Fair Value Measurements

3 Months Ended

Jul. 26, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 14. Fair Value Measurements

Fair value is defined as the exit price or the amount that we would receive upon selling our assets in an orderly transaction to a  market participant as of the period ending on the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value. The hierarchy is broken down into three levels defined as follows:

Ÿ	Level 1	– Inputs are quoted prices in active markets for identical assets.
Ÿ	Level 2	– Inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active and inputs that are observable for the asset, either directly or indirectly.
Ÿ	Level 3	– Inputs are unobservable inputs for the asset.

Observable inputs are inputs market participants would use in valuing the asset based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing our asset and are developed based upon the best information available in the circumstances. The categorization of assets within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 3 financial assets include investment securities for which there is limited market activity such that the determination of fair value requires significant judgment or estimation.

We have had no assets and liabilities measured at fair value on a recurring basis at July 26, 2013 or at April 26, 2013.

Investment in Convertible Debt Security

We invested in a convertible debt security issued by NeuroVista Corporation (“NeuroVista”) on August 20, 2010. NeuroVista is a privately-held company that was focused on the development of an implantable device intended to inform patients when seizures are likely to occur, as well as to alert caregivers when seizures do occur. We considered this security an ‘available-for-sale’ debt security measured at fair value on a recurring basis using Level 3 inputs, as this investment was in a privately-held entity without quoted market prices. During the quarter ended July 27, 2012, we determined that we were unlikely to receive the return of our principal and accrued interest and performed a fair value analysis of the assets we expected to receive in foreclosure. We estimated the fair value of the debt instrument at $1,450,000, with the resulting impairment loss of $4,058,768 reported as other-than-temporary and separately stated in the consolidated statement of income. During the quarter ended October 26, 2012, NeuroVista advised us that an event of default had occurred under the terms of the convertible debt security, and in February 2013, we conducted a foreclosure sale of the assets subject to our security interest and took possession of the company’s tangible and intangible assets, which resulted in no further gain or loss on the settlement of the debt security.

The following table provides a reconciliation of the beginning and ending balance of the NeuroVista debt instrument measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	For the Thirteen Weeks Ended
	July 26, 2013		July 27, 2012
Beginning Balance	$	-	$	5,508,768
Net purchases / (settlements)		-		-
Transfers in/(out) of Level 3		-		-
Other-than-temporary impairment included in net income		-		(4,058,768)
Ending Balance	$	-	$	1,450,000

Investment in Equity Security

Our investment in equity consists of two investments in convertible preferred stock of privately-held companies which we carry at cost; see “Note 6. Investments”.  We do not mark-to-market these investments. Each reporting period we review all available information related to this investee to identify any significant adverse effect on the fair value of our investments. If we identify events or changes in circumstances that indicate a decrease in value of this investment that is other than temporary, we would recognize the loss. The inputs to our fair value measurements are considered Level 3 in the fair value hierarchy.