2. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

On November 11, 2014, the Audit Committee of the Company’s Board of Directors, in connection with an internal review initiated by Company management, concluded that, because of a misapplication of the accounting guidance related to redeemable equity, the Company’s previously issued consolidated financial statements for the years ended December 28, 2013, December 29, 2012, and December 31, 2011, and the financial statements for the quarters ended March 31, 2014 and June 30, 2014 should no longer be relied upon. As such, the Company has restated its financial statements for the following periods: (i) the fiscal year ended December 28, 2013 and (ii) the quarterly periods ended March 30, 2014 and March 31, 2013 (the “Restated Periods”). These corrections result in restatements to the carrying amount of redeemable common stock and accumulated deficits for all periods and have no impact on the Company’s current or previously reported cash position, net income or loss, or statement of cash flows.

Under Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, the appropriate accounting for redeemable equity first depends upon a determination of whether the equity is currently redeemable or not currently redeemable. Shares that are currently redeemable should be recorded at redemption value. For shares not currently redeemable, the accounting guidance allows for changes in redemption value to be accreted from the initial issuance date to the earliest redemption date. The Company originally determined that the redeemable common stock was not currently redeemable. However, the original determination of the earliest redemption date did not consider that the common stock was redeemable at the option of employees upon termination. In considering this fact, management determined that a significant portion of the common stock was currently redeemable and as a consequence those shares should have been carried at redemption value.

The guidance on accounting for redeemable equity also specifies that if the redemption value is less than the original issuance cost, the carrying amount of the redeemable common stock should not be less than the original issuance cost. The Company’s historical accounting did not appropriately consider this requirement, which resulted in certain shares of redeemable common stock being reported at a carrying amount below the original issuance cost.

The impact of the restatements on affected line items of the Condensed Consolidated Balance Sheets as of March 30, 2014 and December 28, 2013 and the Condensed Consolidated Statements of Redeemable Common Stock, Accumulated Deficit and Accumulated Other Comprehensive Income for the three months ended March 30, 2014 and March 31, 2013 are presented below. The restatements had no impact on the Company’s Consolidated Statements of Comprehensive Income (Loss) or Consolidated Statements of Cash Flows for any period.



Condensed Consolidated Balance Sheets
	March 30, 2014
	As
	Previously		As
	Reported	Correction	Restated
Redeemable common stock, $0.01 par value,
shares authorized: 30,000,000,
shares issued and outstanding: 8,128,417	$ 61,635	$ 95,794	$ 157,429
Accumulated deficit	(411,486)	(95,794)	(507,280)


	December 28, 2013
	As
	Previously		As
	Reported	Correction	Restated
Redeemable common stock, $0.01 par value,
shares authorized: 30,000,000,
shares issued and outstanding: 8,129,112	$ 63,322	$ 94,123	$ 157,445
Accumulated deficit	(415,173)	(94,123)	(509,296)



Condensed Consolidated Statements of Redeemable Common Stock,
Accumulated Deficit and Accumulated Other Comprehensive Income


	For the Three Months Ended March 30, 2014
	As
	Previously		As
	Reported	Correction	Restated
Balance, December 28, 2013 - Redeemable Common Stock	$ 63,322	$ 94,123	$ 157,445
Redemption of redeemable common stock	(11)	(8)	(19)
Change in fair value and accretion of redeemable common stock	(1,676)	1,679	3
Balance, March 30, 2014 - Redeemable Common Stock	61,635	95,794	157,429

Balance, December 28, 2013 - Accumulated Deficit	(415,173)	(94,123)	(509,296)
Redemption of redeemable common stock	-	8	8
Change in fair value and accretion of redeemable common stock	1,676	(1,679)	(3)
Balance, March 30, 2014 - Accumulated Deficit	(411,486)	(95,794)	(507,280)



	For the Three Months Ended March 31, 2013
	As
	Previously		As
	Reported	Correction	Restated
Balance, December 29, 2012 - Redeemable Common Stock	$ 81,704	$ 95,672	$ 177,376
Redemption of redeemable common stock	(10)	(2)	(12)
Change in fair value and accretion of redeemable common stock	(1,236)	1,244	8
Balance, March 31, 2013 - Redeemable Common Stock	80,458	96,914	177,372

Balance, December 29, 2012 - Accumulated Deficit	(439,923)	(95,672)	(535,595)
Redemption of redeemable common stock	-	2	2
Change in fair value and accretion of redeemable common stock	1,236	(1,244)	(8)
Balance, March 31, 2013 - Accumulated Deficit	(436,544)	(96,914)	(533,458)