Etsy 2015 Annual Report Download - page 61

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
Liquidity and Capital Resources
The following tables show our cash and cash equivalents, short-term investments, accounts receivable and working capital as of the dates indicated:




Cash and cash equivalents
$ 69,659
$ 271,244
Short-term investments
19,184
21,620
Accounts receivable, net
15,404
20,275
Working capital
85,608
278,932
As of December 31, 2015, our cash and cash equivalents, a majority of which were held in cash deposits and money market funds, were held for working
capital purposes and to invest in the build-out of our new Brooklyn, New York headquarters and other capital expenditures related to new office spaces
globally to support the growth in our business and operations. Through December 31, 2015, we have invested approximately $11.0 million into the new
Brooklyn, New York headquarters, and we intend to invest up to an additional $40.0 million through the middle of 2016.
We believe that our existing cash and cash equivalents and short-term investments, together with cash generated from operations and available borrowing
capacity under our Credit Agreement, will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity
assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to borrow funds
under our Credit Agreement or raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital
requirements and the adequacy of available funds will depend on many factors, including those described in "Key Factors Affecting Our Performance"
above and the Risk Factors section of this Annual Report on Form 10-K. We may not be able to secure additional financing to meet our operating
requirements on acceptable terms, or at all.

Prior to our initial public offering, or IPO, we financed our operations and capital expenditures primarily through cash flows generated by operations and
through non-registered sales of preferred stock and common stock. Since inception and prior to the completion of our IPO, we have raised a total of $131.6
million from the sale of preferred stock and common stock (including proceeds from the exercise of stock options), net of costs and expenses associated with
such financings.
On April 21, 2015, we closed our IPO, in which we issued and sold 13,333,333 shares of common stock at a public offering price of $16.00 per share. We
received net proceeds of $194.4 million after deducting underwriting discounts of $13.9 million and other offering expenses of approximately $5.1 million.
These expenses were recorded against the proceeds received from the IPO. In addition, we incurred approximately $300,000 in IPO-related expenses not
deductible from IPO proceeds.

In May 2014, we entered into a $35.0 million senior secured revolving credit facility pursuant to a Revolving Credit and Guaranty Agreement with several
lenders, or the Credit Agreement. In March 2015, we amended the Credit Agreement to increase the credit facility to $50.0 million. In December 2015, we
amended the Credit Agreement to clarify certain provisions relating to permitted investments and to make other immaterial updates. As amended, the Credit
Agreement will mature in May 2019. The amended Credit Agreement includes a letter of credit sublimit of $10.0 million and a swingline loan sublimit of
$15.0 million.
Borrowings under the amended Credit Agreement (other than swingline loans) bear interest, at our option, at (i) a base rate equal to the highest of (a) the
prime rate, (b) the federal funds rate plus 0.50% and (c) an adjusted LIBOR rate for a one-month interest period plus 1.00%, in each case plus a margin
ranging from 0.00% to 0.25% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 1.25%. Swingline loans under the amended Credit
Agreement bear interest at the same base rate (plus the margin applicable to borrowings bearing interest at the base rate). These margins are determined based
on the total leverage ratio for the preceding four fiscal quarters. We are also obligated to pay other customary fees for a credit facility of this size and type,
including an unused commitment fee and fees associated with letters of credit. As amended, the Credit Agreement also permits us, in certain circumstances, to
request an increase in the facility by an additional amount of up to $50.0 million (and in minimum amounts of $10.0 million) at the same maturity, pricing
and other terms.
57