| Organization and Summary of Significant Accounting Policies | Note 1. Organization and Summary of Significant Accounting Policies Nature of Operations Support.com, Inc. (“Support.com”, “the Company”, “We” or “Our”), was incorporated in the state of Delaware on December 3, 1997. Our common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SPRT.” Support.com is a leading provider of cloud-based software and services that enable technology support for a connected world. Our technology support services programs help leading brands create new revenue streams and deepen customer relationships. We offer turnkey, outsourced support services for service providers, retailers and technology companies. Our technology support services programs are designed for both the consumer and small and medium business (“SMB”) markets, and include computer and mobile device set-up, security and support, virus and malware removal, wireless network set-up, and home security and automation system support. Our Support.com Cloud offering (Nexus) is a SaaS solution for companies to optimize support interactions with their customers using their own or third party support personnel. The solution enables companies to quickly resolve complex technology issues for their customers, boosting agent productivity and dramatically improving the customer experience. Basis of Presentation The consolidated financial statements include the accounts of Support.com and its wholly owned foreign subsidiaries. All intercompany transactions and balances have been eliminated. In June 2009, we sold our legacy Enterprise software business to Consona Corporation. Therefore, our audited consolidated financial statements and accompanying notes reflect the Enterprise business as a discontinued operation for all periods presented in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets. Foreign Currency Translation The functional currency of our foreign subsidiaries is generally the local currency. Assets and liabilities of our wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates prevailing during the year. Any material resulting translation adjustments are reflected as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Realized foreign currency transaction gains (losses) were not material during the years ended December 31, 2015, 2014, and 2013. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s most significant, difficult and subjective judgments include revenue recognition, the valuation of investments, the assessment of recoverability of intangible assets and their estimated useful lives, the assessment of recoverability of goodwill and indefinite-lived intangible assets, the valuation and recognition of stock-based compensation expense and the recognition and measurement of current and deferred income tax assets and liabilities. Actual results could differ materially from these estimates. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, investments and trade accounts receivable. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We are exposed to credit risks in the event of default by the issuers to the extent of the amount recorded on the balance sheet. The credit risk in our trade accounts receivable is substantially mitigated by our evaluation of the customers’ financial conditions at the time we enter into business and reasonably short payment terms. Trade Accounts Receivable and Allowance for Doubtful Accounts Trade accounts receivable are recorded at the invoiced amount. We perform evaluations of our customers’ financial condition and generally do not require collateral. We make judgments as to our ability to collect outstanding receivables and provide allowances for a portion of receivables when collection becomes doubtful. Our allowances are made based on a specific review of all significant outstanding invoices. For those invoices not specifically provided for, allowances are recorded at differing rates, based on the age of the receivable. In determining these rates, we analyze our historical collection experience and current payment trends. The determination of past-due accounts is based on contractual terms. The following table summarizes the allowance for doubtful accounts as of December 31, 2015, 2014, and 2013 (in thousands): Balance at Beginning of Period Adjustments to Costs and Expenses Write- offs Balance at End of Period Allowance for doubtful accounts: Year ended December 31, 2013 $ 2 $ 1 $ (3 ) $ — Year ended December 31, 2014 $ — $ 12 $ (10 ) $ 2 Year ended December 31, 2015 $ 2 $ 29 $ (25 ) $ 6 As of December 31, 2015, Comcast and Office Depot accounted for approximately 73% and 13%, respectively, of our total accounts receivable. As of December 31, 2014, Comcast accounted for 80% of our total accounts receivable. No other customers accounted for 10% or more of our total accounts receivable as of December 31, 2015 and 2014. Cash, Cash Equivalents and Investments All liquid instruments with an original maturity at the date of purchase of 90 days or less are classified as cash equivalents. Cash equivalents and short-term investments consist primarily of money market funds, certificates of deposit, commercial paper, corporate and municipal bonds. Our interest income on cash, cash equivalents and investments is recorded monthly and reported as interest income and other in our consolidated statements of operations. Our cash equivalents and short-term investments are classified as available-for-sale, and are reported at fair value with unrealized gains/losses included in accumulated other comprehensive loss within stockholders’ equity on the consolidated balance sheets and in the consolidated statements of comprehensive income (loss). We view our available-for-sale portfolio as available for use in our current operations, and therefore we present our marketable securities