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Fair Value Measurements
 9 Months Ended
Sep. 28, 2025
Fair Value Measurements [Abstract]  
Fair Value Measurements

(4) Fair Value Measurements

 

The following table sets forth the Company’s financial assets and liabilities that are measured at fair value, on a recurring basis (in thousands):

 

   As of September 28, 2025 
   Level 1   Level 2   Level 3   Total 
Financial Assets                    
Restricted cash  $3,841   $—   $—   $3,841 
Total  $3,841   $—   $—   $3,841 
Financial Liabilities                    
July 2024 Notes derivative liability  $—   $—   $21,664   $21,664 
July 2024 Notes derivative liability – related parties   —    —    13,940    13,940 
September 2024 derivative liability   —    —    53,301    53,301 
September 2024 derivative liability – related parties   —    —    5,922    5,922 
July 2025 Note derivative liability– related party   —    —    3,468    3,468 
September 2025 Notes derivative liability   —    —    16,274    16,274 
Forward purchase agreement liabilities    —    —    4,301    4,301 
Public warrants   —    —    2,588    2,588 
Private placement warrants   —    —    1,880    1,880 
Working capital warrants   —    —    215    215 
SAFE Agreement with related party   —    —    497    497 
Total  $—   $—   $124,050   $124,050 

 

   As of December 29, 2024 
   Level 1   Level 2   Level 3   Total 
Financial Assets                
Restricted cash  $3,841   $—   $—   $3,841 
Total  $3,841   $—   $—   $3,841 
Financial Liabilities                    
July 2024 Notes derivative liability  $—   $—   $13,563   $13,563 
July 2024 Notes derivative liability – related parties   —    —    21,127    21,127 
September 2024 Notes derivative liability   —    —    55,474    55,474 
September 2024 Notes derivative liability – related parties   —    —    6,958    6,958 
Forward purchase agreement liabilities (1)   —    —    3,494    3,494 
Public warrants   —    —    862    862 
Private placement warrants   —    —    627    627 
Working capital warrants   —    —    72    72 
SAFE Agreement with related party   —    —    384    384 
Total  $—   $—   $102,561   $102,561 

 

(1) Includes $1.3 million due to related parties as of and December 29, 2024.

 

Subsequent to issuance, changes in the fair value of the derivative liabilities, liability classified warrants, forward purchase agreements and SAFEs are recorded within Other expense, net in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss.

Derivative liabilities

 

The Company issued derivative liabilities in conjunction with the issuance of certain convertible notes in July 2024 September 2024 and July 2025 (as defined in Note 9 – Borrowings and Derivative Liabilities). The Company valued the derivative liabilities as of September 28, 2025, and December 29, 2024 using a binomial lattice model, which includes Level 3 unobservable inputs. The key inputs used were dividend yield, the Company’s common stock price, volatility, and risk-free rate of the derivative liabilities.

 

The July 2024 Notes derivative liability valuation included the following inputs:

 

   As of 
   September 28,
2025		   December 29,
2024		 
Coupon rate   12.0%   12.0%
Conversion rate   595.24    595.24 
Conversion price  $1.68   $1.68 
Common stock price  $1.77   $1.81 
Risk-free rate   3.7%   4.43%
Volatility   73.9%   62.0%
Dividend yield   0.0%   0.0%

 

The September 2024 Notes derivative liability valuation included the following inputs:

 

   As of 
   September 28,
2025		   December 29,
2024		 
Coupon rate   7.0%   7.0%
Conversion rate   467.84    467.84 
Conversion price  $2.14   $2.14 
Common stock price  $1.77   $1.81 
Risk-free rate   3.7%   4.43%
Volatility   77.8%   66.6%
Dividend yield   0.0%   0.0%

 

The July 2025 Note derivative liability valuation included the following inputs:

 

   As of 
   September 28,
2025		 
Coupon rate   12.0%
Conversion rate   558.66 
Conversion price  $1.79 
Common stock price  $1.77 
Risk-free rate   3.7%
Volatility   75.1%
Dividend yield   0.0%

 

The September 2025 Notes derivative liability valuation included the following inputs:

 

   As of 
   September 28,
2025		 
Coupon rate   7.0%
Conversion rate   467.84 
Conversion price  $2.14 
Common stock price  $1.77 
Risk-free rate   3.7%
Volatility   77.8%
Dividend yield   0.0%

Public warrants

 

The public warrants are measured at fair value on a recurring basis. The public warrants were valued based on the closing price of the publicly traded instrument.

