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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report: September 28, 2023

(Date of earliest event reported)

 

FDCTECH, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   000-56338   81-1265459

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS. Employer

Identification No.)

 

200 Spectrum Center Drive, Suite 300

Irvine, CA 92618

(Address of principal executive offices, including zip code)

 

(877) 445-6047

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common   FDCT   OTCQB

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 
 

 

Item 1.01   Entry into a Material Definitive Agreement.

 

On September 28, 2023, FDCTech, Inc. (“FDC” or the “Company,” OTCQB: FDCT) signed a legally binding letter of intent (LOI) with Alchemy Group where the Company will acquire 100% of Alchemy Markets DMCC (Alchemy UAE), 100% of Alchemy Prime Ltd. (Alchemy UK), and the remaining 49.90% of Alchemy Markets Ltd. (Alchemy Malta), collectively known as Alchemy Group. The Company will issue 1,700,000 shares of its Series B Preferred stock, or such other number of shares that the parties agree upon to shareholder(s) of Alchemy Group, for the acquisition. Upon finalizing the merger, the existing management team and board of directors will continue to oversee and manage the Company’s operations.

 

The foregoing description of the LOI with Alchemy Group does not purport to be complete. It is qualified in its entirety by reference to the full text of the document, which is filed as an exhibit to this report and is incorporated herein by reference.

 

Item 7.01   Regulation FD Disclosure

 

On September 28, 2023, the Company issued a press release announcing the binding LOI with Alchemy Group. We have furnished a copy of the press release as Exhibit 99.1 hereto, which is incorporated into Item 7.01 by reference.

 

The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section, and is not deemed incorporated by reference in any filing of Basic’s under the Securities Act of 1933, as amended unless specifically identified therein as being incorporated therein by reference.

 

ITEM 9.01    Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit Number   Description
     
10.1   Binding Letter of Intent dated September 28, 2023.
     
99.1   Press release dated September 28, 2023.
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    FDCTECH, INC.
       
September 29, 2023   By: /s/ Imran Firoz
Date     Imran Firoz
      Chief Financial Officer
      (Principal Executive Officer)

 

3

 

 

 

Exhibit 10.1

 

September 28, 2023

 

Attn: Gope S. Kundnani

 

Alchemy Markets DMCC (UAE), 100%, Alchemy UAE

Alchemy Prime Ltd. (UK), 100%, Alchemy UK

Alchemy Markets Ltd. (Malta), 49.90%, Alchemy Malta

 

Unit 1, 74 Back Church Lane, E1 1LX,

London, UK

 

RE: Binding Letter of Intent for Merger

 

This Binding Letter of Intent (“LOI”) is entered into by and between FDCTech (OTCQB: FDCT, “FDCT”) and Gope S. Kundnani, who owns 100% of Alchemy Markets DMCC (Alchemy UAE), 100% of Alchemy Prime Ltd. (Alchemy UK), and 49.90% of Alchemy Markets Ltd. (Alchemy, Malta), collectively referred as Alchemy.

 

This LOI outlines the general terms and conditions by which Alchemy is willing to merge (the “Merger”) with or into FDCTech, Inc., a Delaware corporation (“FDCT”).

 

1.Definitive Agreement:

 

Subject to the terms and provisions of this LOI, the parties agree to negotiate in good faith toward the execution of definitive transaction agreements, including, without limitation, Employment Agreements for all appropriate parties and a merger agreement (the “Merger Agreement”) setting forth the terms and conditions of the transactions contemplated by this LOI (collectively, the “Definitive Agreements”). In addition to the terms outlined in this LOI, the Definitive Agreements will contain such additional representations, warranties, covenants, conditions, and terms as are customary of transactions of the type contemplated by this LOI and are consistent with the terms of this LOI.

 

2.Pre-Merger Conditions: FDCT shall file Schedule 14C to update shareholders with information about the following corporate actions:

 

a)Reverse split FDCT common stock in a 1-for-10 reverse split, ten (10) shares of stock would be exchanged for one (1) share, “Reverse Split or Stock Consolidation.”

 

b)Approve and accept the Certificate of Amendment to be filed with the Delaware Secretary of State, according to the authority invested in the Board of Directors by the Certificate of Incorporation to authorize 10,000,000 shares of Series B Preferred Stock at $0.0001 par value per share (the “Series B Preferred Stock”).

