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Fair Value Measurements
 3 Months Ended
Aug. 25, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Cash and cash equivalents represent cash in banks and highly liquid short-term investments that have maturities of three months or less when acquired. These highly liquid short-term investments are both readily convertible to known amounts of cash and so near to their maturity that they present insignificant risk of changes in value due to changes in interest rates.
The Term Loan Credit Facility (as defined in Note 10 – Debt) contains embedded derivatives requiring bifurcation as multiple derivative instruments (“debt derivative liability”). The debt derivative liability related to the Term Loan Credit Facility is recorded as a discount to the long-term debt in the Condensed Consolidated Financial Statements. The embedded debt derivative liability is recorded at fair value, and remeasured every reporting period, with changes in fair value recognized as a component of other expense, net. The fair value of the embedded derivative liabilities associated with the Term Loan Credit Facility was estimated using a probability weighted discounted cash flow model. The Term Loan Credit Facility has a fair value of $132,400 as of August 25, 2024, which was estimated using discounted cash flow model using Level 3 inputs and assumptions. Imprecision in estimating unobservable market inputs can affect the amount of gain or loss recorded for a particular position. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Outstanding borrowings under the Company's Revolving Credit Facility are carried at cost, which approximates their fair value as of August 25, 2024 and May 26, 2024, due to their short duration.
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:
Fair Value at August 25, 2024Fair Value at May 26, 2024

Level 1Level 2Level 3Level 1Level 2Level 3
Liabilities:
Debt derivative liability(1)
$— $— $24,500 $— $— $25,400 
Total liabilities$— $— $24,500 $— $— $25,400 
(1) As of August 25, 2024 and May 26, 2024, the fair value of the debt derivative liability is included on its own line 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, related party, were (i) a weighted average probability related to the timing of a change in control over the remaining term of the debt; (ii) the estimated probability related to an event of default of the Alcon Supply Agreement, as amended, weighted as to 30 days from the reporting date and at the end of the term of the Term Loan agreement.; and (iii) a risk-adjusted discount rate. There was no change in the probability related to event of default of the Alcon Supply Agreement during the first fiscal quarter of 2025.
Key inputs into the discount rate assumptions during the quarter ended August 25, 2024 and year ended May 26, 2024 were as follows:
Three Months EndedYear Ended
August 25, 2024May 26, 2024
Assumptions
Discount rate
20.4% — 22.2%
21.3% — 23.5%
Implied spread
16.8%
16.8% — 17.9%
Risk free rate
3.7% — 5.5%
4.3% — 5.6%

The following table reflects the fair value roll forward reconciliation of Level 3 assets and liabilities measured at fair value for the following periods:
Three Months Ended
August 25, 2024August 27, 2023
Balance at beginning of period$25,400 $64,900 
Decrease in fair value(1)
(900)(200)
Balance at end of period$24,500 $64,700 
(1) For the three months ended August 25, 2024 and August 27, 2023, the decreases in fair value are recorded in the “Change in fair value of debt derivative liability, related party” line within the condensed consolidated statement of operations.