Anuvu Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2020, and December 31, 2019, respectively (dollar values in thousands, other than per-share values):


	Balance Sheet Location	June 30, 2020		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
Shares of common stock	Short-term investment	$	3,315	$	3,315	$	—	$	—
		$	3,315	$	3,315	$	—	$	—

Liabilities:
Contingently issuable shares ⁽¹⁾	Accounts payable and accrued liabilities	$	116	$	—	$	—	$	116
Phantom stock options ⁽²⁾	Other non-current liabilities	387		—		—		387
Total		$	503	$	—	$	—	$	503


	Balance Sheet Location	December 31, 2019		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities:
Contingently issuable shares ⁽¹⁾	Accounts payable and accrued liabilities	$	305	$	—	$	—	$	305
Phantom stock options ⁽²⁾	Other non-current liabilities	464		—		—		464
Total		$	769	$	—	$	—	$	769

(1) In connection with the Sound-Recording Settlements (as described in Note 10. Commitments and Contingencies above), the Company is obligated to issue to UMG (as defined in that Note) 20,000 shares of its common stock when and if the closing price of the Company's common stock exceeds $250.00 per share and an additional 16,000 shares of common stock when and if the closing price of the Company’s common stock exceeds $300.00 per share. Such contingently issuable shares are classified as liabilities and are re-measured to fair value each reporting period.

(2) Our cash-settled phantom stock options are accounted for as liability awards and are re-measured at fair value each reporting period with changes flowing through statement of operations. As of June 30, 2020, the aggregate estimated fair value of our cash-settled phantom stock options was $0.4 million, of which the amortized portion recognized as a liability in our condensed consolidated balance sheet was $0.4 million.

The following table shows the carrying amounts and the fair values of our long-term debt in the condensed consolidated financial statements at June 30, 2020 and December 31, 2019, respectively (in thousands):


	June 30, 2020						December 31, 2019
	Carrying Amount⁽⁷⁾		Fair Value		Carrying Amount ⁽⁷⁾		Fair Value
Senior secured term loan facility, due January 2023 ⁽⁺⁾⁽¹⁾	$	485,682	$	337,227	$	485,166	$	454,168
Senior secured revolving credit facility, due January 2022⁽⁺⁾⁽²⁾	80,615		80,615		43,315		43,315
Convertible senior notes due 2035⁽¹⁾⁽³⁾	71,479		8,250		71,126		37,125
Second Lien Notes, due June 2023⁽⁴⁾⁽⁵⁾	161,905		31,177		149,772		99,922
Other debt⁽⁶⁾	27,318		22,937		23,683		23,685
	$	826,999	$	480,206	$	773,062	$	658,215

(+) This facility is a component of the 2017 Credit Agreement.

(1)The estimated fair value is classified as Level 2 financial instrument and was determined based on quoted prices of the instrument in a similar over-the-counter market.

(2)The estimated fair value is considered to approximate carrying value and is classified as Level 3 financial instruments.

(3)The fair value of the 2.75% Convertible Notes is exclusive of the conversion feature therein, 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”. The principal amount outstanding of the Convertible Notes was $82.5 million as of June 30, 2020, and the carrying amount in the foregoing table reflects this outstanding principal amount net of debt issuance costs and discount associated with the equity component.

(4)The principal amount outstanding of the Second Lien Notes, due June 2023 as set forth in the foregoing table was $188.7 million as of June 30, 2020, and includes $38.7 million of payment-in-kind (“PIK”) interest converted to principal since debt issuance. The value allocated to the attached penny warrants and market warrants for financial reporting purposes was $14.9 million and $9.3 million, respectively. These qualify for classification in stockholders’ equity and are included in the condensed consolidated balance sheets within “Additional paid-in capital” (see Note 10. Financing Arrangements).

(5)The fair value of the Second Lien Notes was determined based on a Black-Derman-Toy interest rate Lattice model. The key inputs of the valuation model contain certain Level 3 inputs.

(6)The estimated fair value is considered to approximate carrying value given the short-term maturity and is classified as Level 3 financial instruments. For June 30, 2020, Other debts primarily consisted of (i) $3.4 million financing for transponder purchases, which was payable April 2020, and remains unpaid at filing date; and (ii) $17.8 million of finance lease liability relating to an assessed right-of-use over a satellite bandwidth capacity (refer to Note 4. Leases for further details).

(7)The carrying amounts presented above at June 30, 2020 and December 31, 2019 are net of $55.5 million and $60.5 million of unamortized bond discounts and issuance costs, respectively.