In response to
certain questions received by FORM Holdings Corp. (the “Company”) in connection with the previously announced merger
(the “Merger”) between the Company and XpresSpa Holdings, LLC (as more fully described in the previously filed Registration
Statement on Form S-4, as amended, declared effective by the Securities and Exchange Commission (the “SEC”) on October
27, 2016 and the final proxy statement/prospectus filed with the SEC on October 28, 2016 (the “Proxy Statement/Prospectus”)),
the Company is expanding the description of the repayment feature of the Series D Convertible Preferred Stock to provide additional
detail regarding the number of shares which may be issued if the Company, at the seven year maturity date of the Series D Convertible
Preferred Stock, elects to make a payment, or any portion thereof, in shares of common stock rather than in cash. As set forth
in the Certificate of Designation of Preferences, Rights and Limitations for the Series D Convertible Preferred Stock attached
as Annex E to the Proxy Statement/Prospectus, the formula for calculating the number of shares to be issued in connection with
such repayment (the “Base Shares”) will be based on the volume weighted average price per share of the Company’s
common stock for the thirty trading days prior to the date of calculation (the “Base Price”) plus an additional number
of shares of common stock (the “Premium Shares”), calculated as follows: (i) if the Base Price is greater than $9.00,
no Premium Shares shall be issued, (ii) if the Base Price is greater than $7.00 and equal to or less than $9.00, an additional
number of shares equal to 5% of the Base Shares shall be issued, (iii) if the Base Price is greater than $6.00 and equal to or
less than $7.00, an additional number of shares equal to 10% of the Base Shares shall be issued, (iv) if the Base Price is greater
than $5.00 and equal to or less than $6.00, an additional number of shares equal to 20% of the Base Shares shall be issued and
(v) if the Base Price is less than or equal to $5.00, an additional number of shares equal to 25% of the Base Shares shall be issued.
Accordingly, if the volume weighted average price per share of the Company’s common stock is below $9.00 per share at the
time of repayment and the Company exercises the option to make such repayment in shares of common stock, a large number of shares
of common stock may be issued to the holders of the Series D Convertible Preferred Stock upon maturity which may have a negative
effect on the trading price of the Company’s common stock. At the seven year maturity date of the Series D Convertible Preferred
Stock (which shall be the date that is seven years from the closing date of the Merger), the Company, at its election, may decide
to issue shares of common stock based on the formula set forth above or to re-pay in cash all or any portion of the Series D Convertible
Preferred Stock.
In 2023, upon the
maturity date of the Series D Convertible Preferred Stock, when determining whether to repay the Series D Convertible Preferred
Stock in cash or shares of common stock, the Company expects to consider a number of factors, including its cash position, the
price of its common stock and its capital structure at such time. Because the Company does not have to make a determination as
to which option to elect until 2023, it is impossible to predict whether it is more or less likely to repay in cash, stock or a
portion of each.
For example, assuming
the entire amount of the Series D Convertible Preferred Stock was outstanding at the seven year maturity date, and the Company
opted to repay such Series D Convertible Preferred Stock entirely in shares of common stock, the number of shares of common stock
to be issued at such repayment if the Base Price was $9.00 per share, $6.50 per share and $2.50 (slightly below the closing price
on November 7, 2016) would be approximately 2,770,833 shares, 4,019,231 shares and 11,875,000, respectively.
The information
in this Item 8.01 shall be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, and shall
be deemed incorporated by reference in the Company’s filings under the Securities Act of 1933, as amended, including, without
limitation, the Proxy Statement/Prospectus.