x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2015
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM __________ TO ________
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Delaware
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27-4757800
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification Number)
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4553 Glencoe Avenue
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Los Angeles, California
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90292
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
Common Stock, $0.0001 par value
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Name of each exchange on which registered
The NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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Item No.
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Description
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•
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Our Connectivity segment provides our airline partners and their passengers with Wi-Fi connectivity over Ku-band satellite transmissions, and to a lesser extent operations solutions to airline customers. This segment offers specialized network equipment, media applications and premium content services that enable airline passengers to access in-flight Internet, live television, on-demand content, texting services, shopping and travel-related information, as well as real-time data and operations solutions that enable airlines to improve their internal operations. With our Airconnect solution installed on over 700 aircraft today, we operate one of the largest fleets of aircraft enhanced with satellite-based in-flight connectivity ("IFC") services.
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Our Content segment selects, manages and distributes wholly-owned and licensed media content, video and music programming, applications, digital advertising solutions and games to more than 150 airlines worldwide, as well as to maritime and other away-from-home non-theatrical markets.
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•
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2010 - Southwest Airlines Co.;
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•
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2011 - Norwegian Air Shuttle;
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•
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2011 - WirelessG (Mango Airlines);
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•
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2012 - Icelandair;
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•
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2014 - Air China (trial):
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•
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2014 - NOK Air;
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•
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2014 - Air France / Orange (trial);
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•
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2015 - flydubai and,
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•
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2015 - Shareco (“Shareco” is a company owned by the HNA Group)
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•
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Connectivity Equipment
- we sell and lease equipment that enables our satellite-based services to operate on aircraft. Our equipment is generally shipped and sold as a single kit, with components of the kits separately priced for future ordering. Significant components of our equipment kits include the radome, antenna, modems, wireless access points and activation packages. Substantially all of our equipment is manufactured and warrantied by third party manufacturers.
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•
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Regulatory Support
- we obtain Supplemental Type Certificates (“STCs”), which are certificates issued when an applicant has received Federal Aviation Administration (“FAA”), European Aviation Safety Agency (“EASA”) or similar international regulatory approval to modify an aircraft from its original type certificate approval. An STC on an aircraft type enables our equipment to be installed on that aircraft type. Our equipment is linefit on the new Boeing 737MAX and we currently have STCs for retrofitting our system on Boeing 737, 757, 777 and Airbus A320 aircraft types.
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•
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Post-Implementation Support -
once our equipment is installed and operational, we provide each aircraft technical and network support, which includes 24/7 operational assistance and monitoring of the connectivity performance and bandwidth of our satellite-based services.
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•
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Airtime App:
The Airtime App is an innovative application that allows passengers to personalize their IFE directly on their mobile devices.
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•
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Airtime Content-to-Go:
For a quick go-to-market solution, airlines have the ability to offer a pre-flight download of digital media content using the Airtime Content-to-Go functionality, which requires no onboard hardware. It enables passengers to download content as early as when they book a flight. The content will remain locked until the passenger boards the plane, at which point they will be able to view the content that they purchased.
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•
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Airapps:
the Air series of apps engage the passenger throughout their pre-flight, as well as during and post-flight travels. Key Air Apps products include
Airgames, Airread, Airshop, Airmeal, Airterminals, Aircities, Airhealth
and
Airnews.
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•
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Flight operations
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▪
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Accurate, integrated flight operations data in near real-time to support day-of disruption management, reducing the number of flight cancellations, delays, diversions, and improving operation reliability.
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•
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Operations planning
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▪
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Accurate, integrated, post-operational data to support operations planning, including flight schedule, aircraft maintenance and other resources, resulting in improved overall operational efficiency, cost savings (such as fuel), and an improved passenger experience.
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•
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Asset Forensics
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▪
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Real-time equipment hours & cycles, operational severity assessment, not-to-exceed airfield and enroute performance based on actual weathers, asset contingency planning and risk management, lessees operations due diligence and contract compliance, maintenance tracking and reserve assessment, enhance long-range MRO forecast fidelity and strategic planning precision.
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•
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Passenger experience
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▪
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Accurate, real-time data to improve passenger experience through fewer cancellations and delays, better notification of flight disruptions, smoother connections, and timely response to consumer requests.
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•
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Airport operations
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▪
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Complete data for airport capacity projections, runway and gate usage, passenger traffic flows, taxi time analytics, concessions planning, passenger notification, and overall airport operations.
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•
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acquiring IFE licenses for major Hollywood, independent and international film and television productions, and marketing such distribution rights to the airline, maritime and other non-theatrical markets;
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•
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making content available for IFE systems and all associated services; and
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•
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providing services ranging from the selection, purchase, production and technical adjustment of content to customer support in connection with the integration and servicing of IFE programs.
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•
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growth of our Connectivity segment’s commercial airline customer base;
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•
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attractiveness of our Connectivity segment’s customer base to media partners;
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•
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deployment of live television and content-on-demand on more aircraft and with additional airline customers and increasing passenger adoption both in the U.S. and abroad;
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•
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establishment and maintenance of beneficial contractual relationships with media partners whose content, products and services are attractive to airline passengers; and,
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•
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ability to customize and improve our Connectivity segment’s service offerings in response to trends and customer interests.
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•
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different technological solutions for broadband Internet than those used in North America;
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•
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varied, unfamiliar and unclear legal and regulatory restrictions;
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•
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unexpected changes in international regulatory requirements and tariffs;
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•
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unexpected changes in governmental or political structures in certain foreign countries;
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•
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legal, political or systemic restrictions on the ability of U.S. companies to do business in foreign countries, including restrictions on foreign ownership of telecommunications providers or the establishment of economic sanctions by the U.S. affecting businesses such as ours;
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inability to find content or service providers to partner with on commercially reasonable terms, or at all;
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•
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Foreign Corrupt Practices Act compliance and related risks;
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•
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difficulties in staffing and managing foreign operations;
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•
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currency fluctuations;
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•
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ongoing instability or changes in a country’s or region’s economic or political conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts;
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•
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longer collection cycles and financial instability among customers; and
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•
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potential adverse tax consequences.
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Continued availability and reliability of data sources utilized in our platform, including radar, aircraft, flight and schedule information provided by government agencies, commercial publishers, global distribution systems, and individual airlines;
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•
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Continued availability and reliability of third-party cloud services and data hosting companies, including Amazon Web Services and Google Cloud Services. Substantially all of masFlight’s customer-facing solutions are operated from the Amazon Web Services environment. An extended disruption in the availability of Amazon Web Services resources may impact our ability to deliver contracted services to our customers;
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•
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New competition related to data aggregation, cloud data warehousing, benchmarking, analytics, business intelligence, flight operations management, schedule planning, cockpit EFB software and aircraft interface devices;
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•
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Reliance on commercial partners and third parties for the transmission of aircraft-generated data to ground-based information systems and computer networks;
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•
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Changes to government regulations related to the segregation and security of sensitive air-traffic management data, real-time and historical aircraft position information including VIP movements, avionics data and other aircraft information generated during flight, and other safety-sensitive data sources.
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termination or failure to renew contracts by our airline customers;
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•
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a reduction in sales or delay in market acceptance of our connectivity service;
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•
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sales credits or refunds to our customers;
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•
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governmental compliance requirements regarding customer privacy rights;
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loss of existing customers and difficulty in attracting new customers;
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•
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diversion of development resources;
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harm to our reputation and brand image;
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•
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increased insurance costs; and
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claims for substantial damages.
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•
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potential disruption of our ongoing business and distraction of management;
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•
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difficulty integrating the operations and products of the acquired business;
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•
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use of cash to fund the acquisition or for unanticipated expenses;
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limited market experience in new businesses;
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•
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exposure to unknown liabilities, including litigation against the companies that we acquire;
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•
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additional costs due to differences in culture, geographical locations and duplication of key talent;
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delays associated with or resources being devoted to regulatory review and approval;
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•
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acquisition-related accounting charges affecting our balance sheet and operations;
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difficulty integrating the financial results of the acquired business in our consolidated financial statements;
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controls in the acquired business;
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potential impairment of goodwill;
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dilution to our current stockholders from the issuance of equity securities; and
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•
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potential loss of key employees or customers of the acquired company.
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•
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requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce the amounts available to fund working capital, capital expenditures, product development efforts and other general corporate purposes;
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increasing our vulnerability to adverse changes in general economic, industry and market conditions;
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•
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obligating us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing;
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
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•
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placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
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actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
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•
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changes in the market’s expectations about our operating results;
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•
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success of competitors;
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•
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our operating results failing to meet the expectation of securities analysts or investors in a particular period;
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changes in financial estimates and recommendations by securities analysts concerning the Company, the market for in-flight entertainment, the airline industry, or the travel market in general;
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•
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operating and stock price performance of other companies that investors deem comparable to us;
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•
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our ability to market new and enhanced products on a timely basis;
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•
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changes in laws and regulations affecting our business or our industry;
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•
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commencement of, or involvement in, litigation involving the Company;
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•
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changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
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•
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the volume of shares of our common stock available for public sale;
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•
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any major change in our board or management;
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•
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sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
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•
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general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
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•
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a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;
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•
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no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates.
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•
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the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
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•
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the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer
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•
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
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•
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the requirement that an annual meeting of stockholders may be called only by the chairman of the board of directors, the chief executive officer, or the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
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•
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limiting the liability of, and providing indemnification to, our directors and officers;
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•
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controlling the procedures for the conduct and scheduling of stockholder meetings;
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•
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providing the board of directors with the express power to postpone previously scheduled annual meetings of stockholders and to cancel previously scheduled annual meetings of stockholders;
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•
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providing that directors may be removed prior to the expiration of their terms by stockholders only for cause; and
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•
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advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.
