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Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-05-14 · 364 added, 501 removed, 1 unchanged (100% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

to the “Company,” “Insight Acquisition Corp.,” “Insight,” “our,” “us” or

“we” refer to Insight Acquisition Corp.

The following discussion and analysis of the Company’s financial condition

and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere

in this Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that

involve risks and uncertainties.

Note Regarding Forward-Looking Statements

of the statements contained in this Annual Report on Form 10-K may constitute “forward-looking statements” for purposes of

the federal securities laws.

Our forward-looking statements include, but are not limited to, statements regarding our or our management

team’s expectations, hopes, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections,

forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”

“intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and similar expressions may identify forward-looking statements, but

the absence of these words does not mean that a statement is not forward-looking.

forward-looking statements contained in this Annual Report on Form 10-K are based on our current expectations and beliefs concerning

future developments and their potential effects on us.

There can be no assurance that future developments affecting us will be those

that we have anticipated.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control)

or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these

forward-looking statements.

These risks and uncertainties include, but are not limited to, the following risks, uncertainties (some of

which are beyond our control) or other factors:

have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective;

ability to select an appropriate target business or businesses;

ability to complete a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with

one or more businesses (the “Business Combination”);

expectations around the performance of a prospective target business or businesses;

success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial Business Combination;

officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in

approving our initial Business Combination;

potential ability to obtain additional financing to complete our initial Business Combination;

pool of prospective target businesses;

ability to consummate an initial Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic;

ability of our officers and directors to generate a number of potential Business Combination opportunities;

public securities’ potential liquidity and trading;

use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

trust account not being subject to claims of third parties;

financial performance following our initial public offering (“IPO”);

other risks and uncertainties discussed herein, in our filings with the SEC and in our final prospectus relating to our IPO, filed with

the SEC on September 2, 2021.

one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in

material respects from those projected in these forward-looking statements.

We undertake no obligation to update or revise any forward-looking

statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities

are a blank check company incorporated in Delaware on April 20, 2021.

We were formed for the purpose of effecting a Business Combination

that we have not yet identified.

Our sponsor is Insight Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”).

Our registration statement for our IPO was declared effective on September 1,

On September 7, 2021, we consummated an IPO of 24,000,000 Units (and with respect to the Class A common stock included

in the Units being offered, the “Public Shares”), generating gross proceeds of $240.0 million, and incurring offering

costs of approximately $17.5 million, of which approximately $12.0 million and approximately $668,000 was for deferred underwriting

commissions and offering costs allocated to derivative warrant liabilities, respectively.

Simultaneously with the closing of the IPO,

the Company consummated the private placement (“Private Placement”) of 7,500,000 and 1,200,000 warrants (each, a “Private

Placement Warrant” and collectively, the “Private Placement Warrants”), to the Sponsor and Cantor Fitzgerald &

and Odeon Group, LLC, respectively, for an aggregate of 8,700,000 Private Placement Warrants, at a price of $1.00 per Private Placement

Warrant, generating proceeds of $8.7 million.

the closing of the IPO and the Private Placement, $241.2 million ($10.05 per Unit) of the net proceeds of the sale of the Units

in the IPO and of the Private Placement Warrants in the Private Placement were placed in a trust account (“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 invest only in direct

government treasury obligations, as determined by the Company, until the earlier of:

(i) the completion of a Business Combination

and (ii) the distribution of the Trust Account as described below.

management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement

Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.

If the Company is unable to complete a Business Combination by December

7, 2023 (the “Combination Period”), which may be extended by our board of directors in their sole discretion on a monthly

basis, by depositing $20,000 per month into the Trust Account, up to and including to June 7, 2024, we will (i) cease all operations

except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem

the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including

interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of such interest

may be used to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish

Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as

promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors,

liquidate and dissolve, subject, in each case, to the Company’s obligations under Delaware law to provide for claims of creditors

and the requirements of other applicable law.

issuance of additional shares in a Business Combination:

significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the

Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of

the Class B common stock;

subordinate the rights of holders of Class A common stock if preference shares are issued with rights senior to those afforded our

Class A common stock;

cause a change in control if a substantial number of our Class A common stock are issued, which may affect, among other things,

our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers

and directors;

have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking

to obtain control of us;

adversely affect prevailing market prices for our Class A common stock.

if we issue debt or otherwise incur significant debt, it could result in:

and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;

● acceleration

of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants

that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while

the debt is outstanding;

inability to pay dividends on our Class A common stock;

a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends

on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

● limitations

on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

● limitations

on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of

our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

Proposed Business Combination

April 3, 2023, Insight Acquisition Corp., a Delaware corporation (the “Company”), Avila Amalco Sub Inc., an Alberta

corporation (“Amalco Sub”) and Avila Energy Corporation, an Alberta corporation (“Avila”), entered into a business

combination agreement (the “Avila BCA”) pursuant to which the Company will acquire Avila for consideration of shares of the

Company following its redomicile into the Province of Alberta.

The terms of the Avila BCA, which contained customary representations

and warranties, covenants, closing conditions and other terms relating to the mergers and the other transactions contemplated thereby,

are summarized below.

The Company’s entry into the Avila BCA was previously disclosed in the Company’s Current Report on

Form 8-K, which was filed on April 4, 2023, and is incorporated herein by reference.

August 10, 2023, the Company and Avila entered into a Letter Agreement providing for the mutual termination of the Avila BCA.

Agreement provides for the mutual release of claims against the other party and also provides that Avila will pay to SPAC $300,000 in

partial reimbursement of expenses incurred by SPAC in connection with the Avila BCA (the “Avila Payment”).

The Avila Payment

is due and payable as follows:

1) up to $300,000 immediately upon Avila’s receipt of net proceeds from any financing, public or

private, in excess of U.S.

$3,000,000, -or- (2) (i) $50,000 by December 1, 2023, (ii) $100,000 by February 1, 2024 and (iii) $150,000

by April 1, 2024.

The termination of the Avila BCA was previously disclosed in the Company’s Current Report on Form 8-K, which

was filed on August 11, 2023, and is incorporated herein by reference.

previously disclosed, on March 29, 2023, the Company entered into a forward share purchase agreement (the “Forward Share Purchase

Agreement”) with Avila, Meteora Special Opportunity Fund I, LP, Meteora Capital Partners, LP and Meteora Select Trading Opportunities

Master, LP (collectively, “Seller”) for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”).

