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

Quarterly report pursuant to Section 13 or 15(d)

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

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

9 Months Ended

Sep. 30, 2014

Schedule of Segment Reporting Information, by Segment

Segment revenue, expenses and contribution profit for the three and nine month periods ended September 30, 2014 and 2013 derived from the Company's Content and Connectivity segments were as follows (in thousands):



	Three Months Ended September 30,
	2014						2013
	Content		Connectivity	Consolidated			Content		Connectivity		Consolidated
Revenue:
Licensing	$	60,907	—	$	60,907		$	44,645	$	—	$	44,645
Service	10,603		19,933	30,536			8,796		16,218		25,014
Equipment	—		11,180	11,180			—		4,859		4,859
Total revenue	71,510		31,113	102,623			53,441		21,077		74,518
Operating expenses:
Cost of sales	50,596		23,022	73,618			38,809		15,193		54,002
Contribution profit	20,914		8,091	29,005			14,632		5,884		20,516
Other operating expenses				37,019							27,317
Loss from operations				$	(8,014	)					$	(6,801	)



	Nine Months Ended September 30,
	2014						2013
	Content		Connectivity	Consolidated			Content		Connectivity		Consolidated
Revenue:
Licensing	$	172,375	—	$	172,375		$	106,353	$	—	$	106,353
Service	33,917		53,735	87,652			18,346		34,893		53,239
Equipment	349		26,360	26,709			—		20,270		20,270
Total revenue	206,641		80,095	286,736			124,699		55,163		179,862
Operating expenses:
Cost of sales	149,475		63,866	213,341			92,158		47,413		139,571
Contribution profit	57,166		16,229	73,395			32,541		7,750		40,291
Other operating expenses				98,339							76,720
Loss from operations				$	(24,944	)					$	(36,429	)

Schedule of Earnings Per Share, Basic and Diluted



	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Net income (loss) (numerator):
Net income (loss)	$	(15,530	)	$	(5,395	)	$	(29,683	)	$	(45,445	)
Income allocable to non-controlling interests	—			158			194			89
Net income (loss) for basic EPS	(15,530		)	(5,553		)	(29,877		)	(45,534		)


Shares (denominator):
Weighted-average shares for basic EPS	72,877			55,166			72,284			51,106
Adjusted weighted-average share for diluted EPS	72,877			55,166			72,284			51,106

Basic earnings (loss) per share	$	(0.21	)	$	(0.10	)	$	(0.41	)	$	(0.89	)
Diluted earnings (loss) per share	$	(0.21	)	$	(0.10	)	$	(0.41	)	$	(0.89	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Securities not included in the calculation of diluted earnings (loss) per share were as follow:



	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013

Stock options and restricted stock units	4,434	4,002	1,816	3,079
Restricted stock units	13	—	—	—
Non-employees stock options	5	—	6	—
Equity warrants	445	7,536	1,378	7,520
Liability warrants	154	18,826	1,958	19,060

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 September 30, 2014, and December 31, 2013, respectively (in thousands):



	September 30, 2014		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Earn-out liability (1)	$	1,205	$	—	$	—	$	1,205
Global Eagle warrants (2)	45,161		45,161		—		—
Total financial liabilities	$	46,366	$	45,161	$	—	$	1,205

(1) Includes $1.1 million earn-out liability for EIM, a subsidiary of AIA assumed in the Business Combination.

(2) Includes 10,148,508 public warrants.



	December 31, 2013		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Earn-out liability (1)	$	1,421	$	—	$	—	$	1,421
Global Eagle warrants (2)	71,570		71,570		—		—
Total financial liabilities	$	72,991	$	71,570	$	—	$	1,421

(1) Includes $1.4 million earn-out liability for EIM, a subsidiary of AIA assumed in the Business Combination.

(2) Includes 15,567,650 public warrants.

Fair Value, by Balance Sheet Grouping

The following table shows both the carrying amounts, which approximate the fair values, of the Company's financial assets and liabilities in the consolidated financial statements at September 30, 2014 and December 31, 2013, respectively (in thousands):



	September 30, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Notes payable	$	3,457	$	3,457	$	10,801	$	10,801

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 September 30, 2014, (in thousands):



	Earn-Out Liability
Balance, December 31, 2013	$	1,421
Fair value of earn-out liability assumed in the Purple Inflight Entertainment's acquisition	136
Change in value	875
Payment of 2013 EIM earn-out liability	$	(1,227	)
Balance, September 30, 2014	$	1,205

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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