F-1/A: Black Titan Corporation Files Series B Preferred Share Certificate

Black Titan Corporation has filed a Certificate of Designations for its Series B Convertible Preferred Shares, outlining the terms, preferences, and limitations of these shares.

Summary

• Black Titan Corporation has officially filed the Certificate of Designations, Preferences, Rights and Limitations for its Series B Convertible Preferred Shares.
• This filing details the terms and conditions under which these shares can be issued and converted into ordinary shares.
• The Series B Preferred Shares have a par value of $0.001 and a stated value of $1,000 per share.
• Holders of Series B Preferred Shares are entitled to dividends on an as-if-converted basis, equal to dividends paid on ordinary shares.
• These shares carry no voting rights, but holders have specific consent rights over certain corporate actions that could adversely affect their rights.
• Upon liquidation, dissolution, or winding-up, Series B Preferred Shareholders are entitled to receive assets pari passu with ordinary shareholders.
• Conversion into ordinary shares occurs at a price equal to 80% of the 5-day VWAP preceding the conversion date, representing a 20% discount.
• The company must deliver conversion shares within two trading days or the standard settlement period after the conversion date.
• Failure to deliver conversion shares by the Share Delivery Date may result in liquidated damages payable by the company.
• A Beneficial Ownership Limitation is in place, restricting conversion if it would cause a holder to beneficially own more than 19.99% of outstanding ordinary shares, though this can be waived with 61 days' notice.
• The company must reserve sufficient authorized and unissued ordinary shares for conversion.
• No fractional shares are issued upon conversion; fractional amounts are rounded down.
• The company will pay transfer agent fees for same-day processing of conversion notices and electronic delivery of shares.
• The filing also outlines adjustments to the conversion price for dividends, stock splits, and other corporate events.
• In the event of a Fundamental Transaction, holders are entitled to receive the Alternate Consideration receivable by ordinary shareholders.
• The company must provide notice to Preferred Shareholders regarding dividends, rights offerings, and other significant corporate events.
• Governing law for the Certificate of Designations is the internal laws of the Cayman Islands, with exclusive jurisdiction in New York courts for disputes.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as neutral to slightly negative due to the detailed terms of convertible preferred shares which can lead to dilution, and the inherent risks associated with the company's nascent digital asset strategy.

Positives

• The filing clearly defines the terms of the Series B Convertible Preferred Shares, providing transparency for potential investors and stakeholders.
• The conversion mechanism at a discount (80% of 5-day VWAP) offers an incentive for conversion and potential upside for holders.
• The company's commitment to delivering conversion shares within a specified timeframe (two trading days) is a positive operational commitment.
• The inclusion of liquidated damages for failure to deliver shares provides a mechanism for recourse for preferred shareholders.
• The company's reservation of shares for conversion ensures that conversion obligations can be met.
• The clear governance structure regarding fundamental transactions and adverse changes to preferred share rights provides shareholder protection.

Negatives

• The potential for significant dilution exists if a large number of Series B Preferred Shares are converted into ordinary shares.
• The company's obligation to pay liquidated damages for delivery failures could impose financial strain if not managed effectively.
• The Beneficial Ownership Limitation of 19.99% could restrict conversion for large holders, potentially impacting liquidity or strategic flexibility.
• The company's reliance on future capital raises to fund operations and potential digital asset strategies introduces financial risk.

Risks

• The company's ability to manage its digital asset treasury strategy (DAT+) is subject to evolving regulatory frameworks, market volatility, and technological risks.
• The company's business is dependent on licenses and reseller contracts with third-party software vendors, and changes to these agreements could adversely affect performance.
• The company faces competition from other HCM solutions providers, and failure to compete effectively could impact its business.
• The company's reliance on a few key customers for a significant portion of its revenue creates concentration risk.
• The project-based nature of the business and timing of delivery can lead to fluctuations in revenue, profit, and cash flow.
• The company's management team has limited experience managing a public company.
• Failure to implement and maintain effective internal controls over financial reporting could adversely affect investor confidence and stock price.
• The company's status as a foreign private issuer and its Cayman Islands incorporation may offer less investor protection than a U.S. domestic issuer.
• The company does not expect to declare dividends in the foreseeable future.
• The company's financial projections may not prove to be reflective of actual financial results.
• The company's business is subject to numerous legal and regulatory risks, particularly concerning data privacy and cybersecurity.
• The company's international operations expose it to various political, economic, and social risks.
• The company's reliance on its sales force and the intense competition for skilled sales personnel could hinder business growth.
• The company's reputation and brand recognition are critical and could be harmed by negative publicity or events.
• The company's business strategies are subject to external factors and may not be successfully implemented.
• The company's customer contracts are often short-term, requiring continuous efforts to secure new contracts and renewals.
• The company is exposed to foreign exchange transaction risks.
• The company's HCM project deliverables are exposed to unexpected delays or interruptions.
• The company's success depends on market acceptance of the digitalization of human resources processes.
• The company's insurance coverage may not be adequate to cover all potential losses or liabilities.
• Changes in laws and regulations related to the internet or changes in internet infrastructure could diminish demand for the company's solutions.
• Volatility in the financial and economic environment could harm the company's business.
• The company's financial results may fluctuate due to many factors, some of which are beyond its control.
• The company's DAT+ strategy is in its early stages and may not be successfully implemented or managed.
• The company's digital asset holdings are subject to extreme price volatility.
• The company's digital asset strategy requires specialized web3 operational knowledge, and a failure to maintain this expertise could lead to mismanagement.
• The accounting and tax treatment of digital assets is complex and evolving, creating uncertainty.
• The success of the DAT+ strategy depends on the company's ability to select the right projects and tokens.
• The digital asset trading platforms on which cryptocurrencies trade are relatively new and largely unregulated.
• A disruption of the internet could affect the operation of cryptocurrency networks.
• The lack of full insurance for the company's crypto assets exposes it to the risk of loss.
• If deemed an investment company under the Investment Company Act, applicable restrictions could make it impractical to continue certain business segments.

