Alpha Modus Holdings, Inc. To Strengthen Balance Sheet by $31 Million Through CEO-Led Capital Restructuring

Rhea-AI Summary

Alpha Modus Holdings (NASDAQ: AMOD) announced a significant capital restructuring led by CEO William Alessi, involving the conversion of Series C Preferred Stock into Class A Common Stock through his family trusts. This strategic move will strengthen the company's balance sheet by $31 million, reducing mezzanine equity by $31,151,393 while increasing common stock by 26,515,152 shares. The restructuring will boost Additional Paid-in Capital by $31,148,742, enhancing the company's financial flexibility and long-term solvency metrics. The transaction aims to improve capital structure, optimize the balance sheet, increase transparency for investors, and demonstrate insider confidence in the company's future growth potential.

Positive

• $31 million reduction in preferred equity obligations improves balance sheet strength
• Conversion of preferred to common stock aligns CEO interests with shareholders
• Increased transparency and simplified equity structure for investors
• Enhanced ability to access capital markets due to improved solvency metrics
• Strong insider confidence signal through CEO family trust participation

Negative

• Significant dilution with addition of 26.5 million new common shares
• Potential downward pressure on stock price due to increased share count

Insights

Financial Restructuring Analyst

CEO-led $31M equity restructuring strengthens balance sheet, reduces preferred stock overhang, and signals insider confidence in long-term growth.

Alpha Modus is executing a notable balance sheet transformation through the conversion of $31.15 million in Series C Preferred Stock into Class A Common Stock. This transaction isn't merely cosmetic—it represents a fundamental strengthening of the company's financial position by shifting obligations from the mezzanine section (between liabilities and equity) directly into permanent shareholder equity.

The mechanics of this restructuring are straightforward but powerful. The company will reduce its mezzanine equity by $31,151,393 while increasing common stock and additional paid-in capital by nearly the same amount (split between a nominal $2,651 for the common shares and $31,148,742 for the capital surplus). The result is 26,515,152 new common shares issued to the CEO's family trusts.

From a financial health perspective, this move delivers several concrete benefits. First, it eliminates a significant overhang of preferred equity claims that had priority over common shareholders. Second, it substantially improves key solvency metrics that institutional investors and lenders evaluate. Third, it simplifies the capital structure, enhancing analytical transparency.

What makes this particularly noteworthy is that it's being led by the CEO's family interests. This signals strong insider confidence in Alpha Modus' future at current valuation levels. By converting preferred shares (which typically carry liquidation preferences and other protective provisions) into common stock, the CEO is effectively placing his financial interests in direct alignment with ordinary shareholders rather than maintaining a privileged position.

For a NASDAQ-listed emerging technology company, this capital restructuring could meaningfully improve its ability to attract institutional investment and potentially secure more favorable terms for future capital raises, supporting its stated focus on AI-driven retail technology and patent enforcement.

CORNELIUS, N.C., June 04, 2025 (GLOBE NEWSWIRE) -- Alpha Modus Holdings, Inc. (NASDAQ: AMOD), an emerging leader in AI-driven retail technology, today announced a transformative improvement to its capital structure, driven by the planned exchange of Series C Preferred Stock into Class A Common Stock by CEO William Alessi’s affiliated family trusts. The transaction should not only align the CEO family with common shareholders but should deliver a material $31 million boost to shareholder equity.

As a result of the transaction:

• Mezzanine Equity to be reduced by $31,151,393
  Significantly reducing preferred equity overhang and long-term liabilities.
• Common Stock to be increased by 26,515,152 shares and $2,651
  Reflecting the conversion and aligning economic interests with all shareholders.
• Additional Paid-in Capital to be increased by $31,148,742
  Boosting the Company’s permanent equity base and financial flexibility.
  

This reallocation of capital should remove approximately $31 million in preferred equity obligations from the mezzanine section of the balance sheet, which should enhance the Company's long-term solvency metrics, lower perceived risk, and improve its ability to access capital markets going forward.

“This isn’t just a show of faith—it’s a structural upgrade,” said CEO William Alessi. “We’re realigning our capital stack in a way that strengthens Alpha Modus from the inside out. This is a powerful message to current and future investors: we’re positioning ourselves for growth, not debt.”

Implications for Investors and the Company:

• Improved Capital Structure: By reducing mezzanine equity and boosting common equity, the Company believes it will enhance its attractiveness to institutional investors.
• Balance Sheet Optimization: The exchange should significantly de-leverage Alpha Modus’ balance sheet, through decreasing shareholder deficit and increasing tangible shareholder equity.
• Increased Investor Transparency: The reclassification from preferred to common stock should improve visibility and simplify equity calculations for analysts and investors.
• Signal of Confidence: The move reinforces that insiders see current valuations as opportunistic and are betting on a long-term upward trend.

The financial figures cited above are estimates prior to quarter-end and will be finalized in the Company’s upcoming quarterly filing.

Alpha Modus remains committed to its mission of driving shareholder value through patent enforcement, AI technology adoption, and strategic expansion in the retail innovation sector.

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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A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5efe555b-ba30-4857-8d5c-0410b21901ea

FAQ

What is the impact of AMOD's $31 million capital restructuring on shareholders?

The restructuring reduces preferred equity by $31M, increases common stock by 26.5M shares, and improves balance sheet strength, though it creates dilution for existing shareholders.

How many new shares will be issued in Alpha Modus' (AMOD) restructuring?

The restructuring will result in the issuance of 26,515,152 new Class A Common Stock shares.

What are the benefits of AMOD's capital restructuring?

Benefits include improved balance sheet strength, better access to capital markets, increased transparency, and alignment of CEO interests with common shareholders.

How will AMOD's capital restructuring affect its balance sheet?

The restructuring will reduce mezzanine equity by $31.15M, increase Additional Paid-in Capital by $31.15M, and strengthen overall financial flexibility.

What is CEO William Alessi's role in AMOD's capital restructuring?

CEO William Alessi is leading the restructuring through his family trusts, converting Series C Preferred Stock into Class A Common Stock.