DEF 14C: FDCTech Boosts Shares, Authorizes Reverse Stock Split

FDCTech, Inc. has approved an increase in authorized common and preferred shares and granted its Board discretion to effect a reverse stock split to enhance marketability and meet exchange listing requirements.

Summary

• The Board of Directors and a majority of stockholders approved two corporate actions on September 4, 2025, via written consent, eliminating the need for a special meeting.
• Authorized common stock increased from 500,000,000 shares to 750,000,000 shares.
• Authorized preferred stock increased from 10,000,000 shares to 15,000,000 shares.
• The Board of Directors is authorized, in its discretion, to amend the articles of incorporation to effect a reverse stock split of outstanding common stock in a ratio of not less than 1-for-10 and not more than 1-for-100, at any time prior to June 30, 2026.
• The primary purpose of the authorized share increase is to provide greater flexibility for future corporate needs, including strategic transactions, mergers, acquisitions, stock dividends, equity compensation, and financings.
• The primary purpose of the reverse stock split is to increase the per share price of common stock, meet initial listing requirements for the NYSE and/or NASDAQ (minimum $3.00 or $4.00 per share), appeal to a broader range of investors, and improve the perception of the common stock.
• Stockholders holding 87.6% of the total issued and outstanding voting power approved these actions.
• The Corporate Actions are expected to become effective on or about the 20th calendar day after the mailing of the Information Statement, which is on or about October 2, 2025.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to strategic moves aimed at improving marketability and flexibility for growth (uplisting, M&A, financing). However, this is tempered by significant risks of future dilution for existing shareholders and the inherent uncertainties and potential negative perceptions associated with reverse stock splits.

Positives

• Increased flexibility for future corporate needs, including potential strategic transactions, mergers, acquisitions, and business combinations.
• Enhanced ability to fund future operations and take timely advantage of market conditions and favorable financing opportunities.
• Potential to meet initial listing requirements for major exchanges like the NYSE and NASDAQ, which could broaden investor interest and improve liquidity.
• A higher stock price may attract institutional investors and brokerage firms that are reluctant to invest in or recommend lower-priced securities.
• Board discretion allows for the timing of the reverse stock split when it is deemed most advantageous to the company and its stockholders.

Negatives

• Future issuance of additional authorized shares may dilute the earnings per share, equity, and voting rights of existing stockholders.
• A reverse stock split does not guarantee a proportional increase in the market price of common stock, and the price may not be sustained.
• Stockholders could suffer a material loss in the value of their shares if the post-split price trades at less than its pre-split price multiplied by the reverse split ratio.
• A reverse stock split may decrease the liquidity of common stock due to a reduced number of outstanding shares.
• The substantial increase in unissued authorized common stock after a reverse split could allow for more significant future dilution of existing stockholders.
• The increase in authorized shares could have an anti-takeover effect, potentially discouraging unsolicited takeover attempts or inhibiting management changes, which may limit stockholder opportunities to dispose of shares at a better price.
• Some stockholders may end up with 'odd lots' (less than 100 shares) after a reverse stock split, which can be more difficult to sell and incur higher brokerage commissions.

Risks

• Future issuance of newly authorized common and preferred shares could dilute the equity and voting rights of existing stockholders.
• There is no assurance that a reverse stock split will increase the stock price or otherwise benefit the market for common stock, and the price may not increase proportionally or be sustained.
• The market price for common stock after a reverse stock split could be less than its pre-split price multiplied by the reverse split ratio, leading to a loss in value for stockholders.
• A reverse stock split may negatively impact the liquidity of common stock due to a reduced number of outstanding shares.
• The material increase in unissued authorized common stock resulting from a reverse stock split could allow for more substantial future dilution of existing stockholders.
• The increased authorized shares could have an anti-takeover effect, potentially discouraging unsolicited takeover attempts or inhibiting management changes, even if such transactions might be beneficial to stockholders.

Future Outlook

The company's future outlook involves leveraging the increased authorized shares for strategic growth initiatives, including potential mergers, acquisitions, and various financing activities. The Board's discretion to implement a reverse stock split aims to increase the per share price of common stock, which is a strategic move to meet major exchange listing requirements (NYSE/NASDAQ) and attract a broader range of investors, thereby improving the stock's marketability and perception.

Management Comments

• Our Board believes it is in FDCTech's best interests to increase the number of authorized shares of Common Stock in order to give us greater flexibility in considering and planning for future corporate needs, including, but not limited to, potential strategic transactions, including mergers, acquisitions and business combinations, stock dividends, grants under equity compensation plans, stock splits or financings, as well as other general corporate transactions.
• The Board believes that additional authorized shares of Common Stock will enable us to take timely advantage of acquisition opportunities that become available to us, as well as market conditions and favorable financing.
• The Board believes that granting this discretion provides the Board with maximum flexibility to act in the best interests of our shareholders.
• Our Board believes that the benefits to the Company and our shareholders outweigh the risks [associated with a reverse stock split].
• The primary purpose of effecting the Reverse Stock Split, should the Board of Directors choose to effect one, would be to increase the per share price of our Common Stock.

