tZERO, the global leader in blockchain innovation for capital
markets, released today the following letter to investors from CEO
Saum Noursalehi.
Dear Investors,
With an exciting year upon us, I want to provide a recap of our
progress over the last year and preview some of what is in store
for tZERO in 2020, a year that we believe will be an inflection
point for the company. Overall, industry adoption of digital
securities continues to progress. Over the past year we saw
increases in institutional involvement, as well as advancements in
technology and regulatory engagement. We anticipate these trends to
continue in 2020.
Much of our focus last year was on building. We allocated our
capital, both human and financial, on acquiring the necessary
regulatory approvals (which is on-going), developing our
trading/digital securities technology, and building the leadership
team necessary to advance our company vision. Over the course of
2019, we launched trading on the tZERO ATS (formerly known as PRO
Securities ATS), traded our first digital securities, subscribed
additional broker-dealers, launched the tZERO Crypto app, worked
with management at the Boston Security Token Exchange (BSTX) to
file a proposed rulebook, and received several patents, protecting
our ecosystem. We believe our progress last year lays the
groundwork for our continued success.
In addition to these achievements, we also built a world-class
leadership team. In our view, we have the right mix of capital
markets, regulatory and technology expertise to drive the adoption
of our end-to-end ecosystem. I could not have done this without the
help of Steve Hopkins, who over the last year helped me staff up
and focus our organization. Having accomplished these objectives,
Steve is moving on from the firm. I thank him for his dedicated
service.
With the right leadership team and technology and regulatory
framework in place, we are shifting our focus to growth and
adoption. This includes two overarching priorities on the supply
and demand side of our business: trading more digital securities,
and enhancing liquidity on the tZERO ATS. Both are areas we have
made meaningful progress.
More Digital Securities
I am pleased to report, we anticipate trading our third digital
security on the tZERO ATS, in the coming weeks. I am encouraged by
our recent progress and the robust pipeline that our team has
developed over the past few months. While we set an ambitious
objective of trading up to five new digital securities by the end
of 2019, we and our partners, including the external broker-dealer
participants, have to carefully work through legal and financial
due diligence, regulatory matters and operations to ensure that
only high-quality assets trade on the tZERO ATS. As our partners
work through more of these new securities, we expect to see
significant efficiencies of scale.
While digital securities are still in their early stages, we are
seeing an increased level of interest and acceptance among both
issuers and investors. It is important to keep in mind that many of
the issuers intending to trade on the tZERO ATS are doing so in
conjunction with a new capital raise. As a result, the timing for
when these new securities trade depends on broader corporate
strategies, the speed of the capital raise process and regulatory
considerations. With that in mind, we continue to make progress
filling the queue of digital securities intending to trade on the
tZERO ATS. As you may recall, we recently signed an agreement with
Alliance Investments to tokenize River Plaza, which commenced its
capital raise process this quarter.
Furthermore, we are in late-stage discussions with several
issuers that we expect to sign in the coming months. Lastly, our
long-term pipeline of potential issuers now exceeds 200. These
issuers are diverse in nature, spanning real estate, investment
funds, technology, film and pharmaceutical companies. In the near
term we expect real estate to be a leading asset class, followed by
funds and other private companies.
Enhance Liquidity
The second priority is to continue to increase the pool of
investors that trade on the tZERO ATS. In addition to Dinosaur
Financial, tZERO ATS has signed agreements with five additional
broker-dealers, and we are working on getting them live so their
customers can begin trading on the tZERO ATS as soon as possible.
Over the last year we have had discussions with over 100
broker-dealers, and we are currently in active discussions with
several dozen broker-dealers.
We continue to make progress advancing our retail broker-dealer,
tZERO Markets. This is an important initiative as it will allow us
to integrate our web and mobile app experiences in the future,
enabling investors to trade digital securities and cryptocurrencies
on one platform. We are working closely with regulators and are
targeting a launch of tZERO Markets in the first half of this
year.
