DEF: Alpha Modus Seeks Share Increase, Board Elections

Alpha Modus Holdings, Inc. will hold its 2025 annual meeting to vote on director elections, a significant increase in authorized Class A common stock, auditor ratification, and executive compensation.

Summary

• The 2025 Annual Meeting of Stockholders will be held virtually on December 30, 2025, at 1:00 p.m. Eastern time, with a record date of November 17, 2025.
• Stockholders will vote on electing five directors to the Board of Directors.
• A proposal seeks to amend the Certificate of Incorporation to increase the number of authorized shares of Class A common stock from 200,000,000 to 2,000,000,000 shares.
• The appointment of MaloneBailey, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, will be put to a vote for ratification.
• A non-binding advisory vote on the compensation of named executive officers will also be considered.
• As of November 17, 2025, there were 41,959,958 shares of common stock issued and outstanding.
• The increase in authorized shares is intended to provide flexibility for future organic growth, capital investments, financing, acquisitions, and other corporate transactions without requiring additional stockholder meetings.
• The Company reported a net income of $4,103,067 for the fiscal year 2024.
• The Total Shareholder Return (TSR) for an initial $100 investment from December 31, 2023, through December 31, 2024, was $27.80.

Sentiment

Score: 4

Explanation: The filing outlines necessary corporate governance actions and a strategic move to increase authorized shares for future growth, which is positive. However, the significant negative Total Shareholder Return, the deferral of executive cash compensation tied to future funding, and the extensive related-party debt indicate underlying financial challenges and potential shareholder dilution, leading to a cautious sentiment.

Positives

• The Board of Directors is actively addressing corporate governance by seeking stockholder approval for director elections and auditor ratification.
• The proposed increase in authorized shares provides the Company with strategic flexibility for future growth initiatives, capital raising, and potential acquisitions.
• The Company has a Code of Ethics applicable to all directors, officers, and employees, promoting ethical conduct and compliance.
• The Audit Committee, composed of independent directors, is responsible for overseeing financial reporting integrity and risk management, with Scott Wattenberg identified as an audit committee financial expert.

Negatives

• The significant increase in authorized Class A common stock (tenfold) could lead to substantial dilution for existing stockholders if a large number of new shares are issued.
• The potential for future share issuances could depress the market price of the common stock.
• The increase in authorized shares, while not intended as such, could have an anti-takeover effect, potentially making changes in control more difficult.
• The Company retains the right to defer payment of cash compensation to its CEO, CFO, and CSO until an aggregate of $10,000,000 in funding has been raised, indicating potential liquidity constraints.
• The Total Shareholder Return (TSR) for an initial $100 investment from December 31, 2023, to December 31, 2024, was $27.80, representing a significant decline in shareholder value.

Risks

• Future issuance of additional shares of common stock, preferred stock, or convertible securities could have a dilutive effect on the earnings per share, book value per share, voting power, and ownership interest of existing stockholders.
• The future issuance of additional shares could depress the market price of the common stock or preferred stock.
• An increase in the number of authorized shares of common stock may be construed as having an anti-takeover effect, potentially rendering more difficult or discouraging a merger, tender offer, proxy contest, or change in control.
• If the Authorized Shares Amendment is not approved, the Company may be unable to issue shares when needed for strategic purposes, potentially hindering growth or financing opportunities.
• Private Placement Warrants will expire worthless if the Company does not complete a business combination within the required combination period.
• The Company's ability to pay cash compensation to its CEO, CFO, and CSO is contingent on raising an aggregate of $10,000,000 in funding, posing a risk to executive retention if funding is delayed.

Future Outlook

The Board recommends increasing authorized shares to ensure sufficient stock for future organic growth, capital investments, financing, acquisitions, and other corporate transactions, allowing for expedited actions as market conditions permit. While no current plans exist for issuing newly authorized shares, discussions with potential financing sources and acquisition targets are routine. The Company intends to provide stockholders with an annual advisory vote on executive compensation in the future.

Management Comments

• "We encourage you to access the virtual meeting prior to the start time."
• "We recommend that you carefully review the procedures needed to gain admission in advance."
• "Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting."
• "The Company encourages stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings."
• "We look forward to seeing you at the meeting."
• "Our Board believes that the current number of authorized and unissued shares of common stock available for issuance is inadequate."
• "The Board is not presently aware of any attempt, or contemplated attempt, to acquire control of the Company and the proposed Authorized Shares Amendment to increase the number of authorized shares of common stock is not part of any plan by our Board to recommend or implement a series of anti-takeover measures."
• "The Compensation Committee believes that our compensation program should reflect the competitive recruiting and retention conditions in the Company's industry, so that we can attract, motivate and retain top industry talent."
• "The Compensation Committee also believes that our compensation program should be tied in part to our financial and operational performance, so that our executive officers are held accountable through their compensation for the performance of the Company based on our achievement of certain pre-determined financial and operational goals."
• "In addition, the Compensation Committee believes that our compensation program should be tied in part to the executive officers achievement of pre-determined individual performance goals, to encourage and promote individual contributions to the Company's overall performance."
• "We believe that our executive compensation program (1) has played a significant role in our ability to attract, motivate and retain a highly qualified executive team to manage the Company, and (2) is structured in the best manner possible to support the achievement of our short-term and long-term business goals and the creation and enhancement of stockholder value."

