| Business Combinations and Other Investments | 2. Business Combinations and Other Investments 2017 Business Combinations Acquisition of DeVero On July 17, 2017, Netsmart (as defined below) completed the acquisition of DeVero, Inc. (“DeVero”), a healthcare technology company that develops electronic medical record solutions for home healthcare and hospice, for an aggregate purchase price of $50.5 million in cash. The purchase price was funded through incremental borrowings under Netsmart’s credit facilities. The allocation of the aggregate consideration is as follows: $32.4 million of goodwill; $19.0 million of intangible assets related to customer relationships; $6.9 million of intangible assets related to technology; $0.5 million of intangible assets related to product trademarks; $2.0 million of cash; other assets of $0.8 million; accounts payable and accrued expenses of $2.6 million; deferred revenue of $0.9 million; and deferred income taxes of $7.6 million. This allocation is preliminary and subject to changes, which could be significant, as appraisals of tangible and intangible assets are finalized, and additional information becomes available. The acquired intangible assets related to technology and customer relationships will be amortized over their estimated useful lives of 7-20 years using a method that approximates the pattern of economic benefits to be gained by the intangible assets. The goodwill is not deductible for tax purposes. We incurred $0.4 million of acquisition costs which are included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2017. The results of operations of DeVero were not material to our consolidated results of operations for the year ended December 31, 2017. Acquisition of the Patient/Provider Engagement Solutions Business from NantHealth, Inc. On August 25, 2017, the Company completed the acquisition of substantially all of the assets relating to the provider/patient engagement solutions business of NantHealth, Inc. (“NantHealth”). The consideration for the transaction included the 15,000,000 shares of common stock of NantHealth that had been held by the Company as available for sale securities and which had a fair value of $42.8 million at the time of the transaction. The transaction also includes adjustments for working capital and deferred revenue obligations, as well as a modification of the commercial agreement between the parties. Total consideration for the transaction was as follows:
(In thousands)
Cash
$
1,742
Add: Final net working capital surplus
906
Add: NantHealth common stock
42,750
Less: Value assigned to modification of existing commercial agreement with NantHealth
(22,900
)
Total consideration for NantHealth provider/patient solutions business
$
22,498
The allocation of the fair value of the consideration transferred as of the acquisition date of August 25, 2017 is shown in the table below. This allocation is preliminary and subject to changes, which could be significant, as appraisals of tangible and intangible assets are finalized, and additional information becomes available. The goodwill is expected to be deductible for tax purposes.
(In thousands)
Cash and cash equivalents
$
21
Accounts receivable, net
2,069
Prepaid expenses and other current assets
1,735
Fixed assets
3,401
Intangible assets
12,442
Goodwill
13,350
Other assets
204
Accounts payable and accrued expenses
(1,519
)
Deferred revenue
(9,205
)
Net assets acquired
$
22,498
The following table summarizes the estimated fair values of the most significant identifiable intangible assets and their estimated useful lives:
Useful Life
Fair Value
Description
(In years)
(In thousands)
Customer Relationships
19
$
9,200
Technology
5
3,000
Tradenames
5
200
$
12,400
Acquisition of the Enterprise Information Solutions Business from McKesson Corporation On October 2, 2017, Allscripts Healthcare, LLC, a wholly-owned subsidiary of the Company (“Healthcare LLC”), completed the transactions contemplated by a purchase agreement (the “Purchase Agreement”) with McKesson Corporation (“McKesson”), pursuant to which Healthcare LLC purchased McKesson’s Enterprise Information Solutions Business division (the “EIS Business”), which provides certain software solutions and services to hospitals and health systems, by acquiring all of the outstanding equity interests of two indirect, wholly-owned subsidiaries of McKesson. The acquisition of the EIS Business was based on a total enterprise value of $185 million as shown in the table below. The net consideration paid was funded through incremental borrowings under our debt facilities.
