================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: August 28, 2001
(Date of earliest event reported)
TIVO INC.
(exact name of registrant as specified in its charter)
Delaware Commission File: 77-0463167
(State or other jurisdiction 000-27141 --------------------
of incorporation or --------- (I.R.S. Employer
organization) Identification No.)
2160 Gold Street
P.O. Box 2160
Alviso, California 95002
(Address of Principal executive offices, including zip code)
(408) 519-9100
--------------
(Registrant's telephone number, including area code)
================================================================================
ITEM 5. OTHER EVENTS
On August 28, 2001, TiVo Inc. closed a private placement of $51,750,000 of
convertible debt and warrants in a private placement to accredited investors in
reliance on Regulation D under the Securities Act of 1933. The securities have
not been registered under the Securities Act of 1933 and may not be offered or
sold in the United States absent registration or an applicable exemption from
such registration requirements.
The private placement consisted of the following securities:
1 $51,750,000 of 7% Convertible Senior Notes due 2006:
---------------------------------------------------
Conversion.
----------
The notes are convertible at the option of the holder at any time prior to
maturity into common stock, initially at a conversion price of $6.73 per
share, subject to antidilution adjustment upon certain events. The notes
mature on August 15, 2006. Interest is payable semi-annually in arrears on
August 15 and February 15, beginning on Feburary 15, 2002.
Conversion Price Adjustments.
----------------------------
The conversion price of the notes will be adjusted on the date which is the
earlier of (1) the date by which we are required to have had the shelf
registration statement covering the resale of the notes, warrants and units
and the common stock underlying the notes and warrants declared effective
by the Securities and Exchange Commission or be subject to liquidated
damages under our registration rights agreement with the investors in the
offering or (2) two days after the date on which the Securities and
Exchange Commission declares effective the shelf registration statement
(the earlier of such dates, the "effective registration adjustment date")
if the average closing price per share of our common stock for the 10
consecutive trading days preceding the effective registration adjustment
date is less than the conversion price on such date to the greater of such
average closing price or the floor price of $4.21 per share. The conversion
price will also be adjusted on August 23, 2002 if the average closing price
per share of our common stock for the 10 consecutive trading days preceding
August 23, 2002 is less than the conversion price on such date, to the
greater of such average closing price or the floor price of $4.21 per
share. In no event will the conversion price on the notes be reduced below
the floor price of $4.21 per share by any such adjustment. The floor price
is additionally subject to antidilution adjustment upon certain events in
accordance with any such antidilution adjustment to the conversion price.
In addition, if at any time before August 28, 2003, we choose to issue
additional common stock or common stock equivalents in certain
circumstances at an effective per share price (or with respect to common
stock equivalents, at an effective per share conversion or exercise price)
(in either case, based upon the portion of the purchase price we allocated
to such common stock or common stock equivalents for federal income tax
purposes) less than the effective conversion price of the notes (based upon
the portion of the purchase price we allocated to the notes for federal
income tax purposes, which initially is $5.45 per share), the conversion
price of the notes would be reduced so that the effective conversion price
of the notes would be equal to the effective per share price of such common
stock or common stock equivalents.
In the event that any such common stock equivalent contains an adjustment
provision pursuant to which the conversion or exercise price of such common
stock equivalent may itself be adjusted in certain circumstances and such
adjustment occurs, resulting in a reduction of such conversion or exercise
price to a price lower than the conversion price then in effect for the
notes, regardless of whether such adjustment occurs prior to August 28,
2003, the conversion price for the notes will be adjusted so that the
effective conversion price of the notes equals the conversion or exercise
price of such common stock equivalent.
-2-
The maximum number of shares issuable upon full conversion of the notes
(not including the effect of any adjustment for certain issuances of
additional common stock or common stock equivalents, as described above),
at the initial conversion price of $6.73 per share, is 7,687,164. If the
conversion price were reduced to the floor price of $4.21 per share upon
the adjustment described in the first paragraph under "Conversion Price
Adjustments," such number of shares would be 12,292,163.
