Actionable news
0
All posts from Actionable news
Actionable news in OSTK: Overstock.com, Inc.,

Offering of Warrants to Purchase


Page

Prospectus Supplement

Prospectus Supplement Summary

S-1

The Offering

S-3

Risk Factors

S-4

Description of the Warrants

S-21

Recent Developments

S-22

Forward-Looking Statements

S-22

Use of Proceeds

S-23

Price Range of Common Stock

S-24

Plan of Distribution

S-27

Validity of the Securities

S-27

Where You Can Find More Information

S-27

Information Incorporated by Reference

S-28

Prospectus

About This Prospectus

ii

Prospectus Summary

1

Risk Factors

5

Forward-Looking Statements

9

Ratio of Earnings to Fixed Charges

10

Use of Proceeds

10

Description of Capital Stock

11

Description of the Depositary Shares

16

Description of the Warrants

19

Description of the Debt Securities

21

Description of the Units

33

About Digital Securities

34

Plan of Distribution

37

Validity of the Securities

40

Experts

40

Where You Can Find More Information

40

Information Incorporated by Reference

40

PROSPECTUS SUPPLEMENT SUMMARY

This summary highlights information contained elsewhere in this prospectus supplement and the accompanying prospectus. It does not contain all of the information that you should consider before making an investment decision. We urge you to read the entire prospectus supplement, the accompanying prospectus, any related free writing prospectus and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus carefully, including the historical financial statements and notes to those financial statements incorporated by reference in this prospectus supplement and the accompanying prospectus.

Please read "Risk Factors" beginning on page S-4 of this prospectus supplement, and "Risk Factors" beginning on page 5 of the accompanying prospectus. You should also read "Risk Factors" and "Information Regarding Forward-Looking Statements" in our Quarterly Report on Form 10-Q for the period ended June 30, 2017 filed with the SEC on August 3, 2017, and any more recent reports we file under the Securities Exchange Act of 1934, as amended ("Exchange Act"). All of these will give you more information about important risks that you should consider before investing in the securities we are offering. As used in this prospectus supplement, "we," "us," "Overstock," "Overstock.com," "our," "our company" and "the Company" refer to Overstock.com, Inc., a Delaware corporation and, unless the context otherwise indicates, include its consolidated subsidiaries.

The Company

Overview

We are an online retailer and advancer of blockchain technology. Through our online retail business we offer a broad range of price-competitive brand name, non-brand name and closeout products, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, health and beauty products, electronics and computers, and sporting goods, among other products. In July 2017, we launched a new Cars tab. We sell these products and services through our Internet websites located at www.overstock.com, www.o.co and www.o.biz (referred to collectively as the "Website"). Although our three websites are located at different domain addresses, the technology and equipment and processes supporting the Website and the process of order fulfillment described herein are the same for all three websites.

In late 2014, we began working on initiatives to develop and advance blockchain technology, which we refer to collectively as Medici. As part of our Medici initiatives, we have formed a wholly-owned subsidiary Medici Ventures, Inc. and acquired a majority interest in a financial technology company and two related registered broker dealers which we have rolled into the majority-owned subsidiary tØ.com, Inc. ("tZERO"). We have also made minority investments in several blockchain technology companies. In 2015, we were the first public company to issue a private security using blockchain technology and in December 2016, as a successful demonstration of our technology, we issued publicly traded blockchain preferred shares of Overstock.com, Inc.

Recent Developments

Refinancing. On November 6, 2017, we refinanced our bank debt by borrowing $40 million from an entity directly or indirectly wholly owned by Dr. Patrick Byrne's mother and brother, and repaying all of our debt to U.S. Bank and the other bank under our credit facility. Dr. Patrick Byrne is our Chief Executive Officer, a member of our board of directors and our largest stockholder. We concurrently terminated the swaps we had entered into in connection with the U.S. Bank debt and the finance leases we had entered into with an affiliate of U.S. Bank. Our wholly owned subsidiary O.Com Land LLC, a Utah limited liability company ("O.Com Land") mortgaged our corporate headquarters and the related land, fixtures and certain personal property to the new lender to secure the new debt, and we have guaranteed the debt. The new debt carries an interest rate of 8.0% and a default rate of

18.0%. The new loan has no financial covenants. The new loan is for a term of 18 months, subject to mandatory prepayment under certain circumstances, and is prepayable at our election at any time without penalty or premium. Interest only will be due monthly. The principal amount and any then unpaid interest will be due and payable on May 1, 2019 (subject to mandatory prepayment in the event of a sale or encumbrance of the headquarters building or a change of ownership of Overstock or the occurrence of certain other events, including material changes to Overstock's business, the loss of management control of Overstock by Patrick Byrne and other events. See "Recent Developments."

