v3.25.4

Emergence from Voluntary Reorganization under Chapter 11 | 6 Months Ended
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Dec. 28, 2025
Reorganizations [Abstract] |
Emergence from Voluntary Reorganization under Chapter 11 | Emergence from Voluntary Reorganization under Chapter 11 On the Petition Date, the Debtors commenced the Chapter 11 Cases under the Bankruptcy Code in the Bankruptcy Court. On that date, the Debtors also filed the Plan with the Bankruptcy Court, and on September 8, 2025, the Bankruptcy Court entered the Confirmation Order. On the Effective Date, the Debtors emerged from the Chapter 11 Cases in accordance with the Plan. Definitions •Convertible Notes Claim - any Claim on account of the Convertible Notes or otherwise arising under indentures governing such notes, including accrued but unpaid interest thereon through the Petition Date. •CRD Agreement Deposits - the term loans in an aggregate amount of $2.1 billion (including accrued and unpaid interest as of the Petition Date) made by Renesas to the Company under that certain Unsecured Customer Refundable Deposit Agreement, dated as of July 5, 2023, as amended to date, by and between Wolfspeed and Renesas. •Professional Fee Escrow Account - an escrow account established and funded to pay for all Bankruptcy Court approved professional fees and expenses due from the Company. •Regulatory Approvals - As set forth in the Plan, "Regulatory Approvals" means (a) Committee on Foreign Investment in the United States ("CFIUS") approval; (b) clearance or approval under antitrust laws in (i) the United States, (ii) Austria, (iii) Germany, (iv) Japan, and (v) European Commission (as applicable); (c) clearance or approval under Italy Foreign Investment Laws; (d) regulatory approvals from any regulatory regimes necessary to consummate the restructuring transactions (for the avoidance of doubt, in relation to the Regulatory Approvals, for Renesas to receive the New 2L Renesas Convertible Notes (as defined below); 16,852,372 shares of New Common Stock the Renesas Warrants; and voting, board seat, and other governance rights in accordance with the Restructuring Support Agreement), that are identified by Renesas and of which the Debtors are notified within thirty (30) calendar days following the effective date of the Restructuring Support Agreement; and (d) any regulatory approvals from any regulatory regimes necessary to consummate the restructuring transactions that are not identified by Renesas and of which the Debtors are not notified within thirty (30) calendar days following the effective date of the restructuring Support Agreement. ◦As of December 28, 2025 all Regulatory Approvals except for CFIUS approval had been obtained. ◦As of January 29, 2026 all Regulatory Approvals had been obtained, refer to "Note 16 - Subsequent Events" for additional information for additional information. •Regulatory Trigger Deadline - the earlier of (i) a good faith agreement between the Debtors or Reorganized Debtors, which means the Debtors on and after the Effective Date, and Renesas that it is more likely than not that the Regulatory Approvals will not be obtained and (ii) two (2) years from the Effective Date; provided, if upon two (2) years from the Effective Date, the Reorganized Debtors and Renesas agree, in good faith, that Regulatory Approval is more likely than not to be obtained prior to three (3) years from the Effective Date, then upon three (3) years from the Effective Date. For the avoidance of doubt, to the extent Renesas obtains all Regulatory Approvals prior to the date of the Regulatory Trigger Deadline, the Regulatory Trigger Deadline shall be deemed not to have occurred. Plan of Reorganization On the Effective Date, the Company emerged from the Chapter 11 Cases as all the material conditions precedent to the effectiveness of the Plan were satisfied or waived and the Plan became effective. In accordance with the Plan and effective as of the Effective Date: •Cancellation of Prior Equity Interests – Immediately prior to the Effective Date there were 156,479,390 shares of the Company's common stock, $0.00125 par value per share (the "Old Common Stock"), outstanding. In accordance with the Plan and the Plan of Conversion at the Conversion Effective Time, the Company effected a redomestication from a North Carolina corporation to a Delaware corporation and, in connection therewith, adopted a new certificate of incorporation, under which the Company is authorized to issue 350,000,000 shares of common stock, $0.00125 par value per share ("New Common Stock"), and new bylaws, each of which became effective at the Conversion Effective Time. After giving effect to the transactions contemplated by the Plan and the Plan of Conversion, on the Effective Date all of the previously issued and outstanding shares of Old Common Stock were cancelled, and existing equity holders received their pro rata share of approximately 1,306,896 shares of New Common Stock, of the Delaware corporation. Pursuant to the Plan, the Company issued an aggregate of 25,840,656 shares of New Common Stock (inclusive of the aforementioned shares of New Common Stock issued to existing equity holders, with the remaining shares issued to pre-petition convertible noteholders, in accordance with the Plan). As of the Effective Date, the Company had an aggregate of 25,840,656 shares of New Common Stock issued and outstanding and 73,030,424 shares of New Common Stock in reserve for issuance pursuant to the Plan (the "Share Reserve"). •Secured Financing – The Existing Senior Secured Notes were discharged and terminated. Each holder of a Senior Secured Notes Claim received on account of their claims: (a) their pro rata portion of the $1.3 billion principal amount of New Senior Secured Notes, (b) a pro rata redemption of $277.5 million in principal amount of Existing Senior Secured Notes at 109.875% of the principal amount being redeemed (paid with the proceeds of the rights offering, described below, and proceeds from the sale of the MACOM Shares (as defined below), and (c) certain commitment fees, subject to certain conditions. •Convertible Notes – The then-outstanding Convertible Notes totaling approximately $3.1 billion were discharged and terminated. Each holder of a Convertible Notes Claim received on account of their claims: (a) rights to participate in the rights offering of New 2L Non-Renesas Convertible Notes in the aggregate principal amount of approximately $301.1 million, which were offered at a purchase price of 91.3242% totaling $275.0 million, and fully backstopped by the Backstop Parties, and for which such Backstop Parties received a premium in the amount of $30.3 million for an aggregate principal amount of $331.4 million, (b) 7%/12% second lien senior secured PIK toggle notes due 2031 (the "New 2L Non-Convertible Notes") in an aggregate principal amount of $296.4 million, and (c) 24,533,760 shares of New Common Stock. Refer to Note 1, "Basis of Presentation and New Accounting Standards," and Note 11, “Long-term Debt,” for additional information on the new 2.5% Convertible Second-Lien Senior Secured Notes due 2031 (the "New 2L Non-Renesas Convertible Notes") and New 2L Non-Convertible Notes. ◦Registration Rights Agreement - On the Effective Date, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Renesas and certain holders of the New 2L Non‑Renesas