MOD Token-Equity Swap Voting Announcement to MOD Tokenholders
MOD Token-Equity Swap Voting Announcement to MOD Tokenholders
August 07, 2019
On 23 July 2019, modum.io AG (Modum) announced to offer to its MOD tokenholders (tokenholders) the opportunity to swap MOD tokens into tokenized Modum shares on the blockchain. Modum further announced its decision to conduct a voting to let current tokenholders vote on the proposed approach.
With this MOD Token-Equity Swap Voting Announcement, Modum informs the tokenholders about the key elements of the voting.
After carefully taking into consideration the various feedbacks we received the last days, we have decided to move the start date of the voting by two weeks. This, among others, gives our tokenholder community sufficient time to familiarize with the MOD Token-Equity Swap Terms and to move their MOD token from an exchange to a wallet.
The new start date of the voting is 21 August 2019 and voting will be open for two weeks, ending on 4 September 2019. As a consequence in case of a positive voting result, registration for the token-equity swap starts on 16 September and ends on 30 November 2019. See the full timeline below.
Background and Basis for the Voting
Modum completed a successful token sale in fall 2017 and raised $13.5 million for the development of their company and products through the sale of MOD tokens. The MOD token was successfully distributed and began trading shortly afterwards on various exchanges. In 2019, the MOD token was delisted from major exchanges causing it to become partly illiquid. In view of these developments, Modum decided to pursue the option to swap the MOD token to a future proof equity share and in consequence to terminate the contractual obligations of the MOD token. For this purpose, Modum will tokenize its shares and tokenholders will be able to swap their existing MOD tokens for tokenized shares.
The tokenization of the existing shares and the MOD token-equity swap shall be part of a bigger, integrated project towards the full replacement of all MOD tokens with tokenized shares of Modum, giving tokenholders not only dividend rights but additionally all other rights attached to normal registered shares of a Swiss company limited by shares ("Aktiengesellschaft"), such as voting rights, right to participate in shareholder meetings, rights in liquidation proceeds, and pre-emptive rights in cases of capital increases.
As the tokenization of shares of Modum and the MOD token-equity swap are new elements of Modum’s token strategy, Modum decided to give tokenholders the opportunity to vote on the proposed token-equity swap. Read the key elements of the voting:
1. Voting of MOD Tokenholders
The voting is going to take place from 21 August to 4 September 2019. The voting process is similar to previous milestone votings. Tokenholders can vote directly on myetherwallet or use the web app voting.modum.io. The web app can also be used with various Ethereum wallet browser plugins such as Metamask or Mist. In order to cast a valid vote, tokenholders must sign a transaction with the private key of their address holding MOD tokens. The number of MOD tokens on the address define the number of votes (voting power). Every MOD token in circulation has one vote. Locked MOD tokens can not vote.
The instructions for the voting procedure are described here.
Every tokenholder will have the possibility to answer with "yes" or "no" the following question:
"Do you approve of the MOD token-equity swap proposal consisting of the following elements:
(1) Tokenization of existing shares of modum.io AG,
(2) MOD token-equity swap offering based on the MOD Token-Equity Swap Terms and amendment of Modum’s Terms of Token Sale, and
(3) Termination of all contractual rights attached to outstanding MOD tokens?
as described herein and based on the MOD Token-Equity Swap Terms."
Please read the following information concerning your voting rights carefully:
Relevant point in time: Wednesday, 21 August, 11:00am CEST: The voting rights will be determined on Wednesday at 11:00am CEST. Note that voting rights are non-transferable. This means, the voting power will be allocated to the accounts which hold MOD tokens on Wednesday, at 11:00am CEST.
In practice this means:
- If you want to participate in the voting, remove your tokens from any exchange and put them in your wallet, no later than 21 August, 10:59am CEST
- In order to vote, use your wallet address which holds your MOD tokens on Wednesday, 21 August, 11:00am CEST
- You cannot vote if you move your tokens to your wallet after 21 August, 10:59am CEST
- You cannot increase your voting power by buying more tokens after Wednesday, 21 August, 11:00am CEST
2. Tokenization of Existing Shares
Modum will tokenize 100% of its existing shares by using a DLT-platform. Every shareholder must first register on the DLT-platform in order to get access to the tokenized shares.
