AMOD

Business Context and Reporting Period

Company: ALPHA MODUS HOLDINGS, INC. (AMOD)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: A technology and intellectual property company focused on data-driven systems for retail consumer engagement. The company operates as a single segment and is classified as an emerging growth company and smaller reporting company. It has no current revenue stream and relies on patent enforcement settlements and financing activities.

Key Financial Metrics

Material Changes vs. Prior Period

• Operating Expenses: Increased significantly to $6.37 million for the six months ended June 30, 2026, compared to $2.51 million in the prior year period. This was driven by higher professional fees, payroll expenses, and development costs for the kiosk system.
• Net Loss: Net loss widened to $6.17 million (six months) from $3.10 million in the prior year period, primarily due to increased operating expenses and interest costs, partially offset by gains in fair value of warrant liabilities.
• Patent Infringement Income: Recognized $325,000 in other income from patent settlements during the six months ended June 30, 2026, compared to $13,096 in the prior year period.
• Capital Structure: Significant equity activity occurred, including the conversion of all 4,300,000 shares of Series C Preferred Stock into Class A Common Stock. Additionally, the company raised approximately $2.87 million through an "At-the-Market" offering and entered into a $10 million Pre-Paid Purchase agreement with Streeterville Capital, LLC.
• Derivative Liabilities: A new derivative liability of $1.89 million was recognized related to the Pre-Paid Purchase agreement. Conversely, the fair value of warrant liabilities decreased, resulting in a gain of $1.13 million for the six-month period.

Guidance, Outlook, and Risks

• Liquidity and Going Concern: Management has raised substantial doubt about the company's ability to continue as a going concern. With a working capital deficit of $6.25 million and no revenue, the company estimates it needs to raise a minimum of an additional $2.5 million to fund operations for the next 12 months.
• Financing Strategy: The company is actively seeking additional funding through future financings and increased revenues. It has entered into a Securities Purchase Agreement with Streeterville Capital, LLC, allowing for up to $10 million in pre-paid purchases, though there is no assurance of full utilization.
• Legal Proceedings: The company is engaged in numerous patent infringement lawsuits against major retailers and technology firms (e.g., Kroger, Walgreens, Lowe's, 7-Eleven). While several cases have been settled, others remain in initial pleading or discovery stages. Outcomes of these litigations are critical to potential future revenue.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, citing a material weakness. Remediation plans include implementing a more timely reporting schedule.

Investor Verification Checklist

• Going Concern Status: Verify the company's ability to secure the estimated $2.5 million in additional funding required to avoid operational curtailment.
• Patent Litigation Outcomes: Monitor the status of pending lawsuits against major retailers, as these represent the primary potential revenue source.
• Debt Obligations: Review the terms of the $5.57 million in related-party convertible notes and the new $10 million Pre-Paid Purchase facility, including conversion rates and interest accruals.
• Stock Dilution: Assess the impact of recent equity issuances, including the conversion of Series C Preferred Stock and shares issued for services and debt settlement.
• Internal Control Remediation: Confirm progress on remediation of the material weakness in internal controls over financial reporting.