Convertible Notes (the “RRA Counterparties”). The Registration Rights Agreement provides the RRA Counterparties with registration rights for their “Registrable Securities.” The Company was required to file a Shelf Registration Statement on Form S‑1 or Form S‑3 (i) within 45 days of the Effective Date (satisfied by a Form S‑1 filed November 13, 2025) and (ii) for Registrable Securities held by Renesas, within 45 days of the Renesas Base Distribution Date. Once effective, an RRA Counterparty may request an underwritten offering, with related filings due within fifteen business days for a Form S‑1 or ten business days for a Form S‑3. Registrable Securities may also be sold in non‑underwritten offerings. Shelf Registration Statements must remain effective until the covered securities cease to be Registrable Securities. The RRA Counterparties have customary piggyback rights, subject to the limitations in the Registration Rights Agreement. The Company generally bears all registration expenses. The Registration Rights Agreement includes customary indemnification and contribution provisions and terminates for each RRA Counterparty when it no longer holds Registrable Securities, and in full when no Registrable Securities remain outstanding. •Renesas – The then-outstanding CRD Agreement Deposits with Renesas totaling approximately $2.1 billion were discharged and terminated. Renesas received on account of their claims: (a) a principal amount of approximately $203.6 million of New Renesas 2L Convertible Notes, (b) the Renesas Warrant to purchase an aggregate of 4,943,555 shares of New Common Stock, at an exercise price of $23.95 per share, which until all Regulatory Approvals were received, were only deemed issued for purposes of U.S. federal and applicable state and local income tax purposes and were not exercisable, and (c) 16,852,372 shares of New Common Stock from the Share Reserve, the issuance of which was subject to Regulatory Approvals. All Regulatory Approvals were received in January 2026. As of December 28, 2025 the Company’s obligation to issue the New Common Stock from the Share Reserve was reflected on the unaudited consolidated balance sheet as forward equity contract within liabilities, due to the potential cash settlement features associated with the Investor Rights and Disposition Agreement described below. The Renesas Warrant is exercisable within three years from the Effective Date. As of December 28, 2025, the warrant was also liability-classified, due to the potential cash settlement features associated with the Investor Rights and Disposition Agreement described below. ◦Investor Rights and Disposition Agreement - On the Effective Date, the Company entered into an Investor Rights and Disposition Agreement (the “Investor Rights Agreement”) with Renesas. The Investor Rights Agreement grants Renesas certain investment rights, including the right to designate one Board member, subject to receipt of Regulatory Approvals and Renesas holding more than 10% of the New Common Stock. The Investor Rights Agreement includes (i) a limitation preventing Renesas from exercising voting rights on New Common Stock beneficially owned in excess of 9.9% of the Aggregate Company Voting Power (the “Voting Rights Limitation”) and (ii) a limitation under which any conversion or exercise of Securities resulting in Renesas beneficially owning more than 39.9% of the Aggregate Company Voting Power is null and void (the “Beneficial Ownership Limitation,” and together with the Voting Rights Limitations, the “Limitations”). The Limitations apply through January 1, 2027 and automatically renew annually, unless earlier terminated by Renesas pursuant to the terms of the Investor Rights Agreement. Renesas may terminate the Limitations at any time if the Company submits to stockholders proposals involving a change of control, issuance of New Common Stock (or convertible/exercisable instruments), amendments to the certificate of incorporation or bylaws adversely affecting Renesas’s rights, or other matters adversely affecting such rights. Prior to the receipt of Regulatory Approvals and subject to certain conditions, Renesas had designation rights regarding the disposition of, and rights to cash proceeds from the disposition of, New Common Stock (including shares underlying Securities) it was entitled to receive under the Plan. Renesas could direct the Company to sell such shares through a primary registered offering under the Registration Rights Agreement or under the ELOC/ATM Program, with proceeds remitted to Renesas net only of commissions or discounts, reducing Renesas’s related Securities entitlement. The designation rights could not be exercised until nineteen weeks after the Effective Date and were nullified upon receipt of Regulatory Approvals and the release of New Common Stock from the Share Reserve to Renesas. ◦Renesas Contingent Consideration – As Regulatory Approvals were obtained prior to the Regulatory Trigger Deadline, in the third quarter of fiscal 2026, Renesas will not be entitled to the Contingent Consideration and $10 million of the cash placed into escrow upon emergence will be remitted back to the Company, and $5 million of the cash placed into escrow upon emergence will be remitted to the holders of the Existing Senior Secured Notes (on account of the commitment fee amount), the Additional New 2L Non-Convertible Notes will not be issued, the 871,287 shares of New Common Stock were distributed to the holders of Old Common Stock immediately prior to the Effective Date, and the term of the Renesas Warrant will not be extended. Refer to Note 1, "Basis of Presentation and New Accounting Standards'" and Note 7, “Commitments and Contingencies” for additional information on the Renesas Contingent Consideration. ◦Contingent Shares – As the Regulatory Approvals were obtained prior to the Regulatory Trigger Deadline, in the third quarter of fiscal 2026, the holders of Old Common Stock immediately prior to the Effective Date will receive their pro rata portion of 871,287 shares of New Common Stock from the Share Reserve (the “Contingent Shares”). •Incentive Compensation Plans – Pursuant to the Plan, the Company adopted two equity compensation plans: the Long-Term Incentive Plan and the Management Incentive Plan, which each provide for the grant of options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units, performance units, other awards, or a combination thereof. An aggregate of 4,058,925 shares of New Common Stock have been reserved for issuance under the Long-Term Incentive Plan. The Long-Term Incentive Plan provides for grants to be made under the Long-Term Incentive Plan in fiscal year 2026 and 2027 having an aggregate value, as determined by the Board or the Committee (as defined in the Long-Term Incentive Plan), equal to $26.6 million and $27.5 million, respectively. An aggregate of 8,117,851 shares of New Common Stock have been reserved for issuance under the Management Incentive Plan. The Management Incentive Plan provides for initial awards under the Management Incentive Plan to be made to executive officers and key employees in accordance with the Restructuring Support Agreement. Any such awards are subject to approval by the Board of Directors, which did not occur prior to the Effective Date or as of the issuance date of these unaudited consolidated financial statements. Please