What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-04-15 · 973 added, 1080 removed, 26 unchanged (99% of the section changed)

Risk Factors.

We 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.

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.

An investment in our common

stock involves a high degree of risk.

Before deciding to purchase, hold, or sell our common stock, you should consider carefully the risks

described below in addition to the cautionary statements and risks described elsewhere in this Annual Report and in our other filings

with the SEC, including our registration statements and reports on Forms 10-K, 10-Q and 8-K.

The risks and uncertainties described below

are not the only ones we face.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also

impair our business operations.

If any of these known or unknown risks or uncertainties actually occur, our business, financial condition,

results of operations or cash flows could be seriously harmed.

This could cause the trading price of our common stock to decline, resulting

in a loss of all or part of your investment.

Risks Related to Alpha Modus’ Business

The Company had operating losses and negative

cash flows from operating activities in the past, and it may not achieve or sustain profitability.

The Company had an operating

loss of $834,895 and net cash used in operating activities of $1,676,499 in 2024.

The Company cannot assure you that it will be able to

generate net profit or positive cash flows from operating activities in the future.

Its future revenue growth and profitability will depend

on a variety of factors, many of which are beyond its control.

These factors include effectiveness of its monetization strategy, its ability

to control costs and expenses and to manage its growth effectively, market competition, and the macroeconomic and regulatory environment.

The Company may fail to develop and improve its operational, financial and managerial controls, enhance its financial reporting systems

and procedures, recruit, train and retain skilled professional personnel, or maintain customer satisfaction to effectively support and

manage its future growth.

If the Company invests substantial time and resources to expand its patent family but fails to manage the growth

of its business and capitalize on its growth opportunities effectively, it may not be able to achieve profitability, and its business,

financial condition, results of operations and prospects would be materially and adversely affected.

If Alpha Modus is unable to continue as

a going concern, its securities will have little or no value.

Although the Company’s

audited financial statements for the years ended December 31, 2024 and 2023, were prepared under the assumption that it would continue

our operations as a going concern, the reports of its independent registered public accounting firm that accompanies its financial statements

for the years ended December 31, 2024 and 2023, contain a going concern qualification in which such firm expressed substantial doubt about

the Company’s ability to continue as a going concern, based on its financial statements and results at that time, including its

lack of current revenues, recurring losses from operations and net capital deficiency.

The Company expects to continue

to incur significant expenses in 2025.

The Company’s prior losses and potential expected future losses have had, and will continue

to have, an adverse effect on its financial condition.

In addition, continued operations and the Company’s ability to continue as

a going concern may be dependent on its ability to obtain additional financing in the near future and thereafter, and there are no assurances

that such financing will be available to it at all or will be available in sufficient amounts or on reasonable terms.

The Company’s

financial statements do not include any adjustments that may result from the outcome of this uncertainty.

If the Company is unable to

generate sufficient additional funds in the future through operations, financings or from other sources or transactions, it will exhaust

its resources and will be unable to continue operations.

If it cannot continue as a going concern, its shareholders would likely lose

most or all of their investment in it.

The 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.

The AI market is competitive

and rapidly evolving.

The principal competitive factors in Alpha Modus’ market include research and development capabilities, industry

know-how, continuous capital investment, product portfolio, among others.

Many of Alpha Modus’ competitors have substantial competitive

advantages, including larger scale, longer operating history, greater brand recognition, more established relationships with customers,

suppliers and partners, and greater financial, research and development, marketing and other resources.

As a result, Alpha Modus’

competitors may be able to respond more quickly and effectively than Alpha Modus can to new or changing opportunities, technologies, standards

or customer requirements.

In addition, some competitors may offer products, solutions and services that address one or more number of

functions with greater depth, application, or functionality greater than Alpha Modus’ solutions and technologies.

existing and potential competitors may develop and market new products, solutions and services with functionality comparable to it.

Alpha Modus is unable to compete successfully against its current or potential competitors, its business, financial condition, and results

of operations may be materially and adversely impacted.

If 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.

The AI industry market is

subject to rapid technological changes, evolving industry standards, regulations and customer needs, requirements and preferences.

success of Alpha Modus’ business will depend, in part, on its ability to adapt and respond to these changes on an effective and

timely basis.

If it fails to improve its technologies in a way that satisfies potential users or customers of intellectual property that

keep pace with rapid technological and industry changes, its business, operating results and financial condition could be adversely affected.

If new technologies emerge that are able to deliver competitive products, solutions and services at lower prices, more efficiently, more

conveniently or more securely, such technologies could adversely impact Alpha Modus’ ability to compete effectively.

Issues arising in connection with the use

of AI in the market generally may result in reputational harm or liability to Alpha Modus.

As with many disruptive innovations,

AI presents risks and challenges that could affect its adoption, and therefore Alpha Modus’ business.

investment in our common stock involves a high degree of risk.

Before deciding to purchase, hold, or sell our common stock, you should

consider carefully the risks described below in addition to the cautionary statements and risks described elsewhere in this Annual Report

and in our other filings with the SEC, including our registration statements and reports on Forms 10-K, 10-Q and 8-K.

The risks and uncertainties

described below are not the only ones we face.

Additional risks and uncertainties not presently known to us or that we currently deem

immaterial may also impair our business operations.

If any of these known or unknown risks or uncertainties actually occur, our business,

financial condition, results of operations or cash flows could be seriously harmed.

This could cause the trading price of our common

stock to decline, resulting in a loss of all or part of your investment.

Related to Alpha Modus’ Business and Industry

Company had operating losses and negative cash flows from operating activities in the past, and it may not achieve or sustain profitability.

Company had an operating loss of $5,244,188 and net cash used in operating activities of $3,210,182 in 2025.

The Company cannot assure

you that it will be able to generate net profit or positive cash flows from operating activities in the future.

Its future revenue growth

and profitability will depend on a variety of factors, many of which are beyond its control.

These factors include effectiveness of its

monetization strategy, its ability to control costs and expenses and to manage its growth effectively, market competition, and the macroeconomic

and regulatory environment.

The Company may fail to develop and improve its operational, financial and managerial controls, enhance its

financial reporting systems and procedures, recruit, train and retain skilled professional personnel, or maintain customer satisfaction

to effectively support and manage its future growth.

If the Company invests substantial time and resources to expand its patent family

but fails to manage the growth of its business and capitalize on its growth opportunities effectively, it may not be able to achieve

profitability, and its business, financial condition, results of operations and prospects would be materially and adversely affected.

Alpha Modus is unable to continue as a going concern, its securities will have little or no value.

the Company’s audited financial statements for the years ended December 31, 2025 and 2024, were prepared under the assumption that

it would continue our operations as a going concern, the reports of its independent registered public accounting firm that accompanies

its financial statements for the years ended December 31, 2025 and 2024, contain a going concern qualification in which such firm expressed

substantial doubt about the Company’s ability to continue as a going concern, based on its financial statements and results at

that time, including its lack of current revenues, recurring losses from operations and net capital deficiency.

Company expects to continue to incur significant expenses in 2026.

The Company’s prior losses and potential expected future losses

have had, and will continue to have, an adverse effect on its financial condition.

In addition, continued operations and the Company’s

ability to continue as a going concern may be dependent on its ability to obtain additional financing in the near future and thereafter,

and there are no assurances that such financing will be available to it at all or will be available in sufficient amounts or on reasonable

The Company’s financial statements do not include any adjustments that may result from the outcome of this uncertainty.

If the Company is unable to generate sufficient additional funds in the future through operations, financings or from other sources or

transactions, it will exhaust its resources and will be unable to continue operations.

If it cannot continue as a going concern, its

shareholders would likely lose most or all of their investment in it.

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.

AI market is competitive and rapidly evolving.

The principal competitive factors in Alpha Modus’ market include research and development

capabilities, industry know-how, continuous capital investment, product portfolio, among others.

Many of Alpha Modus’ competitors

have substantial competitive advantages, including larger scale, longer operating history, greater brand recognition, more established

relationships with customers, suppliers and partners, and greater financial, research and development, marketing and other resources.

As a result, Alpha Modus’ competitors may be able to respond more quickly and effectively than Alpha Modus can to new or changing

opportunities, technologies, standards or customer requirements.

In addition, some competitors may offer products, solutions and services

that address one or more number of functions with greater depth, application, or functionality greater than Alpha Modus’ solutions

and technologies.

Alpha Modus’ existing and potential competitors may develop and market new products, solutions and services with

functionality comparable to it.

If Alpha Modus is unable to compete successfully against its current or potential competitors, its business,

financial condition, and results of operations may be materially and adversely impacted.

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.

AI industry market is subject to rapid technological changes, evolving industry standards, regulations and customer needs, requirements

and preferences.

The success of Alpha Modus’ business will depend, in part, on its ability to adapt and respond to these changes

on an effective and timely basis.

If it fails to improve its technologies in a way that satisfies potential users or customers of intellectual

property that keep pace with rapid technological and industry changes, its business, operating results and financial condition could

be adversely affected.

If new technologies emerge that are able to deliver competitive products, solutions and services at lower prices,

more efficiently, more conveniently or more securely, such technologies could adversely impact Alpha Modus’ ability to compete

arising in connection with the use of AI in the market generally may result in reputational harm or liability to Alpha Modus.

with many disruptive innovations, AI presents risks and challenges that could affect its adoption, and therefore Alpha Modus’ business.

AI algorithms may be flawed.

Datasets may be insufficient or contain biased information.

Inappropriate or controversial data practices could impair the acceptance

of AI solutions.

These deficiencies could undermine the decisions, predictions, or analysis AI applications produce, subjecting the providers

of AI technologies generally, including Alpha Modus, to competitive harm, legal liability, and brand or reputational harm.

Some AI scenarios

present ethical or data privacy issues.

If Alpha Modus enables or offers AI solutions that are controversial because of their impact on

human rights, privacy, employment, or other social issues, it may experience brand or reputational harm.

Risks Related to Alpha Modus’ Intellectual

Alpha 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.

Alpha Modus’ trade secrets,

trademarks, patents, and other intellectual property rights are critical to its success.

Alpha Modus expects to rely on confidentiality

agreements and non-compete agreements with third parties to protect its intellectual properties.

However, events beyond its control may

pose threats to its intellectual property rights and the integrity of its technologies and brand.

Effective protection of Alpha Modus’

intellectual property rights is expensive and challenging.

While Alpha Modus has taken measures to protect its intellectual property rights

by filing patent applications, pursuing patent prosecution, and obtaining patents in the United States, such efforts are inadequate to

guard against and prohibit potential infringement and misappropriation.

In addition, Alpha Modus’ intellectual property rights may

be declared invalid or unenforceable by the courts.

Furthermore, Alpha Modus cannot assure you that any of its pending patent or other

intellectual property rights applications will ultimately proceed to registration or will result in registration with adequate scope for

its business.

Some of Alpha Modus’ applications or registrations may be successfully challenged or invalidated by others.

Modus’ intellectual property rights applications are not successful, it may have to use different intellectual property rights for

its affected technologies, or seek to enter into arrangements with any third parties who may have prior registrations, applications or

rights, which might not be available on commercially reasonable terms, if at all.

If Alpha Modus fails to protect or enforce its intellectual

property rights, its competitors may use its technologies without authorization.

As a result, future customers and partners could then

devalue Alpha Modus’ technologies, and Alpha Modus’ ability to compete effectively may be impaired, which could have a material

adverse effect on its business, financial condition and results of operations.

Alpha 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.

Alpha Modus competes in markets

where there are a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights, as well

as disputes regarding infringement of these rights.

Alpha Modus intends to enforce its patent rights by bringing legal claims against

other parties, and its competitors and other third parties may, whether rightly or falsely, bring legal claims against it for infringing

on their intellectual property rights.

The intellectual property laws in the United States, which cover the validity, enforceability and

scope of protection of intellectual property rights, are evolving, and litigation is a popular means to resolve commercial disputes.

intellectual property lawsuits against Alpha Modus, whether successful or not, may harm our brand and reputation.

Prosecuting and defending

intellectual property claims is costly and can impose a significant burden on our management and resources.

Any intellectual property

litigation to which Alpha Modus becomes a party may require it to do one or more of the following:

cease selling, licensing, or using products or features that incorporate the intellectual property rights that Alpha Modus allegedly infringes, misappropriates, or violates;

make substantial payments for legal fees, settlement payments, or other costs or damages, including indemnification of third parties;

obtain a license or enter into a royalty agreement, either of which may not be available on reasonable terms or at all, in order to obtain the right to sell or use the relevant intellectual property;

redesign the allegedly infringing products or services to avoid infringement, misappropriation, or violation, which could be costly, time-consuming, or impossible.

Further, there is no guarantee

that Alpha Modus can obtain favorable judgment in its legal cases, in which case it may need to pay damages or be forced to cease using

certain intellectual property that is critical to our technology or service offerings.

Any resulting liabilities or expenses or required

changes to technologies may have a material adverse effect on Alpha Modus’ business, results of operations, and prospects.

Alpha 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.

The success of Alpha Modus’

intellectual property business is heavily dependent on obtaining and enforcing patents.

Patent acquisition and enforcement is costly,

time-consuming, and inherently uncertain.

Obtaining and enforcing patents across various industries, including the artificial intelligence

industry, involves a high degree of technological and legal complexity.

Alpha Modus’ patent rights may be affected by developments

or uncertainty in U.S.

Inappropriate or controversial data practices

could impair the acceptance of AI solutions.

These deficiencies could undermine the decisions, predictions, or analysis AI applications

produce, subjecting the providers of AI technologies generally, including Alpha Modus, to competitive harm, legal liability, and brand

or reputational harm.

Some AI scenarios present ethical or data privacy issues.

If Alpha Modus enables or offers AI solutions that are

controversial because of their impact on human rights, privacy, employment, or other social issues, it may experience brand or reputational

Related to Alpha Modus’ Intellectual Property

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.

Modus’ trade secrets, trademarks, patents, and other intellectual property rights are critical to its success.

Alpha Modus expects

to rely on confidentiality agreements and non-compete agreements with third parties to protect its intellectual properties.

events beyond its control may pose threats to its intellectual property rights and the integrity of its technologies and brand.

protection of Alpha Modus’ intellectual property rights is expensive and challenging.

