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Fair Value of Certain Financial Assets and Liabilities
3 Months Ended
Mar. 30, 2012
Fair Value of Certain Financial Assets and Liabilities [Abstract]  
Fair Value of Certain Financial Assets and Liabilities

4. Fair Value of Certain Financial Assets and Liabilities

Level 1 financial assets and liabilities consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company’s cash equivalents consist primarily of funds in money market accounts, which are classified within Level 1 of the fair value hierarchy. Cash equivalents at March 30, 2012 and September 30, 2011 were $1.0 million and $23.0 million, respectively.

Level 2 financial assets and liabilities consist of inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company had no financial assets or liabilities classified as Level 2 as of March 30, 2012 or September 30, 2011.

Level 3 financial assets and liabilities consist of inputs that are both significant to the fair value measurement and unobservable, and consist of the Company’s warrant to purchase approximately 6.1 million shares of Mindspeed common stock. The warrant was valued using the Black-Scholes-Merton valuation model (see Note 5). The fair value of the Mindspeed warrant was $0.8 million and $1.7 million as of March 30, 2012 and September 30, 2011, respectively.

The fair value of other financial instruments, which consists of the Company’s 11.25% senior secured notes due 2015, was $190.8 million as of March 30, 2012. The fair value of the 11.25% senior secured notes is based on an indicative bid price provided by the underwriter of the senior secured notes, and was 109.0% and 112.0% of par as of March 30, 2012 and September 30, 2011, respectively.

There were no reclassification of investments between levels during the six fiscal months ended March 30, 2012. Other than the unrealized gains and losses related to the Company’s warrant to purchase 6.1 million shares of Mindspeed common stock, there were no significant realized or unrealized gains as of or during the six month period ended March 31, 2012.