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Alpha Modus crashes after agreeing to issue huge share block for Bitcoin

The Nasdaq-listed company would receive 3,170 BTC valued at $71,000 each, for 51.62 million Class A shares plus warrants that could add another 51.62 million shares.

Reported · Written up by our desk · Market Structure

Alpha Modus shares dropped about 25% to $2.84 after the Nasdaq-listed firm agreed to raise Bitcoin-linked capital via a large share issuance, according to an Aug. 27 SEC filing reported by CryptoSlate.

Under the deal, 10 non-US investors would contribute 3,170 BTC in exchange for 51.62 million Class A shares and warrants covering another 51.62 million shares. The agreement values the Bitcoin at $71,000 per BTC, implying about $225.1 million in consideration, and it is signed but not yet closed, so the Bitcoin has not been transferred and the new securities have not been issued.

CryptoSlate reports that Alpha Modus had about 4.99 million Class A shares outstanding under the agreement’s Aug. 24 capitalization table. Issuing the initial 51.62 million shares would increase the total to roughly 56.61 million and reduce pre-deal shares to about 8.8% of the enlarged base, meaning the company would issue about 10.35 new shares to Bitcoin investors for every existing Class A share.

The filing also flags additional potential dilution from the warrants, which could add another 51.62 million shares if exercised at $4.36 over a two-year term, subject to beneficial-ownership limits, Nasdaq requirements, and any shareholder approvals. The company said the transaction is intended to help repair a balance sheet tied to Nasdaq delisting risk, noting $2.0 million in cash, a $6.1 million stockholders’ deficit, and $6.3 million in working-capital deficit, with no revenue reported and substantial doubt about its ability to continue as a going concern.

Latest closeBitcoin $77,411.01 ▼3.5%|Nasdaq Comp. 26,130.20 ▼0.1%

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