Alpha Modus Holdings (AMOD) risk factors, FY2024 10-K

Other

1. 01We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. We reserve the right not to provide risk factors in our future filings

Risks Related to Alpha Modus’ Business and Industry

1. 02The Company had operating losses and negative cash flows from operating activities in the past, and it may not achieve or sustain profitability
2. 03If Alpha Modus is unable to continue as a going concern, its securities will have little or no value
3. 04The artificial intelligence (AI) technology market in which Alpha Modus participates is competitive, and if it does not compete effectively, its business, operating results and financial condition could be harmed
4. 05If Alpha Modus fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, its business may be materially and adversely affected
5. 06Issues arising in connection with the use of AI in the market generally may result in reputational harm or liability to Alpha Modus

Risks Related to Alpha Modus’ Intellectual Property

1. 07Alpha Modus may fail to obtain, maintain, and protect its intellectual property rights and proprietary information or prevent third parties from any unauthorized use of its technologies
2. 08Alpha Modus will likely become subject to intellectual property disputes, which are typically costly and may subject us to significant liability and increased costs of business
3. 09Alpha Modus’ intellectual property business is reliant on the strength of is patent portfolios and is subject to evolving legislation, regulations, and rules associated with patent law, which may adversely affect its business
4. 10Changes to patent laws in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing Alpha Modus’ ability to protect its product or its current or future product candidates
5. 11The enforcement of Alpha Modus’ intellectual property rights depends in part upon its ability to retain the best legal counsel in order to achieve favorable outcomes from litigation, and Alpha Modus’ desired legal counsel may become conflicted out of such representation
6. 12Alpha Modus may experience delays in successful prosecution, enforcement, and licensing of its patent portfolio
7. 13Because Alpha Modus’ patents are expected to expire in 2034-2037, its continued operations beyond those dates will depend on its ability to obtain additional patents with later expiration dates
8. 14Alpha Modus’ lack of patent enforcement and licensing experience could adversely affect its operations
9. 15Alpha Modus may not be able to protect its intellectual property rights throughout the world

Risks Related to Being a Public Company

1. 16Alpha Modus is incurring increased costs as a result of operating as a public company, and its management will devote substantial time to compliance with its public company responsibilities and corporate governance practices
2. 17Alpha Modus’ management team has limited experience managing a Nasdaq-listed public company
3. 18If we were deemed to be an investment company for purposes of the Investment Company Act of 1940, as amended (the “Investment Company Act”), we may be required to liquidate the Company
4. 19Alpha Modus is a “controlled company” within the meaning of the listing rules of Nasdaq and, as a result, can rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies
5. 20Alpha Modus may issue additional shares of common or preferred stock, which would dilute the interests of stockholders and likely present other risks
6. 21Alpha Modus may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to holders, thereby making the Public Warrants worthless
7. 22We may be subject to the Excise Tax included in the Inflation Reduction Act of 2022 in connection with redemptions of our Common Stock after December 31, 2022
8. 23We expect that we will retain most, if not all, of our available funds and any future earnings to fund our operations and the development and growth of our business. As a result, we do not expect that we will pay any cash dividends on our common stock in the foreseeable future
9. 24The existence of indemnification rights to the Company’s directors, officers, and employees may result in substantial expenditures by the Combined Company and may discourage lawsuits against its directors, officers, and employees
10. 25If the Company fails to develop or maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results or prevent financial fraud. As a result, current and potential stockholders could lose confidence in its financial reporting
11. 26Effective internal control is necessary to provide reliable financial reports and effectively prevent fraud. If the Company cannot provide reliable financial reports or prevent fraud, it could be subject to regulatory action or other litigation and its operating results could be harmed

Risks Related to Ownership of Alpha Modus’ Shares

1. 27Anti-takeover provisions contained in the Amended and Restated Charter and the Company’s Bylaws, as well as provisions of Delaware law, could impair a takeover attempt
2. 28These provisions, alone or together, could delay hostile takeovers and changes in control of Alpha Modus or changes in Alpha Modus Board and Alpha Modus’ management
3. 29Claims for indemnification by Alpha Modus’ directors and officers may reduce Alpha Modus’ available funds to satisfy successful third-party claims against Alpha Modus and may reduce the amount of money available to Alpha Modus
4. 30If securities or industry analysts do not publish or cease publishing research or reports about Alpha Modus, its business, or its market, or if they change their recommendations regarding Alpha Modus’ securities adversely, the price and trading volume of Alpha Modus’ securities could decline
5. 31The Company’s Series C Preferred Stock, and the future issuances of other debt securities and equity securities, may adversely affect us, including the market price of the Company’s common stock and be dilutive to existing stockholders
6. 32There can be no assurance that the Company’s common stock will continue to be so listed, or that we will be able to comply with the continued listing standards of Nasdaq
7. 33An active market for Alpha Modus’ securities may not develop, which would adversely affect the liquidity and price of Alpha Modus’ securities
8. 34The market price of the Company’s common stock may decline
9. 35Future sales, or the perception of future sales, by Alpha Modus or its stockholders in the public market could cause the market price for Alpha Modus common stock to decline
10. 36Alpha Modus’ failure to meet the continued listing requirements of Nasdaq could result in a delisting of its Securities
11. 37Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination
12. 38We have identified material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner
13. 39The future exercise of registration rights may adversely affect the market price of our common stock