Overstock.com 2014 Annual Report Download - page 54

Table of Contents
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Our benefit for income taxes for the year ended December 31, 2013 of $68.0 million is primarily due to our decision to release our deferred tax asset
valuation allowance of $75.5 million at December 31, 2013. Our provision for income taxes for the year ended December 31, 2012 of $485,000 was for
federal alternative minimum tax and certain income tax uncertainties, including interest and penalties.
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
Subject to our need for additional financing for a portion of the anticipated costs of completing our new corporate headquarters as described below,
we believe that the cash and cash equivalents currently on hand and expected cash flows from future operations will be sufficient to continue operations for
at least the next twelve months. However, we may require additional financing for the completion of the new corporate headquarters and related equipment
and furniture. Although we are attempting to obtain additional financing, there can be no assurance that we will be able to do so, or that any financing
available will be available on satisfactory terms. Our failure to generate sufficient revenues or profits or to obtain additional financing or raise additional
capital could have a material adverse effect on our operations and on our ability to achieve our intended business objectives. Any projections of future cash
needs and cash flows are subject to substantial uncertainty.
As we have previously announced, we plan to build a new corporate headquarters in Salt Lake City, Utah. In September 2014, our wholly owned real
estate subsidiary purchased the site for the headquarters for approximately $11 million in cash. In October 2014, the subsidiary entered into a Construction
Agreement relating to the construction of the future headquarters (see  below). We currently estimate the total cost of the
headquarters, including the cost of the land and related equipment and furniture, at approximately $95 million.
On October 24, 2014, we entered into a syndicated senior secured credit facility with U.S. Bank National Association, and other banks which
provides for an approximately 27-month construction loan of $45.8 million (which is designed to subsequently convert into an approximately 6.75-year term
loan following completion of the construction of the headquarters), and a three-year $10 million revolving loan facility that terminates on October 24, 2017
but may be renewed with the consent of all lenders.
The actual amount of financing to be available under the construction loan facility will be limited by a loan-to-value limit of 80% based on periodic
appraisals. The loan agreement requires us to fund a substantial portion of the project costs ($37.4 million) prior to any draws on either the term loan facility
or the revolving facility. We have the right to prepay either loan without penalty at any time.
If the conditions to the conversion of the construction loan into the term loan are not satisfied in early 2017, both the construction loan and the
revolver would become due immediately. This would have a material adverse effect on our liquidity.
The $10 million in financing to be available under the revolving loan facility may be used for working capital, capital expenditures and other
corporate purposes, but may not be used for the construction of the headquarters. In order to draw on either the construction loan or the revolving loan we are
required to satisfy a number of conditions set forth in the loan agreement. Based on these conditions (primarily the requirement to fund a substantial portion
of the project costs) we do not expect to draw on the construction loan until the second half of 2015 (see 
 below).
We expect to continue discussions with the bank regarding additional financing for equipment and furniture for our new corporate headquarters,
when we are nearer to completion of construction.
Our principal sources of liquidity are cash flows generated from operations, and our existing cash and cash equivalents. At December 31, 2014, we
had cash and cash equivalents of $181.6 million.
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