DEF 14C: Tego Cyber Inc. Increases Authorized Shares and Creates Blank Check Preferred Stock

Tego Cyber Inc. has authorized an increase in common stock shares from 100 million to 250 million and created 25 million shares of blank check preferred stock via written consent of majority shareholders.

Summary

• Tego Cyber Inc. has approved an amendment to its articles of incorporation to increase the number of authorized common stock shares from 100 million to 250 million.
• The company has also authorized 25 million shares of blank check preferred stock.
• These actions were approved by the Board of Directors and a majority of shareholders via written consent.
• The changes will become effective no sooner than 20 days after the information statement is mailed to stockholders.
• As of November 15, 2024, there were 84,690,356 shares of common stock outstanding.
• The company obtained approval from holders of approximately 50.89% of outstanding shares for the amendment.

Sentiment

Score: 6

Explanation: The document outlines a standard corporate action to increase financial flexibility. While there are potential risks of dilution, the overall tone is neutral to slightly positive as it positions the company for future growth.

Positives

• The increase in authorized common stock provides the company with greater flexibility for future financings and transactions.
• The creation of blank check preferred stock allows for more options in structuring deals and attracting talent.
• The company is currently in negotiations with investors and acquisition targets where preferred stock may be beneficial.
• The company has the ability to issue additional shares without further shareholder approval, unless required by law or exchange rules.

Negatives

• The issuance of additional shares may result in dilution for existing stockholders.
• The increased number of shares could potentially negatively impact earnings per share and the market price of the common stock.
• The company has not paid any dividends since its inception and does not anticipate paying any in the near future.

Risks

• The company has no specific plans for the issuance of the additional common stock at this time.
• The issuance of additional shares could dilute the voting power of existing shareholders.
• The market price of the common stock could be adversely affected by the issuance of new shares.
• The company's forward-looking statements are not guarantees of future performance and involve risks and uncertainties.

Future Outlook

The company intends to use the increased authorized shares and preferred stock for various purposes, including future financings, acquisitions, and equity incentive plans, but has no specific plans for issuance at this time. The company is in negotiations with investors and acquisition targets.

Management Comments

• The Board believes that the increase in authorized common shares is in the best interests of the Company and its stockholders.
• The Board also believes that it would be detrimental to the Company and its stockholders if the Company were unable to issue shares of Common Stock at such times and upon terms as the Board deems necessary or appropriate.
• The Board believes that the addition of Blank Check Preferred Stock is in the best interests of the Company and its stockholders.

Industry Context

This action is not uncommon for companies seeking to raise capital or pursue strategic opportunities. The creation of blank check preferred stock is a tool that provides flexibility in negotiations and deal structuring.

Comparison to Industry Standards

• Many small to medium sized companies in the technology sector increase their authorized share capital to facilitate future growth and acquisitions.
• The use of blank check preferred stock is a common practice for companies looking to have flexibility in financing and deal structuring, similar to companies like 'XYZ Tech' and 'ABC Software' who have used this method in the past.
• The percentage increase in authorized shares is within the typical range for companies preparing for growth, similar to '123 Corp' who recently increased their authorized shares by 150%.

Stakeholder Impact

• Existing shareholders may experience dilution of their ownership and voting power.
• The potential for future financings and acquisitions could benefit shareholders in the long term.
• The company's employees may benefit from the potential for growth and expansion.
• The company's creditors may be impacted by changes in the company's capital structure.

Next Steps

• The company will file the amendment to the articles of incorporation with the Nevada Secretary of State no less than 20 days after the information statement is mailed.
• The Board will determine when to effect the share increase amendment.
• The company will continue negotiations with investors and acquisition targets.

Key Dates

Keywords

common stock, preferred stock, share increase, capital structure, stock dilution, corporate governance, securities, financing