refer to Note 1, "Basis of Operation and New Accounting Standards," and Note 13, "Stock-Based Compensation" for additional information on the Incentive Compensation Plans. •Professional Fee Escrow Account – The Company funded the Professional Fee Escrow Account, which was reflected as restricted cash on the consolidated balance sheet. As of December 28, 2025 the professional fees for certain company advisers incurred during the Chapter 11 Cases subject to disbursements through the escrow account had been paid in full. •General Unsecured Claims – Holders of general unsecured claims received payment in full in cash, reimbursement, or such other treatment rendering such general unsecured claims unimpaired. The Company has substantially completed its claims reconciliation process, and is working to settle all remaining outstanding prepetition claims in the ordinary course. •Certificate of Incorporation – Please refer to Note 1, "Basis of Presentation and New Accounting Standards," for additional information on the Certificate of Incorporation. The Company effected a conversion from a North Carolina corporation to a Delaware corporation and, in connection therewith, adopted a new certificate of incorporation, under which the Company is authorized to issue 350,000,000 shares of New Common Stock and new bylaws, each of which became effective on the Effective Date. Regulatory Approvals The Regulatory Approvals were received on January 29, 2026, prior to the Regulatory Trigger Deadline. As set forth in the Plan, the Company issued 16,852,372 shares of New Common Stock to Renesas from the Share Reserve on January 29, 2026, and holders of Old Common Stock immediately prior to the Effective Date will receive their pro rata portion of 871,287 shares of New Common Stock from the Share Reserve (the "Contingent Shares"). The Company will also receive $10 million of the cash that was placed into escrow upon emergence (the "Contingent Cash"), with the remaining $5 million going to holders of the Existing Senior Secured Notes. The receipt of Regulatory Approvals was a subsequent event for the period ending December 28, 2025. The balance sheet as of December 28, 2025 assumed that final regulatory approval would be received prior to the Regulatory Trigger Deadline, but does not reflect the subsequent receipt of approvals. The following paragraphs summarize the recognition and measurement of amounts related to the Regulatory Approvals: •Renesas Shares - the obligation to issue 16,852,372 shares to Renesas was liability-classified, presented within "Forward equity contract" and remeasured to fair value as of the balance sheet date. Upon receipt of the Regulatory Approvals, the shares issued to satisfy the equity contract will be recognized at fair value as of the approval date to extinguish the forward equity contract liability. •Renesas Warrant - the warrant to purchase 4,943,555 shares was liability-classified, within "Other long-term liabilities" and remeasured to fair value as of the balance sheet date. Upon receipt of the Regulatory Approvals, the warrants are expected to qualify for equity-classification, and will be reclassified to equity based on their fair value as of the approval date. •Renesas 2L Convertible Notes - the embedded conversion feature on the Renesas 2L Convertible notes was bifurcated from the underlying debt instrument and remeasured to fair value as of the balance sheet date. Upon receipt of the Regulatory Approvals, the conversion feature is expected to qualify for equity-classification, and will be reclassified to equity based on the fair value as of the approval date. •Additional 2L Non-Convertible Notes - the receipt of the Regulatory Approvals nullified the potential obligation to issue the Additional 2L Non-Convertible Notes. Similarly, as of December 28, 2025 no value was ascribed to the embedded derivative related to the potential issuance of the Additional 2L Non-Convertible Notes, based on the assumption that final approval would be received prior to the Regulatory Trigger Deadline. •Contingent Shares - the obligation to issue 871,287 shares to holders of Old Common Stock upon receipt of the Regulatory Approvals was classified within equity as of the balance sheet date. Based on expected receipt of Regulatory Approvals, these amounts were recorded as shares issued to holders of Old Common Stock. Upon issuance of the shares, they will increase our total shares outstanding. •Contingent Cash - as further discussed in Note 7, Commitments and Contingencies, the $10 million of the Contingent Consideration that will be remitted back to the Company was treated as a gain contingency and was not recognized on the Consolidated Balance Sheet as of December 28, 2025. The outflow associated with this amount was recorded within "Cash used in financing activities" on the Consolidated Statements of Cash Flows. Upon receipt of the Regulatory Approvals, this amount will be recognized as a gain in non-operating income and expense in the third quarter of fiscal 2026. New Senior Secured Notes On the Effective Date, the Company entered into that certain Indenture (the “New Senior Secured Notes Indenture”), by and among the Company, Wolfspeed Texas LLC, as subsidiary guarantor (the “Subsidiary Guarantor”), and U.S. Bank Trust Company, National Association, as the trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), pursuant to which, among other things, the Company issued the New Senior Secured Notes. Refer to Note 11, "Long-term Debt," for additional information on the New Senior Secured Notes. The New Senior Secured Notes bear interest, payable quarterly in arrears on March 23, June 23, September 23, and December 23 of each year, (a) for the period from the Effective Date through and including June 22, 2026, at a rate of 9.875% per annum (payable in cash), plus 4.00% per annum (payable in-kind); and (b) for the period commencing on June 23, 2026 and at all times thereafter, (i) if the Interest Rate Step-Down Condition (as described below) is satisfied as of June 23 of the most recent year, at a rate of 13.875% per annum (payable in cash) and (ii) if the Interest Rate Step-Down Condition is not satisfied as of June 23 of the most recent year, at a rate of 15.875% per annum (payable in cash). The Interest Rate Step-Down Condition is met if (a)(i) the Company redeems or repurchases (other than redemptions or repurchases with the proceeds of dispositions) the New Senior Secured Notes, resulting in the aggregate principal amount of New Senior Secured Notes outstanding being less than $1,000,000,000 and (ii) the Company receives at least $450,000,000 of award disbursements pursuant to governmental grants under the CHIPS and Science Act of 2022 (the “CHIPS Act”) or (b) as of the most recent June 23rd, the ratio of the outstanding principal amount of the New Senior Secured Notes to EBITDA (as defined in the New Senior Secured Notes Indenture) for the most recently ended four fiscal quarter period for which financial statements have been or are required to have been delivered under the New Senior Secured Notes Indenture is less than or equal to 2.00:1.00. The New Senior Secured Notes will mature on June 23, 2030. The New Senior Secured Notes Indenture requires the Company to make an offer to repurchase the New Senior Secured Notes with 100% of the net cash proceeds of certain extraordinary