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Location
|
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Property / Approximate Size
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Use and Term
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Function
|
Westlake Village, CA, USA
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Building (6,880 square feet)
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Leased office; termination date: 3/31/16
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Corporate/Connectivity Services
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Marina Del Rey, CA, USA
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Building Suite #200 (14,667 square feet)
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Leased office; termination date: 5/17/17
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Corporate/Content Services
|
Marina Del Rey, CA, USA
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Building Suite #300 (5,064 square feet)
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Leased office; termination date: 5/17/17
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Corporate/Content Services
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Vaughan, Ontario, Canada
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Building (10,200 square feet)
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Leased office; termination date: 12/31/17
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Content Services
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Lombard, Ill, USA
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Building (24,304 square feet)
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Leased office; termination date: 2/28/25
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Connectivity R&D
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Camarillo, CA USA
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Hanger
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Leased plane hanger; termination date: 6/30/16
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Connectivity R&D and Operations
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New York, NY, USA
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|
Building (300 square feet)
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Leased office; biannual renewal
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Ad Sales/Marketing
|
Los Angeles, CA, USA
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Building (10,000 square feet)
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Leased office; termination date: 6/31/16
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Content Services
|
North Point, Hong Kong
|
|
Building (5,213 square feet)
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Leased office; termination date: 6/18/18
|
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Content Services
|
Reston, VA, USA
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|
Building (2,906 square feet)
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|
Leased office; termination date: 12/31/20
|
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Operations Data Solutions
|
Amsterdam, Netherlands
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|
Building (850 square feet)
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|
Leased office; termination date: 12/31/18
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Content Services
|
Singapore, Southeast Asia
|
|
Building (7,100 square feet)
|
|
Leased office; termination date: 7/8/17
|
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Content Services
|
Dubai Media City, Dubai, United Arab Emirates
|
|
Building (1,550 square feet)
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Leased office; termination date: 5/31/16
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Content Services
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Dubai Media City, Dubai, United Arab Emirates
|
|
Building (1,543 square feet)
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Leased office; termination date: 10/31/16
|
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Content Services
|
Mumbai, India
|
|
Building (2,588 square feet)
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Leased office; termination date: 3/31/18
|
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Content Services
|
Mumbai, India
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|
Building (13,278 square feet)
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Leased office; 99 year lease, 90 years remaining
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Content Services
|
Miami, FL, USA
|
|
Building (5,651 square feet)
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Leased office; termination date: 2/29/16
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Operations Data Solutions
|
London, United Kingdom
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|
Building (14,500 square feet)
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Leased office; termination date: 3/31/16
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Content Services
|
Irvine, CA, USA
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|
Building (22,000 square feet)
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Leased office; termination date 6/30/20
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Content Technical Lab
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Sundsvall, Sweden
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Building (2,100 square feet)
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Leased office; termination date: 9/30/19
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Operations Data Solutions
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Manchester, United Kingdom
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Building (13,533 square feet)
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Owned Building mortgage to be paid off in 2032
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Content Services
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Madrid, Spain
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Building (2,435 square feet)
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Leased office; termination date: 3/31/16
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Content Services
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Lake Forest, CA, USA
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Building (5,311 square feet)
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Leased office; termination date: 3/19/17
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Content Services
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Beijing, China
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Building 10 square meter
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Leased office; biannual renewal
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Connectivity
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Beijing, China
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Building 592 square feet
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Leased office; annual renewal
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Connectivity Sales
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Auckland, New Zealand
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Building 873 square feet
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Lease Office: end 10/31/18
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Content Services
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Montreal, Canada
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Building 22,244 square feet
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Lease Office: end 6/30/25
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Content Services
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Year Ended December 31, 2015
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
13.74
|
|
|
$
|
9.70
|
|
Third Quarter
|
$
|
13.36
|
|
|
$
|
10.77
|
|
Second Quarter
|
$
|
14.23
|
|
|
$
|
12.26
|
|
First Quarter
|
$
|
15.74
|
|
|
$
|
12.95
|
|
|
|
|
|
||||
Year Ended December 31, 2014
|
High
|
|
Low
|
||||
Fourth Quarter
|
$
|
14.23
|
|
|
$
|
9.61
|
|
Third Quarter
|
$
|
13.88
|
|
|
$
|
9.30
|
|
Second Quarter
|
$
|
16.48
|
|
|
$
|
9.37
|
|
First Quarter
|
$
|
18.48
|
|
|
$
|
14.23
|
|
|
Year ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
426,030
|
|
|
387,735
|
|
|
$
|
259,722
|
|
|
69,210
|
|
|
33,637
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of Sales
|
279,156
|
|
|
281,873
|
|
|
197,938
|
|
|
76,897
|
|
|
35,947
|
|
|||||
Sales and marketing expenses
|
17,705
|
|
|
13,287
|
|
|
10,330
|
|
|
3,935
|
|
|
3,129
|
|
|||||
Product development
|
28,610
|
|
|
23,010
|
|
|
9,068
|
|
|
2,646
|
|
|
3,392
|
|
|||||
General and administrative
|
81,965
|
|
|
77,773
|
|
|
70,629
|
|
|
14,534
|
|
|
9,552
|
|
|||||
Amortization of intangible assets
|
26,994
|
|
|
24,552
|
|
|
17,281
|
|
|
34
|
|
|
25
|
|
|||||
Restructuring charges
|
411
|
|
|
4,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
434,841
|
|
|
424,718
|
|
|
305,246
|
|
|
98,046
|
|
|
52,045
|
|
|||||
Loss from operations
|
(8,811
|
)
|
|
(36,983
|
)
|
|
(45,524
|
)
|
|
(28,836
|
)
|
|
(18,408
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest (expense) income, net
|
(2,492
|
)
|
|
88
|
|
|
(2,417
|
)
|
|
(10,368
|
)
|
|
(233
|
)
|
|||||
Change in fair value of derivatives
|
11,938
|
|
|
(6,955
|
)
|
|
(63,961
|
)
|
|
(3,576
|
)
|
|
—
|
|
|||||
Other expense, net
|
(1,140
|
)
|
|
(2,770
|
)
|
|
(1,000
|
)
|
|
(23
|
)
|
|
(60
|
)
|
|||||
Loss before income taxes
|
(505
|
)
|
|
(46,620
|
)
|
|
(112,902
|
)
|
|
(42,803
|
)
|
|
(18,701
|
)
|
|||||
Income tax provision
|
1,621
|
|
|
10,574
|
|
|
1,839
|
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
(2,126
|
)
|
|
(57,194
|
)
|
|
(114,741
|
)
|
|
(42,803
|
)
|
|
(18,701
|
)
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
194
|
|
|
290
|
|
|
—
|
|
|
—
|
|
|||||
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
(2,126
|
)
|
|
(57,388
|
)
|
|
(115,031
|
)
|
|
(42,803
|
)
|
|
(18,701
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share - basic
(1)
|
$
|
(0.03
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(1.35
|
)
|
Net loss per common share - diluted
(1)
|
$
|
(0.18
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
|
$
|
(2.24
|
)
|
|
$
|
(1.35
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average common shares - basic
(1)
|
77,558
|
|
|
73,300
|
|
|
53,061
|
|
|
19,148
|
|
|
13,883
|
|
|||||
Weighted average common shares - diluted
(1)
|
78,394
|
|
|
73,300
|
|
|
53,061
|
|
|
19,148
|
|
|
13,883
|
|
|
Year ended December 31,
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Cash and cash equivalents and marketable securities
|
$
|
223,552
|
|
|
$
|
197,648
|
|
|
$
|
258,796
|
|
|
$
|
2,088
|
|
|
$
|
8,810
|
|
Working capital
|
$
|
205,623
|
|
|
$
|
155,598
|
|
|
$
|
176,121
|
|
|
$
|
(3,799
|
)
|
|
$
|
(11,654
|
)
|
Total assets
|
$
|
639,539
|
|
|
$
|
533,595
|
|
|
$
|
578,883
|
|
|
$
|
29,437
|
|
|
$
|
23,931
|
|
Long term liabilities
|
$
|
119,863
|
|
|
$
|
46,654
|
|
|
$
|
39,577
|
|
|
$
|
3,111
|
|
|
$
|
2,703
|
|
Total stockholders' equity (deficit)
|
$
|
353,761
|
|
|
$
|
312,629
|
|
|
$
|
356,184
|
|
|
$
|
1,417
|
|
|
$
|
(9,147
|
)
|
(1)
|
On January 31, 2013 and in conjunction with the Business Combination, Row 44 common stock $0.0001 par value was converted into Global Eagle Entertainment Inc. common stock par value $0.0001. Immediately prior to the Business Combination, Row 44’s proportional adjustment to the existing conversion ratios for each series of preferred stock outstanding was effected in January 2009. Accordingly, all share and per share amounts for all periods presented have been adjusted retrospectively, where applicable, to reflect the stock conversion retrospectively to January 1, 2010.
|
(1)
|
The Company estimated that it would incur total expenses relating to employee termination benefits, which primarily include severance and transitional-related expenses, of approximately
$2.7 million
, all of which represents cash expenditures which were incurred and expensed through December 31, 2015.
|
(2)
|
In connection with the closure of its German operations pursuant to the Plan, the Company disposed of approximately
11000
square feet of leased facilities in Duisburg and Munich, Germany, representing approximately
6%
of its global facilities square footage. The Company incurred an aggregate of approximately
$0.4 million
of facilities disposal charges pursuant to the Plan through December 31, 2015.
|
(3)
|
From the third quarter of 2014 through the fourth quarter of 2015, the Company anticipated to incur periodic restructuring expenditures in an aggregate amount of
$1.5 million
to
$2.0 million
, comprised of legal and professional fees associated with the execution of the Plan. Through December 31, 2015, the Company incurred and expensed approximately
$1.5 million
in legal and professional fees in connection with the Plan.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue
|
$
|
426,030
|
|
|
$
|
387,735
|
|
|
$
|
259,722
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
279,156
|
|
|
281,873
|
|
|
197,938
|
|
|||
Sales and marketing expenses
|
17,705
|
|
|
13,287
|
|
|
10,330
|
|
|||
Product development
|
28,610
|
|
|
23,010
|
|
|
9,068
|
|
|||
General and administrative
|
81,965
|
|
|
77,773
|
|
|
70,629
|
|
|||
Amortization of intangible assets
|
26,994
|
|
|
24,552
|
|
|
17,281
|
|
|||
Restructuring charges
|
411
|
|
|
4,223
|
|
|
—
|
|
|||
Total operating expenses
|
434,841
|
|
|
424,718
|
|
|
305,246
|
|
|||
Loss from operations
|
(8,811
|
)
|
|
(36,983
|
)
|
|
(45,524