BSTX
We have been making progress advancing our BSTX joint venture
with BOX Digital Markets. This exchange aims to serve mature
companies looking for a more efficient and transparent way to trade
and raise capital through leveraging distributed ledger and smart
contract technology. The SEC recently announced an amendment to the
BSTX rulebook and commenced a new comment period. We currently
expect to receive a decision from the SEC in Q2 2020.
In closing, I would like to address our capital raising
priorities. As Overstock management mentioned recently, it is
committed to funding tZERO. As our business continues to develop in
the first half of the year and we continue to hit milestones and
prove out the business model further, it may become appropriate to
approach external sources of capital in late 2020 or 2021. We would
only do this, however, in a manner that enhances our business and
stakeholder value.
tZERO has built the most robust and active digital security
ecosystem in the marketplace to date. We believe the most effective
way to increase value for our stakeholders, including TZROP
investors, is by focusing on growing the supply and demand side of
our business. This will be achieved by trading more assets,
enhancing liquidity and launching BSTX. I am more confident in the
company’s prospects than ever before, and I look forward to keeping
you abreast of our progress in the year ahead.
Respectfully,
Saum Noursalehi CEO, tZERO
Investor Notices
Investors should note that trading digital securities could
involve substantial risks, including no guarantee of returns, costs
associated with selling and purchasing, no assurance of liquidity
which could impact the price and ability to sell, and possible loss
of principal invested. Further, an investment in single digital
security could mean lack of diversification and, consequently,
higher risk.
As of the date of this press release, tZERO has not authorized
peer to peer transfers of tZERO’s preferred equity token (TZROP).
Other than in limited and customary circumstances that do not
constitute “sales” for purposes of securities law, such as
transfers due to a gift, death or divorce (and then only following
compliance with Computershare Trust Company, N.A.’s (Computershare)
or Electronic Transaction Clearing, Inc.’s (ETC) procedures, as
applicable), TZROP holders may resell shares of TZROP only on the
tZERO ATS, which is operated by tZERO ATS, LLC, a SEC-registered
broker-dealer and member of FINRA and SIPC, only through a
brokerage account established with Dinosaur Financial, LLC (Dino),
a SEC-registered broker-dealer and member of FINRA and SIPC and a
subscriber to the tZERO ATS, with clearing and custody provided by
ETC a registered broker-dealer and member of FINRA and SIPC, and
Computershare, as transfer agent. In order to comply with and
manage our obligations under applicable laws and regulations and
ensure the security and functionality of the digital courtesy
carbon copy of Computershare’s records, tZERO may, at any time,
prohibit the holders of TZROP from transferring shares of TZROP
from their brokerage account and holding them directly with
Computershare. When such a prohibition is in effect, tZERO may
permit such transfers only in extraordinary circumstances and
subject to any and all conditions that tZERO may determine.
No Offer, Solicitation, Investment Advice or
Recommendations
This release is for informational purposes only and does not
constitute an offer to sell, a solicitation to buy, or a
recommendation for any security or token, nor does it constitute an
offer to provide investment advisory or other services by the tZERO
or any of its affiliates, subsidiaries, officers, directors or
employees. No reference to any specific security or token
constitutes a recommendation to buy, sell or hold that security or
token or any other security or token. Nothing in this release shall
be considered a solicitation or offer to buy or sell any security,
token, future, option or other financial instrument or to offer or
provide any investment advice or service to any person in any
jurisdiction. Nothing contained in this release constitutes
investment advice or offers any opinion with respect to the
suitability of any security or token, and the views expressed in
this release should not be taken as advice to buy, sell or hold any
security or token. In preparing the information contained in this
release, we have not taken into account the investment needs,
objectives and financial circumstances of any particular investor.
This information has no regard to the specific investment
objectives, financial situation and particular needs of any
specific recipient of this information and investments discussed
may not be suitable for all investors. Any views expressed in this
release by us were prepared based upon the information available to
us at the time such views were written. Changed or additional
information could cause such views to change. All information is
subject to possible correction. Information may quickly become
unreliable for various reasons, including changes in market
conditions or economic circumstances.
