Consolidated Businesses

FolioDynamix Acquisition

On November 3, 2014, Actua acquired all of the issued and outstanding stock of FolioDynamix for approximately $201.7 million in cash (which included $0.7 million as a working capital adjustment that occurred in the first quarter of 2015) and $4.1 million of equity value related to rolled stock options. The $4.1 million fair value of the rolled stock options was determined using a Black-Scholes model that, given the relatively short expected term applied to the model, essentially approximated the intrinsic value of these awards. Actua allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values at the date of acquisition. FolioDynamix’s results are included in our consolidated financial statements beginning on November 1, 2014 (as the results of FolioDynamix between November 1, 2014 and November 3, 2014 were deemed insignificant).

FolioDynamix offers wealth management service providers and financial advisors a comprehensive, secure, cloud-based wealth management technology platform and advisory solutions for managing the full wealth management lifecycle across all types of investment programs. FolioDynamix provides its customers with leading-edge technology to attract and retain the best advisors, enable more effective business process management, accelerate client acquisition and gain visibility across all assets under management ("AUM"). FolioDynamix’s customers, which include a variety of financial services organizations, such as brokerage firms, banks (trust and retail), large registered investment advisors ("RIAs") and RIA networks and other fee-based managed account providers, access specified bundles of platform applications through the cloud on a periodic (usually multi-year) subscription basis; FolioDynamix sells the periodic subscriptions directly to its customers through its internal sales team.

The following table summarizes the allocation of the consideration paid for FolioDynamix and the estimated fair value of the assets acquired and liabilities assumed.



(in thousands)

Cash consideration (including $0.7 million of working capital adjustment paid in 2015)	$	201,699
Fair value of stock options of FolioDynamix	4,125
Total consideration	$	205,824

Recognized amounts of identifiable assets acquired and liabilities assumed:
Financial assets	$	9,324
Property, plant and equipment	1,581
Customer lists (10 year life)	23,300
Trademarks, trade names and domain names (5 year life)	8,100
Technology (8 year life)	15,200
Financial liabilities	(14,397		)
Contingent consideration	(1,870		)
Deferred tax liability	(1,585		)
	$	39,653

Goodwill	166,171
Total identifiable net assets and liabilities assumed	$	205,824

Actua recognized $166.2 million of goodwill, which is not deductible for tax purposes, in connection with the FolioDynamix acquisition. No specific synergies exist between FolioDynamix and Actua’s other businesses; however, Actua personnel perform various tasks for FolioDynamix, such as certain marketing, legal and finance tasks that, at times, generate cost savings at the company. Actua incurred $1.4 million in transaction costs associated with the FolioDynamix acquisition that were recorded as general and administrative expense during 2014. The fair value adjustment to the historical deferred revenue reduced deferred revenue by approximately $6.0 million. FolioDynamix contributed $3.8 million of revenue and $1.1 million of net income to Actua’s 2014 consolidated results. See the, “Pro Forma Information” subsection of this Note 4 for further pro forma information on revenue, net income (loss) and net income (loss) per share.

Other Acquisitions

On August 9, 2013, Bolt acquired Superior Access Insurance Services, Inc. for $8.7 million in cash. Bolt has estimated the allocation of purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective estimated fair values at the date of acquisition.

On August 8, 2014, VelocityEHS acquired Knowledge Management Innovations (“KMI”) for $11.5 million, subject to working capital adjustments, including a contingent earn-out payment of up to $2.0 million tied to certain performance measures that VelocityEHS expects to become due in 2016. VelocityEHS has estimated the allocation of the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their provisional respective fair values at the date of acquisition.

On October 1, 2014, Bolt acquired certain assets of Ludwig for $2.1 million in cash. The acquisition was accounted for under the acquisition method. Bolt allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values as of the date of acquisition.

On December 17, 2014, GovDelivery acquired NuCivic, Inc. (“NuCivic”) for $5.1 million of consideration, consisting of $2.0 million in cash payments (including a $0.6 million deferred payment) and $3.1 million of GovDelivery stock. The acquisition was accounted for under the acquisition method. GovDelivery allocated the purchase price to the acquired tangible and identifiable intangible assets and liabilities based upon their respective fair values as of the date of acquisition.