The Forward Share Purchase Agreement was terminated as a result of the termination of the Avila BCA on August 10, 2023, as described

August 30, 2023, the Company, Sponsor and Polar Multi-Strategy Master Fund (“Polar”), an investor, entered into an agreement

(the Subscription Agreement”) in which Polar has agreed to fund the Sponsor up to $1,000,000, pursuant to written draw down requests

(a “Capital Call”), and the Sponsor will in turn loan such funds to the Company, to cover the Company’s working capital

expenses (each a “Sponsor Loan”).

In September 2023, Polar funded Sponsor $150,000 under the Subscription Agreement and the

Sponsor loaned the Company $150,000 from Polar.

All subsequent Capital Calls are subject to the mutual consent of the Company, Sponsor

All Capital Calls funded by Polar shall not accrue interest and are repayable by the Sponsor at the closing of the Company’s

initial business combination.

At the option of Polar, all Capital Calls funded by Polar may be repaid by the Company through the issuance

of 1 share of Class A Common Stock for each $10 of the outstanding Capital Calls funded by Polar.

Sponsor is also responsible to reimburse

Polar for its reasonable attorney’s fees incurred in connection with the Subscription Agreement up to $5,000.

In the event, a business

combination does not occur and the Company’s liquidates, then all Capital Calls funded by Polar out of cash held in the Sponsor’s

bank accounts and/or the Company’s bank accounts, excluding the Company’s Trust Account.

The Sponsor Loans shall not accrue

interest and shall be repaid by the Company at the closing of the business combination.

consideration of the funds received, the Company will issue, at the closing of its business combination, to Polar one (1) shares of the

company’s Class A Common Stock for each dollar Polar funds through the Capital Calls (“Subscription Shares”).

The Subscription

Shares shall not be subject to any transfer restrictions or any other lock-up provisions, earn outs, or other contingencies.

The Subscription

Shares (i) to the extent feasible and in compliance with all applicable laws and regulations shall be registered as part of any registration

statement issuing shares before or in connect ion with the Business Combination Closing or (ii) if no such registration statement is

filed in connection with the Business Combination Closing, shall promptly be registered pursuant to the first registration statement

filed by the Company or the surviving entity following the Business Combination Closing, which shall be filed no later than 30 days after

the Business Combination Closing and declared effective no later than 90 days after the Business Combination Closing.

The Sponsor shall

not sell, transfer, or otherwise dispose of any securities owned by the Sponsor until the Subscription Shares have been transferred to

the Investor and the registration statement has been made effective.

the event the Sponsor of the Company default in their obligations under the Subscription Agreement (a “Default”), then the

Sponsor shall be required to transfer to Polar 0.1 share of Class A Common Stock or Class B Common Stock for each $1 that Polar has funded

under the Capital Calls as of the date of such Default and shall be required repeat such issuance for each month the such Default continues.

foregoing description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by the terms and

conditions of the actual Subscription Agreement, a copy of which is attached to the Quarterly Report on Form 10-Q for the quarter ended

June 30, 2023 as Exhibit 10.10, which was filed on October 25, 2023, and incorporated herein by reference.

Developments – Execution of the Alpha Modus Business Combination Agreement

as of October 13, 2023, the Company, IAC Merger Sub Inc., a Florida corporation (“Merger Sub”) and Alpha Modus, Corp., a

Florida corporation (“Alpha Modus”), entered into a business combination agreement and plan of merger (the “Alpha Modus

BCA”) pursuant to which Merger Sub will merge with and into Alpha Modus with Alpha Modus as the surviving corporation and becoming

a wholly owned subsidiary of the Company.

The Board of Directors of the Company (the “Board”) has unanimously approved and

declared advisable the Alpha Modus BCA, the Merger and the other transactions contemplated thereby (the “Proposed Transactions”).

A copy of the Alpha Modus BCA is filed as Exhibit 2.1 in the current report on Form 8-K dated October 17, 2023.

In connection with entering

into the Alpha Modus BCA, in October 2023, the Company formed IAC Merger Sub Inc, a Florida corporation.

December 28, 2023, the Company filed with the U.S.

Securities and Exchange Commission (“SEC”) a registration statement on

Form S-4 (the “Registration Statement”) in connection with the proposed business combination with Alpha Modus, Corp.

in Metro-Charlotte, NC (the “Business Combination”).

and Going Concern

As of December 31, 2023, we had $0 in our operating bank account for

operating expenses and working capital deficit of $3,571,406.

liquidity needs prior to the consummation of the IPO were satisfied through the payment of $25,000 from the Sponsor to cover for certain

offering costs on behalf of the Company in exchange for issuance of the Founder Shares, and the loan from the Sponsor of approximately

$163,000 under the Note.

We repaid $157,000 of the Note balance on September 7, 2021 and repaid the remaining balance of approximately

$6,000 in full on September 13, 2021, at which time the Note was terminated.

Subsequent to the consummation of the IPO, our liquidity

has been satisfied through the net proceeds from the consummation of the IPO and the Private Placement held outside of the Trust Account.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,

or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working

Capital Loans”).

As of December 31, 2023 and 2022, there were no amounts outstanding under any Working Capital Loans.

August 17, 2023, the Company issued an unsecured promissory note in the aggregate principal amount of $480,000 (the “Note”)

to the Sponsor, in exchange for the Sponsor advancing $480,000 to the Company to fund six one-month extensions of the amount of time

the Company has to complete its initial business combination, from March 7, 2023 to September 7, 2023.

The Note does not bear interest

and matures upon the closing of an initial business combination by the Company.

In addition, at the option of the holder, the Note may

be paid by the Company through the issuance of private placement warrants of the Company at a price of $1.00 per unit.

The loan will

be forgiven, except to the extent of any funds held outside of the Company’s trust account, by the Sponsor, if Company is unable

to consummate an initial business combination.

On November 6, 2023, the Company and the Sponsor entered into a written agreement (the

“Rescission Agreement”) to rescind and nullify that certain promissory note in the principal amount of $480,000 and executed

on August 17, 2023 (the “Note”) pursuant to which the Company agreed to pay the Sponsor the principal amount of $480,000

subject to the terms and conditions of the Note.