(In thousands)
Aggregate purchase price
$
185,000
Add: Final net working capital surplus
1,331
Less: Assumption of restructuring indebtedness
(16,834
)
Net consideration paid in cash for the EIS Business
$
169,497
The EIS Business acquisition is being accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, Business Combinations We have performed a preliminary valuation analysis as of the acquisition date of October 2, 2017 of the fair value of the EIS Business’ assets and liabilities. Our estimates and assumptions are subject to change, which could be significant, as appraisals of intangible assets are finalized, and as additional information becomes available during the measurement period (up to one year from the acquisition date). The goodwill is expected to be deductible for tax purposes. Among the factors that contributed to a purchase price resulting in the recognition of goodwill were the expected growth and synergies that we believe will result from the integration of the EIS business with our software solutions and services to hospitals and health systems. The following table summarizes the preliminary allocation of the purchase consideration as of the acquisition date:
(In thousands)
Cash and cash equivalents
$
1,068
Accounts receivable, net
65,632
Prepaid expenses and other current assets
19,633
Fixed assets
9,808
Intangible assets
136,200
Goodwill
29,227
Other assets
1,601
Accounts payable and accrued expenses
(32,497
)
Deferred revenue
(58,490
)
Other liabilities
(2,685
)
Net assets acquired
$
169,497
The acquired intangible assets are being amortized over their useful lives, using a method that approximates the pattern of economic benefits to be gained by the intangible asset and consist of the following amounts for each class of acquired intangible asset:
Useful Life
Fair Value
Description
(In years)
(In thousands)
Customer Relationships
10
$
75,200
Technology
7
57,200
Tradenames
7
3,800
$
136,200
Acquisition costs related to the EIS Business acquisition totaled $4.8 million and are included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2017. Asset Purchase Agreement with Third Party On March 31, 2017, Netsmart entered into an Asset Purchase Agreement with a third party, for an aggregate cash consideration of $4.0 million, to acquire intellectual property, certain contractual relationships and certain associates. This transaction has been accounted for as a business combination. The Asset Purchase Agreement provides for contingent consideration to be paid to the third party based on the number of customers of the third party that migrate to Netsmart’s electronic health record product. The value of the contingent consideration has been estimated to be $0.5 million at March 31, 2017. Netsmart accrued $0.6 million at December 31, 2017 within other liabilities. This amount represents the discounted fair value of the contingent consideration. This transaction resulted in the recognition of goodwill of $4.4 million. The goodwill is expected to be deductible for tax purposes. We have finalized the allocation of the fair value of the consideration transferred as of December 31, 2017. 2016 Business Combinations Formation of Joint Business Entity and Acquisition of Netsmart, Inc. On March 20, 2016, we entered into a Contribution and Investment Agreement (the “Contribution Agreement”) with GI Netsmart Holdings LLC, a Delaware limited liability company (“GI Partners”) to form a joint business entity, Nathan Holding LLC, a Delaware limited liability company (“Nathan”). The formation of Nathan was completed on April 19, 2016. As a result, pursuant to, and subject to the terms and conditions of, the Contribution Agreement, Nathan issued to Allscripts Class A Common Units in exchange for Allscripts contributing its Homecare TM The Nathan operating agreement provides that the Class A Preferred Units entitle the owners at any time and from time to time following the later of (A) the earlier of (I) the fifth anniversary of the effective date and (II) a change in control of Allscripts, and (B) the earlier of (I) the payment in full of the obligations under the Netsmart Credit Agreements and the termination of any commitments thereunder or (II) with respect to any proposed redemption, such earlier date for such redemption consented to in writing by the required lenders under each of the credit facilities under which obligations remain unpaid or under which commitments continue, to redeem all or any portion of their Class A Preferred Units for cash at a price per Unit equal to the Class A Preferred liquidation preference for each such Class A Preferred Unit as of the date of such redemption. The liquidation preference is equal to the greater of (i) a return of the original issue price plus a preferred return (accruing on a daily basis at the rate of 11% per annum and compounding annually on the last day of each calendar year) or (ii) the as-converted value of Class A Common Units in Nathan. The consolidated statement of operations for the year ended December 31, 2016 gives effect to the accretion of the 11% redemption preference as part of the calculation of net income (loss) attributable to Allscripts stockholders. Also on April 19, 2016, Nathan acquired Netsmart, Inc., a Delaware corporation, pursuant to the Agreement and Plan of Merger, dated as of March 20, 2016 (the “Merger Agreement”), by and among Nathan Intermediate LLC, a Delaware limited liability company and a wholly-owned subsidiary of Nathan (“Intermediate”), Nathan Merger Co., a Delaware corporation and a wholly-owned subsidiary of Intermediate (“Merger Sub”), Netsmart, Inc. and Genstar Capital Partners V, L.P., as the equityholders’ representative. Pursuant to the Merger Agreement, on April 19, 2016, Merger Sub was merged with and into Netsmart, Inc., with Netsmart, Inc. surviving as a wholly-owned subsidiary of Intermediate (the “Merger”). As