Alpha Modus Holdings Enters into Funding Agreement in Connection with Broadcom Patent Infringement Lawsuit, Secures Option to Acquire Alpha Modus Ventures

Rhea-AI Summary

Alpha Modus Holdings (NASDAQ: AMOD) has entered into a patent monetization and funding agreement with Alpha Modus Ventures, LLC regarding a patent infringement lawsuit against Broadcom Inc. The lawsuit, filed on April 22, 2025, concerns three U.S. patents (11,108,591; 11,303,473; 11,310,077) related to Fibre Channel data transport over Ethernet technology. Additionally, AMOD has secured an option to acquire 100% of Alpha Modus Ventures, subject to shareholder approval. The acquisition would consolidate patent ownership under AMOD and strengthen its position in enforcement actions. The lawsuit is being heard in the United States Western District Texas Court.

Positive

• Strategic funding agreement to monetize patents through litigation against Broadcom
• Option to acquire Alpha Modus Ventures could strengthen patent portfolio and enforcement position
• Potential for significant financial returns through patent enforcement

Negative

• Uncertain outcome of patent litigation against Broadcom
• Acquisition option subject to shareholder approval with no guarantee of completion
• Potential legal costs and resources required for patent enforcement

Insights

Patent & Intellectual Property Expert

AMOD funding patent lawsuit against Broadcom with option to acquire litigation entity; represents strategic IP monetization with uncertain outcome.

Alpha Modus Holdings has deployed an intriguing patent monetization strategy by funding litigation against Broadcom Inc. for alleged infringement of three patents covering Fibre Channel over Ethernet technology. This technical area is significant - FCoE allows storage network traffic to run over standard Ethernet networks, representing valuable technology in data center infrastructure that Broadcom may be incorporating into various products.

The structure of this deal is particularly noteworthy. Rather than suing directly, AMOD is funding a separate entity (Alpha Modus Ventures) controlled by AMOD's CEO William Alessi, while simultaneously securing an option to acquire this entity outright. This creates a strategic separation that potentially limits AMOD's immediate litigation risk while maintaining upside exposure if the patents prove valuable through court victory or settlement.

The Western District of Texas venue selection is deliberate - this jurisdiction has historically processed patent cases efficiently, though with somewhat less plaintiff advantage following recent judicial assignment changes. The three patents in question (11,108,591; 11,303,473; and 11,310,077) appear relatively recent based on their numbering, which may strengthen their enforceability against current technologies.

This litigation marks a significant strategic direction for AMOD, potentially transforming the company from primarily an AI-driven retail technology provider into a hybrid business that includes aggressive patent monetization. The press release's emphasis on "additional suits and partnerships" signals this isn't an isolated effort but rather the beginning of a coordinated patent assertion campaign targeting multiple companies implementing FCoE technology.

Legal Expert

AMOD's patent funding structure creates flexibility but carries inherent litigation risks despite strategic corporate separation.

The legal architecture of this deal warrants careful examination. AMOD has created a structured funding arrangement that maintains corporate separation between the public company and the direct plaintiff entity, while securing future acquisition rights through an option agreement. This approach potentially provides several strategic advantages: it may offer some liability insulation, create flexible settlement pathways, and potentially address patent standing issues.

However, investors should recognize several important legal realities. Patent litigation against major corporations like Broadcom typically spans 2-3 years before resolution, generating significant legal expenses throughout. Broadcom, with extensive resources and likely its own patent portfolio, can be expected to mount a robust defense, potentially including validity challenges against the asserted patents.

The governance aspects deserve scrutiny as well. The same individual (William Alessi) controls both the public company providing funding and the entity filing the lawsuit. While disclosed in the press release, this relationship creates potential conflicts of interest that sophisticated investors typically monitor carefully.

The shareholder approval requirement for exercising the acquisition option indicates the potential materiality of this transaction. Patent litigation outcomes are inherently unpredictable - while successful enforcement could potentially generate substantial licensing revenue through settlements or court-ordered royalties, unfavorable rulings could result in minimal returns despite significant legal expenditures. The company's characterization of this as potentially "transformative" reflects both the significant upside potential and the speculative nature of litigation-based business strategies.

