To address a bloated stock structure while facilitating a merger with Two Hands Corporation (TWOH) without a reverse split, GBT Technologies (GTCH) can utilize several alternative corporate restructuring strategies.
In late 2023, GBT's board specifically chose to cancel a planned reverse split, opting instead to increase authorized shares to 30 billion to provide the necessary "flexibility" for acquisitions like this one without a split.
1. Utilizing High Authorized Share Counts
By increasing its authorized shares to 30 billion, GBT has the legal "room" to issue the millions (or billions) of new shares required for the Two Hands acquisition without needing to consolidate its existing stock first.
Facilitating TWOH: GBT can issue new GTCH shares directly to TWOH shareholders as part of the proposed share-for-share transaction.
Result: This facilitates the merger but leaves the total share count extremely high (bloated), as it avoids the consolidation of a reverse split.
2. Stock Buybacks and Share Retirement
To "fix" the bloat after the merger is completed, the combined company could implement a share repurchase program.
Mechanism: GBT would use accumulated cash or future earnings from its transition into the Wertheim & Company merchant banking platform to buy its own shares from the open market.
Retirement: Once repurchased, these shares are typically canceled or retired, effectively reducing the number of outstanding shares without a reverse split ratio.
3. Strategic "Spin-Outs" or Asset Transfers
As GBT transitions into Wertheim & Company, it may choose to restructure by separating its technology IP from its banking operations.
Spin-Off: GBT could "spin off" its legacy technology patents into a separate, new subsidiary.
Dividend Distribution: Shares of this new subsidiary could be distributed to existing GTCH and former TWOH shareholders as a dividend. This creates value for shareholders in a "cleaner" structure while allowing the parent company to potentially reduce its own equity base through exchange offers.
4. Debt-for-Equity Conversions
Both companies have historically used debt-for-equity swaps to clean their balance sheets.
Facilitating the Merger: As part of the proposal, GBT intends to assume all TWOH debt.
Cleaning the Structure: Instead of issuing new shares to creditors, GBT could negotiate with existing major debt-holders to swap their debt for specialized "preferred stock" or other instruments that do not bloat the common share count seen by the public markets.
5. Rebranding and New Business Model
The pivot to the Wertheim & Company merchant banking model is intended to change the company's valuation metrics. By shifting from a "development-stage tech" firm to a "financial services" firm, the company aims to attract different types of investors who may be more comfortable with a high share count if the Earnings Per Share (EPS) and revenue from the new banking operations justify the structure.
Guess we're not worried about TWOH debt now huh😎🤣
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