You don't own a story.
You own the machine.
Here is the question most white papers spend forty pages avoiding: what do I legally own, against which entity, and what happens if that entity fails? This page is the answer, in full.
Two links. Nothing in the middle.
The claim chain will be published as constating documents and binding token terms. Not just as a white paper diagram. Version 4.2 needed three links and a participation contract in the middle. Version 5.0 deleted the middle.
You hold the token
$NPKN: held and transferred on-chain, with the ERC-3643 compliance layer enforcing who may hold it. No custodian standing in for you.
The token IS the share
The digital form of a registered common share of NewCo (British Columbia, Canada): entered in NewCo's share capital, maintained on a register kept by a registered transfer agent. The holder is not “like” a shareholder. The holder is a shareholder.
NewCo owns the machine
Through the Conversion, NewCo holds Napkin Inc. and its subsidiaries: the portfolio, the marketplace, the AI stack, the whole consolidation perimeter.
- Not a derivative that references a share.
- Not a participation note that mimics one.
- Not a wrapper around somebody else's stock.
- The share itself, carrying the same rights as any common share.
There is no contractual claim standing between you and the machine, because you own the machine.
Tokens that confer nothing
The share itself
Issued by the company whose shares they are, with the issuer's own obligations attached. SEC-qualified tokenized common shares have traded with a registered transfer agent since 2021. This is not a legal frontier. Most of the 2025-26 tokenized-stock wave wraps other issuers' shares in exposure products. $NPKN is the opposite construction.
Last claim, full residual.
One senior claim is disclosed rather than discovered, and what it means if things go wrong is stated here, in the same breath as the title.
In an insolvency of the group, NPKN holders hold common equity, ranked as equity: behind the EUR 500M Vienna-listed program's secured series and their first-ranking liens, behind every operating liability of the perimeter, last in the waterfall.
That is the whole sentence, and it is what ownership means. Creditors are paid in full before shareholders receive anything; whatever remains belongs entirely to the shareholders. We will not dress the rank up, and we will not apologize for it either: equity's position is the price of equity's upside.
Silence makes surprised victims
A starting position, not a life sentence
Why we embrace the security label.
Most crypto projects structure around securities law. We structure into it. A common share is not arguably a security. It is the paradigm case, the instrument securities law was written about. We spent four versions engineering an instrument honest enough to deserve the label. Now we simply hold the thing the label names.
Outside MiCA, into the Prospectus Regulation
One prospectus, 30 EEA states
The law is what makes ownership true
The security classification is not our compliance cost. It is our product working as described.
If we go quiet, we pay more.
The Vienna MTF is exchange-regulated and its ongoing disclosure requirements are light, so the token terms carry contractual disclosure covenants that exceed any venue requirement. We do not borrow credibility from a listing segment. We write it into the contract.
Annual audited IFRS consolidation
Consolidated financial statements from a named top-10 audit firm, delivered within 120 days of year-end. A contractual covenant in the token terms, not a venue courtesy.
Semi-annual reviewed interims
Reviewed interim financial statements every six months, so the year never goes dark between audits.
Quarterly ISAE 3000 attestations
Examination-level attestation of exactly the metrics that drive the Engine. The numbers the machine executes against, signed by the attesting firm.
Disclosure failure costs the issuer: immediately and mechanically.
If we miss the 120-day covenant, the Engine percentage automatically steps UP, with a mandatory self-tender trigger for sustained failure. Every disclosure regime we studied punishes holders for issuer opacity: the numbers go dark and the price pays. Ours is inverted by contract.
Disclosure failure is a cost we imposed on ourselves, in writing.
A British Columbia corporation, for tax logic. Not flag preference.
The Conversion's second phase is a plan of arrangement under BC corporate law, and a share-for-share exchange into a Canadian corporation preserves the rollovers embedded in the legacy table. The structure is share-for-share first and tokenization of the share second. The order is the tax planning.
