Alpha Modus Holdings Inc. (NASDAQ: AMOD) entered into an exchange agreement to convert 90% of its outstanding preferred stock into common equity, according to a company statement.

The agreement involves family trusts controlled by Chief Executive Officer William Alessi, which hold the Series C Preferred Stock representing 90% of the company's preferred shares. The conversion will retire these preferred securities and issue common stock in exchange.

The transaction removes over $71 million in convertible preferred stock from Alpha Modus's capital structure. Combined with previous balance sheet initiatives that eliminated approximately $41 million in mezzanine equity, the company said the conversion will reduce its stockholders' deficit.

"This is not a financing event – it is a structural execution," Alessi stated. "We are removing legacy preferred features and transitioning insider ownership entirely into common equity – the same class of stock held by our investors."

The common shares issued in the exchange reflect existing economic rights from the preferred securities negotiated before the 2024 business combination closing. Shares received in the exchange are subject to transfer restrictions through June 13, 2026.

Following the conversion, approximately 430,000 Series C Preferred Stock shares will remain outstanding, held by the company's Chief Strategy Officer. This represents the remaining 10% of preferred equity not included in the current exchange.

Alpha Modus received a Nasdaq notice regarding its failure to meet alternative financial listing standards. The company has 45 days to submit a compliance plan and may receive up to 180 days to regain compliance if the plan is accepted. The preferred stock conversion is intended to support compliance efforts by reducing the stockholders' deficit and increasing the market value of listed securities.

The Charlotte, North Carolina-based company operates AI-driven retail technology and financial services infrastructure.