Alpha Modus Holdings, Inc. CEO Affiliates To Exchange Preferred Stock for Common Stock, Demonstrating Confidence in Near Future Outlook

Rhea-AI Summary

Alpha Modus Holdings CEO William Alessi's family trusts have agreed to convert 3.2 million shares of Series C Preferred Stock into 26,079,868 shares of Class A Common Stock, with a lock-up period until June 13, 2026. This $32 million stake conversion removes key downside protections and liquidation preferences associated with the preferred shares. The strategic move aims to reduce the preferred equity stack and demonstrates management's confidence in the company's valuation and future prospects. The transaction is expected to support NASDAQ listing compliance by enhancing the company's market value of listed securities (MVLS) and protect common shareholders from potential future dilution by fixing conversion terms at current market prices.

Positive

• CEO's family converts $32 million worth of preferred shares to common stock, showing strong confidence in company's future
• Removal of liquidation preferences and downside protections on 3.2M preferred shares benefits common shareholders
• Lock-up period until June 2026 demonstrates long-term commitment from management
• Transaction helps with NASDAQ listing compliance by improving market value of listed securities
• Conversion at current market prices prevents potential future dilution for common shareholders

Negative

• Significant increase in common shares outstanding could impact stock price
• CEO family still retains portion of preferred holdings with special rights and protections

Insights

Corporate Finance Specialist

CEO's $32M preferred-to-common conversion signals strong confidence while removing liquidation preferences and downside protections that favored preferred shareholders.

The announcement that CEO William Alessi's family trusts are converting 3.2 million shares of Series C Preferred Stock into 26,079,868 shares of Class A Common Stock represents a significant restructuring of Alpha Modus' capital hierarchy. This transaction, valued at approximately $32 million, eliminates important downside protections that previously benefited these preferred shareholders at the expense of common stockholders. The preferred shares carried liquidation preferences (meaning they would be paid first in any liquidation scenario) and likely had redemption rights that have now been voluntarily relinquished.

Most notably, this conversion locks in the exchange ratio at current market prices, removing the risk of additional dilution that could have occurred if the preferred shares were converted later at lower stock prices. This is particularly significant as preferred shares often contain anti-dilution provisions that would issue more common shares if conversion happens at lower prices. By converting now and accepting a lock-up period through June 2026, the CEO has essentially capped the dilution from these shares and aligned his family's financial interests directly with common shareholders.

The mentioned NASDAQ compliance benefits suggest the company may have been facing challenges meeting the exchange's minimum Market Value of Listed Securities requirements. This conversion should boost the company's MVLS by increasing the publicly traded float, potentially securing its continued listing status. While CEO confidence signals are often overstated, this transaction represents genuine financial risk-taking by the Alessi family, forfeiting the safety net of preferred stock protections in favor of common shareholder alignment.

CORNELIUS, N.C., June 02, 2025 (GLOBE NEWSWIRE) -- Alpha Modus Holdings, Inc. (NASDAQ: AMOD), a pioneer in AI-driven retail technology, today announced that CEO William Alessi’s affiliated family trusts have agreed to voluntarily exchange a substantial portion—3.2 million shares—of their Series C Preferred Stock into 26,079,868 shares of Class A Common Stock, and have agreed to lock-up those shares of common stock until June 13, 2026. This strategic move will significantly reduce the preferred equity stack, eliminate associated key stock price downside protections associated with the preferred stock being exchanged, and underscore growing optimism about the Company’s immediate future trajectory.

While the Alessi family will retain a portion of their original preferred holdings, this major exchange signals a strong alignment with the Company’s common shareholders and a personal financial commitment to the Company's long-term success by the CEO’s family.

“No one has a clearer line of sight into Alpha Modus than I do,” said CEO William Alessi. “By voluntarily exchanging what amounts to a $32 million stake in preferred stock—complete with liquidation preferences and downside protections—into common shares, I’m making a clear, public statement: I believe Alpha Modus is undervalued, and the path forward should reward long-term common shareholders. This is not just alignment; it’s commitment.”

Shareholder-Focused Benefits of the Exchange Include:

• Removal of Liquidation Preferences and Redemption Rights on 3.2M Preferred Shares.
  The transaction will strip away preferential treatment on the preferred shares being exchanged, which should provide other common shareholders increased residual value.
• Fixing Exchange Terms at Today’s Valuation
  The exchange should allow common shareholders to avoid potential future dilution that could have occurred had the preferred shares being exchanged remained outstanding, by locking in the number of shares of common stock issuable upon conversion based on current market pricing, removing the risk of additional shares being issuable upon conversion of the preferred if stock prices decline in the future.
• Support for NASDAQ Compliance
  The transaction should enhance the Company’s market value of listed securities (MVLS), aiding in compliance with NASDAQ’s continued listing requirements.
• CEO Takes on Market Risk
  By exchanging into common stock now—and agreeing to a lock-up through June 2026—the Alessi family is signaling strong conviction in Alpha Modus’ growth prospects.

Though not a public forecast, the CEO’s decision may be viewed by shareholders as a vote of confidence in the Company’s near-term outlook, and a possible signal that the CEO believes that current pricing does not reflect the Company’s underlying value or achievement of operational milestones.

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

About Alpha Modus Holdings, Inc.
Alpha Modus Holdings, Inc. (NASDAQ: AMOD) is pioneering the future of retail through advanced AI and real-time intelligence. With a defensible IP portfolio and a relentless focus on innovation, Alpha Modus enables smarter retail decisions and positions its shareholders at the forefront of the AI retail revolution.

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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FAQ

What is the significance of AMOD CEO converting preferred shares to common stock?

The conversion of $32 million worth of preferred shares to common stock demonstrates management's confidence in the company's future and removes special rights and protections, better aligning CEO interests with common shareholders.

How many shares are involved in the AMOD preferred stock conversion?

3.2 million shares of Series C Preferred Stock are being converted into 26,079,868 shares of Class A Common Stock.

What is the lock-up period for the converted AMOD shares?

The converted shares will be locked up until June 13, 2026, preventing their sale during this period.

How does the AMOD preferred stock conversion benefit shareholders?

The conversion removes liquidation preferences and downside protections, fixes conversion terms at current prices to prevent future dilution, and helps with NASDAQ listing compliance.

What is the value of the preferred stock being converted by AMOD's CEO?

The preferred stock being converted is valued at $32 million.