a result of these transactions (the “Netsmart Transaction” or “Netsmart Acquisition”), the establishment of Nathan combined the Allscripts Homecare TM At the effective time of the Merger, shares of Netsmart, Inc.’s common stock issued and outstanding immediately prior to the effective time were converted into the right to receive a pro rata share of $950 million, reduced by net debt and subject to working capital and other adjustments (the “Purchase Price”). Each vested outstanding option to acquire shares of Netsmart, Inc.’s common stock became entitled to receive a pro rata share of the Purchase Price, less applicable exercise prices of the options. Certain holders of shares of Netsmart, Inc.’s common stock, who were members of Netsmart, Inc.’s management, exchanged a portion of such shares for equity interests in Nathan, in lieu of receiving their pro rata share of the Purchase Price, and certain holders of options to purchase shares of Netsmart, Inc.’s common stock, who were also members of Netsmart, Inc.’s management, invested a portion of such holder’s proceeds from the Merger in equity interests in Nathan (collectively, the “Rollover”). After the completion of the Merger and the Rollover, Allscripts owned 49.1%, GI Partners owned 47.2% and Netsmart’s management owned 3.7% of the outstanding equity interests in Netsmart, in each case on an as-converted basis. As part of the Netsmart Transaction, we deposited $15 million in an escrow account to be used by Netsmart to facilitate the integration of our Homecare TM The acquisition of Netsmart, Inc. by Nathan was completed for an aggregate consideration of $937 million. The consideration was funded by the sources of funds as described in the table below. The new Netsmart term loans are non-recourse to Allscripts and its wholly-owned subsidiaries. A portion of the debt proceeds were used to extinguish Netsmart, Inc.’s existing debt of $325 million, including accrued interest and fees of $2 million.
(In thousands)
Cash contribution for redeemable convertible non-controlling interest in Netsmart - GI Partners
$
333,606
Exchange of Netsmart, Inc.'s common stock for redeemable convertible non-controlling interest in Netsmart - Netsmart, Inc. management
25,543
Cash contribution from borrowings under revolver in exchange for common stock in Netsmart - Allscripts
43,782
Net borrowings under new term loans - Netsmart
534,135
Total consideration for Netsmart, Inc.
$
937,066
Under the acquisition method of accounting, the fair value of consideration transferred for Netsmart, Inc. was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date with the remaining unallocated amount recorded as goodwill. During the year ended December 31, 2016, we recorded several measurement period adjustments, which included $3.6 million decrease in accounts receivable, net, $0.3 million increase in prepaid expenses and other assets, $0.3 million decrease in other assets, $0.7 million increase in deferred taxes, net, $0.6 million decrease in other liabilities and $3.7 million increase in the residual allocation to goodwill. The final allocation of the fair value of the consideration transferred, including measurement period adjustments through December 31, 2017, is shown in the table below.
(In thousands)
Cash and cash equivalents
$
5,982
Accounts receivable, net
50,472
Prepaid expenses and other current assets
9,667
Fixed assets
26,829
Intangible assets
409,500
Goodwill
619,283
Other assets
6,540
Accounts payable
(14,151
)
Accrued expenses
(9,595
)
Deferred revenue
(18,843
)
Capital lease obligations
(17,833
)
Deferred taxes, net
(127,729
)
Other liabilities
(3,056
)
Net assets acquired
$
937,066
Allscripts’ contribution of its Homecare TM TM As noted above, the formation of Netsmart resulted in the merger of our Homecare TM Homecare TM business The acquired intangible assets are being amortized over their useful lives, using a method that approximates the pattern of economic benefits to be gained by the intangible asset and consist of the following amounts for each class of acquired intangible asset:
Useful Life
Fair Value
Description
(In years)
(In thousands)
Technology
10
$
144,000
Corporate Trademark
indefinite
27,000
Product Trademarks
10
8,500
Customer Relationships
12-20
230,000
$
409,500
Acquisition costs related to the Netsmart Acquisition totaled $4.1 million and are included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2016. No acquisition costs related to the Netsmart Acquisition were recognized during the year ended December 31, 2017. Acquisition of HealthMEDX On October 27, 2016, Netsmart completed the acquisition of HealthMEDX, LLC, a Delaware limited liability company (“HealthMEDX”), for an aggregate consideration of $39.2 million. HealthMEDX is a provider of electronic medical record solutions for long-term and post-acute care including continuing care retirement communities, assisted living, independent living, skilled nursing and home care providers. The aggregate consideration was funded by the sources of funds as shown in the table below and includes a contingent consideration payable to the HealthMEDX unitholders in the first half of 2018 of up to $3.5 million based on HealthMEDX achieving certain recurring revenue milestones in 2017. The fair value of such contingent consideration shown in the table below represents the maximum pay-out amount discounted at the weighted-average cost of capital rate used as part of the HealthMEDX valuation. The outstanding contingent consideration of $0.9 million is included in accrued expenses in the accompanying consolidated balance sheet as of December 31, 2017. The decrease in value of the contingent consideration was the result of a revised estimate of the liability due. The portion of the aggregate consideration that was paid in cash at closing was funded with borrowings under the Netsmart Credit Agreements.