Strategic Initiatives. We have engaged an investment banking firm to help us identify strategic initiatives. We have asked the investment banking firm to consider a broad range of potential transactions and initiatives. The investment bank has not yet recommended any action. Our board continually discusses a variety of potential changes to our business, but has not made any determination to make any change or to undertake any transaction at all, and may not do so in the foreseeable future or at all.

Corporate Information

We were incorporated in Delaware in 2002. Our principal executive offices are located at, and our mailing address is, 799 W. Coliseum Way, Midvale, UT 84047, and our telephone number is (801) 947-3100. We maintain a website at www.overstock.com. We make our periodic and current reports that are filed with the SEC available, free of charge, on our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information contained on our website does not constitute part of this prospectus supplement.

Our common stock trades on the Nasdaq Global Market under the symbol "OSTK."

Overstock.com is a registered trademark of Overstock.com, Inc., and t0 and t0.com are trademarks of t0.com. Other service marks, trademarks and trade names referred to in this prospectus supplement are the property of their respective owners. This prospectus supplement contains references to our trademarks as well as third-party trademarks. Solely for convenience, trademarks and trade names referred to in this prospectus supplement may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. We do not intend our use of third-party trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

THE OFFERING

Purchase Price per Warrant

$4,000,000.00 and $2,600,000, respectively

Exercise Price per Share of Common Stock

$40.45

Shares of Common Stock issuable upon exercise in full of all Warrants

3,722,188

Expiration Date of Warrants

January 2, 2018 and February 7, 2018, respectively

Underlying Common stock offered by us

3,722,188 shares.

Common stock to be outstanding assuming the sale and exercise of all Warrants offered in this offering

3,722,188 shares.

Common Stock Nasdaq Symbol

"OSTK"

Use of proceeds

We expect to receive aggregate net proceeds from the sale of the Warrants of $6,600,000. If all of the Warrants are purchased and exercised in full, we would receive additional net proceeds of $150,562,046 from the sale of the common stock issuable upon exercise in full of the warrants. We plan to use all of the net proceeds for general corporate purposes and working capital requirements, including sales and marketing activities. In addition, we may use a portion of the net proceeds to acquire complementary technologies or businesses. However, we currently have no commitments or agreements and are not involved in any negotiations with respect to any such transactions.

Risk factors

See "Risk Factors" on page S-4 of this prospectus supplement and on page 5 of the accompanying prospectus for a discussion of risks relating to an investment in our common stock.

The number of shares to be outstanding after this offering excludes shares issuable upon vesting of outstanding restricted stock units, and shares reserved for issuance pursuant to our 2005 Equity Incentive Plan, as well as our outstanding Blockchain Voting Series A Preferred Stock and our Voting Series B Preferred Stock, both of which vote with the common stock, are entitled to an annual dividend of $0.16 per share, if declared by the board of directors, in preference to any dividend to be paid to the holders of the common stock, and share in distributions with the common stock. As of September 30, 2017, the 681,259 issued shares of Preferred Stock constituted approximately 2.7% of the total number of shares of the Preferred Stock and the common stock, taken together.


Common Stock Price

High Low

Year Ended December 31, 2015

First Quarter

24.70 18.14

Second Quarter

25.93 19.78

Third Quarter

24.00 16.98

Fourth Quarter

17.71 11.86

Year Ended December 31, 2016

First Quarter

15.65 10.03

Second Quarter

17.93 13.79

Third Quarter

17.36 14.31

Fourth Quarter

19.70 13.05

Year ended December 31, 2017

First Quarter

20.50 15.60

Second Quarter

18.15 13.75

Third Quarter

32.25 14.30

Fourth Quarter (through November 7, 2017)

48.25 25.58

2016 2015 2014

Shares Weighted
Average
Exercise
Price
Shares Weighted
Average
Exercise
Price
Shares Weighted
Average
Exercise
Price

