Note 3—Supplemental Financial Information

Inventories

Inventories consist of the following (in thousands):



		March 30,		December 29,
		2013		2012

Raw materials	$	3,718	$	4,544
Work in process		873		70
Finished goods		1,634		2,766
	$	6,225	$	7,380

Warranty Liabilities

The following table summarizes the activity related to the warranty liabilities (in thousands):



	Three Months Ended
		March 30,		March 31,
		2013		2012

Beginning balance	$	235	$	189
Estimated cost of warranty claims charged to cost of sales		31		54
Cost of actual warranty claims		(14)		(42)
Ending balance		252		201
Less current portion		(151)		(121)
Long-term warranty obligations	$	101	$	80

The allowance for warranty liabilities expected to be incurred within one year is included as a component of accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. The allowance for warranty liabilities expected to be incurred after one year is included as a component of other liabilities in the accompanying condensed consolidated balance sheets.

Computation of Net Loss Per Share

The following table sets forth the computation of net loss per share, including the reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share (in thousands, except per share data):



	Three Months Ended
		March 30,		March 31,
		2013		2012

Basic and diluted net loss per share:
Numerator: Net loss	$	(3,170)	$	(1,081)
Denominator: Weighted-average common shares outstanding, basic and diluted		30,205		26,729
Basic and diluted net loss per share	$	(0.10)	$	(0.04)

The following table sets forth potentially dilutive common share equivalents, consisting of shares issuable upon the exercise or vesting of outstanding stock options and restricted stock awards, respectively computed using the treasury stock method. These potential common shares have been excluded from the diluted net loss per share calculations above as their effect would be anti-dilutive for the periods then ended (in thousands):

The above common share equivalents would have been included in the calculation of diluted earnings per share had the Company reported net income for the periods then ended.

Major Customers

The Company’s product sales have historically been concentrated in a small number of customers. The following table sets forth sales to customers comprising 10% or more of the Company’s net sales as follows:



	Three Months Ended
	March 30,		March 31,
	2013		2012
Customer:
Customer A	24	%	85	%
Customer B	18	%	*
Customer C	10	%	*

The Company’s accounts receivable as of March 30, 2013 were concentrated with four customers, representing approximately 19%, 16%, 16% and 10% of aggregate gross receivables. At December 29, 2012, two customers represented approximately 41% and 24% of aggregate gross receivables. A significant reduction in sales to, or the inability to collect receivables from, a significant customer could have a material adverse impact on the Company. The Company mitigates risk with foreign receivables by purchasing comprehensive foreign credit insurance.

Cash Flow Information

The following table sets forth supplemental disclosures of cash flow information and non-cash investing and financing activities (in thousands):



	Three Months Ended
		March 30,		March 31,
		2013		2012

Supplemental disclosure of non-cash investing and financing activities:
Debt financed acquisition of assets	$	240	$	180
Change in unrealized gain (loss) from investments in marketable securities	$	-	$	7
Contractual marketing funds due to collaboration partners	$	-	$	800

Three Months Ended

Common share equivalents