| Recent Acquisitions | Recent Acquisitions During the year ended December 31, 2014, the Company completed the acquisitions of Cetera, Summit, J.P. Turner, Hatteras, First Allied, ICH, StratCap, Trupoly and a controlling interest in Docupace and during the first quarter of 2015, the Company completed the acquisitions of VSR and Girard (collectively, the “recent acquisitions”). The recent acquisitions were made in order for the Company to diversify its revenue stream. The resulting goodwill associated with the recent acquisitions consists of synergies related to higher strategic partner revenues as well as expense synergies associated with back office management, technology efficiencies, savings from the renegotiation of the Company’s clearing contracts, the elimination of duplicative public company expenses and other factors. All of the recent acquisitions have been accounted for using the purchase method of accounting except for the First Allied acquisition. The First Allied acquisition, which closed on June 30, 2014, was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings at the time of the acquisition of First Allied by RCAP Holdings. The Company’s financial statements as of and for the three and nine months ended September 30, 2014 have been prepared to reflect the financial position and results of operations of First Allied as if the Company had acquired it on September 25, 2013, the date that First Allied was acquired by RCAP Holdings. The Company’s results of operations only include the results of operations of Cetera, Summit, J.P. Turner, Hatteras, ICH, StratCap, Trupoly, Docupace, VSR and Girard beginning on the date of each respective acquisition. As a result of a sustained decline in the Company’s market capitalization and reductions in the expectations of future growth and profitability of its reporting units, the Company determined that it was appropriate to test its goodwill and intangible assets for impairment as of June 30, 2015, which resulted in impairment charges for StratCap and J.P. Turner’s goodwill and intangible assets. Again during the third quarter of 2015, the Company sustained an additional significant decline in the Company’s market capitalization and additional reductions in the expectations of future growth and profitability for certain reporting units. The Company determined that it would be appropriate to test its goodwill and intangible assets for impairment as of September 30, 2015 for each of its reporting units. Based on the testing performed, the Company incurred additional impairment charges for each of its reporting units. See Note 8 for more information. Details of each recent acquisition are as follows: Cetera Financial Holdings . On April 29, 2014, the Company completed the acquisition of Cetera. The purchase price was $1.15 billion (subject to certain adjustments), and the Company paid $1.13 billion in cash after adjustments. Cetera is a financial services holding company formed in 2010 that provides independent broker-dealer services and investment advisory services through four distinct independent broker-dealer platforms: Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC and Cetera Financial Specialists LLC. The acquisition, including related costs, was financed with a $575.0 million senior secured first lien term loan, a $150.0 million senior secured second lien term loan (together, with a $25.0 million senior secured first lien revolving credit facility, the “Bank Facilities”), the issuance of $120.0 million (aggregate principal amount) of 5.0% Senior Convertible Notes due 2021 (the “convertible notes”) and $270.0 million (aggregate stated liquidation value) of 7.0% Series A Convertible Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”), as described in further detail in Notes 9 and 11 , and cash on hand. The assignment of the total consideration for the Cetera acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 241,641 Cash and segregated securities 7,999 Trading securities 741 Receivables 49,443 Property and equipment 17,735 Prepaid expenses 15,083 Deferred compensation plan investments 76,010 Notes receivable 38,805 Other assets 37,096 Accounts payable (94,074 ) Accrued expenses (32,421 ) Other liabilities (112,977 ) Deferred compensation plan accrued liabilities (75,294 ) Total fair value excluding goodwill and intangible assets 169,787 Goodwill 292,165 Intangible assets 944,542 Deferred tax liability (273,752 ) Total consideration $ 1,132,742 As of September 30, 2015 , approximately $7.7 million of the goodwill from Cetera’s historic pre-acquisition goodwill is deductible for income tax purposes. The total Cetera consideration consisted of the following: ($ in thousands) Contractual purchase price $ 1,150,000 Purchase price adjustments 17,258 Total consideration $ 1,132,742 The Company’s supplemental pro forma results of operations for Cetera for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 919.3 Loss before taxes (30.5 ) The supplemental pro forma results of operations for the nine months ended September 30, 2014 include adjustments which reflect a full nine months of amortization of intangible assets in connection with the closing of the acquisition on April 29, 2014. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the nine months ended September 30, 2014 , the Company adjusted the pro forma results to exclude acquisition-related expenses of $24.1 million based on the assumption that this acquisition was completed on January 1, 2013. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. Summit Financial Services Group . On June 11, 2014, the Company completed the acquisition of Summit. Summit was a publicly traded company that had financial advisors providing securities brokerage and investment retail advice in the United States with its common stock listed on the OTC Markets Group, Inc. under the symbol “SFNS.” Pursuant to the merger agreement, each share of Summit common stock issued and outstanding immediately prior to the effective time of the merger was converted into the right to receive $1.588 in merger consideration, which consisted of cash and Class A common stock. Summit shareholders who received merger consideration were also entitled to receive the pro rata portion of certain tax refunds generated after the closing of the merger as a result of certain net operating losses incurred by Summit in 2014 and which were not acquired by the Company pursuant to the merger agreement. The aggregate amount of these refunds was $2.5 million , or approximately $0.06 per share of Summit common stock, which was paid (without interest) on June 29, 2015. As consideration in the merger, the Company issued 498,884 shares of Class A common stock pursuant to a registration statement on Form S-4 and paid consideration in cash of $38.6 million , which does not include cash distributed by Summit to its shareholders. The aggregate cash consideration paid was $46.7 million which is inclusive of the cash distributed by Summit. The assignment of the total consideration for the Summit acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 13,353 Receivables 3,147 Property and equipment 362 Prepaid expenses 1,531 Notes receivable 1,092 Other assets 2,366 Accounts payable (9,973 ) Accrued expenses (3,100 ) Total fair value excluding goodwill and intangible assets 8,778 Goodwill 23,891 Intangible assets 31,240 Deferred tax liability (6,751 ) Total consideration $ 57,158 As of September 30, 2015 , approximately $0.1 million of the goodwill from Summit’s historic pre-acquisition goodwill is deductible for income tax purposes. The total Summit consideration consisted of the following: ($ in thousands) Cash paid by the Company $ 46,727 Stock issued by the Company 10,431 Total consideration $ 57,158 The Company’s supplemental pro forma results of operations for Summit for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 74.5 Loss before taxes (4.2 ) The supplemental pro forma results of operations for the nine months ended September 30, 2014 include adjustments which reflect a full nine months of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the nine months ended September 30, 2014 , the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.8 million based on the assumption that this acquisition was completed on January 1, 2013. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. J.P. Turner & Company . On June 12, 2014, the Company completed the acquisition of J.P. Turner for cash in the aggregate amount of $12.8 million , subject to post-closing adjustments, plus 239,362 shares of Class A common stock in a private placement offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). J.P. Turner is a retail broker-dealer and investment adviser which also offered a variety of other services, including investment banking. Pursuant to the original purchase agreement, which was amended on March 4, 2015, the Company agreed to an additional aggregate cash payment, payable on one -year anniversary of the closing date, of $7.6 million to the sellers and issue to the sellers an aggregate number of shares of Class A common stock equal to (i) $3.2 million divided by (ii) the average of the per share closing price of Class A common stock for the five trading days ending on the trading day immediately prior to June 12, 2015. However, the Company amended its agreement with the sellers of J.P. Turner prior to this date. Prior to the amendment, the Company also agreed to make earn-out payments to the sellers with respect to each of the fiscal years ending December 31, 2014, December 31, 2015 and December 31, 2016, based on the achievement of certain agreed-upon revenue or earnings before interest, taxes and depreciation and amortization (“EBITDA”) performance targets in those years (subject to an annual combined minimum performance hurdle of 8.0% and an annual dollar cap of $2.5 million ). Each earn-out payment, if any, was to be made by the Company 50% in cash and 50% in the form of Class A common stock (unless the sellers elect to receive a greater amount of Class A common stock). On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $4.5 million and $10.6 million , respectively. On March 4, 2015, the Company amended its