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income (expense), net
|
(2,492
|
)
|
|
88
|
|
|
(2,417
|
)
|
|||
Change in fair value of derivatives
|
11,938
|
|
|
(6,955
|
)
|
|
(63,961
|
)
|
|||
Other expense, net
|
(1,140
|
)
|
|
(2,770
|
)
|
|
(1,000
|
)
|
|||
Loss before income taxes
|
(505
|
)
|
|
(46,620
|
)
|
|
(112,902
|
)
|
|||
Income tax provision
|
1,621
|
|
|
10,574
|
|
|
1,839
|
|
|||
Net loss
|
(2,126
|
)
|
|
(57,194
|
)
|
|
(114,741
|
)
|
|||
Net income attributable to non-controlling interest
|
—
|
|
|
194
|
|
|
290
|
|
|||
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
$
|
(2,126
|
)
|
|
$
|
(57,388
|
)
|
|
$
|
(115,031
|
)
|
|
|
|
|
|
|
||||||
Net loss per share - basic
|
$
|
(0.03
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
Net loss per common share - diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares - basic
|
77,558
|
|
|
73,300
|
|
|
53,061
|
|
|||
Weighted average common shares - diluted
|
78,394
|
|
|
73,300
|
|
|
53,061
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation expense:
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
2,957
|
|
|
$
|
2,820
|
|
|
$
|
1,113
|
|
Sales and marketing
|
893
|
|
|
471
|
|
|
—
|
|
|||
Product development
|
1,443
|
|
|
858
|
|
|
71
|
|
|||
General and administrative
|
4,154
|
|
|
3,030
|
|
|
2,719
|
|
|||
Total depreciation expense
|
$
|
9,447
|
|
|
$
|
7,179
|
|
|
$
|
3,903
|
|
|
Year Ended December 31,
|
||||||||||
Stock-based compensation expense:
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of sales
|
$
|
322
|
|
|
$
|
36
|
|
|
$
|
—
|
|
Sales and marketing expenses
|
701
|
|
|
46
|
|
|
—
|
|
|||
Product development
|
1,020
|
|
|
268
|
|
|
—
|
|
|||
General and administrative
|
6,192
|
|
|
7,717
|
|
|
4,536
|
|
|||
Total stock-based compensation expense
|
$
|
8,235
|
|
|
$
|
8,067
|
|
|
$
|
4,536
|
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Cost of sales
|
66
|
%
|
|
73
|
%
|
|
76
|
%
|
Sales and marketing expenses
|
4
|
%
|
|
3
|
%
|
|
4
|
%
|
Product development
|
7
|
%
|
|
6
|
%
|
|
3
|
%
|
General and administrative
|
19
|
%
|
|
20
|
%
|
|
27
|
%
|
Amortization of intangible assets
|
6
|
%
|
|
6
|
%
|
|
7
|
%
|
Restructuring charges
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
Total operating expenses
|
102
|
%
|
|
110
|
%
|
|
118
|
%
|
Loss from operations
|
(2
|
)%
|
|
(10
|
)%
|
|
(18
|
)%
|
Other income (expense)
|
2
|
%
|
|
(3
|
)%
|
|
(26
|
)%
|
Loss before income taxes
|
—
|
%
|
|
(12
|
)%
|
|
(43
|
)%
|
Income tax provision
|
—
|
%
|
|
3
|
%
|
|
1
|
%
|
Net loss
|
—
|
%
|
|
(15
|
)%
|
|
(44
|
)%
|
Net income attributable to non-controlling interest
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
—
|
%
|
|
(15
|
)%
|
|
(44
|
)%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Licensing
|
$
|
308,153
|
|
|
$
|
96,906
|
|
|
$
|
405,059
|
|
|
$
|
277,389
|
|
|
$
|
74,839
|
|
|
$
|
352,228
|
|
|
$
|
181,885
|
|
|
$
|
51,350
|
|
|
$
|
233,235
|
|
Equipment
|
—
|
|
|
20,971
|
|
|
20,971
|
|
|
—
|
|
|
35,507
|
|
|
35,507
|
|
|
—
|
|
|
26,487
|
|
|
26,487
|
|
|||||||||
Total Revenue
|
308,153
|
|
|
117,877
|
|
|
426,030
|
|
|
277,389
|
|
|
110,346
|
|
|
387,735
|
|
|
181,885
|
|
|
77,837
|
|
|
259,722
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Licensing and Services
|
203,693
|
|
|
57,942
|
|
|
261,635
|
|
|
195,454
|
|
|
54,881
|
|
|
250,335
|
|
|
134,207
|
|
|
42,590
|
|
|
176,797
|
|
|||||||||
Equipment
|
—
|
|
|
17,521
|
|
|
17,521
|
|
|
—
|
|
|
31,538
|
|
|
31,538
|
|
|
—
|
|
|
21,141
|
|
|
21,141
|
|
|||||||||
Total Cost of Sales
|
203,693
|
|
|
75,463
|
|
|
279,156
|
|
|
195,454
|
|
|
86,419
|
|
|
281,873
|
|
|
134,207
|
|
|
63,731
|
|
|
197,938
|
|
|||||||||
Contribution Profit
|
104,460
|
|
|
42,414
|
|
|
146,874
|
|
|
81,935
|
|
|
23,927
|
|
|
105,862
|
|
|
47,678
|
|
|
14,106
|
|
|
61,784
|
|
|||||||||
Other Operating Expenses
|
|
|
|
|
155,685
|
|
|
|
|
|
|
142,845
|
|
|
|
|
|
|
107,308
|
|
|||||||||||||||
Loss from Operations
|
|
|
|
|
(8,811
|
)
|
|
|
|
|
|
(36,983
|
)
|
|
|
|
|
|
(45,524
|
)
|
|||||||||||||||
Other income (expense)
|
|
|
|
|
8,306
|
|
|
|
|
|
|
(9,637
|
)
|
|
|
|
|
|
(67,378
|
)
|
|||||||||||||||
Loss before income taxes
|
|
|
|
|
(505
|
)
|
|
|
|
|
|
(46,620
|
)
|
|
|
|
|
|
(112,902
|
)
|
|||||||||||||||
Income tax provision
|
|
|
|
|
1,621
|
|
|
|
|
|
|
10,574
|
|
|
|
|
|
|
1,839
|
|
|||||||||||||||
Net loss
|
|
|
|
|
$
|
(2,126
|
)
|
|
|
|
|
|
$
|
(57,194
|
)
|
|
|
|
|
|
$
|
(114,741
|
)
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
||||||||
Service
|
$
|
96,906
|
|
|
$
|
74,839
|
|
|
$
|
51,350
|
|
|
29
|
%
|
|
46
|
%
|
Equipment
|
20,971
|
|
|
35,507
|
|
|
26,487
|
|
|
(41
|
)%
|
|
34
|
%
|
|||
Total Revenue Connectivity Segment
|
$
|
117,877
|
|
|
$
|
110,346
|
|
|
$
|
77,837
|
|
|
7
|
%
|
|
42
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
||||||||
Licensing and services
|
$
|
308,153
|
|
|
$
|
277,389
|
|
|
$
|
181,885
|
|
|
11
|
%
|
|
53
|
%
|
Total Revenue Content Segment
|
$
|
308,153
|
|
|
$
|
277,389
|
|
|
$
|
181,885
|
|
|
11
|
%
|
|
53
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
||||||||
Service
|
$
|
57,942
|
|
|
$
|
54,881
|
|
|
$
|
42,590
|
|
|
6
|
%
|
|
29
|
%
|
Equipment
|
17,521
|
|
|
31,538
|
|
|
21,141
|
|
|
(44
|
)%
|
|
49
|
%
|
|||
Total Connectivity Cost of Sales
|
$
|
75,463
|
|
|
$
|
86,419
|
|
|
$
|
63,731
|
|
|
(13
|
)%
|
|
36
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
||||||||
Content Cost of Sales
|
$
|
203,693
|
|
|
$
|
195,454
|
|
|
$
|
134,207
|
|
|
4
|
%
|
|
46
|
%
|
|
Year Ended December 31,
|
|
% Change
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
||||||||
Sales and marketing expenses
|
$
|
17,705
|
|
|
$
|
13,287
|
|
|
$
|
10,330
|
|
|
33
|
%
|
|
29
|
%
|
Product development
|
28,610
|
|
|
23,010
|
|
|
9,068
|
|
|
24
|
%
|
|
154
|
%
|
|||
General and administrative
|
81,965
|
|
|
77,773
|
|
|
70,629
|
|
|
5
|
%
|
|
10
|
%
|
|||
Amortization of intangible assets
|
26,994
|
|
|
24,552
|
|
|
17,281
|
|
|
10
|
%
|
|
42
|
%
|
|||
Restructuring charges
|
411
|
|
|
4,223
|
|
|
—
|
|
|
(90
|
)%
|
|
N/A
|
|
|||
|
$
|
155,685
|
|
|
$
|
142,845
|
|
|
$
|
107,308
|
|
|
9
|
%
|
|
33
|
%
|
|
Year Ended December 31,
|
|
% Change
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2014 to 2015
|
|
2013 to 2014
|
|||||
Total other income (expense), net
|
8,306
|
|
|
(9,637
|
)
|
|
(67,378
|
)
|
|
(186
|
)%
|
|
(86
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2.014
|
|
2013
|
||||||
Net cash provided by (used in) operating activities
|
$
|
21,575
|
|
|
$
|
(23,395
|
)
|
|
$
|
(54,143
|
)
|
Net cash provided by (used in) investing activities
|
$
|
(80,890
|
)
|
|
$
|
(9,723
|
)
|
|
$
|
129,840
|
|
Net cash provided by (used in) financing activities
|
$
|
84,833
|
|
|
$
|
(28,031
|
)
|
|
$
|
181,011
|
|
|
2015
|
|
2014
|
||||
Convertible senior notes
|
$
|
70,013
|
|
|
$
|
—
|
|
Bank debt
|
855
|
|
|
943
|
|
||
Bank loans
|
1,374
|
|
|
2,071
|
|
Years Ending December 31,
|
Amount
|
||
2016
|
$
|
869
|
|
2017
|
831
|
|
|
2018
|
68
|
|
|
2019
|
68
|
|
|
2020
|
60
|
|
|
Thereafter
|
83,056
|
|
|
Total
|
$
|
84,952
|
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|||||
Contractual Obligations (in thousands):
|
|
|
|
|
|
|
|
|
|
|||||
Operating lease obligations
|
10,752
|
|
|
2,185
|
|
|
2,835
|
|
|
2,193
|
|
|
3,539
|
|
Satellite commitment (1)
|
243,973
|
|
|
32,614
|
|
|
63,067
|
|
|
44,162
|
|
|
104,130
|
|
Deferred revenue arrangements (2)
|
16,794
|
|
|
10,449
|
|
|
3,283
|
|
|
3,062
|
|
|
—
|
|
Long-term debt obligations (3), (4)
|
84,952
|
|
|
869
|
|
|
899
|
|
|
128
|
|
|
83,056
|
|
Contingent consideration obligations (5)
|
10,766
|
|
|
5,646
|
|
|
5,011
|
|
|
109
|
|
|
—
|
|
Content and television license fees and guarantees (6)
|
60,683
|
|
|
30,715
|
|
|
28,867
|
|
|
1,101
|
|
|
—
|
|
Equipment purchase commitments (7)
|
17,632
|
|
|
17,632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
445,552
|
|
|
100,110
|
|
|
103,962
|
|
|
50,755
|
|
|
190,725
|
|
(1)
|
Amounts represent future satellite cost commitments to Hughes Network Systems and SES over the period January 1, 2016 through December 31, 2027.
|
(2)
|
Amounts represent obligations to provide service for which we have already received cash from our customers.
|
(3)
|
Includes amounts pertaining to the Convertible Senior Notes and Citibank Term Loans and related interest. Interest payments were calculated based upon the interest rate in effect at December 31, 2015. See also Note 14. Notes Payable and Bank Debts.
|
(4)
|
Includes amounts pertaining to a mortgage loan assumed for a building acquired in the IFES acquisition.
|
(5)
|
The amounts above include earn-out liabilities for business combinations during the year ended
December 31, 2015
. These amounts also include future obligations relating to employee compensation as part of the masFlight acquisition. Amounts above represent estimated payouts, while actual maximum payouts total $24.0 million.
|
(6)
|
Amounts represent minimum guarantees and contractual obligations associated with licensing and providing our content and Internet protocol television services to our customers.
|
(7)
|
Equipment purchase commitments represent purchase commitments for Connectivity equipment inventory. The Company has purchase commitments with various providers of equipment for the Company's connectivity services. As of December 31, 2015, the Company have committed to purchase $17.6 million of future products which we expect to purchase during the year ended December 31, 2016.
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Southwest Airlines
|
23
|
%
|
|
24
|
%
|
|
22
|
%
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
GLOBAL EAGLE ENTERTAINMENT INC.
|
|
|
By:
|
/s/ Michael Zemetra
|
|
|
Michael Zemetra
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|
Signature
|
|
Title
|
|
Date
|
/s/ David M. Davis
|
|
Chief Executive Officer and Director
|
|
March 17, 2016
|
David M. Davis
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Michael Zemetra
|
|
Chief Financial Officer and Treasurer
|
|
March 17, 2016
|
Michael Zemetra
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Edward L. Shapiro
|
|
Chairman of the Board of Directors
|
|
March 17, 2016
|
Edward L. Shapiro
|
|
|
|
|
|
|
|
|
|
/s/ Louis Bélanger-Martin
|
|
Director
|
|
March 17, 2016
|
Louis Bélanger-Martin
|
|
|
|
|
|
|
|
|
|
/s/ Harry E. Sloan
|
|
Director
|
|
March 17, 2016
|
Harry E. Sloan
|
|
|
|
|
|
|
|
|
|
/s/ Jeff Sagansky
|
|
Director
|
|
March 17, 2016
|
Jeff Sagansky
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Leddy
|
|
Director
|
|
March 17, 2016
|
Jeffrey A. Leddy
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey E. Epstein
|
|
Director
|
|
March 17, 2016
|
Jeffrey E. Epstein
|
|
|
|
|
|
|
|
|
|
/s/ Robert W. Reding
|
|
Director
|
|
March 17, 2016
|
Robert W. Reding
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
|
|
|
|
||||||
License
|
$
|
252,775
|
|
|
$
|
231,521
|
|
|
$
|
153,966
|
|
Service
|
152,204
|
|
|
120,707
|
|
|
79,262
|
|
|||
Equipment
|
21,051
|
|
|
35,507
|
|
|
26,494
|
|
|||
Total revenue
|
426,030
|
|
|
387,735
|
|
|
259,722
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of sales:
|
|
|
|
|
|
||||||
Licensing and services
|
261,635
|
|
|
249,878
|
|
|
176,863
|
|
|||
Equipment
|
17,521
|
|
|
31,995
|
|
|
21,075
|
|
|||
Total cost of sales
|
279,156
|
|
|
281,873
|
|
|
197,938
|
|
|||
Sales and marketing expenses
|
17,705
|
|
|
13,287
|
|
|
10,330
|
|
|||
Product development
|
28,610
|
|
|
23,010
|
|
|
9,068
|
|
|||
General and administrative
|
81,965
|
|
|
77,773
|
|
|
70,629
|
|
|||
Amortization of intangible assets
|
26,994
|
|
|
24,552
|
|
|
17,281
|
|
|||
Restructuring charges
|
411
|
|
|
4,223
|
|
|
—
|
|
|||
Total operating expenses
|
434,841
|
|
|
424,718
|
|
|
305,246
|
|
|||
Loss from operations
|
(8,811
|
)
|
|
(36,983
|
)
|
|
(45,524
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income (expense), net
|
(2,492
|
)
|
|
88
|
|
|
(2,417
|
)
|
|||
Change in fair value of derivatives
|
11,938
|
|
|
(6,955
|
)
|
|
(63,961
|
)
|
|||
Other expense, net
|
(1,140
|
)
|
|
(2,770
|
)
|
|
(1,000
|
)
|
|||
Loss before income taxes
|
(505
|
)
|
|
(46,620
|
)
|
|
(112,902
|
)
|
|||
Income tax provision
|
1,621
|
|
|
10,574
|
|
|
1,839
|
|
|||
Net loss
|
(2,126
|
)
|
|
(57,194
|
)
|
|
(114,741
|
)
|
|||
Net income attributable to non-controlling interest
|
—
|
|
|
194
|
|
|
290
|
|
|||
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
$
|
(2,126
|
)
|
|
$
|
(57,388
|
)
|
|
$
|
(115,031
|
)
|
|
|
|
|
|
|
||||||
Net loss per share - basic
|
$
|
(0.03
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
Net loss per common share - diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares - basic
|
77,558
|
|
|
73,300
|
|
|
53,061
|
|
|||
Weighted average common shares - diluted
|
78,394
|
|
|
73,300
|
|
|
53,061
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net loss
|
$
|
(2,126
|
)
|
|
$
|
(57,194
|
)
|
|
$
|
(114,741
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Unrealized foreign currency translation adjustments
|
(303
|
)
|
|
4
|
|
|
—
|
|
|||
Unrealized gain on available for sale securities
|
—
|
|
|
112
|
|
|
101
|
|
|||
Less: reclassification adjustments for recognized gains included in net loss
|
—
|
|
|
(112
|
)
|
|
(101
|
)
|
|||
Total unrealized gain on available for sale securities
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) income
|
(303
|
)
|
|
4
|
|
|
—
|
|
|||
Comprehensive loss
|
(2,429
|
)
|
|
(57,190
|
)
|
|
(114,741
|
)
|
|||
Comprehensive income attributable to non-controlling interests
|
—
|
|
|
194
|
|
|
290
|
|
|||
Comprehensive loss attributable to Global Eagle Entertainment Inc. common stockholders
|
$
|
(2,429
|
)
|
|
$
|
(57,384
|
)
|
|
$
|
(115,031
|
)
|
|
Common Stock
|
|
Common Stock Non-Voting
|
|
Treasury Stock
|
|
Additional
|
|
Subscriptions
|
|
Accumulated
|
|
Other Accumulated Comprehensive
|
|
Total Global Eagle Entertainment Inc.