Future Outlook

The company's future outlook is tied to the successful implementation of its DAT+ strategy, which involves digital asset treasury management, and its core business in Human Capital Management (HCM) solutions. The company is exploring strategic investments in digital currencies and blockchain-related initiatives, subject to market conditions, regulatory considerations, and board oversight. The success of the DAT+ strategy is dependent on various factors including market volatility, evolving regulations, and technological advancements. The company's HCM business is focused on expanding its market share in Southeast Asia, particularly in Singapore and Indonesia, and developing cloud-based HCM solutions.

Management Comments

• The Company recently initiated a business strategy focused around a digital asset treasury strategy termed the DAT+ strategy.
• Our goal is to acquire and grow our overall digital asset position and utilize professional treasury strategies to increase our digital asset holdings.
• We expect the source of capital for our acquisitions of digital assets, in the next twelve months, and beyond, will come from capital raises.
• We recently completed a sale of a series of original issue discount senior, unsecured convertible notes for up to an aggregate principal amount of $200,000,000. We will utilize the proceeds from the transaction to fund our acquisitions of digital assets.

Industry Context

StockSavvy.ai notes that Black Titan Corporation's filing of the Series B Convertible Preferred Share Certificate of Designations is a standard procedural step for companies issuing preferred equity. The company's dual focus on a digital asset treasury strategy (DAT+) and its core HCM business places it at the intersection of emerging technology trends and established enterprise software markets. The HCM market is experiencing growth driven by digitalization and AI adoption, with a significant shift towards cloud-based solutions. Black Titan's expansion plans in Southeast Asia align with regional digital transformation initiatives. The DAT+ strategy, however, introduces significant risks related to regulatory uncertainty, market volatility, and the nascent nature of digital asset management.

Management Changes

Corporate Governance

Related Party Transactions

• Black Titan Corporation (formerly BSKE Limited) has amounts due to its affiliate, TTNP, totaling $147,120 as of July 31, 2025, for formation and accrued offering costs.
• TalenTec Sdn. Bhd. had a related party payable of $358,626 to The Sire Group Ltd. as of July 31, 2024, related to professional fees paid on behalf of the company. This relationship changed after December 23, 2024.
• Ho Say San and Choo Yeow, former directors and shareholders of TalenTec, provided guarantees for the company's bank borrowings.
• Black Titan Corporation issued 5,500 Series A Preferred Shares to ARC Group Limited for $5,500,000.
• Black Titan Corporation issued 800 Series B Preferred Shares to ARC Group Limited as part of a settlement agreement with David Lazar.

Stakeholder Impact

• Ordinary shareholders may experience dilution if Series B Preferred Shares are converted.
• The company's digital asset strategy introduces new risks that could impact all stakeholders.
• The company's reliance on key customers could impact its stability and, consequently, its shareholders.
• The company's international operations expose it to risks that could affect its financial performance and, by extension, its stakeholders.
• The company's management team's limited experience with public companies could impact operational efficiency and investor confidence.

Next Steps

• The company will continue to pursue its digital asset treasury (DAT+) strategy, subject to market conditions and regulatory considerations.
• The company plans to expand its HCM solutions business by adding to its product offerings and expanding operations to Singapore and Indonesia.
• Black Titan has agreed to register the ordinary shares underlying the Series B Shares within sixty (60) days after the closing date of the sale of the Series B shares.
• The company will continue to manage its operations and financial condition, including its liquidity and capital resources.

Key Dates

Recommendation

The company's filing outlines the terms of Series B Convertible Preferred Shares, which could lead to dilution. While the company is pursuing a digital asset strategy, this is in its early stages and carries significant risks. The core HCM business shows steady revenue growth, but competition is intense. The company's financial position and management experience as a newly public entity warrant a cautious 'hold' recommendation until clearer execution on its strategies and improved financial stability are demonstrated.

Keywords

Black Titan Corporation, Series B Convertible Preferred Shares, Certificate of Designations, Preferred Stock, Convertible Securities, SEC Filing, Corporate Governance, Capital Markets, Securities Law, Cayman Islands Law, Digital Asset Treasury Strategy, DAT+ Strategy, Human Capital Management, TalenTec, Titan Pharmaceuticals