While Alpha Modus has taken measures to protect

its intellectual property rights by filing patent applications, pursuing patent prosecution, and obtaining patents in the United States,

such efforts are inadequate to guard against and prohibit potential infringement and misappropriation.

In addition, Alpha Modus’

intellectual property rights may be declared invalid or unenforceable by the courts.

Furthermore, Alpha Modus cannot assure you that

any of its pending patent or other intellectual property rights applications will ultimately proceed to registration or will result in

registration with adequate scope for its business.

Some of Alpha Modus’ applications or registrations may be successfully challenged

or invalidated by others.

If Alpha Modus’ intellectual property rights applications are not successful, it may have to use different

intellectual property rights for its affected technologies, or seek to enter into arrangements with any third parties who may have prior

registrations, applications or rights, which might not be available on commercially reasonable terms, if at all.

If Alpha Modus fails

to protect or enforce its intellectual property rights, its competitors may use its technologies without authorization.

future customers and partners could then devalue Alpha Modus’ technologies, and Alpha Modus’ ability to compete effectively

may be impaired, which could have a material adverse effect on its business, financial condition and results of operations.

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.

Modus competes in markets where there are a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and

proprietary rights, as well as disputes regarding infringement of these rights.

Alpha Modus intends to enforce its patent rights by bringing

legal claims against other parties, and its competitors and other third parties may, whether rightly or falsely, bring legal claims against

it for infringing on their intellectual property rights.

The intellectual property laws in the United States, which cover the validity,

enforceability and scope of protection of intellectual property rights, are evolving, and litigation is a popular means to resolve commercial

Any intellectual property lawsuits against Alpha Modus, whether successful or not, may harm our brand and reputation.

and defending intellectual property claims is costly and can impose a significant burden on our management and resources.

Any intellectual

property litigation to which Alpha Modus becomes a party may require it to do one or more of the following:

selling, licensing, or using products or features that incorporate the intellectual property rights that Alpha Modus allegedly infringes,

misappropriates, or violates;

substantial payments for legal fees, settlement payments, or other costs or damages, including indemnification of third parties;

a license or enter into a royalty agreement, either of which may not be available on reasonable terms or at all, in order to obtain

the right to sell or use the relevant intellectual property;

the allegedly infringing products or services to avoid infringement, misappropriation, or violation, which could be costly, time-consuming,

or impossible.

there is no guarantee that Alpha Modus can obtain favorable judgment in its legal cases, in which case it may need to pay damages or

be forced to cease using certain intellectual property that is critical to our technology or service offerings.

Any resulting liabilities

or expenses or required changes to technologies may have a material adverse effect on Alpha Modus’ business, results of operations,

and prospects.

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.

success of Alpha Modus’ intellectual property business is heavily dependent on obtaining and enforcing patents.

Patent acquisition

and enforcement is costly, time-consuming, and inherently uncertain.

Obtaining and enforcing patents across various industries, including

the artificial intelligence industry, involves a high degree of technological and legal complexity.

Alpha Modus’ patent rights

may be affected by developments or uncertainty in U.S.

or foreign patent statutes, patent case law, U.S.

Patent and Trademark Office (“USPTO”) rules and regulations

and the rules and regulations of foreign patent offices.

In addition, the United States may, at any time, enact changes to U.S.

law and regulations, including by legislation, by regulatory rulemaking, or by judicial precedent, that adversely affect the scope of

patent protection available and weaken the rights of patent owners to obtain patents, enforce against patent infringement and obtain injunctions

and/or damages.

For example, over the past several years, the Court of Appeals for the Federal Circuit and the Supreme Court issued various

opinions, and the USPTO modified its guidance for practitioners on multiple occasions, either narrowing the scope of patent protection

available in certain circumstances or weakening the rights of patent owners in certain situations.

Other countries may likewise enact

changes to their patent laws in ways that adversely diminish the scope of patent protection and weaken the rights of patent owners to

obtain patents, enforce against patent infringement, and obtain injunctions and/or damages.

In addition to increasing uncertainty with

regard to Alpha Modus’ ability to obtain patents in the future, this combination of events has created uncertainty with respect

to the value of patents, once obtained.

Alpha Modus cannot predict the breadth of claims that may be allowed or enforced in its patents

or in third-party patents, and whether Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable

to it, which may, in turn, affect the value of its patent assets.

Further, the United States

and other governments may, at any time, enact changes to law and regulation that create new avenues for challenging the validity of issued

For example, the Leahy-Smith America Invents Act (described in more detail in the following risk factor) created new administrative

post-grant proceedings, including post-grant review, inter-partes review, and derivation proceedings that allow third parties to challenge

Patent and Trademark Office

(“USPTO”) rules and regulations and the rules and regulations of foreign patent offices.

In addition, the United States may,

at any time, enact changes to U.S.

patent law and regulations, including by legislation, by regulatory rulemaking, or by judicial precedent,

that adversely affect the scope of patent protection available and weaken the rights of patent owners to obtain patents, enforce against

patent infringement and obtain injunctions and/or damages.

For example, over the past several years, the Court of Appeals for the Federal

Circuit and the Supreme Court issued various opinions, and the USPTO modified its guidance for practitioners on multiple occasions, either

narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations.

Other countries may likewise enact changes to their patent laws in ways that adversely diminish the scope of patent protection and weaken

the rights of patent owners to obtain patents, enforce against patent infringement, and obtain injunctions and/or damages.

to increasing uncertainty with regard to Alpha Modus’ ability to obtain patents in the future, this combination of events has created

uncertainty with respect to the value of patents, once obtained.

Alpha Modus cannot predict the breadth of claims that may be allowed

or enforced in its patents or in third-party patents, and whether Congress or other foreign legislative bodies may pass patent reform

legislation that is unfavorable to it, which may, in turn, affect the value of its patent assets.

the United States and other governments may, at any time, enact changes to law and regulation that create new avenues for challenging

the validity of issued patents.

For example, the Leahy-Smith America Invents Act (described in more detail in the following risk factor)

created new administrative post-grant proceedings, including post-grant review, inter-partes review, and derivation proceedings that

allow third parties to challenge the validity of issued patents.

This applies to all of Alpha Modus’ patents.

Because of a lower evidentiary standard in USPTO proceedings

compared to the evidentiary standard in U.S.

federal courts necessary to invalidate a patent claim, a third party could potentially provide

evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to

invalidate the claim if first presented in a district court action.

In addition to increasing uncertainty with regard to Alpha Modus’

ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once

Because of a lower

evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S.

federal courts necessary to invalidate a patent

claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though

the same evidence would be insufficient to invalidate the claim if first presented in a district court action.

In addition to increasing

uncertainty with regard to Alpha Modus’ ability to obtain patents in the future, this combination of events has created uncertainty

with respect to the value of patents, once obtained.

Depending on decisions by the U.S.

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could

change in unpredictable ways that could weaken Alpha Modus’ ability to obtain new patents or to enforce its existing patents and

patents that it might obtain in the future.

Additionally, new rules regarding

the burden of proof in patent enforcement actions could significantly increase the cost of Alpha Modus’ enforcement actions, and

new standards or limitations on liability for patent infringement could negatively impact Alpha Modus’ revenue derived from such

enforcement actions.

In addition, recent federal court decisions have lowered the threshold for obtaining attorneys’ fees in patent

infringement cases and increased the level of deference given to a district court’s fee-shifting determination.

These decisions

may make it easier for district courts to shift a prevailing party’s attorneys’ fees to a non-prevailing party if the district

court believes that the case was weak or conducted in an abusive manner.

As a result, defendants in patent infringement actions brought

by non-practicing entities may elect not to settle because these decisions make it much easier for defendants to get attorneys’

Finally, it is difficult to

predict the outcome of patent enforcement litigation at the trial level and outcomes can be unfavorable.

It can be difficult to understand

complex patented technologies, and as a result, this may lead to a higher rate of unfavorable litigation outcomes.

Moreover, in the event

of a favorable outcome, there is often a higher rate of successful appeals in patent enforcement litigation than more standard business

Such appeals are expensive and time consuming, resulting in increased costs and a potential for delayed or foregone revenue

opportunities in the event of modification or reversal of favorable outcomes.

Although Alpha Modus plans to diligently pursue enforcement

litigation, it cannot predict with reliability the decisions that may made by juries and trial courts.

Changes 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.

Alpha Modus’ success

is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents is costly, time consuming and inherently

Patent reform legislation in the United States and other countries, including the Leahy-Smith America Invents Act (the “Leahy-Smith

Act”), contributes to those uncertainties and costs.

The Leahy-Smith Act includes a number of significant changes to U.S.

These include provisions that have affected the way patent applications are prosecuted and have redefined prior art and provided

more efficient and cost-effective avenues for competitors to challenge the validity of patents.

In addition, the Leahy-Smith Act has transformed

patent system into a first-to-file system in which, assuming that other requirements of patentability are met, the first inventor

to file a patent application will be entitled to the patent regardless of whether a third party was first to invent the claimed invention.

A third party that has filed a patent application in the USPTO after March 2013 but before Alpha Modus could therefore be awarded a patent

covering an invention of Alpha Modus even if Alpha Modus had made the invention before it was made by such third party.

This requires

Alpha Modus or its licensees to be cognizant of the time from invention to filing of a patent application.

Furthermore, Alpha Modus’

ability to obtain and maintain valid and enforceable patents depends on whether the differences between its technology and the prior art

allow its technology to be patentable over the prior art.

Since patent applications in the United States and most other countries are

confidential for a period of time after filing or until issuance, Alpha Modus cannot be certain that it was the first to either (i) file

any patent application related to its product or product candidates, or (ii) invent any of the inventions claimed in its patents or patent

applications.

Even where Alpha Modus has a valid and enforceable patent, Alpha Modus or its licensees may not be able to exclude others

from practicing the claimed invention where the other party can show that they used the invention in commerce before our filing date or

the other party benefits from a compulsory license.

Among some of the other changes

introduced by the Leahy-Smith Act are changes that (i) affect the way patent applications are prosecuted, (ii) redefine prior art, and

(iii) provide more efficient and cost-effective avenues for competitors to challenge the validity of patents.

These include changes that

limit where a patentee may file a patent infringement suit and provide new opportunities for third parties to challenge issued patents

in the USPTO.

Alpha Modus or its licensees may be subject to the risk of third-party prior art submissions on pending applications or

become a party to opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging

There is a lower standard of evidence necessary to invalidate a patent claim in a USPTO proceeding relative to the standard

Congress, the federal courts, and the USPTO,

the laws and regulations governing patents could change in unpredictable ways that could weaken Alpha Modus’ ability to obtain

new patents or to enforce its existing patents and patents that it might obtain in the future.

Additionally,

new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of Alpha Modus’ enforcement

actions, and new standards or limitations on liability for patent infringement could negatively impact Alpha Modus’ revenue derived

from such enforcement actions.

In addition, recent federal court decisions have lowered the threshold for obtaining attorneys’

fees in patent infringement cases and increased the level of deference given to a district court’s fee-shifting determination.

These decisions may make it easier for district courts to shift a prevailing party’s attorneys’ fees to a non-prevailing

party if the district court believes that the case was weak or conducted in an abusive manner.

As a result, defendants in patent infringement

actions brought by non-practicing entities may elect not to settle because these decisions make it much easier for defendants to get

attorneys’ fees.

it is difficult to predict the outcome of patent enforcement litigation at the trial level and outcomes can be unfavorable.

difficult to understand complex patented technologies, and as a result, this may lead to a higher rate of unfavorable litigation outcomes.

Moreover, in the event of a favorable outcome, there is often a higher rate of successful appeals in patent enforcement litigation than

more standard business litigation.

Such appeals are expensive and time consuming, resulting in increased costs and a potential for delayed

or foregone revenue opportunities in the event of modification or reversal of favorable outcomes.

Although Alpha Modus plans to diligently

pursue enforcement litigation, it cannot predict with reliability the decisions that may made by juries and trial courts.

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.

Modus’ success is heavily dependent on intellectual property, particularly patents.

Obtaining and enforcing patents is costly,

time consuming and inherently uncertain.

Patent reform legislation in the United States and other countries, including the Leahy-Smith

America Invents Act (the “Leahy-Smith Act”), contributes to those uncertainties and costs.

The Leahy-Smith Act includes a

number of significant changes to U.S.

These include provisions that have affected the way patent applications are prosecuted

and have redefined prior art and provided more efficient and cost-effective avenues for competitors to challenge the validity of patents.

In addition, the Leahy-Smith Act has transformed the U.S.

patent system into a first-to-file system in which, assuming that other requirements

of patentability are met, the first inventor to file a patent application will be entitled to the patent regardless of whether a third

party was first to invent the claimed invention.

A third party that has filed a patent application in the USPTO after March 2013 but

before Alpha Modus could therefore be awarded a patent covering an invention of Alpha Modus even if Alpha Modus had made the invention

before it was made by such third party.

This requires Alpha Modus or its licensees to be cognizant of the time from invention to filing

of a patent application.

Furthermore, Alpha Modus’ ability to obtain and maintain valid and enforceable patents depends on whether

the differences between its technology and the prior art allow its technology to be patentable over the prior art.

Since patent applications

in the United States and most other countries are confidential for a period of time after filing or until issuance, Alpha Modus cannot

be certain that it was the first to either (i) file any patent application related to its product or product candidates, or (ii) invent

any of the inventions claimed in its patents or patent applications.

Even where Alpha Modus has a valid and enforceable patent, Alpha

Modus or its licensees may not be able to exclude others from practicing the claimed invention where the other party can show that they

used the invention in commerce before our filing date or the other party benefits from a compulsory license.

some of the other changes introduced by the Leahy-Smith Act are changes that (i) affect the way patent applications are prosecuted, (ii)

redefine prior art, and (iii) provide more efficient and cost-effective avenues for competitors to challenge the validity of patents.

These include changes that limit where a patentee may file a patent infringement suit and provide new opportunities for third parties

to challenge issued patents in the USPTO.

Alpha Modus or its licensees may be subject to the risk of third-party prior art submissions

on pending applications or become a party to opposition, derivation, reexamination, inter partes review, post-grant review or

interference proceedings challenging our patents.

