SideChannel Seeks 98% Cut in Authorized Shares to Slash Delaware Franchise Tax
SDCH sits 42% above its 52-week low of $1.29 on light trading volume (0.4× avg).
Summary
To avoid a surge in Delaware franchise taxes, SideChannel proposes cutting authorized common shares from 681M to 13.1M — a cash-saving move for a company with only $311K in the bank.
Key Events · Corporate Governance and Compliance · SDCH
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98% Reduction in Authorized Shares Proposed
The board seeks to cut authorized common shares from 681,000,000 to 13,100,000 and preferred from 10,000,000 to 1,000,000, leaving 14.1M total authorized shares.
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Delaware Franchise Tax Savings
Without the reduction, annual franchise taxes would jump from $4,450 to ~$200,000; with it, taxes drop to ~$100,000 in 2026 and ~$4,000 in 2027, preserving cash.
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Cash Runway Pressure
As of May 2026, the company had only $311,000 in cash and a widening net loss, making the tax savings critical to extending operations.
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Special Meeting on September 23, 2026
Shareholders will vote on the proposal at a special meeting; the board recommends approval.
Analysis · SDCH · Technology
SideChannel is asking shareholders to approve a dramatic reduction in authorized shares — from 681 million to 13.1 million common and from 10 million to 1 million preferred. The primary aim is to slash Delaware franchise taxes, which would balloon from $4,450 in 2025 to an estimated $200,000 annually without the change. With only $311,000 in cash as of May 2026 and a recent net loss, the tax savings are critical to preserving runway. The reduction also addresses dilution concerns, though the company retains enough headroom for outstanding warrants, RSUs, and future needs. The special meeting is set for September 23, 2026.
At the time of this filing, SDCH was trading at $1.83 on OTC in the Technology sector, with a market capitalization of approximately $8.4M. The 52-week trading range was $1.29 to $9.70. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.