Overstock.com (NASDAQ: OSTK) subsidiary t0.com, Inc. (tZERO) has announced the start of the Subsequent Sale Period for its tZERO Preferred Equity Tokens (tZERO Security Tokens) after raising $100 million in its Pre-Sale Period from strategic purchasers at discounted purchase prices.
During the Subsequent Sale Period, rights to acquire tZERO Security Tokens will be sold pursuant to Simple Agreements for Future Equity (SAFEs) at a fixed price of $10.00 per tZERO Security Token, subject to discounts and other concessions. U.S. investors will only be permitted to execute SAFEs and participate in the Subsequent Sale Period if they are accredited investors, as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the Securities Act).
Overstock CEO and founder Patrick M. Byrne said:
I thank our early, strategic investors for sharing our vision to issue a preferred equity security token. Raising $100 million is no small task, and our team has worked tirelessly to conduct this offering in accordance with exemptions under the US securities laws. The opening of the Subsequent Sale Period is another step toward establishing a new paradigm in the capital markets through innovative technology. I welcome all of our new investors.
The Subsequent Sale Period will be facilitated by SaftLaunch, as well as StartEngine.com (StartEngine), a technology platform that permits tZERO to independently connect with prospective investors.
Joseph Cammarata, President of tZERO commented:
We have signed an agreement with StartEngine to utilize their services as another bridge between potential investors and tZERO during the Subsequent Sale Period. To facilitate timely and efficient interactions with potential investors, both StartEngine and SaftLaunch will support us in the Subsequent Sale Period. As we transition to the Subsequent Sale Period, we are one step closer to our financing goals, including the use of a portion of the proceeds of the offering toward leveraging our blockchain experience and expertise to develop a trading system capable of trading tokens that are determined to be securities under the U.S. securities laws.
Howard Marks, CEO of StartEngine, added:
StartEngine is a leading platform built to help companies like tZERO launch regulated ICOs in the United States and Internationally. tZERO is leading the way for Security Tokens, and we are proud to support them.
As of March 1, 2018, tZERO has entered into executed SAFES with approximately 1,100 Purchasers for approximately $114.6mm of Tokens, of which $100.6 million has been funded by the respective purchasers. tZERO also announced an extension of the offering until 5 pm EDT on May 14, 2018.
tZERO initially commenced its offering of tZERO Security Tokens on December 18, 2017. In connection with the commencement of the Subsequent Sale Period, tZERO has issued an Amended, Supplemented and Restated Private Placement Offering Memorandum (the Memorandum), which supersedes all prior offering materials that investors have previously received. Investors that have executed a SAFE on or prior to March 1, 2018, may rescind their SAFE and receive a full refund of their investment, as described in the Memorandum, through 5 pm EDT on March 8, 2018.
The symbol for the tZERO Security Token, upon its inception, is expected to be TZRO and the token is expected to be ERC-20 or equivalent compliant. The size of the offering of the tZERO Security Tokens is $250 million with the option to upsize to $300 million in the event that there is sufficient market demand to do so. The tZERO Security Token will be a series of preferred equity of tZERO, with such terms, including with respect to the payment of dividends, as set forth in the terms and conditions included in the Memorandum.