Upon execution and delivery of the Rescission Agreement, the Note, in its entirety,

is hereby irrevocably rescinded, abrogated, cancelled and rendered null and void ab initio and of no force or effect whatsoever, and

the positions among the Company and the Sponsor shall be restored to what would have existed had they not entered into the Note.

On August 30, 2023, the Company, Sponsor and Polar Multi-Strategy Master

Fund (“Polar”), an investor, entered into an agreement (the Subscription Agreement”) in which Polar has agreed to fund

the Sponsor up to $1,000,000, pursuant to written draw down requests (a “Capital Call”), and the Sponsor will in turn loan

such funds to the Company, to cover the Company’s working capital expenses (each a “Sponsor Loan”).

For the year ended

December 31, 2023, Polar funded Sponsor $600,000 under the Subscription Agreement and the Sponsor loaned the Company $600,000 from Polar.

connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting

Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going

Concern,” the Company had until November 7, 2023 (or up to June 7, 2024 in the event the Company extends such date to the

fullest extend), to consummate a Business Combination (the “Combination Period”).

It is uncertain that we will be able to

consummate a Business Combination by this time.

If a Business Combination is not consummated by this date, there will be a mandatory

liquidation and subsequent dissolution of the Company.

We have determined that the insufficient liquidity as well as the mandatory liquidation,

should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability

to continue as a going concern.

We intend to complete a Business Combination by close of business on June 7, 2024.

No adjustments have

been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 7, 2024.

and Uncertainties

continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that

the virus could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific

impact is not readily determinable as of the date of the consolidated financial statements.

The consolidated financial statements do

not include any adjustments that might result from the outcome of this uncertainty.

February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine.

As a result of this action,

various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus.

the impact of this action and related sanctions on the world economy are not determinable as of the date of these consolidated financial

The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable

as of the date of these consolidated financial statements.

August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides

for, among other things, a new U.S.

federal 1% excise tax on certain repurchases of stock by publicly traded U.S.

domestic corporations

and certain U.S.

domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023.

tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased.

The amount of the excise

tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating

the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair

market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent

the abuse or avoidance of the excise tax.

Any share redemption or other share repurchase that occurs after December 31, 2022, in

connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax.

Whether and to what extent the

Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will depend on a number

of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination,

extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE”

or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination

but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the

Company held a meeting on March 6, 2023 where the stockholders voted to approve a proposal to amend the Company’s amended and restated

certificate of incorporation to extend the Combination Period, from March 7, 2023, monthly for up to six additional months at the election

of the Company, ultimately until as late as September 7, 2023 (the “Extension”, and such extension date the “Extended

In connection with the March 6, 2023 meeting, 21,151,393 shares of the Company’s common stock were redeemed with

a total redemption payment of $215,621,387.

As a result, the Company booked a liability of $2,156,214 for the excise tax based on 1%

of shares redeemed during the reporting period.

For interim periods, an entity is not required to estimate future stock repurchases and

stock issuances to measure its excise tax obligation.

Rather, an entity can generally record the obligation on an as-incurred basis.

In other words, the excise tax obligation recognized at the end of a quarterly financial reporting period is calculated as if the end

of the quarterly period was the end of the annual period for which the excise tax obligation is payable.

to the AM BCA, (i) in the event the business combination contemplated by the AM BCA occurs, then the surviving company shall pay the

Company’s excise tax liability;

(ii) if Alpha Modus does not obtain its shareholders approval of the business combination, or Alpha

Modus breaches the AM BCA, then Alpha Modus will be responsible to pay the Company’s excise tax liability;

and (iii) if an Alpha

Modus material adverse effect occurs and the business combination does not close, or if Alpha Modus fails to close the business combination

for any reason other than a material breach by the Company, then Alpha Modus will be responsible to pay the Company’s excise tax

In all other circumstances the Company will be responsible to pay the Company’s excise tax liability, except if the

Company liquidates prior to December 31, 2023, in which event there will be no excise tax liability.

The Company will not use any of

the funds held in the Trust Account and any additional amounts deposited into the Trust Account, as well as any interest earned thereon,

to pay for the Company’s excise tax liability.

In addition, because the excise tax would be payable by the Company and not by the

redeeming holders, the mechanics of any required payment of the excise tax by the Company have not been determined.

The foregoing could

cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business

In October 2023, the Israel-Hamas war commenced.

As a result of the

war, instability in the Middle East and various other regions of the world may occur and effect the world economy.

Various nations, including

the United States, as a reaction to the Israel-Hamas war have begun taking actions that may further affect the world economy.

on the world economy are not determinable as of the date of these consolidated financial statements.

The specific impact on the Company’s

financial condition, results of operations and cash flows is also not determinable as of the date of these consolidated financial statements.

of Operations

entire activity since inception up to December 31, 2023 was in preparation for our formation, the IPO and search for a business combination

We will not generate any operating revenues until the closing and completion of our initial Business Combination.

For the year ended December 31, 2023, we had net loss of approximately

$651,000, which consisted of approximately $538,000 of loss on change in the fair value of derivative liabilities, approximately $2.4

million in general and administrative costs, approximately $300,000 in general and administrative costs – related party, approximately

$143,000 franchise tax expenses, approximately $112,000 interest expense – debt discount and approximately $615,000 income tax expense,

partially offset by approximately $3.1 million of gain on investments held in Trust Account, approximately $273,000 gain on forgiveness

of deferred underwriting fee payable, and approximately $86,000 of gain on change in the fair value of the forward purchase agreement

the year ended December 31, 2022, we had net income of approximately $11.9 million, which consisted of $10.7 million change in the fair

value of derivative warrant liabilities and approximately $3.3 million of net gain on investments held in Trust Account partially offset

by approximately $1.3 million in general and administrative costs, income tax expense of approximately $625,000 and approximately $206,000

franchise tax expenses.

Contractual Obligations

Registration Rights

The holders of Founder Shares, Private Placement

Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise

of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder

Shares), are entitled to registration rights pursuant to a registration and stockholder rights agreement signed prior to the consummation

These holders are entitled to certain demand and “piggyback” registration rights.

We will bear the expenses incurred

in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters were entitled to an underwriting

discount of $0.20 per unit, or $4.8 million in the aggregate, paid upon the closing of the IPO.

