Investments

The cost and carrying value of available-for-sale investments were as follows (in thousands):



September 30, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	4,608	$	42	$	(95	)	$	4,555
Marketable equity securities	10,545		7,988		(139		)	18,394
Total available-for-sale investments	$	15,153	$	8,030	$	(234	)	$	22,949



December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	8,909	$	198	$	(65	)	$	9,042
Marketable equity securities	14,780		7,335		(125		)	21,990
Total available-for-sale investments	$	23,689	$	7,533	$	(190	)	$	31,032

There were no investments that had a material unrealized loss position as of September 30, 2015 or December 31, 2014.

The amortized cost and carrying value of investments in debt securities, by contractual maturity, are shown below. Actual maturity dates may differ from contractual maturity dates because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):



	September 30, 2015				December 31, 2014
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
Due in one year or less	$	162	$	161	$	3,786	$	3,958
Due after one year through five years	2,689		2,617		3,310		3,255
Due after five years	1,757		1,777		1,813		1,829
Total	$	4,608	$	4,555	$	8,909	$	9,042

Debt Securities

The Company owns corporate bonds and other debt securities, which are purchased based on the maturity and yield-to-maturity of the bond and an analysis of the fundamental characteristics of the issuer. At September 30, 2015, and December 31, 2014, there were unrealized losses on certain bonds in the portfolio. The Company does not consider those bonds to be other-than-temporarily impaired because the Company expects to hold, and will not be required to sell, these particular bonds, and it expects to recover the entire amortized cost basis at maturity. There were no impairment losses recorded on debt securities during the three and nine months ended September 30, 2015 and 2014.

Marketable Equity Securities

The Company’s investment in marketable equity securities was $18.4 million at September 30, 2015, and principally consisted of common stock of publicly traded small-capitalization companies in the U.S. and select foreign markets. At September 30, 2015, the Company reviewed its equity securities in an unrealized loss position and concluded certain of such securities were not other-than-temporarily impaired as the declines were not of sufficient duration and severity, and publicly-available financial information, collectively, did not indicate impairment. The primary cause of the loss on those securities was normal market volatility. No material impairment losses were recorded during the three and nine months ended September 30, 2015 and 2014.

Other Investments

The Company owned the following investments that are not classified as available-for-sale (in thousands):



	September 30, 2015				December 31, 2014
	Carrying Value		Voting Interest		Carrying Value		Voting Interest
Investment in Synthonics	$	2,170	18.3	%	$	2,170	19.6	%

Investment in Mindjet:
Investment in common stock	$	—	19.3	%	$	6,611	15.0	%
Investment in preferred stock	1,312		—	%	15,858		13.4	%
	$	1,312	19.3	%	$	22,469	28.4	%
Total	$	3,482			$	24,639

Investment in Synthonics:

Synthonics, Inc. (“Synthonics”) is a private company co-founded by a member of the Company’s board of directors. The Company’s investment consists of preferred shares as discussed in Note 9 “Related-Party Transactions.”

Investment in Mindjet:

During the three months ended September 30, 2015, Mindjet, Inc. (“Mindjet”) raised additional capital from existing shareholders. The Company elected not to participate in the offering and as a result, the Company’s existing investment in preferred stock was converted to common stock at five shares of preferred stock for one share of common stock, and the Company’s investment in convertible debt was converted into nonvoting preferred stock resulting in a decline in the Company’s voting ownership to 19.3%. In addition, the Company lost its right to a board seat. Given the current voting interest and loss of board representation, the Company determined it no longer had significant influence over the operating and financial policies of Mindjet and therefore discontinued the equity method of accounting during the third quarter of 2015. The remaining investment was held at cost at September 30, 2015. At September 30, 2015 the Company’s total carrying value in Mindjet was $2.2 million, comprised of $1.3 million in preferred stock and a note receivable of $851,000 that is expected to be converted into additional preferred stock during the fourth quarter of 2015.

The Company had previously accounted for the investment in common stock using the equity method of accounting, which resulted in recording a loss of $1.9 million and $3.4 million in the condensed consolidated statement of operations and comprehensive income or loss for the three and nine months ended September 30, 2015, respectively, and a loss of $410,000 and $1.6 million for the three and nine months ended September 30, 2014, respectively. The Company’s share of the losses reported by Mindjet during the third quarter of 2015 were allocated to the carrying value of the common stock investment until it reached zero, and then to the preferred stock and convertible debt.

During the nine months ended September 30, 2015, the Company recorded a $20.7 million impairment loss on the investment in Mindjet common and preferred shares as the estimated fair value was less than the carrying value due to significantly increased, and continuing operating losses and resulting liquidity issues, actual financial results significantly less than projections, and decreased market conditions that have adversely affected the value of Mindjet. Such loss was recorded in impairment on investments in the condensed consolidated statement of operations and comprehensive income or loss. The fair value of the investment in Mindjet was based on an analysis of the financial and operational aspects of the company, including consideration of business enterprise value-to-revenue ratios for comparable public companies to current revenue metrics for the company. Determination of the business enterprise value based on the foregoing was then considered in an analysis of the distribution of equity value to the various classes of debt and equity issued by Mindjet in order to reflect differences in value due to differing liquidation preferences, dividend and voting rights. The fair value approach relied primarily on Level 3 unobservable inputs, whereby expected future cash flows were determined using revenue multiples that included assumptions regarding an entity’s assumptions about risk and uncertainties. The estimates were based upon assumptions believed to be reasonable, but which by their nature are uncertain and unpredictable.

It is reasonably possible that the Company’s ownership percentage in Mindjet will continue to decline as other shareholders fund the ongoing operations with additional equity capital and upon conversion of notes in the fourth quarter of 2015. The Company does not anticipate investing any additional capital into Mindjet.

The carrying value of the Company’s investment in Mindjet is subject to impairment testing at each reporting period, or more frequently if facts and circumstances indicate the investment may be impaired. It is reasonably possible that circumstances may continue to deteriorate which could require the Company to record additional impairment losses on the remaining investment balances.

During the fourth quarter of 2014, the Company recorded a $1.1 million impairment loss on the preferred shares as the estimated fair value of such shares was less than the carrying value. The fair value was determined using a 50/50 weighting of the guideline public company method (market approach) and a discounted cash flow method (income approach).

During 2014, the Company was notified by Mindjet that it was asserting a breach in the representations and warranties made by Spigit, Inc. (“Spigit”) in the September 10, 2013 merger agreement. As part of the notification, Mindjet made a claim against the Mindjet shares held by the former Spigit shareholders, including the Company. A partial settlement was reached by the parties in November 2014 and the Company expects final resolution in 2015. The partial settlement was not material to the Company and was paid in shares of Mindjet. The maximum damages to the Company for the remaining claim is estimated between zero and $1.2 million and any settlement would be paid by the Company in shares of Mindjet. The Company is unable to provide a more meaningful estimate due to the ongoing development of information important to resolving the matter. Consequently, the Company has not accrued any liability related to the claim.