Convertible Notes and Credit Facilities (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table presents the components of the Notes as of December 31, 2016 and December 31, 2015 (in thousands, except for years and percentages):



	December 31, 2016			December 31, 2015
Liability:
Principal amount	$	128,250		$	128,250
Less: Debt discount, net of amortization	(22,302		)	(26,732		)
Less: Debt issuance costs, net of amortization	(2,689		)	(3,223		)
Carrying amount	$	103,259		$	98,295
Remaining amortization period (years)	3.9 years			4.9 years
Effective interest rate on liability component	9.94		%	9.94		%

Equity:
Value of conversion option	$	26,925		$	26,925
Less: Equity issuance costs	(863		)	(863		)
Carrying amount	$	26,062		$	26,062

Convertible Interest Expense Recognized

The following table presents interest expense recognized related to the Notes for the years ended December 31, 2016 and December 31, 2015 (in thousands):



	Year ended December 31,
	2016		2015
Contractual interest expense	$	5,130	$	240
Amortization of debt discount	4,430		193
Amortization of debt issuance costs	534		23
Total interest expense recognized	$	10,094	$	456

Schedule of Debt

In connection with the TVN acquisition, the Company assumed a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands):



	December 31, 2016
Financing from French government agencies related to various government incentive programs ⁽¹⁾	$	17,930
Term loans ⁽²⁾	1,400
Secured borrowings ⁽³⁾	—
Obligations under capital leases	1,860
Total debt obligations	21,190
Less: current portion	(7,275		)
Long-term portion	$	13,915

Other than the 4.00% Notes, the Company did not have any other indebtedness as of December 31, 2015.

(1) As of December 31, 2016, the Company’s TVN French Subsidiary had an aggregate of $17.9 million of loans due to various financing programs of French government agencies, $14.7 million of which is related to loans backed by R&D tax credit receivables. As of December 31, 2016, the TVN French Subsidiary had an aggregate of $25.7 million of R&D tax credit receivables from the French government from 2017 through 2020. (See Note 10, “Certain Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month plus 1.3% and matures between 2017 through 2019. The remaining loans of $3.3 million at December 31, 2016 primarily relates to financial support from French government agencies for R&D innovation projects at minimal interest rates and these loans mature between 2020 through 2023.

(2) One of the term loans with a certain financial institution contains annual covenants that require the TVN French Subsidiary to maintain a minimum working capital balance and various other financial covenants and restrictions that limit the French Subsidiary’s ability to incur additional indebtedness. The annual covenant is based on French statutory year-end results and the TVN French Subsidiary failed the 2016 covenant test primarily due to the Company’s plan to integrate TVN’s operations into other subsidiaries for tax planning and logistic purpose. The Company has informed the financial institution of the 2016 covenant test results and has made plans to pay off the entire loan balance of approximately $0.4 million in early 2017 and as a result, the entire loan balance is recorded under “Other debts and capital lease obligations, current,” in the Consolidated Balance Sheets.

(3) The TVN French Subsidiary obtained advances under a credit line with BPI France against a pool of eligible receivables with recourse. The maximum advance under this credit line for receivables is €2 million (approximately $2.1 million as converted using the exchange rate at December 31, 2016), less applicable fees, and €200,000 (approximately $0.2 million as converted using the exchange rate at December 31, 2016) of cash is pledged for this program. This credit line was renewed in July 2016 for an additional year with no material change to the terms of the credit agreement. There was no balance outstanding to BPI France as of December 31, 2016.

Schedule of Maturities of Long-term Debt

The table below shows the future minimum repayments of debts and capital lease obligations as of December 31, 2016 (in thousands):



Years ending December 31,	Capital lease obligations		Other Debt obligations
2017	$	971	$	6,304
2018	801		5,416
2019	63		6,255
2020	25		554
2021	—		451
Thereafter	—		350
Total	$	1,860	$	19,330