TiVo 2007 Annual Report Download - page 56

Table of Contents
For the fiscal year ended January 31, 2007, the principal source of cash generated from financing activities related to the issuance of common stock, of
which $64.5 million was the net proceeds of our September 5, 2006 underwritten public offering, $9.1 million was related to stock option exercises, $3.3
million was from proceeds from warrant exercises, and $2.8 million related to issuances of stock under our employee stock purchase plan.
Financing Agreements
Universal Shelf Registration Statement.
We have an effective universal shelf registration statement on Form S-3 (No. 333-146156) 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. Depending on market
conditions, we may issue securities under this or future registration statements or in private offering exempt from registration requirements.
Revolving Line of Credit Facility with Citigroup.
On January 25, 2007, we entered into a credit agreement, together with a post-closing agreement and related security and other ancillary agreements,
with Citigroup Global Markets Realty Corp., as lender and agent. Under the terms of the credit agreement Citigroup has extended a revolving line of credit
equal to the lesser of $50 million or amounts available pursuant to a borrowing base calculation. As of January 31, 2008, we could borrow the full $50
million. We may request that an additional $50 million of borrowing capacity be added to the revolving line of credit, subject to receipt of lending
commitments and other conditions. The credit agreement requires us to use proceeds exclusively for working capital and general corporate purposes. As of
January 31, 2008, we had no borrowings outstanding under this credit agreement.
Borrowings under the credit agreement are secured by a first-priority security interest on substantially all of our current and future assets (except for
certain intellectual property held by our subsidiaries and certain other assets). Borrowings under the credit agreement will bear interest at a rate equal to 1-
month LIBOR for U.S. dollar deposits plus 4.0%, but during an event of default, the interest rate becomes 2.0% above the rate in effect immediately before
the event of default.
The credit agreement includes, among other terms and conditions, limitations on our ability to create, incur, assume or be liable for indebtedness (other
than specified types of permitted indebtedness); dispose of assets outside the ordinary course (subject to specified exceptions); acquire, merge or consolidate
with or into another person or entity (other than specified types of permitted acquisitions); create, incur or allow any lien on any of its property or assign any
right to receive income (except for specified permitted liens); make investments (other than specified types of investments); or pay dividends or make
distributions (each subject to specified exceptions), and certain financial covenants. At January 31, 2008, we were in compliance with these covenants. The
credit agreement terminates and any and all borrowings are due on January 25, 2010, but may be terminated earlier by us without penalty upon written notice
and prompt repayment of all amounts borrowed.
Contractual Obligations
As of January 31, 2008, we had contractual obligations to make the following cash payments:
Payments due by Period
Contractual Obligations Total
Less
than 1
year 1-3 years 3-5 years
Over 5
years
(In thousands)
Operating leases $ 4,861 $ 2,428 $ 2,433 $ — $ —
Purchase obligations 4,525 $ 4,525 — — —
Total contractual cash obligations $ 9,386 $ 6,953 $ 2,433 $ — $ —
Purchase Obligations with Contract Manufacturers and Suppliers. We purchase components from a variety of suppliers and use several contract
manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and
help assure adequate component supply, we enter into agreements with contract manufacturers and suppliers that either allow them to procure inventory based
upon criteria as defined by us or that establish the parameters defining our requirements. In certain instances, these agreements allow us the option to cancel,
reschedule, and adjust our requirements based on our business needs prior to firm orders being placed. The table above displays that portion of our purchase
commitments arising from these agreements that is firm, non-cancelable, and unconditional. If there are unexpected changes to anticipated demand for our
products or in the sales mix of our products, some of the firm, non-cancelable, and unconditional purchase commitments may result into TiVo being
committed to purchase excess inventory. The above table does not include a reserve of $1.1 million for excess non-cancelable purchase commitments which is
included in accrued liabilities on our consolidated balance sheet dated January 31, 2008.
54