Yahoo 1998 Annual Report Download - page 34

For the year ended December 31, 1998, cash provided by financing activities of
$281.3 million was due primarily to the issuance of Common Stock to SOFTBANK
in the amount of $250.0 million during July 1998 and the issuance of Common
Stock pursuant to the exercise of stock options. For the year ended December 31,
1997, cash provided by financing activities of $9.6 million was due primarily to
the issuance of Common Stock pursuant to the exercise of stock options. For the
year ended December 31, 1996, cash provided by financing activities of $107.2
million was primarily due to the March 1996 issuance of 5.1 million shares of
Convertible Series C Preferred Stock for aggregate proceeds of $63.8 million, the
April 1996 initial public offering of 17.9 million shares of Common Stock for net
proceeds of $35.1 million, and other issuances of Common Stock.
The Company currently has no material commitments other than those under
operating lease agreements. The Company has experienced a substantial increase
in its capital expenditures and operating lease arrangements since its inception,
which is consistent with increased staffing, and anticipates that this will con-
tinue in the future. Additionally, the Company will continue to evaluate possible
acquisitions of, or investments in businesses, products, and technologies that
are complementary to those of the Company, which may require the use of cash.
Management believes existing cash and investments will be sufficient to meet
the Company’s operating requirements for at least the next twelve months;
however, the Company may sell additional equity or debt securities or obtain
credit facilities to further enhance its liquidity position. The sale of additional
securities could result in additional dilution to the Company’s shareholders.
YEAR 2000 IMPLICATIONS
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field and cannot distinguish 21st
century dates from 20th century dates. These date code fields will need to
distinguish 21st century dates from 20th century dates and, as a result, many
companies’ software and computer systems may need to be upgraded or replaced
in order to comply with such “Year 2000” requirements. The Company is in the
process of assessing the Year 2000 issue and expects to complete the program by
the spring of 1999. The Company has not incurred material costs to date in this
process, and currently does not believe that the cost of additional actions will
have a material effect on its results of operations or financial condition.
Although Yahoo! currently believes that its systems are Year 2000 compliant in
all material respects, the current systems and products may contain undetected
errors or defects with Year 2000 date functions that may result in material costs.
Although Yahoo! is not aware of any material operational issues or costs associ-
ated with preparing its internal systems for the Year 2000, the Company may
experience serious unanticipated negative consequences (such as significant
downtime for one or more Yahoo! Media properties) or material costs caused by
undetected errors or defects in the technology used in its internal systems. In
addition, the Company utilizes third-party equipment, software and content,
including non-information technology systems (“non-IT systems”), such as its
security system, building equipment, and non-IT systems embedded microcon-
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