eBay 1998 Annual Report Download - page 70

eBAY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
70
Property and equipment includes $23,000 and $0 of equipment under capital leases at December 31, 1997 and
1998, respectively. Accumulated depreciation of assets under capital leases totaled $7,000 and $0 at December 31,
1997 and 1998, respectively.
December 31,
1997 1998
(in thousands)
Intangible assets, net:
Purchased technology.................................................................................................. $ — $ 500
Covenants not to compete ........................................................................................... — 208
Customer list ............................................................................................................... — 1,484
Goodwill...................................................................................................................... — 24
— 2,216
Less: Accumulated amortization ................................................................................. — (1,030)
$ — $1,186
Other current liabilities:
Accrued compensation and related benefits ................................................................ $ 68 $ 978
Advertising accruals.................................................................................................... — 1,274
Professional fees.......................................................................................................... — 451
Other accruals.............................................................................................................. 249 1,541
$ 317 $4,244
Note 4—Related Party Transactions:
Notes receivable from stockholders
At December 31, 1997 the Company held a note receivable from an officer of the Company totaling $68,000.
The note was full recourse, was secured by Common Stock and bore simple interest at 6% per annum. The principal
and interest on the note was repaid in November 1998. At December 31, 1998, the Company held notes receivable
from employees, officers and a director totaling $1.1 million, representing amounts owed to the Company from the
exercise of stock options. These full recourse notes are secured by Common Stock and bear interest at a rate of 8%
per annum. Interest is due and payable on December 1st of each year, and the principal is due on or before
December 1, 2002.
Professional services
In connection with the recruitment of its Chief Executive Officer, the Company engaged the services of an
executive search firm affiliated with a holder of the Company’ s Series B Mandatorily Redeemable Convertible
Preferred Stock. During 1998, the Company paid fees for services performed of $93,000 and issued 46,248 shares of
Series B Mandatorily Redeemable Convertible Preferred Stock with a fair value on the date earned of $93,000. The
amount paid for the services and the fair value of the shares are included in general and administrative expenses in
the consolidated statement of income for the year ended December 31, 1998.
Note 5—Debt:
Line of credit
At December 31, 1997 and 1998, the Company had $545,000 and $0, respectively, outstanding under a line of credit
with a financial institution. The line of credit provides for a revolving line, including an equipment sub-
limit facility, of up to $750,000 and expired on January 5, 1999. Under the line of credit, the Company was required
to comply with certain financial covenants. The Company was in compliance with all such covenants at December
31, 1997 and 1998.