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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020

or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission file number: 001-34720
TELENAV, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0521800
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)

4655 Great America Parkway, Suite 300
Santa Clara, California 95054
(Address of principal executive offices, including zip code)
(408) 245-3800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.001 Par Value per ShareTNAVThe NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of September 30, 2020, there were 47,522,790 shares of the Registrant’s Common Stock outstanding.


Table of Contents
TELENAV, INC.
TABLE OF CONTENTS
 
  Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.


Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements.

TELENAV, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(unaudited)
September 30,
2020
June 30,
2020
Assets
Current assets:
Cash and cash equivalents$28,313 $20,518 
Short-term investments70,505 90,315 
Accounts receivable, net of allowances of $7 and $5 at September 30, 2020 and June 30, 2020, respectively47,371 34,542 
Restricted cash2,059 1,494 
Deferred costs25,881 26,121 
Prepaid expenses and other current assets4,839 4,505 
Total current assets178,968 177,495 
Property and equipment, net3,689 4,319 
Operating lease right-of-use assets6,363 7,067 
Deferred income taxes, non-current1,318 1,515 
Goodwill14,255 14,255 
Deferred costs, non-current50,160 54,548 
Other assets41,192 34,552 
Total assets$295,945 $293,751 
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable$19,728 $12,291 
Accrued expenses31,833 36,210 
Operating lease liabilities2,824 2,786 
Deferred revenue37,876 37,973 
Income taxes payable223 715 
Total current liabilities92,484 89,975 
Operating lease liabilities, non-current4,654 5,191 
Deferred revenue, non-current95,654 100,970 
Other long-term liabilities664 645 
Commitments and contingencies   
Stockholders’ equity:
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding
  
Common stock, $0.001 par value: 600,000 shares authorized; 47,523 and 47,342 shares issued and outstanding at September 30, 2020 and June 30, 2020, respectively47 47 
Additional paid-in capital194,912 192,170 
Accumulated other comprehensive loss(432)(477)
Accumulated deficit(92,038)(94,770)
Total stockholders’ equity102,489 96,970 
Total liabilities and stockholders’ equity$295,945 $293,751 

See accompanying Notes to Condensed Consolidated Financial Statements.
1

Table of Contents
TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
 September 30,
 20202019
Revenue:
Product$56,809 $55,990 
Services12,787 10,639 
Total revenue69,596 66,629 
Cost of revenue:
Product32,530 31,989 
Services7,553 4,862 
Total cost of revenue40,083 36,851 
Gross profit29,513 29,778 
Operating expenses:
Research and development18,986 20,663 
Sales and marketing1,996 1,946 
General and administrative6,512 7,287 
Total operating expenses27,494 29,896 
Income (loss) from operations2,019 (118)
Other income, net714 561 
Income from continuing operations before provision for income taxes2,733 443 
Provision for income taxes14 411 
Equity in net (income) of equity method investees(616) 
Income from continuing operations 3,335 32 
Discontinued operations:
Income from operations of Advertising business, net of tax 832 
Loss from sale of Advertising business (4,818)
Loss on discontinued operations (3,986)
Net income (loss)$3,335 $(3,954)
Basic income (loss) per share:
Income from continuing operations$0.07 $ 
Loss on discontinued operations (0.08)
Net income (loss)$0.07 $(0.08)
Diluted income (loss) per share:
Income from continuing operations$0.07 $ 
Loss on discontinued operations (0.08)
Net income (loss)$0.07 $(0.08)
Weighted average shares used in computing income (loss) per share:
Basic47,227 47,780 
Diluted47,841 49,648 
Stock-based compensation expense included in continuing operations above:
Cost of revenue$19 $16 
Research and development1,830 1,095 
Sales and marketing369 135 
General and administrative639 506 
Total stock-based compensation expense$2,857 $1,752 

See accompanying Notes to Condensed Consolidated Financial Statements.
2

Table of Contents
TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)


Three Months Ended
 September 30,
 20202019
Net income (loss)$3,335 $(3,954)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax360 (310)
Available-for-sale securities:
Unrealized gain (loss) on available-for-sale securities, net of tax(127)59 
Reclassification adjustments for loss on available-for-sale securities recognized, net of tax(188)(1)
Net increase (decrease) from available-for-sale securities, net of tax(315)58 
Other comprehensive income (loss), net of tax45 (252)
Comprehensive income (loss)$3,380 $(4,206)

See accompanying Notes to Condensed Consolidated Financial Statements.

