Tokens.com Inc. (“
Tokens”) and COIN Hodl Inc.
(TSXV: COIN) (“
COIN”) are pleased to announce that
they have executed a definitive transaction agreement dated March
9, 2021 (the “
Definitive Agreement”), which,
subject to the satisfaction of certain conditions, including
receipt of all necessary stock exchange approvals, will result in
the reverse takeover of COIN by Tokens (the
“
Transaction”). As previously announced, in
connection with the Transaction, Tokens is undertaking a brokered
and non-brokered private placement offering (the
“
Concurrent Financing”) of subscription receipts
of Tokens (each, a “
Subscription Receipt”), which
is expected to close on or about March 10, 2021.
The Transaction
The parties have made significant progress with
respect to due diligence, completion of Tokens’ audited financial
statements and the drafting of a filing statement in connection
with the Transaction.
Pursuant to the terms of the Definitive
Agreement, the Transaction will be structured as a “three-cornered
amalgamation” involving COIN, a wholly-owned subsidiary of COIN
(“COIN Subco”) and Tokens (the
“Amalgamation”). In connection with the closing of
the Transaction (the “Closing”), it is expected
that:
- COIN will
distribute to the pre-Closing COIN Shareholders, on a pro-rata
basis as a tax-free return of capital, an approximate amount
between $1,600,000 and $3,400,000 in cash and all of the shares of
Abaxx Technologies Inc. held by COIN;
- Tokens will
subdivide all of the then issued and outstanding class A common
shares of Tokens (each, a “Tokens Share”) on the
basis of approximately 3.133 new Tokens Shares for each existing
Tokens Share (the “Split”);
- COIN will
consolidate all of the then issued and outstanding common shares of
COIN (each, a “COIN Share”) on a consolidation
ratio that will result in there being such number of COIN Shares
outstanding immediately prior to the Closing (after giving effect
to any COIN option exercises that occur prior to the Closing) as
have an aggregate value of $1,050,000 based on the price (on a
post-Split basis) per Subscription Receipt under the Concurrent
Financing, which, as at the date of this Agreement, is expected to
be an aggregate of 1,399,851 COIN Shares based on an expected
post-Split price of $0.75 per Subscription Receipt (the
“Consolidation”);
- Tokens and COIN
Subco will amalgamate under the Business Corporations Act (Ontario)
with the amalgamated company to be named “Tokens.com Capital
Corp.”, or such other name as may be determined by Tokens, and will
be a wholly-owned subsidiary of COIN;
- COIN will
change its name to “Tokens.com Corp.”, or such other name as
determined by Tokens (on a post-Closing basis, the
“Resulting Issuer”);
- COIN will have
at least $360,000 in available cash and no liabilities; and
- each Tokens
Share will be cancelled, and the former holders of Tokens Shares
will receive one post-Consolidation COIN Share (each, a
“Resulting Issuer Share”) for each Tokens Share
held.
The Resulting Issuer will carry on the business
of Tokens, which is the operation of technology that secures next
generation blockchain networks through “proof-of-stake” technology
that supports the growth of decentralized finance applications,
which are built on top of blockchains. The Closing is expected to
occur in Q2 2021, and no later than 120 days from the closing of
the Concurrent Financing.
Assuming completion of the Concurrent Financing
and the Transaction, it is expected that, following the Closing,
the Resulting Issuer will have approximately 75.0 million Resulting
Issuer Shares outstanding, with former Tokens' shareholders holding
approximately 40.3 million Resulting Issuer Shares, representing
approximately 54% of the Resulting Issuer Shares, and, together
with subscribers under the Concurrent Financing, holding
approximately 98% of the Resulting Issuer Shares.
Pursuant to Section 4.1 of Policy 5.2 of the TSX
Venture Exchange’s Corporate Finance Manual (the
“Manual”), COIN does not intend to seek the
approval of the shareholders of COIN for the Transaction because:
(i) the Transaction is not a “Related Party Transaction” (as
defined in Policy 1.1 of the Manual), and no other circumstances
exist which may compromise the independence of COIN or other
interested parties (including the directors and officers of COIN)
with respect to the Transaction; (ii) based on COIN’s business
operations over the previous 12 months and the state of COIN’s
asset base, COIN is without active operations; (iii) COIN is not
and will not be subject to a cease trade order or otherwise be
suspended from trading on completion of the Transaction; and (iv)
approval of the COIN shareholders for the Amalgamation is not
required under applicable corporate or securities laws (although
COIN shareholder approval will be sought for certain ancillary
matters including the proposed name change of COIN and
consolidation of the COIN Shares).