An additional fee of $0.50 per unit,

or $12.0 million in the aggregate will be payable to the underwriters for deferred underwriting commissions.

The deferred fee will

become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business

Combination, subject to the terms of the underwriting agreement.

On April 3, 2023, the Company received a waiver from one of the

underwriters of its Initial Public Offering pursuant to which such underwriter waived all rights to $5.4 million of its $8.4 million

deferred underwriting commissions payable upon completion of an initial Business Combination.

In connection with this waiver, the underwriter

also agreed that the remainder of the deferred underwriting fee of $3.0 million will be payable upon the consummation of the business

As of December 31, 2023 and 2022, $6,600,000 and $12,000,000 were outstanding under deferred underwriting fee payable, respectively.

Services Agreement

On September 1, 2021, we entered into an agreement

with the Sponsor, pursuant to which we agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative

services provided to or incurred by members of our management team until the earlier of the consummation of a Business Combination and

the Company’s liquidation.

For the year ended December 31, 2023 and 2022, we incurred approximately $120,000 under the services

agreement in the statements of operations.

As of December 31, 2023 and 2022, $160,000 and $40,000, respectively, was included in accrued

expenses—related party on the consolidated balance sheets.

The Board has also approved payments of up to $15,000 per month, through

the earlier of the consummation of our initial Business Combination or our liquidation, to members of our management team for services

rendered to us.

In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for

any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing

due diligence on suitable business combinations.

Our audit committee reviews on a quarterly basis all payments that were made to the Sponsor,

executive officers or directors, or the Company’s or their affiliates.

For the year ended December 31, 2023 and 2022, we incurred

approximately $180,000 under the services agreement in the statements of operations.

As of December 31, 2023 and 2022, $225,000 and $45,000,

respectively, was included in due to related party on the consolidated balance sheets.

Critical Accounting Estimates

The preparation of consolidated financial statements

and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent

assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expenses during the

period reported.

Actual results could materially differ from those estimates.

The Company has not identified any critical accounting

Recent Accounting Pronouncements

Management does not believe that any recently issued,

but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial

Discussion and Analysis of Financial Condition and Results of Operations.

References in this section to “we,”

“our,” “us,” and “Alpha Modus” generally refer to Alpha Modus, Corp.

prior to the Business Combination

and to Alpha Modus Holdings, Inc.

and its consolidated subsidiaries after giving effect to the Business Combination.

References to “Legacy

Alpha Modus” generally refer to Alpha Modus, Corp., and references to the “Company” generally refer to Alpha Modus

Holdings, Inc.

The following discussion and analysis of our results of operations and financial condition should be read in conjunction

with the sections entitled “Business,” “Unaudited Pro Forma Condensed Combined Financial Information and Other Data,”

and our financial statements and related notes and other information included elsewhere in this report.

This discussion contains forward-looking

statements based upon our current expectations, estimates and projections that involve risks and uncertainties.

Actual results could

differ materially from those anticipated in these forward-looking statements due to, among other considerations, the matters discussed

under “Risk Fa ctors” and “Cautionary Note

Regarding Forward-Looking Statements.”

Company was a blank check company as “Insight Acquisition Corp.” On December 13, 2024, the Company completed a business combination

with Alpha Modus, Corp., a Florida corporation.

At closing of the business combination, the Company’s name was changed to “Alpha

Modus Holdings, Inc.,” and the Company’s operations are now those of Alpha Modus.

Alpha Modus offers technology

as a service.

Its core technologies have been deployed on IBM’s Bluemix platform and earned a Beacon Award by IBM 2016 for Best

New Application on IBM Cloud from an Entrepreneur.

Alpha Modus has been recognized by IBM Watson as a thought leader in technology.

technological innovation is at the core of the company, Alpha Modus has developed comprehensive end-to-end patented solutions for retailers

and consumer brands to bring innovation to consumers and enhance their experience at the point of sale.

On January 11, 2024, Alpha

Modus entered into a license agreement with GZ6G Technologies Corp.

(“ GZ6G ”), which gives GZ6G the right to use Alpha

Modus’ patented intellectual property, and pertains to GZ6G’s promotional, advertising, and operational functions, including

co-development arrangements with Alpha Modus for AI-driven advertising solutions for stadiums and event management.

Alpha Modus intends

to deploy services under the license by the end of 2024, expand event venue service offerings in late 2025, and expand service offerings

in additional industries in 2024.

On January 16, 2024, Alpha

Modus initiated a patent infringement action against The Kroger Company alleging patent infringement of several Alpha Modus patents encompassing

retail marketing and advertising data-driven technologies to enhance consumer’s in-store experience at the point of decision.

November 12, 2024, Alpha Modus initiated a patent infringement lawsuit against Brookshire Grocery Co.

alleging infringement of several

Alpha Modus patents pertaining to its ‘571 patent portfolio, ‘825 patent portfolio, ‘672 patent portfolio, ‘890

patent portfolio and ‘880 patent portfolio, which encompass retail marketing and advertising data-driven technologies to enhance

consumers’ in-store experience at the point of decision.

On December 17, 2024, Alpha Modus filed a similar patent infringement lawsuit

against Wakefern Food Corporation and Shelf Nine LLC (which has since been settled), and on February 3, 2025, Alpha Modus filed a patent

infringement lawsuit against Walgreen Co.

On April 10, 2024, Alpha Modus

entered into a license agreement with Xalles Holdings Inc.

and its subsidiary, CashXAI Inc.

(“ CashX ”), which gives

CashX the exclusive right to use all of Alpha Modus’ patented intellectual property in connection with CashX’s promotional,

advertising, and operational functions, including co-development arrangements with Alpha Modus, within the Exclusive Industry.

The “Exclusive

Industry” means the industry relating to self-service kiosks located in retail food, drug and convenience stores for the purpose

of serving Unbanked and Underbanked consumers, by offering banking, phone and insurance solutions to the consumer.

An “Unbanked”

consumer means a person that does not have a checking or savings account with an FDIC-insured institution, and an “Underbanked”

consumer means a person that has or had a checking or savings account with an FDIC-insured institution, but regularly uses non-traditional

banks such as Venmo or the Cash App, or lenders such as a check cashing company or payday lender.

Alpha Modus intends to deploy services

under the license by the end of 2024.

Alpha Modus intends to continue

its intellectual property licensing and enforcement efforts throughout 2025.