There is a lower standard of evidence necessary to invalidate a patent claim in a USPTO

proceeding relative to the standard in U.S.

district or federal court.

This could lead third parties to challenge and successfully invalidate Alpha Modus or its licensees’

patents that would not otherwise be invalidated if challenged through the court system.

Accordingly, a third party may attempt to use

the USPTO procedures to invalidate Alpha Modus or its licensees’ patent claims that would not have been invalidated if first challenged

by the third party as a defendant in a district court action.

Thus, the Leahy-Smith Act and its implementation increase the uncertainties

and costs surrounding the prosecution of Alpha Modus or its future licensees’ patent applications and the enforcement or defense

of Alpha Modus’ issued patents, all of which could have a material adverse effect on our business, financial condition, results

of operations and prospects.

Additionally, the U.S.

Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances

or weakening the rights of patent owners in certain situations.

In addition, there have been recent proposals for additional changes to

the patent laws of the United States and other countries that, if adopted, could impact Alpha Modus or its licensees’ ability to

obtain or maintain patent protection for Alpha Modus or its out-licensed proprietary technology or Alpha Modus’ or its licensees’

ability to enforce Alpha Modus or its out-licensed proprietary technology, respectively.

Depending on future actions by the U.S.

courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change

in unpredictable ways that would weaken Alpha Modus’ ability to obtain new patents;

enforce or shorten the term of Alpha Modus or

its licensees’ existing patents and patents that might be obtained in the future;

shorten the term that has been lengthened by patent

term adjustment of existing patents or patents that Alpha Modus might obtain in the future;

or challenge the validity or enforceability

of Alpha Modus patents that may be asserted against Alpha Modus by competitors or other third parties.

Any of these outcomes could have

a material adverse effect on Alpha Modus’ business.

For example, with respect to patent term adjustment, the Federal Circuit’s

recent holding in In re Cellect, LLC , 81 F.4 th 1216 (Fed.

2023), that obviousness-type double patent analysis for

a patent that has received patent term adjustment must be based on the expiration date of the patent after the patent term adjustment

has been added, may negatively impact the term of Alpha Modus’ patents.

Finally, Europe’s new

Unitary Patent system and Unified Patent Court (the “UPC”) may present uncertainties for Alpha Modus’ ability to protect

and enforce patent rights against competitors in Europe.

In 2012, the European Patent Package (the “EU Patent Package”), regulations

were passed with the goal of providing a single pan-European Unitary Patent system and a new UPC for litigation involving European patents.

This could lead third parties to challenge and successfully invalidate

Alpha Modus or its licensees’ patents that would not otherwise be invalidated if challenged through the court system.

a third party may attempt to use the USPTO procedures to invalidate Alpha Modus or its licensees’ patent claims that would not

have been invalidated if first challenged by the third party as a defendant in a district court action.

Thus, the Leahy-Smith Act and

its implementation increase the uncertainties and costs surrounding the prosecution of Alpha Modus or its future licensees’ patent

applications and the enforcement or defense of Alpha Modus’ issued patents, all of which could have a material adverse effect on

our business, financial condition, results of operations and prospects.

Additionally,

Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in

certain circumstances or weakening the rights of patent owners in certain situations.

In addition, there have been recent proposals for

additional changes to the patent laws of the United States and other countries that, if adopted, could impact Alpha Modus or its licensees’

ability to obtain or maintain patent protection for Alpha Modus or its out-licensed proprietary technology or Alpha Modus’ or its

licensees’ ability to enforce Alpha Modus or its out-licensed proprietary technology, respectively.

Depending on future actions

Congress, the U.S.

courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing

patents could change in unpredictable ways that would weaken Alpha Modus’ ability to obtain new patents;

enforce or shorten the

term of Alpha Modus or its licensees’ existing patents and patents that might be obtained in the future;

shorten the term that

has been lengthened by patent term adjustment of existing patents or patents that Alpha Modus might obtain in the future;

the validity or enforceability of Alpha Modus patents that may be asserted against Alpha Modus by competitors or other third parties.

Any of these outcomes could have a material adverse effect on Alpha Modus’ business.

For example, with respect to patent term adjustment,

the Federal Circuit’s recent holding in In re Cellect, LLC , 81 F.4 th 1216 (Fed.

2023), that obviousness-type

double patent analysis for a patent that has received patent term adjustment must be based on the expiration date of the patent after

the patent term adjustment has been added, may negatively impact the term of Alpha Modus’ patents.

Europe’s new Unitary Patent system and Unified Patent Court (the “UPC”) may present uncertainties for Alpha Modus’

ability to protect and enforce patent rights against competitors in Europe.

In 2012, the European Patent Package (the “EU Patent

Package”), regulations were passed with the goal of providing a single pan-European Unitary Patent system and a new UPC for litigation

involving European patents.

Implementation of the EU Patent Package occurred in June 2023.

Under the UPC, all European patents, including those issued prior to ratification

of the European Patent Package, will by default automatically fall under the jurisdiction of the UPC.

The UPC will provide Alpha Modus’

competitors with a new forum to centrally revoke European patents and allow for the possibility of a competitor to obtain pan-European

It will be several years before Alpha Modus will understand the scope of patent rights that will be recognized and the strength

of patent remedies that will be provided by the UPC.

Under the EU Patent Package, Alpha Modus will have the right to opt patents out of

the UPC over the first seven years of the court’s existence, but doing so may preclude Alpha Modus from realizing the benefits of

the new unified court.

Patent litigation is inherently risky because

courts may find Alpha Modus’ patents invalid, not infringed, or unenforceable, and the USPTO, or other relevant patent office, may

either invalidate Alpha Modus’ patents or materially narrow the scope of their claims during the course of a reexamination, opposition

or other such proceeding.

Patent litigation is inherently

risky and may result in the invalidation of Alpha Modus’ patents, even if it is the plaintiff in an underlying action.

It is difficult

to predict the outcome of patent enforcement litigation at any level.

Although Alpha Modus intends to diligently pursue enforcement litigation,

it cannot predict with significant reliability the decisions made by juries and trial courts.

At the trial level, it is often difficult

for juries and trial judges to understand complex, patented technologies, and as a result, there is a higher rate of successful appeals

in patent enforcement litigation than more standard business litigation.

The defendant to any case

Alpha Modus brings may file as many appeals as allowed by right, including to District Court, the Federal Circuit and the Supreme Court.

Such appeals are expensive and time-consuming, and the outcomes of such appeals are sometimes unpredictable, resulting in increased costs

and reduced or delayed revenue which could have a material adverse effect on Alpha Modus’ results of operations and financial condition.

These appeals may also result in the invalidation of Alpha Modus’ patents, which may have an adverse impact on Alpha Modus’

operations and financial performance.

The 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.

The success of Alpha Modus’

intellectual property enforcement efforts will depend in part upon its ability to retain the best legal counsel to coordinate its patent

infringement litigation matters.

As Alpha Modus’ intellectual property business evolves, Alpha Modus expects that it will become

more difficult to find the best legal counsel to handle all of its patent enforcement matters due in part to potential conflicts of interest.

This is because, from time to time, the counterparties to litigation matters have previously engaged world class law firms that are specialized

in connection with the industries of the patents at issue in such matters.

These previous engagements may have, or may in the future,

result in these firms being conflicted out of representing us.

In addition, counterparties

in Alpha Modus’ patent litigation matters may devote a substantial amount of resources to avoid or limit a finding that they are

liable for infringing on Alpha Modus’ patents or, in the event liability is found, to avoid or limit the amount of associated damages.

There is a risk these counterparties may file inter-partes reviews, reexaminations or other proceedings with the USPTO or other government

agencies in the United States or abroad in an attempt to invalidate, narrow the scope or render unenforceable the patents Alpha Modus

owns or controls.

If this were to occur, it may have a significant negative impact on Alpha Modus’ intellectual property.

The inability to retain the

best legal counsel to represent Alpha Modus in infringement actions may result in unfavorable or adverse outcomes, which may result in

losses, exhaustion of financial resources or other adverse effects which could encumber Alpha Modus’ ability to effectively operate

its business or execute its business strategy.

Alpha Modus cannot provide any assurance that any prospective patent prosecution or litigation

matters will result in a favorable outcome.

Alpha Modus may experience delays in successful

prosecution, enforcement, and licensing of its patent portfolio.

The value of Alpha Modus’

patent portfolios is dependent upon the issuance of patents in a timely manner.

More patent applications are filed each year.

believes this increase in patent applications has resulted in longer delays in obtaining approval of pending patent applications.

USPTO experiences reductions in funding, it could have an adverse impact on the cost of processing pending patent applications and the

value of those pending patent applications, negatively impacting the value of Alpha Modus’ patent applications.

Further, reductions

in funding from Congress could result in higher patent application filing and maintenance fees charged by the USPTO, causing an increase

in Alpha Modus’ expenses.

Application delays could cause delays in recognizing revenue from these patents and could cause Alpha

Modus to miss opportunities to license patents before other competing technologies are developed or introduced into the market.

After prosecuting Alpha Modus’

patents, Alpha Modus’ intellectual property business can incur significant general and administrative and legal expenses prior to

entering into license agreements and generating license revenues.

Alpha Modus plans to spend considerable resources educating prospective

licensees on the benefits of a license arrangement with it.

As such, Alpha Modus may incur significant losses in any particular period

before any associated revenue stream begins.

Alpha Modus believes that

it will frequently be engaged in litigation to enforce its patents, protect its trade secrets, or determine the validity and scope of

the proprietary rights of others.

Under the UPC, all European patents, including

those issued prior to ratification of the European Patent Package, will by default automatically fall under the jurisdiction of the UPC.

The UPC will provide Alpha Modus’ competitors with a new forum to centrally revoke European patents and allow for the possibility

of a competitor to obtain pan-European injunctions.

It will be several years before Alpha Modus will understand the scope of patent rights

that will be recognized and the strength of patent remedies that will be provided by the UPC.

Under the EU Patent Package, Alpha Modus

will have the right to opt patents out of the UPC over the first seven years of the court’s existence, but doing so may preclude

Alpha Modus from realizing the benefits of the new unified court.

litigation is inherently risky because courts may find Alpha Modus’ patents invalid, not infringed, or unenforceable, and the USPTO,

or other relevant patent office, may either invalidate Alpha Modus’ patents or materially narrow the scope of their claims during

the course of a reexamination, opposition or other such proceeding.

litigation is inherently risky and may result in the invalidation of Alpha Modus’ patents, even if it is the plaintiff in an underlying

It is difficult to predict the outcome of patent enforcement litigation at any level.

Although Alpha Modus intends to diligently

pursue enforcement litigation, it cannot predict with significant reliability the decisions made by juries and trial courts.

level, it is often difficult for juries and trial judges to understand complex, patented technologies, and as a result, there is a higher

rate of successful appeals in patent enforcement litigation than more standard business litigation.

defendant to any case Alpha Modus brings may file as many appeals as allowed by right, including to District Court, the Federal Circuit

and the Supreme Court.

Such appeals are expensive and time-consuming, and the outcomes of such appeals are sometimes unpredictable, resulting

in increased costs and reduced or delayed revenue which could have a material adverse effect on Alpha Modus’ results of operations

and financial condition.

These appeals may also result in the invalidation of Alpha Modus’ patents, which may have an adverse impact

on Alpha Modus’ operations and financial performance.

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.

success of Alpha Modus’ intellectual property enforcement efforts will depend in part upon its ability to retain the best legal

counsel to coordinate its patent infringement litigation matters.

As Alpha Modus’ intellectual property business evolves, Alpha

Modus expects that it will become more difficult to find the best legal counsel to handle all of its patent enforcement matters due in

part to potential conflicts of interest.

This is because, from time to time, the counterparties to litigation matters have previously

engaged world class law firms that are specialized in connection with the industries of the patents at issue in such matters.

These previous

engagements may have, or may in the future, result in these firms being conflicted out of representing us.

addition, counterparties in Alpha Modus’ patent litigation matters may devote a substantial amount of resources to avoid or limit

a finding that they are liable for infringing on Alpha Modus’ patents or, in the event liability is found, to avoid or limit the

amount of associated damages.

There is a risk these counterparties may file inter-partes reviews, reexaminations or other proceedings

with the USPTO or other government agencies in the United States or abroad in an attempt to invalidate, narrow the scope or render unenforceable

the patents Alpha Modus owns or controls.

If this were to occur, it may have a significant negative impact on Alpha Modus’ intellectual

inability to retain the best legal counsel to represent Alpha Modus in infringement actions may result in unfavorable or adverse outcomes,

which may result in losses, exhaustion of financial resources or other adverse effects which could encumber Alpha Modus’ ability

to effectively operate its business or execute its business strategy.

Alpha Modus cannot provide any assurance that any prospective patent

prosecution or litigation matters will result in a favorable outcome.

Modus may experience delays in successful prosecution, enforcement, and licensing of its patent portfolio.

value of Alpha Modus’ patent portfolios is dependent upon the issuance of patents in a timely manner.

More patent applications

are filed each year.

Alpha Modus believes this increase in patent applications has resulted in longer delays in obtaining approval of

pending patent applications.

If the USPTO experiences reductions in funding, it could have an adverse impact on the cost of processing

pending patent applications and the value of those pending patent applications, negatively impacting the value of Alpha Modus’

patent applications.

Further, reductions in funding from Congress could result in higher patent application filing and maintenance fees

charged by the USPTO, causing an increase in Alpha Modus’ expenses.

Application delays could cause delays in recognizing revenue

from these patents and could cause Alpha Modus to miss opportunities to license patents before other competing technologies are developed

or introduced into the market.

prosecuting Alpha Modus’ patents, Alpha Modus’ intellectual property business can incur significant general and administrative

and legal expenses prior to entering into license agreements and generating license revenues.

Alpha Modus plans to spend considerable

resources educating prospective licensees on the benefits of a license arrangement with it.

As such, Alpha Modus may incur significant

losses in any particular period before any associated revenue stream begins.

Modus believes that it will frequently be engaged in litigation to enforce its patents, protect its trade secrets, or determine the validity

and scope of the proprietary rights of others.

Enforcement proceedings are typically protracted and complex.

The costs are typically substantial, and

the outcomes are unpredictable.

Enforcement actions divert managerial, technical, legal and financial resources from business operations,

and there are no assurances that such enforcement actions will result in favorable results for Alpha Modus.