The BC choice compounds with everything else that already lives there: the arrangement court, the founder's residency, and the uncapped BC offering-memorandum lane. EU retail distribution is stated as intent plus options. A direct passported prospectus for the tokenized BC share, or an EEA depositary instrument wrapping the share one-to-one: decided by securities counsel inside the prospectus process and published in the token documents. We present the fork honestly rather than manufacture certainty we do not yet have.
| Critical-path item | Why it gates |
|---|---|
| Bondholder change-of-control consent | The EUR 500M program must consent to NewCo acquiring Napkin Inc. |
| Fairness opinion and court order | The Arrangement binds only with both; dissent rights run through the court |
| Tax opinions | The rollover structure must be opined, not assumed |
| Transfer agent and ATS arrangements | The register and the trading venues must be live before TGE |
| Prospectus approvals | FMA approval and EEA passporting for the retail lane |
Any of these can slip, and if one slips, the token slips with it. That is not a caveat we mumble. It is Gate G1 working as designed: dates slip before gates do.
The four TGE gatesThree phases, strict order, nobody wronged.
At the time of writing, the claim chain does not exist yet: Napkin Inc. carries a conventional private cap table built over years of raises, advisor grants, and seller rolls. The Conversion is how that table becomes tokenized common equity without a single holder being wronged. Each phase a precondition for the next.
The Trim
Every legacy shareholder tranche is offered cash at or above invested cash basis, priced tranche by tranche. The holders who carried the early risk and want cash are honored with a cash win before the token era begins.
- Primary source: a new equity raise into NewCo, targeted at roughly $50M
- Fallback: the bond program's earmarked $25M buyback allocation
- Token proceeds are NEVER a source: under any scenario, in any phase
The Arrangement
A court-approved plan of arrangement under BC law converts the remaining, self-selected cap table into tokenized common shares of NewCo. Every legacy class collapsed into a single class of common in one step, with dissent rights protecting anyone who objects.
- Founders intend to roll the substantial majority of their 30M combined shares
- Founder sales into Phase 1 are a published dial, capped at 10–15% of holdings
- The founder pool is capped at 20% of supply: future founder recruits included, granted from inside the pool, never from the community
- Post-TGE, the Founder Liquidity Dial applies: sales limited to a published dial (target: up to 10% of remaining holdings per rolling 12 months), outside blackout windows, disclosed on-chain
The Raise
New tokenized shares issue from treasury through the compliant lanes (the passported EU prospectus, the BC offering memorandum, Reg D 506(c), Reg S) to fund the scale-up.
- Every raised dollar buys new companies
- No circularity: exits were fiat-funded in Phase 1, the legacy book arrived by conversion
- At TGE the token is backed by real equity in an operating company with attested revenue from day one
The Nobody Loses Covenant
The Trim runs under a covenant with a name, published in advance, because unnamed principles get quietly shaved.
Cash Floor
Universal Roll
No Forced Cash
The Founder's Backstop
Any holder whose contractual exit falls below invested basis is made whole personally by the founder. Stewardship in action, and here, a term.
Five jurisdictions. No single point of failure.
Every credible retail path on Earth in 2026 runs through securities law, not around it. So we run through it, in five jurisdictions at once: multi-jurisdiction redundancy, the same logic that makes a distributed ledger worth running, applied to the corporate stack behind it.
| Entity | Domicile | Role | Key regime |
|---|---|---|---|
| NewCo (Napkin 2.0) | British Columbia, Canada | Group parent; issuer of the tokenized common shares | BC arrangement law; NI 45-106 |
| Napkin Group AG | Zug, Switzerland | Portfolio + IP holdco inside the perimeter | Swiss DLT Act; FINMA taxonomy |
| Napkin Securities AG | Vaduz, Liechtenstein | EU distribution vehicle (EEA retail) | TVTG; EU Prospectus Regulation |
| Napkin Markets Inc. | Delaware, USA | US tranche distribution | Reg D 506(c); Reg A+; Innovation Exemption |
| Napkin Operations (Canada) Ltd. | Victoria, BC | Real opco; Canadian retail lane | NI 45-106 s.2.9(1) OM exemption |
| Napkin Foundation | Cayman Islands | Future RSX protocol steward | Foundation Companies Act; VASP Act |
21X: Frankfurt
Securitize ATS
A path, not a promise
Ethena launched, then negotiated.
We pre-file, then launch.
March 2025: BaFin prohibited the public offer of Ethena's USDe in Germany, froze reserves, levied a EUR 600,000 coercive fine, and forced a supervised 42-day redemption wind-down and EU exit. That product was less security-like than ours. A yield-bearing instrument offered to EU retail without authorization gets shut down, every time.
Own the claim, not the metaphor.
Section 6 of the white paper publishes the claim chain, the covenant stack, and the Conversion: as terms, not talking points.