No assurances can be given that any of these plans will come

to fruition or that, if implemented, they will necessarily yield positive results.

Business Combination Agreements

The Company was originally

incorporated in Delaware on April 20, 2021, as a special purpose acquisition company under the name “Insight Acquisition Corp.”

On October 13, 2023, the Company

and Alpha Modus, Corp.

entered into the Business Combination Agreement, which was subsequently amended on June 21, 2024.

Pursuant to the

Business Combination Agreement, as amended, Alpha Modus, Corp., and the Company agreed that (i) each share of Alpha Modus, Corp.

stock (other than those properly exercising any applicable appraisal rights under applicable law) would be converted into (A) one share

of Company common stock, and (B) the contingent right to receive a pro rata portion of the Earnout Shares (as defined below) (which may

and (iii) each share of Alpha Modus, Corp.

preferred stock (other than those properly exercising any applicable appraisal rights

under applicable law) would be converted into (A) one share of Company Series C Preferred Stock, and (B) the contingent right to receive

a pro rata portion of the Earnout Shares (as defined below) (which may be zero) (collectively the “Merger Consideration”).

The stockholders of Alpha

may be issued up to 2,200,000 additional shares of Company common stock (the “Earnout Shares”).

The Earnout Shares

will be earned and issued in one-third (1/3) increments (of approximately 733,333 shares) if, for any twenty (20) trading days within

any thirty (30)-consecutive trading day period beginning at least 180 days after the Closing and on or prior to the 5-year anniversary

of the Closing, the VWAP of the Company’s common stock equals or exceeds $13.00 per share, $15.00 per share and $18.00 per share

(as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing), respectively,

with all remaining Earnout Shares earned and issued upon certain changes of control of IAC at or prior to the 5-year anniversary of the

Additionally, at the Closing,

the Company’s sponsor, Insight Acquisition Sponsor LLC (the “Sponsor”) was required to deposit 750,000 shares of Company

common stock into escrow (the “Sponsor Earnout Shares”), and the Sponsor Earnout Shares will be released to the Sponsor according

to the same milestones and timelines applicable to the Earnout Shares described above.

Additionally, the Company and the Sponsor agreed

that the Sponsor will forfeit and cancel 750,000 shares of Company common stock at Closing.

Finally, at the Closing, (i) the Company will

to use its best efforts to pay off the Company’s loan(s) from Polar Multi-Strategy Master Fund (“Polar”) (expected to

be approximately $975,000 at Closing), (ii) the Company will use its best efforts to pay Alpha Modus, Corp.’s loans from Janbella

Group, LLC (“Janbella”) (expected to be approximately $1,400,000 at Closing), (iii) the Company will issue to Janbella 1,392,308

shares of Company common stock, (iv) the Company will issue to Michael Singer 125,000 shares of Company common stock, (v) the Company

will issue to Cantor Fitzgerald & Co.

(“Cantor”) 210,000 shares of Company common stock, and (vi) the Company will issue

to Odeon Capital Group, LLC (“Odeon”) 90,000 shares of Company common stock.

Cantor, the representative

of the underwriters in the Company’s original IPO in September 2021, was entitled to a deferred underwriting commission upon the

closing of the Business Combination of $6,600,000, which amount was not subject to change based on redemption levels.

On June 20, 2024,

Cantor and Odeon entered into fee modification agreements with the Company pursuant to which (i) Cantor would be issued 210,000 shares

of Company common stock and Odeon would be issued 90,000 shares of Company common stock at the closing of the Business Combination, and

(ii) Cantor and Odeon would waive the right to any further underwriting commissions or other payments by the Company under its Underwriting

Agreement with them, subject to the other terms of those fee modification agreements.

On October 29, 2024, Company

stockholders approved the Business Combination and other transactions and proposal presented within the proxy statement/prospectus in

connection with Business Combination transactions.

Financing in Connection with Business Combination

On October 23, 2024, Alpha

Modus Holdings, Inc.

(the “Company”) entered into a securities purchase agreement (the “SPA”) with Streeterville

Capital, LLC (the “Investor”), pursuant to which the Company would sell, and the Investor would purchase, a secured convertible

promissory note in the original principal amount of $2,890,000 (the “Note”) for a net purchase price of $2,600,000 (after

deducting an original issue discount of $260,000, and payment of $30,000 for the Investor’s legal, accounting, due diligence, asset

monitoring, and other transaction expenses).

The SPA includes customary

representations, warranties and covenants by the Company and customary closing conditions.

The SPA grants the Investor (i) the right to

fund up to an additional $5,000,000 to the Company, with the Company’s consent, through the date that is six months following repayment

of the Note in full (the “Reinvestment Right”), and (ii) the exclusive right, on customary market terms, to enter into an

equity line of credit or other similar financing arrangement with the Company for at least $20,000,000, through the date that is one year

following the Purchase Price Date (defined below).

Pursuant the SPA, Alpha Modus, Corp.

is required to guarantee all of the Company’s

obligations under the Note and related transaction documents pursuant to a guaranty agreement (the “Guaranty”), and the Note

will also be secured by security agreements (the “Security Agreements”) by and between the Investor and both the Company and

Alpha Modus, Corp., granting the Investor first priority security interests in all assets of the Company, as well as all assets of Alpha

Modus, Corp., including all of Alpha Modus’ intellectual property (and including Alpha Modus’ patent portfolio) pursuant to

a separate intellectual property security agreement (the “IP Security Agreement”).

Additionally, the Company and Alpha Modus

(collectively the “Borrowers”), and William Alessi, his entity, Janbella Group, LLC, and the trusts deemed to be beneficially

Alessi (each a “Capital Party” and collectively the “Capital Parties”), are required to execute at

closing a subordination and voting agreement (the “Subordination Agreement”) pursuant to which (i) all of the Borrowers’

indebtedness and obligations to each Capital Party will be subordinated to Investor, (ii) all security interests of any Capital Party

will be subordinate to Investor’s security interests, (iii) the Borrowers will not make any payments to any Capital Party, (iv)

none of the Capital Parties will accelerate any subordinated debt or equity, (v) and no Capital Party will convert or exchange their preferred

stock of the Company into Common Stock, until such time as the Investor has been fully paid and all financing agreements between the Investor

and the Borrowers are terminated.