 

c)The Certificate of Amendment will designate Series B Preferred Stock converted into common stock in a 100-for-1 conversion; the holder of Series B Preferred Stock can convert one (1) share of Series B Stock to one hundred (100) common stock.

 

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d)Alchemy shall provide PCOAB audited financial statements for the last two fiscal years of Alchemy Markets DMCC and a review of the interim or stub period for the recent quarter. Alchemy shall furnish such financial reports within 71 calendar days of the definitive agreement.

 

3.Amendment and Restatement of Governing Documents:

 

Effective as of the date of the Merger, subject to shareholder approval, FDCT will amend and restate its Articles of Incorporation (i) to include provisions similar to those found in articles of incorporation customarily used by public companies, (ii) to Reverse Split as defined in 2(a) (the “Share Consolidation”), and (iii) to the “Name Change” as defined in 2(b), (iii) to create and designate a new Series B Preferred Stock as defined in 2(c) and 2 (d).

 

Effective as of the date of the Merger, subject to shareholder approval, FDCT will amend and restate its Bylaws to include provisions similar to those found in bylaws customarily used by public companies (the “Amended and Restated Bylaws”).

 

4.Merger:

 

Subject to the conditions stated herein,

 

(i)FDCT will issue 1,700,000 shares of its Series B Preferred stock, or such other number of shares that the parties agree upon, to Gope S. Kundnani or his assignees to acquire:

 

a)one hundred percent (100.00%) equity stake in Alchemy UAE, on a fully diluted basis,
b)one hundred percent (100.00%) equity stake in Alchemy UK, on a fully diluted basis,
c)forty-nine point nine percent (49.90%) equity stake in Alchemy Malta, on a fully diluted basis,

 

(ii)Alchemy will merge with and into FDCT, and

 

(iii)FDCT shall issue 100,000 shares of Series B Preferred Stock to each of its current officers, Mitchell M. Eaglstein (CEO, Director), Imran Firoz (CFO, Director), and Alchemy’s key employees. FDCT shall issue 10,000 Series B Preferred Stock to William B. Barnett, Esq.

 

Whatever number of shares the parties agree upon, the number issued shall be in the same proportionate amount listed above. The Merger contemplated by this LOI will be collectively called the “Merger.”

 

5.Proforma Shares: The proforma shares are based on post-reverse Split or Share Consolidation as defined in 2(a).

 

a)Common Stock:

 

Name and Address (1)  Title of Class  Number of Shares Beneficially Owned   Percent of Class 
Mitch Eaglstein, CEO, Director (2)  Common   3,076,811    1.32%
Imran Firoz, CFO, Director (3)  Common   2,431,000    1.04%
Brian Platt, CTO  Common   100,000    0.04%
Jonathan Baumgart, Director  Common   64,500    0.03%
Gope S. Kundnani, Director (4)  Common   15,000,000    6.43%
FRH Group Corporation (5)  Common   3,360,000    1.44%
Non-affiliate shareholders  Common   9,326,162    4.00%
Gope S. Kundnani, Series B Preferred Conversion (6)  Common   170,000,000    72.85%
Officers, Series B Preferred Conversion (7)  Common   30,000,000    12.86%
Total      233,358,473    100.00%
Officers and Directors as a group (5 persons) (8)  Common   210,672,311    90.28%

 

2
 

 

b)Series A Preferred Stock:

 

Name and Address (1)  Title of Class  Number of Shares Beneficially Owned   Percent of Class 
Mitch Eaglstein (2)  Preferred   1,500,000    37.50%
Gope S. Kundnani (4)  Preferred   1,500,000    37.50%
FRH Group Corporation (5)  Preferred   1,000,000    25.00%
Total      4,000,000    100.00%
              
Series A Preferred Voting Stock as % of outstanding, 50-for-1      200,000,000    8.57%

 

c)Voting Stock (Common + Series A):

 

  Title of  Number of Voting   Percent of 
Name and Address(1)  Class  Shares   Class 
Mitch Eaglstein (2)  Voting   88,076,811    20.32%
Gope S. Kundnani (4)  Voting   260,000,000    60.00%
Felix R. Hong (5)  Voting   53,360,000    12.31%
Others  Voting   31,921,662    7.37%
       433,358,473    100.00%

 

(1) 200 Spectrum Drive, Suite 300, Irvine, CA, 92618.

