Quarterly report pursuant to Section 13 or 15(d)

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

v2.4.0.8
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2013
Accounting Policies [Abstract]  
Schedule of Segment Reporting Information, by Segment
Segmental revenue, expenses and contribution profit for the three and six month periods ended June 30, 2013 and 2012 derived from the Company's Connectivity and Content segments were as follows (in thousands):
Three Months Ended

Six Months Ended

June 30, 2013

June 30, 2013

Connectivity
Content
Consolidated

Connectivity
Content
Consolidated
Revenue:







     Licensing
$
—

$
38,405

$
38,405


$
—

$
61,709

$
61,709

     Service
12,379

5,678

18,057


18,673

9,550

28,223

     Equipment
6,369

—

6,369


15,412

—

15,412

Total Revenue
18,748

44,083

62,831


34,085

71,259

105,344















Operating Expenses:











Cost of Sales
16,975

32,845

49,820


32,221

53,348

85,569

Contribution Profit
1,773

11,238

13,011


1,864

17,911

19,775

Other Operating Expenses




20,487






49,403

Loss from Operations




$
(7,476
)





$
(29,628
)

 
Three Months Ended
 
Six Months Ended
 
June 30, 2012
 
June 30, 2012
 
Connectivity
 
Connectivity
Revenue:
 
 
 
     Licensing
$
—

 
$
—

     Service
2,604

 
4,683

     Equipment
14,232

 
30,660

Total Revenue
16,836

 
35,343

 
 
 
 
Operating Expenses:
 
 
 
     Cost of Sales
18,722

 
36,604

Contribution Loss
(1,886
)
 
(1,261
)
Other Operating Expenses
4,663

 
9,430

Loss from Operations
$
(6,549
)
 
$
(10,691
)
Business Acquisition, Pro Forma Information
Supplemental information on an unaudited pro forma basis, as if these acquisitions had been completed as of January 1, 2012, is as follows (in thousands, except per share data):
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,

2013
2012
 
2013
2012
Revenues
$
62,831

$
58,989

 
$
118,670

$
118,894

Net loss
(13,638
)
(19,036
)
 
(40,682
)
(31,733
)
Basic and diluted net loss per share
(0.25
)
(0.94
)

(0.83
)
(1.56
)
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 June 30, 2013, and December 31, 2012, respectively (in thousands):

 
June 30, 2013
Quotes Prices in Active Markets (Level 1)
 Significant Other Observable Inputs (Level 2)
 Significant Other Unobservable Inputs (Level 3)
Earn-out liability
$
1,365

$
—

$
—

$
1,365

Global Eagle warrants (1)
30,220

30,220

—

—

Total financial liabilities
$
31,585

$
30,220

$
—

$
1,365


(1) Includes 18,492,500 public warrants and 333,333 sponsor warrants.


December 31, 2012
Quotes Prices in Active Markets (Level 1)
 Significant Other Observable Inputs (Level 2)
 Significant Other Unobservable Inputs (Level 3)
Series C warrants
$
5,482

$
—

$
—

$
5,482

Common stock warrants
2,696

—

—

2,696

Total financial liabilities
$
8,178

$
—

$
—

$
8,178

Fair Value, by Balance Sheet Grouping
The following table shows both the carrying amounts and the fair values of financial assets and liabilities not carried at fair value in the consolidated financial statements at June 30, 2013 and December 31, 2012, respectively (in thousands):

 
June 30, 2013
 
December 31, 2012

Carrying Amount
Fair Value
 
Carrying Amount
Fair Value
Financial Liabilities:
 
 
 
 
 
Notes Payable
$
8,026

$
8,026

 
$
—

$
—

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables present the fair value roll-forward reconciliation of level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis for the six months ended June 30, 2013, and 2012, respectively (in thousands):


Series C Warrants
Common Stock Warrants
Earn-Out Liability
Total
Balance, January 1, 2013
$
5,482

$
2,696

$
—

$
8,178

  Reclassification to equity
(2,879
)
(2,696
)
—

(5,575
)
  Change in value
132

—

—

132

Elimination of Row 44 Series C-1 Preferred Warrants held by AIA
(2,735
)
—

—

(2,735
)
Level III Liability acquired in AIA Stock Purchase
—

—

1,365

1,365

Balance, June 30, 2013
$
—

$
—

$
1,365

$
1,365



Series C Warrants
Common Stock Warrants
Earn-Out Liability
Total
Balance, January 1, 2012
$
—

