Provides overview of key efforts and events leading up to
platform launch
Following the announcement on January 24, 2019 by tZERO Group,
Inc., a global leader in blockchain innovation for capital markets
and majority-owned subsidiary of Overstock.com, Inc. (NASDAQ:OSTK),
regarding the commencement of trading of tZERO security tokens on
the tZERO platform, a technology solution for trading digital
securities, tZERO provides further information regarding the key
events and efforts that led up to this important milestone.
As previously announced, the platform now enables accredited
investors to trade tZERO security tokens with other accredited
investors through a digital securities brokerage account with the
introducing broker-dealer, Dinosaur Financial Group, LLC.
Trades are executed on the alternative trading system (ATS)
operated by tZERO subsidiary PRO Securities, LLC.
The history of Overstock and tZERO’s leadership in the digital
security space is an incremental and iterative journey of
innovation that goes back to 2016, when Overstock issued its
landmark preferred digital security, the ownership and transfer of
which would be recorded on a proprietary ledger that would be
distributed using blockchain technology. Once it was issued,
Overstock’s preferred digital security was included for trading on
the ATS operated by PRO Securities. tZERO provided the technology
behind trading of this first SEC-registered digital security in the
world. As a further recognition of the impact of this technology,
on January 1, 2019, tZERO also obtained a patent for a crypto
integration platform. The patent highlights the technological
leadership of tZERO in blockchain innovation for the capital
markets.
The key milestones in the process leading up to the commencement
of trading of tZERO security tokens are described below.
Timeline of Key Milestones for the tZERO
Platform:
April 2015: Overstock filed a shelf
registration statement on Form S-3 with the U.S. Securities and
Exchange Commission (SEC) to register digital securities, with the
ownership and transfer of these securities recorded on a
proprietary, blockchain-based ledger.
October 2015: PRO Securities filed with the SEC
an amendment to its Form ATS, which, among other things, described
transactions in digital securities. PRO Securities subsequently
filed additional amendments to its Form ATS. In accordance
with SEC rules, each amendment was filed at least 20 calendar days
prior to implementing any material changes to the operation of PRO
Securities ATS.
December 2015: The SEC declared Overstock’s
shelf registration statement effective.
December 2016: Overstock issued the first
SEC-registered digital security in the world, the Blockchain Voting
Series A Preferred Stock (OSTKP), using tZERO-developed
technologies and OSTKP began to trade on the PRO Securities
ATS.
December 2017 to August 2018: On December
18, 2017, tZERO launched a Security Token Offering, which closed in
August 2018. The offering was conducted pursuant to
exemptions from the registration requirements of the Securities Act
of 1933. Approvals were neither required nor provided by the
SEC or the Financial Industry Regulatory Authority, Inc. (FINRA)
for any registration statements, offering documents, or Forms ATS
in connection with the offer and sale of securities in the Security
Token Offering; tZERO’s trading architecture or platform did not
require or receive their express approval in order to trade digital
securities or use blockchain technology.
June 2018: tZERO and BOX Digital Markets
LLC entered into a joint venture, which is expected to become the
world’s first regulated exchange for trading security tokens.
The joint venture is seeking approval from the SEC prior to
beginning operations.
October 2018: tZERO completed the issuance
of tZERO security tokens to investors who had fully funded signed
agreements for future equity (SAFEs) prior to the August 2018
closing of the Security Token Offering. tZERO raised $134
million from over 1,000 global investors during the offering.
Later that month, tZERO open-sourced its token contracts.
November 2018 to January 2019: Prior to trading
commencing of tZERO security tokens on the tZERO platform, tZERO,
Dinosaur Financial, PRO Securities and a FINRA member broker-dealer
that would clear the trades in the tZERO tokens, met with the FINRA
to present the mechanics of the tZERO Platform in connection with
the trading of tZERO security tokens. In addition, PRO
Securities filed an amendment to its Form ATS with the SEC in
December 2018 in connection with the proposed trading of tZERO
security tokens on the PRO Securities’ ATS. On or around
January 10, 2019, FINRA staff approved the Fully Disclosed Clearing
Agreement between Dinosaur Financial and the clearing firm, which
governs the clearing of Dinosaur Financial customer trades executed
on the PRO Securities ATS. Following that, Dinosaur Financial
began onboarding accredited investors as customers to facilitate
trading of the tZERO security tokens.
January 2019: tZERO obtained a patent from the
United States Patent and Trademark Office for a system that can
take orders to trade “digital transactional items” such as
securities, tokens, shares, cash, and other assets from broker
dealers and then translate the orders into crypto orders on a
digital trading platform or exchange.
January 24, 2019: tZERO announced commencement
of trading on the platform of tZERO security tokens by accredited
investors.
tZERO looks forward to working to continue to innovate in the
capital markets industry and develop new capital markets solutions
on its own and in partnership with other industry leaders,
including in connection with other tokenized assets, such as debt
instruments, commodities and real estate. The launch of
tZERO’s security trading platform, utilized by its broker-dealer
affiliates and partners, is the latest advancement of Overstock’s
global leadership in creating blockchain-based systems to introduce
trust through technology to existing global industries and markets.
Overstock’s involvement in blockchain began in 2014 with the
founding of Medici Ventures, its wholly-owned subsidiary created to
apply blockchain technologies to existing industries to eliminate
middlemen, democratize capital, and rehumanize commerce.
Today, Medici Ventures has interests in companies we
believe are building the foundation of a "tech stack for society"
based on trust systems by introducing blockchain and other related
technologies to industries such as capital markets, money and
banking, identity, property, voting, and supply chains.
About Overstock.com
Overstock.com, Inc Common Shares (NASDAQ:OSTK) / Series A
Preferred (Medici Ventures’ tZERO platform: OSTKP) / 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
Overstock.com and other related matters on the Newsroom and
Investor Relations pages on its website, Overstock.com.
About tZERO Group, Inc.
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.
O, Overstock.com, O.com, Club O, Main Street
Revolution, and Worldstock are registered trademarks of
Overstock.com, Inc. O.biz and Space Shift are also
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
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (the 1934 Act).
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.com's Form 10-K for the year ended December 31, 2017,
which was filed on March 15, 2018, subsequently filed quarterly
reports on Form 10-Q, including its Form 10-Q for the quarter ended
September 30, 2018, which was filed with the SEC on November 9,
2018, current reports filed on Form 8-K, and any other subsequent
filings with the SEC under the 1934 Act.
tZERO is not a registered broker-dealer, funding portal,
investment adviser or investment manager 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. Secondary
market trades will be executed by PRO Securities, LLC, a
broker-dealer registered with the SEC and a member of FINRA and
SIPC, through the PRO ATS. More information about PRO
Securities may be found at www.finra.org.
Media Contact:pr@overstock.com
Investor Contact:ir@overstock.com
SOURCE: Overstock.com, Inc.
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