Patent litigation schedules

in general, and in particular trial dates, are subject to routine adjustment, and in most cases delay, as courts adjust their calendars

or respond to requests from one or more parties.

Trial dates often are rescheduled by the court for various reasons that are often unrelated

to the underlying patent assets and typically for reasons that are beyond our control.

As a result, to the extent such events are an indicator

of possible future revenue opportunities for Alpha Modus, or other outcome determinative events, they may and often do change which can

result in delay of the expected scheduled event.

Any such delay could be significant and could affect the corresponding future revenue

opportunities, thus adversely impacting Alpha Modus’ business, results of operations and financial condition.

Further, federal courts are

becoming more crowded, and as a result, patent enforcement litigation is taking longer.

Alpha Modus’ anticipated patent enforcement

actions are expected to be almost exclusively prosecuted in federal court.

Federal trial courts that hear patent enforcement actions also

hear criminal cases.

The costs are typically

substantial, and the outcomes are unpredictable.

Enforcement actions divert managerial, technical, legal and financial resources from

business operations, and there are no assurances that such enforcement actions will result in favorable results for Alpha Modus.

litigation schedules in general, and in particular trial dates, are subject to routine adjustment, and in most cases delay, as courts

adjust their calendars or respond to requests from one or more parties.

Trial dates often are rescheduled by the court for various reasons

that are often unrelated to the underlying patent assets and typically for reasons that are beyond our control.

As a result, to the extent

such events are an indicator of possible future revenue opportunities for Alpha Modus, or other outcome determinative events, they may

and often do change which can result in delay of the expected scheduled event.

Any such delay could be significant and could affect the

corresponding future revenue opportunities, thus adversely impacting Alpha Modus’ business, results of operations and financial

federal courts are becoming more crowded, and as a result, patent enforcement litigation is taking longer.

Alpha Modus’ anticipated

patent enforcement actions are expected to be almost exclusively prosecuted in federal court.

Federal trial courts that hear patent enforcement

actions also hear criminal cases.

Criminal cases tend to take priority over patent enforcement actions.

As a result, it is difficult to predict the

length of time it will take to complete an enforcement action.

Moreover, Alpha Modus believes there is a trend in increasing numbers of

civil lawsuits and criminal proceedings before federal judges, and, as a result, it believes that the risk of delays in patent enforcement

actions will have a greater negative effect on Alpha Modus’ business in the future unless this trend changes.

Because 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.

Alpha Modus’ current

patents are expected to expire in 2034-2037.

If Alpha Modus does not obtain patents or other intellectual property with expiration dates

that extend beyond those years, its operations would be adversely affected.

Alpha Modus’ lack of patent enforcement

and licensing experience could adversely affect its operations.

Alpha Modus has limited patent

enforcement experience and cannot provide any assurance that it will be able to effectively manage patent enforcement efforts.

enforcement litigation is complex and needs to be closely and carefully managed.

Because Alpha Modus does not have experience in managing

patent enforcement efforts, it may not do so effectively, and its enforcement efforts could be harmed as a result.

Similarly, Alpha Modus

has limited experience managing intellectual property licensing programs, and this lack of experience could impair its ability to execute

its business plans.

Alpha Modus may not be able to protect its

intellectual property rights throughout the world.

Filing, prosecuting, and defending

patents in all countries throughout the world would be prohibitively expensive, and intellectual property rights in some countries outside

the United States could be less extensive than those in the United States.

Alpha Modus may not choose, or be able, to obtain patent protection

outside the United States.

In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent

as federal and state laws in the United States, even in jurisdictions where Alpha Modus does pursue patent protection.

Consequently, Alpha

Modus may not be able to prevent third parties from practicing its intellectual property in all countries outside the United States, even

in jurisdictions where it does pursue patent protection.

Competitors may use Alpha

Modus’ technologies in jurisdictions where it has not pursued and obtained patent protection and, further, may export otherwise

infringing products to territories where Alpha Modus has patent protection, but enforcement is not as strong as that in the United States.

As a result, it is difficult

to predict the length of time it will take to complete an enforcement action.

Moreover, Alpha Modus believes there is a trend in increasing

numbers of civil lawsuits and criminal proceedings before federal judges, and, as a result, it believes that the risk of delays in patent

enforcement actions will have a greater negative effect on Alpha Modus’ business in the future unless this trend changes.

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.

Modus’ current patents are expected to expire in 2034-2037.

If Alpha Modus does not obtain patents or other intellectual property

with expiration dates that extend beyond those years, its operations would be adversely affected.

Modus’ lack of patent enforcement and licensing experience could adversely affect its operations.

Modus has limited patent enforcement experience and cannot provide any assurance that it will be able to effectively manage patent enforcement

Patent enforcement litigation is complex and needs to be closely and carefully managed.

Because Alpha Modus does not have experience

in managing patent enforcement efforts, it may not do so effectively, and its enforcement efforts could be harmed as a result.

Alpha Modus has limited experience managing intellectual property licensing programs, and this lack of experience could impair its ability

to execute its business plans.

Modus may not be able to protect its intellectual property rights throughout the world.

prosecuting, and defending patents in all countries throughout the world would be prohibitively expensive, and intellectual property

rights in some countries outside the United States could be less extensive than those in the United States.

Alpha Modus may not choose,

or be able, to obtain patent protection outside the United States.

In addition, the laws of some foreign countries do not protect intellectual

property rights to the same extent as federal and state laws in the United States, even in jurisdictions where Alpha Modus does pursue

patent protection.

Consequently, Alpha Modus may not be able to prevent third parties from practicing its intellectual property in all

countries outside the United States, even in jurisdictions where it does pursue patent protection.

may use Alpha Modus’ technologies in jurisdictions where it has not pursued and obtained patent protection and, further, may export

otherwise infringing products to territories where Alpha Modus has patent protection, but enforcement is not as strong as that in the

United States.

These products may compete with Alpha Modus’ technologies.

Alpha Modus’ patents or other intellectual property rights may

not be effective or sufficient to prevent them from competing.

Many companies have encountered

significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain countries,

particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection,

particularly those relating to technology products, which could make it difficult for Alpha Modus to stop infringement of its intellectual

Proceedings to enforce patent rights in foreign jurisdictions could result in substantial costs and divert Alpha Modus’

efforts and attention from other aspects of its business, could put its patents at risk of being invalidated or interpreted narrowly and

patent applications at risk of not issuing, and could provoke third parties to assert claims against it.

Alpha Modus may not prevail in

any lawsuits that it initiates, and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, Alpha

Modus’ efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage

from its intellectual property.

Many countries have compulsory

licensing laws under which a patent owner may be compelled to grant licenses to third parties.

In addition, many countries limit the enforceability

of patents against government agencies or government contractors.

In these countries, the patent owner may have limited remedies, which

could materially diminish the value of such patent.

If Alpha Modus is forced to grant a license to third parties with respect to any of

its patents, its competitive position may be impaired, and its business, financial condition, results of operations, and prospects may

be adversely affected.

Risks Related to Being a Public Company

Alpha 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.

Alpha Modus is incurring significant

legal, accounting and other expenses that it did not incur as a private company, and these expenses may increase even more after Alpha

Modus is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.

As a public company, Alpha Modus is subject

to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as well as rules adopted, and to be

adopted, by the SEC and Nasdaq, and other applicable securities rules and regulations, which impose various requirements on public companies,

including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

Alpha Modus’ management and other personnel will need to devote a substantial amount of time to these public company requirements.

Moreover, Alpha Modus expects these rules and regulations to substantially increase its legal and financial compliance costs and to make

some activities more time-consuming and costly.

The increased costs will increase Alpha Modus’ operating loss.

Alpha Modus may need

to hire additional legal, accounting and financial staff with appropriate public company experience and technical accounting knowledge

and maintain an internal audit function.

In addition, changing laws,

regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing

legal and financial compliance costs, and making some activities more time consuming.

These laws, regulations, and standards are subject

to varying interpretations and may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result

in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance

Alpha Modus intends to invest resources to comply with evolving laws, regulations, and standards, and this investment may result

in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities

to compliance activities.

If Alpha Modus’ efforts to comply with new laws, regulations, and standards differ from the activities

intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate

legal proceedings against Alpha Modus and its business may be adversely affected.

The rules and regulations

applicable to public companies make it more expensive for Alpha Modus to obtain and maintain director and officer liability insurance,

and Alpha Modus may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

These factors could

also make it more difficult for Alpha Modus to attract and retain qualified members of its board of directors, particularly to serve on

Alpha Modus’ audit committee and compensation committee, and qualified executive officers.

Alpha Modus cannot predict

or estimate the amount or timing of additional costs it may incur to respond to these requirements.

The impact of these requirements could

also make it more difficult for Alpha Modus to attract and retain qualified persons to serve on its board of directors, its board committees

or as executive officers.

Alpha Modus’ management team has limited

experience managing a Nasdaq-listed public company.

Alpha Modus’ management

team has limited experience managing a Nasdaq-listed public company, interacting with public company investors and complying with the

increasingly complex laws pertaining to exchange-listed public companies.

Alpha Modus’ management team may not successfully or efficiently

manage their new roles and responsibilities.

Alpha Modus’ transition to being a public company subjects it to significant regulatory

oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.

These new obligations and constituents will require significant attention from Alpha Modus’ senior management and could divert their

attention away from the day-to-day management of Alpha Modus’ business, which could adversely affect Alpha Modus’ business,

financial condition, and operating results.

If 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

There is currently uncertainty

concerning the applicability of the Investment Company Act to a special purpose acquisition company (“SPAC”), and we, as a

former SPAC, may in the future be subject to a claim that we have been operating as an unregistered investment company.

If we are deemed

to be an investment company for purposes of the Investment Company Act, we may be required to liquidate.

If we are required to liquidate,

our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation

in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.

Upon closing our initial IPO

in September 2021, the net proceeds of the IPO and of a private offering of warrants were placed in a trust account located in the United

States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S.

“government securities”

within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting

certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invested only in direct U.S.

government treasury

obligations, until the earlier of:

(i) the completion of a Business Combination and (ii) the distribution of the trust account as described

Alpha Modus’ patents or other intellectual property

rights may not be effective or sufficient to prevent them from competing.

companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets,

and other intellectual property protection, particularly those relating to technology products, which could make it difficult for Alpha

Modus to stop infringement of its intellectual property.

Proceedings to enforce patent rights in foreign jurisdictions could result in

substantial costs and divert Alpha Modus’ efforts and attention from other aspects of its business, could put its patents at risk

of being invalidated or interpreted narrowly and patent applications at risk of not issuing, and could provoke third parties to assert

claims against it.

Alpha Modus may not prevail in any lawsuits that it initiates, and the damages or other remedies awarded, if any,

may not be commercially meaningful.

Accordingly, Alpha Modus’ efforts to enforce intellectual property rights around the world

may be inadequate to obtain a significant commercial advantage from its intellectual property.

countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.

many countries limit the enforceability of patents against government agencies or government contractors.

In these countries, the patent

owner may have limited remedies, which could materially diminish the value of such patent.

If Alpha Modus is forced to grant a license

to third parties with respect to any of its patents, its competitive position may be impaired, and its business, financial condition,

results of operations, and prospects may be adversely affected.

Related to Being a Public Company

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.

Modus is incurring significant legal, accounting and other expenses that it did not incur as a private company, and these expenses may

increase more after Alpha Modus is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act.

company, Alpha Modus is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Dodd-Frank Act, as

well as rules adopted, and to be adopted, by the SEC and Nasdaq, and other applicable securities rules and regulations, which impose

various requirements on public companies, including the establishment and maintenance of effective disclosure and financial controls

and changes in corporate governance practices.

Alpha Modus’ management and other personnel will need to devote a substantial amount

of time to these public company requirements.

Moreover, Alpha Modus expects these rules and regulations to substantially increase its

legal and financial compliance costs and to make some activities more time-consuming and costly.

The increased costs will increase Alpha

Modus’ operating loss.

Alpha Modus may need to hire additional legal, accounting and financial staff with appropriate public company

experience and technical accounting knowledge and maintain an internal audit function.

addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for

public companies, increasing legal and financial compliance costs, and making some activities more time consuming.

These laws, regulations,

and standards are subject to varying interpretations and may evolve over time as new guidance is provided by regulatory and governing

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to

disclosure and governance practices.

Alpha Modus intends to invest resources to comply with evolving laws, regulations, and standards,

and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention

from revenue-generating activities to compliance activities.

If Alpha Modus’ efforts to comply with new laws, regulations, and

standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice,

regulatory authorities may initiate legal proceedings against Alpha Modus and its business may be adversely affected.

rules and regulations applicable to public companies make it more expensive for Alpha Modus to obtain and maintain director and officer

liability insurance, and Alpha Modus may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

These factors could also make it more difficult for Alpha Modus to attract and retain qualified members of its board of directors, particularly

to serve on Alpha Modus’ audit committee and compensation committee, and qualified executive officers.

Modus cannot predict or estimate the amount or timing of additional costs it may incur to respond to these requirements.

The impact of

these requirements could also make it more difficult for Alpha Modus to attract and retain qualified persons to serve on its board of

directors, its board committees or as executive officers.

Modus’ management team has limited experience managing a Nasdaq-listed public company.

Modus’ management team has limited experience managing a Nasdaq-listed public company, interacting with public company investors

and complying with the increasingly complex laws pertaining to exchange-listed public companies.

Alpha Modus’ management team may

not successfully or efficiently manage their new roles and responsibilities.

Alpha Modus’ transition to being a public company

subjects it to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny

of securities analysts and investors.

These new obligations and constituents will require significant attention from Alpha Modus’

senior management and could divert their attention away from the day-to-day management of Alpha Modus’ business, which could adversely

affect Alpha Modus’ business, financial condition, and operating results.

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.

is currently uncertainty concerning the applicability of the Investment Company Act to a special purpose acquisition company (“SPAC”),

and we, as a former SPAC, may in the future be subject to a claim that we have been operating as an unregistered investment company.

If we are deemed to be an investment company for purposes of the Investment Company Act, we may be required to liquidate.