On June 10, 2015, GovDelivery acquired certain assets of Talent Management in Government, Inc. (“TMGov”) for $0.5 million of consideration, $0.4 million at closing and $0.1 million to be paid upon achievement of certain milestones, as set forth in the applicable purchase agreement. The acquisition was accounted for under the acquisition method. GovDelivery has allocated the purchase price to the acquired identifiable intangible assets based upon their respective fair values as of the date of acquisition.

On July 13, 2015, GovDelivery acquired Vox Metropolis, Inc. (d/b/a Textizen) (“Textizen”) for approximately $2.1 million of consideration, consisting of $1.2 million of cash and $0.9 million of GovDelivery stock; $0.4 million of the $1.2 million of cash consideration is being retained by GovDelivery until July 2016 in order to satisfy potential indemnity claims. The acquisition was accounted for under the acquisition method. GovDelivery has allocated the purchase price to the acquired identifiable intangible assets based upon their respective fair values as of the date of acquisition.

On November 25, 2015, VelocityEHS acquired certain assets of WellNet Solutions, Inc. (“WellNet”) for cash consideration of $0.7 million. Intangible assets of $1.4 million were recorded in connection with the acquisition. Additionally, contingent consideration of $0.7 million was recorded within the "accrued expense" line item within the current liabilities section of the Consolidated Balance Sheet associated to the estimated costs for future incremental WellNet customer acquisitions.

The allocations of the respective KMI, Ludwig, NuCivic, TMGov, and Textizen purchase prices, to identified intangible assets and tangible assets and liabilities were as follows:



(in thousands)	KMI		Ludwig		NuCivic		TMGov		Textizen
Goodwill	$	6,735	$	455	$	1,257	$	—	$	606
Customer lists (5-11 year life)	2,900		2,366		202		250		171
Trademarks, trade names and domain names (5-11 year life)	300		—		330		—		117
Technology (5 year life)	400		—		—		250		347
Non-compete agreement (5 year life)	—		129		14		—		—
Other net assets (liabilities)	1,165		—		197		—		(41		)
Total net assets acquired	$	11,500	$	2,950	$	2,000	$	500	$	1,200

Redeemable Noncontrolling Interests

Certain GovDelivery stockholders had the ability to require GovDelivery to redeem a portion of their shares in 2016 based on a fair value determination. Additionally, in connection with the NuCivic and Textizen acquisitions, certain GovDelivery stockholders have the ability to require GovDelivery to redeem a portion of their shares in 2017, 2018, 2019 and 2020 based on a fair value determination. Certain VelocityEHS stockholders have the ability to require VelocityEHS to redeem a portion of their shares in 2016 and 2017 based on a fair value determination.

Certain FolioDynamix shareholders have the ability to require FolioDynamix to redeem a portion of their shares in 2018, 2019 and 2020 based on a fair value determination. Because those redemptions are outside the control of the respective businesses, Actua has classified the noncontrolling interests outside of equity and will accrete to the estimated redemption values with an offset to additional paid-in capital. The noncontrolling interests are classified as “Redeemable noncontrolling interests” in Actua’s Consolidated Balance Sheets.

As discussed in Note 2, “Significant Accounting Policies”, during 2015, Actua corrected an immaterial error and revised previously reported amounts due to a change from recognizing noncontrolling interests related to FolioDynamix as a component of permanent equity to recognizing those interests as a component of temporary equity in redeemable noncontrolling interests.