3

Table of Contents
TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated DeficitTotal Stockholders' Equity
Three Months Ended September 30, 2020SharesAmount
Balance at June 30, 202047,342 $47 $192,170 $(477)$(94,770)$96,970 
Issuance of common stock upon exercise of stock options14  67 — — 67 
Release of restricted stock units, net of shares withheld for taxes162  (359)— — (359)
Issuance of common stock under employee stock purchase plan305 — 1,204 — — 1,204 
Repurchase of common stock(300)— (1,027)— (603)(1,630)
Stock-based compensation expense— — 2,857 — — 2,857 
Foreign currency translation adjustment, net of tax— — — 360 — 360 
Unrealized loss on available-for-sale securities, net of tax— — — (315)— (315)
Net income— — — — 3,335 3,335 
Balance at September 30, 202047,523 $47 $194,912 $(432)$(92,038)$102,489 
Three Months Ended September 30, 2019
Balance at June 30, 201946,911 $47 $182,349 $(1,477)$(90,279)$90,640 
Issuance of common stock upon exercise of stock options1,326 1 8,340 — — 8,341 
Release of restricted stock units, net of shares withheld for taxes329 1 (1,273)— — (1,272)
Stock-based compensation expense, continuing operations— — 1,752 — — 1,752 
Stock-based compensation expense, discontinued operations— — 887 — — 887 
Foreign currency translation adjustment, net of tax— — — (310)— (310)
Unrealized loss on available-for-sale securities, net of tax— — — 58 — 58 
Net loss— — — — (3,954)(3,954)
Balance at September 30, 201948,566 $49 $192,055 $(1,729)$(94,233)$96,142 
See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
September 30,
 20202019
Operating activities
Net income (loss)$3,335 $(3,954)
Loss on discontinued operations 3,986 
Income from continuing operations3,335 32 
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities:
Stock-based compensation expense2,857 1,752 
Depreciation and amortization760 922 
Operating lease amortization, net of accretion710 544 
Accretion of net premium on short-term investments85 12 
Equity in net (income) of equity method investees(616) 
Other(351)101 
Changes in operating assets and liabilities:
Accounts receivable(12,653)16,355 
Deferred income taxes245 171 
Deferred costs4,694 1,979 
Prepaid expenses and other current assets205 (502)
Other assets(513)28 
Trade accounts payable7,431 1,738 
Accrued expenses and other liabilities(4,537)(10,259)
Income taxes payable(500)(152)
Operating lease liabilities(504)(897)
Deferred revenue(5,656)10,345 
Net cash provided by (used in) operating activities(5,008)22,169 
Investing activities
Purchases of property and equipment(67)(461)
Purchases of short-term investments(2,381)(41,418)
Purchase of long-term investments(5,711)(2,000)
Proceeds from sales and maturities of short-term investments21,791 11,052 
Net cash provided by (used in) investing activities
13,632 (32,827)
Financing activities
Proceeds from exercise of stock options67 8,306 
Tax withholdings related to net share settlements of restricted stock units(359)(832)
Proceeds from issuance of common stock under employee stock purchase plan1,204  
Repurchase of common stock(1,630) 
Net cash provided by (used in) financing activities(718)7,474 
Effect of exchange rate changes on cash, cash equivalents and restricted cash454 (336)
Net increase (decrease) in cash, cash equivalents and restricted cash, continuing operations8,360 (3,520)
Net cash used in discontinued operations (3,975)
Cash, cash equivalents and restricted cash, beginning of period22,012 29,225 
Cash, cash equivalents and restricted cash, end of period$30,372 $21,730 
Supplemental disclosure of cash flow information
Income taxes paid, net$472 $739 
Non-cash investing: Investment in inMarket Media, LLC acquired in exchange for sale of Advertising business$ $15,600 
Cash flows from discontinued operations:
Net cash used in operating activities$ $(3,569)
Net cash used in financing activities (406)
Net cash transferred from continuing operations 3,975 
Net change in cash and cash equivalents from discontinued operations  
Cash and cash equivalents of discontinued operations, beginning of period  
Cash and cash equivalents of discontinued operations, end of period$ $ 
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents$28,313 $19,278 
Restricted cash 2,059 2,452 
Total cash, cash equivalents and restricted cash$30,372 $21,730 
See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1.Summary of business and significant accounting policies
Description of business
Telenav, Inc., also referred to in this report as “we,” “our” or “us,” was incorporated in September 1999 in the State of Delaware. We are a leading provider of automotive software and services providing both in-vehicle and cloud-based solutions. We focus on navigation and location-based services (LBS), where we pioneered many innovations including the market’s first mobile cloud-based navigation service. Navigation and LBS are the primary applications for in-vehicle infotainment (IVI) systems and we are using our strengths and core competencies to address the growing demand for overall connected car services. We provide our connected-car products and services directly to automobile manufacturers, as well as tier-one suppliers. Our fiscal year ends on June 30, and in this report we refer to the fiscal year ended June 30, 2020 as “fiscal 2020” and the fiscal year ending June 30, 2021 as “fiscal 2021.”
Commencing July 1, 2019, we operate in a single segment, automotive. Through June 30, 2019, we operated in three segments - automotive, advertising and mobile navigation. In August 2019, we completed the disposition of our digital advertising operations (the "Ads Business") and have presented the results of operations for the Ads Business as discontinued operations for all prior periods presented. See Note 11. Our mobile navigation services business represented less than 5% of total revenue for the three months ended September 30, 2020 and 2019 and we expect the business to continue to decline. Our chief executive officer, or CEO, the chief operating decision maker, does not review mobile navigation revenue and cost of revenue separately. As a result, we combine the mobile navigation business with the automotive business in a single segment.
Basis of presentation
The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The condensed consolidated financial statements include the accounts of Telenav, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements include all adjustments (consisting only of normal recurring adjustments) that our management believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.