If we are required

to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the

potential appreciation in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.

closing our initial IPO in September 2021, the net proceeds of the IPO and of a private offering of warrants were placed in a trust account

located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S.

securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money

market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invested only in direct U.S.

government treasury obligations, until the earlier of:

(i) the completion of a Business Combination and (ii) the distribution of the

trust account as described below.

The longer that the funds in the trust account were held in short-term U.S.

government securities or in money market funds invested

exclusively in such securities, the greater the risk that we may be considered an unregistered investment company, in which case we would

be required to register as an investment company with the SEC.

Alpha 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.

Alpha Modus’ CEO, William

Alessi, is deemed to beneficially own or control in excess of 34.5% of Alpha Modus’ common stock and 100% of Alpha Modus’

preferred stock.

As a result, Alpha Modus is deemed to be a “controlled company” as defined under the listing rules of Nasdaq.

Under Nasdaq listing rules, controlled companies are companies of which more than 50% of the voting power for the election of directors

is held by an individual, a group, or another company.

For as long as Alpha Modus remains a controlled company, Alpha Modus will be permitted

to elect to rely on certain exemptions from Nasdaq’s corporate governance rules, including the following:

an exemption from the rule that a majority of its board of directors must be independent directors;

an exemption from the rule that its compensation committee be composed entirely of independent directors;

an exemption from the rule that its director nominees must be selected or recommended solely by independent directors or a nominating committee composed solely of independent directors;

Although Alpha Modus does

not currently intend for Alpha Modus to rely on the “controlled company” exemptions to Nasdaq’s corporate governance

rules, Alpha Modus could elect to rely on these exemptions in the future.

If it elected to rely on those “controlled company”

exemptions, a majority of the members of Alpha Modus’ board of directors might not be independent directors, its nominating and

corporate governance and compensation committees might not consist entirely of independent directors, and you would not have the same

protection afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance rules.

Alpha Modus may issue additional shares

of common or preferred stock, which would dilute the interests of stockholders and likely present other risks.

Alpha Modus may issue additional

shares of common or preferred stock for financing or other reasons.

The issuance of additional shares of common or preferred stock:

may significantly dilute the equity interest of existing investors;

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to holders of common stock;

could cause a change in control if a substantial number of common stock is issued, which may affect, among other things, Alpha Modus’ ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of Alpha Modus’ present officers and directors;

may adversely affect prevailing market prices for Alpha Modus’ common stock and/or warrants.

We may amend the terms of the warrants in

a manner that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding

public warrants.

As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number

of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without holder approval.

Our warrants are issued in

registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.

agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any

defective provision, but requires the approval by the holders of at least a majority of the then-outstanding public warrants to make any

change that adversely affects the interests of the registered holders of public warrants.

Accordingly, we may amend the terms of the public

warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants approve of such amendment.

Although our ability to amend the terms of the public warrants with the consent of at least a majority of the then-outstanding public

warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants,

convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable

upon exercise of a warrant.

Alpha Modus may redeem unexpired Public

Warrants prior to their exercise at a time that is disadvantageous to holders, thereby making the Public Warrants worthless.

Alpha Modus will have the

ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01

per warrant, provided that the last reported sales price of Alpha Modus common stock equals or exceeds $18.00 per share for any 20 trading

days within a 30-trading day period ending on the third trading day prior to the date Alpha Modus gives notice of redemption.

the Public Warrants become redeemable by Alpha Modus, Alpha Modus may exercise its redemption right even if it is unable to register or

qualify the underlying securities for sale under all applicable state securities laws.

Redemption of the outstanding Public Warrants could

force holders of the warrants (i) to exercise the Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous

for them to do so, (ii) to sell the Public Warrants at the then-current market price when they might otherwise wish to hold their Public

Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption,

is likely to be substantially less than the market value of the Public Warrants.

As of March 31, 2025, the sales price of the Class A

common stock did not exceed the threshold that would allow Alpha Modus to redeem the Public Warrants.

We 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.

On August 16, 2022, President

Biden signed into law the Inflation Reduction Act of 2022, which, among other things, imposes a 1% excise tax on any publicly traded domestic

corporation that repurchases its stock after December 31, 2022 (the “ Excise Tax ”).

The Excise Tax is imposed on the

fair market value of the repurchased stock, with certain exceptions.

Because we are a Delaware corporation and because our securities

trade on Nasdaq, we are a “covered corporation” within the meaning of the Inflation Reduction Act.

While not free from doubt,

absent any further guidance from the U.S.

Department of the Treasury (the “Treasury”), who has been given authority to provide

regulations and other guidance to carry out and prevent the abuse or avoidance of the Excise Tax, the Excise Tax may apply to any redemptions

of our IAC Class A common stock after December 31, 2022, including redemptions in connection with the Business Combination, unless an

exemption is available.

Generally, issuances of securities by us in connection with our initial Business Combination transaction (including

any PIPE transaction at the time of our initial Business Combination), as well as any other issuances of securities not in connection

with our initial Business Combination, would be expected to reduce the amount of the Excise Tax in connection with redemptions occurring

in the same calendar year.

In addition, the Excise Tax would be payable by us, and not by the redeeming holder.

Further, based on recently

issued interim guidance from the IRS and Treasury, subject to certain exceptions, the Excise Tax should not apply in the event of IAC’s

We do not expect that we will pay dividends

in the foreseeable future.

We 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.

The Company’s board

of directors will have complete discretion as to whether to distribute dividends.

Even if the board of directors decides to declare and

pay dividends, the timing, amount, and form of such dividends, if any, will depend on the future results of operations and cash flow,

capital requirements and surplus, the amount of distributions, if any, received by the Company from its subsidiaries, the Company’s

financial condition, contractual restrictions, and other factors deemed relevant by the board of directors.

There is no guarantee that

the shares of Company common stock will appreciate in value or that the trading price of the shares will not decline.

Holders of the Company

common stock should not rely on an investment in shares of common stock as a source for any future dividend income.

The 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.

The Amended and Restated Charter

contains indemnification provisions obligating the Company to provide indemnification for its directors, officers, and employees in certain

circumstances.

Such indemnification obligations could result in the Company incurring substantial expenditures to cover the cost of settlement

or damage awards against its directors, executive officers, and employees, which it may be unable to recoup.

These provisions and resultant

costs may also discourage the Company from bringing a lawsuit against its directors and executive officers for breaches of their fiduciary

duties and may similarly discourage the filing of derivative litigation by its stockholders against its directors and officers even though

such actions, if successful, might otherwise benefit the Company and its stockholders.

If 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.

The Company is subject to

the risk that its independent registered public accounting firm could communicate to its board of directors that it has deficiencies in

its internal control structure that they consider to be “significant deficiencies.” A “significant deficiency”

is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is more than

a remote likelihood that a material misstatement of the entity’s financial statements will not be prevented or detected by the entity’s

internal controls.

Effective 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.

The Company’s intended

business, operations, and accounting are expected to be substantially more complex than they have been to date.

It may be time consuming,

difficult, and costly for the Company to develop and implement the internal control and reporting procedures required by the Exchange

the Company may need to hire additional financial reporting, internal control, and other finance personnel in order to develop and

implement appropriate internal control and reporting procedures.

If the Company is unable to comply with the internal control over financial

reporting requirements of the Exchange Act, then it may not be able to obtain the required independent accountant certifications, which

may preclude it from keeping its filings current with the SEC.

Further, a material weakness

in the effectiveness of internal control over financial reporting could result in an increased chance of fraud and the loss of customers,

reduce the Company’s ability to obtain financing, and require additional expenditures to comply with these requirements, each of

which could have a material adverse effect on its business, results of operations, and financial condition.

If the Company is unable to

implement and maintain effective internal control over financial reporting, including as applicable standards governing internal control

are modified, supplemented, or amended from time to time, the Company may not be able to ensure that it can conclude on an ongoing basis

that it has effective internal control over financial reporting.

Failure to achieve and maintain effective internal control over financial

reporting could cause the Company to face regulatory action and cause investors to lose confidence in its reported financial information,

either of which could adversely affect the value of the Company common stock.

Risks Related to Ownership of Alpha Modus’

The Amended and Restated Charter requires,

to the fullest extent permitted by law, that derivative actions brought in the Company’s name, as applicable, against their respective

directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the

Court of Chancery in the State of Delaware, which may have the effect of discouraging lawsuits against the Company’s directors,

officers, other employees or stockholders, as applicable.

The Amended and Restated Charter

requires, to the fullest extent permitted by law, that derivative actions brought in Alpha Modus’ name, as applicable, against their

respective directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought

only in the Court of Chancery in the State of Delaware or, if the Court of Chancery does not have subject matter jurisdiction, in the

federal district court of the State of Delaware.

This exclusive forum provision may limit a stockholder’s ability to bring a claim

in a judicial forum that it finds favorable for disputes with Alpha Modus, or any of their respective directors, officers, other employees

or stockholders, which may discourage lawsuits with respect to such claims, although their respective stockholders will not be deemed

to have waived their compliance with federal securities laws and the rules and regulations thereunder.

However, there is no assurance

that a court would enforce the choice of forum provision contained in the Amended and Restated Charter.

If a court were to find such provision

to be inapplicable or unenforceable in an action, Alpha Modus may incur additional costs associated with resolving such action in other

jurisdictions, which could harm their business, operating results and financial condition.

The Amended and Restated Charter

provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law.

The Amended and Restated

Charter also provides that to the fullest extent permitted by applicable law, the federal district courts of the United States will be

the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

The exclusive forum provision

will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal

courts have exclusive jurisdiction.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce

any duty or liability created by the Exchange Act or the rules and regulations thereunder.

As a result, federal courts will have exclusive

jurisdiction over suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal

courts have exclusive jurisdiction.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over

all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

both state and federal courts have jurisdiction to entertain such claims.

As noted above, the Amended and Restated Charter provides that

the federal district courts of the United States will be, to the fullest extent permitted by applicable law, the exclusive forum for the

resolution of any complaint asserting a cause of action under the Securities Act.

Due to the concurrent jurisdiction for federal and state

courts created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created by the Securities Act

or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive form provision.

also cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Anti-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.

The Amended and Restated Charter

and the Company’s Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in

our management without the consent of our board of directors.

government securities or

in money market funds invested exclusively in such securities, the greater the risk that we may be considered an unregistered investment

company, in which case we would be required to register as an investment company with the SEC.

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.

Modus’ CEO, William Alessi, is deemed to beneficially own or control in excess of ___ % of Alpha Modus’ common stock

and 90% of Alpha Modus’ preferred stock.

As a result, Alpha Modus is deemed to be a “controlled company” as defined

under the listing rules of Nasdaq.

Under Nasdaq listing rules, controlled companies are companies of which more than 50% of the voting

power for the election of directors is held by an individual, a group, or another company.

For as long as Alpha Modus remains a controlled

company, Alpha Modus will be permitted to elect to rely on certain exemptions from Nasdaq’s corporate governance rules, including

the following:

exemption from the rule that a majority of its board of directors must be independent directors;

exemption from the rule that its compensation committee be composed entirely of independent directors;

exemption from the rule that its director nominees must be selected or recommended solely by independent directors or a nominating

committee composed solely of independent directors;

Alpha Modus does not currently intend for Alpha Modus to rely on the “controlled company” exemptions to Nasdaq’s corporate

governance rules, Alpha Modus could elect to rely on these exemptions in the future.

If it elected to rely on those “controlled

company” exemptions, a majority of the members of Alpha Modus’ board of directors might not be independent directors, its

nominating and corporate governance and compensation committees might not consist entirely of independent directors, and you would not

have the same protection afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance rules.

Modus may issue additional shares of common or preferred stock, which would dilute the interests of stockholders and likely present other

Modus may issue additional shares of common or preferred stock for financing or other reasons.

The issuance of additional shares of common

or preferred stock:

significantly dilute the equity interest of existing investors;

subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded to holders of

common stock;

cause a change in control if a substantial number of common stock is issued, which may affect, among other things, Alpha Modus’

ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of Alpha Modus’

present officers and directors;

adversely affect prevailing market prices for Alpha Modus’ common stock and/or warrants.

may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of

at least a majority of the then outstanding public warrants.

As a result, the exercise price of the warrants could be increased, the

exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could

be decreased, all without holder approval.

warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent,

The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity

or correct any defective provision, but requires the approval by the holders of at least a majority of the then-outstanding public warrants

to make any change that adversely affects the interests of the registered holders of public warrants.

Accordingly, we may amend the terms

of the public warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants approve

of such amendment.

Although our ability to amend the terms of the public warrants with the consent of at least a majority of the then-outstanding

public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of

the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common

stock purchasable upon exercise of a warrant.

Modus may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to holders, thereby making the Public

Warrants worthless.

Modus will have the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration,

at a price of $0.01 per warrant, provided that the last reported sales price of Alpha Modus common stock equals or exceeds $18.00 per

share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date Alpha Modus gives notice

of redemption.

If and when the Public Warrants become redeemable by Alpha Modus, Alpha Modus may exercise its redemption right even if

it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of the

outstanding Public Warrants could force holders of the warrants (i) to exercise the Public Warrants and pay the exercise price therefor

at a time when it may be disadvantageous for them to do so, (ii) to sell the Public Warrants at the then-current market price when they

might otherwise wish to hold their Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding

Public Warrants are called for redemption, is likely to be substantially less than the market value of the Public Warrants.

31, 2025, the sales price of the Class A common stock did not exceed the threshold that would allow Alpha Modus to redeem the Public

previously believed that we may have been 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.

Based on final regulations released by the Treasury and IRS, we no longer believe

that we are subject to the Excise Tax, but if that conclusion is not correct, we could be subject to the Excise Tax.

August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”), which, among other things,

imposes a 1% excise tax on any publicly traded domestic corporation that repurchases its stock after December 31, 2022 (the “Excise

The Excise Tax is imposed on the fair market value of the repurchased stock, with certain exceptions.

Because we are a Delaware

corporation and because our securities trade on Nasdaq, we are a “covered corporation” within the meaning of the Inflation

Reduction Act.

Department of the Treasury (the “Treasury”) was given authority to provide regulations and other

guidance to carry out and prevent the abuse or avoidance of the Excise Tax.