Outstanding—beginning of year

204 $ 17.27 224 $ 17.27 273 $ 17.30

Exercised

(42 ) 17.08 (16 ) 16.94 (30 ) 17.08

Expired/Forfeited

(6 ) 17.08 (4 ) 18.26 (19 ) 18.00

Outstanding—end of year

156 $ 17.33 204 $ 17.27 224 $ 17.27

Options exercisable at year-end

156 $ 17.33 204 $ 17.27 224 $ 17.27

2016 2015 2014

Units Weighted
Average
Grant Date
Fair Value
Units Weighted
Average
Grant Date
Fair Value
Units Weighted
Average
Grant Date
Fair Value

Outstanding—beginning of year

349 $ 24.80 578 $ 16.70 704 $ 10.79

Granted at fair value

541 14.52 239 24.60 242 28.24

Vested

(219 ) 22.57 (377 ) 12.34 (302 ) 11.87

Forfeited

(111 ) 16.52 (91 ) 24.35 (66 ) 17.70

Outstanding—end of year

560 $ 17.46 349 $ 24.80 578 $ 16.70

Common stock

Preferred stock

Depositary Shares

Warrants

Debt securities

Units

About This Prospectus

ii

Prospectus Summary

1

Risk Factors

5

Forward-Looking Statements

9

Ratio of Earnings to Fixed Charges

10

Use of Proceeds

10

Description of Capital Stock

11

Description of the Depositary Shares

16

Description of the Warrants

19

Description of the Debt Securities

21

Description of the Units

33

About Digital Securities

34

Plan of Distribution

37

Validity of the Securities

40

Experts

40

Where You Can Find More Information

40

Information Incorporated by Reference

40

PROSPECTUS SUMMARY

This summary description about us and our business highlights selected information contained elsewhere in this prospectus or incorporated in this prospectus by reference. This summary does not contain all of the information you should consider before buying securities in this offering. You should carefully read this entire prospectus and any applicable prospectus supplement, including each of the documents incorporated herein or therein by reference, before making an investment decision. As used in this prospectus, "we," "us," "Overstock," "Overstock.com," "O.co," "our," "our company" and "the Company" refer to Overstock.com, Inc., a Delaware corporation.

The Company

Overview

We are an online retailer offering price-competitive brand name, non-brand name and closeout merchandise, including furniture, home decor, bedding and bath, housewares, jewelry and watches, apparel and designer accessories, electronics and computers, and sporting goods, among other products. We also sell hundreds of thousands of best seller and current run books, magazines, CDs, DVDs and video games ("BMMG"). We sell these products through our Internet websites located at www.overstock.com, www.o.co and www.o.biz (referred to collectively as the Website). We deal primarily in price-competitive, replenishable and closeout merchandise and use the Internet to aggregate both supply and demand to create an efficient marketplace for selling these products. We provide manufacturers with a one-stop liquidation channel to sell both large and small quantities of excess, closeout and replenishable inventory without disrupting sales through traditional channels.

The merchandise offered on our Website is from a variety of sources including well-known, brand-name manufacturers. At September 30, 2015 we had relationships with approximately 3,674 independent fulfillment partners whose products we offer for sale on our Website. Sales through our fulfillment partners accounted for approximately 91% of our net revenues for the three and nine months ended September 30, 2015. Our Website Shopping section is organized into a number of main product lines, including: For the Home, Furniture, Bed & Bath, Women, Men, Jewelry, Watches, Health & Beauty, Electronics, Sports & Outdoors, Baby, Clothing & Shoes, Gifts & Flowers, Pet Supplies, Books-Movies-Music-Games, Kids, Luggage & Bags, Crafts & Sewing, Office, Toys & Hobbies, Emergency Preparedness, Business Supplies, Cars and Gifts. Our specialty offerings include our Worldstock, Main Street Revolution, As Seen on TV, Big Brother House and Farmers Market offerings. During 2014 we began to broker insurance products, and to offer (through a third party) a store credit card providing up to 12 months' financing of purchases. We also offer a free pet adoptions service which allows users to search listings of nearby adoptable cats, dogs, and other pets from thousands of animal shelters and rescues nationwide. We modify the organization and content of our shopping site periodically.

We are committed to providing superior customer service. We staff our customer service department with dedicated in-house and outsourced professionals who respond to phone, instant online chat and e-mail inquiries on products, ordering, shipping status, returns and other areas of customer inquiry.

