Equity Method Investment

During fiscal 2015, we purchased a series of preferred stock ownership interests in a privately-held company that designs human-computer interaction technology for total consideration of $5.0 million. This gross investment constituted a 22.7% ownership interest. As a result of the ownership interest and after considering the level of our participation in the management of and interaction with the investee, we determined that we have the ability to exert significant influence over the investee. Accordingly, we have accounted for the investment by the equity method and have recognized our proportionate share of the investee’s operating results in the Consolidated Statements of Operations.

In the third quarter of fiscal 2016, we made an additional investment of $1.0 million via a convertible debt instrument, bringing our gross investment in the investee to $6.0 million. We have determined that this additional investment is an in-substance common stock and has been included in our equity method accounting.

In the second quarter of fiscal 2017, we advanced the investee $1.0 million through a short-term instrument. As this investment is due and payable in the fourth quarter of fiscal 2017, it is included in prepaid expenses and other current assets in our Consolidated Balance Sheet.

Applying the equity method, the proportionate share of the investee's net loss that we have recognized in the Consolidated Statements of Operations is presented in the following table:



	Three Months Ended						Six Months Ended
(In thousands)	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Equity in net loss of an unconsolidated affiliate, net of tax	$	(154	)	$	(368	)	$	(493	)	$	(678	)

Through July 1, 2017, we have reduced the value of our investment by approximately $2.4 million, representing our cumulative proportionate share of the privately-held company’s net loss accumulated to that date. The net balance of our investment included in other long-term assets in the Consolidated Balance Sheets is detailed in the following table:



(In thousands)	Total
Balance at December 31, 2016	$	4,049
Equity in net loss of an unconsolidated affiliate, net of tax	(493		)
Balance at July 1, 2017	$	3,556