Optional Redemption.
-------------------
We may redeem, under certain conditions, some or all of the notes, at any
time before maturity, at a redemption price, in cash, of $1,000 per $1,000
principal amount of the notes, plus accrued and unpaid interest, if any,
to, but excluding, the redemption date. Before August 28, 2004, we may only
exercise this right if (1) the closing price per share of our common stock
exceeds 200% of the conversion price then in effect (not including the
effect of any adjustment that would otherwise have been made on either the
effective registration adjustment date or August 23, 2002, as described
above, or of any additional conversion price adjustment for issuances of
common stock or common stock equivalents with an effective per share price
lower than the then effective conversion price, as described above) for any
20 out of 30 consecutive trading days and (2) within 10 days following the
end of such 30-day period, we mail a notice of redemption to holders of the
notes. In addition, in order for us to exercise the right at any time prior
to the last date on which the shelf registration statement is required to
remain effective and available for use pursuant to our registration rights
agreement with the investors in the offering, the shelf registration
statement must be effective and available for use at all times during the
period beginning 30 days prior to the date of the redemption notice and
ending on the earlier of the redemption date or the last date on which the
shelf registration statement is required to remain effective and available
for use pursuant to such registration rights agreement, and must be
expected to remain effective and available for use until the earlier of 30
days following the redemption date or the last date on which the shelf
registration statement is required to remain effective pursuant to such
registration rights agreement. Holders may convert their notes into shares
of our common stock at any time prior to the redemption date, which may not
be less than 60 days nor more than 90 days after the date of mailing of the
redemption notice. If we redeem some or all of the notes prior to August
28, 2002, we will make an additional payment in cash with respect to the
notes called for provisional redemption in an amount equal to $70 per
$1,000 principal amount of notes (representing approximately one year's
interest), less the amount of any interest we actually paid on the notes
prior to the date we mailed the notice.
Repurchase at holder's option upon a repurchase event.
-----------------------------------------------------
The holders of the notes may require us to repurchase their notes, in cash,
upon a repurchase event at 110% of the principal amount of the notes, plus
accrued, but unpaid, interest. Such repurchase events include certain
changes of control and the delisting of our common stock.
2. Warrants to purchase approximately 2.5 million shares of our common stock.
-------------------------------------------------------------------------
Each of these warrants, which we call the "five-year warrants," represents
the right to purchase one share of our common stock. The five-year warrants
are exercisable at any time on or before August 28, 2006. The exercise
price of the five-year warrants is initially $7.85 per share of our common
stock, subject to adjustment upon certain events.
Each of the five-year warrants will expire at 5:00 p.m., local time, in New
York City on August 28, 2006.
The maximum number of shares issuable upon full exercise of the five-year
warrants, assuming the initial exercise price of $7.85 per share, is
2,536,766.
-3-
3. Units consisting of additional warrants. As part of the private placement,
---------------------------------------
we issued two additional sets of warrants that initially trade as a unit,
as described below. Each unit consists of one warrant, which we call the
"one-year warrants," to purchase one share of our common stock and one
warrant, which we call the "five-year terminable warrants," to purchase .33
of a share of our common stock. The one-year warrant and the five-year
terminable warrant that comprise each unit are not separately transferable,
except that upon the exercise of the one-year warrant, the corresponding
five-year terminable warrant may thereafter be separately transferred (the
date of such exercise, the "separation date").
One-year warrants to purchase approximately 3.8 million shares of our
---------------------------------------------------------------------
common stock.
------------
Each one-year warrant represents the right to purchase one share of our
common stock. The one-year warrants are exercisable at any time on or
before August 28, 2002, subject to early termination as described
below. The exercise price of the one-year warrants is initially $6.73
per share of our common stock, subject to antidilution adjustment upon
certain events.
