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Fair Value Measurements | 6 Months Ended
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Jun. 29, 2019
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The following table presents information about our assets and liabilities measured at fair value on a recurring basis as of June 29, 2019 and December 29, 2018 and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
| June 29, 2019 |  | December 29, 2018
| Fair Value Measurements Using Input Types |  |  |  | Fair Value Measurements Using Input Types |  |
| Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market mutual funds | $ | 18,365 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,365 |  |  | $ | 18,148 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,148 |
Certificates of deposit | 37,082 |  |  | — |  |  | — |  |  | 37,082 |  |  | 37,180 |  |  | — |  |  | — |  |  | 37,180 |
Total assets | $ | 55,447 |  |  | $ | — |  |  | $ | — |  |  | $ | 55,447 |  |  | $ | 55,328 |  |  | $ | — |  |  | $ | — |  |  | $ | 55,328 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent acquisition consideration | $ | — |  |  | $ | — |  |  | $ | 447 |  |  | $ | 447 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,964 |  |  | $ | 1,964 |
Total liabilities | $ | — |  |  | $ | — |  |  | $ | 447 |  |  | $ | 447 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,964 |  |  | $ | 1,964 |
The following table sets forth a summary of changes in fair value of our contingent acquisition consideration liability, which represents the recurring measurement that is classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs (in thousands):
| June 29, 2019
| Contingent Acquisition Consideration
Beginning balance - December 29, 2018 | $ | 1,964 |
Change in fair value of contingent consideration | 116 |
Payment of contingent consideration liability | (1,633 | )
Ending balance - June 29, 2019 | $ | 447 |
We recorded our estimates of the fair value of contingent consideration associated with the Town & Country Resources, Inc. and Trusted Labs, Inc. acquisitions based on the evaluation of the likelihood of the achievement of the contractual conditions that would result in the payment of the contingent considerations and weighted probability assumptions of these outcomes. For both acquisitions, the fair value of the liability was estimated using the Monte Carlo simulation with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included our probability assessments of the achievement of certain financial and operational metrics, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the merger agreements. The cash portion of the contingent consideration liabilities have been discounted to reflect the time value of money, and therefore, as the milestone dates approach, the fair value of these liabilities will increase. Changes in fair value are recorded in general and administrative expense in the accompanying consolidated statements of operations. Non-Recurring Fair Value Measurements We re-measure the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets comprise long-lived assets, including property and equipment, right of use asset impairments, intangible assets and goodwill. In the six months ended June 29, 2019 and June 30, 2018, no significant remeasurements were necessary. Other financial instruments not measured or recorded at fair value in the accompanying condensed consolidated balance sheets principally consist of accounts receivable, accounts payable, and accrued liabilities. The estimated fair values of these instruments approximate their carrying values due to their short-term nature. In the quarter ended September 30, 2017, we ceased use of 25,812 square feet of the Company’s headquarters facility and recorded a restructuring liability, which upon adoption of ASC 842 we reclassified this liability as a reduction of the right-of-use asset associated with the lease. We have updated our estimate in subsequent periods, as discussed in Note 12. These estimates include assumptions for the time period it will take to obtain a subtenant, construction costs, and certain sublease rates. These estimates may vary from the sublease agreements ultimately executed, if at all, and could result in an adjustment to the right of use asset. In the first and third quarters of fiscal 2018 and first quarter of fiscal 2019, we updated our assumptions, as we had signed a sublease agreement for a portion of the ceased use space during the first quarter of fiscal 2018 and updated our estimates for the expected time period it will take to obtain a subtenant for the remainder of the cease use space during both the first and third quarters of fiscal 2018. We discounted the estimated future cash flows to arrive at fair value. This resulted in an additional $0.6 million of charges, of which $0.5 million was incurred in the first quarter of fiscal 2018; $0.1 million was incurred in the third quarter of fiscal 2018, $0.2 million was incurred in the first quarter of fiscal 2019 and $0.3 million was incurred in the second quarter of 2019. The measurement of our restructuring charges and right of use asset impairments using these assumptions is a level 3 measurement. During the quarter ended June 29, 2019, we decided to abandon and seek a sublet for 36,395 square feet of the Company’s headquarters facility, which resulted in a right of use asset impairment charge of $1.1 million. This loss was determined by comparing the fair value of the impacted right of use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC Topic 360, Property, Plant, and Equipment (“ASC 360”). The fair value of the right of use asset was based on the estimated sublease income for the portion of the Company’s headquarters taking into consideration the time period it will take to obtain a subtenant, the applicable discount rate and the sublease rate. Additionally, we recorded a restructuring loss of $0.7 million associated with abandoning the space. The loss was comprised of exit and disposal costs consisting of construction costs, real estate taxes, broker fees and utilities. Furthermore, we wrote-off $0.5 million of leasehold improvements related to the space. Refer to Note 12 for further information. The measurement of our restructuring loss and right of use asset impairments using the assumptions described is a level 3 measurement. In the second quarter of fiscal 2019, we decided to wind down our Figure 8 business. This resulted in an indicator of impairment for the associated goodwill and intangible assets. Given that Figure 8 was only acquired in the first quarter of fiscal 2019, we had not yet integrated the business into our existing reporting units. As we will be disposing of the business, our impairment assessment completed in the second quarter of fiscal 2019 resulted in an impairment loss of $8.2 million in the three and six months ended June 29, 2019. This impairment loss was comprised of the $5.3 million of goodwill recorded upon acquisition and $2.9 million of net proprietary software intangible assets.

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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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