Overstock.com,Inc. (NASDAQ:OSTK) Files An 8-K Regulation FD Disclosure
Item 7.01Regulation FD Disclosure

Overstock.com,Inc. “Overstock” announces that it will hold an informational webcast for its shareholders on December17, 2018 from 2:30 PM (MT) to 3:00 PM (MT). The event will include discussion and Q&A with members of the company’s executive leadership team regarding recent developments with GSR Capital. Interested shareholders are invited to send their written questions to Overstock’s Investor Relations team at [email protected] before the webcast.

Webcast Information

To access the live webcast, please visit the Events& Presentations tab on the company’s Investor Relations website, http://investors.overstock.com. To listen to the conference call via telephone, dial (877) 673-5346 and enter the audience passcode 1682898 when prompted. Participants outside the U.S. or Canada who do not have Internet access should dial +1 (724) 498-4326 and enter the audience passcode provided above.

Letter to Shareholders from Patrick M. Byrne, President, CEO, and Founder

Dear Shareholders,

I write to lay out for you the status of our stock purchase transaction with GSR and our progress with GSR as a strategic partner. GSR Capital did not close the GSR Stock purchase transaction nor enter definitive agreements on December15, 2018 as GSR had stipulated in its August5, 2018 term sheets with Overstock and tZERO. GSR’s leadership has informed me that GSR still intends to close this deal and is committed to this transaction and our partnership. GSR leadership tells me a key partner from outside of China needed more time to participate in the deal. Given the four-month period from when our initial term sheets were signed with GSR,I am, of course, as disappointed as any shareholder. Although it is uncertain whether the transaction with GSR will close at the same amounts we previously disclosed or at all, we have granted GSR an extension, at its request, until February28, 2019 to close the transaction. We will continue to work with GSR in good faith during this extension because we value the work they have done and the potential of our partnership.

WHY WE ARE PARTNERING WITH GSR

In the second quarter we announced that we had received a letter of intent from GSR, a significant Hong Kong investment firm, to invest in the tZERO security token offering.GSR was interested in gaining a large see-through interest on tZERO’s economics and partnering to scale tZERO into major capital markets across Asia.While our token issuance was bringing in plenty of capital to meet tZERO’s needs to build its security token ecosystem and Digital Locate Receipt software, the combination of GSR’s capital and its outstanding connections offered tZERO the ability to scale in the most lucrative blockchain capital market outside of the US. In particular, GSR is well-connected in the renewable energy and battery sectors and has a compelling vision for using tokenized smart contracts to automate the purchasing process in rare materials such industries use, such as a cobalt.We think that tokenizing and proving an Asian exchange for cobalt and other rare minerals could be extraordinarily attractive. We are announcing separately today (see attached press release) that GSR has retained tZERO to tokenize the offering of hundreds of millions of dollars’ worth of cobalt in Asia during 2019.

THE PROCESS WITH GSR TO DATE

As we moved through the process of bringing GSR into tZERO’s security token offering, GSR became interested in diversifying its investment in tZERO to include both tZERO and Overstock.com common equity. To achieve that diversified investment, GSR signed a binding agreement to buy $30 million of tZERO security tokens by May2019. GSR also signed a term sheet agreement to buy up to 18% of tZERO common equity and up to 10% of Overstock.com common stock. This term sheet agreement called on the parties to finalize these contemplated transactions by December15, 2018 to give GSR ample time to complete due diligence and for all of Overstock, tZERO and GSR to prepare our strategic work together before GSR consummated its investment.

GSR then proceeded to a due diligence period in which it studied our operations and team.During that period, GSR also introduced to tZERO a number of potential business partners and customers in Hong Kong, Korea, Japan, and Singapore. Starting in November, GSR transitioned from due diligence to working with tZERO on a business partnership relating to the cobalt offering and developing the definitive documents for the GSR investments. By December14, all the parties had incorporated each other’s concerns in the documents to a largely satisfactory level when GSR contacted us and asked for an extension to allow a key partner in the cobalt initiative from outside of China to participate in the deal.Even though the partner in question is well known to us and will be a valuable part of our ecosystem, it was both frustrating to us, as it likely is to you, that the delay came at the eleventh hour.

WHERE THAT LEAVES US TODAY

Despite our concerns (which no doubt you share), we have decided to grant GSR the time requested to onboard this additional partner (who we think will in fact be a highly valuable participant in the ecosystem). Additionally, in a display of commitment to our partnership, GSR has signed a retainer agreement with tZERO to ensure the cobalt offering is not delayed by this extension on the GSR investment. While we are appreciative of GSR’s commitment and excited about the opportunity in cobalt offering, we do acknowledge to you our shareholders that one should not assume the arrival of GSR’s investment until it arrives.