Tokens.com and COIN Hodl Announce Proposed Reverse Takeover

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TORONTO, Jan. 25, 2021 (GLOBE NEWSWIRE) — COIN Hodl Inc. (TSXV: COIN) (“COIN”) is happy to announce that it has entered right into a letter of intent dated efficient January 21, 2021 (the “LOI”) with Tokens.com Inc. (“Tokens”), a privately held Ontario company. The LOI units out the final phrases and situations pursuant to which COIN has agreed to accumulate all the issued and excellent securities of Tokens in change for securities of COIN (the “Transaction”).

The Transaction will outcome within the reverse takeover of COIN by Tokens, as contemplated underneath the insurance policies of the TSX Enterprise Trade (the “Trade”). COIN and Tokens are at arm’s size and the Transaction is not going to be a non-arm’s size transaction underneath the insurance policies of the Trade. On closing of the Transaction (the “Closing”), it’s anticipated that the Ensuing Issuer shall be listed as a Expertise Issuer on the Trade and its enterprise shall be that of Tokens.

Description of Tokens

Tokens is an organization that makes use of Proof-of-Stake (“PoS”) or staking know-how to offer safety and transaction validation companies to digital belongings which are constructed on blockchain know-how. Tokens offers its staking companies to digital belongings within the cryptocurrency sector that builders use to jot down sensible contracts and decentralized finance (“DeFi”) purposes, corresponding to Ethereum 2.0. DeFi is a brand new class of monetary purposes that gives customers with automated and clear monetary companies, corresponding to borrowing and lending, with out the necessity for monetary establishments. PoS is inextricably linked to DeFi, with staking offering the infrastructure and safety wanted to course of transactions and safe blockchains. Administration of Tokens believes that as DeFi purposes turn into mainstream sooner or later, the necessity for Tokens’ staking companies will commensurately improve.

Tokens has deployed capital into staking blockchain based mostly digital belongings. Tokens will get compensated for offering its staking companies within the underlying digital asset it’s staking. At the moment, the corporate’s gross staking compensation, expressed as a proportion of deployed capital, is averaging roughly 12% annualized. Tokens may profit from the potential appreciation within the underlying digital asset stock used for staking. Staking is a subsequent technology know-how utilized by many digital belongings, corresponding to Ethereum 2.0, to safe their networks. Not like conventional cryptocurrency mining, which is used to mine older blockchains like Bitcoin and Ethereum 1.0, staking is just not reliant on specialised {hardware} that may quickly turn into outdated, and doesn’t devour huge quantities of electrical energy. As an alternative, staking know-how makes use of digital asset possession and clever software program to make digital asset transactions safe, dependable and sustainable.

Tokens has entered into agreements with business leaders, Polychain Labs, Bison Trails and Staked, to handle its staking operations and supply the underlying know-how and companies. Tokens holds the vast majority of its digital belongings in Coinbase Custody, a SOC 1/ SOC 2 licensed digital asset custodian, which claims to carry $20bn+ of digital belongings in segregated cold-storage. A few of Tokens’ digital belongings that can not be custodied at Coinbase Custody (e.g., if Coinbase doesn’t assist the custodying or staking of a specific digital asset) are custodied by Tokens internally, utilizing its in depth safety protocols and inner controls.

Tokens’ founding group consists of blockchain entrepreneurs, Andrew Kiguel, co-founder and former CEO of Hut 8 Mining Corp., certainly one of North America’s largest bitcoin miners, and Trevor Koverko, founder and CEO of Polymath, one of many world’s main safety token platforms. Tokens was fashioned in collaboration with Polychain Labs, an affiliate of Polychain Capital, which is among the largest cryptocurrency enterprise capital corporations in Silicon Valley. In December 2020, Tokens carried out a non-public placement which included strategic investments by Bitbuy Restricted, First Block Capital, HIVE Blockchain Applied sciences Ltd., PowerOne Capital Group, Matthew Roszak (the co-founder and Chairman of Bloq, Inc.), and Olaf Carlson-Wee (the founder and CEO of Polychain Capital).

Phrases of the Transaction

The Transaction is anticipated to proceed by means of a three-cornered amalgamation, pursuant to which Tokens will merge with a wholly-owned Ontario subsidiary of COIN fashioned for the needs of finishing the Transaction, following which COIN (following the Closing, the “Ensuing Issuer”) will change its title to “Tokens.com Inc.”, or such different title as could also be decided by Tokens (the “Identify Change”), and proceed the enterprise of Tokens. The ultimate transaction construction shall be decided after the events have thought-about relevant tax, securities and accounting issues.

The events intend to enter right into a definitive settlement in respect of the Transaction (the “Definitive Settlement”) inside 45 days of the date of the LOI, or such different date as could also be agreed to by COIN and Tokens. Previous to the Closing, it’s anticipated that the issued and excellent widespread shares within the capital of COIN (every, a “COIN Share”) shall be consolidated (the “Consolidation”) such that, instantly previous to the Closing, the variety of COIN Shares excellent shall be equal to $1,000,000 divided by the value at which subscription receipts are bought underneath the Non-public Placement (as outlined under). The Consolidation ratio shall be included in a subsequent information launch.

