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COMMON STOCK WARRANTS AND EARN-OUT LIABILITY | 6 Months Ended
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Jun. 28, 2026
Equity [Abstract] |
COMMON STOCK WARRANTS AND EARN-OUT LIABILITY | COMMON STOCK WARRANTS AND EARN-OUT LIABILITY The Company consummated a business combination (the “Business Combination”) pursuant to that certain Agreement and Plan of Merger dated March 11, 2021 (the “Merger Agreement”), by and among Empower Ltd., (“Empower”), Empower Merger Sub I Inc., Empower Merger Sub II LLC, and Holley Intermediate Holdings, Inc. (“Holley Intermediate”) on July 16, 2021, (the “Closing” and such date, the “Closing Date”). Upon the Closing, there were 14,666,644 Warrants, consisting of 9,999,977 public warrants ("Public Warrants") and 4,666,667 private warrants ("Private Warrants" and together with the Public Warrants, the “Warrants”), outstanding to purchase shares of Common Stock that were issued by Empower prior to the Business Combination. Each Warrant entitled the registered holder to purchase one share of Common Stock at a price of $11.50 per share, subject to adjustments, provided that the Company had an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them was available and such shares were registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. The Warrants were exercisable only for a whole number of shares of Common Stock. The Warrants expired on July 16, 2026, in accordance with their terms. None of the Warrants were exercised. The Company’s Warrants are accounted for as a liability in accordance with ASC 815-40 and are presented as a warrant liability on the condensed consolidated balance sheets. The warrant liability was measured at fair value at inception and on a recurring basis, with changes in fair value recognized as non-operating expense. As of June 28, 2026 and December 31, 2025, a warrant liability with a fair value of $444 and $2,024, respectively, was reflected in the condensed consolidated balance sheets. A decrease of $548 and $7 in the fair value of the warrant liability was reflected as change in fair value of warrant liability in the condensed consolidated statements of comprehensive income for the 13-week period ended June 28, 2026 and June 29, 2025, respectively. A decrease of $1,579 and $80 in the fair value of the warrant liability was reflected as change in fair value of warrant liability in the condensed consolidated statements of comprehensive income for the 26-week period ended June 28, 2026 and June 29, 2025, respectively. Additionally, the Sponsor received 2,187,500 shares of Common Stock upon the Closing, which vest in two equal tranches upon achievement of certain market share price milestones during the earn-out period, as outlined in the Merger Agreement (the “Earn-Out Shares”). The first tranche of Earn-Out Shares vested during the first quarter of 2022. Upon vesting, the first tranche of 1,093,750 Earn-Out Shares were issued and a liability of $14,689, representing the fair value of the shares on the date of vesting, was reclassified from liabilities to equity. The remaining tranche of Earn-Out Shares will be forfeited if the applicable conditions are not satisfied before July 16, 2028 (seven years after the Closing Date). The unvested Earn-Out Shares are presented as an earn-out liability on the condensed consolidated balance sheet and are remeasured at fair value with changes in fair value recognized as non-operating expense. As of June 28, 2026 and December 31, 2025, an earn-out liability with a fair value of $273 and $2,045, respectively, was reflected as a long-term liability in the condensed consolidated balance sheets. A decrease of $1,258 and $219 in the fair value of the earn-out liability was reflected as change in fair value of earn-out liability in the condensed consolidated statements of comprehensive income for the 13-week periods ended June 28, 2026 and June 29, 2025, respectively. A decrease of $1,772 and $404 in the fair value of the earn-out liability was reflected as change in fair value of earn-out liability in the condensed consolidated statements of comprehensive income for the 26-week period ended June 28, 2026 and June 29, 2025, respectively.

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