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Fair Value | 12 Months Ended
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Sep. 27, 2019
Fair Value Disclosures [Abstract] |
Fair Value | FAIR VALUE We group our financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data.
Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by us.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis We measure certain assets and liabilities at fair value on a recurring basis such as our financial instruments. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the fiscal year ended September 27, 2019. Assets and liabilities measured at fair value on a recurring basis consist of the following (in thousands):
| September 27, 2019
| Fair Value |  | Active Markets for Identical Assets (Level 1) |  | Observable Inputs (Level 2) |  | Unobservable Inputs (Level 3)
Assets |  |  |  |  |  |  |
Money market funds | $ | 261 |  |  | $ | 261 |  |  | $ | — |  |  | $ | — |
Commercial paper | 71,629 |  |  | — |  |  | 71,629 |  |  | — |
Corporate bonds | 29,597 |  |  | — |  |  | 29,597 |  |  | — |
Total assets measured at fair value | $ | 101,487 |  |  | $ | 261 |  |  | $ | 101,226 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |
Warrant liability | 12,364 |  |  | — |  |  | — |  |  | 12,364 |
Total liabilities measured at fair value | $ | 12,364 |  |  | $ | — |  |  | $ | — |  |  | $ | 12,364 |
| September 28, 2018
| Fair Value |  | Active Markets for Identical Assets (Level 1) |  | Observable Inputs (Level 2) |  | Unobservable Inputs (Level 3)
Assets |  |  |  |  |  |  |
Money market funds | $ | 253 |  |  | $ | 253 |  |  | $ | — |  |  | $ | — |
Commercial paper | 69,950 |  |  | — |  |  | 69,950 |  |  | — |
Corporate bonds | 28,271 |  |  | — |  |  | 28,271 |  |  | — |
Total assets measured at fair value | $ | 98,474 |  |  | $ | 253 |  |  | $ | 98,221 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |
Contingent consideration | $ | 585 |  |  | $ | — |  |  | $ | — |  |  | $ | 585 |
Warrant liability | 13,129 |  |  | — |  |  | — |  |  | 13,129 |
Total liabilities measured at fair value | $ | 13,714 |  |  | $ | — |  |  | $ | — |  |  | $ | 13,714 |
The quantitative information utilized in the fair value calculation of our Level 3 liabilities are as follows:
Liabilities | Valuation Technique |  | Unobservable Input |  | September 27, 2019 |  | September 28, 2018
Contingent consideration | Discounted cash flow |  | Discount rate |  | N/A |  | 9.2%
|  |  | Probability of achievement |  | N/A |  | 90%
|  |  | Timing of cash flows |  | N/A |  | 1 month
Warrant liability | Black-Scholes model |  | Volatility |  | 61.4% |  | 60.7%
|  |  | Discount rate |  | 1.71% |  | 2.81%
|  |  | Expected life |  | 1.2 years |  | 2.2 years
|  |  | Exercise price |  | $14.05 |  | $14.05
|  |  | Stock price |  | $21.68 |  | $20.60
|  |  | Dividend rate |  | —% |  | —%
The fair values of the contingent consideration liabilities were estimated based upon a risk-adjusted present value of the probability-weighted expected payments by us. Specifically, we considered base, upside and downside scenarios for the operating metrics upon which the contingent payments are to be based. Probabilities were assigned to each scenario and the probability-weighted payments were discounted to present value using risk-adjusted discount rates. The changes in assets and liabilities with inputs classified within Level 3 of the fair value hierarchy consist of the following (in thousands):
| Fiscal Year 2019
| September 28, 2018 |  | Net Realized/Unrealized Losses (Gains) Included in Earnings |  | Purchases and Issuances |  | Sales and Settlements |  | September 27, 2019
Contingent consideration | $ | 585 |  |  | $ | 65 |  |  | $ | — |  |  | $ | (650 | ) |  | $ | — |
Warrant liability | $ | 13,129 |  |  | $ | (765 | ) |  | $ | — |  |  | $ | — |  |  | $ | 12,364 |
| Fiscal Year 2018
| September 29, 2017 |  | Net Realized/Unrealized Losses (Gains) Included in Earnings |  | Purchases and Issuances |  | Sales and Settlements |  | September 28, 2018
Contingent consideration | $ | 1,679 |  |  | $ | (394 | ) |  | $ | — |  |  | $ | (700 | ) |  | $ | 585 |
Warrant liability | $ | 40,775 |  |  | $ | (27,646 | ) |  | $ | — |  |  | $ | — |  |  | $ | 13,129 |
| Fiscal Year 2017
| September 30, 2016 |  | Net Realized/Unrealized Losses (Gains) Included in Earnings |  | Purchases and Issuances |  | Sales and Settlements |  | September 29, 2017
Contingent consideration | $ | 848 |  |  | $ | 180 |  |  | $ | 1,701 |  |  | $ | (1,050 | ) |  | $ | 1,679 |
Warrant liability | $ | 38,253 |  |  | $ | 2,522 |  |  | $ | — |  |  | $ | — |  |  | $ | 40,775 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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