TiVo 2003 Annual Report Download - page 30

Table of Contents
Financing Agreements
January 2004 Common Stock Offering. On January 30, 2004, we issued 8,000,000 shares of our common stock, par value $.001 per share, at $9.30 per
share to institutional investors managed by a large investment management firm headquartered in Boston. The issuance of the shares was registered pursuant
to our $100 million universal shelf registration statement on Form S-3 (File No. 333-106731). Our net proceeds from this sale were approximately $74.1
million after deducting our estimated offering expenses (see Item 8. Note 9. "Redeemable Convertible Preferred Stock, Common Stock and Stockholders'
Equity"). We intend to use the net proceeds for general corporate purposes, primarily to fund sales, marketing and customer acquisitions, and secondarily to
fund research and development, capital expenditures and working capital. Pending the application of the net proceeds, we expect to invest the proceeds in
investment-grade, interest-bearing securities.
$100 Million Universal Shelf Registration Statement. We have an effective universal shelf registration statement on file with the Securities and
Exchange Commission under which we may issue up to $100,000,000 of securities, including debt securities, common stock, preferred stock, and warrants.
As a result of the January 2004 common stock offering described above, there is $25,600,000 of remaining availability under this shelf registration statement.
On March 18, 2004, we filed a new universal shelf registration statement on Form S-3 (No. 333-113719) that, when declared effective, will increase the
securities we may issue under the combined registration statements to $100,000,000. Depending upon market conditions, we may issue securities under these
or future registration statements.
July 2003 Common Stock Offering. On July 1, 2003, we issued approximately 2.9 million shares of our common stock, par value $.001 per share, at
$9.26 per share. Net proceeds were approximately $26.1 million after deducting our cash offering expenses of approximately $500,000. We used the net
proceeds for general corporate purposes.
October 2002 Common Stock Offering. On October 7, 2002, we executed a purchase agreement with certain institutional investors to issue and sell
6,963,788 shares of our common stock, par value $.001 per share, for a per share purchase price of $3.59 and an aggregate purchase price of $25.0 million,
plus warrants to purchase 1,323,120 shares of our common stock with a term of three years and an exercise price of $5.00 per share and warrants to purchase
an additional 1,323,120 shares of our common stock with a term of four years and an exercise price of $5.00 per share. The offering closed on October 8,
2002 with net proceeds of approximately $24.3 million after deducting our cash offering expenses of approximately $650,000. We used the net proceeds from
this offering for general corporate purposes.
7% Convertible Senior Notes Due 2006. On August 28, 2001, we closed a private placement of $51.8 million in face value of convertible notes and
received cash proceeds of approximately $43.7 million from investors. In addition, we received non-cash consideration of $8.1 million in the form of
advertising and promotional services from Discovery Communications, Inc. and the National Broadcasting Company, Inc., who were existing stockholders.
Debt issuance costs were approximately $3.6 million, resulting in net cash proceeds of approximately $40.1 million. Of the total proceeds of $51.8 million,
$8.1 million was recorded as prepaid advertising and promotional services. As part of the transaction, we paid $5.0 million in October 2001 to NBC for
advertising that ran during the period that began October 1, 2001 and ended March 31, 2002.
During the period beginning on December 30, 2002 and ending on January 28, 2003, we temporarily reduced the conversion price of our convertible
notes from $3.99 to $3.70 per share pursuant to the indenture governing the notes in order to induce early conversions. During this period, $22.7 million in
principal amount of the $43.2 million outstanding principal amount of the notes was converted into an aggregate of 6,135,400 shares of our common stock.
The reduced conversion price resulted in 445,936 shares of common stock being issued in addition to the 5,689,464 shares of common stock that would have
been issuable upon conversion of the $22.7 million principal amount of notes at $3.99 per share.
Loan and Security Agreement. On July 17, 2003, we entered into a loan and security agreement with Silicon Valley Bank, whereby Silicon Valley
Bank agreed to extend to us a revolving line of credit of up to the lesser of $6 million or a borrowing base. The borrowing base is equal to the sum of 80% of
eligible accounts receivable plus 100% of pledged certificates of deposit (up to $2.0 million). The line of credit is secured by a first priority security interest
on all of our assets except for our intellectual property. We are required to maintain at least $2.0 million in pledged certificates of deposit with Silicon Valley
Bank during the term of the line of credit. The line of credit bears interest at the greater of prime plus 0.75% or 5.00% per annum, but in an event of default,
the interest rate becomes 3.00% above the rate effective immediately before the event of default. The loan and security agreement includes, among other
terms and conditions, limitations on our ability to dispose of our assets; merge or
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