Industry Context

The company's current listing on the OTC PINK tier and its stated goal to meet NYSE and NASDAQ listing requirements (which typically include a minimum trading price of $3.00 or $4.00 per share) reflects a common strategy for smaller public companies seeking to uplist to more prestigious exchanges. Uplistings are often pursued to gain greater visibility, attract institutional investors who may have mandates against investing in lower-priced or OTC stocks, and potentially improve stock liquidity and analyst coverage. The proposed reverse stock split is a direct response to these industry-standard listing prerequisites.

Comparison to Industry Standards

• The company's aim to meet NYSE and NASDAQ listing requirements (minimum trading price of $3.00 or $4.00 per share) aligns with standard practices for companies seeking to uplist from OTC markets to major national exchanges.
• Many institutional investors and brokerage firms have internal policies that restrict or prohibit investments in 'lower-priced stocks,' making the company's strategy to increase its per-share price a common industry approach to broaden its investor base.
• The use of a reverse stock split to achieve a higher per-share price is a recognized, albeit sometimes risky, method employed by companies across various industries to comply with exchange listing standards and improve market perception.

Management Changes

Corporate Governance

Related Party Transactions

• On February 22, 2021, the company eliminated $1,256,908 in debt from FRH Group convertible notes by issuing 12,569,080 shares of unregistered common stock to FRH, which then assigned them to FRH Group Corporation, owned by Mr. Hong.
• In September 2022, the company issued 30,000,000 common shares for $300,000 cash and 5,000,000 common shares valued at $60,000 as director compensation to Gope S. Kundnani.
• In January 2023, the company issued 115,000,000 common shares to Gope S. Kundnani, a director, for $550,000 cash.
• The November 30, 2023, acquisition of Alchemy Prime Ltd. and a stake in Alchemy Markets Ltd. involved 1,800,000 Series B Preferred Stock. Additionally, the company received $2,500,000 in direct investment for Series A Preferred and $5,500,000 for Common Stock from Alchemy Prime Holdings Shareholder. Gope S. Kundnani, a director and controlling shareholder of the company, is also an officer and controlling shareholder of Alchemy Prime Holdings Limited (APHL) and abstained from voting on these transactions.
• In January 2024, the company issued 50,000 and 141,844 Series B Preferred Stock to Gope S. Kundnani for services rendered and $200,000 cash.
• In January 2024, the company issued 150,000 shares of Series B preferred stock each to Mitchell M. Eaglstein (CEO and Director) and Imran Firoz (CFO and Director) for services valued at $1.41 per share.

Stakeholder Impact

• **Shareholders:** Face potential future dilution from increased authorized shares. May benefit from increased stock price and marketability if the reverse split is successful, but also risk value loss and decreased liquidity. Fractional shares will be rounded up. No dissenters' rights are available.
• **Management/Board:** Gains increased flexibility in strategic decision-making, capital management, and the ability to pursue M&A or financing opportunities.
• **Potential Investors:** May find the company's stock more attractive if it achieves a higher per-share price and uplists to a major exchange, potentially broadening the investor base.
• **Creditors:** No direct impact mentioned, but increased financial flexibility could indirectly affect the company's ability to manage debt.

Next Steps

• The Corporate Actions are expected to become effective on or about the 20th calendar day after the mailing of the Information Statement (approximately October 22, 2025).
• The company will file a certificate of amendment to its Certificate of Incorporation with the Delaware Secretary of State to effect the Authorized Share Increase.
• The Board of Directors will determine, in its sole discretion, whether and when to implement a reverse stock split, and its specific ratio, prior to June 30, 2026.
• If a reverse stock split is implemented, the company will file a certificate of amendment with the Delaware Secretary of State and publicly announce the effective date.
• Shareholders will be notified of the reverse stock split and provided instructions for exchanging stock certificates, with fractional shares rounded up to the next whole share.

Key Dates

Recommendation

The company is undertaking significant strategic actions to improve its capital structure and market position, including increasing authorized shares for future flexibility and authorizing a reverse stock split to potentially uplist to a major exchange. While these steps are necessary for long-term growth and market visibility, they come with notable risks, particularly the potential for future dilution and the uncertainty of a reverse stock split's impact on stock price and liquidity. The history of related party transactions also warrants careful monitoring. A seasoned investor would likely hold to observe the execution of these strategies and their market reception, while closely tracking any further dilution and the company's operational performance post-split.

Keywords

FDCTech, FDC, Reverse Stock Split, Authorized Shares, Capital Structure, Corporate Governance, SEC Filing, Stock Dilution, NYSE Listing, NASDAQ Listing, Equity Financing, Mergers and Acquisitions