agreement with the sellers of J.P. Turner to settle the remaining consideration. As part of the amendment, the Company paid aggregate consideration of $9.1 million , which consisted of $6.4 million in cash and 245,813 shares of Class A common stock, or an aggregate value of $2.7 million based on $11.106 per share, the average of the per share closing price of Class A common stock for the five trading days prior to March 4, 2015. In addition, the Company recorded new deferred consideration of $4.8 million which was payable six months from the settlement date which will be paid 50% in cash and 50% in shares of Class A common stock. As of November 13, 2015, the Company has not paid this deferred consideration payable. The Company also settled its receivable in respect of an indemnification claim of $1.8 million as part of the amendment which resulted in a gain of $1.2 million for the nine months ended September 30, 2015 which was reflected as a reduction in other expenses in the statement of operations. During the second quarter of 2015, the Company determined that it would be more effective if J.P. Turner no longer operated as a separate broker-dealer subsidiary and that it would no longer use the J.P. Turner brand. The Company has invited certain J.P. Turner financial advisors to join Summit. The change took place at the end of October 2015 at which time any advisors who were not invited to join Summit had their advisory contracts terminated. . The assignment of the total consideration for the J.P. Turner acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 10,171 Receivables 712 Property and equipment 232 Prepaid expenses 892 Notes receivable 1,660 Other assets 2,171 Accounts payable (1,710 ) Accrued expenses (8,543 ) Other liabilities (656 ) Total fair value excluding goodwill and intangible assets 4,929 Goodwill 13,579 Intangible assets 14,200 Total consideration $ 32,708 As of September 30, 2015 , approximately $8.7 million of the goodwill from the J.P. Turner acquisition is deductible for income tax purposes. The total J.P. Turner consideration consisted of the following: ($ in thousands) Cash paid by the Company $ 12,786 Stock issued by the Company 4,860 Contingent consideration 4,500 Deferred consideration 10,562 Total consideration $ 32,708 The Company’s supplemental pro forma results of operations with J.P. Turner for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 45.5 Income before taxes 2.8 The supplemental pro forma results of operations include adjustments which reflect a full nine months of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. Hatteras Funds Group . On June 30, 2014, the Company completed the purchase of substantially all the assets related to the business and operations of Hatteras and assumed certain liabilities of Hatteras. Hatteras was a private company, and it is the sponsor of, investment advisor to and distributor for the Hatteras Funds complex, a family of alternative investment funds registered as investment companies with the SEC. Pursuant to the purchase agreement, the aggregate initial purchase price was $40.0 million (subject to certain adjustments for net working capital, net assets under management and consolidated pre-tax net income) payable as follows: (A) 75.0% was paid on the closing date of the Hatteras acquisition; (B) 7.5% was payable on June 30, 2015, the first anniversary of the closing date of the Hatteras acquisition. The payment due on June 30, 2015 has not been made and is accruing interest in accordance with the purchase agreement. (C) 7.5% will be payable on June 30, 2016, the second anniversary of the closing date of the Hatteras acquisition; and (D) 10.0% will be payable on June 30, 2017, the third anniversary of the closing date of the Hatteras acquisition. Additionally, pursuant to the purchase agreement, the Company will pay additional consideration calculated and payable based on the consolidated pre-tax net operating income generated by the businesses of Hatteras in the fiscal years ending December 31, 2016 and December 31, 2018. On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $24.9 million and $9.4 million , respectively. As of September 30, 2015 , the fair value of the contingent consideration was $11.3 million . The change in the fair value of the contingent consideration was recorded in other expenses on the consolidated statement of operations. The fair value was determined by a third-party valuation firm using projected pre-tax net operating income and discounted cash flow analysis which was reviewed by the Company. On November 6, 2015, the Company entered into a non-binding letter of intent to sell Hatteras to the Hatteras Funds management group. See Note 22 for more information. The assignment of the total consideration for the Hatteras acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 805 Receivables 7,747 Property and equipment 192 Prepaid expenses 326 Other assets 120 Accounts payable (3,721 ) Accrued expenses (5,277 ) Total fair value excluding goodwill and intangible assets 192 Goodwill 15,348 Intangible assets 48,770 Total consideration $ 64,310 