3. MOD Token-Equity Swap Offering and Amendment of Modum’s Terms of Token Sale
Modum intends to swap all MOD tokens against modum.io AG shares based on the MOD Token-Equity Swap Terms. The pre-final version of these terms is accessible here. The password for the document is communicated to the tokenholders via the telegram tokenholder channel. The finalized terms will be accessible at the start of the voting period. The applicable swap ratio will be one (1) share for nine (9) MOD tokens (no pro rata shares for less than nine (9) MOD tokens). Every holder of MOD tokens will need to register on the DLT-platform in order to participate in the MOD token-equity swap.
Based on its unilateral amendment right in Section I, 4. of Modum’s Terms of Token Sale, Modum will publish amended terms and conditions adding the following new provision at the end of Section I:
"5. modum.io AG may terminate unilaterally all rights attached to the MOD Token at any time and at its sole discretion. In case of such unilateral termination by modum.io AG, the MOD token becomes functionless and worthless. Therefore, modum.io AG must pay a compensation to holders of MOD tokens at the moment of termination in a form determined according to its sole discretion and only upon such holder of MOD tokens actively contacting modum.io AG within 10 years from the exercise of such unilateral termination by modum.io AG."
Following the unilateral amendment of the Terms of Token Sale, any tokenholder at the time of the amendment has the right to terminate all rights attached to the MOD token with written notice to Modum within 30 days of the announcement of the amendment. Modum will pay a compensation to tokenholders who terminate the Terms of Token Sale and thus the rights attached to the MOD token. The compensation will be provided as one (1) share of modum.io AG for twelve (12) MOD tokens (no pro rata shares for less than twelve (12) MOD tokens). Every tokenholder will need to register on the DLT-platform in order to get any shares.
4. Termination of all Contractual Rights attached to outstanding MOD Tokens
The following contractual rights are currently attached to the MOD tokens according the Modum’s Terms of Token Sale (see Section II, 2.+3.):
- The right to receive payments equal to the proportionate amount of all dividends being concluded to be paid out on all ordinary shares (equity) in Modum (Profit Sharing Mechanism); and
- The right to vote on the achievement of a set of milestones which are defined by Modum on a discretionary basis (Voting Mechanism).
Modum shall not force any tokenholders to swap the MOD token for modum.io AG shares. However, based on the amended Terms of Token Sale, Modum will terminate unilaterally all contractual rights attached to the still outstanding MOD tokens after the end of the MOD token-equity swap period (see timeline below). This step is necessary, because the MOD token-equity swap is only successful for all stakeholders if 100% of the MOD tokens can be replaced. Tokenholders whose rights have been terminated unilaterally can actively contact Modum during ten (10) years following the announcement of the termination in order to get a compensation of one (1) share of modum.io AG for twelve (12) MOD tokens (no pro rata shares for less than twelve (12) MOD tokens). Every tokenholder will need to register on the DLT-platform in order to get any shares.
7 August 2019 Token-equity swap voting announcement, including pre-final MOD Token-Equity Swap Terms and voting instructions
21 August – 4 September 2019 Token-equity swap voting
16 September – 30 November 2019 Tokenholder registration on DLT platform
15 October – 30 November 2019 Tokenswap for registered tokenholders
From 1 December 2019 Termination of rights attached to the MOD token
Following the media release of 23 July 2019 on Modum offering its investors the opportunity to swap MOD tokens into tokenized Modum shares on the blockchain, the matter was and is lively discussed on social media channels, in particular on Telegram. Modum has held an Ask-Me-Anything (AMA) session on Telegram on 25 July 2019 providing clarifying statements related to the proposed MOD token-equity swap. Further information can be found in the FAQ and in the Summary of the AMA Session on Modum’s website.
For further information or if you have any questions join the discussion on Telegram.