8-K: Invech Holdings Amends Preferred Stock, Engages Craft Capital

Invech Holdings, Inc. has amended its Series A Preferred Stock terms and entered into an exclusive finder agreement with Craft Capital Management LLC for potential financing and strategic transactions.

Summary

• Invech Holdings, Inc. amended and restated the Certificate of Designation for its Series A Preferred Stock, which was approved by the Board and sole Series A shareholder on March 30, 2026, and filed with the Nevada Secretary of State on the same day.
• The Series A Preferred Stock consists of 1,000,000 shares with a par value of $0.001, cannot be issued in fractional shares, and holds significant voting power.
• Holders of Series A Preferred Stock, as a class, have voting rights equal to 80% of the total common stock issued and outstanding plus any other voting preferred stock.
• Dividends and liquidation payments for Series A Preferred Stock are pari passu with common stock.
• Unanimous written consent of Series A holders is required to adversely alter their rights, preferences, or privileges.
• The company entered into a Finder Agreement with Craft Capital Management LLC, a FINRA and SEC-regulated broker-dealer, effective March 27, 2026.
• Craft Capital will provide services for various transactions, including equity/debt financing, licensing agreements, joint ventures, mergers, and acquisitions.
• The agreement has a one-year term, with Craft Capital serving as the exclusive broker-dealer for the first 180 days.
• Craft Capital is entitled to a success fee of 10% of gross proceeds from equity financing, 5% for debt financing, and 5% on each put of an equity line of credit (ELOC) plus 1% upfront commitment shares.
• Additionally, Craft Capital will receive non-callable warrants equal to 5% warrant coverage of the amount raised in financing transactions, with specific pricing and terms.
• For non-financing transactions, compensation will be mutually agreed upon, or a 7% cash fee based on licensing fees, merger/acquisition value, or joint venture ownership.
• The company is responsible for all transaction-related expenses, including legal, accounting, and filing fees, regardless of whether a transaction closes.
• A "Tail Period" extends Craft Capital's entitlement to fees for one year after the agreement's termination, and up to two years for specific introduced parties.
• Craft Capital also holds an irrevocable right of first refusal for 12 months after a completed transaction for future financing or capital raising activities, with certain exceptions.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral development. While engaging a regulated broker-dealer for capital raising is a positive step, the high fees, warrant coverage, and significant control granted to Series A Preferred Stock holders introduce potential downsides and governance concerns.

Positives

• Engagement of a FINRA/SEC-regulated broker-dealer (Craft Capital Management LLC) could enhance the company's ability to secure financing and strategic partnerships.
• The Finder Agreement covers a broad range of potential transactions (equity, debt, M&A, joint ventures), offering flexibility for future growth initiatives.
• The Series A Preferred Stock structure provides a clear framework for a significant shareholder, potentially stabilizing governance.

Negatives

• The company is obligated to pay Craft Capital significant success fees (e.g., 10% for equity financing, 5% warrant coverage) and all transaction-related expenses, regardless of transaction completion, which could be costly.
• The 180-day exclusivity period limits the company's ability to seek alternative broker-dealers during that time.
• The "Tail Period" and "Right of First Refusal" provisions extend Craft Capital's claim to fees and future engagement opportunities, potentially restricting the company's flexibility for an extended period.
• The Series A Preferred Stock grants 80% voting rights to its holders as a class, which represents a highly concentrated control block and could limit the influence of common shareholders.
• The requirement for unanimous written consent from Series A holders to adversely alter their rights gives them significant veto power over future corporate actions affecting their class.

Risks

• Financing Risk: There is no guarantee that any transaction will take place, meaning the company may incur expenses without securing necessary financing or strategic partnerships.
• High Transaction Costs: The significant success fees (up to 10% of gross proceeds for equity financing, plus 5% warrant coverage) and the obligation to reimburse all expenses, even if no transaction closes, could strain the company's financial resources.
• Dilution Risk: Future equity financing transactions facilitated by Craft Capital would likely result in dilution for existing common shareholders, further exacerbated by the 5% warrant coverage granted to Craft.
• Governance Concentration Risk: The Series A Preferred Stock's 80% voting power and unanimous consent requirement for adverse changes to its rights concentrate significant control, potentially limiting the board's and common shareholders' flexibility in strategic decisions.
• Broker-Dealer Dependence: The exclusivity period and the right of first refusal could make the company overly dependent on Craft Capital for future capital raising and strategic advisory needs.
• Arbitration Risk: Disputes with Craft Capital will be resolved through binding arbitration before FINRA in Nassau County, New York, which may not be the preferred forum for the company.

