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Business Overview
12 Months Ended
Jan. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Business Overview

(1) Business Overview

Description of Business

Tintri, Inc. (Tintri or the Company) was incorporated in the state of Delaware in 2008 and is headquartered in Mountain View, California. The Company develops and markets an enterprise cloud platform combining cloud management software technology and a range of all-flash and hybrid storage systems, for virtualized and cloud environments.

Initial Public Offering

In July 2017, the Company completed its initial public offering (IPO), in which it sold 8,572,000 shares of common stock. The shares were sold at an IPO price of $7.00 per share for net proceeds of $55.8 million, after deducting underwriting discounts and commissions of $4.2 million. Immediately prior to the closing of the Company’s IPO, all shares of the Company’s then-outstanding convertible preferred stock automatically converted into an aggregate 17,992,973 shares of common stock in accordance with the terms of each series of preferred stock.

Following the completion of the IPO, the IPO underwriters exercised an over-allotment option to purchase an additional 1,000,000 shares of common stock from the Company in August 2017. The additional shares were sold at the IPO price of $7.00 per share for net proceeds of $6.5 million, after deducting underwriting discounts and commissions of $0.5 million.

Liquidity and Going Concern

 

The accompanying consolidated financial statements have been prepared on the going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company has experienced negative cash flows from operations since its inception and expects negative cash flows from operations to continue for the foreseeable future. Net losses incurred during the years ended January 31, 2016, 2017, and 2018, amounted to $101.0 million, $105.8 million, and $157.7 million, respectively. Unless and until the Company is able to generate sufficient revenue from sales of its products and services to generate positive cash flows from operations, it expects such losses to continue. The Company is also subject to certain financial covenants related to its debt facilities that, if breached, could result in the debt becoming immediately due and payable in the event the lenders choose to declare an event of default. The Company may not have sufficient liquidity to repay amounts outstanding under its debt facilities should they become immediately due and payable. As of January 31, 2018, the Company was not in compliance with certain covenants contained in its credit facility with Silicon Valley Bank (SVB). In March 2018, the Company amended the credit facility with SVB in exchange for the waiver by SVB with respect to certain prior events of default (Note 15). In April 2018, the Company entered into an amended and restated loan agreement with SVB to, among other things, extend the maturity date of its credit facility to May 2, 2019. In April 2018, the Company also entered into an amendment with TriplePoint to extend the maturity date of its credit facility to August 2019.

 

Historically, the Company has funded a significant portion of its operations through the issuance of equity and debt. In the year ended January 31, 2016, the Company raised $124.6 million in gross proceeds (Note 7) related to the sale of convertible preferred stock. The Company has also entered into credit facilities, under which the Company had borrowed an aggregate of $69.0 million as of January 31, 2018, and drawn down $25.0 million from its Note Purchase Agreement in February and March 2018 (Notes 5 and 15). In July 2017, the Company completed its IPO, in which it raised $55.8 million, after deducting underwriting discounts and commission of $4.2 million. In August 2017, the Company sold an additional 1,000,000 shares of its common stock in connection with the IPO underwriters exercising an over-allotment option, pursuant to which the Company received net proceeds of $6.5 million, after deducting underwriting discounts and commissions.

 

The additional financing from the Company’s IPO, its existing cash and cash equivalents, amounts borrowed under its credit facilities and Note Purchase Agreement (Note 15), and its plan to continue to drive efficiencies in the Company’s sales organization and other business units, through efforts such as the September 2017 restructuring plan (Note 12) and the February 2018 and March 2018 restructuring plans (Note 15), may not allow the Company to meet its debt financial covenants as early as May 31, 2018. Further, regardless of the financial covenants the Company likely does not have sufficient cash to meet its obligations associated with its operating activities beyond June 30, 2018. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

While the Company’s plan to mitigate the conditions that are causing the substantial doubt is to raise additional debt or equity financing and/or work with its lenders to amend certain financial covenants, it cannot be assessed as that the Company will be successful. The Company’s ability to raise additional liquidity and/or amend its financial covenants is subject to a number of uncertainties, including, but not limited to, the market demand for the Company’s common or preferred stock, the Company’s financial performance and outlook, the market demand for the Company’s products and services, negative economic developments, adverse market conditions, significant delays in launch of new products and lack of market acceptance of new products.

If the Company is unable to successfully raise additional capital or otherwise address its liquidity requirements, it will likely fail to satisfy the minimum liquidity covenants of its credit facilities as early as the end of May 2018, which would constitute an event of default under those facilities and enable its lenders to demand immediate payment of all amounts due under those facilities.  The Company does not currently have the ability to repay these amounts. Although the Company is seeking to raise additional debt or equity financing in order to remain in compliance with the financial covenants under its credit facilities, it may be unable to do so. As a result, the Company is currently undertaking a review of the potential business alternatives in addition to seeking additional capital, which may include restructuring or refinancing its indebtedness, undertaking additional restructuring plans, reducing or delaying capital expenditures, filing for bankruptcy protection, winding down its business, or selling the business or certain of its assets or operations.

Based on the Company’s assessment, it is probable that it will be unable to comply with its financial covenants through January 31, 2019, and it may fail to comply with certain financial covenants as early as May 31, 2018, and as such it has classified all outstanding balances as of January 31, 2018 as a current liability.