It’s anticipated that sure Ensuing Issuer Shares to be issued to holders of Tokens Shares shall be topic to lock-up preparations, pursuant to which 25% will turn into freely tradeable on the Closing and 25% will turn into freely tradeable on every of the primary, second and third months following the Closing. As well as, sure Ensuing Issuer Shares shall be topic to the escrow necessities of the Trade.

Completion of the Transaction shall be topic to varied situations, together with:

• the events coming into into the Definitive Settlement;
• the events acquiring all required administrators’, shareholders’, regulatory and third-party consents, together with the conditional approval of the Trade, for the Transaction;
• approval of all issues put ahead by COIN on the COIN Assembly (as outlined under);
• completion of the Non-public Placement;
• completion of the Consolidation;
• completion of the Return of Capital (as outlined under);
• compliance with relevant itemizing necessities of the Trade; and
• on the Closing, the liabilities and obligations (contingent or in any other case) of COIN being zero, and COIN having at the very least $360,000 in obtainable money.

It’s anticipated that, previous to the Closing, COIN will distribute, as a tax-free return of capital to its shareholders, on a professional rata foundation, between roughly $1,600,000 and $2,400,000 in money (relying pre-distribution choice workout routines and bills of the distribution), and 1,011,250 shares of Abaxx Applied sciences Inc., which symbolize all the widespread shares within the capital of Abaxx held by COIN (the “Return of Capital”), on phrases to be agreed, in writing, by Tokens, performing moderately, and in compliance with all relevant securities legal guidelines.

Tokens Non-public Placement

Previous to the Closing, Tokens expects to finish a non-public placement financing of subscription receipts, to boost minimal gross proceeds of $15,000,000 (the “Non-public Placement”), on phrases to be decided.

Not one of the securities to be issued in reference to the Transaction or the Non-public Placement have been, or shall be, registered underneath the US Securities Act of 1933, as amended (the “1933 Act”), or any state securities legal guidelines, and will not be supplied or bought inside the US or to any U.S. Particular person (as outlined in Regulation S underneath the 1933 At) except registered underneath the 1933 Act and relevant state securities legal guidelines or an exemption from such registration is offered. This press launch doesn’t represent a suggestion to promote or a solicitation of a suggestion to promote any securities in any jurisdiction the place such provide or solicitation could be illegal, together with the US.

COIN Shareholder Assembly

Previous to the Closing, COIN will name a gathering of its shareholders (the “COIN Assembly”) for the aim of approving, amongst different issues:

• the Identify Change;
• the Consolidation;
• the adoption of a brand new omnibus fairness incentive plan in kind and substance passable to Tokens, performing moderately, and the Trade;
• the election, efficient as of the Closing, of such new administrators as decided by Tokens, performing moderately, and, if required, a rise within the variety of the administrators and an modification to COIN’s articles to allow the board of administrators to nominate as much as one-third of the variety of extra administrators as was elected on the final shareholder assembly;
• to the extent requested by Tokens, the adoption of recent bylaws, together with an advance discover bylaw, in kind and substance passable to Tokens, performing moderately; and
• if required underneath relevant securities legal guidelines, the Return of Capital.

Administration and Administrators of the Ensuing Issuer

On the Closing, it’s anticipated that each one present administrators and officers of COIN will resign and get replaced by nominees of Tokens. It’s anticipated that the board of administrators of the Ensuing Issuer shall be fastened at 5 administrators, which is able to embrace Andrew Kiguel and such different administrators as could also be decided by Tokens previous to the Closing. Biographical info relating to Mr. Kiguel and Tokens’ officers is about out under:

Andrew Kiguel – Co-Founder and Chief Govt Officer

Mr. Kiguel co-founded Hut 8 Mining Corp, certainly one of North America’s largest bitcoin miners, for which he served as CEO till April 2020. Previous to becoming a member of Hut 8, Mr. Kiguel performed an integral position, for greater than 18 years, within the Actual Property and Retail Capital Markets teams of GMP Securities, together with most not too long ago as Managing Director, Funding Banking, and was a key member of GMP’s Blockchain Funding Banking Group. Mr. Kiguel has in depth expertise in offering funding banking and M&A advisory companies to quite a few private and non-private entities.

Trevor Koverko – Co-Founder and Chief Expertise Officer

Mr. Koverko is a outstanding blockchain founder and investor, seeding initiatives corresponding to Ethereum and Block One and is the founding father of Polymath, the main safety token platform. Previous to founding Polymath, he based and bought two profitable tech startups and was drafted to the New York Rangers (NHL).

Deven Soni – Chief Working Officer

Mr. Soni is an skilled operations govt and investor. He spent a number of years as a technology-focused investor at Goldman Sachs and Highland Capital Companions, the place he performed an integral position in funding a number of prime know-how companies. Mr. Soni can be the co-founder of Wired Traders (a non-public fairness fund centered on small cap buyouts), founding director of Polymath, and an energetic investor within the digital belongings house.

