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)

3 Months Ended

Mar. 31, 2015

Schedule of Segment Reporting Information, by Segment

Segment revenue, expenses and contribution profit for the three month periods ended March 31, 2015 and 2014 derived from the Company's Content and Connectivity segments were as follows (in thousands):



	Three Months Ended March 31,
	2015							2014
	Content		Connectivity		Consolidated			Content		Connectivity		Consolidated
Revenue:
Licensing and services	$	71,650	$	22,200	$	93,850		$	63,590	$	16,494	$	80,084
Equipment	—		6,455		6,455			—		5,884		5,884
Total revenue	71,650		28,655		100,305			63,590		22,378		85,968
Operating expenses:
Cost of sales
Licensing and services	50,002		13,698		63,700			46,144		13,722		59,866
Equipment	—		5,726		5,726			—		5,251		5,251
Total Cost of sales	50,002		19,424		69,426			46,144		18,973		65,117
Contribution profit	21,648		9,231		30,879			17,446		3,405		20,851
Other operating expenses					34,909							30,243
Loss from operations					$	(4,030	)					$	(9,392	)

Schedule of Earnings Per Share, Basic and Diluted



	Three Months Ended March 31,
	2015			2014
Net income (loss) (numerator):
Net loss	$	(3,431	)	$	(26,149	)
Income allocable to non-controlling interests	—			194
Net loss for basic EPS	(3,431		)	(26,343		)

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	$	(4,385	)	$	(26,343	)

Shares (denominator):
Weighted-average shares for basic EPS	76,874			71,978
Effect of assumed exercise of warrants liability	1,851			—
Adjusted weighted-average share for diluted EPS	78,725			71,978

Basic loss per share	$	(0.04	)	$	(0.37	)
Diluted loss per share	$	(0.06	)	$	(0.37	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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



	Three Months Ended March 31,
	2015	2014

Stock options	2,708	1,742
Restricted stock units	25	—
Non-employees stock options	3	—
Equity warrants	537	2,904
Liability warrants	—	4,785
Convertible notes	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, 2015, and December 31, 2014, respectively (in thousands):



	March 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)	$	1,710	$	—	$	—	$	1,710
Global Eagle warrants (2)	51,660		51,660		—		—
Total financial liabilities	$	53,370	$	51,660	$	—	$	1,710

(1) Includes $1.7 million earn-out liability for Entertainment in Motion, Inc. ("EIM"), a subsidiary of AIA, assumed in the Business Combination.

(2) Includes 10,129,508 public warrants.



	December 31, 2014		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Earn-out liability (1)	$	1,710	$	—	$	—	$	1,710
Global Eagle warrants (2)	52,671		52,671		—		—
Total financial liabilities	$	54,381	$	52,671	$	—	$	1,710

(1) Includes $1.7 million earn-out liability for EIM, a subsidiary of AIA, assumed in the Business Combination.

(2) Includes 10,148,508 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 liabilities in the condensed consolidated financial statements at March 31, 2015 and December 31, 2014, respectively (in thousands):



	March 31, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities:
Convertible senior notes ⁽¹⁾	$	69,564	$	81,469	$	—	$	—
Notes payable	$	2,760	$	2,760	$	3,015	$	3,015

(1) The fair value of the Notes is inclusive 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).

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, 2015 (in thousands):



	Earn-Out Liability
Balance, December 31, 2014	$	1,710
Change in value	—
Balance, March 31, 2015	$	1,710

- 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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