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)

6 Months Ended

Jun. 30, 2015

Schedule of Segment Reporting Information, by Segment

Segment revenue, expenses and contribution profit for the three and six month periods ended June 30, 2015 and 2014 derived from the Company's Content and Connectivity segments were as follows (in thousands):



	Three Months Ended June 30,
	2015						2014
	Content		Connectivity		Consolidated		Content		Connectivity		Consolidated
Revenue:
Licensing and services	$	73,814	$	24,563	$	98,377	$	71,363	$	17,308	$	88,671
Equipment	—		3,999		3,999		177		9,297		9,474
Total revenue	73,814		28,562		102,376		71,540		26,605		98,145
Operating expenses:
Cost of sales
Licensing and services	48,047		14,378		62,425		52,737		13,294		66,031
Equipment	—		3,658		3,658		—		8,577		8,577
Total cost of sales	48,047		18,036		66,083		52,737		21,871		74,608
Contribution profit	25,767		10,526		36,293		18,803		4,734		23,537
Other operating expenses					35,746						31,076
Income (Loss) from operations					$	547					$	(7,539	)



	Six Months Ended June 30,
	2015							2014
	Content		Connectivity		Consolidated			Content		Connectivity		Consolidated
Revenue:
Licensing and services	$	145,463	$	46,764	$	192,227		$	134,755	$	33,802	$	168,557
Equipment	—		10,454		10,454			376		15,180		15,556
Total revenue	145,463		57,218		202,681			135,131		48,982		184,113
Operating expenses:
Cost of sales
Licensing and services	98,049		28,076		126,125			98,880		27,015		125,895
Equipment	—		9,384		9,384			—		13,829		13,829
Total cost of sales	98,049		37,460		135,509			98,880		40,844		139,724
Contribution profit	47,414		19,758		67,172			36,251		8,138		44,389
Other operating expenses					70,655							61,321
Loss from operations					$	(3,483	)					$	(16,932	)

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 June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net income (loss) (numerator):
Net income (loss)	$	12,987		$	11,996		$	9,556		$	(14,153	)
Income allocable to non-controlling interests	—			—			—			194
Net income (loss) for basic EPS	12,987			11,996			9,556			(14,347		)

Less: adjustment for change in fair value on warrants liability for diluted EPS after assumed exercise of warrants liability	14,789			21,326			15,743			5,808
Net loss for dilutive EPS	$	(1,802	)	$	(9,330	)	$	(6,187	)	$	(20,155	)

Shares (denominator):
Weighted-average shares for basic EPS	77,111			71,988			76,993			71,983
Effect of assumed exercise of warrants liability	1,407			480			1,630			2,942
Adjusted weighted-average shares for diluted EPS	78,518			72,468			78,623			74,925

Basic earnings (loss) per share	$	0.17		$	0.17		$	0.12		$	(0.20	)
Diluted loss per share	$	(0.02	)	$	(0.13	)	$	(0.08	)	$	(0.27	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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



	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
Stock options	3,234	3,026	2,926	1,471
Restricted stock units	51	50	36	29
Non-employees stock options	1	1	3	2
Equity warrants	489	32	513	32
Convertible notes	4,447	—	3,261	—

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, 2015, and December 31, 2014, respectively (in thousands):



	June 30, 2015		Quotes Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Earn-out liability	$	—	$	—	$	—	$	—
Global Eagle warrants (1)	36,871		36,871		—		—
Total financial liabilities	$	36,871	$	36,871	$	—	$	—

(1) 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 the carrying amounts, which approximate the fair values, of the Company's financial liabilities in the condensed consolidated financial statements at June 30, 2015 and December 31, 2014, respectively (in thousands):



	June 30, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Convertible senior notes ⁽¹⁾	$	69,713	$	80,430	$	—	$	—
Notes payable	$	2,659	$	2,659	$	3,015	$	3,015

(1) The fair value of the convertible senior 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 June 30, 2015 (in thousands):



	Earn-Out Liability
Balance, December 31, 2014	$	1,710
Payment of 2014 EIM earn-out liability	(1,519		)
Non-cash adjustment to 2014 EIM earn-out liability	(191		)
Balance, June 30, 2015	$	—