Our condensed consolidated financial statements also include the financial results of Shanghai Jitu Software Development Ltd., or Jitu, located in China. Based on our contractual arrangements with the shareholders of Jitu, we have determined that Jitu is a variable interest entity, or VIE, for which we are the primary beneficiary and are required to consolidate in accordance with Accounting Standards Codification, or ASC, subtopic 810-10, or ASC 810-10, Consolidation: Overall. The results of Jitu did not have a material impact on our financial statements for the three months ended September 30, 2020 and 2019.
The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for fiscal 2020, included in our Annual Report on Form 10-K for fiscal 2020 filed with the U.S. Securities and Exchange Commission, or SEC, on August 21, 2020, which we refer to as the Form 10-K.
Significant accounting policies
There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Form 10-K.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions made by us include the determination of revenue recognition and deferred revenue, including estimating and allocating the transaction price of customer contracts, the recoverability of accounts receivable and short-term investments, the determination of the fair value of non-marketable debt and equity investments, the assessment of goodwill for impairment, the fair value of stock-based awards issued, the determination of income taxes and the recoverability of deferred tax assets. Actual results could differ from those estimates.
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus first identified in China in late 2019 (COVID-19) as a pandemic, which continues to spread throughout the U.S. and the world. The COVID-19 pandemic and related adverse public health developments have caused and will continue to cause disruption to the economy and our business operations resulting from shelter-at-home orders, quarantines, self-isolations, or other restrictions on the ability of our employees to perform their jobs. For example, our automotive manufacturer partners closed manufacturing plants in response to the COVID-19 pandemic and only re-opened them in the three months ended June 30, 2020 for production in North America and Europe. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and we cannot predict. During the three months ended September 30, 2020, this uncertainty resulted in a higher level of judgment related to our estimates and assumptions concerning short-term investments, long-lived assets, non-marketable equity and debt investments, goodwill, and variable consideration related to revenue recognition. We expect uncertainties around our key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our condensed consolidated financial statements.
Disaggregation of revenue
In order to further depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors, the following table depicts the disaggregation of revenue according to revenue type and pattern of recognition (in thousands):
Three Months Ended September 30,
20202019
Product
On-board automotive navigation solutions (point in time)(1)
$56,809 $55,990 
Total product revenue56,809 55,990 
Services
Brought-in automotive navigation solutions (over time)(2)
10,914 6,222 
Automotive maintenance and support and other (over time)90 1,669 
Mobile navigation services (over time) 1,783 2,748 
Total services revenue12,787 10,639 
Total revenue$69,596 $66,629 
(1)Includes i) royalties earned and recognized at the point in time usage occurs, ii) map updates and iii) customized software development fees.
(2)Includes royalties earned and recognized over time from the allocation of transaction price to service obligations for hybrid automotive solutions.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
Contract assets
Contract assets relate to our rights to consideration for performance obligations satisfied but not billed at the reporting date. As of September 30, 2020 and June 30, 2020, we had no contract assets.
Deferred costs
Changes in the balance of total deferred costs (current and non-current) during the three months ended September 30, 2020 were as follows (in thousands):
Deferred Costs
ContentDevelopmentTotal
Balance, June 30, 2020$73,598 $7,071 $80,669 
Content licensing costs incurred33,136  33,136 
Customized software development costs incurred 695 695 
Less: cost of revenue recognized(37,213)(1,246)(38,459)
Balance, September 30, 2020$69,521 $6,520 $76,041 
Concentrations of risk and significant customers
Revenue related to products and services provided through Ford Motor Company and affiliated entities, or Ford, comprised 45% and 52% for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and June 30, 2020, receivables due from Ford were 38% and 39% of total accounts receivable, respectively.
Revenue related to products and services provided through General Motors Holdings and its affiliates, or GM, comprised 45% and 25% for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and June 30, 2020, receivables due from GM were 46% and 44% of total accounts receivable, respectively.
Revenue related to products and services provided to affiliates of Grab Holdings, Inc., which, collectively with certain of its affiliates, we refer to as Grab, comprised 10% of total revenue for the three months ended September 30, 2019.
Restricted cash
As of September 30, 2020 and June 30, 2020, we had restricted cash of $2.1 million and $1.5 million, respectively, on our condensed consolidated balance sheets, comprised primarily of prepayments from a customer.
Accumulated other comprehensive loss, net of tax
The components of accumulated other comprehensive loss, net of related taxes, and activity as of September 30, 2020, were as follows (in thousands):
Foreign Currency
Translation
Adjustments
Unrealized
Gains (Losses) on
Available-for-Sale
Securities
Total
Balance, net of tax as of June 30, 2020$(1,834)$1,357 $(477)
Other comprehensive income (loss) before reclassifications, net of tax360 (127)233 
Amount reclassified from accumulated other comprehensive loss, net of tax  (188)(188)
Other comprehensive income (loss), net of tax360 (315)45 
Balance, net of tax as of September 30, 2020$(1,474)$1,042 $(432)