About tZERO
tZERO Group, Inc. (“tZERO“) is a majority owned subsidiary of
Overstock.com, focusing on the development and commercialization of
financial technology (FinTech) based on cryptographically-secured,
decentralized ledgers – more commonly known as blockchain
technologies. Since its inception, tZERO has pioneered the effort
to bring greater efficiency and transparency to capital markets
through the integration of blockchain technology. For more
information on tZERO, please visit: https://www.tzero.com/.
tZERO is not a registered broker-dealer, funding portal,
underwriter, investment bank, investment adviser or investment
manager, and is not providing brokerage, investment banking or
underwriting services, recommendations or investment advice to any
person, and does not provide any brokerage services. tZERO takes no
part in the negotiation or execution of secondary market
transactions for the purchase or sale of securities and at no time
has possession of investor funds or securities in connection with
such transactions.
About tZERO ATS, LLC
tZERO ATS, LLC is a broker-dealer registered with the SEC and a
member of FINRA and SIPC. More information about tZERO ATS may be
found at www.finra.org.
About SpeedRoute LLC
SpeedRoute LLC is a broker-dealer registered with the SEC and a
member of FINRA and SIPC. More information about tZERO ATS may be
found at www.finra.org.
About tZERO Crypto
tZERO Crypto, Inc. is a wholly owned subsidiary of tZERO Group,
Inc. tZERO Crypto, Inc. and tZERO Group, Inc. are not registered
broker-dealers, underwriters, investment banks, or investment
advisers, and are not providing brokerage, investment banking or
underwriting services, recommendations or investment advice to the
users of the tZERO Crypto app. No broker-dealer affiliate of tZERO
Group, Inc. is involved in the transactions and services offered by
the tZERO Crypto app. tZERO Crypto, Inc. is licensed as an
authorized money transmitter in every jurisdiction in which it does
business that requires such authorization. See the legal
disclosures and list of tZERO Crypto, Inc.’s licensing authorities
on https://www.tzero.com/crypto-app for more information.
About Overstock.com
Overstock.com, Inc Common Shares (NASDAQ:OSTK) / Digital Voting
Series A-1 Preferred Stock (Medici Ventures’ tZERO platform: OSTKO)
/ Series B Preferred (OTCQX:OSTBP) is an online retailer and
technology company based in Salt Lake City, Utah. Its leading
e-commerce website sells a broad range of new products at low
prices, including furniture, décor, rugs, bedding, home
improvement, and more. The online shopping site, which is visited
by nearly 40 million customers a month, also features a marketplace
providing customers access to millions of products from third-party
sellers. Overstock was the first major retailer to accept
cryptocurrency in 2014, and in the same year founded Medici
Ventures, its wholly-owned subsidiary developing and accelerating
blockchain technologies to democratize capital, eliminate
middlemen, and re-humanize commerce. Overstock regularly posts
information about the company and other related matters on the
Newsroom and Investor Relations pages on its website,
Overstock.com.
O, Overstock.com, O.com, Club O, Main Street Revolution, and
Worldstock are registered trademarks of Overstock.com, Inc. Other
service marks, trademarks and trade names which may be referred to
herein are the property of their respective owners.
This press release contains certain forward-looking statements,
including, but not limited to, statements related to tZERO’s
ability to raise capital, additional digital securities becoming
available to be traded on the tZERO ATS, the ability of subscribed
broker-dealers to the tZERO ATS becoming active subscribers, SEC
approval of the BSTX rulebook, and launch of tZERO Markets, LLC,
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements include all statements other than
statements of historical fact. Additional information regarding
factors that could materially affect results and the accuracy of
the forward-looking statements contained herein may be found in
Overstock’s Form 10-Q for the quarter ended September 30, 2019,
which was filed with the SEC on November 12, 2019, and any
subsequent filings with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200130005469/en/
Investors: Michael Mougias, +1-347-293-1248
mmougias@tzero.com Media: Alexandra Sotiropoulos,
+1-347-293-1416 asotiropoulos@tzero.com
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