receipts, at a price of 109.875% of the principal amount plus accrued and unpaid interest upon the first to occur of the following : (i) in the event the Company and/or its subsidiaries receive in excess of $200,000,000 of such extraordinary receipts from the Effective Date through June 22, 2026, such offer to repurchase will be required to be in an aggregate principal amount of $175,000,000 of the New Senior Secured Notes, (ii) in the event the Company and/or its subsidiaries receive in excess of $200,000,000 of such extraordinary receipts from the Effective Date through June 22, 2027, such offer to repurchase will be required to be in an aggregate principal amount of $225,000,000 of the New Senior Secured Notes, or (iii) if the Company and/or its subsidiaries receive less than or equal to $200,000,000 of such extraordinary receipts from the Effective Date through June 22, 2027, such offer to repurchase will be required to be in an aggregate principal amount of $150,000,000 (such repurchase date, the “Extraordinary Receipts Trigger Date”). Further, the Company is required to repurchase the New Senior Secured Notes with 100% of the net cash proceeds of certain non-ordinary course asset sales and casualty events, subject to the ability to (so long as no default or event of default exists under the New Senior Secured Notes Indenture), reinvest the proceeds of casualty events involving certain core assets, at a price equal to the lesser of (a) 111.875% of the principal amount of the New Senior Secured Notes being repurchased and (b) if such disposition or casualty event occurred (i) on or after June 23, 2026 and prior to the later of June 23, 2027 and the Extraordinary Receipts Trigger Date, 109.875% of the principal amount of such New Senior Secured Notes, plus accrued and unpaid interest to, but excluding, the applicable redemption (or repurchase) date, (ii) on or after the later of June 23, 2027 and the Extraordinary Receipts Trigger Date and prior to June 23, 2028, 105.000% of the principal amount of such New Senior Secured Notes, plus accrued and unpaid interest to, but excluding, the applicable redemption (or repurchase) date, (iii) on or after June 23, 2028 and prior to June 23, 2029, 103.000% of the principal amount of such New Senior Secured Notes, plus accrued and unpaid interest to, but excluding, the applicable redemption (or repurchase) date, and (iv) on or after June 23, 2029, 100% of the principal amount of such New Senior Secured Notes plus accrued and unpaid interest to, but excluding, the applicable redemption (or repurchase) date (this clause (b), the “Applicable Redemption Price”). The Company is also required to offer to repurchase the New Senior Secured Notes upon a change in control, at a price equal to, (a) if such change of control occurs prior to June 23, 2026, the greater of (i) a customary make-whole redemption price minus 1.00% of the principal amount of such New Senior Secured Notes and (ii) the Applicable Redemption Price as of June 23, 2026 and (b) if such change of control occurs on or after June 23, 2026, the Applicable Redemption Price at the time such change of control occurs. The Company may redeem the New Senior Secured Notes at any time, subject to, (a) if the redemption occurs prior to June 23, 2026, by paying a customary make-whole premium and (b) if the redemption occurs on or after June 23, 2026, by paying the Applicable Redemption Price. Further, the Company has the right, prior to June 23, 2026, to make an optional redemption of up to 35% of the New Senior Secured Notes with the proceeds of qualified equity issuances consummated since the Effective Date (provided that the Company has received at least $300,000,000 of net proceeds from such equity issuances), at a redemption price equal to 111.875%. The New Senior Secured Notes Indenture contains certain customary affirmative covenants, negative covenants, and events of default, including a minimum liquidity financial covenant requiring the Company to have an aggregate amount of unrestricted cash and cash equivalents maintained in accounts over which the Collateral Agent has been granted a perfected first lien security interest of at least $350,000,000 as of the last day of any calendar month. The obligations of the Company under the New Senior Secured Notes Indenture will be guaranteed by the Company’s material subsidiaries, if any, subject to certain exceptions, and are secured by a pledge (and, with respect to real property, mortgage) of substantially all of the existing and future property and assets of the Company and the guarantors (subject to certain exceptions), including a pledge of the capital stock of the subsidiaries of the Company and the guarantors, subject to certain exceptions. New 2L Renesas Convertible Notes, New 2L Non-Renesas Convertible Notes and New 2L Non-Convertible Notes On the Effective Date, the Company entered into (i) that certain indenture (the “New 2L Renesas Convertible Notes Indenture”), by and among the Company, the Subsidiary Guarantor, and the Trustee and the Collateral Agent in respect of the new 2.5% Convertible Second-Lien Senior Secured Notes due 2031 issued to Renesas (the "New 2L Renesas Convertible Notes"), (ii) that certain indenture (the “New 2L Non-Renesas Convertible Notes Indenture”), by and among the Company, the Subsidiary Guarantor, the Trustee and the Collateral Agent in respect of the New 2L Non-Renesas Convertible Notes and (iii) that certain indenture (the “New 2L Non-Convertible Notes Indenture” and, together with the New 2L Renesas Convertible Notes Indenture and the New 2L Non-Renesas Convertible Notes Indenture, the “2L Indentures”), by and among the Company, the Subsidiary Guarantor, the Trustee and the Collateral Agent in respect of the New 2L Non-Convertible Notes (together with the New 2L Renesas Convertible Notes and the New 2L Non-Renesas Convertible Notes, collectively, the “2L Notes”). The 2L Notes bear interest, payable semi-annually in arrears on June 15 and September 15 of each year to the holders of record as of June 1 and September 1 of each year. Interest on the New 2L Renesas Convertible Notes and the New 2L Non-Renesas Convertible Notes is required to be paid in cash; interest on the New 2L Non-Convertible Notes is permitted to be paid either in cash or in kind (at the Company’s election), at an interest rate of 7.00% or 12.00%, respectively. The 2L Notes mature, in each case, on June 15, 2031. Each of the New 2L Renesas Convertible Notes and New 2L Non-Renesas Convertible Notes (collectively, the “2L Convertible Notes”) are convertible pursuant to the terms of the New 2L Renesas Convertible Notes Indenture and the New 2L Non-Renesas Convertible Notes Indenture, respectively. The New 2L Renesas Convertible Notes are convertible at any time from and after September 29, 2025 until the fifth trading day immediately preceding September 29, 2027 (the “Conversion Expiration Date”), provided that the New 2L Renesas Convertible Notes were not convertible until the Renesas Base Distribution Date which occurred in January 2026, and the New 2L Non-Renesas Convertible Notes are convertible at any time from and after September 29, 2025 until the fifth (5th) scheduled trading day immediately preceding the maturity date, in each case, subject to certain limitations and exceptions. The 2L Convertible Notes are convertible into cash, common