(2) Mitchell Eaglstein, Co-Founder, CEO, Director.

(3) Imran Firoz, Co-Founder, CFO, Director.

(4) Gope S. Kundnani, Director, owns shares personally and through Alchemy Prime Limited.

(5) Felix R. Hong owns one hundred percent of FRH Group Corporation.

(6) 1,500,000 Series B converted to common stock as defined in 2 (d).

(7) 200,000 Series B converted to common stock, owned by Mitchell Eaglstein and Imran Firoz as defined in 2 (d).

(8) Mitchell Eaglstein, Imran Firoz, Brian Platt, Jonathan Baumgart, and Gope S. Kundnani.

 

3
 

 

6.Stock Plan:

 

Effective as of the date of the Merger, subject to shareholder approval, FDCT will adopt a 2023 Stock Option Plan (the “2023 Stock Plan”) under which FDCT shall reserve 20% of the issued and outstanding shares of its common stock shall be reserved for grants to employees, board members, and consultants.

 

7.Board of Directors:

 

Effective on the date of execution of the Merger Agreement, the Board of Directors of FDCT will vote to increase the size of the Board to seven members and will name Gope S. Kundnani as the Chairman and Director.

 

To list FDCT on a senior exchange, the Board will authorize the creation of an Audit Committee, a Compensation Committee, a Corporate Governance Committee, and other committees as determined by the Board. Effective as of the date of the Merger, the members of the Board of Directors of FDCT will consist of the following individuals (the “Post-Merger Board” ):

 

Gope S. Kundnani, Executive Chairman, Affiliate of FDCT

Mitchell M. Eaglstein, CEO, Executive Director

Imran Firoz, CFO, Executive Director

Jonathan Baumgart, Non-Executive Director

Independent Director to be determined

 

8.Shareholders’ Approval:

 

The Merger will require obtaining the approval of the shareholders of FDCT for the following items: (i) the Amended and Restated Articles of Incorporation, including the Share Increase and the Name Change; (ii) the Amended and Restated Bylaws; (iii) the 2023 Stock Plan; and (iv) the Post-Merger Board.

 

9.Conditions:

 

The Merger is subject to and conditioned on the following:

 

a.Negotiation and execution of the Definitive Agreement;

 

b.The approval of the shareholders of FDCT to the following items: (i) the Amended and Restated Articles of Incorporation, including the Share Increase and the Name Change, (ii) the Amended and Restated Bylaws, (iii) the 2023 Stock Plan, and (iv) the Post-Merger Board;

 

c.Upon closing, FDCTech will change its name to Alchemy Fintech Holdings and change its Ticker Symbol to reflect the new name – ACMY or ALCM (available);

 

d.The purchase of directors’ and officers’ insurance by FDCT in amounts acceptable to all parties hereto;

 

e.FDCT and Alchemy to be valued at $35 million and $350 million, or in its discretion, FDCT may obtain an opinion from a qualified financial adviser as to the fairness of the Merger and related transactions from a financial point of view;

 

f.FDCT obtaining at least a $21 million debt facility directly qualified financial institution for the combined entity, which has a proforma $30,000,000 cash on hand, over $12,000,000 EBIT, and three-year CAGR of 100% and

 

g.Each party’s completion and satisfaction with the result of its due diligence investigations are within the sole discretion of such party to determine whether the results of the due diligence investigations are satisfactory.
   
 h.Transaction is subject to regulatory approvals as per the regulatory status of each entity.

 

10.Confidentiality/ Exclusive Dealings:

 

The parties shall keep the existence of this LOI and its terms confidential, except as required by law. They shall not disclose the same to any third party except to investors, consultants, accountants, lawyers, business advisers, and financing sources necessary to evaluate or consummate the proposed transaction contemplated hereby, to the extent that such third parties also agree to keep such information confidential except to the extent required by law.

 

For 90 days from the execution of this LOI, none of FDCT, their respective boards of directors or, other governing bodies, or their attorneys or agents shall negotiate with other parties concerning the matters that are the subject of this LOI.

