TiVo 2006 Annual Report Download - page 36

Table of Contents
We expect that our existing capital resources will be sufficient to meet our cash requirements through the next twelve months. However, as we continue
to grow our business, we may need to raise additional capital, which may not be available on acceptable terms or at all. We may also incur debt or may draw
upon our line of credit which will subject us to restrictive covenants which if violated by us would cause us to incur penalties and increased expenses which
could in turn harm our business. If we cannot raise necessary additional capital on acceptable terms, we may not be able to develop or enhance our products
and services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements.
If additional capital is raised through the issuance of equity securities, the percentage ownership of our existing stockholders will decline, stockholders
may experience dilution in net book value per share, or these equity securities may have rights, preferences or privileges senior to those of the holders of our
common stock. In addition, we may be limited in our ability to raise capital through the issuance of additional equity securities by the number of authorized,
but unissued and unreserved shares of our common stock available for issuance. Any debt financing, if available, may involve covenants limiting, or
restricting our operations or future opportunities. For example, we may seek to leverage our existing and future revenues to raise capital for investing in future
subscription growth initiatives. Such financing activities may involve the issuance of debt or other secured instruments tied to current or future revenues that
may involve covenants limiting, or restricting our operations or future opportunities or may involve other risks to stockholders.
The large number of shares available for future sale could adversely affect the market price for our stock.
Sales of a substantial number of shares of our common stock in the public market or the perception that such sales might occur could adversely affect
the market price of our common stock. Several of our stockholders own a substantial number of our shares.
As of January 31, 2007, options to purchase a total of 18,665,974 shares were outstanding under our option and equity incentive plans, and there were
22,123,913 shares available for future grants. We have filed registration statements with respect to the shares of common stock issuable under our option and
equity incentive plans.
Future sales of the shares of the common stock, or the registration for sale of such common stock, or the issuance of common stock to satisfy our
current or future cash payment obligations or to acquire technology, property, or other businesses, could cause immediate dilution and adversely affect the
market price of our common stock. The sale or issuance of such stock, as well as the existence of outstanding options and shares of common stock reserved
for issuance under our option and equity incentive plans, also may adversely affect the terms upon which we are able to obtain additional capital through the
sale of equity securities.
We expect to continue to experience volatility in our stock price.
The market price of our common stock is highly volatile. Since our initial public offering in September 1999 through April 3, 2007, our common stock
has closed between $71.50 per share and $2.55 per share, closing at $6.45 on April 3, 2007. The market price of our common stock may be subject to
significant fluctuations in response to, among other things, the factors discussed in this section and the following factors:
• changes in estimates of our financial performance or changes in recommendations by securities analysts;
• our failure to meet, or our ability to exceed, the expectations of securities analysts or investors;
• release of new or enhanced products or introduction of new marketing initiatives by us or our competitors;
• announcements by us or our competitors of the creation, developments under or termination of significant strategic relationships, joint ventures,
significant contracts or acquisitions;
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