Industry Context

The filing reflects a common practice among growth-oriented companies to ensure sufficient authorized capital for future strategic initiatives, including M&A and financing, which is crucial in dynamic technology and clean energy sectors. The emphasis on attracting and retaining top talent through competitive executive compensation aligns with broader industry trends where skilled leadership is a key differentiator. However, the reliance on future funding for executive cash compensation and the negative Total Shareholder Return suggest the company may be facing challenges that are not uncommon for early-stage or rapidly evolving companies in competitive industries.

Comparison to Industry Standards

• The significant increase in authorized shares (from 200 million to 2 billion) is a common strategy for growth-oriented companies to ensure sufficient capital for future M&A, financing, and equity incentive plans. However, such a large increase can be viewed with caution by investors due to potential future dilution, especially when compared to more mature companies with stable capital structures.
• The executive compensation structure, which includes performance-based cash bonuses and long-term incentive awards, aligns with typical industry practices designed to attract and retain top talent in competitive sectors like technology and clean energy.
• The provision allowing for the deferral of executive cash compensation until the company raises $10 million in funding is an unusual practice for a publicly traded company and may signal liquidity constraints, deviating from the standard compensation practices of financially robust industry peers.
• The Total Shareholder Return (TSR) of $27.80 on an initial $100 investment from December 31, 2023, to December 31, 2024, represents a substantial decline, indicating underperformance relative to broader market indices and many industry benchmarks during the same period.

Management Changes

Corporate Governance

Legal Proceedings

• To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in any significant legal proceedings such as bankruptcy, criminal convictions, court injunctions, SEC/CFTC violations, regulatory actions, or self-regulatory organization sanctions.

Related Party Transactions

• William Alessi, CEO and director, loaned the Company $89,929 in 2021, which was fully repaid by April 17, 2024.
• Janbella Group, LLC, controlled by William Alessi, was involved in several secured promissory notes with the Company, including an Amended and Restated 12% Senior Secured Promissory Note for $453,750 (as of Dec 31, 2024) and multiple 0% Senior Secured Promissory Notes totaling $921,941 (as of Dec 31, 2024).
• On March 29, 2024, the Company issued 1,400,000 shares of common stock, valued at $35,000, to Janbella Group, LLC in connection with a note extension.
• The Company reimbursed Mr. Alessi $208,433 in 2023 for share cancellation and a potential acquisition, which was fully paid by 2024.
• An unsecured promissory note for $35,000 was issued to Jeffrey J. Gary, a related party, on July 25, 2024, convertible into private placement warrants.
• As part of the Business Combination, the Company was to pay off Alpha Modus, Corp.'s loans from Janbella Group, LLC (approximately $1,400,000) and issue 1,392,308 shares of Company common stock to Janbella.
• Greg Richter, a director, is William Alessi's brother-in-law.

Stakeholder Impact

• **Shareholders**: Face potential significant dilution from the proposed tenfold increase in authorized shares. The negative Total Shareholder Return indicates a decrease in investment value. They have the opportunity to vote on key corporate governance matters, including director elections and executive compensation.
• **Executive Officers**: Their compensation structure includes base salary, performance-based bonuses, and long-term incentive awards. However, cash compensation can be deferred until the Company raises $10,000,000 in funding, which could impact their immediate financial stability and retention.
• **Creditors**: Related party loans from Janbella Group, LLC (controlled by the CEO) are secured by all Company assets, indicating a significant claim on assets. The Company plans to pay off existing loans from Polar Multi-Strategy Master Fund and Janbella Group, LLC as part of the business combination, which would benefit these specific creditors.
• **Employees**: While not explicitly detailed, the executive compensation policies aim to attract, motivate, and retain talent, which could indirectly benefit employees through a stable and well-led company. The deferral of executive compensation might signal broader financial challenges that could eventually affect other employees.

Next Steps

• Stockholders are to vote on the election of directors, the authorized shares amendment, auditor ratification, and executive compensation at the Annual Meeting on December 30, 2025.
• If the Authorized Shares Amendment is approved, Company officers are authorized to file the Third Amended and Restated Certificate with the Delaware Secretary of State.
• The Board may abandon the Authorized Shares Amendment even if approved by stockholders, with public disclosure of the decision and reason.
• Final voting results will be published in a current report on Form 8-K filed with the SEC within four business days of the meeting.
• The Company intends to provide stockholders with an opportunity to cast an advisory vote on executive compensation every year in the future.
• The Nominating and Corporate Governance Committee will continue evaluating director compensation.
• The Company will use its website and SEC filings to disseminate disclosures regarding amendments or waivers to the code of ethics.
• Shareholder proposals and director nominations for the 2026 Annual Meeting must be received by April 14, 2026.

Key Dates

Recommendation

The filing presents a mixed bag. While the company is taking necessary steps for corporate governance and positioning itself for future growth through increased authorized shares, the significant negative Total Shareholder Return and the deferral of executive cash compensation tied to future funding are concerning. The extensive related-party debt also warrants caution. The strategic intent for growth is present, but the financial performance and potential dilution suggest a 'hold' position until there is clearer evidence of improved financial health and successful execution of growth strategies without excessive dilution.

Keywords

Alpha Modus Holdings, Proxy Statement, Annual Meeting, Stockholder Vote, Authorized Shares, Common Stock, Corporate Governance, Executive Compensation, MaloneBailey, Related Party Transactions, Business Combination, Dilution, Anti-Takeover, DEF 14A, Clean Energy Technologies