 

11.Fees and Costs

 

Each party hereto shall bear its costs and expenses, including legal fees, consulting fees, and travel expenses, incurred in connection with the transactions contemplated hereby.

 

12.Termination

 

The parties shall use commercially reasonable efforts to agree on and enter into the Definitive Agreement. Either party may terminate this LOI and the negotiations concerning the transactions contemplated hereby by providing written notice to the other party if the parties have not entered into the Definitive Agreements on or before October 31, 2023. This LOI shall terminate on the execution of the Definitive Agreements. Except for Sections 8 (Confidentiality/Exclusive Dealings) and 9 (Fees and Costs) and Section 10, this LOI is not intended to (and will not) be a binding agreement or offer, and this LOI will not give rise to any right or obligation based on any legal or equitable theory (including any right to continue negotiations or to negotiate in good faith). If any party brings an action to interpret or enforce this LOI or for damages for any breach of this LOI, the prevailing party in any such action shall be entitled to reasonable attorneys’ fees and court costs in addition to all other recovery, damages, and costs.

 

[SIGNATURE PAGE TO FOLLOW]

 

4
 

 

Please execute this LOI in the space provided to evidence your agreement to its terms. If this LOI is not fully executed and delivered by September 30, 2023, it will be of no force or effect. This LOI may be executed in counterparts, each of which shall be deemed an original, but all shall constitute one instrument. Delivery of an executed counterpart of a signature page to this LOI by facsimile shall be as effective as delivery of a manually executed counterpart of this LOI.

 

On behalf of Alchemy Markets DMCC, Alchemy Prime Ltd., and Alchemy Markets Ltd.:
     
/s/ Gope S. Kundnani    
Gope S. Kundnani    
Director    
     
On behalf of FDCTech, Inc.    
     
/s/ Mitchell M. Eaglstein    
Mitchell M. Eaglstein    
Director, CEO    

 

5

 

 

Exhibit 99.1

 

Shape

Description automatically generated with medium confidence

 

FDCTech Signs a Binding Letter of Intent to Merge with Alchemy Group

 

The Company plans to acquire 100% of Alchemy Markets DMCC (UAE), 100% of Alchemy Prime Ltd. (UK), and the remaining 49.90% of Alchemy Markets Ltd. (Malta).

 

Post-merger, FDCTech shall provide global institutional liquidity and multi-asset trading solutions backed by its proprietary, regulatory-grade technology.

 

Irvine, CA: September 28, 2023, FDCTech, Inc. (“FDC” or the “Company,” OTCQB: FDCT), a fintech-driven company specializing in buying and integrating small to mid-size legacy financial services companies, today announced the legally binding agreement with Alchemy Group where the Company will acquire 100% of Alchemy Markets DMCC (Alchemy UAE), 100% of Alchemy Prime Ltd. (Alchemy UK), and the remaining 49.90% of Alchemy Markets Ltd. (Alchemy Malta), collectively known as Alchemy Group. The Company will issue 1,700,000 shares of its Series B Preferred stock, or such other number of shares that the parties agree upon to shareholder(s) of Alchemy Group, for the acquisition. Upon finalizing the merger, the existing management team and board of directors will continue to oversee and manage the Company’s operations. This transaction is the result of extensive negotiations commencing in September 2022.

 

The Company aims to establish a premier online trading and investment platform, targeting the European, Asian, and Australian markets. This multi-faceted acquisition strategy marks a pivotal milestone in the Company’s operational history. The Company is firmly convinced that this acquisition serves the best interests of its shareholders as described below:

 

Diversification of Services:

 

Alchemy Markets DMCC: Primarily trades for proprietary accounts on regulated exchanges as an OTC market participant and liquidity provider for small to medium-sized online brokers in certain situations.

 

Alchemy Prime (UK): Financial services to brokers, hedge funds, and other institutional clients in an efficient, low-cost environment regulated by the UK’s Financial Conduct Authority (FCA).

 

Alchemy (Malta): Retail online brokerage services regulated by the Malta Financial Services Authority (MFSA).

 

Positive Cash Flow:

 

Alchemy Group’s impressive financial performance, with over $22 million in audited revenues and a net income surpassing $12 million for fiscal 2022, should bolster the Company’s financial standing and profitability.