Kyle Appleby – Chief Monetary Officer

Mr. Appleby spent the primary 10 years of his profession working in public accounting, the place he supplied each audit and advisory companies to personal corporations and funding funds. In 2007, Mr. Appleby left the world of public accounting to concentrate on offering administration and accounting companies to public corporations throughout a wide range of industries, together with crypto-currency, know-how, junior mining, meals manufacturing, agriculture, hashish and others. Mr. Appleby has been the chief monetary officer of corporations listed in Canada, the US and London, UK, and has in depth expertise in monetary reporting, IPOs, fund elevating and company governance.

Buying and selling in COIN Shares

Buying and selling in COIN Shares on the Trade has been halted in compliance with the insurance policies of the Trade in reference to this announcement. Buying and selling in COIN Shares will stay halted pending the evaluation of the proposed Transaction by the Trade and satisfaction of the situations of the Trade for resumption of buying and selling. It’s possible that buying and selling within the COIN Shares is not going to resume previous to the Closing.

Sponsor

The Transaction shall be topic to the sponsorship necessities of the Trade except a waiver or exemption from the sponsorship requirement is offered. If required, a sponsor shall be recognized at a later date and shall be introduced in a subsequent information launch. COIN intends to use for a waiver of the sponsorship requirement in reference to the Transaction.

Additional Info

A abstract of great monetary info with respect to Tokens, in addition to the anticipated administrators, officers and different insiders of the Ensuing Issuer following the Closing, shall be included in a subsequent information launch.

Additional particulars in regards to the proposed Transaction, the Non-public Placement and the Ensuing Issuer shall be supplied within the disclosure doc to be ready and filed in reference to the Transaction. Traders are cautioned that, besides as disclosed in such disclosure doc, any info launched or acquired with respect to the Transaction will not be correct or full and shouldn’t be relied upon.

All info contained on this information launch with respect to COIN or Tokens, as relevant, was supplied by administration of such social gathering and has not been independently verified by the opposite social gathering.

Completion of the Transaction is topic to a lot of situations, together with Trade acceptance and, if relevant, disinterested shareholder approval. The place relevant, the Transaction can’t shut till the required shareholder approval is obtained. There will be no assurance that the Transaction shall be accomplished as proposed or in any respect.

Traders are cautioned that, besides as disclosed within the administration info flow into or submitting assertion to be ready in reference to the Transaction, any info launched or acquired with respect to the Transaction will not be correct or full and shouldn’t be relied upon. Buying and selling within the securities of COIN must be thought-about extremely speculative.

The Trade has by no means handed upon the deserves of the proposed Transaction and has neither authorized nor disapproved the contents of this press launch.

For additional info, please contact:

Neither TSX Enterprise Trade nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Trade) accepts duty for the adequacy or accuracy of this launch.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

This information launch comprises “forward-looking info” and “forward-looking statements” (collectively, “forward-looking statements”) inside the that means of relevant Canadian securities legal guidelines. All statements aside from statements of historic reality are forward-looking statements, and are based mostly on expectations, estimates and projections as on the date of this information launch. Any assertion that includes discussions with respect to predictions, expectations, beliefs, plans, projections, targets, assumptions, future occasions or efficiency (typically utilizing phrases corresponding to “expects”, “anticipates”, “plans”, “price range”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends”, or variations of such phrases and phrases, or stating that sure actions, occasions or outcomes “might” or “might”, “would”, “may” or “will” be taken to happen or be achieved, should not statements of historic reality and could also be forward-looking statements. On this information launch, forward-looking statements relate, amongst different issues, to: the phrases and situations of the proposed Transaction; the phrases of the proposed Non-public Placement; the present enterprise of Tokens; the enterprise and operations of COIN and Tokens following the Closing; and anticipated administrators and officers of the Ensuing Issuer following the Closing. Ahead-looking statements are essentially based mostly upon a lot of estimates and assumptions that, whereas thought-about affordable, are topic to identified and unknown dangers, uncertainties and different components which can trigger precise outcomes and future occasions to vary materially from these expressed or implied by such forward-looking statements. Such components embrace: normal enterprise, financial, aggressive, political and social uncertainties; delay or failure to obtain any vital board, shareholder or regulatory approvals, together with the approval of the Trade; the danger that the Trade might not approve the Transaction; that components might happen which impede or forestall Tokens’ future enterprise plans; and different components past the management of COIN and Tokens. There will be no assurance that such statements will show to be correct, as precise outcomes and future occasions might differ materially from these anticipated in such statements. Accordingly, readers mustn’t place undue reliance on the forward-looking statements and data contained on this information launch. The phrases and situations of the Transaction and the Non-public Placement might change based mostly on the receipt of tax, company and securities legislation recommendation for every of the events. Besides as required by legislation, COIN and Tokens assume no obligation to replace the forward-looking statements, whether or not they change on account of new info, future occasions or in any other case, besides as required by legislation.