tZERO Expands TZROP Conversion Proposal to Include Common Equity Participation

tZERO Group, Inc. announced an enhancement to its previously announced proposal to convert TZROP security tokens into tokenized Series B preferred stock. The revised proposal now includes eight shares of the company’s common stock for each TZROP share converted, in addition to the three shares of Series B preferred stock originally proposed. This change responds to investor feedback seeking broader participation across tZERO’s capital structure.

The resulting common stock shares are expected to be fully tokenized and custodied on-chain within tZERO’s regulated wallet infrastructure. While the value of these interests depends on future business development, financing terms, and potential strategic transactions, the objective is to provide enhanced exposure to another layer of tZERO’s capital structure and any potential upside in liquidity events. Bed Bath & Beyond, Inc., tZERO’s largest shareholder, expressed its intention to support this proposal despite the significant dilution to its common stock position, subject to certain corporate governance enhancements.

As part of these governance changes, Bed Bath & Beyond will receive a designated Board seat to fill a vacancy on tZERO’s Board. Additionally, tZERO will engage Alvarez & Marsal to assist with a comprehensive review of its current technology resources, vendor services and operational footprint. Marcus Lemonis, Executive Chairman and CEO of Bed Bath & Beyond, stated that this next phase must be defined by stronger governance, clear accountability, and a materially lower cost structure.

Upon closing of the conversion, tZERO’s CEO Alan Konevsky will assume the role of Chairman of the Board as Matt Mosman transitions to a director role. Konevsky noted that this revised proposal reflects feedback from the investor community, who expressed strong desire for additional participation across the capital stack and ability to share in the company’s future upside. Under the enhanced proposal, existing TZROP holders will hold approximately 31% of the company’s outstanding common stock and restricted stock units issued with respect to such common shares.

The enhanced proposal will reduce the interests of current common stock holders by approximately 30% in that class, and the interests of current Series B preferred stock holders by 27% in that class. Upon conversion, the Series B preferred stock and common stock shares issued to TZROP holders would together represent approximately 31% of the company on a fully diluted basis based on current capitalization. A summary of the independent Dahn Consulting Group report on relative value is posted on the TZROP Amendment webpage, accessible at https://www.tzero.com/tzrop-amendment.

An updated pro forma capitalization table and set of FAQs are available for investors to review on the TZROP Amendment webpage, accessible at https://www.tzero.com/tzrop-amendment. The terms of the original proposal and the amended proposal have been approved by an independent special committee of the Board of Directors of tZERO. The enhanced proposal has been approved by the majority holders of the Series B preferred stock. The proposed restructuring remains subject to approval by the required classes of security holders and satisfaction of other conditions described in the consent solicitation materials.

In connection with the proposed conversion, tZERO entered into a letter of intent with Bed Bath & Beyond for up to $10 million in additional capital through a convertible note financing. The letter of intent is available on the TZROP Amendment webpage, accessible at https://www.tzero.com/tzrop-amendment. This enhancement is intended to further align early supporters of tZERO with the company’s long-term growth trajectory by providing direct participation in the equity of the company across each current share class that will exist following conversion.

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