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Organization, Basis of Presentation, and Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Aug. 27, 2023
Accounting Policies [Abstract]  
Schedule of Disaggregation of Revenue
The following tables disaggregates revenues by major product lines and services (in thousands):
Three Months Ended
(In thousands)August 27, 2023August 28, 2022
Contact development and manufacturing organization$21,539 $18,268 
HA manufacturing2,983 5,456 
Total$24,522 $23,724 
Schedule of Inventories
As of August 27, 2023 and May 28, 2023, inventories consisted of the following (in thousands):

(In thousands)August 27, 2023May 28, 2023
Finished goods$16,476 $13,141 
Raw materials18,391 17,735 
Work in process7,281 10,349 
Inventory reserve(458)(384)
Total$41,690 $40,841 
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table summarizes the fair value of the Company’s assets and liabilities that are measured at fair value on a recurring and non-recurring basis (in thousands):
Fair Value at August 27, 2023Fair Value at May 28, 2023

Level 1Level 2Level 3Level 1Level 2Level 3
Liabilities:
Debt derivative liability(1)
$— $— $64,700 $— $— $64,900 
Total liabilities$— $— $64,700 $— $— $64,900 
(1) As of August 27, 2023 and May 28, 2023, the fair value of the debt derivative liability is included in non-current liabilities in the Company’s Condensed Consolidated Balance Sheets.
The key inputs to the valuation models that were utilized to estimate the fair value of the debt derivative liability were (i) an estimated probability related to the timing of a change in control over the 12 months following the end of the fiscal period; (ii) the estimated probability related to an event of default of the supply agreement with Alcon, as amended, over the 12 months following the end of the fiscal period; and (iii) a risk-adjusted discount rate.
The risk adjusted discount rate as of August 27, 2023 and May 28, 2023 were as follows:
August 27, 2023May 28, 2023
Assumptions
Discount rate
22.3% — 24.2%
22.3% — 24.5%
Implied spread
17.9%
18.5%
Risk free rate
4.4% — 6.3%
3.8% — 6.0%
The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the three months ended August 27, 2023 (in thousands):
Debt Derivative Liability
Balance as of May 29, 2022
$— 
Fair value on issuance(1)
64,900 
Balance as of May 28, 2023
$64,900 
Decrease in fair value(2)
(200)
Balance as of August 27, 2023
$64,700 

(1)At May 28, 2023, the fair value of the embedded derivative liability approximated the fair value upon issuance on May 22, 2023.
(2)For the three months ended August 27, 2023, the decrease in fair value is recorded within “Change in fair value of debt derivative liability, related party” within the condensed consolidated statement of operations.