INVESTMENTS

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



December 31, 2017	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	700	$	6	$	(22	)	$	684
Marketable equity securities	513		710		(5		)	1,218
Total	$	1,213	$	716	$	(27	)	$	1,902



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

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, 2017				December 31, 2016
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
Due in one year or less	$	225	$	204	$	182	$	183
Due after one year through five years	475		480		4,124		4,199
	$	700	$	684	$	4,306	$	4,382

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,
	2017			2016			2015
Gross realized gains:
Debt securities	$	77					$	419
Equity securities and other investments	9,746			$	610		1,010
Total gain	9,823			610			1,429
Gross realized losses:
Debt securities	(87		)	(90		)	(4		)
Equity securities and other investments ⁽¹⁾	(1,014		)	(4,525		)	(21,020		)
Total loss	(1,101		)	(4,615		)	(21,024		)
Net realized gain (loss)	$	8,722		$	(4,005	)	$	(19,595	)

⁽¹⁾Included within this caption for the years ended December 31, 2016 and 2015 is $2.2 million and $20.7 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 and the Company recorded a $2 million loss 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 common and preferred stock investment in Mindjet, Inc. (“Mindjet”) a privately held company located in San Francisco, California that provides business innovation software, as discussed below.

Debt and Marketable Equity Securities

At December 31, 2017, there were no material unrealized losses on the Company’s investments in debt or marketable equity securities. Furthermore, there were no impairment losses recorded on debt or equity securities during the three years ended December 31, 2017.

Other Investments:

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 with an 18.3% voting interest. During 2016, the Company recorded an impairment loss of $2.2 million on the investment when the estimated fair value dropped below the carrying value due to continuing losses reported by Synthonics, the resulting liquidity issues, and decreased market conditions that have adversely affected the value. The loss was 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 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:

The Company owns a convertible note receivable (which is recorded within other assets in the consolidated financial statements) and common stock and nonvoting preferred stock representing a voting ownership of 19.3% of Mindjet. The Company determined it currently does not have significant influence over the operating and financial policies of Mindjet and records the investment at cost. The carrying value of the investment, including the convertible note receivable and associated interest, was approximately $2.3 million at December 31, 2017 and 2016.

The Company had previously accounted for the investment in common stock using the equity method of accounting when it did have significant influence over Mindjet. 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 for the year ended December 31, 2015. 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 when the estimated fair value dropped below the carrying value due to significantly increased, and continuing operating losses and resulting liquidity issues at the company, 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.