|
|
Non-Controlling
|
|
Total
|
|||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-in Capital
|
|
Receivable
|
|
Deficit
|
|
Income (Loss)
|
|
Stockholders' Equity
|
|
Interest
|
|
Equity (Deficit)
|
|||||||||||||||||||||||
Balance as of January 1, 2013
|
23,405
|
|
|
$
|
2
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
130,780
|
|
|
$
|
(453
|
)
|
|
$
|
(128,912
|
)
|
|
$
|
—
|
|
|
$
|
1,417
|
|
|
—
|
|
|
$
|
1,417
|
|
|
Reclassification of MLBAM warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,696
|
|
|
—
|
|
|
2,696
|
|
||||||||||
Reclassification of Series C warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,879
|
|
|
—
|
|
|
2,879
|
|
||||||||||
Change in fair value of common stock warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|
93
|
|
||||||||||
Warrants for common stock issued for services and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
—
|
|
|
359
|
|
||||||||||
Exchange of Warrants for Common Stock
|
898
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,235
|
|
|
—
|
|
|
13,235
|
|
||||||||||
Recapitalization as a result of Row 44 Merger
|
15,373
|
|
|
2
|
|
|
4,750
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
105,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,546
|
|
|
—
|
|
|
105,546
|
|
||||||||||
Stock purchase of AIA
|
—
|
|
|
—
|
|
|
14,368
|
|
|
1
|
|
|
(3,054
|
)
|
|
(30,659
|
)
|
|
144,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113,598
|
|
|
25,287
|
|
|
138,885
|
|
||||||||||
Repurchase and retirement of common stock
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,191
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,191
|
)
|
|
—
|
|
|
(1,191
|
)
|
||||||||||
Shares of the Company issued to acquire PMG
|
432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,447
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,447
|
|
|
—
|
|
|
4,447
|
|
||||||||||
Conversion of Sponsor promissory note to warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(491
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(491
|
)
|
|
—
|
|
|
(491
|
)
|
||||||||||
Waiver of sponsor warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,900
|
|
|
—
|
|
|
9,900
|
|
||||||||||
Issuance of stock to former executive
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,527
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,527
|
|
|
—
|
|
|
1,527
|
|
||||||||||
Issuance of common stock, net of offering costs
|
15,793
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204,007
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
204,008
|
|
|
—
|
|
|
204,008
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,009
|
|
|
—
|
|
|
3,009
|
|
||||||||||
Interest income on subscription receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
||||||||||
Purchase of subsidiary share from a non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
(15,182
|
)
|
|
(15,369
|
)
|
||||||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(115,031
|
)
|
|
—
|
|
|
(115,031
|
)
|
|
290
|
|
|
(114,741
|
)
|
|
Common Stock
|
|
Common Stock Non-Voting
|
|
Treasury Stock
|
|
Additional
|
|
Subscriptions
|
|
Accumulated
|
|
Other Accumulated Comprehensive
|
|
Total Global Eagle Entertainment Inc.
|
|
Non-Controlling
|
|
Total
|
|||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-in Capital
|
|
Receivable
|
|
Deficit
|
|
Income (Loss)
|
|
Stockholders' Equity
|
|
Interest
|
|
Equity (Deficit)
|
|||||||||||||||||||||||
Balance, December 31, 2013
|
55,902
|
|
|
$
|
5
|
|
|
19,118
|
|
|
$
|
2
|
|
|
(3,054
|
)
|
|
$
|
(30,659
|
)
|
|
$
|
620,862
|
|
|
$
|
(478
|
)
|
|
$
|
(243,943
|
)
|
|
$
|
—
|
|
|
$
|
345,789
|
|
|
$
|
10,395
|
|
|
$
|
356,184
|
|
Conversion of non-voting common stock
|
19,118
|
|
|
2
|
|
|
(19,118
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Exercise of common stock options and warrants, net
|
351
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,942
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,942
|
|
|
—
|
|
|
2,942
|
|
||||||||||
Issuance of common stock to former Row 44 stockholders
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
345
|
|
||||||||||
Issuance of common stock in exchange for warrants, net of transaction fees of $362
|
4,227
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,047
|
|
|
—
|
|
|
24,047
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,067
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,067
|
|
|
—
|
|
|
8,067
|
|
||||||||||
Interest income on subscription receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
||||||||||
Comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,388
|
)
|
|
—
|
|
|
(57,388
|
)
|
|
194
|
|
|
(57,194
|
)
|
||||||||||
Purchase of subsidiary share from a non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,152
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,152
|
)
|
|
(10,589
|
)
|
|
(21,741
|
)
|
||||||||||
Balance, December 31, 2014
|
79,626
|
|
|
$
|
8
|
|
|
—
|
|
|
$
|
—
|
|
|
(3,054
|
)
|
|
$
|
(30,659
|
)
|
|
$
|
645,110
|
|
|
$
|
(503
|
)
|
|
$
|
(301,331
|
)
|
|
$
|
4
|
|
|
$
|
312,629
|
|
|
$
|
—
|
|
|
$
|
312,629
|
|
Convertible note conversion option fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,674
|
|
|
—
|
|
|
12,674
|
|
||||||||||
Exercise of common stock options and warrants, net
|
607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,006
|
|
|
—
|
|
|
6,006
|
|
||||||||||
Restricted stock units vested and distributed, net of tax
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
—
|
|
|
(208
|
)
|
||||||||||
Issuance of common stock in exchange for warrants
|
1,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,600
|
|
|
—
|
|
|
16,600
|
|
||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,235
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,235
|
|
|
—
|
|
|
8,235
|
|
||||||||||
Tax benefit on stock options exercise
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|
—
|
|
|
279
|
|
||||||||||
Interest income on subscription receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
||||||||||
Comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,126
|
)
|
|
—
|
|
|
(2,126
|
)
|
|
—
|
|
|
(2,126
|
)
|
||||||||||
Balance, December 31, 2015
|
81,676
|
|
|
$
|
8
|
|
|
—
|
|
|
$
|
—
|
|
|
(3,054
|
)
|
|
$
|
(30,659
|
)
|
|
$
|
688,696
|
|
|
$
|
(528
|
)
|
|
$
|
(303,457
|
)
|
|
$
|
(299
|
)
|
|
$
|
353,761
|
|
|
$
|
—
|
|
|
$
|
353,761
|
|
|
|
|
Year Ended December 31,
|
|
|
||||||
|
|
|
|
|
|||||||
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,126
|
)
|
|
$
|
(57,194
|
)
|
|
$
|
(114,741
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
36,592
|
|
|
34,422
|
|
|
30,850
|
|
|||
Non-cash interest expense, net
|
903
|
|
|
23
|
|
|
(25
|
)
|
|||
Stock-based compensation
|
8,235
|
|
|
8,067
|
|
|
4,536
|
|
|||
Issuance of shares for working capital settlement
|
—
|
|
|
345
|
|
|
—
|
|
|||
Loss on equity method investments
|
—
|
|
|
1,500
|
|
|
—
|
|
|||
Change in fair value of derivative financial instruments
|
(11,938
|
)
|
|
6,955
|
|
|
63,961
|
|
|||
Provision for bad debt
|
797
|
|
|
5,539
|
|
|
760
|
|
|||
Warrants for common stock issued for services
|
—
|
|
|
—
|
|
|
452
|
|
|||
Deferred income taxes
|
(6,452
|
)
|
|
(5,068
|
)
|
|
(4,904
|
)
|
|||
Other
|
96
|
|
|
—
|
|
|
(176
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(5,879
|
)
|
|
(26,386
|
)
|
|
(2,803
|
)
|
|||
Inventory
|
(1,580
|
)
|
|
(3,557
|
)
|
|
(3,054
|
)
|
|||
Content library
|
(477
|
)
|
|
(1,743
|
)
|
|
(9,377
|
)
|
|||
Prepaid expenses and other current assets
|
(3,320
|
)
|
|
(5,394
|
)
|
|
(7,648
|
)
|
|||
Deposits and other assets
|
2,883
|
|
|
(4,018
|
)
|
|
—
|
|
|||
Accounts payable and accrued expenses
|
3,908
|
|
|
19,641
|
|
|
(22,508
|
)
|
|||
Deferred revenue
|
(3,134
|
)
|
|
3,151
|
|
|
5,384
|
|
|||
Income taxes payable
|
3,067
|
|
|
322
|
|
|
5,150
|
|
|||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
21,575
|
|
|
(23,395
|
)
|
|
(54,143
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Acquisitions of companies, net of cash acquired
|
(60,242
|
)
|
|
(500
|
)
|
|
(44,909
|
)
|
|||
Purchases of property and equipment
|
(20,653
|
)
|
|
(9,074
|
)
|
|
(11,477
|
)
|
|||
Cash received from Row 44 Merger
|
—
|
|
|
—
|
|
|
159,305
|
|
|||
Cash received from AIA Stock Purchase
|
—
|
|
|
—
|
|
|
22,135
|
|
|||
Purchase of investments
|
(3,264
|
)
|
|
—
|
|
|
(1,500
|
)
|
|||
Proceeds from sale of investment
|
3,269
|
|
|
583
|
|
|
6,286
|
|
|||
Other
|
—
|
|
|
(732
|
)
|
|
—
|
|
|||
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
|
(80,890
|
)
|
|
(9,723
|
)
|
|
129,840
|
|
|
|
|
Year Ended December 31,
|
|
|
||||||
|
|
|
|
|
|||||||
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net of offerings costs of $7.1 million
|
—
|
|
|
—
|
|
|
204,008
|
|
|||
Acquisition of non-controlling interest
|
—
|
|
|
(21,741
|
)
|
|
(15,369
|
)
|
|||
Proceeds from borrowings
|
81,250
|
|
|
2,047
|
|
|
—
|
|
|||
Repayment of notes payable
|
(851
|
)
|
|
(9,669
|
)
|
|
(5,637
|
)
|
|||
Proceeds from issuance of PAR note
|
—
|
|
|
—
|
|
|
19,000
|
|
|||
Repayment of PAR note
|
—
|
|
|
—
|
|
|
(19,000
|
)
|
|||
Repurchase of common stock warrants
|
—
|
|
|
(1,406
|
)
|
|
(800
|
)
|
|||
Proceeds from exercise of stock options and warrants
|
5,604
|
|
|
3,100
|
|
|
—
|
|
|||
Payments of withholding taxes on cashless exercise of stock based awards in Business Combination
|
—
|
|
|
—
|
|
|
(1,191
|
)
|
|||
Convertible senior note issuance fees
|
(831
|
)
|
|
—
|
|
|
—
|
|
|||
Other financing activities, net
|
(339
|
)
|
|
(362
|
)
|
|
—
|
|
|||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
84,833
|
|
|
(28,031
|
)
|
|
181,011
|
|
|||
Effects of exchange rate movements on cash and cash equivalents
|
386
|
|
|
1
|
|
|
—
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
25,904
|
|
|
(61,148
|
)
|
|
256,708
|
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
197,648
|
|
|
258,796
|
|
|
2,088
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
223,552
|
|
|
$
|
197,648
|
|
|
$
|
258,796
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Taxes
|
$
|
5,435
|
|
|
$
|
4,203
|
|
|
$
|
6,232
|
|
Interest
|
$
|
1,161
|
|
|
$
|
447
|
|
|
$
|
2,071
|
|
Significant non-cash items:
|
|
|
|
|
|
||||||
Issuance of sponsor warrants in exchange for notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,900
|
|
Issuance of common stock to repurchase Global Eagle public company warrants
|
$
|
16,600
|
|
|
$
|
24,448
|
|
|
$
|
13,235
|
|
Inventory converted to property and equipment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,575
|
|
|
2015
|
|
2014
|
||||
Accounts receivable, gross
|
$
|
102,089
|
|
|
$
|
92,985
|
|
Less: Allowance for doubtful accounts
|
(8,640
|
)
|
|
(7,468
|
)
|
||
Accounts receivable, net
|
$
|
93,449
|
|
|
$
|
85,517
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Beginning balance
|
$
|
7,468
|
|
|
$
|
1,929
|
|
|
$
|
7
|
|
Bad debt reserve acquired in acquisition
|
—
|
|
|
—
|
|
|
1,931
|
|
|||
Additions charged to statements of operations
|
1,172
|
|
|
5,539
|
|
|
760
|
|
|||
Less: Bad debt write offs
|
—
|
|
|
—
|
|
|
(769
|
)
|
|||
Ending balance
|
$
|
8,640
|
|
|
$
|
7,468
|
|
|
$
|
1,929
|
|
•
|
Level 1: Observable quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2: Observable quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
|
•
|
Level 3: Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques.
|
|
December 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)
|
9,652
|
|
|
—
|
|
|
—
|
|
|
9,652
|
|
Global Eagle warrants
(2)
|
24,076
|
|
|
24,076
|
|
|
—
|
|
|
—
|
|
Total financial liabilities
|
33,728
|
|
|
24,076
|
|
|
—
|
|
|
9,652
|
|
|
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
|
|
|
Earn-Out Liabilities
|
||
Balance, December 31, 2014
|
$
|
1,710
|
|
Fair value of earn-out liability assumed in 2015 acquisitions
|
9,652
|
|
|
Payments of earn-out liability
|
(1,519
|
)
|
|
Non-cash adjustment to 2014 EIM earn-out liability
|
(191
|
)
|
|
Balance, December 31, 2015
|
$
|
9,652
|
|
|
Earn-Out Liabilities
|
||
Balance, December 31, 2013
|
$
|
1,421
|
|
Fair value of earn-out liability assumed in Purple Inflight Entertainment's acquisition
|
136
|
|
|
Net changes in valuation
|
1,580
|
|
|
Payments of earn-out liability
|
(1,427
|
)
|
|
Balance, December 31, 2014
|
$
|
1,710
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Convertible senior notes
(1)
|
$
|
70,013
|
|
|
$
|
78,557
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes payable
|
2,229
|
|
|
2,229
|
|
|
3,015
|
|
|
3,015
|
|
|
Weighted Average Useful Life (Years)
|
|
Amounts at September 30, 2015 (Preliminary)
|
|
Adjustments
|
|
Purchase Price Allocation, as Adjusted
|
||||||
Goodwill
|
|
|
$
|
38,832
|
|
|
$
|
2,261
|
|
|
$
|
41,093
|
|
Customer relationships
|
7.6
|
|
19,200
|
|
|
(5,200
|
)
|
|
14,000
|
|
|||
Developed technology
|
5.7
|
|
21,800
|
|
|
100
|
|
|
21,900
|
|
|||
Trade name
|
5.0
|
|
200
|
|
|
—
|
|
|
200
|
|
|||
Accounts receivable
|
|
|
6,814
|
|
|
(364
|
)
|
|
6,450
|
|
|||
Property and equipment
|
|
|
1,783
|
|
|
—
|
|
|
1,783
|
|
|||
Deferred tax liability (
preliminary)
|
|
|
(12,952
|
)
|
|
1,905
|
|
|
(11,047
|
)
|
|||
Accrued expenses
|
|
|
(4,045
|
)
|
|
(334
|
)
|
|
(4,379
|
)
|
|||
Other liabilities assumed, net of assets acquired
|
|
|
(2,033
|
)
|
|
364
|
|
|
(1,669
|
)
|
|||
Total consideration transferred
|
|
|
$
|
69,599
|
|
|
$
|
(1,268
|
)
|
|
$
|
68,331
|
|
•
|
Row 44 had the greatest enterprise value between Row 44 and AIA based on the consideration paid by GEAC;
|
•
|
The officers of the newly combined company consist primarily of former Row 44 executives, including the Chief Executive Officer, Chief Financial Officer, and General Counsel;
|
•
|
GEAC paid a premium over the market value of AIA’s shares prior to the public announcement of the AIA Stock Purchase;
|
•
|
As of the date of the Business Combination, the Row 44 and combined Company's headquarters are in the same Los Angeles metropolitan area; and
|
•
|
The composition of the Board of Directors does not result in the ability of either Row 44 or AIA being able to appoint, elect, or remove a majority of the Board of Directors.
