In fall 2017, Modum successfully completed a token sale by raising USD 13.5 million to grow the company and develop its products. The MOD token was distributed in October of the same year and quickly began trading on various exchanges. In the wake of the 2018-2019 bear market, the MOD token’s value dropped in line with the overall reduction of the crypto-asset market capitalization. In addition, delistings from exchanges where the MOD token was traded on put further pressure on the token’s value, as well as resulting in partial market liquidity bottlenecks.

In face of the latest market and regulatory developments, Modum has extensively studied various options to improve the long term viability of the MOD token with the interest of all its stakeholders, first and foremost, its investors and tokenholders, in mind. The outcome is the world's first token-equity swap whereby all tokenholders are given the option to swap their existing MOD tokens for tokenized shares of Modum.

Modum has recognized a general trend towards regulated token exchanges as well as tokenized shares. Blockchain provides an ideal platform to transform a conventional share into a fully digital, easily transferrable and secure assets.

The MOD Token-Equity Swap

Tokenholders have the unique opportunity of becoming direct shareholders of Modum. As the tokenization of shares of Modum and the MOD token-equity swap are new elements of Modum’s token strategy, Modum decided to conduct a milestone voting to let current tokenholders vote on the proposed approach.

The voting period will start on 7 August and last for two weeks. If the outcome is positive, Modum will offer to swap the MOD token into ordinary registered shares of Modum. The full terms of the swap are published prior to the voting period. The actual swap period will start on 1 September.

The tokenization and the MOD token-equity swap are part of a larger, 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 Swiss companies, such as voting rights, right to participate in shareholder meetings, rights to liquidation proceeds, and pre-emptive rights in cases of capital increases.

“We are convinced that by offering our tokenholders the opportunity to become shareholders in Modum, we are leading the way in how to face current market developments – the tokenized shares will clear the ambiguous circumstances around regulated and non-regulated exchanges the MOD token is facing and will ensure a sustainable long term outlook for our future shareholders,” says Marc Degen, co-founder and Chairman of the Board.

Timeline

23 July 2019 Public annoucement

25 July 2019 Public AMA session, 6pm CEST

7 August 2019 Milestone voting announcement, including swap terms

7-21 August 2019 Milestone voting

1 September - 30 November 2019 Tokenholder registration on daura

15 October - 30 November 2019 Tokenswap for registered tokenholder

From 1 December 2019 onwards Termination of rights attached to the MOD token

Strong Partners and Strong Technology

Modum has partnered with daura AG, a Zurich (Switzerland) based subsidiary of Swisscom AG. daura provides the platform for the blockchain based registration of the Modum shares (digitalization of share register). The daura platform is based on the Hyperledger Fabric permissioned blockchain framework. For legal and valuation advice, we counted on the reputable law firm Meyerlustenberger Lachenal (MLL) and on our long-time advisor S&K Partners.

For more information, please visit our token-equity swap FAQ here.

Updated on 24 July 2019