As of September 30, 2015 , the goodwill from the Hatteras acquisition is not deductible for income tax purposes. The total Hatteras consideration consisted of the following: ($ in thousands) Cash paid by the Company $ 30,000 Contingent consideration 24,880 Deferred consideration 9,430 Total consideration $ 64,310 The contingent and deferred consideration in the table above represents the fair value at the date of acquisition which includes discounting for the time value of money. The estimated range of undiscounted outcomes of the contingent consideration as of September 30, 2015 was as follows: ($ in thousands) Low Case High Case Estimated contingent consideration amount $ 4,810 $ 44,120 The Company’s supplemental pro forma results of operations for Hatteras for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 47.5 Income before taxes 5.3 The supplemental pro forma results of operations for the nine months ended September 30, 2014 include adjustments which reflect a full nine months of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. For the nine months ended September 30, 2014 , the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.6 million based on the assumption that this acquisition was completed on January 1, 2013. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. First Allied Holdings . On June 30, 2014, RCAP Holdings contributed all its equity interests in First Allied to the Company. As consideration for the contribution, 11,264,929 shares of Class A common stock were issued to RCAP Holdings in a private placement offering exempt from registration under the Securities Act. First Allied is an independent broker-dealer with financial advisors in branch offices across the United States. First Allied was acquired by RCAP Holdings through a merger transaction on September 25, 2013 for an effective cost of $177.0 million , consisting of $145.0 million in merger consideration (including exchangeable notes issued by RCAP Holdings in the initial aggregate principal amount of $26.0 million (the “First Allied notes”)) paid to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger. The number of shares issued as consideration was determined based on a value of $207.5 million for the equity of First Allied and the one-day volume weighted average price (“VWAP”) of Class A common stock on January 15, 2014, the day prior to the announcement of the signing of the Cetera merger agreement. The value of $207.5 million for the equity of First Allied established by the Company’s board of directors in January 2014 was determined as the effective cost to RCAP Holdings for First Allied of $177.0 million (consisting of $145.0 million in merger consideration (including First Allied notes) paid by RCAP Holdings to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger), minus indebtedness (net of cash) of First Allied of $7.0 million plus a carrying cost of $37.5 million . The value of the shares of Class A common stock issued by the Company as consideration in the First Allied acquisition was $239.2 million , based on the closing price for Class A common stock of $21.23 per share on June 30, 2014, the date of the consummation of the contribution. Accordingly, the effective cost to the Company for the First Allied acquisition was $271.2 million (including $32.0 million of First Allied indebtedness), which is $94.2 million more than the effective cost to RCAP Holdings for First Allied on September 25, 2013 under the terms of the original First Allied merger agreement. As of September 25, 2013, the date of common control, the Company recorded $137.2 million of net assets related to First Allied as a result of the contribution. In addition, following consummation of the contribution, $32.0 million of First Allied indebtedness was outstanding. On July 28, 2014, the First Allied outstanding indebtedness was repaid by the Company as required by the terms of the Bank Facilities, which the Company entered into in connection with the acquisition of Cetera on April 29, 2014. The Company’s acquisition of First Allied was accounted for at historical cost in a manner similar to a pooling-of-interest accounting because First Allied and the Company were under the common control of RCAP Holdings immediately following the acquisition of First Allied by RCAP Holdings on September 25, 2013. See Note 2 for additional detail. As of September 30, 2015 , approximately $6.8 million of the goodwill from First Allied’s historic pre-acquisition goodwill was deductible for income tax purposes. Investors Capital Holdings . On July 11, 2014, the Company completed the acquisition of ICH. ICH was a publicly traded company with its common stock listed on the NYSE MKT under the symbol “ICH”. ICH provides broker-dealer services to investors in support of trading and investment in securities, alternative investments and variable life insurance as well as investment advisory and asset management services. The aggregate consideration was $52.5 million . The Company issued 2,027,966 shares of Class A common stock ( 2,029,261 shares issued on July 11, 2014, of which 1,295 shares were