TiVo 2006 Annual Report Download - page 90

Table of Contents
for these loss contingencies if both of the following conditions are met: information available prior to issuance of the financial statements indicates that it is
probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. As of January 31, 2007,
the Company has only accrued a liability for Nolz, et al. v. TiVo as the other lawsuits filed against the Company have not met the conditions for an accrual to
be made. The Company expenses legal costs as they are incurred.
Facilities Leases
The Company's corporate headquarters consists of two buildings located in Alviso, California, which are used for administrative, sales and marketing,
customer service, and product research and development activities. In October 1999, the Company entered into an office lease with WIX/NSJ Real Estate
Limited Partnership for its headquarters. On April 27, 2006, the Company entered into the First Amendment to Lease Agreement, dated as of February 1,
2006, which amends the Lease Agreement, dated as of October 6, 1999. Under the Amendment, the Company extended for an additional three years, from
March 9, 2007 to January 31, 2010, the current Lease Agreement. Under the terms of the Amendment, monthly rent is approximately $165,000 with built-in
base rent escalations periodically throughout the lease term. The lease is classified as an operating lease. Rent expense is recognized using the straight-line
method over the lease term and for fiscal year ended January 31, 2007, 2006, and 2005 was $2.1 million, $3.0 million, and $3.0 million, respectively.
Additionally, the Company delivered a letter of credit totaling $477,000, to WIX/NSJ Real Estate Limited Partnership as collateral for performance by
the Company of all of its obligations under the lease. The letter of credit is to remain in effect the entire term of the lease, but the amount does decrease over
time. The Company also has operating leases for sales and administrative office space in New York.
Operating lease cash payments for the fiscal years ended January 31, 2007, 2006, and 2005 were $1.8 million, $3.3 million, and $3.1 million,
respectively. Future minimum operating lease payments as of January 31, 2007, are as follows:
Fiscal Year Ending
Lease
Payments
(In thousands)
January 31, 2008 2,331
January 31, 2009 2,386
January 31, 2010 2,431
Total $ 7,148
9. STOCKHOLDERS EQUITY/(DEFICIT)
Common Stock
On September 11, 2006 the Company sold 8,264,463 shares of its common stock, to institutional investors at $7.865 per share. The shares were
registered pursuant to the Company's $100 million universal shelf registration statement on Form S-3 (File No. 333-113719). The net proceeds from this sale
were approximately $64.5 million after deducting the Company's estimated offering expenses of $484,000.
During the fiscal year ended January 31, 2005 the Company issued an aggregate of 1,553,883 shares of common stock upon conversion of $6.2 million
in face value of convertible notes payable at the conversion price of $3.99 per share. During the fiscal years ended January 31, 2007, 2006, and 2005, the
Company issued 627,215 shares, 671,348 shares, and 434,083 shares of common stock as a result of employee stock purchase plan purchases and 1,892,697
shares, 1,643,915 shares, and 448,086 shares of common stock as a result of the exercise of stock options, respectively.
87