INVESTMENTS

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



December 31, 2016	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	4,306	$	82	$	(6	)	$	4,382
Marketable equity securities	10,400		10,327		(38		)	20,689
Total	$	14,706	$	10,409	$	(44	)	$	25,071



December 31, 2015	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	4,458	$	46	$	(51	)	$	4,453
Marketable equity securities	10,339		7,879		(81		)	18,137
Total	$	14,797	$	7,925	$	(132	)	$	22,590

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):



	December 31, 2016				December 31, 2015
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
Due in one year or less	$	182	$	183	$	38	$	37
Due after one year through five years	4,124		4,199		2,603		2,566
Due after five years					1,817		1,850
	$	4,306	$	4,382	$	4,458	$	4,453

Included in other income, net in the accompanying consolidated financial statements is the net realized gain or loss on investments (in thousands):



	Year Ended December 31,
	2016			2015			2014
Gross realized gains:
Debt securities				$	419		$	7
Equity securities and other investments	$	610		1,010			5,545
Total gain	610			1,429			5,552
Gross realized losses:
Debt securities	(90		)	(4		)	(116		)
Equity securities and other investments ⁽¹⁾	(4,525		)	(21,020		)	(1,781		)
Total loss	(4,615		)	(21,024		)	(1,897		)
Net realized gain (loss)	$	(4,005	)	$	(19,595	)	$	3,655

⁽¹⁾Included within this caption for the years ended December 31, 2016, 2015, and 2014, is $2.2 million, $20.7 million and $1.1 million, respectively, that is reported in a separate line, impairment loss on unconsolidated affiliate, within the Company’s consolidated statements of operations and comprehensive income or loss for the years then ended.

Significant Realized Gains and Losses:

During the year ended December 31, 2016, the Company’s 51% owned subsidiary, Klablab, Inc. (“Klablab”), ceased further operations. The Company originally purchased a 51% interest in Klablab in 2011, with its founder retaining the remaining 49% noncontrolling interest. Historically, 49% of the losses from the operations have been allocated to noncontrolling interest that resulted in a deficit in the balance attributable to the noncontrolling interest. As the noncontrolling interest was not obligated to fund such deficit, the balance was recorded as a realized loss upon abandonment of the business. As such, the Company recorded a $2 million loss during the fourth quarter of 2016, which is included within other income, net within the Company’s consolidated statements of operations and comprehensive income or loss for the year then ended and also reported in the gross realized loss on equity securities in the table above.

The realized losses reported in 2015 were primarily due to the $20.7 million impairment loss on the investment in Mindjet, Inc. (“Mindjet”) common and preferred shares discussed below.

Debt Securities

At December 31, 2016, there were unrealized losses on certain bonds held by the Company. 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 expects to recover the entire amortized cost basis at maturity. There were no impairment losses recorded on debt securities during the three years ended December 31, 2016.

Marketable Equity Securities

At December 31, 2016, the Company reviewed all of its equity securities in an unrealized loss position and concluded certain 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 losses on those securities was normal market volatility. No material impairment losses were recorded on marketable equity securities during the three years ended December 31, 2016.

Other Investments:

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



	December 31, 2016				December 31, 2015
	Carrying Value		Voting Interest		Carrying Value		Voting Interest
Investment in Synthonics	$	—	18.2	%	$	2,170	18.3	%

Investment in Mindjet:
Investment in common stock	$	—	19.3	%	$	—	19.3	%
Investment in preferred stock	1,312				1,312
	$	1,312	19.3	%	$	1,312	19.3	%
Total	$	1,312			$	3,482

Investment in Synthonics:

Synthonics, Inc. (“Synthonics”) is a private company co-founded by a previous member of the Company’s board of directors. The Company’s investment consists of preferred shares as discussed in Note 11 “Related-Party Transactions.” During 2016, the Company recorded an impairment loss of $2.2 million on its investment in Synthonics as the estimated fair value was less than the carrying value due to continuing losses, the resulting liquidity issues, and decreased market conditions that have adversely affected the value. The loss is recorded within impairment loss on investment in unconsolidated affiliate in the Company’s consolidated statements of operations and comprehensive income or loss for the year then ended December 31, 2016 and also reported in the gross realized loss on equity securities in the table above. The fair value approach relied primarily on Level 3 unobservable inputs, whereby the enterprise value was determined using book value multiples that included assumptions regarding an entity’s risks and uncertainties. The estimates were based upon assumptions believed to be reasonable, but which by their nature are uncertain and unpredictable.

Investment in Mindjet:

During 2015, 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 resulting 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 for the investment in common stock during the third quarter of 2015. The remaining carrying value of the investment, including a convertible note receivable and associated interest was approximately $2.3 million at December 31, 2016 and 2015.

The Company had previously accounted for the investment in common stock using the equity method of accounting. This resulted in recording a loss within equity in loss of unconsolidated affiliate in the consolidated statement of operations and comprehensive income or loss of $3.4 million and $2.1 million for the years ended December 31, 2015 and 2014, respectively. The Company’s share of the losses reported by Mindjet during 2015 was allocated to the carrying value of the common stock investment until it reached zero and then to the preferred stock and convertible debt.

During 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 unfavorable market conditions that have adversely affected the value of Mindjet. Such loss was recorded in impairment loss on investment in unconsolidated affiliate in the 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. 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.