$
—

$
—

$
—

Issuance of warrants
4,323

279

—

4,602

  Change in value
—

—

—

—

Balance, June 30, 2012
$
4,323

$
279

$
—

$
4,602

Corrections to Previously Issued Financial Statements for Immaterial Errors
Balance sheet as of March 31, 2013 (in thousands):
 
March 31, 2013 (unaudited)
 
As Previously Reported
 Adjustments
 As Adjusted
Assets:
 
 
 
Cash and cash equivalents
$
135,251

$
—

$
135,251

Accounts receivable, net
47,059

321

47,380

Inventories, current
21,796

777

22,573

Other current assets
—

—

—

Property and equipment, net
7,907

351

8,258

Goodwill
40,301

(372
)
39,929

Intangible assets, net
102,342

—

102,342

Other assets
18,477

5,051

23,528

Total assets
$
373,133

$
6,128

$
379,261

Liabilities and Stockholders' Equity (Deficit):
Accounts payable and accrued expenses
$
69,669

$
—

$
69,669

Deferred revenue, current
6,035

1,445

7,480

Derivative liabilities
29,181

—

29,181

Deferred revenue, non-current
—

5,242

5,242

Notes payable and accrued interest
11,092

—

11,092

Other
32,211

—

32,211

Total liabilities
148,188

6,687

154,875

Redeemable preferred stock
—

—

—

Stockholders' Equity
363,760

—

362,736

Accumulated deficit
(155,335
)
(559
)
(155,894
)
Total stockholders' equity (deficit)
208,425

(559
)
206,842

Non-controlling interest
16,520

—

16,520

Total liabilities and stockholders' equity (deficit)
$
373,133

$
6,128

$
379,261


Statements of operations for the three and six months ended June 30, 2012 and three months ended March 31, 2013 (in thousands):
 
Three months ended June 30, 2012
 
Six months ended June 30, 2012
 
Three months ended March 31, 2013 (unaudited)
 
As Previously Reported
 Adjustments
 As Adjusted
 
As Previously Reported
 Adjustments
 As Adjusted
 
As Previously Reported
 Adjustments
 As Adjusted
Revenues
$
17,748

$
(912
)
$
16,836

 
$
37,457

$
(2,114
)
$
35,343

 
$
42,232

$
281

$
42,513

Operating Expenses:
Cost of sales
19,809

(1,087
)
18,722

 
38,550

(1,946
)
36,604

 
32,378

3,371

35,749

Sales and marketing
777

—

777

 
1,992

—

1,992

 
2,287

—

2,287

Product development
850

—

850

 
1,499

—

1,499

 
1,193

144

1,337

General and administrative
3,030

—

3,030

 
5,928

(1
)
5,927

 
27,109

(3,050
)
24,059

Amortization expense
6

—

6

 
12

—

12

 
1,233

—

1,233

Total operating expenses
24,472

(1,087
)
23,385

 
47,981

(1,947
)
46,034

 
64,200

465

64,665

Loss from operations
(6,724
)
175

(6,549
)
 
(10,524
)
(167
)
(10,691
)
 
(21,968
)
(184
)
(22,152
)
Other expenses (income), net
(7,224
)
—

(7,224
)
 
(10,518
)
—

(10,518
)
 
(4,835
)
—

(4,835
)
Loss before income taxes
(13,948
)
175

(13,773
)
 
(21,042
)
(167
)
(21,209
)
 
(26,803
)
(184
)
(26,987
)
Income tax expense
—

—

—

 
—

—

—

 
34

—

34

Net loss before non-controlling interests
(13,948
)
175

(13,773
)
 
(21,042
)
(167
)
(21,209
)
 
(26,837
)
(184
)
(27,021
)
Net loss attributable to non-controlling interests
—

—

—

 
—

—

—

 
39

—

39

Net loss
(13,948
)
175

(13,773
)
 
(21,042
)
(167
)
(21,209
)
 
(26,798
)
(184
)
(26,982
)
Cumulative preferred stock dividends and accretion
(1,772
)
—

(1,772
)
 
(3,148
)
—

(3,148
)
 
(942
)
—

(942
)
Net loss attributable to common stockholders
$
(15,720
)
$
175

$
(15,545
)
 
$
(24,190
)
$
(167
)
$
(24,357
)
 
$
(27,740
)
$
(184
)
$
(27,924
)
Net loss per share:
 
 


 
 
 


 
 
 


Basic and diluted
$
(0.77
)
 
$
(0.76
)
 
$
(1.19
)
 
$
(1.20
)
 
$
(0.64
)
 
$
(0.64
)
Weighted average number of shares
20,352

 
20,352

 
20,352

 
20,352

 
43,345

 
43,345