|
|
Amount
|
||
Operating cash
|
$
|
8
|
|
Add: cash held in trust
|
189,255
|
|
|
Less: cash paid for GEAC shares that were redeemed
|
(101,286
|
)
|
|
Add: cash received from backstop participants
|
71,250
|
|
|
Net cash received from Row 44 Merger
|
$
|
159,227
|
|
|
Amount
|
||
Goodwill
|
$
|
35,385
|
|
Existing technology – software
|
2,574
|
|
|
Existing technology – games
|
12,331
|
|
|
IPR&D
|
7,317
|
|
|
Customer relationships
|
80,758
|
|
|
Other intangibles
|
2,568
|
|
|
Content library
|
14,297
|
|
|
Accounts receivable, net of allowances
|
31,984
|
|
|
Deferred tax liability
|
(28,752
|
)
|
|
Current liabilities
|
(56,548
|
)
|
|
Other assets acquired, net of liabilities assumed
|
67,630
|
|
|
Net assets acquired
|
169,544
|
|
|
Less: Non-controlling interest
|
25,287
|
|
|
Total consideration transferred
|
$
|
144,257
|
|
|
Amount
|
||
Goodwill
|
$
|
4,843
|
|
Trade names
|
1,171
|
|
|
Customer relationships
|
10,863
|
|
|
Non-compete
|
396
|
|
|
Fixed assets
|
3,284
|
|
|
Other assets
|
1,334
|
|
|
Accounts payable and accrued liabilities
|
(12,579
|
)
|
|
Other assets acquired, net of liabilities assumed
|
6,384
|
|
|
Total consideration transferred
|
$
|
15,696
|
|
|
Amount
|
||
Goodwill
|
$
|
12,425
|
|
Trade names
|
341
|
|
|
Customer relationships
|
28,258
|
|
|
Fixed assets
|
3,498
|
|
|
Liabilities assumed, net of other assets acquired
|
(8,276
|
)
|
|
Total consideration transferred
|
$
|
36,246
|
|
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
53,014
|
|
|
$
|
52,345
|
|
Adjustment to IFES goodwill
|
—
|
|
|
308
|
|
||
Goodwill arising from business combinations (Note 3)
|
41,093
|
|
|
379
|
|
||
Currency translation and other adjustments
|
(311
|
)
|
|
(18
|
)
|
||
Ending balance
|
$
|
93,796
|
|
|
$
|
53,014
|
|
|
2015
|
|
2014
|
||||
Leasehold improvements
|
$
|
3,886
|
|
|
$
|
1,592
|
|
Furniture and fixtures
|
2,154
|
|
|
2,293
|
|
||
Equipment
|
21,043
|
|
|
17,593
|
|
||
Computer equipment
|
6,967
|
|
|
4,115
|
|
||
Computer software and ERP system
|
8,677
|
|
|
5,950
|
|
||
Automobiles
|
255
|
|
|
307
|
|
||
Buildings
|
2,649
|
|
|
2,649
|
|
||
Albatross (aircraft)
|
425
|
|
|
425
|
|
||
Satellite transponder
|
6,700
|
|
|
—
|
|
||
Construction in-progress
|
6,319
|
|
|
1,501
|
|
||
Total property, plant, and equipment
|
59,075
|
|
|
36,425
|
|
||
Accumulated depreciation
|
(20,009
|
)
|
|
(12,774
|
)
|
||
Property, plant and equipment, net
|
$
|
39,066
|
|
|
$
|
23,651
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Depreciation expense:
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
2,957
|
|
|
$
|
2,820
|
|
|
$
|
1,113
|
|
Sales and marketing
|
893
|
|
|
471
|
|
|
—
|
|
|||
Product development
|
1,443
|
|
|
858
|
|
|
71
|
|
|||
General and administrative
|
4,154
|
|
|
3,030
|
|
|
2,719
|
|
|||
Total depreciation expense
|
$
|
9,447
|
|
|
$
|
7,179
|
|
|
$
|
3,903
|
|
|
|
|
December 31, 2015
|
||||||||||
|
Weighted Average Useful Lives
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Intangible assets:
|
|
|
|
|
|
|
|
||||||
Finite life:
|
|
|
|
|
|
|
|
||||||
Existing technology - software
|
5.8 years
|
|
$
|
24,474
|
|
|
$
|
2,978
|
|
|
$
|
21,496
|
|
Existing technology - games
|
5 years
|
|
12,331
|
|
|
7,193
|
|
|
5,138
|
|
|||
Developed technology
|
8 years
|
|
7,317
|
|
|
2,058
|
|
|
5,259
|
|
|||
Customer relationships
|
7.5 years
|
|
133,566
|
|
|
50,184
|
|
|
83,382
|
|
|||
Other
|
3.7 years
|
|
7,399
|
|
|
4,991
|
|
|
2,408
|
|
|||
Content library (acquired in business combination)
|
1.5 years
|
|
14,298
|
|
|
14,298
|
|
|
—
|
|
|||
Content library (acquired post business combination)
|
1.5 years
|
(1)
|
49,599
|
|
|
33,515
|
|
|
16,084
|
|
|||
Total intangible assets
|
|
|
$
|
248,984
|
|
|
$
|
115,217
|
|
|
$
|
133,767
|
|
|
|
|
December 31, 2014
|
||||||||||
|
Weighted Average Useful Lives
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Intangible assets:
|
|
|
|
|
|
|
|
||||||
Finite life:
|
|
|
|
|
|
|
|
||||||
Existing technology - software
|
7 years
|
|
$
|
2,575
|
|
|
$
|
705
|
|
|
$
|
1,870
|
|
Existing technology - games
|
5 years
|
|
12,331
|
|
|
4,727
|
|
|
7,604
|
|
|||
Developed technology
|
8 years
|
|
7,317
|
|
|
1,143
|
|
|
6,174
|
|
|||
Customer relationships
|
7.2 years
|
|
119,879
|
|
|
30,437
|
|
|
89,442
|
|
|||
Other
|
2.5 years
|
|
7,319
|
|
|
3,448
|
|
|
3,871
|
|
|||
Content library (acquired in business combination)
|
1.5 years
|
|
14,298
|
|
|
14,148
|
|
|
150
|
|
|||
Content library (acquired post business combination)
|
1.5 years
|
(1)
|
31,949
|
|
|
18,586
|
|
|
13,363
|
|
|||
Total intangible assets
|
|
|
$
|
195,668
|
|
|
$
|
73,194
|
|
|
$
|
122,474
|
|
Year ending December 31,
|
Amount
|
||
2016
|
$
|
39,015
|
|
2017
|
31,294
|
|
|
2018
|
21,526
|
|
|
2019
|
15,834
|
|
|
2020
|
14,363
|
|
|
Thereafter
|
11,735
|
|
|
Total
|
$
|
133,767
|
|
|
Year ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accounts payable and accrued liabilities
|
$
|
46,790
|
|
|
$
|
39,466
|
|
Content license and royalties
|
57,143
|
|
|
52,714
|
|
||
Accrued payroll obligations
|
9,492
|
|
|
5,438
|
|
||
Deferred acquisition earn-out liability
|
5,105
|
|
|
1,710
|
|
||
Total
|
$
|
118,530
|
|
|
$
|
99,328
|
|
Year ending December 31,
|
Amount
|
||
2016
|
$
|
30,715
|
|
2017
|
27,686
|
|
|
2018
|
1,181
|
|
|
2019
|
676
|
|
|
2020
|
425
|
|
|
Thereafter
|
—
|
|
|
Total minimum payments
|
$
|
60,683
|
|
Year ending December 31,
|
Amount
|
||
2016
|
$
|
2,329
|
|
2017
|
1,694
|
|
|
2018
|
1,308
|
|
|
2019
|
1,201
|
|
|
2020
|
1,160
|
|
|
Thereafter
|
3,539
|
|
|
Total minimum lease payments
|
$
|
11,231
|
|
Year ending December 31,
|
Amount
|
||
2016
|
$
|
32,614
|
|
2017
|
30,905
|
|
|
2018
|
32,162
|
|
|
2019
|
29,271
|
|
|
2020
|
14,891
|
|
|
Thereafter
|
104,130
|
|
|
Total minimum payments
|
$
|
243,973
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Common stock price on grant date
|
$
|
12.91
|
|
|
$
|
11.53
|
|
|
$
|
10.57
|
|
Expected life
|
3.8 years
|
|
|
4.0 years
|
|
|
3.9 years
|
|
|||
Risk-free interest rate
|
1.28
|
%
|
|
1.52
|
%
|
|
1.13
|
%
|
|||
Expected stock volatility
|
43
|
%
|
|
58
|
%
|
|
57
|
%
|
|||
Expected dividend yield
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||
Fair value of stock options granted
|
$
|
4.41
|
|
|
$
|
5.14
|
|
|
$
|
4.65
|
|
Global Eagle Stock Option Plan
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at January 1, 2015
|
5,771
|
|
|
$
|
10.64
|
|
|
|
|
|
||
Granted
|
1,443
|
|
|
$
|
12.91
|
|
|
|
|
|
|
|
Exercised
|
(588
|
)
|
|
$
|
9.79
|
|
|
|
|
|
||
Forfeited
|
(1,001
|
)
|
|
$
|
11.25
|
|
|
|
|
|
||
Outstanding at December 31, 2015
|
5,625
|
|
|
$
|
11.20
|
|
|
3.18
|
|
$
|
204
|
|
Exercisable at December 31, 2015
|
2,555
|
|
|
$
|
10.67
|
|
|
2.75
|
|
$
|
99
|
|
Vested and expected to vest after December 31, 2015
|
5,095
|
|
|
$
|
11.13
|
|
|
3.12
|
|
$
|
191
|
|
Range of Exercise Price
|
Number Outstanding
|
|
Weighted Average Remaining Contractual Term
|
|
Weighted Average Exercise Price
|
|
Number Exercisable
|
|
Weighted Average Exercise Price
|
||||||
$13.15 - $16.70
|
855
|
|
|
4.03
|
|
$
|
13.68
|
|
|
298
|
|
|
$
|
13.86
|
|
$11.44 - $13.14
|
1,148
|
|
|
4.04
|
|
$
|
12.72
|
|
|
149
|
|
|
$
|
12.81
|
|
$10.57 - $11.43
|
1,151
|
|
|
3.44
|
|
$
|
10.73
|
|
|
441
|
|
|
$
|
10.71
|
|
$9.88 - $10.56
|
1,424
|
|
|
2.35
|
|
$
|
10.00
|
|
|
1,064
|
|
|
$
|
10.00
|
|
$8.88 - $9.87
|
1,047
|
|
|
2.40
|
|
$
|
9.68
|
|
|
603
|
|
|
$
|
9.71
|
|
|
5,625
|
|
|
3.18
|
|
$
|
11.20
|
|
|
2,555
|
|
|
$
|
10.67
|
|
|
Units (in thousands)
|
|
Weighted Average Grant date Fair Value
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2015
|
59
|
|
|
$
|
12.90
|
|
|
|
||
Granted
|
430
|
|
|
$
|
12.74
|
|
|
|
||
Vested
|
(49
|
)
|
|
$
|
12.90
|
|
|
|
||
Forfeited
|
(32
|
)
|
|
$
|
13.21
|
|
|
|
||
Balance nonvested at December 31, 2015
|
408
|
|
|
$
|
12.71
|
|
|
$
|
4,026
|
|
Vested and expected to vest at December 31, 2015
|
308
|
|
|
$
|
12.73
|
|
|
$
|
3,042
|
|
|
Year ended December 31,
|
||||||||||
Stock-based compensation expense:
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of sales
|
$
|
322
|
|
|
$
|
36
|
|
|
$
|
—
|
|
Sales and marketing expenses
|
701
|
|
|
46
|
|
|
—
|
|
|||
Product development
|
1,020
|
|
|
268
|
|
|
—
|
|
|||
General and administrative
|
6,192
|
|
|
7,717
|
|
|
4,536
|
|
|||
Total stock-based compensation expense
|
$
|
8,235
|
|
|
$
|
8,067
|
|
|
$
|
4,536
|
|
|
Weighted Average Exercise Price per Warrant
|
|
Number of Warrants (in thousands)
|
|
Weighted Average Remaining Life (in years)
|
|||
Common stock warrants
|
$
|
8.79
|
|
|
690
|
|
|
1.22
|
Series C Preferred stock warrants
|
$
|
8.74
|
|
|
477
|
|
|
1.43
|
Global Eagle Warrants
|
Number of Warrants (in thousands)
|
|
Weighted Average Exercise price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|||
Outstanding at January 1, 2015
|
10,149
|
|
|
$
|
11.50
|
|
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
Exercised
|
(19
|
)
|
|
11.50
|
|
|
|
|
Purchased
|
—
|
|
|
—
|
|
|
|
|
Exchanged for Global Eagle common stock
|
(3,957
|
)
|
|
11.50
|
|
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
|
|
Outstanding and exercisable at December 31, 2015
|
6,173
|
|
|
$
|
11.50
|
|
|
2.09
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
(9,949
|
)
|
|
$
|
(51,809
|
)
|
|
$
|
(99,503
|
)
|
Foreign
|
9,444
|
|
|
5,189
|
|
|
(13,399
|
)
|
|||
Pretax loss from operations
|
$
|
