Green Dot 2010 Annual Report Download - page 81

Note 6 — Income Taxes (continued)
been examined by the IRS, and there have been no material changes in our tax liabilities for those years.
We generally remain subject to examination of our federal income tax returns for the year ended July 31,
2007 and later years. We generally remain subject to examination of our various state income tax returns
for a period of four to five years from the respective dates the returns were filed.
Note 7 — Borrowing Agreements
In March 2009, we increased the balance available on our line of credit from $12.0 million to
$15.0 million. In March 2010, we renewed our line of credit, reducing the balance available from
$15.0 million to $10.0 million. This line of credit matures on March 24, 2011, and bears interest at LIBOR
(as published in The Wall Street Journal) plus 3.50%. We also reduced our cash collateral requirements
from $15.0 million to $5.0 million. We present our cash collateral requirements on our consolidated
balance sheets as restricted cash. There was no outstanding borrowing on this line of credit at Decem-
ber 31, 2010 or 2009.
Note 8 — Concentrations of Credit Risk
Financial instruments that subject us to concentration of credit risk consist primarily of unrestricted
cash and cash equivalents, restricted cash, accounts receivable, and settlement assets. We deposit our
unrestricted cash and cash equivalents and our restricted cash with regional and national banking
institutions, including certain of our card issuing banks, that we periodically monitor and evaluate for
creditworthiness. Credit risk for our accounts receivable is concentrated with card issuing banks and our
customers, and this risk is mitigated by the relatively short collection period and our large customer base.
We do not require or maintain collateral for accounts receivable. We maintain reserves for uncollectible
overdrawn accounts and uncollectible trade receivables. Credit risk for our settlement assets is concen-
trated with our retail distributors, which we periodically monitor.
Note 9 — Stockholders’ Equity
In March 2010, our board of directors amended our Certificate of Incorporation to adopt a dual class
structure for our common stock. The two classes of common stock are Class A common stock and Class B
common stock. Upon adoption, all our common stock outstanding converted to Class B common stock. In
July 2010, we filed a restated Certificate of Incorporation that increased the number of authorized Class A
and Class B common stock from 75,000,000 shares each to 100,000,000 shares each and reduced the
number of authorized shares of preferred stock from 25,553,267 to 5,000,000.
Common Stock
Our Certificate of Incorporation specifies the following rights, preferences, and privileges for our
common stockholders.
Voting
Holders of our Class A common stock are entitled to one vote per share and holders of our Class B
common stock are entitled to ten votes per share. In general, holders of our Class A common stock and
Class B common stock will vote together as a single class on all matters (including the election of directors)
submitted to a vote of stockholders, unless otherwise required by law. Delaware law could require either
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GREEN DOT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)