as short-term assets. We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our carrying value, the Company’s intent to sell the security and the Company’s belief that it will not be required to sell the security before the recovery of its amortized cost. If an investment’s decline in fair value is deemed to be other-than-temporary, we reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be other-than-temporary, if any, are recorded in operations as incurred. At December 31, 2015, the Company evaluated its unrealized losses on available-for-sale securities and determined them to be temporary. We currently do not intend to sell securities with unrealized losses and we concluded that we will not be required to sell these securities before the recovery of their amortized cost basis. At December 31, 2015 and 2014, the estimated fair value of cash, cash equivalents and investments was $65.7 million and $73.8 million, respectively. The following is a summary of cash, cash equivalents and investments at December 31, 2015 and 2014 (in thousands): For the Year Ended December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 8,486 $ — $ — $ 8,486 Money market fund 19,112 — — 19,112 Certificates of deposit 2,980 — (1 ) 2,979 Commercial paper 996 — — 996 Corporate notes and bonds 31,255 — (83 ) 31,172 U.S. government agency securities 2,996 — (7 ) 2,989 $ 65,825 $ — $ (91 ) $ 65,734 Classified as: Cash and cash equivalents $ 27,598 $ — $ — $ 27,598 Short-term investments 38,227 — (91 ) 38,136 $ 65,825 $ — $ (91 ) $ 65,734 For the Year Ended December 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash $ 9,572 $ — $ — $ 9,572 Money market fund 9,859 — — 9,859 Certificates of deposit 3,600 — (5 ) 3,595 Commercial paper 2,996 — — 2,996 Corporate notes and bonds 45,819 — (48 ) 45,771 U.S. government agency securities 2,000 — — 2,000 $ 73,846 $ — $ (53 ) $ 73,793 Classified as: Cash and cash equivalents $ 23,354 $ — $ — $ 23,354 Short-term investments 50,492 — (53 ) 50,439 $ 73,846 $ — $ (53 ) $ 73,793 The following table summarizes the estimated fair value of our available-for-sale securities classified by the stated maturity date of the security (in thousands): December 31, 2015 2014 Due within one year $ 23,588 $ 41,449 Due within two years 14,548 8,990 $ 38,136 $ 50,439 We determined that the gross unrealized losses on our available-for-sale investments as of December 31, 2015 are temporary in nature. The fair value of our available-for-sale securities at December 31, 2015 and 2014 reflects a net unrealized loss of $91,000 and $53,000, respectively. There were no net realized gains (losses) on available-for-sale securities in the years ended December 31, 2015 and 2014. The cost of securities sold is based on the specific identification method. The following table sets forth the unrealized losses for the Company’s available-for-sale investments as of December 31, 2015 and 2014 (in thousands): As of December 31, 2015 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total In Loss Position Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificate of deposits $ 1,439 $ (1 ) $ 240 $ — $ 1,679 $ (1 ) Corporate notes and bonds 20,949 (24 ) 11,218 (59 ) 32,167 (83 ) U.S. government agency securities — — 2,989 (7 ) 2,989 (7 ) Total $ 22,388 $ (25 ) $ 14,447 $ (66 ) $ 36,835 $ (91 ) As of December 31, 2014 In Loss Position Less Than 12 Months In Loss Position More Than 12 Months Total In Loss Position Description Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Certificate of deposits $ 1,679 $ (1 ) $ 1,196 $ (4 ) $ 2,875 $ (5 ) Corporate notes and bonds 35,364 (29 ) 7,794 (19 ) 43,158 (48 ) Total $ 37,043 $ (30 ) $ 8,990 $ (23 ) $ 46,033 $ (53 ) Property and Equipment Property and equipment are stated at cost, less accumulated depreciation which is determined using the straight-line method over the estimated useful lives of two years for computer equipment and software, three years for furniture and fixtures, and the shorter of the estimated useful lives or the lease term for leasehold improvements. Repairs and maintenance costs are expensed as they are incurred. Goodwill We test goodwill for impairment annually on September 30 and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles - Goodwill and Other. For the quarter ended June 30, 2015, based on various quantitative and qualitative factors which included, among others, the continuing decline in the Company’s market capitalization, the Company determined that sufficient indicators existed warranting a review to determine if the fair value of its single reporting unit had been reduced to below its carrying value. As a result, the Company performed goodwill impairment testing using the required two-step process. The Company determined the fair value of its single reporting unit by using a weighted combination of income-based approach and market-based approach, as this combination was deemed the most indicative of the Company’s fair value in an orderly transaction between market participants. Under the income-based approach, the Company used a discounted cash flow methodology which recognizes that current value is premised on the expected receipt of future economic benefits. Indications of value are developed by discounting projected future net cash flows to their present value at a rate that reflects both the current return requirements of the market and the risks inherent in the specific investment. The discounted cash flow methodology requires significant judgment by management in selecting an appropriate discount rate, terminal growth rate, weighted average cost of capital, and projection of future net cash flows, which are inherently uncertain. The inputs and assumptions used in this test are classified as Level 3 inputs within the fair value hierarchy. Due to these significant judgments, the fair value