We have organized our shopping business (sales of product offered through the Shopping Section of our Website) into two principal segments—a "direct" business and a "partner" business. We also derive revenue from other businesses advertising products or services on our Website. We are focusing on expansion of our international business, which has provided less than 2% of our total net revenues for the years ended December 31, 2014 and 2013. During the nine months ended September 30, 2015 and the years ended December 31, 2014 and 2013, no single customer accounted for more than 1% of our total net revenue.

We have a customer loyalty program called Club O for which we sell annual memberships. The Club O loyalty program allows members to earn reward dollars for qualifying purchases made on our Website.

Recent Developments

During 2014, we acquired a 24.9% interest in Pro Securities LLC ("Pro Securities"), a registered broker-dealer that operates a registered ATS (the "Pro Securities ATS"), as part of our efforts to develop and license software to trade digital securities. In conjunction with the agreement to purchase this interest in Pro Securities, we formed Medici, Inc. ("Medici"), doing business as t0.com ("t0.com"), to develop and own the digital securities trading platform technology we refer to as the t0 technology or the t0 software. t0.com licenses the t0 technology on a non-exclusive basis to Pro Securities for use on the Pro Securities ATS, providing Pro Securities with the operational capability to trade digital securities. On August 26, 2015, we entered into a Contribution, Assignment and Assumption Agreement and Consent to Admission of Substitute Member pursuant to which we assigned our 24.9% interest in Pro Securities to Medici.

In June 2015, the Company completed the first placement of corporate bonds in the form of digital securities using the t0 technology. The digital bonds were issued by Overstock in an unregistered private placement pursuant to Rule 506(c) of Regulation D and are restricted securities. The offering of bonds in the form of a digital security was a limited demonstration of the underlying t0 technology, and the digital bonds have characteristics that differ from those of the digital securities offered pursuant to this prospectus. We do not expect significant, if any, secondary market activity to develop with respect to the bonds issued in the form of digital securities.

In August 2015, Cirrus Services LLC ("Cirrus"), a wholly owned subsidiary of Medici, entered into an Asset Purchase Agreement with Cirrus Technologies LLC ("Seller"). Pursuant to the Asset Purchase Agreement, Cirrus acquired all or substantially all of Seller's assets for a purchase price of approximately $30,300,000, consisting of approximately $11,000,000 in cash and approximately 900,000 shares of Overstock's common stock. In connection with this transaction, Overstock entered into a Registration Rights Agreement with Joseph Cammarata for the benefit of the members of Seller, who will receive shares as a result of the transaction. Mr. Cammarata is the sole or majority owner of Seller and each of the other business entities described in the following paragraph, including Pro Securities. In connection with the transactions, Overstock increased its equity ownership of Medici to 81.0% by acquiring an additional 5.9% of Medici's common stock from an entity of which Mr. Cammarata is a 50% owner.

In addition, in August 2015 Medici entered into (i) a Membership Purchase Agreement pursuant to which Medici agreed to purchase all of the outstanding membership interests in SpeedRoute LLC ("SpeedRoute"), and (ii) a Membership Purchase Agreement pursuant to which Medici agreed to purchase all of the outstanding membership interests not already owned by Medici in Pro Securities, and (iii) a Stock Purchase Agreement pursuant to which Medici agreed to purchase 80% of the outstanding capital stock of TraderField Securities Inc. ("TraderField"). SpeedRoute, Pro Securities and TraderField are each privately-held registered broker dealers, and these acquisitions are subject to conditions, including satisfaction of all applicable regulatory requirements. The aggregate consideration to be paid for the interests to be acquired in SpeedRoute, Pro Securities and TraderField acquisitions will be shares of Overstock common stock having a market value of approximately $700,000.

Corporate Information

We were incorporated in Delaware in 2002. Our principal executive offices are located at 6350 South 3000 East, Salt Lake City, Utah 84121, and our telephone number is (801) 947-3100. We maintain a website at www.overstock.com. We make our periodic and current reports that are filed with

the SEC available, free of charge, on our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Information contained on our website does not constitute part of this prospectus.

Our common stock trades on the Nasdaq Global Market under the symbol "OSTK."