Future Outlook

The company aims to pursue various financing and non-financing transactions through its engagement with Craft Capital Management LLC, including equity, debt, licensing, joint ventures, mergers, and acquisitions. There is no guarantee that any specific transaction will be consummated. Craft Capital also has a right of first refusal for future capital raising activities for 12 months after a completed transaction.

Management Comments

• The Company can choose to accept or reject any Transaction in its sole and absolute discretion.
• There is no guaranty or assurance that any Transaction will take place, and that the final legal documentation may contain terms that vary with those set forth on any term sheets.

Industry Context

StockSavvy.ai notes that engaging a regulated broker-dealer like Craft Capital Management LLC is a common strategy for smaller public companies, particularly those without established in-house investment banking capabilities, to access capital markets and explore strategic growth opportunities. The broad scope of the Finder Agreement suggests Invech Holdings is open to various forms of capital infusion and strategic partnerships, which is typical for companies seeking to expand or restructure. The terms, including exclusivity, tail periods, and rights of first refusal, are standard in such agreements but can be more restrictive for companies with limited negotiating leverage. The amendment to Series A Preferred Stock terms, particularly the significant voting rights, indicates a consolidation of control, which can be a double-edged sword, providing stability but potentially limiting broader shareholder influence.

Comparison to Industry Standards

• Finder Fees: Craft Capital's 10% success fee for equity financing and 5% warrant coverage are at the higher end of typical finder/placement agent fees for smaller, less liquid public companies, which often range from 5% to 10% cash and 0% to 5% warrants. For example, larger, more established companies might pay 2-5% cash and no warrants for similar services.
• Exclusivity and Tail Periods: A 180-day exclusivity period and a one-year initial tail period (with potential extensions) are common but can be considered lengthy, especially for a company actively seeking capital. Some agreements might feature shorter exclusivity periods (e.g., 90-120 days) or more narrowly defined tail periods.
• Right of First Refusal: The 12-month right of first refusal for future financing is a significant concession, granting Craft Capital a strong position in future capital raises, which is not universally included in all finder agreements, particularly for companies with stronger market positions.
• Preferred Stock Voting Rights: Granting 80% voting rights to a single class of preferred stock (Series A) is an extremely high concentration of control. While preferred stock often carries enhanced voting rights, 80% effectively gives the Series A holders (or the sole shareholder) near-absolute control over shareholder-level decisions, far exceeding typical enhanced voting rights which might be 1x or 10x common stock votes per share, but rarely such a dominant percentage of the total vote. This is more akin to a control block seen in private equity structures or dual-class share structures designed for founder control, rather than a standard preferred stock issuance in a widely held public company.

Corporate Governance

Stakeholder Impact

• Shareholders (Common): Potential for significant dilution from future equity financings and warrant issuances to Craft Capital. Their voting power is substantially diminished by the 80% voting rights granted to Series A Preferred Stock holders.
• Shareholders (Series A Preferred): Gain substantial control over the company's shareholder-level decisions with 80% voting rights as a class and protection provisions requiring unanimous consent for adverse changes to their rights.
• Creditors: Potential for increased debt if debt financing transactions are pursued, which could alter the company's capital structure and risk profile.
• Management/Board: Their strategic and operational flexibility may be constrained by the significant voting power and protection provisions of the Series A Preferred Stock, as well as the exclusivity and right of first refusal granted to Craft Capital.

Next Steps

• Craft Capital Management LLC may introduce the company to potential investors or strategic partners for financing or non-financing transactions.
• The company will evaluate and decide whether to accept or reject any proposed transactions.
• If a transaction occurs, the company will be obligated to pay success fees and issue warrants to Craft Capital.
• The company will need to provide 30 days prior written notice to Craft Capital for any proposed financing or transaction that may trigger Craft's Right of First Refusal.

Key Dates

Recommendation

The filing presents a mixed bag. While the engagement of a regulated broker-dealer for capital raising is a positive step towards potential growth and liquidity, the terms of the Finder Agreement are quite favorable to Craft Capital, involving high fees, warrant coverage, and restrictive clauses like exclusivity and right of first refusal. More significantly, the amendment to the Series A Preferred Stock, granting 80% voting rights to its holders, represents a substantial concentration of control, which could be a concern for common shareholders regarding future governance and strategic direction. Investors should hold to observe the outcome of Craft Capital's efforts and how the concentrated voting power impacts company decisions before making further investment decisions.

Keywords

Invech Holdings, Craft Capital Management, Finder Agreement, SEC filing, 8-K, Series A Preferred Stock, equity financing, debt financing, mergers and acquisitions, joint ventures, corporate governance, capital raise, broker-dealer, FINRA, preferred stock, voting rights, dilution, investment banking