Shareholders of crypto treasury firm Chaince Digital Holdings are voting on proposals to increase the company's authorized ordinary shares from 1 billion to 20 billion and grant the board broad reverse-split authority. The vote follows the recent establishment of an at-the-market program allowing up to $300 million in stock sales.
Details of the Share and Split Proposals
Proposal Three seeks to create 19 billion additional authorized shares, raising the total ceiling to 20 billion. Authorized shares represent the maximum amount available for issuance under governing documents, differing from currently outstanding shares.
Proposal Four would grant the board authority to conduct one or more reverse splits through the third anniversary of the August meeting. Individual splits could range from 2-for-1 to 200-for-1, subject to a cumulative ratio cap of 4,000-for-1. The board retains discretion over whether and when to exercise this authority.
Both proposals require an affirmative simple majority of votes cast by eligible ordinary shares represented in person or by proxy.
At-the-Market Program and Potential Dilution
The capital vote coincides with Chaince's prospectus supplement for up to $300 million of ordinary-share sales through agent or principal H.C. Wainwright. Wainwright is under no obligation to sell a specific volume or dollar amount, and actual issuance depends on future sales under the program.
A prospectus example assuming 85,227,272 shares sold at $3.52 would bring the total share count to 195,231,072, compared to 110,003,800 shares outstanding as of August 17. This scenario estimates a $1.71 per-share net-tangible-book-value dilution to new investors, excluding shares available under equity plans and warrants.
Chaince stated it may use proceeds from the stock facility for working capital and general corporate purposes. Additionally, the company outlined a preliminary $800 million Bitcoin reserve plan, though its specific funding sources and financing instruments remain undetermined.
