Overstock.com 2004 Annual Report Download - page 52

The estimated amount of redeemable common stock is based solely on the statutes of limitations of the various states in which stockholders may have
rescission rights and may not reflect the actual results. The stock is not redeemable by its terms. We do not have any unconditional purchase obligations, other
long-term obligations, guarantees, standby repurchase obligations or other commercial commitments.
In January 2005, the Company's Board of Directors authorized a stock repurchase program under which we may repurchase up to $50.0 million of our
common stock through December 31, 2007. Under the program, shares may be purchased as determined by management, from time to time and within certain
guidelines, in the open market or in privately negotiated transactions, including privately negotiated structured stock repurchase transactions and through
transactions in the options markets. Depending on market conditions and other factors, these purchases may be commenced or suspended at any time or from
time to time without prior notice.
In February and March 2005, in connection with the buyback program, we entered into several purchased call options, pursuant to which we may
purchase up to 1,250,000 shares of our common stock at certain settlement dates. In connection with these repurchase transactions, we have paid
approximately $47.5 million. Upon settlement, we, at our option, may elect to settle the contracts by physical settlement, net share settlement or net cash
settlement. Accordingly, we expect to receive either our capital investment returned with a premium or shares of our common stock, depending on whether
the market price of our common stock is above or below pre-determined prices agreed in connection with each such transaction.
To the extent that shares of common stock are delivered to us as a result of the transactions described above, the aggregate amount the Company pays or
paid for the repurchase of the shares as a result of these transactions will reduce the amount we might otherwise have spent to directly repurchase shares from
time to time under the stock repurchase program.
We believe that the cash and marketable securities currently on hand, amounts available under our credit facility and cash flows from operations will be
sufficient to continue operations for at least the next twelve months. While we anticipate that, beyond the next twelve months, our cash flows from operations
will be sufficient to fund our operational requirements, we may require additional financing. However, there can be no assurance that if additional financing is
necessary it will be available, or, if available, that such financing can be obtained on satisfactory terms. Failure to generate sufficient revenues, generate
profitability or raise additional capital could have a material adverse effect on our ability to continue as a going concern and to achieve our intended business
objectives. Any projections of future cash needs and cash flows are subject to substantial uncertainty. See "Risk Factors."
Seasonality
Financial results for Internet retailers are generally seasonal. Based upon the Company's historical experience, increased revenues typically occur during
the fourth quarter because of the Christmas retail season. The actual quarterly results for each quarter could differ materially depending upon consumer
preferences, availability of product and competition, among other risks and uncertainties. Accordingly, there can be no assurances that seasonal variations will
not materially affect the Company's results of
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