Selected Consolidated Financial
Information of Tokens
The following table sets out selected financial
information for Tokens as at December 31, 2020:
Item |
As at and for the period from incorporation on November 9,
2020 until December 31,
2020(US$)(unaudited) |
Total Assets |
2,332,003 |
Total Liabilities |
43,872 |
Shareholders’ Equity |
2,288,131 |
Income per common share – basic and diluted |
$(0.01) |
Revenue |
5,932 |
Expenses |
137,489 |
Comprehensive income |
(11,690) |
Directors and Officers of the Resulting
Issuer
Following the Closing, the proposed directors,
officers and other insiders of the Resulting Issuer are expected to
be:
Andrew Kiguel – Chief Executive Officer and
Director
Mr. Kiguel is an accomplished executive with
leadership experience in Canadian capital markets, corporate
governance and entrepreneurship. He co-founded Tokens and has
served as its CEO and as a director since incorporation. Prior to
co-founding Tokens, he was the co-founder, CEO, President and a
director of Hut 8 Mining Corp. (“Hut 8”), one of
the largest publicly-listed bitcoin miners in the world. Prior to
that, he spent over 18 years at GMP Securities LP in investment
banking, with his most recent title as a Managing Director.
Kyle Appleby – CFO and Secretary
Mr. Appleby has been providing chief financial
officer services to public and private companies since 2007. He
assists companies with financial reporting and controls,
governance, operations, regulatory compliance and taxation. He has
served as CFO of Tokens since December 1, 2020 and previously
served as CFO of Nuinsco Resources Inc. from May 2015 to February
2021. Prior to 2007, Mr. Appleby worked for several public
accounting firms in Canada. He is a member in good standing of the
Chartered Professional Accountants of Canada and the Chartered
Professional Accountants of Ontario.
Trevor Koverko – Chief Technology Officer
Mr. Koverko co-founded Tokens and has served as
its Chief Technology Officer and as a director since incorporation.
In this capacity, he has been responsible for development of the
Tokens' technology platform and securing relationships with third
party contractors. Mr. Koverko is a prominent blockchain founder
and investor, seeding projects like Ethereum and Block One, and was
a founder of Polymath Inc., a leading security token network that
facilitates the creation, issue and management of tokens on the
blockchain.
Deven Soni – Chief Operating Officer
Mr. Soni is an experienced operations executive
and investor. Prior to joining Tokens as Chief Operating Officer,
effective as of January 1, 2021, he co-founded Sprayable Inc., the
maker of what are believed to be the world’s first topical caffeine
and melatonin sprays, in 2013. He spent several years as a
technology-focused investor at Goldman Sachs and Highland Capital
Partners, where he helped fund several top technology businesses.
He is the co-founder of Wired Investors, a private equity fund
focused on small cap buyouts. He is also a founding director of
Polymath and an active investor in the digital assets space.
Andrew D’Souza – Director
Mr. D’Souza is the co-founder and CEO of
Clearbanc, the biggest ecommerce investor in the world. Clearbanc
has invested $1 billion into 2,200+ ecommerce and software
companies. Mr. D'Souza has raised hundreds of millions of dollars
in venture capital and is an adviser and investor to companies such
as WealthSimple, Properly and Tulip Retail. Prior to Clearbanc, Mr.
D'Souza was the president of Nymi, a wearable platform focused on
identity and security, and the Chief Operating Officer of education
startup, TopHat.
Frederick T. Pye – Director
Mr. Pye has been the President and CEO of 3iQ
Corp., a leading Canadian digital asset fund manager, since July
2012. Previously, he was a founder, and the President and CEO, of
Argentum Management and Research Corporation, a company dedicated
to managing and distributing quantitative investment portfolios,
including the first long-short mutual fund in Canada, as well as
Senior Vice-President and National Sales Manager at Fidelity
Investments Canada. Mr. Pye also held various positions with
Guardian Trust Company, which listed the first gold, silver and
platinum certificates on the Montreal Exchange. He holds a Masters
Degree in Business Administration from Concordia University.
Jimmy Vaiopoulos – Director
Mr. Vaiopoulos is the CFO and former interim CEO
of Hut 8, one of the first and largest public bitcoin miners in the
world. Mr. Vaiopoulos was the CFO of UGE International Ltd. and
with KPMG in both their advisory and audit practices.
