Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2016

Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis

As of July 2, 2016 and January 2, 2016, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows:

	July 2, 2016								January 2, 2016
	Fair Value Measurements								Fair Value Measurements
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	9,664		—		—	$	9,664	$	9,212		—		—	$	9,212
Liabilities:
Earn-out liability		—		—	$	848	$	848	$	—		—	$	1,005	$	1,005

Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements

The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of July 2, 2016.

As of July 2, 2016

Fair Value

(in thousands)

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

(range)

Earn-out liability

848

Discounted cash flow

Projected royalties

(in thousands)

$2,720

($134 - $2,926)

Discount rate

11.46%

(10.22% - 27.00%)

Reconciliation of the Changes in the Company's Earn-Out - Cash (Level 3 Liabilities) Balance

A reconciliation of the changes in the Company’s earn-out liability (Level 3 liability) for the six months ended July 2, 2016 and July 4, 2015 is as follows:

	Six Months Ended
(in thousands)	July 2, 2016			July 4, 2015
Balance as of beginning of the period	$	1,005		$	1,423
Payments against earn-out		(190	)		(236	)
Change in fair value of earn-out liability		33			32
Balance as of the end of the period	$	848		$	1,219