The amount of income tax benefit allocated to each component of accumulated other comprehensive loss was not material for the three months ended September 30, 2020.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
Recent accounting pronouncements not yet adopted
There have been no other changes in accounting pronouncements during the three months ended September 30, 2020, as compared to the recent accounting pronouncements not yet adopted described in our Form 10-K, that are of significance or potential significance to us.
2.Net income (loss) per share
Basic income (loss) per share is calculated by dividing income (loss) by the weighted-average number of common shares outstanding for the period. Diluted income (loss) per share is computed by dividing income (loss) by the weighted-average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units and employee stock purchase plan rights using the treasury-stock method.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share amounts):
 
 Three Months Ended September 30,
 20202019
Income from continuing operations$3,335 $32 
Loss on discontinued operations (3,986)
Net income (loss)$3,335 $(3,954)
Shares used to compute basic income (loss) per share47,227 47,780 
Dilutive potential common shares:
Stock options 527 
Restricted stock units577 1,341 
Employee stock purchase plan37  
Shares used to compute diluted income (loss) per share47,841 49,648 
Basic income (loss) per share:
Income from continuing operations $0.07 $ 
Loss on discontinued operations (0.08)
Net income (loss)$0.07 $(0.08)
Diluted income (loss) per share:
Income from continuing operations $0.07 $ 
Loss on discontinued operations (0.08)
Net income (loss)$0.07 $(0.08)
Potential common stock equivalents not included in the calculation of diluted income (loss) per share as the effect would be anti-dilutive1,856 5,026 