Insiders
Upon completion of the Transaction, Andrew
Kiguel (proposed CEO and director), Trevor Koverko (proposed Chief
Technology Officer), Kyle Appleby (proposed CFO and secretary),
Deven Soni (proposed COO), Frederick Pye (proposed director), Jimmy
Vaiopoulos (proposed director) and Andrew D’Szoua (proposed
director) are expected to be insiders of the Resulting Issuer by
virtue of them being directors or officers of the Resulting
Issuer.
Additional information with respect to the
Transaction and the Concurrent Financing can be found in news
releases dated January 25, 2021, February 2, 2021, February 18,
2021 and February 25, 2021, which are available on COIN’s SEDAR
profile at www.sedar.com.
None of the securities to be issued in
connection with the Transaction or the Concurrent Financing have
been, or will be, registered under the United States Securities Act
of 1933, as amended (the “1933 Act”), or any state
securities laws, and may not be offered or sold within the United
States or to any U.S. Person (as defined in Regulation S under the
1933 Act) unless registered under the 1933 Act and applicable state
securities laws or an exemption from such registration is
available. This news release does not constitute an offer to sell
or a solicitation of an offer to sell any securities in any
jurisdiction where such offer or solicitation would be unlawful,
including the United States
Completion of the Transaction is subject
to a number of conditions, including but not limited to, acceptance
of the TSX Venture Exchange (the “Exchange”) and if applicable,
disinterested shareholder approval. Where applicable, the
Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as
disclosed in the management information circular or filing
statement to be prepared in connection with the Transaction, any
information released or received with respect to the Transaction
may not be accurate or complete and should not be relied upon.
Trading in the securities of COIN should be considered highly
speculative.
The Exchange has in no way passed upon
the merits of the Transaction and has neither approved nor
disapproved the contents of this news release.
For further information, please contact:
COIN Hodl Inc.Ben CubittChief Executive
OfficerTelephone: (416) 479-5407Email: ir@coinhodlinc.com |
Tokens.com Inc.Andrew Kiguel, Chief Executive
OfficerEmail: contact@tokens.comMedia Contact:Megan Stangl – Talk
Shop MediaEmail: Megan@talkshopmedia.com |
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
ABOUT TOKENS.COM INC.
Tokens.com is a Proof-of-Stake (PoS) technology
company that powers digital asset transactions, including
Decentralized Finance (DeFi) applications. Its founding team
includes blockchain entrepreneurs, Andrew Kiguel, co-founder and
former CEO of Hut 8 Mining Corp, one of North America’s largest
bitcoin miners, and Trevor Koverko, founder and CEO of Polymath,
one of the world’s leading security token platforms. Tokens
provides investors with access and exposure to PoS, a sustainable
process that powers digital asset transactions.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING INFORMATION:
This news release contains “forward-looking
information” and “forward-looking statements” (collectively,
“forward-looking statements”) within the meaning of applicable
Canadian securities laws. All statements other than statements of
historical fact are forward-looking statements, and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance often using phrases such
as “expects”, “anticipates”, “plans”, “budget”, “scheduled”,
“forecasts”, “estimates”, “believes” or “intends”, or variations of
such words and phrases, or stating that certain actions, events or
results “may” or “could”, “would”, “might” or “will” be taken to
occur or be achieved, are not statements of historical fact and may
be forward-looking statements. In this news release,
forward-looking statements relate, among other things, to the terms
and conditions of the Transaction, the Concurrent Financing,
the Consolidation, the Split and the Return of Capital; the current
business of Tokens; the business and operations of COIN and Tokens
following the Closing; and expected directors and officers of the
Resulting Issuer following the Closing. Forward-looking statements
are necessarily based upon a number of estimates and assumptions
that, while considered reasonable, are subject to known and unknown
risks, uncertainties and other factors which may cause actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors
include: general business, economic, competitive, political and
social uncertainties; delay or failure to receive any necessary
board, shareholder or regulatory approvals, including the approval
of any applicable regulatory authority; the risk that a regulatory
authority may not approve the Transaction on the terms proposed or
at all; the risk that the escrow release conditions related to the
subscription receipts sold under the Concurrent Financing may not
be satisfied prior to the applicable deadline; that factors may
occur which impede or prevent Tokens’ future business plans; and
other factors beyond the control of COIN and Tokens. There can be
no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on the forward-looking statements and
information contained in this news release. The terms and
conditions of the Transaction and the Concurrent Financing may
change based on the receipt of tax, corporate and securities law
advice for each of the parties. Except as required by law, COIN and
Tokens assume no obligation to update the forward-looking
statements, whether they change as a result of new information,
future events or otherwise, except as required by law.
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