Note 4—Supplemental Financial Information

Inventories

Inventories consisted of the following as of the dates presented:


	June 30,			December 30,
	2018			2017
		(in thousands)
Raw materials		$	1,474		$	768
Work in process			322			88
Finished goods			1,669			3,249
		$	3,465		$	4,105

Warranty Liabilities

The following table summarizes activity related to warranty liabilities in the periods presented:


	Six Months Ended
	June 30,		July 1,
	2018		2017
	(in thousands)
Beginning balance	$	152		$	89
Estimated cost of warranty claims charged to cost of sales		155			97
Cost of actual warranty claims		(131)			(73)
Ending balance		176			113
Less current portion		(106)			(68)
Long-term warranty liability	$	70		$	45

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 liability expected to be incurred after one year is classified as long-term warranty liability in the accompanying condensed consolidated balance sheets.

Computation of Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share, including the numerator and denominator used in the calculation of basic and diluted net loss per share, for the periods presented:


	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
	2018		2017		2018		2017
	(in thousands, except per share data)
Basic and diluted net loss per share:
Numerator: Net loss	$	(3,417)	$	(3,847)	$	(8,090)	$	(7,189)
Denominator: Weighted-average common shares outstanding, basic and diluted		91,685		61,844		87,073		61,763
Basic and diluted net loss per share	$	(0.04)	$	(0.06)	$	(0.09)	$	(0.12)

The table below 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, and the exercise of warrants, computed using the treasury stock method, and shares issuable upon conversion of the SVIC Note (see Note 5) using the “if-converted” 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 presented:


	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
	2018		2017		2018		2017
	(in thousands)				(in thousands)
Common share equivalents		12,627		13,006		12,628		13,155

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

Major Customers and Products

The Company’s net sales have historically been concentrated in a small number of customers. The following table sets forth the percentage of the Company’s net sales made to customers that each comprise 10% or more of the Company’s net sales in the periods presented:


	Three Months Ended				Six Months Ended
	June 30,		July 1,		June 30,		July 1,
	2018		2017		2018		2017
Customer:
Customer A	28	%	*	%	20	%	*	%
Customer B	*	%	16	%	*	%	*	%
Customer C	*	%	*	%	*	%	11	%

*Less than 10% of net sales during the period.

The Company’s accounts receivable are concentrated with three customers at June 30, 2018 representing 29%, 18% and 11% of aggregate gross receivables, respectively. At December 30, 2017, three customers represented 15%, 13% and 12% of aggregate gross receivables, respectively. The loss of any of the Company’s significant customers or a reduction in sales to or difficulties collecting payments from any of these customers could significantly reduce the Company’s net sales and adversely affect its operating results. The Company tries to mitigate risks associated with foreign receivables by purchasing comprehensive foreign credit insurance.

The Company resells certain component products to end-customers that are not reached in the distribution models of the component manufacturers, including storage customers, appliance customers, system builders and cloud and datacenter customers. For the three and six months ended June 30, 2018 and July 1, 2017, resales of these products represented approximately 75%, 76%, 91% and 91%, respectively, of the Company’s net revenues.

Cash Flow Information

The following table sets forth supplemental disclosures of cash flow information and non-cash financing activities for the periods presented:


	Six Months Ended
	June 30,		July 1,
	2018		2017
	(in thousands)
Supplemental disclosure of non-cash financing activities:
Debt financing of insurance	$	344	$	220