A total of 1,495,000 and 800,000 outstanding performance-based restricted stock units as of September 30, 2020 and 2019, respectively, as described further in Note 9, were excluded from the diluted shares calculation above because they are contingently issuable and none of the performance milestones had been met.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
3.Cash, cash equivalents and short-term investments
Cash and cash equivalents consist of unrestricted cash and highly liquid fixed-income investments with original maturities of three months or less at the time of purchase, including money market funds. Short-term investments consist of readily marketable debt securities with a remaining maturity of more than three months from the date of purchase. Short-term investments are classified as current assets, even though maturities may extend beyond one year, because they represent investments of cash available for operations. We classify all cash equivalents and short-term investments as “available for sale,” as these investments are free of trading restrictions. Marketable debt securities are carried at fair value, with the unrealized gains and losses, net of tax, reported as accumulated other comprehensive income (loss) and included as a separate component of stockholders’ equity. Gains and losses are recognized when realized. When we have determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in earnings. Gains and losses are determined using the specific identification method. We had no material realized gains or losses in the three months ended September 30, 2020 or 2019.
Cash, cash equivalents and short-term investments consisted of the following as of September 30, 2020 (in thousands):
DescriptionAmortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Cash$23,010 $— $— $23,010 
Cash equivalents:
Money market mutual funds5,303 — — 5,303 
Total cash equivalents5,303 — — 5,303 
Total cash and cash equivalents28,313 — — 28,313 
Short-term investments:
U.S. treasury securities1,532 27  1,559 
U.S. agency securities3,188 44  3,232 
Asset-backed securities16,599 352  16,951 
Municipal securities6,280 83  6,363 
Corporate bonds41,651 750 (1)42,400 
Total short-term investments69,250 1,256 (1)70,505 
Cash, cash equivalents and short-term investments$97,563 $1,256 $(1)$98,818 


Cash, cash equivalents and short-term investments consisted of the following as of June 30, 2020 (in thousands):
DescriptionAmortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Cash$20,323 $— $— $20,323 
Cash equivalents:
Money market mutual funds195 — — 195 
Total cash equivalents195 — — 195 
Total cash and cash equivalents20,518 — — 20,518 
Short-term investments:
U.S. treasury securities3,712 41  3,753 
U.S. agency securities5,004 54  5,058 
Asset-backed securities20,392 434  20,826 
Municipal securities9,464 78  9,542 
Corporate bonds50,173 963  51,136 
Total short-term investments88,745 1,570  90,315 
Cash, cash equivalents and short-term investments$109,263 $1,570 $ $110,833 

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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
There were no available-for-sale securities that were in a material unrealized loss position as of September 30, 2020 or June 30, 2020.
The following table summarizes the cost and estimated fair value of short-term fixed income securities classified as short-term investments based on stated maturities as of September 30, 2020 (in thousands):
Amortized
Cost
Estimated
Fair Value
Due within one year$29,750 $30,096 
Due between one and two years28,791 29,479 
Due between two and three years10,709 10,930 
Total$69,250 $70,505 

Declines in fair value judged to be other-than-temporary on securities available for sale are included as a component of other income, net. In order to determine whether a decline in value is other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less than the carrying value and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair market value. As of September 30, 2020, we did not consider any of our short-term investments to be other-than-temporarily impaired.
4.Fair value of financial instruments
Cash equivalents and short-term investments
We measure certain financial instruments at fair value on a recurring basis. We utilize a hierarchy, which consists of three levels, for disclosure of the inputs used to determine the fair value of our financial instruments.
Level 1 valuations are based on quoted prices in active markets for identical assets or liabilities.
Level 2 valuations are based on inputs that are observable, either directly or indirectly, other than quoted prices included within Level 1. Such inputs used in determining fair value for Level 2 valuations include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 valuations are based upon information that is unobservable and significant to the overall fair value measurement.
Where applicable, we use quoted prices in active markets for similar assets to determine fair value of Level 2 short-term investments. If quoted prices in active markets for identical assets are not available to determine fair value, we use quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly. If quoted prices for identical or similar assets are not available, we use third-party valuations utilizing underlying assets assumptions.
All of our cash equivalents and short-term investments are classified within Level 1 or Level 2. As of September 30, 2020 and June 30, 2020, we did not have any short-term investments that require Level 3 valuations. The fair values of these financial instruments were determined using the following inputs at September 30, 2020 (in thousands):
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
 Fair Value Measurements at September 30, 2020 Using
  Quoted Prices
in Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
DescriptionTotal(Level 1)(Level 2)(Level 3)
Cash equivalents:
Money market mutual funds$5,303 $5,303 $ $ 
Total cash equivalents5,303 5,303   
Short-term investments:
U.S. treasury securities1,559 1,559   
U.S. agency securities3,232  3,232  
Asset-backed securities16,951  16,951  
Municipal securities6,363  6,363  
Corporate bonds42,400  42,400  
Total short-term investments70,505 1,559 68,946  
Cash equivalents and short-term investments$75,808 $6,862 $68,946 $ 
The fair values of our financial instruments were determined using the following inputs at June 30, 2020 (in thousands):
 Fair Value Measurements at June 30, 2020 Using
  Quoted Prices
in Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
DescriptionTotal(Level 1)(Level 2)(Level 3)
Cash equivalents:
Money market mutual funds$195 $195 $ $ 
Total cash equivalents195 195   
Short-term investments:
U.S. treasury securities3,753 3,753   
U.S. agency securities 5,058  5,058  
Asset-backed securities20,826  20,826  
Municipal securities9,542  9,542  
Corporate bonds51,136  51,136  
Total short-term investments90,315 3,753 86,562  
Cash equivalents and short-term investments$90,510 $3,948 $86,562 $ 

