Tokens.com and COIN Hodl Announce Proposed Reverse Takeover - Seite 2

Tokens has entered into agreements with industry leaders, Polychain Labs, Bison Trails and Staked, to manage its staking operations and provide the underlying technology and services. Tokens holds the majority of its digital assets in Coinbase Custody, a SOC 1/ SOC 2 certified digital asset custodian, which claims to hold $20bn+ of digital assets in segregated cold-storage. Some of Tokens’ digital assets that cannot be custodied at Coinbase Custody (e.g., if Coinbase does not support the custodying or staking of a particular digital asset) are custodied by Tokens internally, using its extensive security protocols and internal controls.

Tokens’ 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 was formed in collaboration with Polychain Labs, an affiliate of Polychain Capital, which is one of the largest cryptocurrency venture capital firms in Silicon Valley. In December 2020, Tokens conducted a private placement which included strategic investments by Bitbuy Limited, First Block Capital, HIVE Blockchain Technologies 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).

Terms of the Transaction

The Transaction is expected to proceed by way of a three-cornered amalgamation, pursuant to which Tokens will merge with a wholly-owned Ontario subsidiary of COIN formed for the purposes of completing the Transaction, following which COIN (following the Closing, the “Resulting Issuer”) will change its name to “Tokens.com Inc.”, or such other name as may be determined by Tokens (the “Name Change”), and continue the business of Tokens. The final transaction structure will be determined after the parties have considered applicable tax, securities and accounting matters.

The parties intend to enter into a definitive agreement in respect of the Transaction (the “Definitive Agreement”) within 45 days of the date of the LOI, or such other date as may be agreed to by COIN and Tokens. Prior to the Closing, it is expected that the issued and outstanding common shares in the capital of COIN (each, a “COIN Share”) will be consolidated (the “Consolidation”) such that, immediately prior to the Closing, the number of COIN Shares outstanding will be equal to $1,000,000 divided by the price at which subscription receipts are sold under the Private Placement (as defined below). The Consolidation ratio will be included in a subsequent news release.