November 24, 2025, the Treasury and the Internal Revenue Service (“IRS”) issued final regulations under Internal Revenue

Code (“IRC”) Section 4501 (Treasury Decision 10037).

Under these final regulations, transition relief from the Excise Tax

under Section 4501 is appropriate for certain types of stock issued prior to the date of enactment of the IRA if the covered corporation

no longer has discretion as to whether to repurchase such stock after that date.

These final regulations specifically incorporate transition

relief for mandatorily redeemable stock and for stock subject by its terms to a unilateral put option of the holder, if such stock was

outstanding prior to August 16, 2022.

we previously believed that the Excise Tax may have applied to redemptions of our Class A common stock in connection with our Business

Combination completed in 2024, based on the November 24, 2025, final regulations described above, we no longer believe the Excise Tax

applies the Company’s prior common stock redemptions, since those redemptions occurred solely with respect to redeemable stock

issued by the Company in its original IPO in September 2021, such that those redemptions are not treated as stock repurchases for purposes

of IRC Section 4501 because that stock was outstanding prior to August 16, 2022.

Accordingly, as of December 31, 2025, the Company’s

financial statements reflect the removal of the Excise Tax liability of $2,348,302.

our conclusions regarding the applicability of the transition relief provided by the November 24, 2025, final regulations described above

are incorrect, we could still be subject to liability arising from the Excise Tax.

do not expect that we will pay dividends in the foreseeable future.

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

Company’s board of directors will have complete discretion as to whether to distribute dividends.

Even if the board of directors

decides to declare and pay dividends, the timing, amount, and form of such dividends, if any, will depend on the future results of operations

and cash flow, capital requirements and surplus, the amount of distributions, if any, received by the Company from its subsidiaries,

the Company’s financial condition, contractual restrictions, and other factors deemed relevant by the board of directors.

is no guarantee that the shares of Company common stock will appreciate in value or that the trading price of the shares will not decline.

Holders of the Company common stock should not rely on an investment in shares of common stock as a source for any future dividend income.

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.

Amended and Restated Charter contains indemnification provisions obligating the Company to provide indemnification for its directors,

officers, and employees in certain circumstances.

Such indemnification obligations could result in the Company incurring substantial

expenditures to cover the cost of settlement or damage awards against its directors, executive officers, and employees, which it may

be unable to recoup.

These provisions and resultant costs may also discourage the Company from bringing a lawsuit against its directors

and executive officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by its

stockholders against its directors and officers even though such actions, if successful, might otherwise benefit the Company and its

stockholders.

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.

Company is subject to the risk that its independent registered public accounting firm could communicate to its board of directors that

it has deficiencies in its internal control structure that they consider to be “significant deficiencies.” A “significant

deficiency” is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that

there is more than a remote likelihood that a material misstatement of the entity’s financial statements will not be prevented

or detected by the entity’s internal controls.

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.

Company’s intended business, operations, and accounting are expected to be substantially more complex than they have been to date.

It may be time consuming, difficult, and costly for the Company to develop and implement the internal control and reporting procedures

required by the Exchange Act.

the Company may need to hire additional financial reporting, internal control, and other finance personnel

in order to develop and implement appropriate internal control and reporting procedures.

If the Company is unable to comply with the

internal control over financial reporting requirements of the Exchange Act, then it may not be able to obtain the required independent

accountant certifications, which may preclude it from keeping its filings current with the SEC.

a material weakness in the effectiveness of internal control over financial reporting could result in an increased chance of fraud and

the loss of customers, reduce the Company’s ability to obtain financing, and require additional expenditures to comply with these

requirements, each of which could have a material adverse effect on its business, results of operations, and financial condition.

the Company is unable to implement and maintain effective internal control over financial reporting, including as applicable standards

governing internal control are modified, supplemented, or amended from time to time, the Company may not be able to ensure that it can

conclude on an ongoing basis that it has effective internal control over financial reporting.

Failure to achieve and maintain effective

internal control over financial reporting could cause the Company to face regulatory action and cause investors to lose confidence in

its reported financial information, either of which could adversely affect the value of the Company common stock.

Related to Ownership of Alpha Modus’ Shares

Amended and Restated Charter requires, to the fullest extent permitted by law, that derivative actions brought in the Company’s

name, as applicable, against their respective directors, officers, other employees or stockholders for breach of fiduciary duty and other

similar actions may be brought only in the Court of Chancery in the State of Delaware, which may have the effect of discouraging lawsuits

against the Company’s directors, officers, other employees or stockholders, as applicable.

Amended and Restated Charter requires, to the fullest extent permitted by law, that derivative actions brought in Alpha Modus’

name, as applicable, against their respective directors, officers, other employees or stockholders for breach of fiduciary duty and other

similar actions may be brought only in the Court of Chancery in the State of Delaware or, if the Court of Chancery does not have subject

matter jurisdiction, in the federal district court of the State of Delaware.

This exclusive forum provision may limit a stockholder’s

ability to bring a claim in a judicial forum that it finds favorable for disputes with Alpha Modus, or any of their respective directors,

officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although their respective stockholders

will not be deemed to have waived their compliance with federal securities laws and the rules and regulations thereunder.

However, there

is no assurance that a court would enforce the choice of forum provision contained in the Amended and Restated Charter.

If a court were

to find such provision to be inapplicable or unenforceable in an action, Alpha Modus may incur additional costs associated with resolving

such action in other jurisdictions, which could harm their business, operating results and financial condition.

Amended and Restated Charter provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable

The Amended and Restated Charter also provides that to the fullest extent permitted by applicable law, the federal district courts

of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities

exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim

for which the federal courts have exclusive jurisdiction.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over

all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

federal courts will have exclusive jurisdiction over suits brought to enforce any duty or liability created by the Exchange Act or any

other claim for which the federal courts have exclusive jurisdiction.

Section 22 of the Securities Act creates concurrent jurisdiction

for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations

Accordingly, both state and federal courts have jurisdiction to entertain such claims.

As noted above, the Amended and Restated

Charter provides that the federal district courts of the United States will be, to the fullest extent permitted by applicable law, the

exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.

Due to the concurrent jurisdiction

for federal and state courts created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created

by the Securities Act or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive

form provision.

Investors also cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Anti-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.

Amended and Restated Charter and the Company’s Bylaws contain provisions that could have the effect of delaying or preventing changes

in control or changes in our management without the consent of our board of directors.

These provisions include:

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being able to fill vacancies on our board of directors;

the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

limiting the liability of, and providing indemnification to, our directors and officers;

controlling the procedures for the conduct and scheduling of stockholder meetings;

providing for a staggered board, in which the members of the board of directors are divided into three classes to serve for a period of three years from the date of their respective appointment or election;

granting the ability to remove directors with cause by the affirmative vote of 66 2∕3% in voting power of the outstanding shares of Alpha Modus common stock entitled to vote thereon;

requiring the affirmative vote of at least 66 2∕3% of the voting power of the outstanding shares of capital stock of Alpha Modus entitled to vote generally in the election of directors, voting together as a single class, to amend the Proposed Bylaws or certain sections of the Amended and Restated Charter;

advance notice procedures that stockholders must comply with in order to nominate candidates to Alpha Modus Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Alpha Modus.

These 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.

As a Delaware corporation,

we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders holding more than

15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all

of Alpha Modus common stock.

Any provision of Amended and Restated Charter, the Proposed Bylaws or Delaware law that has the effect of

delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of Alpha

Modus common stock and could also affect the price that some investors are willing to pay for Alpha Modus common stock.

Claims 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.

The Company’s Bylaws

provide that Alpha Modus will indemnify its directors and officers, in each case to the fullest extent permitted by Delaware law.

as permitted by Section 145 of the DGCL, the Bylaws and indemnification agreements that the Company has entered into with its directors

and officers provide that:

Alpha Modus will indemnify its directors and officers for serving Alpha Modus in those capacities or for serving other business enterprises at its request, to the fullest extent permitted by Delaware law.

Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

Alpha Modus may, in its discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

Alpha Modus will be required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

Alpha Modus will not be obligated pursuant to its Proposed Bylaws to indemnify a person with respect to proceedings initiated by that person against Alpha Modus or its other indemnitees, except with respect to proceedings authorized by its board of directors or brought to enforce a right to indemnification;

the rights conferred in the Proposed Bylaws are not exclusive, and Alpha Modus is authorized to enter into indemnification agreements with its directors, officers, employees and agents and to obtain insurance to indemnify such persons.

If 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.

The trading market for Alpha

Modus’ securities will be influenced by the research and reports that industry or securities analysts may publish about Alpha Modus,

its business, market or competitors.

Securities and industry analysts do not currently, to the knowledge of management, and may never,

publish research on Alpha Modus.

If no securities or industry analysts commence coverage of Alpha Modus, Alpha Modus’ share price

and trading volume would likely be negatively impacted.

If any of the analysts who may cover Alpha Modus change their recommendation regarding

Alpha Modus common stock adversely, or provide more favorable relative recommendations about Alpha Modus’ competitors, the price

of shares of Alpha Modus common stock would likely decline.

If any analyst who may cover Alpha Modus were to cease coverage of Alpha Modus

or fail to regularly publish reports on it, Alpha Modus could lose visibility in the financial markets, which in turn could cause its

share price or trading volume to decline.

The 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.

We issued 7,500,000 shares

of Series C Preferred Stock in the Business Combination.

The Series C Preferred Stock will generally be convertible at any time 18 months

following the Closing of the Business Combination and may convert in some circumstances into more than 7,500,000 shares of common stock.

Conversion of the Series C Preferred Stock into common Stock will be dilutive to existing stockholders and may reduce the market price

of common stock.

For example, if there has never been a Trigger Event (as defined below), shares of Series C Preferred Stock, which have

a deemed face value of $10.00 per share (the “Face Value”) will convert into shares of common stock at the lesser of the Face

Value or the average of the 5 lowest closing prices of common stock during the 10 trading days preceding conversion.

However, following

a following any Trigger Event, such conversion shall be at the lesser of the Face Value or 50.0% of the average of the lowest closing

prices during the 10 trading days preceding conversion.

“Trigger Event” generally means (i) the Company’s failure to

deliver conversion shares when required;

(ii) violation of or failure to timely perform any covenant in the designation of the rights

of the Series C Preferred Stock;

(iii) suspension from trading or delisting from the Company’s principal trading exchange or market;

cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors

or the resignation, death, or removal of a director with or without cause by stockholders, which prevents stockholders from being

able to fill vacancies on our board of directors;

ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other

terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly

dilute the ownership of a hostile acquirer;

prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting

of our stockholders;

requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our

stockholders to force consideration of a proposal or to take action, including the removal of directors;

the liability of, and providing indemnification to, our directors and officers;

the procedures for the conduct and scheduling of stockholder meetings;

for a staggered board, in which the members of the board of directors are divided into three classes to serve for a period of three

years from the date of their respective appointment or election;

the ability to remove directors with cause by the affirmative vote of 66 2∕3% in voting power of the outstanding shares of

Alpha Modus common stock entitled to vote thereon;

the affirmative vote of at least 66 2∕3% of the voting power of the outstanding shares of capital stock of Alpha Modus entitled

to vote generally in the election of directors, voting together as a single class, to amend the Proposed Bylaws or certain sections

of the Amended and Restated Charter;

notice procedures that stockholders must comply with in order to nominate candidates to Alpha Modus Board or to propose matters to

be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation

of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of Alpha Modus.

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.

a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders

holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders

of substantially all of Alpha Modus common stock.

Any provision of Amended and Restated Charter, the Proposed Bylaws or Delaware law

that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium

for their shares of Alpha Modus common stock and could also affect the price that some investors are willing to pay for Alpha Modus common

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.

Company’s Bylaws provide that Alpha Modus will indemnify its directors and officers, in each case to the fullest extent permitted

by Delaware law.

In addition, as permitted by Section 145 of the DGCL, the Bylaws and indemnification agreements that the Company has

entered into with its directors and officers provide that:

Modus will indemnify its directors and officers for serving Alpha Modus in those capacities or for serving other business enterprises

at its request, to the fullest extent permitted by Delaware law.

Delaware law provides that a corporation may indemnify such person

if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests

of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was

Modus may, in its discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable

Modus will be required to advance expenses, as incurred, to its directors and officers in connection with defending a proceeding,

except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is

not entitled to indemnification;

Modus will not be obligated pursuant to its Proposed Bylaws to indemnify a person with respect to proceedings initiated by that person

against Alpha Modus or its other indemnitees, except with respect to proceedings authorized by its board of directors or brought

to enforce a right to indemnification;

rights conferred in the Proposed Bylaws are not exclusive, and Alpha Modus is authorized to enter into indemnification agreements

with its directors, officers, employees and agents and to obtain insurance to indemnify such persons.

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.

trading market for Alpha Modus’ securities will be influenced by the research and reports that industry or securities analysts

may publish about Alpha Modus, its business, market or competitors.

Securities and industry analysts do not currently, to the knowledge

of management, and may never, publish research on Alpha Modus.

If no securities or industry analysts commence coverage of Alpha Modus,

Alpha Modus’ share price and trading volume would likely be negatively impacted.

If any of the analysts who may cover Alpha Modus

change their recommendation regarding Alpha Modus common stock adversely, or provide more favorable relative recommendations about Alpha

Modus’ competitors, the price of shares of Alpha Modus common stock would likely decline.

If any analyst who may cover Alpha Modus

were to cease coverage of Alpha Modus or fail to regularly publish reports on it, Alpha Modus could lose visibility in the financial

markets, which in turn could cause its share price or trading volume to decline.

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.

issued 7,500,000 shares of Series C Preferred Stock in the Business Combination.

The Series C Preferred Stock will generally be convertible

at any time 18 months following the Closing of the Business Combination and may convert in some circumstances into more than 7,500,000

shares of common stock.

Conversion of the Series C Preferred Stock into common Stock will be dilutive to existing stockholders and may

reduce the market price of common stock.

For example, if there has never been a Trigger Event (as defined below), shares of Series C

Preferred Stock, which have a deemed face value of $10.00 per share (the “Face Value”) will convert into shares of common

stock at the lesser of the Face Value or the average of the 5 lowest closing prices of common stock during the 10 trading days preceding

However, following a following any Trigger Event, such conversion shall be at the lesser of the Face Value or 50.0% of the

average of the lowest closing prices during the 10 trading days preceding conversion.

