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 each of the second and third quarters of fiscal 2017, we advanced the investee $1.0 million through a short-term instrument, bringing our total short-term advances to the investee to $2.0 million. As these investments are due and payable in the fourth quarter of fiscal 2017, they are included in Prepaid expenses and other current assets in our Consolidated Balance Sheets as of September 30, 2017. The investee repaid the total advances in October 2017.

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						Nine Months Ended
(In thousands)	September 30, 2017			October 1, 2016			September 30, 2017			October 1, 2016
Equity in net loss of an unconsolidated affiliate, net of tax	$	(199	)	$	(407	)	$	(692	)	$	(1,085	)

Through September 30, 2017, we have reduced the value of our investment by approximately $2.6 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	(692		)
Balance at September 30, 2017	$	3,357