(505
|
)
|
|
$
|
(46,620
|
)
|
|
$
|
(112,902
|
)
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
932
|
|
|
$
|
2,724
|
|
|
$
|
1,878
|
|
State
|
355
|
|
|
114
|
|
|
7
|
|
|||
Foreign
|
6,786
|
|
|
12,804
|
|
|
4,858
|
|
|||
|
$
|
8,073
|
|
|
$
|
15,642
|
|
|
$
|
6,743
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(2,691
|
)
|
|
$
|
(451
|
)
|
|
$
|
(2,742
|
)
|
State
|
—
|
|
|
37
|
|
|
3
|
|
|||
Foreign
|
(3,761
|
)
|
|
(4,654
|
)
|
|
(2,165
|
)
|
|||
|
(6,452
|
)
|
|
(5,068
|
)
|
|
(4,904
|
)
|
|||
Total provision
|
$
|
1,621
|
|
|
$
|
10,574
|
|
|
$
|
1,839
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income tax benefit at Federal statutory rate
|
$
|
(177
|
)
|
|
$
|
(16,317
|
)
|
|
$
|
(39,512
|
)
|
State income tax, net of federal benefit
|
418
|
|
|
4
|
|
|
(384
|
)
|
|||
Permanent items
|
5,276
|
|
|
3,221
|
|
|
25,374
|
|
|||
Stock compensation
|
375
|
|
|
1,575
|
|
|
(82
|
)
|
|||
Tax credits
|
(586
|
)
|
|
(626
|
)
|
|
(3,093
|
)
|
|||
Other
|
746
|
|
|
(1,376
|
)
|
|
1,463
|
|
|||
Uncertain tax positions
|
708
|
|
|
2,597
|
|
|
95
|
|
|||
Withholding taxes
|
3,431
|
|
|
3,386
|
|
|
2,831
|
|
|||
Rate differential
|
(3,200
|
)
|
|
(2,050
|
)
|
|
5,783
|
|
|||
Rate adjustment
|
(1,371
|
)
|
|
—
|
|
|
60
|
|
|||
Change in valuation allowance
|
(3,999
|
)
|
|
20,160
|
|
|
9,304
|
|
|||
|
$
|
1,621
|
|
|
$
|
10,574
|
|
|
$
|
1,839
|
|
|
December 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Intangible assets
|
$
|
7,624
|
|
|
$
|
11,031
|
|
Allowances and reserves
|
2,925
|
|
|
2,843
|
|
||
Accrued expenses
|
8,398
|
|
|
4,134
|
|
||
Inventory
|
567
|
|
|
567
|
|
||
Investments in affiliates
|
443
|
|
|
—
|
|
||
Stock compensation
|
4,527
|
|
|
2,611
|
|
||
Other
|
2,589
|
|
|
—
|
|
||
Tax credits
|
4,714
|
|
|
5,358
|
|
||
Net operating losses
|
38,923
|
|
|
55,944
|
|
||
Total gross deferred tax asset
|
70,710
|
|
|
82,488
|
|
||
Less valuation allowance
|
(53,199
|
)
|
|
(73,659
|
)
|
||
Net deferred tax assets
|
$
|
17,511
|
|
|
$
|
8,829
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
$
|
(2,756
|
)
|
|
$
|
(1,185
|
)
|
Intangible assets
|
(28,240
|
)
|
|
(24,847
|
)
|
||
Investments in affiliates
|
—
|
|
|
(47
|
)
|
||
Other
|
(8,136
|
)
|
|
(1,095
|
)
|
||
Total deferred tax liabilities:
|
(39,132
|
)
|
|
(27,174
|
)
|
||
Net deferred tax liabilities
|
$
|
(21,621
|
)
|
|
$
|
(18,345
|
)
|
|
December 31,
|
|
December 31,
|
||||
Presented on the balance sheet as follows (in thousands):
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Net current deferred assets
|
$
|
—
|
|
|
$
|
4,719
|
|
Net noncurrent deferred assets
|
703
|
|
|
346
|
|
||
Total deferred tax assets
|
$
|
703
|
|
|
$
|
5,065
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Net current deferred tax liabilities
|
$
|
—
|
|
|
$
|
(80
|
)
|
Net noncurrent deferred tax liabilities
|
(22,324
|
)
|
|
(23,330
|
)
|
||
Total deferred tax liabilities
|
$
|
(22,324
|
)
|
|
$
|
(23,410
|
)
|
|
2015
|
|
2014
|
||||
Balance at beginning of year
|
$
|
4,237
|
|
|
$
|
2,831
|
|
Reversal of prior tax positions
|
—
|
|
|
(1,795
|
)
|
||
Additions based on tax positions related to the current year
|
400
|
|
|
3,201
|
|
||
Balance at end of year
|
$
|
4,637
|
|
|
$
|
4,237
|
|
Balance at December 31, 2012
|
$
|
39,122
|
|
Acquired valuation allowance from purchased acquisitions
|
2,356
|
|
|
Increase in valuation allowance
|
9,304
|
|
|
Balance at December 31, 2013
|
$
|
50,782
|
|
Increase in valuation allowance
|
22,877
|
|
|
Balance at December 31, 2014
|
$
|
73,659
|
|
Acquired valuation allowance from purchased acquisitions
|
(1,400
|
)
|
|
Decrease in valuation allowance
|
(19,060
|
)
|
|
Balance at December 31, 2015
|
$
|
53,199
|
|
|
Year ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Current notes payable
|
|
|
|
||||
Current portion of term loan
|
$
|
690
|
|
|
$
|
690
|
|
Current portion of commercial mortgage loan
|
59
|
|
|
62
|
|
||
Non-current notes payable
|
|
|
|
||||
Convertible senior notes
|
70,013
|
|
|
—
|
|
||
Term loan
|
654
|
|
|
1,344
|
|
||
Commercial mortgage loan
|
796
|
|
|
882
|
|
||
Other
|
30
|
|
|
37
|
|
||
Total notes payable
|
$
|
72,242
|
|
|
$
|
3,015
|
|
Years Ending December 31,
|
Amount
|
||
2016
|
$
|
869
|
|
2017
|
831
|
|
|
2018
|
68
|
|
|
2019
|
68
|
|
|
2020
|
60
|
|
|
Thereafter
|
83,056
|
|
|
Total
|
$
|
84,952
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Licensing and services
|
$
|
308,153
|
|
|
$
|
96,906
|
|
|
$
|
405,059
|
|
|
$
|
277,389
|
|
|
$
|
74,839
|
|
|
$
|
352,228
|
|
|
$
|
181,885
|
|
|
$
|
51,350
|
|
|
$
|
233,235
|
|
Equipment
|
—
|
|
|
20,971
|
|
|
20,971
|
|
|
—
|
|
|
35,507
|
|
|
35,507
|
|
|
—
|
|
|
26,487
|
|
|
26,487
|
|
|||||||||
Total Revenue
|
308,153
|
|
|
117,877
|
|
|
426,030
|
|
|
277,389
|
|
|
110,346
|
|
|
387,735
|
|
|
181,885
|
|
|
77,837
|
|
|
259,722
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Licensing and Services
|
203,693
|
|
|
57,942
|
|
|
261,635
|
|
|
195,454
|
|
|
54,881
|
|
|
250,335
|
|
|
134,207
|
|
|
42,590
|
|
|
176,797
|
|
|||||||||
Equipment
|
—
|
|
|
17,521
|
|
|
17,521
|
|
|
—
|
|
|
31,538
|
|
|
31,538
|
|
|
—
|
|
|
21,141
|
|
|
21,141
|
|
|||||||||
Total Cost of Sales
|
203,693
|
|
|
75,463
|
|
|
279,156
|
|
|
195,454
|
|
|
86,419
|
|
|
281,873
|
|
|
134,207
|
|
|
63,731
|
|
|
197,938
|
|
|||||||||
Contribution Profit
|
104,460
|
|
|
42,414
|
|
|
146,874
|
|
|
81,935
|
|
|
23,927
|
|
|
105,862
|
|
|
47,678
|
|
|
14,106
|
|
|
61,784
|
|
|||||||||
Other Operating Expenses
|
|
|
|
|
155,685
|
|
|
|
|
|
|
142,845
|
|
|
|
|
|
|
107,308
|
|
|||||||||||||||
Loss from Operations
|
|
|
|
|
(8,811
|
)
|
|
|
|
|
|
(36,983
|
)
|
|
|
|
|
|
(45,524
|
)
|
|||||||||||||||
Other income (expense)
|
|
|
|
|
8,306
|
|
|
|
|
|
|
(9,637
|
)
|
|
|
|
|
|
(67,378
|
)
|
|||||||||||||||
Loss before income taxes
|
|
|
|
|
(505
|
)
|
|
|
|
|
|
(46,620
|
)
|
|
|
|
|
|
(112,902
|
)
|
|||||||||||||||
Income tax provision
|
|
|
|
|
1,621
|
|
|
|
|
|
|
10,574
|
|
|
|
|
|
|
1,839
|
|
|||||||||||||||
Net loss
|
|
|
|
|
$
|
(2,126
|
)
|
|
|
|
|
|
$
|
(57,194
|
)
|
|
|
|
|
|
$
|
(114,741
|
)
|
|
December 31, 2015
|
||||||||||||||
|
Connectivity
|
|
Content
|
|
Corporate
|
|
Total
|
||||||||
Cash
|
$
|
3,404
|
|
|
$
|
119,487
|
|
|
$
|
100,661
|
|
|
$
|
223,552
|
|
Accounts receivable, net
|
15,577
|
|
|
77,774
|
|
|
98
|
|
|
93,449
|
|
||||
Goodwill
|
19,273
|
|
|
74,523
|
|
|
—
|
|
|
93,796
|
|
||||
Intangibles
|
7,696
|
|
|
126,071
|
|
|
—
|
|
|
133,767
|
|
||||
Other
|
49,429
|
|
|
34,395
|
|
|
11,151
|
|
|
94,975
|
|
||||
Total assets
|
95,379
|
|
|
432,250
|
|
|
111,910
|
|
|
639,539
|
|
||||
|
|
|
|
|
|
|
—
|
|
|||||||
Accounts payable and accrued expenses
|
10,187
|
|
|
97,699
|
|
|
22,755
|
|
|
130,641
|
|
||||
Deferred tax liability
|
1,946
|
|
|
20,022
|
|
|
356
|
|
|
22,324
|
|
||||
Notes payable
|
—
|
|
|
885
|
|
|
71,357
|
|
|
72,242
|
|
||||
Derivative fair value
|
—
|
|
|
—
|
|
|
24,076
|
|
|
24,076
|
|
||||
Other
|
11,623
|
|
|
21,336
|
|
|
3,536
|
|
|
36,495
|
|
||||
Total liabilities
|
23,756
|
|
|
139,942
|
|
|
122,080
|
|
|
285,778
|
|
||||
Total net assets
|
$
|
71,623
|
|
|
$
|
292,308
|
|
|
$
|
(10,170
|
)
|
|
$
|
353,761
|
|
|
December 31, 2014
|
||||||||||||||
|
Connectivity
|
|
Content
|
|
Corporate
|
|
Total
|
||||||||
Cash
|
$
|
8,350
|
|
|
$
|
74,447
|
|
|
$
|
114,851
|
|
|
$
|
197,648
|
|
Accounts receivable, net
|
18,422
|
|
|
66,882
|
|
|
213
|
|
|
85,517
|
|
||||
Goodwill
|
—
|
|
|
53,014
|
|
|
—
|
|
|
53,014
|
|
||||
Intangibles
|
749
|
|
|
121,725
|
|
|
—
|
|
|
122,474
|
|
||||
Other
|
41,053
|
|
|
29,511
|
|
|
4,378
|
|
|
74,942
|
|
||||
Assets
|
68,574
|
|
|
345,579
|
|
|
119,442
|
|
|
533,595
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued expenses
|
13,366
|
|
|
78,592
|
|
|
7,370
|
|
|
99,328
|
|
||||
Deferred tax liability
|
39
|
|
|
23,367
|
|
|
4
|
|
|
23,410
|
|
||||
Notes payable
|
—
|
|
|
981
|
|
|
2,034
|
|
|
3,015
|
|
||||
Derivative fair value
|
—
|
|
|
—
|
|
|
52,671
|
|
|
52,671
|
|
||||
Other
|
11,800
|
|
|
30,783
|
|
|
(41
|
)
|
|
42,542
|
|
||||
Liabilities
|
25,205
|
|
|
133,723
|
|
|
62,038
|
|
|
220,966
|
|
||||
Total net assets
|
$
|
43,369
|
|
|
$
|
211,856
|
|
|
$
|
57,404
|
|
|
$
|
312,629
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Connectivity:
|
|
|
|
|
|
||||||
United States
|
$
|
102,598
|
|
|
$
|
92,914
|
|
|
$
|
77,837
|
|
Europe
|
14,833
|
|
|
13,807
|
|
|
—
|
|
|||
Other
|
446
|
|
|
3,625
|
|
|
—
|
|
|||
Total Connectivity revenue by region
|
117,877
|
|
|
110,346
|
|
|
77,837
|
|
|||
Content:
|
|
|
|
|
|
||||||
United States and Canada
|
78,662
|
|
|
59,317
|
|
|
89,520
|
|
|||
Europe
|
39,738
|
|
|
47,917
|
|
|
58,889
|
|
|||
Asia and the Middle East
|
155,818
|
|
|
114,886
|
|
|
29,871
|
|
|||
Other
|
33,935
|
|
|
55,269
|
|
|
3,605
|
|
|||
Total Content revenue by region
|
$
|
308,153
|
|
|
$
|
277,389
|
|
|
$
|
181,885
|
|
|
Year ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Southwest Airlines as percentage of total revenue
|
23
|
%
|
|
24
|
%
|
|
22
|
%
|
Southwest Airlines as percentage of total Connectivity revenue
|
85
|
%
|
|
83
|
%
|
|
72
|
%
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net income (loss) (Numerator):
|
|
|
|
|
|
||||||
Net loss
|
$
|
(2,126
|
)
|
|
$
|
(57,194
|
)
|
|
$
|
(114,741
|
)
|
Net income attributable to noncontrolling interest
|
—
|
|
|
194
|
|
|
290
|
|
|||