subsequently canceled on October 6, 2014 as an adjustment to the final consideration) pursuant to a registration statement on Form S-4 and paid aggregate consideration in cash of $8.4 million . The assignment of the total consideration for the ICH acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 6,881 Short term investments and securities owned 499 Receivables 7,500 Property and equipment 275 Notes receivable 1,875 Deferred compensation 2,250 Deferred tax asset 2,613 Other assets 1,055 Accounts payable and accrued expenses (1,945 ) Other liabilities (7,593 ) Notes payable and long-term debt (2,918 ) Non-qualified deferred compensation (2,611 ) Total fair value excluding goodwill, intangible assets, and deferred tax liability 7,881 Goodwill 26,680 Intangible assets 30,100 Deferred tax liability (12,152 ) Total consideration $ 52,509 As of September 30, 2015 , the goodwill from the ICH acquisition is not deductible for income tax purposes. The total ICH consideration consisted of the following: ($ in thousands) Cash paid by the Company $ 8,412 Stock issued by the Company 44,097 Total consideration $ 52,509 The Company’s supplemental pro forma results of operations for ICH for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 71.0 Loss before taxes (3.3 ) The supplemental pro forma results of operations include adjustments which reflect a full nine months of amortization of intangible assets. In addition, the Company recorded pro forma adjustments to eliminate intercompany revenues and expenses. Validus/Strategic Capital Partners . On August 29, 2014, the Company completed the acquisition of StratCap. StratCap, through its subsidiaries, is a wholesale distributor of alternative investment programs. StratCap’s subsidiaries distribute a platform of offerings consisting of two non-traded REITs, a non-traded business development company (“BDC”) and two public, non-traded limited liability companies. StratCap holds minority interests in four of the investment programs that it distributes, and is a joint venture partner along with the sponsor to the fifth investment program. The aggregate consideration paid on the date of the acquisition was $77.5 million . The Company issued 464,317 shares of Class A common stock in a private placement offering exempt from registration under the Securities Act and $67.5 million paid in cash. Additionally, the Company paid $10.0 million in cash on December 1, 2014 and will pay earn-out payments in 2016 and 2017 based on the achievement of certain agreed-upon EBITDA performance targets, which pursuant to the purchase agreement, excludes StratCap’s securities business. On the date of the acquisition, the Company recorded liabilities for contingent consideration and deferred payments, at fair value, of $75.0 million and $10.0 million , respectively. The contingent consideration is payable 50% in cash and 50% in shares of Class A common stock. As of September 30, 2015 , the fair value of the contingent consideration was $20.6 million . The change in the fair value of the contingent consideration was recorded in other expenses on the consolidated statements of operations. The fair value was determined by a third-party valuation firm using projected pre-tax net operating income and discounted cash flow analysis which was reviewed by the Company. During the second quarter of 2015, the Company became aware that previous calculations of the contingent consideration were incorrectly calculated. This miscalculation had an impact on the Goodwill and the Contingent consideration recorded in the Statement of Financial Condition and presented in the tables below as of the acquisition date. Consistent with the disclosures in the Company’s quarterly report on Form 10-Q for the second quarter of 2015, the tables have been updated to reflect an increase in goodwill of $7.7 million with a corresponding increase in the contingent consideration. As a result of this error, the results of operations as of and for the three and nine months ended September 31, 2014, as of and for the year ended December 31, 2014 and as of and for the three months ended March 31, 2015 were misstated by an immaterial amount. The consolidated statement of operations for the nine months ended September 30, 2015 includes an out of period adjustment of $3.0 million as an increase to Other expenses. The Company has evaluated this error and determined that it was not material to the previously issued audited and unaudited financial statements as well as the current unaudited financial statements. The assignment of the total consideration for the StratCap acquisition as of the date of the acquisition was as follows: ($ in thousands) Cash and cash equivalents $ 4,522 Short term investments and securities owned 2,239 Receivables 4,858 Property and equipment 96 Prepaid expenses and other assets 629 Accounts payable (706 ) Accrued expenses (201 ) Other liabilities (908 ) Total fair value excluding goodwill and intangible assets 10,529 Goodwill 30,571 Intangible assets 121,380 Total consideration $ 162,480 As of September 30, 2015 , the goodwill from the StratCap