company renegotiated notes with JanBella, which were in default, extending them to February 1, 2026, with an adjusted balance of $2,747,308.
• The Alessi 2023 Irrevocable Trust holds two unsecured Promissory Notes totaling $2,857,143, with accrued interest.
• The CEO, William Alessi, had advances to the company totaling $81,000 as of June 30, 2026.
• The company's CEO, William Alessi, and his affiliates are subject to a subordination and voting agreement related to the Streeterville Capital SPA, subordinating their debt and security interests to Streeterville.

Stakeholder Impact

• Shareholders: The significant net losses and going concern uncertainty negatively impact shareholder value. The company's ability to raise additional capital through equity issuances could dilute existing shareholders.
• Creditors: The company's substantial liabilities and working capital deficit raise concerns about its ability to meet its obligations.
• Employees: The uncertainty about the company's future operations could impact employee morale and job security. Management intends to remediate internal control weaknesses, which could involve process changes affecting employees.
• Suppliers: The company's financial instability could affect its ability to pay suppliers on time.

Next Steps

• The company intends to seek additional funding through increased revenues and future financings.
• Management intends to remediate the identified material weakness in disclosure controls and procedures.

Key Dates

Recommendation

The company exhibits significant financial distress with widening net losses, increasing operating expenses, and substantial doubt about its ability to continue as a going concern. Despite some positive developments in patent litigation settlements and a new financing agreement, the core business model has not yet generated revenue, and the path to profitability remains highly uncertain. The need for substantial additional capital and the potential for dilution further weigh against a positive outlook.

Keywords

Alpha Modus Holdings, Form 10-Q, Quarterly Report, Financial Statements, Results of Operations, Going Concern, Patent Infringement, Securities Purchase Agreement