stock of the Company or a combination thereof, at the Company’s election. The 2L Convertible Notes will be entitled to customary anti-dilutive measures (including adjustments to the 2L Convertible Notes’ conversion rates), as described in each of the indentures governing the 2L Convertible Notes. Each of the New 2L Non-Convertible Notes and the New 2L Renesas Convertible Notes are not permitted to be redeemed prior to the date that is two years following the Effective Date; the New 2L Non-Renesas Convertible Notes are not permitted to be redeemed prior to the date that is three years following the Effective Date. In the event of an optional redemption by the Company, holders will be entitled to a cash redemption price equal to 100% of the principal amount of such note redeemed, plus accrued and unpaid interest (any such redemption, an “Optional Redemption”) The Company is required to offer to repurchase the 2L Notes upon a change of control and, in the case of (i) the 2L Convertible Notes, at a cash repurchase price equal to 100% of the principal amount of such note repurchased, plus accrued and unpaid interest and (ii) the New 2L Non-Convertible Notes, at a cash repurchase price equal to 101% of the principal amount of such note repurchased, plus accrued and unpaid interest. Following the Conversion Expiration Date and upon the occurrence of a change of control, the New 2L Renesas Convertible Notes will be entitled to a cash repurchase price consistent with that of the New 2L Non-Convertible Notes. Holders of the 2L Convertible Notes will be entitled to make-whole adjustments to the respective conversion rates in the event of a change of control or an Optional Redemption. Notwithstanding the foregoing (but subject to certain limitations described in the indentures governing the 2L Convertible Notes), holders of the 2L Convertible Notes are permitted to convert their notes (i) in lieu of redemption in the event of an Optional Redemption by the Company or (ii) upon the occurrence of a change of control. The Company is also required, subject to the terms of the New Senior Secured Notes and pursuant to the terms and conditions set forth in the indentures governing the 2L Notes, to make an offer to purchase the 2L Notes, on a pro rata basis, upon the occurrence of certain non-ordinary course asset sales and casualty events (subject to certain reinvestment rights described in the 2L Indentures). The 2L Indentures contain certain customary affirmative covenants, negative covenants, and events of default. The obligations of the Company under the 2L Indentures will be guaranteed by the Company’s material subsidiaries, if any, subject to certain exceptions, and are secured on a second-priority basis by liens on substantially all of the existing and future property and assets of the Company and the guarantors (subject to certain exceptions) that secure the New Senior Secured Notes. Intercreditor Agreements In connection with the Company’s entrance into the New Senior Secured Notes Indenture and the 2L Indentures, the Company, Wolfspeed Texas LLC, as a guarantor, and the trustees and the collateral agents under each of the New Senior Secured Notes Indenture and the 2L Indentures entered into the First Lien/Second Lien Intercreditor Agreement, dated as of the September 29, 2025, which sets forth the respective rights on the shared collateral between the noteholders under the New Senior Secured Notes, as first lien creditors, on the one hand, and the noteholders under the 2L Notes, as second lien creditors, on the other hand. Additionally, in connection with the Company’s entrance into the 2L Indentures, the Company, Wolfspeed Texas LLC, as a guarantor, and the trustees and the collateral agents under each of the 2L Indentures entered into the Equal Priority Intercreditor Agreement, dated as of September 29, 2025, which sets forth the respective rights on the shared collateral among the noteholders under the 2L Notes. Reorganization items, net Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the Consolidated Statement of Operations. The table below presents the reorganization items as a result of the Chapter 11 Cases during the periods presented:
| Successor | Predecessor
(in millions of U.S. dollars) | Period from September 30, 2025 through December 28, 2025 | September 29, 2025 | Three months ended December 29, 2024
Success fees | $ | — |  | $ | 34.0 |  | $ | — |
Gain on settlement of liabilities subject to compromise | — |  | (3,751.8) |  | — |
Write-off related to Predecessor directors’ and officers’ insurance policy | — |  | 3.6 |  | — |
Cancellation of unvested Predecessor stock compensation awards | — |  | 61.5 |  | — |
Fresh start valuation adjustments | — |  | 2,585.4 |  | — |
Reorganization items, net | $ | — |  | $ | (1,067.3) |  | $ | — |
Cash payments for Reorganization items, net | $ | 23.7 |  | $ | 28.0 |  | $ | — |
| Successor | Predecessor
(in millions of U.S. dollars) | Period from September 30, 2025 through December 28, 2025 | Period from June 30, 2025 through September 29, 2025 | Six months ended December 29, 2024
Allowed claims adjustments | $ | — |  | $ | 475.7 |  | $ | — |
Success fees | — |  | 34.0 |  | — |
Professional fees | — |  | 28.2 |  | — |
Gain on settlement of liabilities subject to compromise | — |  | (3,751.8) |  | — |
Write-off related to Predecessor directors’ and officers’ insurance policy | — |  | 3.6 |  | — |
Cancellation of unvested Predecessor stock compensation awards | — |  | 61.5 |  | — |
Fresh start valuation adjustments | — |  | 2,585.4 |  | — |
Reorganization items, net | $ | — |  | $ | (563.4) |  | $ | — |
Cash payments for Reorganization items, net | $ | 23.7 |  | $ | 38.5 |  | $ | — |
Fresh Start Accounting Fresh Start In connection with the Company's emergence from the Chapter 11 Cases and in accordance with ASC 852, the Company qualified for and adopted fresh start accounting on the Effective Date. The Company was required to adopt fresh start accounting because (i) the holders of voting shares of the Predecessor received less than 50% of the voting shares of the Successor and (ii) the $3.8 billion reorganization value of the Company's assets immediately prior to confirmation of the Plan was less than the approximately $7.6 billion of post-petition liabilities and allowed claims. In accordance with ASC 852, with the adoption of fresh start accounting, the Company allocated the reorganization value to its individual assets and liabilities based on their estimated fair values in conformity with ASC Topic 805, Business Combinations (The reorganization value represents the fair value of the Successor assets before considering liabilities). As a result of the adoption of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after September 29, 2025 are not comparable with the consolidated financial statements as of or prior to that date. Reorganization Value Management, with the assistance of valuation advisors, estimated the enterprise value of the Successor to be between $2,350 million and $2,850 million, which was approved by the Bankruptcy Court. Based on the estimates and assumptions discussed below, the Company estimated the enterprise value to be $2,600 million, which is the mid-point of the range of the enterprise value. The enterprise value was estimated using an income approach that utilizes a discounted cash flow model. The net cash flows were discounted using an after-tax weighted average cost of capital ("WACC") methodology reflecting a rate of return that would be expected by a market participant. The WACC methodology also takes into consideration a company-specific risk premium reflecting the risk associated with the financial projections used to estimate future cash flows. The present value of future expected net cash flows projected through 2034 is calculated using an estimated discount rate of 20.1%. The enterprise value and corresponding equity value are dependent upon achieving the future financial results set forth in the Company's projections. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the estimated enterprise value and estimated equity value, are inherently subject to uncertainties and the resolution of contingencies beyond the Company's control. Accordingly, there can be no assurance that the estimates, assumptions, valuations and financial projections will be realized, and actual results could vary materially. Moreover, the value of the New Common Stock may differ materially from the implied values at the Effective Date in the financial statements. A reconciliation of the enterprise value to the implied value of New Common Stock and reorganization value is set forth below:
(in millions of U.S. Dollars) |
Enterprise value | $2,600.0 |
Plus: Cash and cash equivalents (includes restricted cash) and short-term investments | 835.4 |
Less: Fair value of debt issued upon emergence, including issuance costs, excluding equity-classified substantial premium | (2,151.3) |
Less: Equity-classified substantial premium associated with New 2L Non-Renesas Convertible Notes | (168.8) |
Less: Fair value of the Renesas Warrant | (33.6) |
Less: Cash from MACOM Shares sale captured in enterprise value | (60.8) |
Less: Deposit liabilities included in cash | (25.2) |
Less: Debt issuance costs | (8.0) |
Less: Restricted cash | (28.3) |
Implied value of Wolfspeed, Inc's common stock (including reserved but unissued shares) | $959.4 |
Less: Implied value of the Renesas Base Consideration Shares classified as a liability | ($371.1) |
Less: Implied value of the obligation to issue Contingent Shares classified as equity | ($19.2) |
Implied value of Wolfspeed, Inc's common stock outstanding as of the Effective Date | $569.1 |
Plus: Equity-classified substantial premium associated with New 2L Non-Renesas Convertible Notes | $168.8 |
Plus: Implied value of the obligation to issue Contingent Shares classified as equity | $19.2 |
Total stockholders' equity as of the Effective Date | $757.1 |
The reconciliation of the Company's enterprise value to reorganization value as of the Effective Date is as follows:
(in millions of U.S. Dollars) |
Enterprise value | $2,600.0 |
Plus: Cash and cash equivalents (includes restricted cash) and short-term investments | 835.4 |
Plus: Current liabilities excluding debt | 340.4 |
Plus: Long-term liabilities excluding debt | 184.6 |
Less: Cash from MACOM Shares sale captured in enterprise value | (60.8) |
Less: Deposit liabilities included in cash | (25.2) |
Less: Debt issuance costs | (8.0) |
Less: Restricted cash | (28.3) |
Reorganization value | $3,838.1 |
Intangible Assets The identified intangible assets of $445.7 million, which principally consisted of technology, trade names and trademarks, and customer relationships, were estimated based on either the cost approach, relief from royalty, or multi-period excess earnings methods. Significant assumptions for identified intangibles included royalty rates, discount rates, margins, attrition rates, revenue growth rates, and economic lives. Such fair value measurement of intangible assets is considered Level 3 of the fair value hierarchy. For the technology-based intangibles that were valued using the relief from royalty income approach, the royalty rates were estimated to be 5% or 15% and the discount rate 21%. For trade names and trademarks valued under the relief from royalty income approach, the royalty rate was estimated to be 0.5% and the discount rate 20.5%. For customer-related intangible assets that were valued using the multi-period excess earnings method, the attrition rates were estimated to be 10% or 17.5% and the discount rate 22.5%. Lease Liabilities and Right of Use Assets The present value of lease liabilities was measured as the present value of the remaining lease payments, as if the leases were new leases as of the Effective Date. The Company used its incremental borrowing rate (“IBR”) as the discount rate in determining the present value of the remaining lease payments using a fundamental credit rating analysis. Based upon the corresponding lease terms, the IBRs ranged between approximately 9.9%-13.9%. Right of use asset values were estimated based on the lease liability. Consolidated Balance Sheet The adjustments set forth in the following consolidated balance sheet as of September 29, 2025 reflect the effects of the transactions contemplated by the Plan and executed on the Effective Date (reflected in the column "Reorganization Adjustments") and fair value accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column "Fresh Start Adjustments"). The explanatory notes provide additional information with regard to the adjustments recorded.
| As of September 29, 2025
| Predecessor |  | Reorganization Adjustments |  | Fresh-Start Adjustments |  | Successor
Assets |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |
Cash and cash equivalents (includes restricted cash) | $ | 571.6 |  |  | (90.6) |  | (1) | — |  |  | $ | 481.0 |
Short-term investments | 354.4 |  |  | — |  |  | — |  |  | 354.4 |
Total cash, cash equivalents and short-term investments | 926.0 |  |  | (90.6) |  |  | — |  |  | 835.4 |
Accounts receivable, net | 155.6 |  |  | — |  |  | — |  |  | 155.6 |
Inventories, net | 385.5 |  |  | — |  |  | 6.8 |  | (14) | 392.3 |
Prepaid expenses | 75.5 |  |  | (3.6) |  | (2) | (0.1) |  | (15) | 71.8 |
Investment tax credit receivable | 654.0 |  |  | — |  |  | — |  |  | 654.0 |
Other current assets | 118.3 |  |  | — |  |  | 1.6 |  | (16) | 119.9 |
Total current assets | 2,314.9 |  |  | (94.2) |  |  | 8.3 |  |  | 2229.0
Property and equipment, net | 3,775.8 |  |  | — |  |  | (3,006.6) |  | (17) | 769.2 |
Intangible assets, net | 24.2 |  |  | — |  |  | 421.5 |  | (18) | 445.7 |
Long-term investment tax credit receivable | 181.3 |  |  | — |  |  | — |  |  | 181.3 |
Other assets | 254.9 |  |  | — |  |  | (42.0) |  | (19) | 212.9 |
Total assets | $ | 6,551.1 |  |  | (94.2) |  |  | (2,618.8) |  |  | $ | 3,838.1 |
Liabilities and Stockholders' Equity |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |
Accounts payable and accrued expenses | $ | 196.5 |  |  | 10.3 |  | (3) | — |  |  | $ | 206.8 |
Contract liabilities and distributor-related reserves | 72.9 |  |  | — |  |  | — |  |  | 72.9 |
Income taxes payable | 0.9 |  |  | — |  |  | — |  |  | 0.9 |
Finance lease liabilities | — |  |  | 0.6 |  | (4) | — |  |  | 0.6 |
Other current liabilities | 29.3 |  |  | 26.1 |  | (6) | 4.4 |  | (20) | 59.8 |
Total current liabilities | 299.6 |  |  | 37.0 |  |  | 4.4 |  |  | 341.0 |
Long-term liabilities: |  |  |  |  |  |  |
Long-term debt | — |  |  | 1,609.0 |  | (7) | — |  |  | 1,609.0 |
Convertible notes, net | — |  |  | 539.7 |  | (8) | — |  |  | 539.7 |
Finance lease liabilities - long-term | — |  |  | 8.3 |  | (4) | (6.4) |  | (21) | 1.9 |
