Subsequent Events

3 Months Ended

Mar. 29, 2014

10. Subsequent Events

On May 8, 2014, the Company and Elutions agreed to amend the Investment Agreement and amend and restate the outstanding Incentive Warrant and Tracking Warrant. The purpose of the amendments was to clarify the intent of certain anti-dilution provisions contained in the instruments and to provide a corresponding approval right to Elutions in the Investment Agreement. As a result of the amendments and effective on the amendment date, both the Incentive Warrant and Tracking Warrant will be accounted for as equity. The fair value of the Tracking Warrant will be reclassified from liability to equity status during the thirteen weeks ended June 28, 2014. The fair value of the Tracking Warrant, included in Liability for Warrants and Derivatives within Current Liabilities in the Condensed Consolidated Balance Sheet, decreased approximately $300,000 between March 29, 2014 and the date of the amendment. This decrease in fair value will be recognized as Other Income during the thirteen weeks ended June 28, 2014. As of May 8, 2014, the fair value of the Tracking Warrant was approximately $1.0 million and was reclassified from Liability for Warrants and Derivatives within Current Liabilities to Stockholders’ Equity. Because the vesting of the Incentive Warrant is contingent on future services to be provided by Elutions and the achievement of performance conditions by Elutions, the Incentive Warrant has zero fair value as of March 18, 2014 and May 8, 2014. The fair value of the Incentive Warrant when earned will be recorded to equity in the future periods during which such warrants are earned by Elutions.