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Subsequent Event
12 Months Ended
Feb. 01, 2014
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event

On March 26, 2014, the Company consummated the sale of $27 million of convertible notes as well as warrants to purchase up to 8.8 million shares of the Company's Class A common stock in a private placement to a single institutional investor with net proceeds of approximately $25 million to the Company. The Company intends to use the proceeds for general corporate purposes.
The convertible notes bear interest at a rate of 6% per year, subject to certain adjustments, and mature in March 2017. The convertible notes are convertible, at the holder's option, into shares of the Company’s Class A common stock at a price of $1.84 per share, subject to customary adjustments. Interest on the convertible notes is payable monthly and the principal amount of the convertible notes will amortize monthly with payments beginning September 26, 2014. Monthly interest and principal payments may be settled in cash or shares of the Company's Class A common stock, at the Company's option, subject to certain conditions. Also subject to certain conditions, at any time from and after April 26, 2015, solely if the Company is making the scheduled amortization payment for such scheduled amortization date in shares of common stock, the holder may accelerate a limited amount of scheduled amortization payments.
In connection with the sale of the convertible notes, the Company issued warrants to purchase up to 8.8 million shares of the Company's Class A common stock. The warrants will be exercisable at $2.12 per share, subject to potential future anti-dilution adjustments. The warrants will be exercisable beginning six months and one day after issuance through September 27, 2019. In addition, the exercise price is also subject to a “full ratchet” anti-dilution adjustment, subject to customary exceptions, in the event that the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price, subject to a floor on the exercise price of $1.76 per share.
Pursuant to the terms of a registration rights agreement entered into with the investor, the Company agreed to file within 45 days of the closing of this transaction a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock issuable upon conversion of, or as payment of principal and interest on, the convertible notes and upon exercise of the warrants.
On March 20, 2014, the Company amended the terms of its senior revolving credit facility as described in Note 6 - "Senior Revolving Credit Facility" in order to permit the issuance of the convertible notes and warrants and for the amortization of the convertible notes.
In recent years, the Company has maintained strong levels of cash, cash equivalents and investments and extinguished its debt.  However, in fiscal 2013, the Company incurred a net loss of $38.4 million and negative cash flow from operations of $17.6 million.  As of February 1, 2014, the Company had cash and cash equivalents and short-term investments of $46.2 million, and the Company increased its liquidity in March 2014 through the convertible notes placement noted above. The Company believes it has sufficient liquidity for fiscal 2014. However, if the Company continues to experience negative cash flow from operations, it will need to continue to rely on its cash reserves to fund its business or seek additional capital.  There can be no assurance that any additional equity or debt financing would be available to the Company, or if available, that such financing would be on favorable terms to the Company.  Accordingly, if the Company's business does not generate sufficient cash flow from operations to fund its working capital needs and planned capital expenditures, and its cash reserves are depleted, the Company may need to take various actions, such as down-sizing and/or eliminating certain operations, which could include exit costs, or reducing or delaying capital expenditures, strategic investments or other actions, and its business may be adversely affected.