Overstock.com 2005 Annual Report Download - page 89

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Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
compensation in the first quarter of 2006. See "Stock-based compensation" of this Note 2 for additional discussion, including the
anticipated effect on financial as a result of adopting this standard.
On March 29, 2005, the SEC published Staff Accounting Bulletin ("SAB") No. 107, which provides the Staff's views on a variety
of matters relating to the interaction between "Statement 123R" and certain Securities and Exchange Commission Rules and
regulations. The Company is currently evaluating the provisions of the SAB and will implement it when the Company begins
expensing stock options under SFAS 123R in the first quarter of 2006.
In November 2005, the FASB issued FASB Staff Position ("FSP") Nos. SFAS 115-I and SFAS 124-I, The Meaning of Other-
Than-Temporary Impairment and Its Application to Certain Investments. This FSP addresses the three-step determination as to when
an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss.
This FSP also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires
certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in this
FSP shall be applied to reporting periods beginning after December 15, 2005. Earlier application is permitted. The Company will
adopt this FSP in the quarter ended March 31, 2006 and is currently evaluating the effect of adoption on its results of operations.
3. PUBLIC OFFERINGS
In June 2004, the Company closed its second follow-on public offering, pursuant to which it sold 1.3 million shares of common
stock, with proceeds to the Company of approximately $37.9 million, net of $405,000 of issuance costs.
In November 2004, the Company closed another follow-on public offering, pursuant to which it sold 1.4 million shares of
common stock, with proceeds to the Company of approximately $75.2 million, net of $215,000 of issuance costs. Concurrently in
November 2004, the Company issued convertible senior notes pursuant to which it received $116.2 million, net of $3.8 million of
initial purchaser's discount and debt issuance costs.
4. MARKETABLE SECURITIES
The Company's marketable securities consist of funds deposited into capital management accounts managed by two financial
institutions. The financial institutions invested these funds in municipal, government, and corporate bonds at December 31, 2004, as
follows (in thousands):
Cost
Basis
Unrealized
Gains
Unrealized
Losses
Estimated
Market Value
U.S. government and government agency securities $ 27,326 $ 45 $ (218 ) $ 27,153
Corporate securities 55,197 — (17 ) 55,180
Mortgage based securities 6,483 — (14 ) 6,469
$ 89,006 $ 45 $ (249 ) $ 88,802
F-19