AMOD

Alpha Modus Holdings, Inc. (AMOD) - Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. Alpha Modus Holdings, Inc. is a technology and intellectual property company focused on data-driven systems for retail environments. The company operates as a single segment and is classified as an emerging growth company and a smaller reporting company. Following a business combination in December 2024, the company's operations are those of Alpha Modus, Corp.

Key Financial Metrics

Note: The company reported no operating revenue. The increase in total assets is primarily driven by a $1.74 million increase in prepaid expenses, largely related to stock-based compensation for consulting agreements.

Material Changes vs. Prior Period

• Net Loss Expansion: Net loss increased significantly from $308,081 in Q1 2025 to $4.02 million in Q1 2026. This was driven by a $2.52 million increase in professional fees and the absence of a $1.04 million gain from the change in fair value of earnout shares liability recorded in the prior year.
• Operating Expenses: Total operating expenses rose 180% to $3.81 million, primarily due to higher professional fees ($2.81 million vs. $0.29 million) and stock-based compensation.
• Cash Position: Cash balances declined by approximately $32,500 during the quarter. Net cash used in operating activities was $1.49 million, partially offset by $1.58 million provided by financing activities (primarily an At-The-Market offering).
• Patent Income: The company recognized $325,000 in patent infringement income in Q1 2026, compared to $0 in Q1 2025.

Outlook, Risks, and Management Commentary

• Going Concern: Management has expressed substantial doubt about the company's ability to continue as a going concern. With only $35,508 in cash and no revenue stream, the company estimates it needs to raise a minimum of $2.5 million to fund operations for the next 12 months.
• Capital Raising: The company is actively raising funds through an At-The-Market (ATM) offering. In Q1 2026, it issued 2.43 million shares for net proceeds of $1.86 million. Subsequent to the quarter end, an additional 2.76 million shares were sold for $0.76 million in net cash.
• Legal Proceedings: The company is heavily engaged in patent enforcement. While several lawsuits against major retailers (Kroger, Walgreens, etc.) have been settled, multiple new lawsuits were filed in late 2025 against companies including Cooler Screens, Lowe's, 7-Eleven, and H&M. These cases are in various stages of litigation.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, citing a material weakness. Remediation plans include implementing a more timely reporting schedule.
• Debt Structure: The company carries significant debt, including convertible notes to related parties and third parties. Several notes are convertible at fixed prices or discounts to market value, creating potential dilution.

Investor Verification Checklist

• Liquidity Runway: Verify the sufficiency of the $35,508 cash balance against the stated $2.5 million funding requirement and the timeline for the next capital raise.
• Revenue Recognition: Confirm the classification of patent infringement settlements as "Other Income" rather than operating revenue and assess the sustainability of this income stream.
• Dilution Risk: Analyze the impact of outstanding warrants (20.7 million), earnout shares (2.2 million), and convertible notes on future share count.
• Related Party Transactions: Review the terms of the convertible notes held by related parties (e.g., The Alessi Trusts, JanBella) and the associated interest rates and conversion prices.
• Legal Outcomes: Monitor the status of pending patent litigation against major retailers, as outcomes could materially impact cash flow or result in significant legal costs.