TIVO INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended July 31, 2002.

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to

Commission file number 000-27141

(Exact name of registrant as specified in its charter)

Delaware		77-0463167
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2160 Gold Street, PO Box 2160, Alviso, CA		95002
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

The number of outstanding shares of the registrant’s Common Stock, $0.001 par value, was 48,792,631 as of September 6, 2002.

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

			Restated
	July 31, 2002		January 31, 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	26,753,000	$	52,327,000
Restricted cash		—		51,735,000
Accounts receivable, net of allowance for doubtful accounts of $10,000 and $23,000, respectively		6,333,000		2,185,000
Accounts receivable-related parties		4,286,000		6,687,000
Inventories		2,719,000		—
Prepaid expenses and other		3,688,000		3,916,000
Prepaid expenses and other-related parties		2,908,000		7,541,000

Total current assets		46,687,000		124,391,000
LONG-TERM ASSETS
Property and equipment, net of accumulated depreciation		15,536,000		18,146,000
Prepaid expenses and other		2,631,000		2,515,000
Prepaid expenses and other-related parties		5,144,000		4,882,000

Total long-term assets		23,311,000		25,543,000

Total assets	$	69,998,000	$	149,934,000


LIABILITIES, CURRENT REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	15,402,000	$	7,003,000
Accrued liabilities		12,572,000		12,618,000
Accrued liabilities-related parties		8,751,000		26,640,000
Deferred interest income on restricted cash		—		3,735,000
Notes payable-related parties		—		2,262,000
Deferred revenue		17,349,000		12,786,000
Deferred revenue-related parties		4,466,000		11,427,000
Current portion of obligations under capital lease		157,000		536,000

Total current liabilities		58,697,000		77,007,000

The accompanying notes are an integral part of these statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

				Restated
	July 31, 2002			January 31, 2002
CURRENT REDEEMABLE CONVERTIBLE PREFERRED STOCK
Series A Redeemable convertible preferred stock, par value $0.001, redemption value $30.00:
Issued and outstanding shares are zero and 1,600,000, respectively		—			2,000
Additional paid-in capital		—			46,553,000

Total current redeemable convertible preferred stock		—			46,555,000

Total current liabilities and current redeemable convertible preferred stock		58,697,000			123,562,000
LIABILITIES
LONG-TERM LIABILITIES
Long-term portion of obligations under capital lease		—			2,000
Convertible notes payable (face value $29,250,000)		19,450,000			18,315,000
Convertible notes payable-related parties (face value $15,000,000)		10,080,000			9,426,000
Deferred revenue		27,579,000			23,552,000
Deferred rent and other		4,824,000			5,021,000

Total long-term liabilities		61,933,000			56,316,000

Total liabilities and current redeemable convertible preferred stock		120,630,000			179,878,000

STOCKHOLDERS’ DEFICIT
Series A Convertible preferred stock, par value $0.001:
Authorized shares are 10,000,000
Issued and outstanding shares are 1,111,861	$	1,000		$	1,000
Common stock, par value $0.001:
Authorized shares are 150,000,000
Issued and outstanding shares are 48,720,951 and 47,411,355, respectively		49,000			47,000
Additional paid-in capital		453,920,000			449,829,000
Deferred compensation		(566,000	)		(1,099,000	)
Prepaid marketing expenses		(1,756,000	)		(14,183,000	)
Note receivable-related parties		(1,097,000	)		(1,568,000	)
Accumulated deficit		(501,183,000	)		(462,971,000	)

Total stockholders’ deficit		(50,632,000	)		(29,944,000	)

Total liabilities, current redeemable convertible preferred stock and stockholders’ deficit	$	69,998,000		$	149,934,000

The accompanying notes are an integral part of these statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended July 31,						Six Months Ended July 31,
	2002			2001			2002			2001
Revenues
Revenues (includes $14,344,000 and $15,988,000 of revenues-related parties for the three months and six months ended July 31, 2002)	$	23,854,000		$	4,106,000		$	33,714,000		$	7,302,000
Hardware revenues		11,109,000			—			14,289,000			—

Total Revenues		34,963,000			4,106,000			48,003,000			7,302,000
Costs of revenues
Costs of revenues		7,576,000			4,408,000			13,029,000			9,874,000
Cost of hardware revenues		11,346,000			—			15,011,000			—

Total costs of revenues		18,922,000			4,408,000			28,040,000			9,874,000

Gross margin (loss)		16,041,000			(302,000	)		19,963,000			(2,572,000	)
Operating Expenses
Research and development		4,518,000			6,898,000			9,520,000			13,821,000
Sales and marketing		5,608,000			5,899,000			13,463,000			19,067,000
Sales and marketing-related parties		3,434,000			16,146,000			26,356,000			39,634,000
General and administrative		3,589,000			4,379,000			7,348,000			8,962,000

Total operating expenses		17,149,000			33,322,000			56,687,000			81,484,000

Loss from operations		(1,108,000	)		(33,624,000	)		(36,724,000	)		(84,056,000	)

Interest income		146,000			607,000			4,245,000			1,998,000
Interest expense and other (includes $358,000 and $770,000 of interest expense-related parties for the three months and six months ended July 31, 2002)		(1,965,000	)		(604,000	)		(3,957,000	)		(655,000	)

Loss before taxes		(2,927,000	)		(33,621,000	)		(36,436,000	)		(82,713,000	)
Provision for income taxes		(111,000	)		—			(111,000	)		—

Net loss		(3,038,000	)		(33,621,000	)		(36,547,000	)		(82,713,000	)
Less: Series A redeemable convertible preferred stock dividend		—			840,000			220,000			1,932,000
Less: Accretion to redemption value of Series A redeemable convertible prefe

PART I : FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Stockholders' Deficit	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes To Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	44

PART II : OTHER INFORMATION		45

Item 1.	Legal Proceedings	45
Item 2.	Changes in Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Submission of Matters to a Vote of Security Holders	46
Item 5.	Other Information	47
Item 6.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	48
Signatures		49

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