CORNELIUS, N.C., May 01, 2025 (GLOBE NEWSWIRE) -- Alpha Modus Holdings, Inc. (Nasdaq: AMOD), a leader in AI-driven retail technology , today announced it has executed a patent monetization and funding agreement with Alpha Modus Ventures, LLC, the entity that recently filed a patent infringement lawsuit against Broadcom Inc on April 22, 2025.

Under the terms of the agreement, Alpha Modus Holdings, Inc. (AMOD) will fund litigation efforts related to the enforcement by Alpha Modus Ventures, LLC (an entity controlled by the CEO of Alpha Modus Holdings, Inc., William Alessi) of U.S. Patent Nos. 11,108,591; 11,303,473; and 11,310,077, which cover breakthrough technologies for transporting Fibre Channel data over Ethernet—a technology the company believes is being broadly infringed by Broadcom and others.

"This transaction underscores our commitment to unlocking value through aggressive IP enforcement and strategic funding structures," said William Alessi, CEO of Alpha Modus Holdings, Inc. "We believe this case against Broadcom will be transformative in both financial and strategic terms."

Importantly, the parties have also executed an option agreement granting Alpha Modus Holdings, Inc., the right to acquire 100% of Alpha Modus Ventures, LLC. The acquisition, if completed, will further consolidate patent ownership under AMOD and strengthen its position in ongoing and future enforcement actions. The exercise of the option will be subject to shareholder approval and other conditions, and there is no guaranty that the option will be exercised.

"This marks yet another major milestone in our strategic roadmap," Alessi added. "Alpha Modus has demonstrated its ability to identify valuable intellectual property, launch enforcement campaigns, and translate litigation into shareholder value. This agreement should continue that momentum."

The litigation against Broadcom is now actively underway in the United States Western District Texas Court and represents one of several high-stakes actions brought or funded by Alpha Modus. The company anticipates additional suits and partnerships will follow as part of its broader strategy to assert and monetize its growing IP portfolio.

For more information and to access Alpha Modus’ press room, visit: https://alphamodus.com/press-room/

For more information about Alpha Modus and its portfolio of innovations, please visit alphamodus.com.

About Alpha Modus

Alpha Modus is a technology company specializing in artificial intelligence solutions for the retail industry. Alpha Modus develops and licenses data-driven technologies that enhance consumer engagement and optimize in-store experiences. Headquartered in Cornelius, North Carolina, Alpha Modus is committed to leading the evolution of retail through innovation and strategic partnerships.

Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Alpha Modus’s actual results may differ from their expectations, estimates, and projections, and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. These forward-looking statements include, without limitation, Alpha Modus’s expectations with respect to future performance.

Alpha Modus cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Alpha Modus does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.

Contact Information

Investor Relations
Alpha Modus Holdings, Inc.
Email: ir@alphamodus.com
Website: www.alphamodus.com

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A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5a84231f-ea70-46e2-b965-6bd06aba64ff

FAQ

What patents is AMOD enforcing against Broadcom in the May 2025 lawsuit?

AMOD is enforcing U.S. Patent Nos. 11,108,591, 11,303,473, and 11,310,077, which cover technologies for transporting Fibre Channel data over Ethernet.

What is the significance of AMOD's option to acquire Alpha Modus Ventures?

The acquisition option would allow AMOD to consolidate patent ownership and strengthen its position in current and future patent enforcement actions, subject to shareholder approval.

Where is the AMOD vs Broadcom patent lawsuit being heard?

The patent infringement lawsuit is being heard in the United States Western District Texas Court.

Who controls Alpha Modus Ventures in the AMOD patent lawsuit against Broadcom?

Alpha Modus Ventures is controlled by William Alessi, who is also the CEO of Alpha Modus Holdings (AMOD).

When did Alpha Modus Ventures file the patent lawsuit against Broadcom?

The patent infringement lawsuit was filed against Broadcom on April 22, 2025.