“Trigger Event” generally means (i)

the Company’s failure to deliver conversion shares when required;

(ii) violation of or failure to timely perform any covenant in

the designation of the rights of the Series C Preferred Stock;

(iii) suspension from trading or delisting from the Company’s principal

trading exchange or market;

(iv) notification of an intention not to comply with a conversion notice;

(v) bankruptcy, insolvency, reorganization, liquidation or similar

(v) bankruptcy, insolvency, reorganization,

liquidation or similar proceedings;

(vi) the appointment of a custodian, receiver or similar official for the Company;

(vii) judgments in excess of $500,000

which are not stayed or satisfied within 30 days of entry;

(viii) failure to comply with reporting requirements of Securities Exchange

(vii) judgments

in excess of $500,000 which are not stayed or satisfied within 30 days of entry;

(viii) failure to comply with reporting requirements

of Securities Exchange Act;

(ix) any regulatory, administrative or enforcement proceeding is initiated against IAC;

or (x) any material provision of the designation

of the rights of the Series C Preferred Stock ceases to be valid or is contested.

As a result, regardless of whether a Trigger Event occurs,

if the trading price of the Company’s common stock is less than $10.00/share at the time of conversion, the Series C Preferred Stock

will generally convert into more than 7,500,000 shares, and if the trading price is substantially lower than $10.00/share or a Trigger

Event occurs, into substantially more than 7,500,000 shares.

Additionally, shares of Series

C Preferred Stock will rank senior to the Company’s common stock with respect to rights upon liquidation, winding up or dissolution.

The Series C Preferred Stock has a liquidation preference of $10.00 per share or an aggregate liquidation preference of $75,000,000 over

holders of common stock.

This preference, and conversion rights associated with the Series C Preferred Stock, may adversely affect us

and reduce returns for holders, or the market price, of the Company’s common stock.

Additionally, in the future,

we may incur debt or issue other equity ranking senior to the Company’s common stock, like the Series C Preferred Stock.

Those securities

will generally have priority upon liquidation.

Such securities also may be governed by an indenture or other instrument containing covenants

restricting our operating flexibility.

Additionally, any convertible or exchangeable securities that we issue in the future may have rights,

preferences and privileges more favorable than those of the Company’s common stock.

Because our decision to issue debt or equity

in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing,

nature or success of our future capital raising efforts.

As a result, future capital-raising efforts may reduce the market price of the

Company’s common stock and be dilutive to existing stockholders.

There 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.

There can be no assurance

that the Company’s common stock will continue to be listed on the Nasdaq, or that we will be able to comply with Nasdaq’s

continued listing standards.

If Nasdaq delists Alpha Modus’ shares from trading on its exchange for failure to meet Nasdaq’s

listing standards, Alpha Modus and its stockholders could face significant material adverse consequences including, but not limited to:

a limited availability of market quotations for Alpha Modus’ securities;

reduced liquidity for Alpha Modus’ securities;

a determination that Alpha Modus common stock is a “penny stock” which will require brokers trading in Alpha Modus common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Alpha Modus common stock;

a limited amount of analyst coverage;

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets

Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which

are referred to as “covered securities.” Because Alpha Modus common stock and Public Warrants are listed on Nasdaq, they are

covered securities.

Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states

to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate

or bar the sale of covered securities in a particular case.

While we are not aware of a state, other than the State of Idaho, having used

these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view

blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank

check companies in their states.

Further, if Alpha Modus was no longer listed on Nasdaq, Alpha Modus’ securities would not be covered

securities and Alpha Modus would be subject to regulation in each state in which Alpha Modus offers its securities.

An active market for Alpha Modus’

securities may not develop, which would adversely affect the liquidity and price of Alpha Modus’ securities.

The price of Alpha Modus’

securities may vary significantly due to factors specific to Alpha Modus as well as to general market or economic conditions.

an active trading market for Alpha Modus’ securities may never develop or, if developed, it may not be sustained.

Holders of Alpha

Modus’ securities may be unable to sell their securities unless a market can be established and sustained.

The market price of the Company’s

common stock may decline.

Fluctuations in the price

of the Company’s securities could contribute to the loss of all or part of your investment.

Prior to the Business Combination, there

has not been an active public market for the Company’s common stock.

If an active market for Alpha Modus’ securities develops

and continues, the trading price of Alpha Modus’ securities in the future could be volatile and subject to wide fluctuations in

response to various factors, some of which are beyond Alpha Modus’ control.

Any of the factors listed below could have a material

adverse effect on your investment in Alpha Modus’ securities and Alpha Modus’ securities may trade at prices significantly

below the price you paid for them.

In such circumstances, the trading price of Alpha Modus’ securities may not recover and may experience

a further decline.

The market price of Alpha

Modus common stock may decline for a number of other reasons including if:

investors react negatively to the prospects of Alpha Modus’ business operations, results, and prospects;

actual or anticipated fluctuations in Alpha Modus’ quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

changes in the market’s expectations about Alpha Modus’ operating results;

success of competitors;

changes in financial estimates and recommendations by securities analysts concerning Alpha Modus or the AI industry in general;

operating and share price performance of other companies that investors deem comparable to Alpha Modus;

Alpha Modus’ ability to market new and enhanced products and technologies on a timely basis;

changes in laws and regulations affecting Alpha Modus’ business;

Alpha Modus’ ability to meet compliance requirements;

commencement of, or involvement in, litigation involving Alpha Modus;

changes in Alpha Modus’ capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of Alpha Modus’ shares of common stock available for public sale;

any major change in Alpha Modus’ Board or management.

Future 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.

The sale of shares of Alpha

Modus common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares

of Alpha Modus common stock.

These sales, or the possibility that these sales may occur, also might make it more difficult for Alpha Modus

to sell equity securities in the future at a time and at a price that it deems appropriate.

All shares currently held

by public stockholders and all of the shares issued in the Business Combination to existing Alpha Modus stockholders are freely tradable

without registration under the Securities Act, and without restriction by persons other than Alpha Modus’ “affiliates”

or (x) any material

provision of the designation of the rights of the Series C Preferred Stock ceases to be valid or is contested.

As a result, regardless

of whether a Trigger Event occurs, if the trading price of the Company’s common stock is less than $10.00/share at the time of

conversion, the Series C Preferred Stock will generally convert into more than 7,500,000 shares, and if the trading price is substantially

lower than $10.00/share or a Trigger Event occurs, into substantially more than 7,500,000 shares.

of Series C Preferred Stock will rank senior to the Company’s common stock with respect to rights upon liquidation, winding up

or dissolution.

The Series C Preferred Stock has a liquidation preference of $10.00 per share or an aggregate liquidation preference

of $75,000,000 over holders of common stock.

This preference, and conversion rights associated with the Series C Preferred Stock, may

adversely affect us and reduce returns for holders, or the market price, of the Company’s common stock.

Additionally,

we have issued debt instruments that permit the holders to convert their Company debt into Company common stock, and any such shares

of common stock issued upon conversion would be dilutive to existing stockholders and when sold into the public markets may adversely

the market price of the Company’s common stock.

the future, we may also incur debt or issue other equity ranking senior to the Company’s common stock, like the Series C Preferred

Those securities could generally have priority upon liquidation.

Such securities also may be governed by an indenture or other

instrument containing covenants restricting our operating flexibility.

Additionally, any convertible or exchangeable securities that

we issue in the future may have rights, preferences and privileges more favorable than those of the Company’s common stock.

our decision to issue debt or equity in the future will depend on market conditions and other factors beyond our control, we cannot predict

or estimate the amount, timing, nature or success of our future capital raising efforts.

As a result, future capital-raising efforts

may reduce the market price of the Company’s common stock and be dilutive to existing stockholders.

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.

can be no assurance that the Company’s common stock will continue to be listed on the Nasdaq, or that we will be able to comply

with Nasdaq’s continued listing standards.

If Nasdaq delists Alpha Modus’ shares from trading on its exchange for failure

to meet Nasdaq’s listing standards, Alpha Modus and its stockholders could face significant material adverse consequences including,

but not limited to:

limited availability of market quotations for Alpha Modus’ securities;

liquidity for Alpha Modus’ securities;

determination that Alpha Modus common stock is a “penny stock” which will require brokers trading in Alpha Modus common

stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market

for Alpha Modus common stock;

limited amount of analyst coverage;

decreased ability to issue additional securities or obtain additional financing in the future.

National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the

sale of certain securities, which are referred to as “covered securities.” Because Alpha Modus common stock and Public Warrants

are listed on Nasdaq, they are covered securities.

Although the states are preempted from regulating the sale of our securities, the

federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent

activity, then the states can regulate or bar the sale of covered securities in a particular case.

While we are not aware of a state,

other than the State of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies,

certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers,

to hinder the sale of securities of blank check companies in their states.

Further, if Alpha Modus was no longer listed on Nasdaq, Alpha

Modus’ securities would not be covered securities and Alpha Modus would be subject to regulation in each state in which Alpha Modus

offers its securities.

active market for Alpha Modus’ securities may not develop, which would adversely affect the liquidity and price of Alpha Modus’

price of Alpha Modus’ securities may vary significantly due to factors specific to Alpha Modus as well as to general market or

economic conditions.

Furthermore, an active trading market for Alpha Modus’ securities may never develop or, if developed, it may

not be sustained.

Holders of Alpha Modus’ securities may be unable to sell their securities unless a market can be established

and sustained.

market price of the Company’s common stock may decline.

in the price of the Company’s securities could contribute to the loss of all or part of your investment.

Prior to the Business

Combination, there has not been an active public market for the Company’s common stock.

If an active market for Alpha Modus’

securities develops and continues, the trading price of Alpha Modus’ securities in the future could be volatile and subject to

wide fluctuations in response to various factors, some of which are beyond Alpha Modus’ control.

Any of the factors listed below

could have a material adverse effect on your investment in Alpha Modus’ securities and Alpha Modus’ securities may trade

at prices significantly below the price you paid for them.

In such circumstances, the trading price of Alpha Modus’ securities

may not recover and may experience a further decline.

market price of Alpha Modus common stock may decline for a number of other reasons including if:

react negatively to the prospects of Alpha Modus’ business operations, results, and prospects;

or anticipated fluctuations in Alpha Modus’ quarterly financial results or the quarterly financial results of companies perceived

to be similar to it;

in the market’s expectations about Alpha Modus’ operating results;

of competitors;

in financial estimates and recommendations by securities analysts concerning Alpha Modus or the AI industry in general;

and share price performance of other companies that investors deem comparable to Alpha Modus;

Modus’ ability to market new and enhanced products and technologies on a timely basis;

in laws and regulations affecting Alpha Modus’ business;

Modus’ ability to meet compliance requirements;

of, or involvement in, litigation involving Alpha Modus;

in Alpha Modus’ capital structure, such as future issuances of securities or the incurrence of additional debt;

volume of Alpha Modus’ shares of common stock available for public sale;

major change in Alpha Modus’ Board or management.

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.

sale of shares of Alpha Modus common stock in the public market, or the perception that such sales could occur, could harm the prevailing

market price of shares of Alpha Modus common stock.

These sales, or the possibility that these sales may occur, also might make it more

difficult for Alpha Modus to sell equity securities in the future at a time and at a price that it deems appropriate.

shares currently held by public stockholders and all of the shares issued in the Business Combination to existing Alpha Modus stockholders

are freely tradable without registration under the Securities Act, and without restriction by persons other than Alpha Modus’ “affiliates”

(as defined under Rule 144 of the Securities Act, “Rule 144”), including Alpha Modus’ directors, executive officers

and other affiliates.

Certain existing Alpha Modus

stockholders, who collectively own 4,342,308 shares of Alpha Modus common stock following the Business Combination and 7,500,000 shares

of Alpha Modus Series C Preferred Stock (all of which shares are deemed to be owned by William Alessi, the CEO of Alpha Modus, as Mr.

Alessi or his spouse have voting and dispositive power with respect to those shares), have agreed pursuant to a lock-up agreement not

to dispose of (or hedge) more than 2,484,616 shares Alpha Modus common stock or securities convertible into or exchangeable for shares

of Alpha Modus common stock during the period from the date of the Closing continuing through the earliest of:

(i) the date that is one

year from the Closing Date, (ii) the last trading day when the last reported sale price of Alpha Modus common stock equals or exceeds

$12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for 20 trading days

within any 30-trading day period at least one year after the Closing Date, or (iii) such date on which Alpha Modus completes a liquidation,

merger, stock exchange, reorganization or other similar transaction that results in all of the Alpha Modus stockholders having the right

to exchange their shares of Alpha Modus common stock for cash, securities or other property.

Because 2,484,616 shares of Alpha Modus common

stock held by those stockholders are not subject to those lock-up restrictions (and have been registered for resale), those stockholders

may sell those shares, which could cause the market price of Alpha Modus common stock to decline.

In the future, Alpha Modus

may also issue its securities in connection with investments or acquisitions.

The amount of shares of Alpha Modus common stock issued

in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of Alpha Modus common

Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to Alpha

Modus stockholders.

Alpha Modus’ failure to meet the continued

listing requirements of Nasdaq could result in a delisting of its Securities.

On January 6, 2025, Alpha

Modus received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company no longer met the minimum

market value of publicly held shares (“MVPHS”) of $15,000,000 required by Nasdaq’s listing rules.

Under the rules, the

Company has 180 calendar days, or until July 7, 2025, to regain compliance.

If the Company’s MVPHS closes at $15,000,000 or more

for a minimum of ten consecutive business days during this period, Nasdaq will provide the Company with written confirmation of compliance,

and the matter will be closed.

On February 5, 2025, Alpha

Modus received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company no longer met the minimum

market value of listed securities (“MVLS”) of $50,000,000 required by Nasdaq’s listing rules.

Under the rules, the Company

has 180 calendar days, or until August 4, 2025, to regain compliance.

If the Company’s MVLS closes at $50,000,000 or more for a

minimum of ten consecutive business days during this period, Nasdaq will provide the Company with written confirmation of compliance,

and the matter will be closed.

