ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities,

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

The following tables present information about assets and liabilities measured at fair value on a recurring basis related to our continuing operations:

Fair value measurements as of May 2, 2021, using:

Quoted

prices in

active markets

for identical

assets

Significant

other

observable

inputs

Significant

unobservable

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Premier Money Market Fund

7,879

N/A

7,879

Short Term Bond Mutual Funds

4,101

N/A

4,101

Short Duration Inflation Protected Mutual Fund

722

N/A

722

Mortgage Securities Mutual Fund

719

N/A

719

Growth Allocation Mutual Funds

339

N/A

339

Moderate Allocation Mutual Fund

N/A

Other

111

N/A

111

Fair value measurements as of May 3, 2020, using:

Quoted

prices in

active markets

for identical

assets

Significant

other

observable

inputs

Significant

unobservable

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Premier Money Market Fund

7,496

N/A

7,496

Short Term Bond Mutual Funds

923

N/A

923

Growth Allocation Mutual Fund

219

N/A

219

Moderate Allocation Mutual Fund

N/A

Other

N/A

As of May 2, 2021, we had assets and liabilities related to our continuing operations that were required to be measured at fair value on a nonrecurring basis that pertained to the assets acquired and certain liabilities assumed in the connection with the CIH business combination effective February 1, 2021, that were acquired at fair value. See Note 2 of the consolidated financial statements for further details regarding this business combination.

Fair value measurements as of May 2, 2021, using:

Quoted

prices in

active markets

for identical

assets

Significant

other

observable

inputs

Significant

unobservable

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Right of use assets

N/A

2,544

N/A

2,544

Equipment and leasehold improvements

N/A

846

Inventory

N/A

The fair value of our right of use assets was based on our analysis of a recent appraisal of the annual lease rates per square foot for industrial buildings that are similar in nature and within the same locale. We believe the annual lease rates per square foot presented in our recent appraisal represent a significant observable inputs and therefore the right of use assets were classified as level 2.

Additionally, in connection with the CIH business combination effective February 1, 2021, we acquired cash, accounts receivable, and certain other current assets, and we assumed accounts payable. Based on the nature of these items and their short-term maturity, the carrying amount of these items approximated their fair values. See Note 2 of the consolidated financial statements for the final allocation of the acquisition cost to assets acquired and liabilities assumed based on their fair values.

The following table presents information about assets and liabilities measured at fair value on a nonrecurring basis related to our continuing operations as of May 3, 2020:

Fair value measurements as of May 3, 2020, using:

Quoted

prices in

active markets

for identical

assets

Significant

other

observable

inputs

Significant

unobservable

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Goodwill

N/A

—

Tradename

N/A

540

Goodwill was recorded at fair market value using a discounted cash flow method that used significant unobservable inputs and was classified as level 3. See Note 9 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment tests.

Tradename was recorded at fair market value using the relief from royalty method that used significant unobservable inputs and was classified as level 3. See Note 8 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment test.

During fiscal 2020, the entire carrying value of our goodwill and tradename associated with our discontinued operation was impaired, and therefore, we did not have goodwill or tradename recorded in our Consolidated Balance Sheets as of May 2, 2021 and May 3, 2020. Consequently, we recorded asset impairment charges totaling $20.2 million that were presented in loss before income taxes from discontinued operation of the fiscal 2020 Consolidated Statement of Net Loss. Of the total asset impairment charges totaling $20.2 million, $13.6 million, and $6.6 million pertained to goodwill and tradename, respectively.

At the end of the third quarter of fiscal 2020, we assessed the fair value of our contingent consideration related to the acquisition of our ownership interest in eLuxury. Based on this assessment, we recorded a reversal of $6.1 million for the full amount of this contingent consideration.

See below or fair value techniques used to determine the fair value of goodwill, tradename, and contingent consideration and the level of the fair value hierarchy these fair value techniques were classified based on the lowest level of inputs used.

Goodwill was assessed for impairment at the end of our third quarter and during our fourth quarter of fiscal 2020. At the end of the third quarter of fiscal 2020, goodwill was recorded at fair market value using a discounted cash flow method that used significant unobservable inputs and was classified as level 3.

During the fourth quarter of fiscal 2020, goodwill was recorded at fair market value based on the expected selling price of our entire ownership in eLuxury in comparison to its carrying amount, including goodwill. As disclosed in Note 3 of the consolidated financial statements, effective March 31, 2020, we sold our entire ownership interest in eLuxury to its noncontrolling interest holder resulting in

the elimination of the home accessories segment at such time. Based on the terms of the sale agreement, we did not receive any consideration for eLuxury’s net assets associated with the sale of our entire ownership interest in eLuxury. We believe the selling price represents a significant observable input and was classified as level 2.

See Note 9 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment tests.

Tradename was assessed for impairment at the end of our third quarter and during our fourth quarter of fiscal 2020. At the end of the third quarter of fiscal 2020, tradename was recorded at fair market value using the relief from royalty method that used significant unobservable inputs and was classified as level 3.

During the fourth quarter of fiscal 2020, tradename was recorded at fair market value based on the expected selling price of our entire ownership in eLuxury in comparison to its carrying amount. As disclosed in Note 3 of the consolidated financial statements, effective March 31, 2020, we sold our entire ownership interest in eLuxury to its noncontrolling interest holder resulting in the elimination of the home accessories segment at such time. Based on the terms of the sale agreement, we did not receive any consideration for eLuxury’s net assets associated with the sale of our entire ownership interest in eLuxury. We believe the selling price represents a significant observable input and was classified as level 2.

See Note 8 of the consolidated financial statements for further details regarding our assessment of impairment, conclusions reached, and the performance of our quantitative impairment test.

At the end of the third quarter of fiscal 2020, the fair value of our contingent consideration was determined using forecasted financial information to calculate EBITDA as it related to the Equity Agreement associated with the acquisition of our ownership interest in eLuxury. Since forecasted financial information utilizes significant unobservable inputs, the fair value of our contingent consideration was classified as level 3.

See Note 3 of the consolidated financial statements for further details regarding the terms of this contingent consideration arrangement.

As of April 28, 2019, we had assets and liabilities related to our discontinued operation that were required to be measured at fair value on a nonrecurring basis in the connection with the eLuxury business combination on June 22, 2018 (during our fiscal 2019), that were acquired at fair value. See Note 3 of the consolidated financial statements for further details regarding the acquisition of eLuxury and subsequent disposal effective March 31, 2020.

Fair value measurements as of April 28, 2019, using:

Quoted

prices in

active markets

for identical

assets

Significant

other

observable

inputs

Significant

unobservable

inputs

(amounts in thousands)

Level 1

Level 2

Level 3

Total

Assets:

Goodwill - discontinued operation

N/A

13,653

Tradename - discontinued operation

N/A

6,549

Equipment - discontinued operation

N/A

2,179

Inventory - discontinued operation

N/A

1,804

Liabilities:

Contingent consideration affiliated with a discontinued operation

N/A

5,856

The tradename was recorded at fair market value using the royalty from relief method that used significant unobservable inputs and was classified as level 3. The contingent consideration – earn-out obligation was recorded at fair market value using Black Scholes pricing model which used significant observable inputs and was classified as level 3.

Additionally, we acquired certain current, assets such as accounts receivable and prepaid expenses, and we assumed certain liabilities such as accounts payable and accrued expenses. Based on the nature of these items and their short-term maturity, the carrying amount

of these items approximated their fair values. See Note 3 of the consolidated financial statements for the final allocation of the acquisition cost to the assets acquired and liabilities assumed based on their fair values.