Net loss attributable to Global Eagle Entertainment, Inc. common stockholders for basic and diluted EPS
|
$
|
(2,126
|
)
|
|
$
|
(57,388
|
)
|
|
$
|
(115,031
|
)
|
|
|
|
|
|
|
||||||
Less: adjustment for change in fair value on warrants liability for diluted EPS after assumed exercise of warrants liability
|
11,938
|
|
|
—
|
|
|
—
|
|
|||
Net loss for dilutive EPS
|
$
|
(14,064
|
)
|
|
$
|
(57,388
|
)
|
|
$
|
(115,031
|
)
|
|
|
|
|
|
|
||||||
Shares (Denominator):
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
77,558
|
|
|
73,300
|
|
|
53,061
|
|
|||
Dilutive effect of stock options and warrants
|
836
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - diluted
|
78,394
|
|
|
73,300
|
|
|
53,061
|
|
|||
|
|
|
|
|
|
||||||
Net loss per share - basic
|
$
|
(0.03
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
Net loss per share - diluted
|
$
|
(0.18
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(2.17
|
)
|
|
2015
|
|
2014
|
|
2013
|
|||
Stock options
|
3,200
|
|
|
2,025
|
|
|
3,457
|
|
Restricted stock units
|
44
|
|
|
3
|
|
|
—
|
|
Non-employees stock options
|
1
|
|
|
5
|
|
|
—
|
|
Equity warrants
|
430
|
|
|
1,101
|
|
|
7,596
|
|
Convertible notes
|
3,850
|
|
|
—
|
|
|
—
|
|
Liability warrants
|
—
|
|
|
1,356
|
|
|
18,893
|
|
|
Quarter ended,
|
||||||||||||||||||||||||||||||
(in thousands)
|
March 31, 2014
|
|
June 30, 2014
|
|
September 30, 2014
|
|
December 31, 2014
|
|
March 31, 2015
|
|
June 30, 2015
|
|
September 30, 2015
|
|
December 31, 2015
|
||||||||||||||||
Revenue
|
$
|
85,968
|
|
|
$
|
98,145
|
|
|
$
|
102,623
|
|
|
$
|
100,999
|
|
|
$
|
100,305
|
|
|
$
|
102,376
|
|
|
$
|
110,114
|
|
|
$
|
113,235
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of sales
|
65,117
|
|
|
74,608
|
|
|
73,618
|
|
|
68,530
|
|
|
69,426
|
|
|
66,083
|
|
|
71,456
|
|
|
72,191
|
|
||||||||
Sales and marketing expenses
|
2,835
|
|
|
3,322
|
|
|
3,980
|
|
|
3,150
|
|
|
3,275
|
|
|
4,964
|
|
|
4,819
|
|
|
4,647
|
|
||||||||
Product development
|
3,922
|
|
|
4,465
|
|
|
7,212
|
|
|
7,411
|
|
|
7,230
|
|
|
6,451
|
|
|
7,766
|
|
|
7,163
|
|
||||||||
General and administrative
|
17,067
|
|
|
17,143
|
|
|
17,172
|
|
|
26,391
|
|
|
18,119
|
|
|
18,326
|
|
|
22,102
|
|
|
23,418
|
|
||||||||
Amortization of intangible assets
|
6,419
|
|
|
6,146
|
|
|
6,049
|
|
|
5,938
|
|
|
5,983
|
|
|
6,005
|
|
|
7,286
|
|
|
7,720
|
|
||||||||
Restructuring charges
|
—
|
|
|
—
|
|
|
2,606
|
|
|
1,617
|
|
|
302
|
|
|
—
|
|
|
66
|
|
|
43
|
|
||||||||
Total operating expenses
|
95,360
|
|
|
105,684
|
|
|
110,637
|
|
|
113,037
|
|
|
104,335
|
|
|
101,829
|
|
|
113,495
|
|
|
115,182
|
|
||||||||
Loss from operations
|
(9,392
|
)
|
|
(7,539
|
)
|
|
(8,014
|
)
|
|
(12,038
|
)
|
|
(4,030
|
)
|
|
547
|
|
|
(3,381
|
)
|
|
(1,947
|
)
|
||||||||
Interest income (expense), net
|
(161
|
)
|
|
42
|
|
|
175
|
|
|
32
|
|
|
(245
|
)
|
|
(583
|
)
|
|
(803
|
)
|
|
(861
|
)
|
||||||||
Change in fair value of financial instruments
|
(15,518
|
)
|
|
21,326
|
|
|
(5,253
|
)
|
|
(7,510
|
)
|
|
954
|
|
|
14,789
|
|
|
(1,877
|
)
|
|
(1,928
|
)
|
||||||||
Other income (expense), net
|
179
|
|
|
(990
|
)
|
|
(984
|
)
|
|
(975
|
)
|
|
(796
|
)
|
|
(443
|
)
|
|
(576
|
)
|
|
675
|
|
||||||||
Loss before income taxes
|
(24,892
|
)
|
|
12,839
|
|
|
(14,076
|
)
|
|
(20,491
|
)
|
|
(4,117
|
)
|
|
14,310
|
|
|
(6,637
|
)
|
|
(4,061
|
)
|
||||||||
Income tax expense
|
1,257
|
|
|
843
|
|
|
1,454
|
|
|
7,020
|
|
|
(686
|
)
|
|
1,323
|
|
|
235
|
|
|
749
|
|
||||||||
Net loss
|
(26,149
|
)
|
|
11,996
|
|
|
(15,530
|
)
|
|
(27,511
|
)
|
|
(3,431
|
)
|
|
12,987
|
|
|
(6,872
|
)
|
|
(4,810
|
)
|
||||||||
Non-controlling interests
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net loss attributable to common stockholders
|
$
|
(26,343
|
)
|
|
$
|
11,996
|
|
|
$
|
(15,530
|
)
|
|
$
|
(27,511
|
)
|
|
$
|
(3,431
|
)
|
|
$
|
12,987
|
|
|
$
|
(6,872
|
)
|
|
$
|
(4,810
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) per common share - basic
|
$
|
(0.37
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.09
|
)
|
|
$
|
(0.06
|
)
|
Net income (loss) per common share - diluted
|
$
|
(0.37
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares basic
|
71,978
|
|
|
71,988
|
|
|
72,877
|
|
|
76,313
|
|
|
76,874
|
|
|
77,111
|
|
|
77,753
|
|
|
78,476
|
|
||||||||
Weighted average common shares diluted
|
71,978
|
|
|
72,468
|
|
|
72,877
|
|
|
76,313
|
|
|
78,725
|
|
|
78,518
|
|
|
77,753
|
|
|
78,476
|
|
(1)
|
The Company estimated that it would incur total expenses relating to employee termination benefits, which primarily include severance and transitional-related expenses, of approximately
$2.7 million
, all of which represents cash expenditures which were incurred and expensed through December 31, 2015.
|
(2)
|
In connection with the closure of its German operations pursuant to the Plan, the Company disposed of approximately
11000
square feet of leased facilities in Duisburg and Munich, Germany, representing approximately
6%
of its global facilities square footage. The Company incurred an aggregate of approximately
$0.4 million
of facilities disposal charges pursuant to the Plan through December 31, 2015.
|
(3)
|
From the third quarter of 2014 through the fourth quarter of 2015, the Company anticipated to incur periodic restructuring expenditures in an aggregate amount of
$1.5 million
to
$2.0 million
, comprised of legal and professional fees associated with the execution of the Plan. Through December 31, 2015, the Company incurred and expensed approximately
$1.5 million
in legal and professional fees in connection with the Plan.
|
|
Termination benefits
|
|
Leases and other contractual obligations
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
$
|
238
|
|
|
$
|
107
|
|
|
$
|
66
|
|
|
$
|
411
|
|
Total Restructuring charges
|
$
|
238
|
|
|
$
|
107
|
|
|
$
|
66
|
|
|
$
|
411
|
|
|
Termination Costs
|
|
Leases and other contractual obligations
|
|
Other
|
|
Total
|
||||||||
Restructuring reserves as of January 1, 2015
|
$
|
809
|
|
|
$
|
39
|
|
|
$
|
1,076
|
|
|
$
|
1,924
|
|
|
|
|
|
|
|
|
|
||||||||
Expense
|
238
|
|
|
107
|
|
|
66
|
|
|
411
|
|
||||
Payments
|
(1,047
|
)
|
|
(146
|
)
|
|
(1,142
|
)
|
|
(2,335
|
)
|
||||
Restructuring reserves as of December 31, 2015
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
COMPANY:
|
|
|
|
|
|
GLOBAL EAGLE ENTERTAINMENT INC.,
a Delaware corporation
|
|
|
|
|
|
By:
|
/s/ Jay Itzkowitz
|
|
|
|
|
Name:
|
Jay Itzkowitz
|
|
|
|
|
Title:
|
SVP & General Counsel
|
|
|
|
|
/s/ David M. Davis
|
|
|
David M. Davis
|
Dates
|
Monthly Reimbursement
Amount
|
October 1, 2013-September 30, 2014
|
GBP 3,800
|
|
Very truly yours,
|
|
|
||
GLOBAL EAGLE ENTERTAINMENT, INC.
|
||
|
||
By:
|
/s/ David M. Davis
|
|
|
||
Printed Name:
|
/s/ David M. Davis
|
|
|
||
Title:
|
Chief Financial Officer
|
|
|
||
I have read and accept this employment offer:
|
||
|
||
/s/ Jay Itzkowitz
|
||
Signature of Jay Itzkowitz
|
||
|
||
Dated: October 1, 2013
|
1.
|
PROPRIETARY INFORMATION, COPYRIGHTS, MASK WORKS & INVENTIONS
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(a)
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Communicate to Global Eagle any facts known by me respecting said Global Eagle Inventions;
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(b)
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do all lawful acts, including the execution and delivery of all papers and proper oaths and the giving of testimony deemed necessary or desirable by Global Eagle or Global Eagle Representatives, with regard to said Global Eagle Inventions, for protecting, obtaining, securing rights in, maintaining and enforcing any and all copyrights, patents, mask work rights or other intellectual property rights in the United States and throughout the world for said Global Eagle Inventions, and for perfecting, affirming, recording and maintaining in Global Eagle and Global Eagle Representatives sole and exclusive right, title and interest in and to the Global Eagle Inventions, and any copyrights, Patents, mask work rights or other intellectual property rights relating thereto; and
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(c)
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generally cooperate to the fullest extent in all matters pertaining to said Global Eagle Inventions, original works of authorship, concepts, trade secrets, improvements, developments and discoveries, any and all applications, specifications, oaths, assignments and all other instruments which Global Eagle shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Global Eagle, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Global Eagle Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.
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(a)
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was developed entirely on my own time without using Global Eagle equipment, supplies, facilities, or trade secret information;
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(b)
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does not relate at the time of conception or reduction to practice of the invention to Global Eagle business, or to its actual or demonstrably anticipated research or development; and
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2.
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NON-COMPETITION AND NON-SOLICITATION
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3.