of the Company’s single reporting unit determined in connection with the goodwill impairment test may not necessarily be indicative of the actual value that would be recognized in a future transaction. Under the market-based approach, the Company considered its market capitalization and estimated control premium which was based on a review of comparative market transactions. The result of the Company’s step one test indicated that the carrying value of the Company’s single reporting unit exceeded its estimated fair value. Accordingly, the Company performed the second step test and concluded that its goodwill was fully impaired and thus recorded a non-cash impairment charge of $14.2 million during the quarter ended June 30, 2015. The goodwill impairment charge was reported as a separate line item in the consolidated statements of operations. The tax benefit associated with the goodwill impairment charge was $1.3 million. The goodwill impairment charge and the associated tax benefit are non-cash in nature and do not affect the Company’s current or future liquidity. Long-Lived Assets We record purchased identifiable intangible assets at fair value. Useful life is estimated as the period over which the identifiable intangible assets are expected to contribute directly or indirectly to the future cash flows of the Company. As we do not believe that we can reliably determine a pattern by which the economic benefits of these identifiable intangible assets will be consumed, management adopted straight-line amortization in accordance with ASC 350. The original cost is amortized on a straight-line basis over the estimated useful life of each identifiable intangible asset. The Company assesses its long-lived assets, which includes property and equipment and identifiable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment - Impairment or Disposal of Long-Lived Assets. Revenue Recognition For all transactions, we recognize revenue only when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred; • Collection is considered probable; and • The fees are fixed or determinable. We consider all arrangements with payment terms longer than 90 days not to be fixed or determinable. If the fee is considered not to be fixed or determinable, revenue is recognized as payment becomes due from the customer provided all other revenue recognition criteria have been met. Services Revenue Services revenue is comprised primarily of fees for technology support services. Our service programs are designed for both the consumer and SMB markets, and include computer and mobile device set-up, security and support, virus and malware removal and wireless network set-up, and automation system onboarding and support. We offer technology services to consumers and SMBs, primarily through our partners (which include communications providers, retailers, technology companies and others) and to a lesser degree directly through our website at www.support.com. We transact with customers via reseller programs, referral programs and direct transactions. In reseller programs, the partner generally executes the financial transactions with the customer and pays a fee to us which we recognize as revenue when the service is delivered. In referral programs, we transact with the customer directly and pay a referral fee to the referring party. Referral fees are generally expensed in the period in which revenues are recognized. In such referral programs, since we are the primary obligor and bear substantially all risks associated with the transaction, we record the gross amount of revenue. In direct transactions, we sell directly to the customer at the retail price. The technology services described above include four types of offerings: • Hourly-Based Services - In connection with the provisions of certain services programs, fees are calculated based on contracted hourly rates with partners. For these programs, we recognize revenue as services are performed, based on billable hours of work delivered by our technology specialists. These services programs also include performance standards, which may result in incentives or penalties, which are recognized as earned or incurred. • Subscriptions - Customers purchase subscriptions or “service plans” under which certain services are provided over a fixed subscription period. Revenues for subscriptions are recognized ratably over the respective subscription periods. • Incident-Based Services - Customers purchase a discrete, one-time service. Revenue recognition occurs at the time of service delivery. Fees paid for services sold but not yet delivered are recorded as deferred revenue and recognized at the time of service delivery. • Service Cards / Gift Cards - Customers purchase a service card or a gift card, which entitles the cardholder to redeem a certain service at a time of their choosing. For these sales, revenue is deferred until the card has been redeemed and the service has been provided. In certain cases, we are paid for services that are sold but not yet delivered. We initially record such balances as deferred revenue, and recognize revenue when the service has been provided or, on the non-subscription portion of these balances, when the likelihood of the service being redeemed by the customer is remote (“services breakage”). Based on our historical redemption patterns for these relationships, we believe that the likelihood of a service being delivered more than 90 days after sale is remote. We therefore recognize non-subscription deferred revenue balances older than 90 days as services revenue. For the years ended December 31, 2015, 2014 and 2013, services breakage revenue accounted for less than 1% of our total revenue. Partners are generally invoiced monthly. Fees from customers via referral programs and direct transactions are generally paid with a credit card at the time of sale. Revenue is recognized net of any applicable sales tax. We generally provide a refund period on services, during which refunds may be granted to customers under certain circumstances, including inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5 and 14 days. For referral programs and direct transactions, the refund period is generally 5 days. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material. Services revenue also includes fees from licensing of our Support.com cloud-based software (Nexus). In such arrangements, customers receive a right to use our Support.com Cloud (Nexus) in their own technology support organizations. We license our cloud-based software using a SaaS model under which customers cannot take possession of the technology and pay us on a per-user basis during the term of the arrangement. In addition, services revenue includes fees from implementation services of our cloud-based software. Currently, revenues from implementation services are recognized ratably over the customer life which is estimated as the term of the arrangement once the Support.com Cloud (Nexus) services are made available to customers. We generally charge for these services on a time and material basis. Software and Other Revenue Software and other revenue is comprised primarily of fees for end-user software products provided through direct customer downloads and through the sale of these end-user software products via partners. Our software is sold to customers as a perpetual license or as a fixed period subscription. We act as the primary obligor and generally control fulfillment, pricing, product requirements, and collection risk and therefore we record the gross amount of revenue. We provide a 30-day money back guarantee for the majority of our end-user software products. For certain end-user software products, we sell perpetual licenses. We provide a limited amount of free technical support to customers. Since the cost of providing this free technical support is insignificant and free product enhancements are minimal and infrequent, we do not defer the recognition of revenue associated with sales of these products. For certain of our end-user software products (principally SUPERAntiSpyware), we sell licenses for a fixed subscription period. We provide regular, significant updates over the subscription period and therefore recognize revenue for these products ratably over the subscription period. Other revenue consists primarily of revenue generated through partners advertising to our customer base in various forms, including toolbar advertising, email marketing, and free trial offers. We recognize other revenue in the period in which our partners notify us that the revenue has been earned. Research and Development Research and development expenditures are charged to operations as they are incurred. Software Development Costs Based on our product development process, technological feasibility is established on the completion of a working model. The Company determined that technological feasibility is reached shortly before the product is ready for general release and therefore development costs incurred have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period in which they were incurred in the consolidated statements of operations. Purchased Technology for Internal Use We capitalize costs related to software that we license and incorporate into our product and service offerings or develop for internal use. In July 2009, we acquired purchased technology for $350,000 and recorded amortization expense related to this technology of $62,000 in 2013. This technology was fully amortized at December 31, 2013. Advertising Costs Advertising costs are recorded as sales and marketing expense in the period in which they are incurred. Advertising expense was $1.2 million, $2.2 million, and $9.2 million for the years ended December 31, 2015, 2014, and 2013, respectively. Earnings (Loss) Per Share Basic earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is computed using our net income (loss) and the weighted average number of common shares outstanding, including the effect of the potential issuance of common stock such as stock issuable pursuant to the exercise of stock options and vesting of restricted stock units (“RSUs”) using the treasury stock method when dilutive. We excluded outstanding weighted average stock options of 4.2 million, 4.0 million and 1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively, from the calculation of diluted earnings per common share because the exercise prices of these stock options were greater than or equal to the average market value of the common stock. These stock options could be included in the calculation in the future if the average market value of the common stock increases and is greater than the exercise price of these stock options. Since we reported a net loss for the years ended December 31, 2015 and 2014, 86,000 and 150,000 outstanding options and RSUs were also excluded from the computation of diluted loss per share since their effect would have been anti-dilutive. Pursuant to approval by the Company's Compensation Committee, the Company issued 475,000 stock options to certain key executives on February 09, 2016. These stock options were not included in the computation of the basic and diluted earnings (loss) per share for the year ended December 31, 2015 because they were not outstanding during this period. The following table sets forth the computation of basic and diluted net earnings (loss) per share (in thousands, except per share amounts): Year Ended December 31, 2015 2014 2013 Net income (loss) (27,041 ) $ (3,483 ) $ 10,383 Basic: Weighted-average shares of common stock outstanding 54,548 53,834 51,553 Shares used in computing basic net earnings (loss) per share 54,548 