Note 9 - Fair Value Measurements

3 Months Ended

Mar. 30, 2025

Notes to Financial Statements

Fair Value Disclosures [Text Block]

9. FAIR VALUE MEASUREMENTS

The Company’s financial liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows:

	Fair Value Measured on March 30, 2025
	Level 1		Level 2		Level 3		Total
Liabilities:
Warrant liability (Public)	$	498	$	—	$	—	$	498
Warrant liability (Private)		—		—		242		242
Earn-out liability		—		—		963		963
Interest rate collar liability		—		3,872		—		3,872
Total fair value liabilities	$	498	$	3,872	$	1,205	$	5,575

	Fair Value Measured on December 31, 2024
	Level 1		Level 2		Level 3		Total
Liabilities:
Warrant liability (Public)	$	548	$	—	$	—	$	548
Warrant liability (Private)		—		—		265		265
Earn-out liability		—		—		1,148		1,148
Interest rate collar liability		—		60		—		60
Total fair value liabilities	$	548	$	60	$	1,413	$	2,021

As of March 30, 2025, the Company's derivative liabilities for its Private and Public Warrants, earn-out liability, and derivative asset for its Collar are measured at fair value on a recurring basis (see Note 7, “Common Stock Warrants and Earn-Out Liability,” and Note 8, "Derivative Instruments," for more details). The fair values of the Private Warrants and earn-out liability are determined based on significant inputs not observable in the market (Level 3). The valuation of the Level 3 liabilities uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. The Company uses a Monte Carlo simulation model to estimate the fair value of its Private Warrants and earn-out liability. The fair value of the Collar, which is included in other noncurrent assets on the condensed consolidated balance sheets, is determined based on models that reflect the contractual terms of the derivative, yield curves, and the credit quality of the counterparties. Inputs are generally observable and do not contain a high level of subjectivity (Level 2). The fair value of the Public Warrants is determined using publicly traded prices (Level 1). Changes in the fair value of the derivative liabilities related to Warrants and the earn-out liability are recognized as non-operating expense in the condensed consolidated statements of comprehensive income. Changes in the fair value of the Collar is recognized as an adjustment to interest expense in the condensed consolidated statements of comprehensive income. Changes in the fair value of the derivative liabilities related to Warrants and the earn-out liability and changes in the fair value of the Collar are recognized in net cash provided by operating activities on the condensed consolidated statements of cash flows.

The fair value of Private Warrants was estimated as of the measurement date using the Monte Carlo simulation model with the following assumptions:

	March 30, 2025			December 31, 2024
Valuation date price	$	2.57		$	3.02
Strike price	$	11.50		$	11.50
Remaining life (in years)		1.29			1.54
Expected dividend	$	—		$	—
Risk-free interest rate		3.91	%		4.12	%
Price threshold	$	18.00		$	18.00

The fair value of the earn-out liability was estimated as of the measurement date using the Monte Carlo simulation model with the following assumptions:

	March 30, 2025			December 31, 2024
Valuation date price	$	2.57		$	3.02
Expected term (in years)		3.29			3.54
Expected volatility		69.48	%		64.33	%
Risk-free interest rate		3.82	%		4.21	%
Price hurdle	$	15.00		$	15.00

As of March 30, 2025 and  December 31, 2024, the Company has accounts receivable, accounts payable and accrued expenses for which the carrying value approximates fair value due to the short-term nature of these instruments. The carrying value of the Company’s long-term debt approximates fair value as the rates used approximate the market rates currently available to the Company. 

The reconciliation of changes in Level 3 liabilities during the 13-week periods ended March 30, 2025 and March 31, 2024 is as follows:

	Private Warrants			Earn-Out Liability			Total
Balance at December 31, 2023	$	2,903		$	3,479		$	6,382
Gains included in earnings		(1,135	)		(649	)		(1,784	)
Balance at March 31, 2024	$	1,768		$	2,830		$	4,598
Balance at December 31, 2024	$	265		$	1,148		$	1,413
Gains included in earnings		(23	)		(185	)		(208	)
Balance at March 30, 2025	$	242		$	963		$	1,205