Digital River 2002 Annual Report Download - page 38

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The Company believes that existing sources of liquidity and the results of its operations will provide adequate cash to fund its operations for at
least the next 24 months, although the Company may seek to raise additional capital during that period. In January 2002, the Company filed a
universal shelf registration statement with the SEC pursuant to which the Company will be permitted to issue up to $100 million in common
stock, preferred stock, debt securities and/or warrants. The sale of additional equity or convertible debt securities could result in additional
dilution to the Company’ s stockholders. There can be no assurances that financing will be available in amounts or on terms acceptable to the
Company, if at all.
Recent Accounting Pronouncements
In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment
of SFAS No. 123.” This statement provides alternative methods of transition for a voluntary change to the fair value method of accounting for
stock-based employee compensation. This statement also amends the disclosure requirements of SFAS No. 123 and APB Opinion No. 28,
“Interim Financial Reporting,” to require prominent disclosures in both annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used on reported results. The Company has implemented the annual
reporting requirements for SFAS No. 148 at December 31, 2002. The Company has determined at this time to continue to account for all stock-
based employee compensation plans under APB Opinion No. 25.
I n June 2002, the Financia l Ac c ounting Standa r ds Boar d issue d SFA S N o. 146, “A cc ounting for Costs Assoc ia ted w ith E xit or D isposal Ac tivitie s”.
SFA S N o. 146 addre sse s financia l ac c ounting a nd re por ting for c osts assoc ia ted w ith e xit or disposal ac tivitie s. I t nullif ie s E me r ging Issue s Ta sk
For ce Issue N o. 94-3, “ Lia bility Re c ognition f or Ce rtain E mployee Te rmina tion Be nef its a nd Othe r Costs to Exit an A c tivity” . SFAS No. 146
r equir es that a liability be r e cognize d f or c osts a ssoc iated with an e xit or disposal ac tivity only w he n the liability is inc urr ed. SFA S No. 146 also
e stablishe s f air value as the objec tive f or initia l mea sur eme nt of lia bilities r e la te d to e xit or disposa l a ctivitie s. SFA S N o. 146 is ef fe c tive for e xit or
disposal a c tivitie s tha t a re initia ted a f te r D ec ember 31, 2002. T he Company doe s not be lie ve that this stateme nt w ill ha ve a ma te r ia l impac t on its
c onsolidate d financia l sta te me nts.
ITEM 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK.
We do not enter into financial instruments for trading or speculative purposes and do not currently utilize derivative financial instruments. Our
operations are conducted primarily in the United States and as such are not subject to material foreign currency exchange rate risk. We have no
long-term debt.
ITEM 8. FIN AN CIA L STA TEMEN TS A N D SU P PLEM ENTAR Y D ATA .
O ur Fina nc ial Stateme nts a nd N ote s the re to appea r beginning a t pa ge 41 of this r e port.