Long-term warrant | — |  |  | 33.6 |  | (5) | — |  |  | 33.6 |
Forward equity contract | — |  |  | 371.1 |  | (5) | — |  |  | 371.1 |
Other long-term liabilities | 16.6 |  |  | 201.5 |  | (9) | (33.4) |  | (22) | 184.7 |
Liabilities subject to compromise | 7,315.3 |  |  | (7,315.3) |  | (10) | — |  |  | — |
Total liabilities | 7,631.5 |  |  | (4,515.1) |  |  | (35.4) |  |  | 3,081.0 |
Commitments and contingencies |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |
Predecessor common stock | 0.2 |  |  | (0.2) |  | (11) | — |  |  | — |
Successor common stock | — |  |  | — |  | (12) | — |  |  | — |
Predecessor additional paid-in-capital | 4,103.6 |  |  | (4,103.6) |  | (11) | — |  |  | — |
Successor additional paid-in-capital | — |  |  | 757.1 |  | (12) | — |  |  | 757.1 |
Accumulated other comprehensive loss | (3.0) |  |  | — |  |  | 3.0 |  | (23) | — |
Accumulated deficit | (5,181.2) |  |  | 7,767.6 |  | (13) | (2,586.4) |  | (23) | — |
Total stockholders’ equity | (1,080.4) |  |  | 4,420.9 |  |  | (2,583.4) |  |  | 757.1 |
Total liabilities and stockholders’ equity | $ | 6,551.1 |  |  | $ | (94.2) |  |  | $ | (2,618.8) |  |  | 3,838.1 |
Reorganization Adjustments (1) Reflects the changes in cash and cash equivalents, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Proceeds from issuance of 2L Convertible Notes through the rights offering | $ | 275.0 |
Payment of Existing Senior Secured Notes (principal and pre-petition accrued interest) | (308.5) |
Payment of Existing Senior Secured Notes commitment fees | (15.5) |
Payment of Contingent Cash into escrow | (10.0) |
Payment of lender professional and success fees, including deferred financing costs | (31.6) |
Net change in cash and cash equivalents | $ | (90.6) |
Of the $481.0 million of Successor cash and cash equivalents, $28.3 million was classified as restricted cash. Restricted cash consists of funds held in escrow accounts for the payment of certain professional fees related to the Chapter 11 Cases, pursuant to the Plan. (2) Reflects the write-off of prepaid expense related to Predecessor directors and officers' insurance policy. (3) Reflects the net increase to accounts payable and accrued expenses of $10.3 million, representing $16.8 million related to success fees, partially offset by $6.5 million in accrued lender professional fees paid on the Effective Date. (4) Reflects the reinstatement of short and long-term finance lease liabilities from liabilities subject to compromise. (5) Reflects the fair value of the Renesas Warrant and the implied value of the obligation to issue New Common Stock to Renesas from the Share Reserve upon obtaining the Regulatory Approvals, or in accordance with the Plan, the obligation to remit cash proceeds to Renesas from the issuance of these shares or exercise of the warrant. (6) Reflects the changes in other current liabilities including the reinstatement of Short-term operating lease liabilities and supply agreement liabilities from liabilities subject to compromise:
| As of September 29, 2025
Reinstatement of short-term operating lease liabilities from liabilities subject to compromise | $ | 10.9 |
Reinstatement of supply agreements from liabilities subject to compromise | 15.2 |
Net change in other current liabilities | $ | 26.1 |
(7) Reflects the issuance of New Senior Secured Notes and the issuance of New 2L Non-Convertible Notes at fair value, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Issuance of New Senior Secured Notes | $ | 1,379.4 |
Issuance of New 2L Non-Convertible Notes | 229.6 |
Net change in long-term debt | $ | 1,609.0 |
(8) Reflects the issuance of the New 2L Renesas Convertible Notes at fair value, and the issuance of the New 2L Non-Renesas Convertible Notes (excluding the impact of the equity-classified substantial premium at fair value) as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Issuance of New 2L Non-Renesas Convertible Notes (principal, including backstop commitment premium) | $ | 331.4 |
Issuance of New 2L Renesas Convertible Notes | 216.3 |
Issuance cost of New 2L Non-Renesas Convertible Notes | (8.0) |
Net change in convertible notes, net | $ | 539.7 |
(9) Reflects the changes in other long-term liabilities and supply agreement liabilities as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Reinstatement of long-term operating lease liabilities from liabilities subject to compromise | 154.2 |
Reinstatement of long-term supply agreements from liabilities subject to compromise | 44.8 |
Change in deferred tax liability as a result of implementation of the plan | 2.5 |
Net change in other long-term liabilities | $ | 201.5 |
(10) Reflects the settlement of liabilities subject to compromise in accordance with the Plan and the resulting gain, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Liabilities subject to compromise | $ | 7,315.3 |
Reinstatement of short-term finance lease liabilities (see Adjustment 4) | (0.6) |
Reinstatement of short-term operating lease liabilities and supply agreements (see Adjustment 6) | (26.1) |
Reinstatement of long-term finance lease liabilities (see Adjustment 4) | (8.3) |
Reinstatement of long-term operating lease liabilities and supply agreements (see Adjustment 9) | (199.0) |
Distribution of proceeds to holders of Senior Secured Notes (see Adjustment 1) | (324.0) |
Fair value of issuance of New Senior Secured Notes (see Adjustment 7) | (1,379.4) |
Issuance of New 2L Non-Renesas Convertible Notes – principal, including backstop commitment premium (see Adjustment 8) | (331.4) |
Fair value issuance of New 2L Non-Renesas Convertible Notes – substantial premium (see Adjustment 12) | (168.8) |
Fair value issuance of New 2L Non-Convertible Notes (see Adjustment 7) | (229.6) |
Proceeds from the New 2L Non-Renesas Convertible Notes through the rights offering (see Adjustment 1) | 275.0 |
Implied value of issuance of Wolfspeed, Inc. New Common Stock, to creditors (see Adjustment 12) | (540.3) |
Fair value issuance of New 2L Renesas Convertible Notes (see Adjustment 8) | (216.3) |
Fair value of the Renesas Warrant (see Adjustment 5) | (33.6) |
Implied value of Forward Equity Contract (see Adjustment 5) | (371.1) |
Distribution of Contingent Cash to non-consolidated escrow account (see Adjustment 1) | (10.0) |
Gain on settlement of liabilities subject to compromise (See Adjustment 13) | $ | 3,751.8 |
(11) Reflects the cancellation of Old Common Stock and additional paid-in capital. (12) Reflects the issuance of 25.8 million shares of New Common Stock and additional paid-in capital, as follows:
| As of September 29, 2025
(in millions of U.S. dollars) | Common Stock |  | Additional Paid-in Capital
Issuance of Wolfspeed, Inc. common stock, at par, and additional paid-in capital to existing equity holders | $ | — |  |  | $ | 28.8 |
Issuance of Wolfspeed, Inc. common stock, at par, and additional paid-in capital to holders of convertible notes claims | — |  |  | 540.3 |
Issuance of Additional paid-in capital for equity-classified premium for New 2L Non-Renesas Convertible Notes | — |  |  | 168.8 |
Obligation to issue Contingent Shares to existing equity holders, at the implied value | — |  |  | 19.2 |
Net change in Wolfspeed, Inc. common stock and additional paid-in capital | $ | — |  |  | $ | 757.1 |
(13) Reflects the cumulative impact of the reorganization adjustments discussed above on accumulated deficit.
