Overstock.com 2002 Annual Report Download - page 37

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Selling shareholder fees — — 439
Changes in operating assets and liabilities:
Accounts receivable (682) (774) (5,429)
Inventories, net (4,025) 1,081 (6,368)
Prepaid expenses and other assets (277) 920 (1,857)
Other long-term assets (143) (263) 246
Accounts payable 2,781 (1,532) 10,051
Accrued liabilities 327 (2,133) 4,316
Net cash (used in) provided by operating activities (22,399) (10,459) 2,489
Cash flows from investing activities:
Purchases of marketable securities — — (34,819)
Sales of marketable securities — — 13,243
Expenditures for property and equipment (3,263) (1,669) (1,746)
Expenditures for other long-term assets — (35) (5)
Cash received from the acquisition of Gear.com 3,499 — —
Net cash provided by (used in) investing activities 236 (1,704) (23,327)
Cash flows from financing activities:
Payments on capital lease obligations (207) (248) (261)
Borrowings on related party note payables 3,000 4,500 1,160
Payments on related party note payables — (3,000) (5,660)
Issuance of redeemable preferred stock — — 6,582
Issuance of common stock in IPO, net of issuance costs — — 26,140
Payment of selling shareholder fees — — (439)
Issuance of common stock 25,150 6,319 31
Exercise of stock options and warrants 5 73 615
Purchase of treasury stock — (100) —
Net cash provided by financing activities 27,948 7,544 28,168
Net increase (decrease) in cash and cash equivalents 5,785 (4,619) 7,330
Cash and cash equivalents, beginning of year 2,563 8,348 3,729
Cash and cash equivalents, end of year $ 8,348 $ 3,729 $ 11,059
Supplemental disclosures of cash flow information:
Interest paid $ 58 $ 271 $ 222
Equipment acquired under capital leases 420 75 25
Deemed dividend on redeemable common stock 210 404 406
Deemed dividend related to beneficial conversion feature of redeemable preferred stock — — 6,607
Conversion of Series A preferred stock to common stock — — 6,582
Unearned stock-based compensation — 2,534 3,481
Lapse of rescission rights on redeemable common stock — 50 1,327
The accompanying notes are an integral part of these consolidated financial statements.
Overstock.com, Inc.
Notes to Consolidated Financial Statements
(all amounts in thousands, except per share data)
1. BUSINESS AND ORGANIZATION
Overstock.com, Inc. (the "Company") is an online "closeout" retailer offering discount, brand-name merchandise for sale primarily over the Internet. The
Company's merchandise offerings include bed-and-bath goods, kitchenware, watches, jewelry, electronics, sporting goods and designer accessories.
The Company was formed on May 5, 1997 as D2—Discounts Direct, a limited liability company. On December 30, 1998, the Company was reorganized
as a C Corporation in the State of Utah and reincorporated in Delaware in May 2002. On October 25, 1999, the Company changed its name to
Overstock.com, Inc.
The Company is subject to risks common to rapidly growing Internet-based companies, including rapid technological change, growth and consumer
acceptance of the Internet, dependence on principal products, new product development, new product introductions and other activities of competitors, and a
limited operating history in Internet related e-commerce activities.