The Note will mature 18 months

following the date the purchase price is delivered to the Company (the “Purchase Price Date”), will accrue interest of 10%

per annum, will be prepayable (after providing five trading days’ notice) at a 20% premium to the then-outstanding balance of the

Note, and will be convertible into Class A common stock (“Common Stock”) of the Company as described below.

Within 30 days

of the Purchase Price Date, the Company will be obligated to file a registration statement on Form S-1 with the SEC registering a number

of shares of Common Stock issuable upon conversion of the Note.

If the registration statement is not declared effective by the SEC within

120 days of the Purchase Price Date, the outstanding balance under the Note will automatically increase by one percent and will continue

increasing by one percent every 30 days thereafter until the registration statement is declared effective or the Investor is able to sell

shares of Common Stock issuable upon conversion of the Note pursuant to Rule 144 under the Securities Act of 1933, as amended.

date that 50% of the shares registered under the registration statement have been issued to Investor (such date, the “Trigger Date”)

the Note has not yet been repaid in full, the Company will be obligated to file an additional registration statement registering additional

shares of Common Stock issuable upon conversion of the Note within 30 days of the Trigger Date.

If that additional registration statement

is not declared effective by the SEC within 120 days of the Trigger Date, the outstanding balance under the Note will automatically increase

by one percent and will continue increasing by one percent every 30 days thereafter until the additional registration statement is declared

The Note will be convertible

at the election of the Investor into shares of Common Stock at any time following the earlier of the effective date of the registration

statement described above or one year following the Purchase Price Date, at a conversion price equal to 90% multiplied by the lowest daily

volume-weighted average price during the five trading days preceding conversion, and provided that (i) the Investor may not convert the

Note into shares of Common Stock to the extent that such conversion would result in the Investor’s beneficial ownership of Common

Stock being in excess of 4.99% (or 9.99% if the Company’s market capitalization is less than $10 million), and provided that (ii)

the Note is not convertible into a total cumulative number of shares of Common Stock in excess of the number of shares of Common Stock

permitted by Nasdaq Listing Rule 5635 (the “Exchange Cap”).

Pursuant to the terms of the Note, the Company will, within 120

days of the Purchase Price Date, seek shareholder approval of the Note and the issuance of shares of Common Stock, issuable upon conversion

of the Note and pursuant to the Reinvestment Right, in excess of the Exchange Cap (the “Shareholder Approvals”).

If such shareholder

approval is not obtained within 120 days, the Company will continue to seek shareholder approval every three months thereafter until shareholder

approval is obtained.

Pursuant to the Subordination Agreement, each Capital Party is required to vote all of their shares of Company stock

in favor of the Shareholder Approvals.

Under the SPA, the Company is required to initially reserve 7,500,000 shares of its Common Stock

for issuance to the Investor under the Note, and the Company is required to add additional shares to the reserve in increments of 100,000

shares when requested by the Investor if at the time of the request the number of shares being held in reserve is less than three times

the number of shares of Common Stock equal to the outstanding balance under the Note divided by the applicable conversion price at that

On December 12, 2024, the

Company amended the SPA (the “Amended SPA”) to revise the terms of the Note.

Pursuant to the Amended SPA, the Note is not

convertible below a floor price of $4.00/share, but if the closing bid price of the Company’s common stock is less than the floor

price for ten consecutive trading days, the Company is required to begin making monthly payments under the Note on the date that is 90

days following the original funding date.

On or about December 13, 2024,

the Company issued the Note to the Investor, the Note was funded on or about December 16, 2024, and since that time, the closing bid price

of the Company’s common stock has been less than the $4.00 floor price for more than ten consecutive trading days, which, under

the terms of the Amended SPA, would have required the Company to begin making monthly payments under the Note, with those monthly payments

commencing on March 16, 2025, and with those monthly payments being equal to 120% multiplied by the outstanding balance divided by the

lesser of 6 or the number of months remaining until the Note’s maturity date.

On January 27, 2025, the Company

and the Investor entered into an amendment to the Note providing that (i) the Company is not required to begin making monthly payments

under the Note until May 16, 2025, (ii) the monthly payments will equal $485,000.00 plus all accrued but unpaid interest, multiplied by

120%, and (iii) the Company will pay to the Investor 50% of all proceeds received by the Company from any equity line of credit or similar

arrangement within one trading day of receipt by the Company.

Business Combination Closing

On December 13, 2024, the

parties to the Business Combination Agreement consummated the Business Combination, and in connection with closing issued the Note to

the Investor, and entered into the Guaranty, Security Agreements, IP Security Agreement, and Subordination Agreement.

Immediately upon

the consummation of the Business Combination, Alpha Modus, Corp.

became a wholly owned subsidiary of the Company, the Company changed

its name to “Alpha Modus Holdings, Inc.,” and the Company is now listed on Nasdaq under the symbol “AMOD”.

Business Combination was accounted for as a reverse recapitalization.

Under this method of accounting, INAQ is treated as the acquired

company for financial statement reporting purposes.

See “ Unaudited Pro Forma Condensed Combined Financial Information and Other

Data .” Legacy Alpha Modus’s financial statements for previous periods will be disclosed in the Company’s future

periodic reports filed with the SEC.

In connection with the Business

Combination, approximately 426,136 shares of common stock were redeemed, which represented a significant portion of the publicly traded

shares outstanding immediately prior to the Business Combination and resulted in only approximately $1.16 million of cash from the INAQ

trust account becoming available to Alpha Modus in connection with the closing of the Business Combination.

In the Business Combination,

the Company issued 5,295,000 shares of common stock and 7,500,000 shares of Series C Preferred Stock to Legacy Alpha Modus’ shareholders

as merger consideration in the Business Combination, and the Company issued 1,817,308 shares of common stock to various parties as required

by the Business Combination Agreement.

Immediately following the Business Combination, including the redemption of shares described above,

there were 12,455,252 shares of the Company’s common stock (all Class A common stock) issued and outstanding, and 7,500,000 shares

of the Company’s Series C Preferred Stock issued and outstanding.

As a result of becoming a

publicly traded company, we will need to hire additional personnel and implement procedures and processes to address public company regulatory

requirements and customary practices.

We expect to incur additional annual expenses as a public company for, among other things, directors’

and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources,

including increased audit and legal fees.