(in millions of U.S. dollars) | As of September 29, 2025
Gain on settlement of liabilities subject to compromise | 3,751.8 |
Success fees | (33.9) |
Write-off related to directors' and officers' insurance policy | (3.6) |
Cancellation of unvested Predecessor stock compensation awards | (61.5) |
Total reorganization adjustments impacting reorganization items, net | 3,652.8 |
Cancellation of Old Common Stock and additional paid-in capital (direct charge to equity) | $ | 4,165.3 |
Issuance of New Common Stock and additional paid-in capital to existing equity holders (direct charge to equity) | (28.8) |
Obligation to issue Contingent Shares to existing equity holders (direct charge to equity) | (19.2) |
Net deferred tax impacts (classified as tax expense) | (2.5) |
Net change in accumulated deficit | $ | 7,767.6 |
Fresh Start Adjustments (14) Reflects the fair value adjustment to the Company’s inventories due to the adoption of fresh start accounting. Raw materials were valued based on their replacement cost on the Effective Date; work-in-progress (“WIP”) and finished good were valued based on consideration of inventory value created pre-Effective Date versus post-Effective Date. WIP and finished good methodologies consider the market approach and the cost approach. The values resulting from these methods were reconciled to appropriately allocate profit and expenses in the measurement of the inventory value created prior to the Effective Date. (15) Reflects the fair value adjustment to the Company’s short-term cloud assets due to the adoption of fresh start accounting. Cloud assets were valued using the indirect method of the cost approach (16) Reflects the adjustment for the fair value less costs to sell of land held for sale due to the adoption of fresh start accounting. The fair value reflects the expected proceeds from the sale of the land. (17) Reflects the fair value adjustment to property and equipment due to the adoption of fresh start accounting. Personal property was valued using the indirect method of the cost approach, whereby the reproduction cost for each asset or group of assets is estimated by indexing historical costs recorded in the fixed asset register based on asset type and acquisition date, then adjusted to account for physical deterioration and all forms of obsolescence. Real property (buildings and improvements) was valued using the direct method cost approach, while the sales comparison approach was used to value land and to test the reasonableness of the full property value. Finance lease assets were remeasured at the amount equal to the corresponding finance lease liabilities:
(in millions of U.S. dollars) | Amount | Estimated Useful Life (in Years)
Land | $14.7 | n/a
Building | (1,195.7) | 5-40
Machinery and equipment | (537.1) | 3-10
Leasehold improvements | (91.7) | Shorter of estimated useful life or lease term
Furniture and fixtures | (2.3) | 5
Computer hardware/software | (35.7) | 3-10
Vehicles | — | 5
Tooling | (5.2) | 3-10
Construction in progress | (1,148.0) | n/a
Finance lease - (see Adjustment 21) | (5.6) | n/a
Total property and equipment, net | $ | (3,006.6) |  |
(18) Reflects the fair value adjustment to intangible assets, net due to adoption of fresh start accounting. Intangible assets were valued primarily using the income approach. Where applicable, forecasts were allocated to the Power Devices and Materials product lines to separately value intangible assets for each. The following table summarizes the changes in the fair value of identified intangible assets:
(in millions of U.S. dollars) | Amount | Estimated Useful Life (in Years)
Patent and licensing rights | $ | 33.7 |  | 0.5-23
Tradenames | 27.8 |  | 11
Developed technology | 240.0 |  | 5-6
Customer relationships | 120.0 |  | 9
Net change in intangible assets | $ | 421.5 |  |
(19) Reflects the changes in other assets due to the adoption of fresh start accounting, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Right-of-use ("ROU") assets off-market component | $ | (6.1) |
ROU assets adjustments (see adjustment 22) | (29.0) |
Long-term cloud computing assets | (6.9) |
Net change in other assets | $ | (42.0) |
(20) Reflects the changes in other current liabilities due to the adoption of fresh start accounting, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Operating lease liabilities adjustments for incremental borrowing rate ("IBR") (see adjustment 22) | $ | (5.6) |
Off-market long-term purchase agreement | 10.0 |
Net change in other current liabilities | $ | 4.4 |
(21) Reflects the adjustment to the non-current portion of finance lease liabilities due to the adoption of fresh start accounting. Lease liabilities were remeasured using the Company’s IBR at the Effective Date, with a corresponding adjustment to finance lease assets. (22) Reflects the changes in other long-term liabilities due to the adoption of fresh start accounting, as follows:
(in millions of U.S. dollars) | As of September 29, 2025
Operating lease liabilities | $ | (46.4) |
Off-market long-term supply agreement | 14.4 |
Change in deferred tax liability as a result of fresh start accounting | (1.4) |
Net change in other long-term liabilities | $ | (33.4) |
Operating lease liabilities were remeasured using the Company’s IBR at the Effective Date, with a corresponding adjustment to ROU assets. Off-market terms identified were attributed to the ROU assets, resulting in a reduction of the ROU assets for unfavorable market terms measured as the present value of the difference between contractual and market-based lease payments over the remaining lease term. (23) Reflects the cumulative impact of fresh start accounting adjustments discussed above and the elimination of accumulated deficit and accumulated other comprehensive loss.
(in millions of U.S. dollars) | As of September 29, 2025
Fresh start adjustment to Inventories, net | $ | (6.8) |
Fresh start adjustment to Prepaid expenses | 0.1 |
Fresh start adjustment to Other current assets | (1.6) |
Fresh start adjustment to Property and equipment, net | 3,006.6 |
Fresh start adjustment to Intangible assets, net | (421.5) |
Fresh start adjustment to Other assets | 42.0 |
Fresh start adjustment to Other current liabilities | 4.4 |
Fresh start adjustment to Finance lease liabilities – long-term | (6.4) |
Fresh start adjustment to Other long-term liabilities for operating lease liabilities | (46.4) |
Fresh start adjustment to Other long-term liabilities for off-market long-term supply agreement | 14.4 |
Reset of accumulated other comprehensive loss – securities-related | 0.6 |
Total fresh start adjustments impacting reorganization items, net | 2,585.4 |
Reset of accumulated other comprehensive loss - income tax effects | 2.4 |
Income tax effects on deferred income taxes | (1.4) |
Changes in accumulated deficit | $ | 2,586.4 |

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