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Basis of Presentation
3 Months Ended
Oct. 27, 2012
Basis of Presentation

2. Basis of Presentation

The accompanying financial data as of October 27, 2012 and for the three months ended October 29, 2011 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as filed with the SEC for the fiscal year ended July 31, 2012.

 

In the opinion of management, the accompanying financial statements include all adjustments necessary to state fairly the financial position as of October 27, 2012 and results of operations and cash flows for the periods ended October 27, 2012 and October 29, 2011. The results of operations and cash flows for the period ended October 27, 2012 are not necessarily indicative of the operating results and cash flows for the full fiscal year or any future periods.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant estimates and judgments relied upon in preparing these financial statements include those related to revenue recognition, allowance for doubtful accounts, warranty obligations, inventory allowance, litigation and other contingencies, and share-based compensation. Estimates, judgments, and assumptions are reviewed periodically by management and the effects of revisions are reflected in the consolidated financial statements in the period in which they are made.

Upon the approval of the Dissolution, we will change our basis of accounting from the going-concern basis which contemplates realization of assets and satisfaction of liabilities in the normal course of business to the liquidation basis. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts. Recorded liabilities will include the estimated costs associated with carrying out the Plan.

On October 11, 2012, the Company paid a special cash distribution to its stockholders of $10.00 per share of its common stock, par value $0.001, or $288.8 million in the aggregate. As a result of having an accumulated deficit, the cash distribution has been recorded as a reduction to additional paid-in capital.

See Note 12: “Subsequent Events” for additional information regarding cash distributions.