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OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES | 6 Months Ended
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Jun. 30, 2012
OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES | 7. OTHER ASSETS AND AMOUNTS DUE TO / FROM AFFILIATES Marketable Equity Securities As of June 30, 2012 and December 31, 2011, the Company had an investment in AWSC, with a fair market value of $2.5 million and $1.6 million, respectively and an adjusted cost basis of $0.7 million and $0.7 million, respectively. One of the Company’s directors is a director of AWSC and several directors and officers own amounts ranging from 0.1% to 0.5% of the outstanding stock of AWSC. As of June 30, 2012 and December 31, 2011, the Company had an investment in WIN, with a fair market value of $1.6 million and $1.7 million, respectively. The adjusted cost basis of the WIN investment is $0. In the six month period ended June 30, 2012 the Company sold 500,000 shares of WIN and recorded a gain of $0.9 million. AWSC and WIN are listed on the Gre Tai Securities Exchange in Taiwan. The Company determines the fair market value of these investments based on the quoted prices from this exchange. Non-Marketable Securities—Equity Method Investments The Company has an approximate 12% interest in KoBrite at June 30, 2012. The Company accounts for its interest using the equity method and at June 30, 2012 the carrying value of the investment was $2.1 million. One of the Company’s directors, who is the chairman of KTC, is a member of the Board of Directors of Bright LED, one of the other principal investors of KoBrite. During the period ended March 31, 2012 the Company acquired a 25% interest in a private company, Ikanos Consulting, LTD (Ikanos), for $0.7 million and subsequent to June 30, 2012 invested an additional $2.5 million, which increased the Company’s interest in Ikanos to 51%. For the period ended June 30, 2012 the Company recorded the results of operation of Ikanos on the equity method of accounting and commencing in the third quarter of 2012 the Company will consolidate Ikanos. Summarized financial information for KoBrite for the three and six month periods ended March 31, 2012 and March 26, 2011 (KoBrite’s results are recorded one quarter in arrears) and Ikanos for the three and six month periods ended June 30, 2012 are as follows:
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, 2012 |  |  | June 25, 2011 |  |  | June 30, 2012 |  |  | June 25, 2011 |
Revenue |  | $ | 1,170,000 |  |  | $ | 1,298,000 |  |  | $ | 2,915,000 |  |  | $ | 2,289,000 |
Gross margin |  |  | (653,000 | ) |  |  | 122,000 |  |  |  | (885,000 | ) |  |  | (399,000 | )
Loss from operations |  |  | (1,505,000 | ) |  |  | (276,000 | ) |  |  | (2,283,000 | ) |  |  | (1,255,000 | )
Net loss |  | $ | (1,532,000 | ) |  | $ | (371,000 | ) |  | $ | (2,843,000 | ) |  | $ | (1,314,000 | )
During the period ended June 30, 2012, the Company acquired a 5% interest in a private company for $1.0 million. If the private company achieves certain development milestones, the Company is obligated to acquire up to an additional 17.5% interest in the private company for a total of $2.0 million. In addition, for an eight month period after the achievement of all of the development milestones, the Company has the right to acquire an additional 10% interest in the private company for $2.0 million or the private company can require the Company to purchase an additional 25% interest for $2.0 million. Amounts Due from and Due to Affiliates Related party receivables from AWSC approximated $2.0 million and $1.1 million at June 30, 2012 and December 31, 2011, respectively. At June 30, 2012 and December 31, 2011 the Company also had $0.1 million and $0.2 million, respectively, due from other related parties. The Company has entered into an agreement wherein it agreed to sell certain of its patents that it was no longer using to a party who would attempt to sublicense the patents. Under the terms of the agreement the amount the Company would receive for the sale of the patents was a percentage of any license fees, after expenses, from the sublicense. In the three and six months ended June 30, 2012 and June 25, 2011 the Company recorded $0 million and $0.2 million of gains, respectively, from the sale of these patents.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 + Details
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