The following is a reconciliation of the activity related to Actua’s redeemable noncontrolling interest during the years ended December 31, 2015, 2014 and 2013:



(in thousands)
Balance at December 31, 2012	$	3,383
Redeemable noncontrolling interest portion of subsidiary net income/(loss)	(105		)
Accretion to estimated redemption value	164
Balance at December 31, 2013	$	3,442
Redeemable noncontrolling interest portion of subsidiary net income/(loss)	72
Accretion to estimated redemption value	6,832
Balance at December 31, 2014	$	10,346
Redeemable noncontrolling interest portion of subsidiary net income/(loss)	(393		)
FolioDynamix impairment charge ⁽¹⁾	(812		)
Accretion to estimated redemption value	4,704
Cash redemption	(3,339		)
Balance at December 31, 2015	$	10,506

___________________________________

⁽¹⁾ This amount pertains to the FolioDynamix goodwill impairment charge discussed in Note 3, “Goodwill and Intangible Assets”

attributed to redeemable noncontrolling interest which is reflected in the "Net income/(loss) attributable to the noncontrolling

interest" line of Actua's Consolidated Statement of Operations.

Subsequent to December 31, 2015, Actua paid $4.9 million in cash to acquire $2.5 million of redeemable noncontrolling interests associated with GovDelivery and $2.4 million of redeemable noncontrolling interests associated with VelocityEHS. These transactions increased Actua's ownership in GovDelivery from 92% to 94% and its ownership in VelocityEHS from 98% to 99%.

Other Consolidated Businesses Transactions

From time to time, Actua acquires additional equity ownership interests in its consolidated businesses. Purchasing equity ownership interests from a consolidated business’ existing shareholders results in an increase in Actua’s controlling interest in that business and a corresponding decrease in the noncontrolling interest ownership. Those transactions are accounted for as decreases to “Noncontrolling interests” and decreases to “Additional paid-in capital” in Actua’s Consolidated Balance Sheets for the relevant periods. Actua may also acquire additional equity ownership interests in its consolidated businesses, either from existing holders or as a result of share issuances by one or more of those businesses, and Actua’s equity ownership interests may be diluted by any such share issuances to other parties. An issuance of equity securities by a consolidated business that results in a decrease in Actua’s equity ownership interests is accounted for in accordance with the policy for “Principles of Accounting for Ownership Interests” described in Note 2, “Significant Accounting Policies.” Other changes to Actua’s equity ownership interests in its consolidated businesses, as well as equity-based compensation award activity at those businesses, also result in adjustments to “Additional paid-in capital” and “Noncontrolling interests” in Actua’s Consolidated Balance Sheets. The impact of any equity-related transactions at Actua’s consolidated businesses is included in the line item “Impact of subsidiary equity transactions” in Actua’s Consolidated Statements of Changes in Equity. The impact of these changes to the noncontrolling interest are also included in the line item “Impact of subsidiary equity transactions” in Actua’s Consolidated Statements of Changes in Equity for the relevant period. These amounts primarily relate to Actua’s acquisition of additional equity ownership interests in our consolidated businesses from noncontrolling interests.

Pro Forma Information (Unaudited)

The information in the following table represents the revenue, net income (loss) from continuing operations attributable to Actua Corporation and the net income (loss) from continuing operations per diluted share attributable to Actua Corporation for the relevant periods had Actua owned FolioDynamix, Bolt owned Ludwig, GovDelivery owned NuCivic, TMGov and Textizen, and VelocityEHS owned KMI in each of those periods.



(in thousands, except per share data)	Year Ended December 31,
	2015			2014
Revenue	$	133,921		$	114,380
Net income (loss) from continuing operations attributable to Actua Corporation	$	(95,496	)	$	(41,579	)
Net income (loss) from continuing operations per diluted share attributable to Actua Corporation	$	(2.58	)	$	(1.12	)



(in thousands, except per share data)	Year Ended December 31,
	2014			2013
Revenue	$	113,705		$	90,561
Net income (loss) from continuing operations attributable to Actua Corporation	$	(41,295	)	$	(35,439	)
Net income (loss) from continuing operations per diluted share attributable to Actua Corporation	$	(1.11	)	$	(0.97	)

Included in the pro forma amount above, are amounts associated with our significant acquisition, FolioDynamix, which contributed $24.6 million of revenue and $1.5 million of net income and $0.04 of net income (loss) per share to our 2014 results. FolioDynamix, contributed $19.8 million of revenue and $(3.2) million of net income (loss) and $(0.90) of net income (loss) per share to our 2013 results.