(In thousands)
Incremental term loan - Netsmart
$
36,195
Contingent consideration payable to former HealthMEDX owners
2,888
Deferred cash consideration
100
Total consideration for HealthMEDX, LLC
$
39,183
The final allocation of the fair value of the consideration transferred is shown in the table below:
(In thousands)
Cash and cash equivalents
$
489
Accounts receivable, net
3,109
Prepaid expenses and other current assets
773
Fixed assets
603
Intangible assets
20,940
Goodwill
18,568
Other assets
45
Accounts payable
(768
)
Accrued expenses
(1,427
)
Deferred revenue
(1,838
)
Current maturities of capital lease obligations
(808
)
Long-term maturities of debt and capital lease obligations
(503
)
Net assets acquired
$
39,183
We believe that the HealthMEDX acquisition will complement the existing Homecare TM business and result in higher future revenue and operating synergies. These factors The following table summarizes the estimated fair values of HealthMEDX’s identifiable intangible assets and their estimated useful lives:
Useful Life
Fair Value
Description
(In years)
(In thousands)
Technology
10
$
11,410
Product Trademarks
10
680
Customer Relationships
15
8,850
$
20,940
Supplemental Information The supplemental pro forma results below were calculated after applying our accounting policies and adjusting the results of the EIS Business to reflect (i) the additional amortization that would have been charged resulting from the fair value adjustments to intangible assets and (ii) the additional interest expense associated with Allscripts’ borrowings under its revolving facility, and (iii) the additional amortization of the estimated adjustment to decrease the assumed deferred revenue obligations to fair value that would have been charged assuming the acquisition occurred on January 1, 2016, together with the consequential tax effects. Supplemental pro forma results for the year ended December 31, 2017 were also adjusted to exclude acquisition-related and transaction costs incurred during this period. Supplemental pro forma results for the year ended December 31, 2016 were adjusted to include these items. We also acquired the provider/patient engagement solutions business of NantHealth, Inc. (the “NantHealth business”) on August 25, 2017, Netsmart, Inc. (“Netsmart”) on April 19, 2016 and HealthMEDX, LLC (“HealthMEDX”) on October 27, 2016. The pro forma results below give effect to (i) the NantHealth business acquisition as if it had occurred on January 1, 2016 and (ii) the Netsmart and HealthMEDX acquisitions as if they had occurred on January 1, 2015, by applying pro forma adjustments attributable to these acquisitions to our historical financial results. The supplemental pro forma results below were calculated after applying our accounting policies and adjusting the results of Netsmart and HealthMEDX to reflect (i) the additional depreciation and amortization that would have been charged resulting from the fair value adjustments to property, plant and equipment and intangible assets, (ii) the additional interest expense associated with Netsmart’s borrowings under the new term loans, and (iii) the additional amortization of the estimated adjustment to decrease the assumed deferred revenue obligations to fair value that would have been charged assuming both acquisitions occurred on January 1, 2015, together with the consequential tax effects. Supplemental pro forma results for the year ended December 31, 2016 were also adjusted to exclude acquisition-related and transaction costs incurred during this period. The supplemental pro forma results for the year ended December 31, 2016 exclude expenses incurred by Netsmart immediately prior to the Netsmart Transaction related to the accelerated pay-out of outstanding equity awards and the payment of seller costs. The effects of transactions between Allscripts and Netsmart during the periods presented have been eliminated in the supplemental pro forma data. The revenue and earnings of Netsmart, since April 19, 2016, and HealthMEDX, since October 27, 2016, are included in our consolidated statement of operations for the years ended December 31, 2016 and 2017, and the supplemental pro forma revenue and net loss of the combined entity is presented as if the acquisitions of both entities had occurred on January 1, 2015. The revenue and earnings of the NantHealth provider and patient engagement solutions business, since August 25, 2017, and the EIS Business, since October 2, 2017, are included in our consolidated statement of operations for the year ended December 31, 2017 and the supplemental pro forma revenue and net loss of the combined entity is presented as if the acquisitions of both entities had occurred on January 1, 2016.