 

Solid Financial Position:

 

Alchemy Group’s robust balance sheet, with over $20 million in net financial assets, ensures the Company has financial stability and high creditworthiness.

 

Geographical Expansion:

 

Alchemy Group’s diverse locations, spanning Europe, the Middle East, and other Asian regions, allow the Company to expand its global footprint, catering to a wider and more diverse clientele.

 

1
 

 

Synergy and Integration:

 

The combined expertise of FDCTech and the Alchemy Group can lead to operational efficiencies, cost savings, and the potential for innovative product and service offerings. The combined team members have financial services experience from 1978 and have successfully built nimble trading infrastructures on all major financial markets from Asia to North America.

 

Competitive Edge:

 

The acquisition would position the Company’s regulatory grade technology and liquidity solutions as a key player for small to medium-sized brokers often overlooked by large financial institutions, giving it a competitive edge over other industry players.

 

The Company is conducting the transaction with its in-house team, with Barnett and Linn serving as the legal adviser to the Company. The Company expects to close the transaction in the next thirty days.

 

Please visit our SEC filings or the Company’s website for more information on the full results, management’s plan, and the binding letter of intent.

 

Alchemy Markets DMCC

 

Alchemy Markets DMCC is registered in the Dubai Multi Commodities Centre, Dubai -United Arab Emirates (License no. DMCC-344359), as a Free Zone Company under the UAE Federal Commercial Company Law on September 28, 2017. Alchemy Markets DMCC primarily trades for proprietary accounts on regulated exchanges as an OTC market participant and liquidity provider for small to medium-sized online brokers in certain situations.

 

Alchemy Markets Ltd. (previously known as NSFX Ltd.)

 

Alchemy Markets (the “Company”) is a limited liability company registered under the Companies Act, Cap — 386 of the Laws of Malta, with registration number C 56519. The Malta Financial Services Authority regulates Alchemy Markets with a License Number IS/56519. Alchemy Markets is authorized to deal on its account as a Category 3 licensed entity by the MFSA, receive and transmit orders for retail and professional clients, and hold and control clients’ money and assets. Alchemy Markets offers trading platform services in English, French, German, Italian, and Arabic, allowing customers to trade currencies, commodities, equities, and other derivatives in real time.

 

Alchemy Prime Limited

 

Alchemy Prime Limited is authorized and regulated by the Financial Conduct Authority, reference number 612233, in the UK. As an award-winning broker, Alchemy Prime has spent years building a deep liquidity network and investing in its pricing technology. Alchemy Prime’s experience and vast network of counterparties position it to deliver customized services to brokers, hedge funds, and other institutional clients in an efficient, low-cost environment. Alchemy Prime offers strong liquidity pools, global reach, exceptionally competitive commission rates, and leverage terms. The trading and registered address is Unit 1, 74 Back Church Lane, London E1 1LX, a company registered in England and Wales with Companies House, reference number 08698974.

 

AD Advisory Services Pty Ltd.

 

AD Advisory Services Pty Ltd. – AFSL No. 237058, an independent specialist dealer group, provides licensing solutions for select education and compliance-focused financial advisors & accountants. ADS’ dedicated management team are qualified financial planners that service metro and regional practices around Australia.

 

FDCTech, Inc.

 

FDCTech, Inc. (“FDC”) is a US-based leading developer of regulatory-grade financial technology infrastructure designed to serve the financial markets of the future. Our clients include regulated and OTC brokerages and prop and algo trading firms of all sizes in forex, stocks, CFDs, commodities, indices, ETFs, precious metals, and other asset classes. Our growth strategy involves acquiring and integrating small to mid-size legacy financial services companies, leveraging our proprietary trading technology and liquidity solutions to deliver exceptional value to our clients.

 

Press Release Disclaimer

 

This press release’s statements may be forward-looking statements or future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets, and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. The Company does not make any representation or warranty, express or implied, regarding the accuracy, completeness, or updated status of such forward-looking statements or information provided by the third party. Therefore, in no case will the Company and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or any related damages.

 

Contact Media Relations

 

FDCTech, Inc.

info@fdctech.com

www.fdctech.com

+1 877-445-6047

200 Spectrum Center Drive, Suite 300,

Irvine, CA, 92618

 

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