Business Context and Reporting Period
Company: Alpha Modus Holdings, Inc. (AMOD)
Filing Type: Form 10-Q (Unaudited)
Period Ended: September 30, 2025
Business Overview: The Company, formed via a reverse recapitalization with Insight Acquisition Corp. in December 2024, focuses on monetizing a portfolio of patents related to AI-driven retail technologies. It has no current revenue streams and operates as a single segment. The Company is classified as an emerging growth company and a smaller reporting company.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | YTD 2025 (9 Months) | Q3 2024 (3 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating Expenses | $1,217,858 | $3,725,869 | $286,131 | $597,595 |
| Net Loss | $(4,259,599) | $(7,354,742) | $(315,746) | $(725,479) |
| Loss Per Share (Basic/Diluted) | $(0.10) | $(0.33) | $(0.05) | $(0.14) |
| Cash and Cash Equivalents | $75,705 (as of Sept 30, 2025) | |||
| Total Assets | $403,259 (as of Sept 30, 2025) | |||
| Total Liabilities | $10,801,685 (as of Sept 30, 2025) | |||
| Working Capital Deficit | $(10,406,476) (as of Sept 30, 2025) |
Material Changes vs. Prior Period
- Net Loss Expansion: Net loss for the nine months ended September 30, 2025, increased to $7.35 million from $0.73 million in the prior year period. This is primarily driven by a $3.52 million interest expense, a $0.67 million loss on the change in fair value of warrant liabilities, and a $0.60 million loss on debt settlement.
- Operating Expenses: Operating expenses rose significantly to $3.73 million YTD 2025 from $0.60 million YTD 2024, attributed to increased professional fees, insurance premiums, and investor relations costs.
- Debt Restructuring: The Company renegotiated related-party notes in August 2025, recognizing $1.28 million in default penalties and interest. A significant convertible note with Streeterville Capital, LLC was fully satisfied in July 2025 through a combination of cash and stock conversions.
- Equity Changes: The Company issued 26 million shares of common stock in June 2025 upon the conversion of Series C Preferred Stock held by CEO trusts, moving $30.6 million from mezzanine equity to stockholders' equity.
Outlook, Risks, and Contingencies
- Going Concern: Management has expressed substantial doubt about the Company's ability to continue as a going concern. With only $75,705 in cash and a working capital deficit of over $10 million, the Company estimates it needs to raise a minimum of $2.5 million to fund operations for the next 12 months.
- Excise Tax Liability: The Company has a recorded excise tax payable of $2,348,302 related to the Inflation Reduction Act. The Company is evaluating options for this obligation, which may accrue additional interest and penalties.
- Patent Litigation: The Company is actively pursuing patent infringement lawsuits against major retailers (including Walgreen Co. and Brookshire Grocery Co.) and has settled actions against Kroger and Wakefern. Revenue from these settlements is non-recurring and uncertain.
- Derivative Liabilities: Significant volatility exists in the fair value of warrant and earnout share liabilities, which are marked-to-market and impact net income significantly.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of September 30, 2025, citing a material weakness in financial reporting timeliness.
Investor Verification Checklist
- Liquidity Runway: Verify the status of the estimated $2.5 million funding requirement and any new financing agreements post-filing.
- Excise Tax Resolution: Confirm the Company's plan to address the $2.35 million excise tax liability and potential penalties.
- Debt Covenants: Review terms of remaining related-party notes (approx. $5.3 million convertible notes) and the $325,000 Loeb & Loeb note for upcoming maturity dates and conversion triggers.
- Patent Monetization: Assess the progress of pending litigation against Walgreen Co. and Brookshire Grocery Co. as a potential revenue source.
- Internal Control Remediation: Monitor the implementation of the remediation plan for the identified material weakness in internal controls.