(Unaudited) Year Ended December 31,
(In thousands, except per share amounts)
2017
2016
Actual from Netsmart since acquisition date of April 19, 2016:
Revenue
$
0
$
173,361
Net loss
$
0
$
(27,709
)
Actual from HealthMEDX since acquisition date of October 27, 2016:
Revenue
$
0
$
4,725
Net income
$
0
$
602
Actual from NantHealth since acquisition date of August 25, 2017:
Revenue
$
6,268
$
0
Net loss
$
(4,393
)
$
0
Actual from EIS Business since acquisition date of October 2, 2017: (1)
Revenue
$
77,046
$
0
Net loss
$
(15,160
)
$
0
Supplemental pro forma data for combined entity:
Revenue
$
2,113,761
$
2,002,253
Net loss attributable to Allscripts Healthcare Solutions, Inc. stockholders
$
(192,653
)
$
(477,744
)
Loss per share, basic and diluted
$
(1.07
)
$
(2.57
) ______________________
(1)
Revenue and Net loss from the EIS Business excludes revenue and income from discontinued operations. Refer to Note 13, “Discontinued Operations”. Other Acquisitions and Investments On December 2, 2016, we acquired a 100% interest in a third party based in Australia for an aggregate consideration of $5.1 million, net of cash acquired. The acquisition will broaden our clinical solutions portfolio. The financial results of this third party were consolidated with our financial results starting on the date of the transaction. The allocation of the estimated fair value of the aggregate consideration is as related to customer relationships, $0.6 million of intangible assets related to technology goodwill is not deductible for tax purposes. The acquired intangible assets relating to technology and customer relationships will be amortized on a straight-line basis over estimated lives of 8 years. The aggregate consideration included a contingent consideration payable to the third-party owners of up to $2.5 million based on the achievement of certain profitability targets by 2018 and 2019. The fair value of $2.0 million accrued at December 31, 2016 was calculated based on probability-weighted simulations of potential target achievements. All amounts are based on the exchange rate between the United States dollar and the Australian dollar as of December 31, 2016. The results of operations of this third party were not material to our consolidated results of operations for the year ended December 31, 2016. On October 14, 2016, we acquired a 100% interest in a third party for an aggregate consideration $24.0 million, net of cash acquired. The acquisition will broaden our population health solutions portfolio. The financial results of this third party were consolidated with our financial results starting on the date of the transaction. The allocation of the aggregate consideration is as follows: $16.2 million of goodwill; $11.5 million of intangibles is not deductible for tax purposes. The acquired intangible assets relating to technology and customer relationships will be amortized on a straight-line basis over estimated lives of 8 years. The results of operations of this third party were not material to our consolidated results of operations for the year ended December 31, 2016. On September 8, 2016, we acquired a 51% interest in a third party for $29.7 million, net of cash acquired. This acquisition broadens our financial analytics solutions portfolio. The financial results of this third party were consolidated with our financial results starting on the date of the transaction and were not material to our consolidated results of operations for the year ended December 31, 2016. The allocation of the fair value of the consideration transferred is as follows: $46.2 million in goodwill; $8.3 million intangible assets related to customer relationships, $10.3 million of intangible assets related to technology; $1.6 million related to tradename; $5.9 million of accounts receivable and other current assets; $0.6 million of deferred tax assets; $1.5 million of fixed assets; $6.0 million of accounts payable, deferred revenue and accruals; $8.5 million of deferred tax liabilities; $0.8 million of other long-term liabilities, and $29.4 million of non-controlling interest. The value of the non-controlling interest was based on its proportionate share of the implied total enterprise value of the third party at the time of the transaction. The goodwill is not deductible for tax purposes. The acquired intangible assets relating to technology, customer relationships and tradename will be amortized on a straight-line basis over estimated lives of 10 years, 13 years and 10 years, respectively. During the three months ended December 31, 2016, we recorded several measurement period adjustments, which included $1.2 million decrease in the value of customer relationship intangibles, $0.2 million decrease in deferred tax liability and $1.0 million increase in the residual allocation to goodwill. As part of this acquisition, Allscripts also obtained a call option to purchase all, but not less than all, of the remaining 49% equity share of the third party after the second and third anniversaries of the transaction date at pre-defined future enterprise values of the third party. Additionally, as part of this acquisition, the minority owners of the third party