Tokens.com, Coin Hodl sign LOI related to proposed reverse takeover

Coin Hodl Inc. agreed to acquire all of the issued and outstanding securities of Tokens.com in exchange for securities of Coin in a transaction that will result in the reverse takeover of Coin by Tokens.

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. After that, Coin, the resulting issuer following the closing of the transaction, will change its name to Tokens.com Inc. or such other name as may be determined by Tokens and continue the business of Tokens.

The parties intend to sign a definitive agreement in respect of the transaction within 45 days of the date of the letter of intent that was entered into effective Jan. 21.

Prior to the closing of the transaction, Tokens expects to complete a private placement financing of subscription receipts to raise minimum gross proceeds of C$15 million.

Before the closing of the transaction, it is anticipated that the issued and outstanding common shares in the capital of Coin will be consolidated such that, immediately prior to the closing, the number of Coin shares outstanding will be equal to C$1 million divided by the price at which subscription receipts are sold under the private placement.

It is expected that, prior to the closing, Coin will distribute, as a tax-free return of capital to its shareholders, on a pro rata basis, between about C$1.6 million and C$2.4 million in cash, and 1,011,250 shares of Abaxx Technologies Inc., which represent all of the common shares in the capital of Abaxx held by Coin, on terms to be agreed in writing by Tokens.

Tokens is a company that uses proof-of-stake or staking technology to provide security and transaction validation services to digital assets built on blockchain technology. Its founding team includes blockchain entrepreneurs Andrew Kiguel and Trevor Koverko.

At the closing, it is expected that all current Coin directors and officers will resign and be replaced by nominees of Tokens. The board of the resulting issuer is expected to be fixed at five directors, which will include Kiguel and such other directors as may be determined by Tokens prior to the closing.