Accretion of net premium on short-term investments totaled $85,000 and $12,000 in the three months ended September 30, 2020 and 2019, respectively.
There were no transfers between Level 1 and Level 2 financial instruments in the three months ended September 30, 2020 and 2019.
We did not have any financial liabilities measured at fair value on a recurring basis as of September 30, 2020 or June 30, 2020.
Non-marketable equity investments
Our non-marketable equity securities are investments in privately held companies without readily determinable market values.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
The carrying value of our non-marketable equity securities is measured at cost and adjusted to fair value for observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in other income, net. Non-marketable equity securities that we remeasure are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the securities we hold.
In September 2020, a company in which we held a $200,000 non-marketable equity investment was acquired in an all cash transaction, resulting in a realized gain to us of $247,000. As of September 30, 2020, the transaction proceeds were in process of being transmitted to us and accordingly, the total of $447,000 was included in prepaid expenses and other current assets in our condensed consolidated balance sheet.
In July 2020, we invested $2.5 million in exchange for Series A-3 redeemable convertible preferred shares representing a less than 20% equity ownership interest in a privately held company.
In January 2020, we completed the sale of certain intellectual property and workforce associated with the OpenTerra Platform in exchange for consideration that included a non-marketable equity interest in Grab Holdings, Inc. ordinary shares valued at $6.2 million. See Note 12.
We had no net unrealized gains from non-marketable equity securities in the three months ended September 30, 2020 and 2019.
The carrying value of our non-marketable equity securities carried at cost and adjusted under the measurement alternative, none of which required remeasurement to fair value, was $9.0 million and $6.7 million at September 30, 2020 and June 30, 2020, respectively.
Non-marketable equity investments accounted for under the equity method
In August 2019, we completed the disposition of our Ads Business in exchange for a non-marketable equity investment in inMarket Media, LLC, or inMarket, valued at $15.6 million. See Note 11. In assessing the fair value of our investment in inMarket, we made assumptions regarding estimated future cash flows, weighted average cost of capital and timing over which the cash flows will occur, amongst other factors.
An investment in a limited liability company such as inMarket that maintains a specific ownership account for each investor is deemed to be similar to an investment in a limited partnership. Accordingly, because we hold more than a 3% to 5% ownership interest in inMarket, we are required to account for our inMarket investment under the equity method of accounting and record our proportionate share of investee earnings each period.
In January 2020, we invested $4.0 million in exchange for Series B preferred units and a warrant to purchase additional preferred units in a privately held limited liability company. The warrant expires on the earlier of (i) July 5, 2021, (ii) acceptance of a purchase offer from another entity, or (iii) an initial public offering of the issuer’s common stock. The exercise price of the warrant is variable depending on the achievement of certain performance conditions by the issuer.
The warrant meets the definition of a derivative financial instrument. Accordingly, we allocated the $4.0 million cost of the investment first to the fair value of the warrant, with the residual allocated to the preferred units. The fair value of the warrant at issuance was determined to be $448,000, with the remaining $3.6 million allocated to the preferred units. In assessing the fair value of the warrant within Level 3, we utilized a Black-Scholes option pricing model incorporating assumptions regarding probability of achievement of performance conditions, underlying equity value, expected term and risk free rate. The underlying equity used in the option pricing model was determined primarily based on revenue and earnings multiples for comparable companies, amongst other factors. The warrant is accounted for separately and marked to market each reporting period, with any gain or loss reported in other income, net in our condensed consolidated statement of operations. Similar to the inMarket investment, we account for the $3.6 million investment in preferred units under the equity method of accounting because we hold more than a 3% to 5% ownership interest in the investee.
We recognized income of $616,000 and zero related to our proportionate share of investments accounted for under the equity method for the three months ended September 30, 2020 and 2019, respectively. The carrying value of our non-marketable equity investments accounted for under the equity method was $20.6 million and $20.0 million at September 30, 2020 and June 30, 2020, respectively.
13