Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

v3.4.0.3
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2016
Accounting Policies [Abstract]  
Schedule of Segment Reporting Information, by Segment
Segment revenue, expenses and contribution profit for the three month periods ended March 31, 2016 and 2015 derived from the Company's Content and Connectivity segments were as follows (in thousands):


 
Three Months Ended March 31,
 
2016
 
2015
 
Content
 
Connectivity
 
Consolidated
 
Content
 
Connectivity
 
Consolidated
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Licensing and services
$
83,606

 
$
24,225

 
$
107,831

 
$
71,650

 
$
22,200

 
$
93,850

Equipment
—

 
5,986

 
5,986

 
—

 
6,455

 
6,455

Total revenue
83,606

 
30,211

 
113,817

 
71,650

 
28,655

 
100,305

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Cost of sales
 
 
 
 
 
 
 
 
 
 
 
Licensing and services
55,637

 
15,757

 
71,394

 
50,002

 
13,698

 
63,700

Equipment
—

 
5,374

 
5,374

 
—

 
5,726

 
5,726

Total Cost of sales
55,637

 
21,131

 
76,768

 
50,002

 
19,424

 
69,426

Contribution profit
27,969

 
9,080

 
37,049

 
21,648

 
9,231

 
30,879

Other operating expenses
 
 
 
 
42,042

 
 
 
 
 
34,909

Loss from operations
 
 
 
 
$
(4,993
)
 
 
 
 
 
$
(4,030
)

Schedule of Earnings Per Share, Basic and Diluted
The computation for basic and diluted EPS was as follows (in thousands, except per share data):
    
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Net loss (numerator):
 
 
 
 
Net loss for basic EPS
 
$
(2,412
)
 
$
(3,431
)
 
 
 
 
 
Less: adjustment for change in fair value on warrants liability for diluted EPS after assumed exercise of warrants liability
 
—

 
954

Net loss for dilutive EPS
 
$
(2,412
)
 
$
(4,385
)
 
 
 
 
 
Shares (denominator):
 
 
 
 
Weighted-average shares for basic EPS
 
78,643

 
76,874

Effect of assumed exercise of warrants liability
 
—

 
1,851

Adjusted weighted-average share for diluted EPS
 
78,643

 
78,725

 
 
 
 
 
Basic loss per share
 
$
(0.03
)
 
$
(0.04
)
Diluted loss per share
 
$
(0.03
)
 
$
(0.06
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
Securities not included in the calculation of diluted loss per share were as follows (in thousands):
 
 
Three Months Ended 
 March 31,
 
 
2016
 
2015
 
 
 
 
 
Stock options
 
5,550

 
2,708

Restricted stock units
 
242

 
25

Non-employee stock options
 
—

 
3

Equity warrants
 
88

 
537

Liability warrants
 
6,173

 
—

Convertible notes
 
4,447

 
2,026

Fair Value Measurements, Recurring and Nonrecurring
The following tables summarize the Company's financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016, and December 31, 2015, respectively (in thousands):

 
March 31, 2016
 
Quotes Prices in Active Markets (Level 1)
 
 Significant Other Observable Inputs (Level 2)
 
 Significant Other Unobservable Inputs (Level 3)
Earn-out liability (1)
$
9,073

 
$
—

 
$
—

 
$
9,073

Public warrants (2)
18,211

 
18,211

 
—

 
—

Total financial liabilities
$
27,284

 
$
18,211

 
$
—

 
$
9,073




 
December 31, 2015
 
Quotes Prices in Active Markets (Level 1)
 
 Significant Other Observable Inputs (Level 2)
 
 Significant Other Unobservable Inputs (Level 3)
Earn-out liability (1)
$
9,652

 
$
—

 
$
—

 
$
9,652

Public warrants (2)
24,076

 
24,076

 
—

 
—

Total financial liabilities
$
33,728

 
$
24,076

 
$
—

 
$
9,652


(1) Includes $9.1 million and $9.7 million as of March 31, 2016 and December 31, 2015, respectively, of earn-out liability for the Company's acquisitions of Western Outdoor Interactive Pvt. Ltd. ("WOI"), certain assets of RMG Networks Holding Corporation (the "RMG Assets"), navAero AB ("navAero") and Marks Systems, Inc. doing business as masFlight ("masFlight") assumed in business combinations for the year ended December 31, 2015.
(2) Includes 6,173,228 warrants originally issued in our initial public offering ("public warrants").
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the fair value roll-forward reconciliation of level 3 assets and liabilities measured at fair value basis for the period ended March 31, 2016 (in thousands):

 
Earn-Out Liability
Balance, December 31, 2015
$
9,652

  Change in value
(579
)
Balance, March 31, 2016
$
9,073

Fair Value, by Balance Sheet Grouping
The following table shows both the carrying amounts, which approximate the fair values, of the Company's financial liabilities in the condensed consolidated financial statements at March 31, 2016 and December 31, 2015, respectively (in thousands):

 
March 31, 2016
 
December 31, 2015
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Financial liabilities:
 
 
 
 
 
 
 
Convertible senior notes (1)
$
68,507

 
$
62,700

 
$
68,335

 
$
78,557

Notes payable
$
2,018

 
$
2,018

 
$
2,229

 
$
2,229

(1) The fair value of the convertible senior notes is exclusive of the conversion feature, which was originally allocated for reporting purposes at $13.0 million, and is included in the condensed consolidated balance sheets within "Additional paid-in capital" (see Note 11).
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]
The table below shows the effect of the reclassification of unamortized debt issuance costs associated with our convertible senior notes in our previously reported consolidated balance sheet as of December 31, 2015 (in thousands):
    
 
As presented December 31, 2015
 
Reclassifications
 
As adjusted December 31, 2015
Other non-current assets
$
13,702

 
$
(1,678
)
 
$
12,024

Notes payable and accrued interest, non-current
71,493

 
(1,678
)
 
69,815