8-K: AMOD CEO Trust Converts Preferred to Common

Alpha Modus Holdings, Inc. announced its CEO's family trust exchanged 4.3 million Series C Preferred shares for over 40 million Class A common shares, subject to a lock-up period.

Summary

• Alpha Modus Holdings, Inc. entered into an Exchange Agreement with The Alessi 2023 Irrevocable Trust, a family trust of CEO William Alessi, on August 14, 2025.
• The trust exchanged 4,300,000 shares of Series C Preferred Stock for 40,111,940 shares of Class A common stock.
• The common shares received by the trust are subject to a lock-up period, prohibiting sale or transfer (except to affiliates) until June 13, 2026.
• The transaction was conducted under an exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as it involved an exchange of securities without additional consideration or remuneration for solicitation.

Sentiment

Score: 3

Explanation: The significant potential dilution from the conversion of preferred stock to common stock, despite the lock-up, is a negative for existing common shareholders. While simplifying the capital structure, the sheer volume of new common shares is concerning.

Positives

• Simplifies the company's capital structure by converting a significant block of preferred stock into common stock.
• Aligns the interests of the CEO's family trust more directly with common shareholders through increased common stock ownership.
• The lock-up period until June 13, 2026, prevents immediate market dilution from the trust's newly acquired common shares.

Negatives

• Significant potential dilution for existing Class A common shareholders due to the issuance of 40,111,940 new shares.
• The conversion ratio of approximately 9.33 common shares per preferred share is substantial, indicating a high conversion rate for the preferred stock.

Risks

• Future dilution risk: While a lock-up is in place, the large block of 40,111,940 common shares held by the trust could create significant selling pressure upon the expiration of the lock-up period on June 13, 2026.
• Potential negative impact on share price: The substantial increase in outstanding common shares could negatively affect the per-share value and trading price of Class A common stock over time.

Future Outlook

The trust holding the newly issued common shares is restricted from selling or transferring them until June 13, 2026, indicating a future date when these shares could potentially enter the market.

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." (Signed by William Alessi, President and Chief Executive Officer).

Industry Context

This transaction is primarily an internal capital structure adjustment for Alpha Modus Holdings, Inc., rather than a reflection of broader industry trends. It aims to simplify the company's equity structure by converting a significant block of preferred shares into common shares.

Comparison to Industry Standards

• This is a specific internal capital restructuring event involving a related party. Direct comparisons to industry-wide benchmarks or specific competitor projects are not applicable based on the provided filing, as it does not detail operational or financial performance metrics.

Related Party Transactions

• The Exchange Agreement was entered into with The Alessi 2023 Irrevocable Trust, a family trust of the Company's CEO, William Alessi, making it a related party transaction.
• Mr. Alessi is deemed to beneficially own the Series C Preferred Stock held by the trust, as his spouse is the trustee.

Stakeholder Impact

• Shareholders: Existing Class A common shareholders face significant potential dilution due to the issuance of over 40 million new common shares.
• Management/Insiders: The CEO's family trust will hold a substantial number of common shares, aligning their interests more closely with common shareholders, but also significantly increasing their direct ownership stake in the common equity.

Next Steps

• The lock-up period for the newly issued common shares will expire on June 13, 2026, at which point the shares held by the trust could become freely tradable (subject to Rule 144).

Key Dates

Recommendation

The issuance of over 40 million new Class A common shares to a related party, representing a significant potential dilution for existing shareholders, is a strong negative. While a lock-up period is in place, the sheer volume of shares that will eventually become tradable poses a substantial overhang risk, likely leading to downward pressure on the stock price. Investors should consider selling to avoid potential future dilution and price depreciation.

Keywords

Alpha Modus Holdings, AMOD, stock exchange, preferred stock, common stock, William Alessi, Series C Preferred, Class A Common, dilution, capital structure, SEC filing, 8-K, related party transaction