 

Private placement and working capital warrants

 

The private placement and working capital warrants are measured at fair value. The Company valued the private placement and working capital warrants, based on a Black-Scholes Option Pricing Method, which included the following inputs:

 

   As of 
   September 28,   December 29, 
   2025   2024 
Expected term   2.81 years    3.56 years 
Expected volatility   169.0%   68.1%
Risk-free rate   3.65%   4.39%
Expected dividend yield   0.00%   0.00%

 

Forward purchase agreement liabilities

 

In the Third Quarter 2025, the Company entered into individual amendments with Meteora Special Opportunity Fund I, LP (“MSOF”), Meteora Capital Partners, LP (“MCP”), and Meteora Select Trading Opportunities Master, LP (“MSTO”) (with MSOF, MCP, and MSTO collectively as “Meteora”), Sandia Investment Management LP (“Sandia”) and Polar (collectively, the “FPA Amendments”) which among other things, extended the valuation date applicable to each of the FPAs.

 

FPAs are measured at fair value on a recurring basis using a Monte Carlo simulation analysis. The expected volatility is determined based on the historical equity volatility of comparable companies over a period that matches the simulation period, which included the following inputs:

 

   As of 
   September 28,   December 29, 
   2025   2024 
VWAP  $1.86   $1.78 
Simulation period   0.80 years    0.55 years 
Risk-free rate   3.73%   4.28%
Volatility   84.8%   117%

 

SAFE agreement with related party

 

The SAFE Agreement was valued based on a conversion probability of 50% based on historical SAFE agreements and a 50% discount rate at the time of conversion as of September 28, 2025, and December 29, 2024.

Financial liabilities not measured at fair value on a recurring basis:

 

The July 2024 Notes, the September 2024 Notes, the July 2025 Note, and the September 2025 Notes were fair valued using a binomial lattice model, which includes Level 3, unobservable inputs. The key inputs used are consistent with those used to fair value the derivative liabilities as discussed under Derivative Liabilities above. The following table sets forth the Company’s financial liabilities that were not measured at fair value, on a non-recurring basis (in thousands):

 

   As of September 28, 2025 
       Fair value 
   Carrying
value		   Estimated
fair value		   Level 1   Level 2   Level 3   Total 
Financial Liabilities                              
July 2024 Notes  $36,998   $34,187   $—   $—   $34,187   $34,187 
July 2024 Notes – related parties   8,155    22,042    —    —    22,042    22,042 
September 2024 Notes   15,750    78,563    —    —    78,563    78,563 
September 2024 Notes – related parties   1,714    8,729    —    —    8,729    8,729 
July 2025 Note – related party   1,373    6,250    —    —    6,250    6,250 
September 2025 Notes   4,218    25,090    —    —    25,090    25,090 
Total  $68,208   $174,861   $—   $—   $174,861   $174,861 

 

   As of December 29, 2024 
       Fair value 
   Carrying
value		   Estimated
fair value		   Level 1   Level 2   Level 3   Total 
Financial Liabilities                        
July 2024 Notes  $17,965   $21,390   $—   $—   $21,390   $21,390 
July 2024 Notes - related parties   24,632    33,323    —    —    33,323    33,323 
September 2024 Notes   5,636    77,245    —    —    77,245    77,245 
September 2024 Notes - related parties   476    8,583    —    —    8,583    8,583 
Total  $48,709   $140,541   $—   $—   $140,541   $140,541