Critical Accounting Policies and Estimates

Basis of Presentation

The accompanying consolidated financial statements

are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant

to the rules and regulations of the SEC and has a year-end of December 31 st .

Critical accounting policies are those that,

in management’s view, are most important to the portrayal of a company’s financial condition and results of operations and

most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently

uncertain and may change in subsequent periods.

While our significant accounting policies are described in more detail in Note 2 to our

financial statements appearing elsewhere in this annual report, we believe that the following accounting policies are those most critical

to the judgments and estimates used in the preparation of our financial statements.

Derivative Liabilities

The Company does not use derivative instruments

to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates all of its financial instruments, including

issued stock purchase warrants and the forward purchase agreement, to determine if such instruments are derivatives or contain features

that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”).

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed

at the end of each reporting period.

The company earnout shares and sponsor earnout

shares (“earnout shares”) as defined in the business combination agreement are recognized as derivative liabilities in accordance

with ASC 815.

In accordance with FASB ASC Topic 820, “Fair Value of Financial Instruments” (“ASC 820”), the Company

recognizes the earnout shares instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value

at each reporting period for so long as they are outstanding.

At the date of the merger, the initial fair value of the earnout shares

have been estimated using a Monte Carlo simulation model.

Subsequently, the fair value of the earnout shares have been estimated using

this same Monte Carlo simulation model.

Derivative earnout shares liabilities are classified as current liabilities (See note 7 for more

details on earnout shares).

Series C Preferred Stock

During the year ended December 31, 2024, the Company

amended and restated its charter to include the designation of a Series C Preferred Stock.

The Amended and Restated Charter authorizes

the issuance of 8,500,000 shares of preferred stock, 7,500,000 shares of which have been designated as Series C Redeemable Convertible

Preferred Stock (“Series C Preferred Stock”), and 1,000,000 shares of which will be undesignated.

Based on the characteristics

and rights of the Series C Preferred Stock, the Company is reporting it as Mezzanine Equity (Temporary Equity) on its consolidated balance

These shares were valued at the date of issuance using a Monte Carlo Simulation model.

The Company determined that subsequent

changes to the carrying value of the series C preferred shares will not be recognized until Redemption becomes probable of occurring.

See Note 9 – Mezzanine Equity for further details.

Off-balance Sheet Arrangements

As of December 31, 2023 and 2022, we did not have

any off-balance sheet arrangements as defined in Item 303 of Regulation S-K.

The JOBS Act contains provisions that, among other

things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging growth company”

and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not

publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not

comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging

growth companies.

As a result, the consolidated financial statements may not be comparable to companies that comply with new or revised

accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating

the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set forth

in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among

other things, (i) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant

to Section 404 of the Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation disclosure that may be required of non-emerging

growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that

may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional

information about the audit and the consolidated financial statements (auditor discussion and analysis) and (iv) disclose certain

executive compensation related items such as the correlation between executive compensation and performance and comparisons of the executive

compensation to median employee compensation.

These exemptions will apply for a period of five years following the completion of our

IPO or until we are no longer an “emerging growth company,” whichever is earlier.

Subsequent Events

During the preparation of the Company’s Annual Report on Form

10-K for the year ended December 31, 2023, the Board learned that between March 2, 2023 and December 5, 2023, the Company withdrew an

aggregate amount of $2,497,248.57 from the 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.

Jeff Gary, consistent with his position

as the Company’s Chief Financial Officer, signed and delivered each of the seven separate written withdrawal requests to Continental.

Between March 10, 2023 and December 11, 2023 the Company paid an aggregate amount of $1,447,889.17 of which $1,130,000, in four payments,

was paid for estimated income tax payments for 2022 and 2023 and $317,889.17, in three payments, was paid for Delaware franchise taxes.

Gary, acting in his capacity as CFO, made each of the seven payments for estimated taxes and Delaware franchise taxes.

The Board learned

further that between March 2, 2023 and December 31, 2023, Mr.

Gary used the remaining $1,049,359.40, that was withdrawn from the Trust

Account for tax purposes to pay other business expenses of the Company.

Each of the transactions described above was recorded on the books

of the Company and no money was used for anything other than tax payments or appropriate Company business related expenses.

The $1,049,359.40

that was withdrawn from the Trust Account for tax purposes to pay business expenses of the Company was fully paid back to the Trust Account

by the Sponsor on March 15, 2024 and on March 26, 2024, and the Sponsor wired an additional $36,285.07 in to the Trust Account to reimburse

the Trust Account for interest that would have accrued on the funds that were erroneously withdrawn from the Trust Account.

there has been no financial loss to shareholders or the Trust Account.

The Sponsor’s reimbursement of the Trust Account in the amount

of $1,085,644.32 is memorialized in a Capital Contribution Agreement, dated May 9, 2024 between Insight Acquisition Corp.

Acquisition Sponsor, LLC, which is attached hereto as Exhibit 10.20.

On July 20, 2023 Mr.

Gary effected the transfer of $480,000 from the

Company’s operating account to the Sponsor and on August 7, 2023, Mr.

Gary effected the transfer of an additional $411,000 from

the Company’s operating account to the Sponsor.

The Board learned on or about November 14, 2023, that Mr.

Gary had transferred funds

from the Company’s operating account to the Sponsor.

Gary informed the Board that the money was being used by the Sponsor to

pay Company expenses.

The Board directed Mr.

Gary to have the Sponsor return all such funds to the Company.

The Sponsor transferred $891,000

to the Company between October 10, 2023 and November 2, 2023.

As a result of the above conduct by Mr.

Gary, the Board adopted resolutions

taking the following actions:

On April 21, 2024, Mr.

Gary was removed as the Company’s Chief Executive Officer and Chief Financial Officer of the Company.

On April 21, 2024, Mr.

Gary was appointed as an Assistant Finance Manager of the Company and shall report to the new Chief Financial Officer of the Company.

On April 21, 2024, Michael

Singer, the Executive Chairman of the Company, was appointed to the position of Chief Executive Officer of the Company.

On April 21, 2024, Mr.

Gary resigned as a director of the Company and the Board has accepted Mr.

Gary’s resignation.

Gary shall be removed

from all Company bank accounts, including the Trust Account and Mr.

Gary’s authority to withdraw funds from the Company bank accounts,

including the Trust Account has been terminated.