There is no guarantee that

the Company’s MVPHS or MVLS will increase sufficiently and for a long enough period of time for the Company to regain compliance

with Nasdaq’s listing rules.

If Alpha Modus fails to regain compliance with these rules, or fails to satisfy other continued listing

requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps

to delist the Company’s securities.

Such a delisting would likely have a negative effect on the price of the securities and would

impair your ability to sell or purchase the securities when you wish to do so.

In the event of a delisting, Alpha Modus can provide no

assurance that any action taken by it to restore compliance with listing requirements would allow its securities to become listed again,

stabilize the market price or improve the liquidity of its securities, prevent its securities from dropping below the Nasdaq minimum bid

price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

the future, Alpha Modus may also issue its securities in connection with investments or acquisitions.

The amount of shares of Alpha Modus

common stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares

of Alpha Modus common stock.

Any issuance of additional securities in connection with investments or acquisitions may result in additional

dilution to Alpha Modus stockholders.

Modus’ failure to meet the continued listing requirements of Nasdaq could result in a delisting of its Securities.

January 6, 2025, Alpha Modus received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”)

indicating that the Company no longer met the minimum market value of publicly held shares (“MVPHS”) of $15,000,000 required

by Nasdaq’s listing rules to be listed on the Nasdaq Global Market.

On February 5, 2025, Alpha Modus received another written notice

from Nasdaq indicating that the Company no longer met the minimum market value of listed securities (“MVLS”) of $50,000,000

required by Nasdaq’s listing rules to be listed on the Nasdaq Global Market.

On July 10, 2025, Nasdaq approved the Company’s

application to transfer its securities listings from the Nasdaq Global Market to the Nasdaq Capital Market, and the Company’s securities

listings were transferred to the Nasdaq Capital Market on July 14, 2025.

The listing transfer resolved the MVPHS and MVLS deficiencies.

January 12, 2026, the Company received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company

was not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing

on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”).

The Nasdaq listing rules require listed securities to

maintain a minimum bid price of $1.00 per share, and, based upon the closing bid price of the Company’s common stock for the prior

30 consecutive business days, the Company no longer met this requirement.

The Nasdaq rules provide the Company a compliance period of

180 calendar days from the date of the notice (or until July 13, 2026) in which to regain compliance with the Minimum Bid Price Requirement.

Alpha Modus is unable to remain in compliance with the Nasdaq Capital Market’s listing rules, Nasdaq may take steps to delist the

Company’s securities.

Such a delisting would likely have a negative effect on the price of the securities and would impair your

ability to sell or purchase the securities when you wish to do so.

In the event of a delisting, Alpha Modus can provide no assurance

that any action taken by it to restore compliance with listing requirements would allow its securities to become listed again, stabilize

the market price or improve the liquidity of its securities, prevent its securities from dropping below the Nasdaq minimum bid price

requirement or prevent future non-compliance with Nasdaq’s listing requirements.

Additionally, if Alpha Modus’ securities

4 unchanged sentences

unless a market can be established or sustained.

Alpha Modus qualifies as an “emerging

growth company” as well as a smaller reporting company within the meaning of the Securities Act, and if Alpha Modus takes advantage

of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make

Alpha Modus’ securities less attractive to investors and may make it more difficult to compare Alpha Modus’ performance with

other public companies.

Alpha Modus qualifies as an

“emerging growth company” within the meaning of Section 2(a)(19) of the Securities Act, as modified by the JOBS Act.

Alpha Modus may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies

that are not emerging growth companies for as long as Alpha Modus continues to be an emerging growth company, including, but not limited

to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced

disclosure obligations regarding executive compensation in Alpha Modus’ periodic reports and proxy statements and (iii) exemptions

from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute

payments not previously approved.

As a result, Alpha Modus’ stockholders may not have access to certain information they may deem

Alpha Modus will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market

value of Alpha Modus common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal

quarter, (ii) the last day of the fiscal year in which Alpha Modus has total annual gross revenue of $1.07 billion or more during such

fiscal year (as indexed for inflation), (iii) the date on which Alpha Modus has issued more than $1 billion in non-convertible debt in

the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common

stock in the IAC IPO.

Investors may find Alpha Modus’ securities less attractive because Alpha Modus will rely on these exemptions.

Alpha Modus cannot predict whether investors will find its securities less attractive because it will rely on these exemptions.

investors find Alpha Modus’ securities less attractive as a result of its reliance on these exemptions, the trading prices of Alpha

Modus’ securities may be lower than they otherwise would be, there may be a less active trading market for its securities and the

trading prices of its securities may be more volatile.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging

growth companies but any such an election to opt out is irrevocable.

We have elected not to opt out of such extended transition period,

which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an

emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

make comparison of Alpha Modus’ financial statements with another public company which is neither an emerging growth company nor

an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential

differences in accounting standards used.

Additionally, Alpha Modus

will qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may

take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial

Alpha Modus will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of

Alpha Modus common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii)

its annual revenues exceeded $100 million during such completed fiscal year and the market value of Alpha Modus common stock held by non-affiliates

exceeds $700 million as of the end of that year’s second fiscal quarter.

To the extent Alpha Modus takes advantage of such reduced

disclosure obligations, it may also make comparison of its financial statements with other public companies difficult or impossible.

Compliance 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.

Section 404 of the Sarbanes-Oxley

Act requires that we evaluate and report on our system of internal controls.

Only in the event we are deemed to be a large accelerated

filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent

registered public accounting firm attestation requirement on our internal control over financial reporting.

Further, for as long as we

remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation

requirement on our internal control over financial reporting.

The fact that we are a blank check company makes compliance with the requirements

of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we

seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy

of its internal controls.

The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act

may increase the time and costs necessary to complete any such business combination.

We 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.

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes

and material weaknesses identified through such evaluation of those internal controls.

A material weakness is a deficiency, or a combination

of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of our annual or interim financial statements will not be prevented or detected on a timely basis.

We previously identified two

significant deficiencies that resulted in immaterial revisions to our previously reported financial statements contained in our Annual

Report on Form 10-K for the year ended December 31, 2021, and the quarterly unaudited financial statements contained in its Form 10-Qs

for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022.

The deficiencies related to a missed adjustment

for shares that were forfeited on October 16, 2021, and a calculation error in the supporting documents for the Company’s income

tax footnote.

These two identified significant deficiencies resulted in our inability to timely file its Annual Report on Form 10-K, and,

thus, resulted in a material weakness in our internal control over financial reporting.

Additionally, between March

2, 2023 and December 5, 2023, the Company withdrew an aggregate amount of $2,497,248.57 from the Company’s IPO trust account pursuant

to seven separate written withdrawal requests to Continental Stock Transfer and Trust (“Continental”), the trustee for the

trust account for the payment of taxes.

While the Company paid an aggregate amount of $1,447,889.17 for tax payments, the remaining amount

of $1,049,359.40, that was withdrawn from the trust account for tax purposes, was used to pay other business expenses of the Company.

On March 15, 2024, the Sponsor deposited $1,049,359.40 into the trust account, and on March 26, 2024, the Sponsor deposited an additional

amount $36,285.07 into the trust account to reimburse the trust account for interest that would have earned on the $1,049,359.40 that

was erroneously withdrawn from the trust account.

This resulted in a material weakness in our internal control over financial reporting.

Subsequent to the end of the March 31 fiscal quarter, the funds were returned by the Sponsor to the trust account.

Furthermore, during

the year ended December 31, 2023, funds were transferred from the trust account to the Company’s operating bank account and then

to the Sponsor, which is not in accordance with the trust agreement.

During the year ended December 31, 2023, we did not have controls

in place to prevent or detect such transfer of funds.

This resulted in a material weakness.

Subsequent to the period end, the funds were

returned by the Sponsor to the Company’s operating bank account.

We have concluded that our

internal control over financial reporting was ineffective as of December 31, 2024, and as of December 31, 2023, because material weaknesses

existed in our internal control over financial reporting.

We have taken a number of measures to remediate the material weaknesses described

however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses,

we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information.

Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock

exchange on which our Class A common stock is listed, the SEC or other regulatory authorities.

Failure to timely file will cause us to

be ineligible to utilize short form registration statements on Form S-3 or, which may impair our ability to obtain capital in a timely

fashion to execute our business strategies or issue shares to effect an acquisition.

In either case, the existence of material weaknesses

or significant deficiencies in internal control over financial reporting could adversely affect our business and our reputation or investor

perceptions of us, which could have a negative effect on the trading price of our stock.

In addition, we will incur additional costs to

remediate material weaknesses in our internal control over financial reporting.

We can give no assurance that

the measures we have taken and plan to take in the future will remediate the material weaknesses in our internal control over financial

reporting or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure

to implement and maintain adequate internal control over financial reporting or circumvention of these controls.

In addition, even if

we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent

or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

The future exercise of registration rights

may adversely affect the market price of our common stock.

Certain of our stockholders

will continue to have registration rights for restricted securities in the future.

We are obligated to register certain securities, including

shares of common stock held by the Sponsor or its assignees and shares of Alpha Modus common stock received by certain significant Alpha

Modus stockholders as part of the Business Combination.

We are obligated to (i) file a resale registration statement to register such

securities, and (ii) use reasonable best efforts to cause such registration statement to be declared effective by the SEC as soon as reasonably

Sales of a substantial number of shares of Alpha Modus common stock pursuant to the resale registration statement in the

public market could occur at any time the registration statement remains effective.

In addition, certain registration rights holders can

request underwritten offerings to sell their securities.

These sales, or the perception in the market that the holders of a large number

of shares intend to sell shares, could reduce the market price of Alpha Modus common stock.

In connection with the Amended

Registration Rights Agreement executed simultaneously with the Business Combination Agreement, approximately 4,500,000 shares of Alpha

Modus common stock, held by the Sponsor and the Anchor Investors, as defined herein, approximately 4,340,000 shares of Alpha Modus common

stock deemed to be beneficially owned by William Alessi, and up to 8,700,000 shares of Alpha Modus common stock underlying the Private

Placement Warrants held by Sponsor and the underwriter are entitled to registration rights.

This amount of shares subject to registration

rights does not include any earnout shares which the Sponsor may receive following the closing of the Business Combination Agreement.

In the event the Sponsor does receive any earnout shares, the Sponsor will have registration rights with respect to such earnout shares.

Modus qualifies as an “emerging growth company” as well as a smaller reporting company within the meaning of the Securities

Act, and if Alpha Modus takes advantage of certain exemptions from disclosure requirements available to emerging growth companies or

smaller reporting companies, this could make Alpha Modus’ securities less attractive to investors and may make it more difficult

to compare Alpha Modus’ performance with other public companies.

Modus qualifies as an “emerging growth company” within the meaning of Section 2(a)(19) of the Securities Act, as modified

by the JOBS Act.

As such, Alpha Modus may take advantage of certain exemptions from various reporting requirements that are applicable

to other public companies that are not emerging growth companies for as long as Alpha Modus continues to be an emerging growth company,

including, but not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley

Act, (ii) reduced disclosure obligations regarding executive compensation in Alpha Modus’ periodic reports and proxy statements

and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of

any golden parachute payments not previously approved.

As a result, Alpha Modus’ stockholders may not have access to certain information

they may deem important.

Alpha Modus will remain an emerging growth company until the earliest of (i) the last day of the fiscal year

in which the market value of Alpha Modus common stock that is held by non-affiliates exceeds $700 million as of the end of that year’s

second fiscal quarter, (ii) the last day of the fiscal year in which Alpha Modus has total annual gross revenue of $1.07 billion or more

during such fiscal year (as indexed for inflation), (iii) the date on which Alpha Modus has issued more than $1 billion in non-convertible

debt in the prior three-year period or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first

sale of common stock in the IAC IPO.

Investors may find Alpha Modus’ securities less attractive because Alpha Modus will rely on

these exemptions.

Alpha Modus cannot predict whether investors will find its securities less attractive because it will rely on these

If some investors find Alpha Modus’ securities less attractive as a result of its reliance on these exemptions, the

trading prices of Alpha Modus’ securities may be lower than they otherwise would be, there may be a less active trading market

for its securities and the trading prices of its securities may be more volatile.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do

not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such an election to opt out is irrevocable.

We have elected not to opt out of such

extended transition period, which means that when a standard is issued or revised and it has different application dates for public or

private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new

or revised standard.

This may make comparison of Alpha Modus’ financial statements with another public company which is neither

an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible

because of the potential differences in accounting standards used.

Additionally,

Alpha Modus will qualify as a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting

companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited

financial statements.

Alpha Modus will remain a smaller reporting company until the last day of the fiscal year in which (i) the market

value of Alpha Modus common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter,

or (ii) its annual revenues exceeded $100 million during such completed fiscal year and the market value of Alpha Modus common stock

held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.

To the extent Alpha Modus takes

advantage of such reduced disclosure obligations, it may also make comparison of its financial statements with other public companies

difficult or impossible.

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.

404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls.

Only in the event we are deemed

to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to

comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public

accounting firm attestation requirement on our internal control over financial reporting.

The fact that we are a blank check company

makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies

because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions

of the Sarbanes-Oxley Act regarding adequacy of its internal controls.

The development of the internal control of any such entity to

achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.

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.

have concluded that our internal control over financial reporting was ineffective as of December 31, 2025 and 2024, because material

weaknesses existed in our internal control over financial reporting.

We have taken some measures to remediate the material weaknesses

described therein;

however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material

weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report

financial information.

Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations

by the stock exchange on which our Class A common stock is listed, the SEC or other regulatory authorities.

Failure to timely file will

cause us to be ineligible to utilize short form registration statements on Form S-3 or, which may impair our ability to obtain capital

in a timely fashion to execute our business strategies or issue shares to effect an acquisition.

In either case, the existence of material

weaknesses or significant deficiencies in internal control over financial reporting could adversely affect our business and our reputation

or investor perceptions of us, which could have a negative effect on the trading price of our stock.

In addition, we will incur additional

costs to remediate material weaknesses in our internal control over financial reporting.

management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose

any changes and material weaknesses identified through such evaluation of those internal controls.

A material weakness is a deficiency,

or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material

misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses in our internal

control over financial reporting or that any additional material weaknesses or restatements of financial results will not arise in the

future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.

In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may

not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors