Good afternoon. I'm Allison Abraham, Chair of the Board of Directors of Overstock.com. At the request of our CEO, Jonathan Johnson, and the Board of Directors, I'll be also serving as the Chair of today's meeting. On behalf of the Board of Directors and the management of Overstock.com, I welcome you to the 2020 special meeting of the stockholders of Overstock. We appreciate your attendance at today's meeting. We are providing a live audio feed of today's meeting for those unable to attend in person. It is now 1:01 P.M. on February 13, 2020, and in accordance with the notice of this meeting, I call a special meeting of the stockholders to order. As each shareholder entered the meeting today, we provided him or her with an agenda for the meeting. We will conduct the meeting in accordance with this agenda.
As noted, we will provide an opportunity for questions and answers and discussion after the Board has presented and explained the five proposals to be voted on today. Please hold your questions until that time. Also, please note in accordance with our bylaws, only the matters contained in the notice of the special meeting included in the Proxy Statement may be considered for this meeting. No other proposals by shareholders may be or will be considered. We are conducting today's meeting in accordance with Regulation FD. Please turn off and silence your cell phones and any other electronic devices. Let me begin by introducing our Board of Directors, followed by corporate officers of the company. As I call their name, I would ask that they please stand. First, Jonathan E. Johnson III. Jonathan is Overstock.com's Chief Executive Officer.
He joined Overstock in 2002 and has served as a member of a number of senior positions. He also has served as a director since 2013 and as Chairman of the Board from 2014 to 2017. Jonathan is also currently serving as President, Medici Ventures, and Chairman of the Board of tZERO. Clay Corbus. Clay is an independent director and member of the audit committee. He has been a director since 2007, and he also serves on the board of Medici Ventures and tZERO. Joe Tabacco. Joe is an independent director. He's the Chair of the Nominating and Corporate Governance Committee and Compensation Committee. He is also a member of the audit committee. Joe has been a director since 2007. Kamelia Aryafar, an Overstock.com's Executive Vice President of Overstock's retail business and Chief Customer, Algorithms, and Analytics Officer, a position she has held since September of 2018. Dr.
Aryafar joined Overstock in 2017 and previously served as a retail business Vice President, Head of Machine Learning, Data Science, and AI, and has served as Overstock's Director of Engineering. As I mentioned, I'm Allison Abraham. I've been a director since 2002. I'm the Chair of the Audit Committee, member of the Compensation Committee, and of the Nominating and Corporate Governance Committee. I would also like to briefly introduce our Senior Executive Officers of Overstock and its subsidiaries, and I ask that each of you please stand, and please remain standing until we've introduced everyone.
First, Dave Nielsen, President of Retail; Rob Hughes, Acting Chief Financial Officer and President of Medici Land Governance; Joel Weight, Chief Technology Officer; Ron Hilton, Chief Sourcing and Operations Officer; JP Knab, Chief Marketing Officer; Krista Mathews, who is our Chief Customer Officer, is out of the office today, but wanted to recognize her; Meghan Tuohig, Chief People Officer; Mark Baker, Chief Product Officer; and Carter Lee is also traveling today, but he serves as our Chief Administration Officer. For tZERO, we have Saum Noursalehi, our Chief Executive Officer of tZERO; Joel Quall, our Chief Financial Officer of tZERO; Amit Goyal, our Chief Technology Officer; Alan Konevsky, our Chief Legal Officer of tZERO; Nariman Noursalehi, SVP of Product Development; Rob Christensen, SVP Product Development tZERO; Chris Campbell is a Director of tZERO.
He was not able to be here today, and Brooke Navarro, who's our Head of Business Development, also was traveling on the road. For Medici Land Governance, we have Ali El Husseini, our Chief Executive Officer, and we have Rob Shapiro, who's a Director of Medici Land Governance and a Director of Medici Ventures. From Medici Ventures, we have Stanton Huntington, General Counsel, Tiffany Smith, our Controller, and Jeremy Smith, who serves as our Chief Technical Officer, who's also traveling today. Oh, you're here. He's here and in the audience. Sorry about that. I'm delighted for the team we have in place. You may be seated. Doug Ives, who's an Assistant Vice President with our transfer agent, Computershare, is also here today and is serving as Inspector of Elections. Mr. Ives has taken the oath of Inspector of Elections prior to this meeting.
Our General Counsel and Corporate Secretary, Glen Nickle, is serving as Secretary of this meeting today, and he will now provide a caution about forward-looking statements that may be made during this meeting, and will then provide a report on the mailing of the notice of this meeting and the presence of a quorum. Glenn?
As we share information today, it's important to note that we may make statements in the course of this meeting that state our intentions, hopes, beliefs, expectations, or predictions of the future. These and all other statements, except for statements of historical fact, constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Overstock.com's actual results could differ materially from those projected in any forward-looking statements that may be made. We disclaim any intention or obligation to revise any forward-looking statements except as required by law. Additional information concerning factors that could cause actual actions or results to differ materially from those contemplated by our forward-looking statements is contained in the documents we file with the SEC, including but not limited to our Proxy Statement for this special meeting and our most recent reports on Form 10-K, Form 10-Q, and Form 8-K.
In particular, please refer to the risk factors described in our Proxy Statement dated December 18, 2019, our Form 10-Q for the quarter ended September 30, 2019, and in our subsequent filings with the Securities and Exchange Commission. We are holding this meeting pursuant to the notice of meeting dated December 23, 2019, which was initially distributed to shareholders on or about December 23, 2019. Copies of affidavits of distribution will be included with the minutes of this meeting. All shareholders of record at the close of business on December 18, 2019, are entitled to vote at this meeting. A list of shareholders entitled to vote has been available at Overstock.com's headquarters for more than the past 10 days and is available at this meeting for examination by any shareholder. We will file all documents concerning the call and notice of the meeting with the records of this meeting.
The count of shares present immediately prior to the commencement of the meeting indicated that 22,940,292 shares of the Preferred Stock, treated as a single Series A1 Preferred Stock were present in person or by proxy. This is about 58.44% of the total outstanding voting shares of the company Series A1 Preferred Stock of the company as of the record date, which exceeds the percentages required to establish a quorum for Proposal 1, Proposal 3, and Proposal 4.
The count of shares present immediately prior to the commencement of the meeting indicated that 22,940,292 shares of Preferred Stock, treated as a single class, and 283,790 shares of the company's Series B Preferred Stock were present in person or by proxy. This is about 58.44% of the total outstanding voting shares of the company and about 79.56% of the total outstanding Series B Preferred Stock of the company as of the record date, which exceeds the percentages required to establish a quorum for Proposal 2 and Proposal 5.
Great. Thank you, Glen. I hereby declare a quorum present for the meeting for each of the proposals and that the meeting is duly convened. The Board of Directors thanks all the shareholders who returned their proxies. Shareholders who returned their proxies authorize the persons named in the proxy card to vote on all proposals coming before this meeting. Those of you who requested ballots so that you could vote individually received them when you entered the meeting today. Ballots are also available at the table where the registration took place. If you voted by ballot, please be sure to use the correct one: Common Series A1 Preferred, Common Series A1 Preferred, or Series B Preferred Stock to vote your shares. If you are voting more than one class of shares today by ballot, please complete a ballot for each class of shares that you hold.
As a matter of process, all five proposals will be moved for a vote prior to any discussions or questions. The first matter for the shareholders is action as Proposal Number 1 to approve the increase of the number Series A1 Preferred Stock Certificate of Designation requiring the uncertificated shares, and amend Series A1 Preferred Stock, all as described in the Proxy Statement. the Board unanimously recommends a vote for this proposal, and I'm pleased to present Series A1 Preferred Proposal and move for the approval of Proposal Number 1. Is there a second?
I second the proposal.
Thank you, Clay. The second matter to be submitted to the shareholders for action is Proposal Number 2 to approve the decrease in the number of authorized shares of voting Preferred Stock to 370,000, all as described in the Proxy Statement. The Board unanimously recommends a vote for this proposal, and I'm pleased to present the Series B Preferred Proposal and move to the approval for Proposal Number 2. Is there a second?
I second the proposal.
Thank you, Joe. The third matter to be submitted to the shareholders is for action as Proposal Number 3, if necessary, to approve the increase in the number of authorized shares of voting Series A1 Preferred to 3 million, amend the provisions of Series A1 Certificate of Designation requiring uncertificated shares, and amend Series A1 Preferred Stock, all as described in the Proxy Statement. this proposal will only be necessary if the A1 Preferred Proposal cannot be adopted, either because it does not receive the required stockholder votes or because the Series B Preferred Proposal, upon which Series A1 Preferred Proposal is conditioned, is not adopted. The Board unanimously recommends for this proposal, and I'm pleased to present the Series A1 Preferred Proposal and move for the approval of Proposal Number 3. Is there a second?
Yes, I second the proposal.
Thanks, Clay. The fourth matter to be submitted to the shareholders for action is Proposal Number 4 to amend the voting rights Series A1 Preferred Stock Certificate of Designation, as explained in the Proxy Statement. The Board unanimously recommends a for for this proposal, and I'm pleased to present Series A1 Preferred Class Proposal and move for the approval of Proposal Number 4. Is there a second?
I second this proposal.
Thank you, Joe. The fifth matter to be submitted to the shareholders for action is Proposal Number 5 to amend the voting rights of the holders of the voting Series B Preferred Stock in the company's certificate of designation of the Series B Preferred Stock, as described in the Proxy Statement. The Board unanimously recommends FOR, and I'm pleased to present the Series B Preferred Class Vote Proposal and move for the approval of Proposal Number 5. Is there a second?
Yes, I second this proposal.
Thank you, Clay. Now we've come to the part of the agenda providing for questions and discussion only on the five proposals. At this time, all questions and discussions must relate solely to the proposals. We will answer any other questions after the voting on the five proposals has concluded. So let me outline the procedures for asking questions on the five proposals. Anyone wishing to address the meeting should come to the microphone located in the front left of the auditorium. After recognition by either Jonathan or myself, please state your name, indicate whether you are a shareholder or a proxy for a shareholder, and present your question. We ask that you try and keep your question to one minute so that we may allow as many people as possible to ask questions.
Questions or discussions relating to matters other than the five proposals are not appropriate at this time and will not be entertained. Please remember that we are webcasting this meeting. For the benefit of the shareholders and others who are listening to the webcast, we ask that you state your question clearly into the microphone. Please be seated once you've asked your question. Kirsty is acting as our moderator for today's event. Kirsty, have we received any questions submitted by the shareholders through the live webcast?
Yes, we have. Have you had direct discussion with the SEC, OCC regarding the delivery of the digital dividend?
So Jonathan, do you want to take that?
The answer is yes, we have.
No further questions at this time.
All right. That concludes—are there any in the audience? Okay. That concludes our discussion for the just the five proposals, and I said there will be Q&A at the end. It is now 1:16 P.M., and the polls are open on all proposals. I suggest that those shareholders voting in person now mark their ballots. We will collect and count the ballots after we've completed voting on all matters on the agenda. We will now vote on Proposal 1. We will now vote on Proposal 2. We are now voting on Proposal 3. We are now voting on Proposal 4. And last, we are voting on Proposal 5. That being the final matter for the action of the shareholders, we will now collect and count the ballots. Please stand if you would like to submit your ballot, and our inspector of elections will collect it for you. Okay.
It is now 1:17 P.M., and there being no further ballots to be collected, I declare the polls to be closed on all proposals. At this time, we'll take any questions relating to the company. We'll follow the same procedures as before and with all questions limited to one minute. Once all the questions have been answered, we're going to go to the preliminary vote. Unless the inspector of elections needs more time, I'll ask the secretary of meeting to now report on the preliminary votes.
The inspector of elections has counted the ballots and proxies and confirms on a preliminary basis as follows: The holders of a majority of the Series A1 Preferred Stock voting as a class represented at this meeting have voted for Proposal 1, as set forth in the Proxy Statement. Thus, Proposal 1 has been approved. The holders of a majority of outstanding voting shares and majority of the outstanding Series B Preferred Stock voting as a class represented at this meeting have voted for Proposal 2, as set forth in the Proxy Statement. Thus, Proposal 2 has been approved. The holders of a majority of the outstanding voting Series A1 Preferred Stock voting as a class represented at this meeting have voted for Proposal 3, as set forth in the Proxy Statement.
Thus, Proposal 3 has been approved. Less than a majority of holders of outstanding voting shares have voted for Proposal 4, as set forth in the Proxy Statement. Thus, Proposal 4 is not approved. Less than a majority of the holders of outstanding voting shares voted for Proposal 5, as set forth in the Proxy Statement. Thus, Proposal 5 is not approved.
Thank you, Glen. Subject to the final tabulation of the votes, I hereby declare the shareholders of Overstock.com have duly approved Proposals 1, 2, and 3 set forth in the Proxy Statement and did not approve Proposals 4 and 5. On behalf of the entire board, I'd like to thank the shareholders for their support. We will provide final results of the votes on a Form 8-K, which we'll file with the SEC within four business days. There being no other official business, this concludes the 2020 special meeting of the shareholders. The meeting is now adjourned. We thank all shareholders, both those that were here in person today and those who voted by proxies. We will also thank all shareholders who could not be with us here in person but were able to listen to the live audio feed. Thank you very much. And you're not saying anything?
Nope. Let me, can I take the mic?
Yeah. Absolutely.
I want to say this is a huge day for Overstock.com and for tZERO. We think we're changing the world with what we're doing with blockchain, and we think that this dividend is the beginning of that. Now, the fact that the first three proposals passed means that we can do this dividend, and we will be announcing a record date and a dividend date shortly. The fact that Proposals four and five didn't pass don't stop us from doing this dividend. It just means that in the future, if we want to change the rights under the Series A and Series B certificates, we'll seek a shareholder vote again. This is great news. Now, we are eager to set a record date and a dividend date for this dividend quickly.
However, we're going to make sure that all I's are dotted and T's are crossed so that when the record date is set and the dividend date comes, thank you, Clay, that everything will work well. I've got to work on my enunciation. That's all that stuff. Let me tell you what some of the gating items are and where they stand. Registering these shares. We are prepared to file a registration statement soon. We've had a comment period back and forth with the SEC and expect to file a fully effective registration statement shortly. We will not do the dividend until there is a real-time data feed so that those holding the Series A Preferred Share can see real-time intraday data quotes and end-of-day quotes, including pricing and other things. That technology is in place and will go live in the next week or so.
So that's a hurdle which we will soon pass. We are working with the DTC to get DTC eligibility. That cannot be done in finality until we set a record date. We're working with them to ensure that when we set the record date, there will be no major hurdles to getting that done. That's probably within the next few days to few weeks that we get there. We're also working with Nasdaq so that they will give us an ex-dividend date so investors can know when to buy or sell stock and receive a dividend or not. Once we finalize DTC eligibility, Nasdaq is willing to set an ex-dividend date. So that doesn't feel like a meaningful hurdle once we get the DTC eligibility. Those are the hurdles.
One other thing I'd like to mention to our shareholders: if you want to trade your dividend share today, you need to have an account with Dinosaur Financial. We refer to them in the shorthand as Dino. If you do not have a Dino account, you will still receive the dividend share. It will show up with your current broker-dealer or wherever you hold your share. You will not be able to trade that share unless it is in a Dino account or unless and until another broker-dealer plugs into the tZERO system. There are three to five other broker-dealers that are working to plug in. There is another way. If it is a large broker-dealer, they can plug in through an omnibus account into Dino so that you can trade within that broker-dealer, and then that broker-dealer's trades will settle within Dino. We want this to work well.
We're confident it will work well. And so until we are 100% confident it works well, we'll not declare a record date or a dividend date. We expect that to happen quickly, and we expect to have the dividend date be no later than sometime in April. So any questions? Big day. Saum, you pleased with this?
Yeah. This is a huge win for tZERO and for Overstock. It's going to bring thousands of investors to us, bring a lot of broker-dealers and institutions, so very pleased.
Okay. Kirsty, are there any questions that have come in on the interweb?
Yes, we do have a few.
Okay.
Saum provided a nice tZERO update recently. In it, he expressed, "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." This seems like it could be a smart move if you can get fair value recognition for the tZERO franchise versus the current funding valuation inside the ATM mechanism. Can you provide more color on the reasons to go outside for funding?
Saum, do you want to address that first?
Yeah. I think the goal long-term is to be independent and be self-sustained. And so while right now we don't feel it's the appropriate time to go raise outside capital, we'd like to hit a few more milestones, including trading additional securities, growing the investor base, which this is really going to help with. And then as we generate more revenues and have a valuation that we think is more appropriate, we'll go out and raise capital.
I would thank our questioner for reading Saum's shareholder letter. That's a great thing to do. And I know Saum has been diligent in trying to be communicative with the stakeholders in tZERO. I too think it will be good when tZERO raises money from someone other than Overstock. I think the timing of that has to be correct, and it has to be ripe. Having more tokens trading, having a little bit more robust tZERO ecosystem will ripen the timing on that. Anything else, Kirsty, that's come in?
Can Saum give us an update on BSTX and why this has been delayed?
Saum, I'll let you address the question to you.
At this stage, BSTX is really, we're working closely with regulators to get approval as a national exchange for digital securities. As I said in my letter, we think we'll get an answer one way or another, and we feel optimistic about it in Q2, so early Q2, we're hoping to get a positive answer on that.
I can just add to that. The delay is because we want to make sure, tZERO wants to make sure when BSTX goes live, that it works and works as expected. Part of that is making sure the regulators have signed off on it. The regulators have come back with questions on the submitted rule book. We've answered those and resubmitted the rule book. Every time there's the back and forth, we start a new shot clock that takes time to expire, and we're certainly not going to take BSTX live until the regulators have approved and the shot clock has expired. Other questions?
Any updates on the status of tZERO's application to become a registered broker-dealer?
Yeah. That's actually following a very similar back and forth with regulators that Jonathan described. We've answered questions from regulators. We've gone back and forth. That one, we're also hopeful we'll get approved in Q2, but it is taking some time. So as soon as they're comfortable, we'll be live and operational.
It's not our job to speak on behalf of regulators. They regulate. We comply. If they ask questions, we answer. If they comment on our applications, we re-comment back and sometimes fix. That's going as quickly as we can push the process.
Will you please get Voatz online in the state of Iowa for the next election process? Please.
Amen. For those that don't know, Voatz is a member of the Medici Ventures portfolio family of companies that has a mobile voting application that allows people to vote remotely in a secure and safe way using blockchain technology. It is today being used in two current presidential primaries, Super Tuesday primaries in Oregon and Washington, where remote voters, overseas voters, can vote ahead of the primary using Voatz today. While Voatz was not in Iowa, it is being used for the first time ever in a presidential primary.
That's all the questions.
It's great to be with our shareholders, both in person and on the phone. Thank you for your support. We thank our shareholders for voting for the first of these three proposals, a big win for Overstock, a big win for innovation. Thank you very much.