O, Overstock.com, O.com, O.co, Club O, Main Street Revolution, Worldstock Fair Trade and Worldstock are registered trademarks of Overstock.com, Inc. O.biz, Club O Dollars, OGlobal and OVillage are trademarks of Overstock.com, Inc. The Overstock.com, Club O, and Worldstock Fair Trade logos are also registered trademarks of Overstock.com, Inc. Other service marks, trademarks and trade names referred to in this prospectus are the property of their respective owners. This prospectus contains references to our trademarks as well as third-party trademarks. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. We do not intend our use of third-party trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other entity.

The Securities We May Offer

We may offer up to $500,000,000 of common stock, preferred stock, depositary shares, warrants, debt securities and/or units in one or more offerings and in any combination. This prospectus provides you with a general description of the securities we may offer. A prospectus supplement, which we will provide each time we offer securities, will describe the specific amounts, prices, terms and form of the securities we determine to offer.

    Common Stock

We may offer shares of our common stock, par value $0.0001 per share, either alone or underlying other registered securities convertible into or exercisable for our common stock. Each holder of our common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders. There are no cumulative voting rights. Holders of our common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by our board of directors out of funds legally available therefor. If there is a liquidation, dissolution or winding up of our company, holders of our common stock would be entitled to share in our assets remaining after the payment of liabilities and any preferential rights of any outstanding preferred stock. The holders of common stock have no preemptive rights. We have never paid a dividend and do not anticipate paying cash dividends in the foreseeable future.

    Preferred Stock and Depositary Shares

Under the terms of our amended and restated certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, exchange and/or conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

We may also issue fractional shares of preferred stock that will be represented by depositary shares and depositary receipts.

Each series of preferred stock, depositary shares or depositary receipts, if issued, will be more fully described in the particular prospectus supplement that will accompany this prospectus, including redemption provisions, rights in the event of our liquidation, dissolution or winding up, voting rights

and rights to convert into common stock. We do not have any shares of preferred stock, depositary shares or depositary receipts outstanding.

    Warrants

We may issue warrants for the purchase of common stock, preferred stock, debt securities, depositary shares or any combination thereof. We may issue warrants independently or together with other securities.

    Debt Securities

We may offer secured or unsecured obligations in the form of one or more series of senior or subordinated debt. The senior debt securities and the subordinated debt securities are together referred to in this prospectus as the "debt securities." The subordinated debt securities generally will be entitled to payment only after payment of our senior debt. Senior debt generally includes all debt for money we borrow, except debt that is stated in the instrument governing the terms of that debt to be not senior to, or to have the same rank in right of payment as, or to be expressly junior to, the subordinated debt securities. We may issue debt securities that are exchangeable and/or convertible into other securities.

The senior and subordinated debt securities will be issued under separate indentures between us and a trustee. We have summarized the general features of the debt securities to be governed by the indentures. These indentures have been filed as exhibits to the registration statement of which this prospectus forms a part. We encourage you to read these indentures. Instructions on how you can get copies of these documents are provided under the heading "Where You Can Find More Information."

    Units

We may issue units consisting of one or more of the other classes of securities issued by us as described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit.

    Digital Securities

We may issue any of the securities described in this prospectus as digital securities, meaning the securities will be uncertificated, registered securities, the ownership and transfer of which are recorded on a proprietary ledger that will be publicly distributed. The validity of publicly available copies of the proprietary ledger can be mathematically proven utilizing cryptographically-secured distributed ledger network technology. See "About Digital Securities."

Our digital securities will not be fungible with our traditional securities that may be outstanding from time to time, and we will not issue digital securities with respect to any class of securities that are already listed for trading on an NMS trading platform. For example, if we were to issue our common stock as digital securities in a registered public offering, we would first reclassify our common stock into Class A and Class B common stock and only issue as digital securities the class that is not then trading on any national market system trading platform. Our digital securities may only be traded on the Pro Securities ATS (or any other closed-system trading platforms that we may make arrangements with in the future) by customers of the sole broker-dealer that will be licensed to provide access to the Pro Securities ATS digital securities trading platform with respect to Overstock digital securities.


(Unaudited) Fiscal Year
Ended December 31,
(Unaudited)
Nine Months
Ended
Sept. 30
2015

2010 2011 2012 2013 2014

Ratio of earnings to fixed charges

3.5x N/A 5.2x 5.7x 4.3x 2.5x

Deficiency of earnings to fixed charges (in thousands)

N/A $ (19,580 ) N/A N/A N/A N/A

More