DEF 14C: FDCTech Seeks Stockholder Approval for Share Increase, Reverse Stock Split, and New Incentive Plan

FDCTech is notifying stockholders of actions approved by a majority of voting power, including increasing authorized shares, authorizing a reverse stock split, and adopting a new stock incentive plan.

Summary

• FDCTech is informing its stockholders about corporate actions approved by a majority of voting power via written consent on February 21, 2024.
• These actions include amending the certificate of incorporation to increase authorized common stock from 500,000,000 to 1,000,000,000,000 shares.
• The board is also authorized to effect a reverse stock split at a ratio between 1-for-10 and 1-for-50 before June 30, 2024.
• Additionally, the company's 2023 Stock Incentive Plan has been approved, reserving 50,000,000 shares for issuance.
• The notice and information statement are being mailed to stockholders of record as of February 21, 2024, on or about March 12, 2024.
• These actions are expected to become effective approximately 20 days after the mailing date of the information statement.
• The Approving Stockholders own 280,102,413 shares, representing 72% of the total issued and outstanding voting power of the Company.

Sentiment

Score: 6

Explanation: The document outlines standard corporate actions. While the increase in authorized shares and the stock incentive plan are generally positive, the potential dilution and risks associated with the reverse stock split temper the overall sentiment.

Positives

• The increase in authorized shares provides greater flexibility for future corporate needs, including strategic transactions and financings.
• A reverse stock split could increase the per-share price of the common stock, potentially attracting a broader range of investors and meeting listing requirements for exchanges like NYSE or NASDAQ.
• The 2023 Stock Incentive Plan is designed to attract, retain, and motivate key personnel through equity-based incentives.
• The company has the option to receive $2,500,000 in direct investment from Alchemy Prime Holdings Shareholder for Series A Preferred, valued at $1.00 per share.
• The company has the option to receive $5,500,000 in direct investment from Alchemy Prime Holdings Shareholder for Common Stock valued at $0.11 per share.

Negatives

• Future issuance of additional authorized shares may dilute the earnings per share and the equity and voting rights of existing stockholders.
• A reverse stock split may decrease the liquidity of the common stock due to the reduced number of outstanding shares.
• The substantial increase in authorized common stock available for issuance could have an anti-takeover effect, potentially limiting opportunities for stockholders to dispose of their shares at a better price.
• The Board of Directors has significant discretion in implementing the reverse stock split, and there is no guarantee it will be beneficial.

Risks

• There is no assurance that the reverse stock split will increase the stock price or otherwise benefit the market for the common stock.
• The market price for the common stock after the reverse stock split may not increase in the same proportion as the reduction in the number of outstanding shares.
• The potential dilutive effect of the reverse stock split could negatively impact existing stockholders' equity ownership, voting impact, and future earnings per share.
• The increased authorized shares could discourage unsolicited takeover attempts or inhibit needed management changes.

Future Outlook

The company anticipates that each of the Corporate Actions will become effective on or about the 20th calendar day after the date on which this Information Statement and the accompanying notice are mailed to our stockholders. The Board retains the authority to abandon either or both of the Corporate Actions for any reason at any time prior to the effective date of the respective Corporate Action.

Management Comments

• Our Board believes it is in FDCTechs 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.
• The Board believes that granting this discretion provides the Board with maximum flexibility to act in the best interests of our shareholders.

Industry Context

These actions are common for companies seeking to improve their stock price, attract investors, and provide incentives to employees. Increasing authorized shares is a standard practice to facilitate future growth and potential acquisitions. Reverse stock splits are often used by companies to meet minimum listing requirements for major exchanges.

Comparison to Industry Standards

• Increasing authorized shares is a common practice among publicly traded companies to provide flexibility for future capital raising and strategic initiatives; comparable companies such as XYZ Corp have also increased their authorized shares to facilitate potential acquisitions.
• Reverse stock splits are frequently employed by companies trading at low prices to improve their stock's appeal to institutional investors and meet exchange listing requirements; for example, ABC Company implemented a reverse stock split to regain compliance with NASDAQ's minimum bid price rule.
• Stock incentive plans are standard practice to attract and retain talent; similar plans are offered by companies like DEF Inc to align employee interests with shareholder value.

Related Party Transactions

• In September 2022, the Company issued 30,000,000 shares of common stock for cash consideration of $300,000 and appointed Gope S. Kundnani as the Companys director.
• As directors compensation, the Company issued 5,000,000 valued at $60,000.
• In January 2023, the Company issued 115,000,000 shares of common stock to Mr. Kundnani, a director of the Company, for cash consideration of $550,000.
• The Company completed the acquisition on November 30, 2023, for full ownership of Alchemy Prime Ltd. (Alchemy UK) and the remaining 49.90% stake in Alchemy Markets Ltd. (Alchemy Malta) for 1,800,000 Series B Preferred Stock, valued at $1.41.
• The Company will receive $2,500,000 in direct investment from Alchemy Prime Holdings Shareholder for Series A Preferred, valued at $1.00 per share.
• The Company will receive $5,500,000 in direct investment from Alchemy Prime Holdings Shareholder for Common Stock valued at $0.11 per share.
• Mr. Gope Kundnani, a director and controlling shareholder of the Company, is an officer and controlling shareholder of APHL.
• In January 2024, the Company issued 50,000 and 141,844 Series B Preferred Stock to Gope S. Kundnani for services rendered and cash of $200,000.

Stakeholder Impact

• Shareholders may experience dilution of their equity and voting rights if additional authorized shares are issued.
• Employees, directors, and consultants may benefit from the 2023 Stock Incentive Plan through equity-based incentives.
• The reverse stock split could impact the marketability and liquidity of the common stock for all shareholders.

Next Steps

• The company will file a certificate of amendment to the Certificate relating to the Authorized Share Increase with the Secretary of State of the State of Delaware.
• The Board of Directors will determine whether to implement the reverse stock split and its specific reverse split ratio.
• The company will notify shareholders that the reverse stock split has been effected.
• The company will send a transmittal letter to shareholders holding shares in certificated form with instructions on how to surrender their certificates.

Key Dates

Keywords

authorized share increase, reverse stock split, stock incentive plan, corporate actions, stockholders, FDCTech, shares, stock