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ENT > SEC Filings for ENT > Form 8-K on 27-May-2014All Recent SEC Filings




Non-Reliance on Previous Financials, Audits or Interim Review

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

Global Eagle Entertainment Inc. (the "Company") has determined that it will restate and correct its previously reported weighted average shares outstanding and net loss per common share ("net loss per share") for the three months ended March 31, 2014. The correction has no impact on the Company's net loss reported in its statements of operations, statement of comprehensive loss, balance sheets (including common share amounts as disclosed in its balance sheets), or the statements of cash flows or equity for the above-mentioned period.

Net loss per share is computed by dividing net loss for the period by the basic and diluted weighted average number of shares outstanding ("weighted average shares") during that period. With respect to the three months ended March 31, 2014, there was a computational error in the accounting for non-voting common stock and treasury stock shares in the calculation of weighted average shares outstanding, which resulted in an error in the computation of net loss per share for the three months ended March 31, 2014. The impact of the correction of this error on the net loss per share amount is as follows:

                                                  Three months ended
                                                     March 31, 2014
Net loss per common share, basic and
diluted-as previously reported                     $         (0.47 )
Difference in net loss per common share, basic
and diluted                                                   0.10
Net loss per common share, basic and
diluted-as restated                                $         (0.37 )

Weighted average common shares, basic and
diluted (in thousands)
Weighted-average shares, basic and diluted-as
previously reported                                         55,914
Add: Net weighted average shares incorrectly
excluded from the original calculation                      16,064
Weighted average shares, basic and diluted-as
restated                                                    71,978

On May 21, 2014, the Audit Committee of the Company's Board of Directors concluded, after discussion with the Company's management and its independent registered public accounting firm, Ernst & Young LLP, that, as a result of the error, the financial statements for the three months ended March 31, 2014 included in the Company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") on May 12, 2014 (the "Q1 2014 Form 10-Q") should no longer be relied upon.

The Company also identified a computational error in the calculation of the number of shares of common stock underlying the Company's outstanding stock options as of March 31, 2014 in Note 10 to the Notes to the Condensed Consolidated Financial Statements (Unaudited) in Item 1 of Part I of the Q1 2014 Form 10-Q.

The Audit Committee has determined that these errors were not the result of any intentional misconduct by any Company personnel. These errors do not affect management's conclusion disclosed in the Q1 2014 Form 10-Q that, as of the end of the period covered by the Q1 2014 Form 10-Q, the Company's disclosure controls and procedures were not effective. The Company intends to file with the SEC an amendment to the Q1 2014 Form 10-Q to reflect the restatements promptly following the filing of this Current Report on Form 8-K.

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