acquisition is not deductible for income tax purposes. The total StratCap consideration consisted of the following: ($ in thousands) Cash paid by the Company $ 67,510 Stock issued by the Company 10,000 Contingent consideration 75,000 Deferred consideration 9,970 Total consideration $ 162,480 The contingent and deferred consideration in the table above represents the fair value at the acquisition date which includes discounting for the time value of money. The estimated range of undiscounted outcomes of the contingent consideration as of September 30, 2015 was as follows: ($ in thousands) Low Case High Case Estimated contingent consideration amount $ 25,210 $ 26,580 The Company’s supplemental pro forma results of operations for StratCap for the nine months ended September 30, 2014 are as follows: Nine Months Ended September 30, ($ in millions) 2014 Total revenues $ 128.2 Loss before taxes (0.7 ) The supplemental pro forma results of operations include adjustments which reflect a full nine months of amortization of intangible assets. For the nine months ended September 30, 2014 , the Company adjusted the pro forma results to exclude acquisition-related expenses of $0.2 million based on the assumption that this acquisition was completed on January 1, 2013. Acquisition-related costs are costs incurred by the acquiree to engage in a business combination. Such costs may include accounting fees, valuation fees, consulting fees and legal fees. Trupoly . On July 21, 2014, the Company announced that it was establishing a crowdfunding investment platform which it since rebranded under the name, “DirectVest.” In connection with this initiative, the Company acquired substantially all the assets of New York based Trupoly, a white-label investor relationship management portal, which was to be integrated into the Company’s crowdfunding investment platform. The assets of Trupoly primarily consist of intangible assets related to existing technology and a non-compete agreement. On the closing date of the Trupoly acquisition, the Company issued shares of Class A common stock in a private placement offering exempt from registration under the Securities Act and paid the remaining consideration in cash. The Company paid 50% of the deferred consideration in shares of Class A common stock and 50% in cash on July 17, 2015. On November 10, 2015, the Company entered into an agreement to sell Trupoly for an immaterial amount. See Note 22 for more information. As of September 30, 2015 , approximately $0.7 million of the goodwill from the Trupoly acquisition is deductible for income tax purposes. Docupace . On November 21, 2014, the Company completed the acquisition of a controlling financial interest in Docupace, a provider of integrated, electronic processing technologies and systems for financial institutions and wealth management firms. The aggregate consideration on the date of the acquisition was $35.1 million , excluding $0.3 million of accrued interest on the deferred payment. On the closing date, the Company paid cash consideration of $18.8 million to the seller of Docupace and acquired a 51% ownership interest. In addition, the Company made a $4.0 million capital contribution on the date of the acquisition, which increased its total ownership interest to 53.525% . Subject to certain covenants in the operating agreement, and if needed to achieve the strategic goals of Docupace’s business as determined by the board of managers, the Company may be required to make total additional capital contributions of $28.0 million and $20.0 million in cash during the years ended December 31, 2015 and 2016, respectively. The post-closing consideration under the agreement between the Company and Docupace was adjusted in accordance with Docupace’s 2014 revenues. The Company determined that the appropriate clawback amount was $2.4 million . On August 20, 2015, the Company settled the net post-closing consideration including accrued interest by issuing 5,461,843 shares of Class A common stock in a private placement to the previous owners of Docupace with an aggregate value of $16.7 million , based on $3.0578 per share, the VWAP of Class A common stock for the ten trading days ending August 19, 2015. The total fair value of Docupace on the date of the acquisition prior to the capital contribution was $68.8 million . The fair value of the non-controlling interest as of the date of the acquisition prior to the capital contribution was $33.7 million . The fair value of the non-controlling interest was determined based on the fair value of the controlling interest held by the Company grossed-up to 100% value in order to derive a per-share price to be applied to the non-controlling shares. This method assumes that the non-controlling shareholder will participate equally with the controlling shareholder in the economic benefits of the post combination entity. During the three and nine months ended September 30, 2015 , the Company made capital contributions of $3.5 million to Docupace which increased its total ownership interest to 55.809% . Based on the purchase price allocations, appro |