On April 21, 2024, the

Board engaged Glenn Worman as the Company’s Chief Financial Officer, and that Mr.

Worman will approve and sign the Company’s

2023 Annual Report on Form 10-K .

Worman’s background is as follows:

Glenn Worman, 65 years old, has been a Partner

in the New York office of SeatonHill Partners, LP since November 2022.

Worman is an accomplished and diverse financial services executive

with a history of providing strong, effective leadership and developing and executing strategy across a spectrum of businesses.

four decades of experience, he is adept at organizational analysis and implementing change, ensuring proper controls and sources of liquidity

are in place, and advising executive management on business direction.

Worman’s prior experience in senior finance and chief

operating officer positions in corporate finance, fixed income and equity capital markets, wealth management, investment management, strategic

analysis, interdealer brokerage, and compliance underscore his ability to handle industry segment and public company chief financial officer

requirements.

Between 2015 and 2022, Mr.

Worman served as the CFO and President of National Holdings Corporation.

From 2011 to 2015, he

served as the Chief Financial Officer for the Americas for ICAP, plc.

Prior to ICAP, plc Mr.

Worman held senior positions at, among other

companies, Duetsche Bank, Morgan Stanley, and Merrill Lynch.

Worman earned a BS degree from Ramapo College of New Jersey and an MBA

from Fairleigh Dickinson University.

Gary agreed to reimburse the Company for all fees and expenses incurred by the Company in connection with the Company’s engagement

Worman as the new Chief Financial Officer of the Company.

forward all withdrawals from the Trust Account, payments of taxes and all fund transfers between the Company and the Sponsor will require

the approval of both the Chief Executive Officer and Chief Financial Officer.

deferred compensation owed to Mr.

Gary by the Company to date, in the aggregate amount of $132,500 shall be forfeited by Mr.

that henceforth Mr.

Gary shall cease to accrue $7,500 per month in service fees.

Gary shall not be the Company’s designee to be a member of the board of directors of the post-transaction company in the Company’s

planned business combination with Alpha Modus Corp.

The removal of Mr.

Gary as Chief Executive Officer and Chief Financial

Officer, the appointment of Mr.

Gary as an Assistant Finance Manager of the Company, Mr.

Gary’s resignation as a director of the

Company, the appointment of Michael Singer as the Chief Executive Officer of the Company and the appointment of Glenn Worman as the Chief

Financial Officer of the Company was previously disclosed by the Company in a Current Report on Form 8-K filed with the SEC on April 24,

We do not have any off-balance

sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Results of Operations

For the year ended December 31, 2024, compared

to the year ended December 31, 2023

Alpha Modus had no revenue

during the years ended December 31, 2024 and 2023.

Operating Expenses

Alpha Modus had operating

expenses of $834,895 for the year ended December 31, 2024, compared to $391,949 for the year ended December 31, 2023.

The increase was

primarily due to an increase in professional fees related to the pending merger and increased accounting and legal fees.

Other Income/Expenses

Alpha Modus had total other

income of $4,938,162 for the year ended December 31, 2024, $168,886 of which was interest expense, $13,226,926 of which was a forbearance

fee expense, $397,553 of which was a loss in change in fair value of warrants liability and $18,731,514 of which was a gain of change

in fair value of earnout shares liability, as compared to total other expense of $109,346, $109,353 of which was interest expense during

the year ended December 31, 2023.

Alpha Modus had a net income

of $4,103,067 for the year ended December 31, 2024, compared to a net loss of $501,295 for the year ended December 31, 2023.

in net income during the year ended December 31, 2024, as compared to the net loss during the year ended December 31, 2023, was primarily

due to the gain in change in fair value of earnout shares of $18,731,514, loss in change in fair value of warrants liability of $397,553

and forbearance fee expense of $13,226,926 during the year ended December 31, 2024, described above.

Liquidity and Capital Resources

As of December 31, 2024, Alpha

Modus had cash of $735,814.

We do not have sufficient resources to effectuate our business.

We expect to incur significant expenses during

the next twelve months of operations, including as a result of becoming a public company.

We estimate that these expenses will be comprised

primarily of general expenses including overhead, legal and accounting fees.

To maintain our plan of growth, we believe we will need to

raise a minimum of an additional $2,500,000.

These factors, along with the lack of current Company revenues, raise substantial doubts

about Alpha Modus’ ability to continue as a going concern.

Operations used cash of $1,676,499

for the year ended December 31, 2024, compared to $515,181 for the year ended December 31, 2023.

We acquired $2,537 in cash

with the business combination but incurred $361,643 in acquisition costs.

We had net cash provided by

financing activities for the year ended December 31, 2024, of $2,664,610, compared to $618,984 for the year ended December 31, 2023.

We will have to raise funds

to pay for our expenses.

We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with

a third party.

There can be no assurance that additional capital will be available to us.

We currently have no arrangements or understandings

with any person to obtain funds through bank loans, lines of credit or any other sources.

Since we have no such arrangements or plans

currently in effect, our inability to raise funds for our operations will have a severe negative impact on our ability to remain a viable

Emerging Growth Company Status

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

are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can choose not to

take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any

such election to not take advantage of the extended transition period is irrevocable.

IAC is an “emerging

growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended

transition period for new or revised financial accounting standards.

Following the consummation of the Business Combination, Alpha Modus

expects to remain an emerging growth company at least through the end of the 2023 fiscal year and to continue to take advantage of the

benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent

permitted by such standards.

This may make it difficult or impossible to compare Alpha Modus’ financial results with the financial

results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to

take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

Subject to certain conditions

set forth in the JOBS Act, if, as an emerging growth company, we intend to rely on such exemptions, we are not required to, among other

(i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section

404(b) of the Sarbanes-Oxley Act;

(ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies

under the Dodd-Frank Wall Street Reform and Consumer Protection Act;

(iii) comply with any requirement that may be adopted by the Public

Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional

information about the audit and the financial statements (auditor discussion and analysis);

and (iv) disclose certain executive compensation-related

items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation

to median employee compensation.

We will remain an emerging

growth company under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the

IAC IPO, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on

we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding common

equity held by non-affiliates, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during

the previous three years.

Quantitative and Qualitative Disclosures

about Market Risk.

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.

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 7. Management’s Discussion and Analysis