10-Q
RLJ ENTERTAINMENT, INC. filed this Form 10-Q on 11/09/2017
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RLJ Entertainment, Inc.

 

Notes To Consolidated Financial Statements

(Unaudited)

 

September 30, 2016, we recognized content amortization and royalty expense of $0.1 million and $0.4 million, respectively. This amortization is included in our cost of sales as content amortization and royalties. As of September 30, 2017, our remaining unamortized content advance is $1.6 million.

ACL paid dividends to RLJE Ltd. of $1.2 million during the nine months ended September 30, 2017 and $1.7 million during the nine months ended September 30, 2016. No dividends were received during the three months ended September 30, 2017 and 2016. We record dividends received as a reduction to the ACL investment account.

Foreign Currency

We recognize foreign currency gains and losses, as a component of other expense, on amounts lent by Acorn Media to RLJE Ltd. and RLJE Australia. As of September 30, 2017, Acorn Media had lent its U.K. subsidiaries approximately $3.9 million and its Australian subsidiary approximately $3.3 million. Amounts lent will be repaid in U.S. dollars based on available cash. Movement in exchange rates between the U.S. dollar and the functional currencies (which are the Pound and the Australian dollar) of those subsidiaries that were lent the monies will result in foreign currency gains and losses. During the three months ended September 30, 2017, we recognized foreign currency gains of $0.2 million and during the three months ended September 30, 2016 we recognized foreign currency losses of $0.1 million. During the nine months ended September 30, 2017, we recognized foreign currency gains of $0.6 million and during the nine months ended September 30, 2016, we recognized foreign currency losses of $0.9 million.

The RLJ Companies, LLC

In June 2013, The RLJ Companies, LLC (whose sole manager and voting member is the chairman of our board of directors) purchased from one of our vendors $3.5 million of contract obligations that we owed to the vendor. These purchased liabilities, which are now owed to The RLJ Companies, are included in accrued royalties and distribution fees in the accompanying consolidated balance sheets. During the three months ended September 30, 2017, we made a $0.5 million payment to The RLJ Companies which reduced our remaining obligation to $3.0 million.

Preferred Stock and Warrants

In May 2015, certain present and former board members and their affiliate companies, including RLJ SPAC Acquisition, LLC, which is owned by the chairman of our board of directors, purchased 16,500 shares of preferred stock and warrants to acquire 1.7 million shares of common stock from us for $16.5 million.

In June 2017, RLJ SPAC Acquisition, LLC converted its 15,000 shares of preferred stock and accumulated dividends and received 5.9 million shares of common stock.

On July 1, 2017, we made a $0.4 million cash dividend payment to preferred stockholders.

 

 

NOTE 15. SUBSEQUENT EVENT

On October 2, 2017, we made a dividend payment of $0.4 million to our preferred shareholders.

On October 2, 2017, we issued AMC 427,347 shares of common stock in payment of $1.3 million of interest on $78.0 million of principal outstanding under the AMC Credit Agreement. At September 30, 2017, this accrued interest was included in accounts payable and accrued liabilities.

 

 

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