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ARBITRATION
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4.
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EQUITABLE RELIEF
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5.
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GENERAL PROVISIONS
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A.
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This Agreement will be governed by the laws of the State of California.
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B.
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This Agreement sets forth the entire agreement and understanding between Global Eagle and me relating to the subject matter herein and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver or any rights under this Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
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C.
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Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
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D.
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This Agreement may not be assigned by me without the prior written consent of Global Eagle, Subject to the foregoing sentence, this Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of Global Eagle, its successors, and its assigns.
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E.
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The provisions of this Agreement are severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions or parts thereof
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Signature:
/s/ Jay Itzkowitz
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Date:
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October 1, 2013
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Print Employee Name: Jay Itzkowitz
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Global Eagle Entertainment Inc.
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By:
/s/ David M. Davis
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Name: David M. Davis
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Title: Chief Financial Officer
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Options
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If you are terminated without Cause during the first 12 months of your employment then 25% of the Options shall be vested on the date of such termination.
If a Change of Control (as defined in the Plan) occurs and you are terminated without Cause within 12 months after such Change of Control, then all of your unvested Options shall vest on the date of such termination.
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Severance
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If your employment is terminated by the Company during the 12 month period starting with the Commencement Date, then you will receive an additional six months (1) severance payments and (ii) medical benefits at the Company’s cost.
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Good Reason
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If you terminate your employment with the Company for Good Reason, that shall be treated for all purposes as a termination by the Company without Cause.
“Good Reason” means (i) if you are assigned duties materially inconsistent with your position or (ii) any breach of a material term of this Agreement by the Company; provided that in each case (x) you must notify the Company within 90 days following the date you first became aware of the events claimed to constitute Good Reason, (y) the Company shall have a thirty day cure right after such notice and (z) if the Company does not cure the breach, then you must terminate your employment within 30 days after such cure period or Good Reason shall no longer exist with respect to such breach.
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Outside Activities
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You shall be permitted to serve on the board of directors (or similar governing body) of companies or entities that do not compete with the Company (provided such activities do not materially interfere with your duties to the Company) and retain any compensation with respect thereto. In addition, you shall be permitted to be a complete or partial owner in other businesses that do not compete with the Company and do not interfere with your duties to the Company.
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Additional Benefits
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During the Employment Period, the Company shall pay (i) your fees and expenses with respect to licensing, continuing legal education and compliance so that you maintain active status in good standing with respect to your NY and California bar memberships up to $1,000 (per year). The Company shall pay for your international flights (business class) and domestic flights shall be in accordance with Company policy.
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Indemnification and Advancement
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The Company shall provide you with indemnification and advancement pursuant to the Company’s standard indemnification agreement. Note: Please provide a copy of this standard form. It was listed as attached to Exhibit 10.15 to the February 26, 2013 Form 8K but was not attached.
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Release
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The Release (referred to in Section 6) will provide customary carve outs for (I) rights to receive severance payments (ii) obtaining post-employment payments and benefits under any employee benefit plan (as defined in ERISA); (iii) indemnification and advancement of fees and expenses under any agreement with or policy of the Company relating to indemnification and advancement of fees and expenses or under any provision of the Company’s articles or by-laws relating to indemnification of directors or officers; (iv) any policy of directors’ or officers’ liability insurance; and (v) obtaining contribution as permitted by law in the event of entry of judgment against you and the Company as a result of any act or failure to act for which you and the Company are jointly liable.
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Section 409A Compliance
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The Agreement will be exempt from or in compliance with Section 409A of the Internal Revenue Code and consistent with the Company’s Section 409A policies.
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Press Release
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The Company shall issue a press release announcing the hiring of you, provided that such press release (i) shall not reference the hiring of any other individuals, and (ii) shall be subject to your advance approval (not to be unreasonably withheld).
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Very truly yours,
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GLOBAL EAGLE ENTERTAINMENT, INC.
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By:
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/s/ David M. Davis
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Printed Name:
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/s/ David M. Davis
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Title:
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Chief Financial Officer
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I have read and accept this employment offer:
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/s/ Wale Adepoju
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Signature of Wale Adepoju
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Dated: August, 6, 2014
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A.
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PREVIOUS EMPLOYMENT
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B.
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PROPRIETARY INFORMATION
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C.
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COPYRIGHT & MASK WORKS
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D.
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INVENTIONS
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(a)
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Communicate to Global Eagle any facts known by me respecting said Global Eagle Inventions;
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(b)
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do all lawful acts, including the execution and delivery of all papers and proper oaths and the giving of testimony deemed necessary or desirable by Global Eagle or Global Eagle Representatives, with regard to said Global Eagle Inventions, for protecting, obtaining, securing rights in, maintaining and enforcing any and all copyrights, patents, mask work rights or other intellectual property rights in the United States and throughout the world for said Global Eagle Inventions, and for perfecting, affirming, recording and maintaining in Global Eagle and Global Eagle Representatives sole and exclusive right, title and interest in and to the Global Eagle Inventions, and any copyrights, Patents, mask work rights or other intellectual property rights relating thereto; and
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(c)
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generally cooperate to the fullest extent in all matters pertaining to said Global Eagle Inventions, original works of authorship, concepts, trade secrets, improvements, developments and discoveries, any and all applications, specifications, oaths, assignments and all other instruments which Global Eagle shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Global Eagle, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Global Eagle Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.
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(a)
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was developed entirely on my own time without using Global Eagle equipment, supplies, facilities, or trade secret information;
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(b)
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does not relate at the time of conception or reduction to practice of the invention to Global Eagle business, or to its actual or demonstrably anticipated research or development; and
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(c)
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does not result from any work performed by me for Global Eagle.
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A.
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NON-COMPETITION
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B.
|
NON-SOLICITATION
|
A.
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This Agreement will be governed by the laws of the State of California.
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B.
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This Agreement and the offer letter to which it is appended sets forth the entire agreement and understanding between Global Eagle and me relating to the subject matter herein and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver or any rights under this Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
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C.
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Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
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D.
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This Agreement may not be assigned by me without the prior written consent of Global Eagle. Subject to the foregoing sentence, this Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of Global Eagle, its successors, and its assigns.
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E.
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The provisions of this Agreement are severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions or parts thereof shall nevertheless be binding and enforceable. In the event that any provision of this Agreement is deemed unenforceable, Global Eagle and I agree that a court or an arbitrator chosen pursuant to the terms hereof shall reform such provision to the extent necessary to cause it to be enforceable to the maximum extent permitted by law. Global Eagle and I agree that each desires the court or arbitrator to reform such provision, and therefore agree that the court or arbitrator will have jurisdiction to do so and that each will abide by the determination of the court or arbitrator.
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Signature:
/s/ Wale Adepoju
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Date:
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August 6, 2014
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Print Employee Name: Wale Adepoju
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Global Eagle Entertainment Inc.
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By:
/s/ David M. Davis
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Name: David M. Davis
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Title: Chief Financial Officer
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|
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1.
|
PROPRIETARY INFORMATION, COPYRIGHTS, MASK WORKS & INVENTIONS
|
A.
|
PREVIOUS EMPLOYMENT
|
B.
|
PROPRIETARY INFORMATION
|
C.
|
COPYRIGHT & MASK WORKS
|
D.
|
INVENTIONS
|
(a)
|
Communicate to Global Eagle any facts known by me respecting said Global Eagle Inventions;
|
(b)
|
do all lawful acts, including the execution and delivery of all papers and proper oaths and the giving of testimony deemed necessary or desirable by Global Eagle or Global Eagle Representatives, with regard to said Global Eagle Inventions, for protecting, obtaining, securing rights in, maintaining and enforcing any and all copyrights, patents, mask work rights or other intellectual property rights in the United States and throughout the world for said Global Eagle Inventions, and for perfecting, affirming, recording and maintaining in Global Eagle and Global Eagle Representatives sole and exclusive right, title and interest in and to the Global Eagle Inventions, and any copyrights, Patents, mask work rights or other intellectual property rights relating thereto; and
|
(c)
|
generally cooperate to the fullest extent in all matters pertaining to said Global Eagle Inventions, original works of authorship, concepts, trade secrets, improvements, developments and discoveries, any and all applications, specifications, oaths, assignments and all other instruments which Global Eagle shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Global Eagle, its successors, assigns and nominees the sole and exclusive rights, title and
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(a)
|
was developed entirely on my own time without using Global Eagle equipment, supplies, facilities, or trade secret information;
|
(b)
|
does not relate at the time of conception or reduction to practice of the invention to Global Eagle business, or to its actual or demonstrably anticipated research or development; and
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(c)
|
does not result from any work performed by me for Global Eagle.
|
2.
|
NON-COMPETITION AND NON-SOLICITATION
|
A.
|
NON-COMPETITION
|
B.
|
NON-SOLICITATION
|
3.
|
ARBITRATION
|
4.
|
EQUITABLE RELIEF
|
5.
|
GENERAL PROVISIONS
|
A.
|
This Agreement will be governed by the laws of the State of California.
|
B.
|
This Agreement sets forth the entire agreement and understanding between Global Eagle and me relating to the subject matter herein and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver or any rights under this Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
|
C.
|
Nothing contained herein shall be construed to require the commission of any act contrary to law. Should there be any conflict between any provisions hereof and any present or future statute, law, ordinance, regulation, or other pronouncement having the force of law, the latter shall prevail, but the provision of this Agreement affected thereby shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law, and the remaining provisions of this Agreement shall remain in full force and effect.
|
D.
|
This Agreement may not be assigned by me without the prior written consent of Global Eagle. Subject to the foregoing sentence, this Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of Global Eagle, its successors, and its assigns.
|
E.
|
The provisions of this Agreement are severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions or parts thereof shall nevertheless be binding and enforceable. In the event that any provision of this Agreement is deemed unenforceable, Global Eagle and I agree that a court or an arbitrator chosen pursuant to the terms hereof shall reform such provision to the extent necessary to cause it to be enforceable to the maximum extent permitted by law. Global Eagle and I agree that each desires the court or arbitrator to reform such provision, and therefore agree that the court or arbitrator will have jurisdiction to do so and that each will abide by the determination of the court or arbitrator.
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Signature:
/s/ Aditya N. Chatterjee
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Date:
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May 14, 2014
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Print Employee Name: Aditya N. Chatterjee
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Global Eagle Entertainment Inc.
|
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By:
/s/ Zant Chapelo
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Name: Zant Chapelo
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Title: SVP Human Resources and Org Development
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Sincerely,
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GLOBAL EAGLE ENTERTAINMENT, INC.
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By:
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/s/ Jay Itzkowitz
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Printed Name:
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Jay Itzkowitz
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Title:
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SVP
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Acknowledged and Agreed:
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/s/ Louis Bélanger-Martin
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Louis Bélanger-Martin
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Legal Name
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Jurisdiction of Formation
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322177 Nova Scotia Limited
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Canada
|
Advanced Film GmbH
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Germany
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Advanced Inflight Alliance Ltd.
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United Kingdom
|
Airline Media Productions, Inc.
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Delaware
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DTI Software, Inc.
|
Canada
|
DTI Software FZ-LLC
|
United Arab Emirates
|
DTI Solutions, Inc.
|
Canada
|
Emphasis Video Entertainment Ltd.
|
Hong Kong
|
Entertainment in Motion, Inc.
|
California
|
Fairdeal Multimedia Pvt. Ltd.
|
India
|
Fairdeal Studios Pvt. Ltd.
|
India
|
Global Eagle Entertainment Luxembourg I S.à r.l.
|
Luxembourg
|
Global Eagle Entertainment Luxembourg II S.à r.l.
|
Luxembourg
|
Global Eagle Entertainment B.V.
|
Netherlands
|
Global Eagle Entertainment GmbH
|
Germany
|
Global Eagle Entertainment Operations Solutions, Inc.
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Delaware
|
Global Entertainment GmbH
|
Germany
|
IFE Holdings Ltd
|
United Kingdom
|
IFE Services Asia Pacific Pte. Ltd
|
Singapore
|
IFE Services Germany Ltd
|
United Kingdom
|
IFE Services Ltd
|
United Kingdom
|
IFE Services SA (Pte)
|
South Africa
|
IFE Services USA, Inc.
|
Delaware
|
IFES Acquisition Corp. Limited
|
United Kingdom
|
InFlight Production, Inc.
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California
|
In-Flight Entertainment Spain SL
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Spain
|
(1)
|
Registration Statement (Form S-3 No. 333-188121) of Global Eagle Entertainment Inc.,
|
(2)
|
Registration Statement (Form S-8 Nos. 333-193052 and 333-206251) pertaining to the 2013 Equity Incentive Plan, as amended, of Global Eagle Entertainment Inc.;
|
Date:
|
March 17, 2016
|
/s/ David M. Davis
|
|
|
David M. Davis
|
|
|
Chief Executive Officer and Director
|
|
|
(principal executive officer)
|
Date:
|
March 17, 2016
|
/s/ Michael Zemetra
|
|
|
Michael Zemetra
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|
Date:
|
March 17, 2016
|
/s/ David M. Davis
|
|
|
David M. Davis
|
|
|
Chief Executive Officer and Director
|
|
|
(principal executive officer)
|
Date:
|
March 17, 2016
|
/s/ Michael Zemetra
|
|
|
Michael Zemetra
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Officer)
|