Each of the one-year warrants will expire at 5:00 p.m., local time, in
New York City on August 28, 2002, unless earlier terminated as
described below.
The maximum number of shares issuable upon full exercise of the
one-year warrants, assuming the initial exercise price of $6.73 per
share, is 3,843,582.
Early termination of one-year warrants at our option.
----------------------------------------------------
We may terminate the one-year warrants at any time if the closing price
per share of our common stock exceeds 150% of the exercise price then
in effect for any 20 out of 30 consecutive trading days (such period,
the "determination period") and a shelf registration statement covering
resales of the common stock issuable upon exercise of the one-year
warrants is effective and available for use at all times during the
period beginning 60 days prior to the date on which we mail notice of
the termination of the one-year warrants and ending on the 60/th/ day
after the mailing date of the notice of termination, and is expected to
remain effective and available for use at least 30 days following such
60/th/ day. If we elect to terminate the one-year warrants, we may only
do so if, within 30 days after the end of the determination period, we
provide notice of termination to the holders of the notes. The one-year
warrants will expire 60 days after the mailing date of the notice of
termination.
Five-year terminable warrants to purchase approximately 1.3 million shares
--------------------------------------------------------------------------
of our common stock.
-------------------
Each five-year terminable warrant represents the right to purchase .33
of a share of our common stock. The five-year terminable warrants are
exercisable at any time on or after the separation date for such
warrant and on or before August 28, 2006, subject to early termination
as described below. The exercise price of the five-year terminable
warrants is initially $7.85 per share of our common stock, subject to
antidilution adjustment upon certain events.
Each of the five-year terminable warrants will expire at 5:00 p.m.,
local time, in New York City on August 28, 2006, unless earlier
terminated as described below.
The maximum number of shares issuable upon full exercise of the
five-year terminable warrants, assuming the initial exercise price of
$7.85 per share, is 1,268,384.
-4-
Early termination of the five-year terminable warrants.
------------------------------------------------------
In the event that the one-year warrant included in a unit with such
five-year terminable warrant terminates or expires without having been
exercised, such corresponding five-year terminable warrant will also
terminate. The termination of the five-year terminable warrant will be
effective as of the date of the termination or expiration of the
one-year warrant.
Registration Rights Agreement.
-----------------------------
We have agreed to use our best efforts to file with the Securities and Exchange
Commission a shelf registration statement covering the resale of the notes, the
warrants, the units and the common stock issuable upon conversion of the notes
and upon exercise of the warrants within 30 days after the closing date of this
offering and to use our best efforts to cause that registration statement to be
declared effective as promptly as practicable after the closing date for this
offering. In the event that the conversion price of the notes is adjusted as
described in the second or third paragraph above under "Conversion Price
Adjustments," we have agreed to use our best efforts to file with the Securities
and Exchange Commission a supplemental shelf registration statement covering the
resale of any additional shares of common stock issuable as a result of the
conversion price adjustment within 30 days after the date on which such
conversion price adjustment occurs. If we file a supplemental shelf registration
statement, we have agreed to use our best efforts to cause such supplemental
shelf registration statement to be declared effective as promptly as
practicable. We have agreed to use our best efforts to keep these shelf
registration statements continuously, subject to certain blackout periods,
effective until the earlier of the sale under the registration statement of all
transfer restricted securities (as defined in the registration rights agreement)
or two years after the latest date on which we issue securities in this
offering. We will be required to pay liquidated damages to the holders of the
notes, warrants or the common stock issued upon conversion or exercise thereof
in certain circumstances.
Use of Proceeds.
---------------
We received net cash proceeds of approximately $40.8 million from the sale of
the notes, warrants and units in this offering, after deducting the placement
agents' fees and estimated offering expenses of approximately $2.85 million (not
including non-cash offering expenses related to the issuance of approximately
146,000 five-year warrants, 221,000 one-year warrants and 221,000 five-year
terminable warrants to one of our placement agents), and not including an
estimated $8.1 million worth of notes and warrants for which we received
consideration in the form of advertising and promotional services from certain
investors in lieu of cash.