53,834 51,553 Basic net earnings (loss) per share $ (0.50 ) $ (0.06 ) $ 0.20 Diluted: Weighted-average shares of common stock outstanding 54,548 53,834 51,553 Add: Common equivalent shares outstanding — — 2,272 Shares used in computing diluted net earnings (loss) per share 54,548 53,834 53,825 Diluted net earnings (loss) per share $ (0.50 ) $ (0.06 ) $ 0.19 Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, which relate entirely to accumulated foreign currency translation losses associated with our foreign subsidiaries and unrealized losses on investments, consisted of the following (in thousands): Foreign Currency Translation Losses Unrealized Losses on Investments Total Balance as of December 31, 2013 (1,858 ) (16 ) (1,874 ) Current-period other comprehensive loss (117 ) (37 ) (154 ) Balance as of December 31, 2014 $ (1,975 ) $ (53 ) $ (2,028 ) Current-period other comprehensive loss (236 ) (38 ) (274 ) Balance as of December 31, 2015 $ (2,211 ) $ (91 ) $ (2,302 ) Realized gains/losses on investments reclassified from accumulated other comprehensive loss are reported as interest income and other, net in our consolidated statements of operations. The amounts noted in the consolidated statements of comprehensive loss are shown before taking into account the related income tax impact. The income tax effect allocated to each component of other comprehensive income for each of the periods presented is not significant. Stock-Based Compensation We apply the provisions of ASC 718, Compensation - Stock Compensation, Determining Fair Value of Share-Based Payments Valuation and Attribution Method: Stock-based compensation expense for service-based stock options and employee stock purchase plan (“ESPP”) is estimated at the date of grant based on the fair value of awards using the Black-Scholes-Merton Monte-Carlo Risk-free Interest Rate: We base our risk-free interest rate on the yield currently available on U.S. Treasury zero coupon issues for the expected term of the stock options. Expected Term: Our expected term represents the period that our stock options are expected to be outstanding and is determined based on historical experience of similar stock options considering the contractual terms of the stock options, vesting schedules and expectations of future employee behavior. Expected Volatility: Our expected volatility represents the amount by which the stock price is expected to fluctuate throughout the period that the stock option is outstanding. The expected volatility is based on the historical volatility of the Company’s stock. Expected Dividend: We use a dividend yield of zero, as we have never paid cash dividends and do not expect to pay dividends in the future. The fair value of our stock-based awards was estimated using the following weighted average assumptions for the years ended December 31, 2015, 2014, and 2013: Stock Option Plan Employee Stock Purchase Plan 2015 2014 2013 2015 2014 2013 Risk-free interest rate 1.2 % 1.6 % 0.9 % 0.2 % 0.1 % 0.1 % Expected term (in years) 3.8 5.1 3.7 0.5 0.5 0.5 Volatility 53.9 % 57.3 % 57.5 % 41.2 % 49.1 % 48.4 % Expected dividend 0 % 0 % 0 % 0 % 0 % 0 % Weighted average grant-date fair value $ 0.68 $ 1.17 $ 2.02 $ 0.34 $ 0.64 $ 1.24 We recorded the following stock-based compensation expense for the fiscal years ended December 31, 2015, 2014, and 2013 (in thousands): For the Year Ended December 31, 2015 2014 2013 Stock-based compensation expense related to grants of: Stock options $ 989 $ 1,110 $ 1,642 ESPP 65 110 106 RSU 1,860 1,654 1,733 $ 2,914 2,874 $ 3,481 Stock-based compensation expense recognized in: Cost of service $ 234 $ 267 $ 332 Cost of software and others 10 14 12 Research and development 589 479 766 Sales and marketing 381 413 412 General and administrative 1,700 1,701 1,959 $ 2,914 $ 2,874 $ 3,481 Cash proceeds from the issuance of common stock net of repurchase of common stock were $26,000, $1.1 million, and $6.9 million for the years ended December 31, 2015, 2014, and 2013, respectively. No income tax benefit was realized from stock option exercises during the year ended December 31, 2015. An income tax benefit (charge) of ($8,000) and $34,000 was realized from stock option exercises during the years ended December 31, 2014 and 2013, respectively. In accordance with ASC 718, we present excess tax benefits from the exercise of stock options, if any, as net cash generated in financing activities. Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets, if it is more likely than not, that such assets will not be realized. Warranties and Indemnifications We generally provide a refund period on sales, during which refunds may be granted to consumers under certain circumstances, including our inability to resolve certain support issues. For our partnerships, the refund period varies by partner, but is generally between 5-14 days. For referral programs and direct transactions, the refund period is generally 5 days. For the majority of our end-user software products, we provide a 30-day money back guarantee. For all channels, we recognize revenue net of refunds and cancellations during the period. Refunds and cancellations have not been material to date. We generally agree to indemnify our customers against legal claims that our end-user software products infringe certain third-party intellectual property rights. As of December 31, 2015, we were not required to make any payment resulting from infringement claims asserted against our customers and have not recorded any related accruals. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In accordance with ASC 820, the following table represents our fair value hierarchy for our financial assets (cash equivalents and investments) measured at fair value on a recurring basis as of December 31, 2015 and 2014 (in thousands): As of December 31, 2015 Level |
