425: Coincheck De-SPAC Deal Progresses: Nasdaq Listing Imminent as Earn-Out Terms Revised

Coincheck Group B.V. is progressing towards its Nasdaq listing via a De-SPAC transaction with Thunder Bridge Capital Partners IV, Inc., with amendments made to the earn-out provisions of the business combination agreement.

Summary

• Coincheck Group B.V. (CCG), a subsidiary of Monex Group, is working to complete its De-SPAC transaction with Thunder Bridge Capital Partners IV, Inc. (THCP) to list on Nasdaq.
• The listing aims to raise funds, use Nasdaq-listed shares for acquisitions, and compensate talent to expand its Web3 and crypto asset business.
• The Business Combination Agreement, initially dated March 22, 2022, has been amended twice, most recently on May 28, 2024.
• An amendment effective October 8, 2024, removes the Earn-out Price Adjustment, which would have provided additional shares to Monex Group, other Coincheck shareholders, and THCP's sponsor if CCG's share price hit certain targets.
• The original earn-out structure would have granted 25,000,000 shares to Monex Group and other Coincheck shareholders, and 1,182,639 shares to the Sponsor, if CCG's share price equaled or exceeded US$12.50 for 20 trading days within 30 consecutive trading days before the fifth anniversary of the merger.
• An additional 25,000,000 shares for Monex Group and other Coincheck shareholders, and 1,182,639 shares for the Sponsor, would have been issued if the share price exceeded US$15.00 during the same period.
• The parties will file relevant materials with the SEC, including a registration statement on Form F-4, which includes a proxy statement/prospectus of THCP.
• THCP's shareholders are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement and documents incorporated by reference therein filed in connection with the proposed business combination.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the company is progressing with its plans to list on Nasdaq, which is generally viewed favorably. However, the removal of the earn-out provision could be seen as slightly negative, suggesting a potential lack of confidence in achieving the higher share price targets.

Positives

• The Nasdaq listing will provide Coincheck Group with access to public capital markets.
• The listing will enable the use of Nasdaq-listed shares for strategic acquisitions.
• The listing will allow Coincheck to attract and retain talent through share-based compensation.
• Removing the Earn-out Price Adjustment reduces potential future dilution of CCG shares.

Risks

• The inability to meet the closing conditions to the business combination could prevent the deal from closing.
• Failure to obtain THCP shareholder approval could terminate the Business Combination Agreement.
• Redemptions by THCP shareholders exceeding a maximum threshold could prevent the deal from closing.
• Failure to meet Nasdaq listing standards could prevent the deal from closing.
• Changes in the cryptocurrency and digital asset markets could negatively impact Coincheck's business.
• General economic conditions could impact Coincheck's ability to execute its growth strategies.
• Coincheck may not be able to develop and maintain effective internal controls.

Future Outlook

Coincheck Group intends to continue its efforts toward completing the CCG De-SPAC Transaction in accordance with the Business Combination Agreement.

Management Comments

• The listing of CCG on Nasdaq through the CCG De-SPAC Transaction will enable us to raise funds from public investors and utilize Nasdaq-listed shares as consideration for potential acquisitions and as compensation for current and future talents, thereby further expanding our Web3 and crypto asset business and further developing our talented employee base.
• We intend to continue our efforts toward completing the CCG De-SPAC Transaction in accordance with the Business Combination Agreement.

Industry Context

The announcement reflects the ongoing trend of cryptocurrency companies seeking public listings through De-SPAC transactions to gain access to capital and enhance their credibility.

Comparison to Industry Standards

• Many cryptocurrency exchanges, such as Coinbase, have pursued public listings to increase their visibility and access to capital.
• The removal of earn-out provisions is a common negotiation point in De-SPAC transactions, reflecting a balance between incentivizing performance and minimizing potential dilution.

Stakeholder Impact

• Shareholders of THCP will have the opportunity to vote on the proposed business combination.
• Employees of Coincheck may benefit from the company's increased access to capital and potential for growth.
• Customers of Coincheck may benefit from the company's expanded services and improved financial stability.

Next Steps

• The parties will file relevant materials with the SEC, including a registration statement on Form F-4.
• THCP will mail the definitive proxy statement/prospectus and a proxy card to each shareholder entitled to vote at the meeting relating to the approval of the proposed business combination.

Key Dates