We intend to use the net cash proceeds from the sale of the notes and warrants
for general corporate purposes, which may include funding research, development,
sales and marketing, capital expenditures and increasing our working capital.
Pending the application of the net proceeds, we expect to invest the proceeds in
investment-grade, interest-bearing securities.
The exact terms of the notes are contained in the indenture attached as Exhibit
4.1 to this Current Report on Form 8-K and are incorporated by reference herein.
The exact terms of the warrants are contained in the warrant agreements attached
as Exhibits 4.2, 4.3 and 4.4 to this Current Report on Form 8-K and are
incorporated by reference herein. The notes were sold to investors pursuant to
note, warrant and unit purchase agreements, the form of which is attached as
Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference
herein. The exact terms of the registration rights that we have granted to the
investors are contained in the registration rights agreement attached as exhibit
99.3 to this Current Report on Form 8-K and incorporated by reference herein.
The descriptions of the notes, warrants, units, indenture, warrant agreements
and registration rights agreement set forth in this report do not purport to be
complete and are qualified in their entirety by the provisions of the indenture,
the warrant agreements and the registration rights agreement.
-5-
A copy of the press release announcing the closing of the note, warrant and unit
offering is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements,
including those pertaining to the net proceeds from the offering and our use of
the net proceeds from the offering. You can identify forward-looking statements
by use of forward-looking terminology such as "believes," "anticipates,"
"expects," "plans," "may," "will," "intends" or the negative of these words and
phrases or similar words or phrases. You can also identify forward-looking
statements by discussions of strategy, plans or intentions. Such forward-looking
statements have known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially
different from any results, performance or achievements expressed or implied by
such forward-looking statements. Actual results could differ materially from
those set forth in such forward-looking statements as a result of the "Factors
That May Affect Future Operating Results" and other risks detailed in our
reports filed with the Securities and Exchange Commission. We caution you not to
place undue reliance on forward-looking statements, which reflect an analysis
only and speak only as of the date of this report.
ITEM 7. EXHIBITS
(c) Exhibits
4.1 Indenture, dated August 28, 2001, between TiVo Inc. and The Bank of New
York, as trustee.
4.2 Warrant Agreement, dated August 28, 2001, between TiVo Inc. and The
Bank of New York, as warrant agent.
4.3 Warrant Agreement, dated August 28, 2001, between TiVo Inc. and The
Bank of New York, as warrant agent.
4.4 Warrant Agreement, dated August 28, 2001, between TiVo Inc. and The
Bank of New York, as warrant agent.
99.1 Press Release, dated August 28, 2001 regarding the convertible note and
warrant offering.
99.2 Form of Note, Warrant and Unit Purchase Agreement.
99.3 Registration Rights Agreement, dated August 28, 2001, between TiVo Inc.
and the parties signatory thereto.
-6-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TIVO INC.
Date: August 29, 2001 By: /s/ David H. Courtney
-------------------------------------
David H. Courtney
Chief Financial Officer and Sr. Vice
President of Finance and
Administration
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Indenture, dated August 28, 2001, between TiVo Inc. and
The Bank of New York, as trustee.
4.2 Warrant Agreement, dated August 28, 2001, between TiVo
Inc. and The Bank of New York, as warrant agent.
4.3 Warrant Agreement, dated August 28, 2001, between TiVo
Inc. and The Bank of New York, as warrant agent.
4.4 Warrant Agreement, dated August 28, 2001, between TiVo
Inc. and The Bank of New York, as warrant agent.
99.1 Press Release, dated August 28, 2001 regarding the
convertible note and warrant offering.
99.2 Form of Note, Warrant and Unit Purchase Agreement.
99.3 Registration Rights Agreement, dated August 28, 2001,
between TiVo Inc. and the parties signatory thereto.