[8-K] Insight Acquisition Corp. Warrant Reports Material Event

Rhea-AI Filing Summary

BTCS Inc. (NASDAQ: BTCS) filed an 8-K disclosing that on 14 July 2025 it borrowed an additional USDT 2.34 million from the AAVE decentralized-finance protocol, lifting total AAVE borrowings to USDT 17.8 million. The debt is collateralised by 16,232 ETH (≈ US$49.1 million @ US$3,025/ETH) and has no fixed maturity; repayment is enforced automatically if the AAVE health factor falls below one. At announcement, the variable borrowing rate was 5.4 %, while the staked ETH collateral earned ≈ 2 %, resulting in an estimated net funding cost of 3.4 %.

The proceeds were used to purchase an additional 2,731 ETH (US$8.24 million) that the Company has staked or intends to stake through its NodeOps validator business. Post-transaction, BTCS held 31,855 ETH with a fair value of US$96.2 million, and total cryptocurrency plus cash holdings of US$100.6 million.

BTCS’s board has authorised management to utilise leverage up to 40 % of total assets (inclusive of convertible notes) at the time of borrowing. The structure provides a high collateral cushion (~2.8×) but introduces liquidation risk if ETH prices fall or AAVE rates rise sharply. Investors should weigh the potential staking yield expansion against increased balance-sheet leverage and DeFi counter-party complexities.

Positive

• Low net funding cost: 3.4 % spreads versus potential staking yields could be earnings-accretive.
• Collateral cushion: 2.8× ETH coverage reduces immediate liquidation probability.
• Strategic asset growth: ETH holdings rise to 31,855 coins, enhancing NodeOps scale.

Negative

• Increased leverage: Total AAVE borrowings now USDT 17.8 million with no fixed maturity.
• Variable interest rate risk: Borrowing cost can rise unexpectedly under DeFi market stress.
• Liquidation exposure: ETH price drop below the health-factor threshold triggers automatic collateral sales.

Insights

Equity Research Analyst

TL;DR: Low-cost leverage raises ETH exposure to drive staking revenue, but health factor must be watched closely.

The incremental USDT 2.34 million draw brings total DeFi leverage to ~18 % of reported crypto value, comfortably below the 40 % board cap. With net funding at 3.4 % and potential staking yields in the 4-6 % range, the spread could be positive and accretive to operating cash flow. The collateral ratio (~280 %) offers a sizeable buffer, implying ETH could decline roughly 55-60 % before triggering a forced liquidation. For growth-oriented investors this move aligns with BTCS’s strategy of monetising validator economics and expanding NodeOps footprint. Near-term EPS impact is limited because interest expense will mostly offset staking rewards; however, NAV per share becomes more sensitive to ETH price swings, making the stock a leveraged play on Ethereum.

Risk Analyst

TL;DR: Variable-rate DeFi debt heightens downside volatility; liquidation risk is real if ETH corrects sharply.

The absence of a fixed term means AAVE’s smart contract can liquidate collateral automatically once the health factor slips below one, potentially crystallising losses during market stress. The interest rate floats and could spike in liquidity crunches, while staking rewards could lag. Concentration in a single asset (ETH) plus reliance on a permissionless protocol adds smart-contract and counter-party risk not present in traditional finance. Leverage at 18 % of crypto assets today could rise quickly if ETH falls, given the borrowings are denominated in a stablecoin. Overall, the risk profile has materially increased even though headline leverage remains below board limits.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 11, 2025

ALPHA MODUS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-40775		86-3386030
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

20311 Chartwell Center Dr., #1469

Cornelius, NC 28031

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (704) 252-5050

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share		AMOD		The Nasdaq Stock Market, LLC
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50		AMODW		The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On July 11, 2025, Alpha Modus Holdings, Inc. (the “Company”) and Rodney Sperry, the Company’s CFO, entered into an Amended Employment Agreement (the “Amended Employment Agreement”), pursuant to which Mr. Sperry’s salary was increased to $144,000 per year, payable $72,000 per year in cash, and $72,000 per year in shares of Company common stock, payable quarterly on the last day of each fiscal quarter beginning July 1, 2025, and valued based on the closing price listed on Nasdaq.com as of the last trading day during the quarter.

The foregoing description of the Amended Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The disclosure provided above in Item 1.01 above is incorporated by reference into this Item 5.02.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
10.1		Amended Employment Agreement, dated July 1, 2025, by and between Alpha Modus Holdings, Inc., and Rodney Sperry
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALPHA MODUS HOLDINGS, INC.
Date: July 15, 2025	By:	/s/ William Alessi
	Name:	William Alessi
	Title:	President and Chief Executive Officer

FAQ

How much did BTCS (BTCS) borrow from AAVE on 14 July 2025?

The Company borrowed USDT 2.34 million, taking total AAVE borrowings to USDT 17.8 million.

What collateral secures BTCS’s AAVE loan and what is its value?

BTCS pledged 16,232 ETH worth approximately US$49.1 million based on a US$3,025 ETH price.

What is the current interest rate on BTCS’s AAVE borrowing?

The variable rate was about 5.4 % per annum at the time of the additional draw.

How many ETH does BTCS now hold and what is the aggregate value?

The Company holds 31,855 ETH valued at roughly US$96.2 million.

What leverage limit has BTCS’s board approved?

Management may borrow up to 40 % of total assets (including convertible notes) at the time of borrowing.

Why is the AAVE loan potentially risky for BTCS shareholders?

A sharp ETH price decline or spike in AAVE rates could drop the health factor below 1, triggering automatic liquidation of the Company’s collateral.