were granted a call option to repurchase the 51% equity share owned by Allscripts at the same pre-defined future enterprise value applicable to Allscripts call option for a period of 9 months after the third anniversary of the transaction date. Such call option can only be exercised in the event that Allscripts chooses not to exercise its call option after the third anniversary of the transaction date. On April 17, 2015, we acquired a majority interest in a third party for $11.1 million and provided a loan to the third party of $9.3 million to refinance its outstanding indebtedness. The financial results of this third party were consolidated with our financial results starting on the date of the transaction, with a proportionate share allocated to non-controlling interest. The allocations of the estimated fair value of the net assets of the third party to goodwill, intangibles and non-controlling interest were $22.3 million, $4.3 million and $11.0 million, respectively. The value of the non-controlling interest was based on its proportionate share of the implied total enterprise value of the third party at the time of the transaction. The goodwill is not deductible for tax purposes. The results of operations of this third party were not material to our consolidated results of operations for the year ended December 31, 2015. The following table summarizes our other equity investments which are included in other assets in the accompanying consolidated balance sheets:
Number of
Investees
Original
Carrying Value at
(In thousands, except # of investees)
at December 31, 2017
Investment
December 31, 2017
December 31, 2016
Equity method investments (1)
3
$
1,658
$
3,258
$
2,436
Cost method investments
7
32,784
26,755
26,041
Total equity investments
10
$
34,442
$
30,013
$
28,477
(1)
Allscripts share of the earnings of our equity method investees is reported based on a one quarter lag. During 2016, we acquired a $1.0 million non-marketable convertible note of a third party with which we have an existing license and distribution agreement. This investment is accounted for under the cost method. The carrying value of the convertible note was $1.0 million and was included in other assets in the accompanying consolidated balance sheets as of December 31, 2017 and December 31, 2016. During 2017, we acquired a $2.6 million non-marketable convertible note of a third party with which we have an existing investment accounted for under the equity method. The carrying value of the convertible note was $2.6 million and was included in other assets in the accompanying consolidated balance sheet as of December 31, 2017. During 2016, we also acquired certain non-marketable equity securities of two third parties and entered into new commercial agreements with each of those third parties to license and distribute their products and services, for a total consideration of $10.2 million. Both of these equity investments are accounted for under the cost method. The carrying value of these investments was $10.2 million and is included in other assets in the accompanying consolidated balance sheets as of December 31, 2017 and December 31, 2016. During 2017, we acquired certain non-marketable equity securities of two third parties and entered into new commercial agreements with one of these third parties to license and distribute their products and services, for a total consideration of $2.8 million. Both of these investments are accounted for under the cost method. The carrying value of these investments was $2.8 million and is included in other assets in the accompanying consolidated balance sheet as of December 31, 2017. As of December 31, 2017, it is not practicable to estimate the fair value of our equity investments primarily because of their illiquidity and restricted marketability. The factors we considered in trying to determine fair value include, but are not limited to, available financial information, the issuer’s ability to meet its current obligations and the issuer’s subsequent or planned raises of capital. Impairment of and Losses on Long-term Investments Each quarter, management performs an assessment of each of our investments on an individual basis to determine if any declines in fair value are other-than-temporary. Based on management's assessment , the Company determined that the decline in fair value of our available for sale marketable securities was other-than-temporary based on a number of factors, including, but not limited to, uncertainty regarding our intent to hold these investments for a period of time that would be sufficient to recover our cost basis in the event of a market recovery, the fact that the fair value of each investment had continued to decline below cost over the period held, and the Company's uncertainty around the near-term prospects for certain of the investments. The cost basis of these marketable securities prior to recognizing the impairment charges was approximately $205.6 million. The Company determined the fair value of these securities based on Level 1 inputs. The aggregate carrying value of this equity investment prior to recognizing the impairment charge was $2.1 million. |
