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Evernorth clears a key hurdle in its merger

Evernorth has overcome a major obstacle in its move to the U.S. markets with a balance sheet plan centered on 473 million XRP. Following shareholder approval of the business combination by special purpose acquisition company Armada Acquisition Corp. II, the transaction is expected to close on Oct. 7, provided the remaining closing conditions are completed.

The combined company’s shares are planned to begin trading on Nasdaq the day after closing under the ticker XRPN. The move marks the completion of one of the main pre-listing steps after the company’s Form S-4 registration statement, filed with the U.S. Securities and Exchange Commission in March, became effective in August.

The company’s target XRP reserve and financing structure

At closing, Evernorth is expected to hold about 473 million XRP. Based on XRP’s roughly $1.50 price at the time of publication, that reserve is worth about $710 million, according to CoinGecko data.

The company said that scale could make Evernorth the largest publicly traded treasury company focused solely on XRP. The transaction is also expected to generate roughly $300 million in gross cash proceeds.

Main funding sources

  • $225 million will come from related private placements.
  • $30 million will come from convertible debt financing.
  • About $48 million will be transferred from Armada II’s trust account.
  • Some investors also contributed XRP directly to the deal.

The investor roster includes Ripple, Kraken, Pantera Capital, SBI Group, Arrington Capital and GSR. Evernorth aims to increase XRP per share through yield strategies, participation in the XRP ecosystem and capital markets transactions.

Mixed results for crypto firms going public via SPACs

Evernorth’s planned Nasdaq debut comes as crypto companies continue to pursue U.S. public listings through SPAC mergers. But in 2024, results for that model have varied from company to company.

Tokenization company Securitize began trading on the New York Stock Exchange in July after completing its merger with Cantor Equity Partners II. CoinShares, meanwhile, listed on Nasdaq in April after a $1.2 billion merger with Vine Hill Capital Investment Corp.

Some crypto treasury projects, however, have backed away. Ether Machine canceled its planned merger with Dynamix in April, citing unfavorable market conditions, while Adam Back’s Bitcoin Standard Treasury Company venture and Cantor Equity Partners I postponed their shareholder vote indefinitely as they look for a deal that better reflects current market conditions.

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