Fair Value Measurements (Tables)

9 Months Ended

Oct. 01, 2016

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

As of October 1, 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:

	October 1, 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	$	9,577		—		—	$	9,577	$	9,212		—		—	$	9,212
Liabilities:
Earn-out liability	$	—		—	$	778	$	778	$	—		—	$	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 October 1, 2016.

As of October 1, 2016

Fair Value

(in thousands)

Valuation

Technique

Significant

Unobservable

Input

Weighted

Average

(range)

Earn-out liability

778

Discounted cash flow

Projected royalties

(in thousands)

$2,096

($134 - $2,284)

Discount rate

11.83%

(10.37% - 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 nine months ended October 1, 2016 and October 3, 2015 is as follows:

	Nine Months Ended
(in thousands)	October 1, 2016			October 3, 2015
Balance as of beginning of the period	$	1,005		$	1,423
Payments against earn-out		(313	)		(328	)
Change in fair value of earn-out liability		86			(129	)
Balance as of the end of the period	$	778		$	966