v3.25.4
Fair Value of Financial Instruments
 6 Months Ended
Dec. 28, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The Company did not have any financial assets or liabilities requiring the use of Level 3 inputs as of December 28, 2025, except as otherwise noted below. There were no transfers between Level 1 and Level 2 during the twelve months ended December 28, 2025.
The following table sets forth financial instruments carried at fair value within the U.S. GAAP hierarchy:
 Estimated fair value
SuccessorPredecessor
(in millions of U.S. Dollars)Fair value hierarchyDecember 28, 2025June 29, 2025
Assets:
Money market funds1$98.8 $61.8 
U.S. treasury securities1144.2 224.6 
MACOM Shares1— 102.0 
Municipal bonds249.2 79.2 
Corporate bonds2119.1 196.8 
Commercial paper225.5 28.3 
Certificates of deposit2$— $5.0 
Liabilities:
Forward equity contract2$302.5 $— 
Warrants334.2 — 
Embedded derivative on New 2L Renesas Convertible Notes3$103.5 $— 
Forward Equity Contract
The fair value of the forward equity contract is determined using the observable market prices of our common stock and is not adjusted for holding restrictions. Before Regulatory Approvals were obtained, and as of December 28, 2025, the forward equity contract was subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in "Non-operating income, net" in the Consolidated Statements of Operation.
Embedded Derivative
The New 2L Renesas Convertible Notes contain embedded conversion features that provide for conversion into shares of common stock as defined in the agreements after receipt of Regulatory Approvals. Before Regulatory Approvals were obtained, and as of December 28, 2025, the conversion feature could only be cash settled as the notes would not be convertible into common stock; the cash settled equity-indexed feature did not qualify for a scope exceptions under ASC 815. Accordingly, this feature is required to be bifurcated and accounted for separately as an embedded derivative. The embedded derivative liability was initially recorded at fair value at the issuance date, with an offsetting discount recorded to the host debt instrument. The discount is amortized to interest expense over the term of the notes using the effective interest method. The embedded derivative was subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in “Non-operating income, net" in the Consolidated Statements of Operations. The fair value of the embedded derivatives is determined using the Goldman Sachs binomial lattice model and is classified within Level 3 of the fair value hierarchy. The Embedded Derivative was classified as a Level 3 measurement within the fair value hierarchy because the valuation models involve the use of unobservable inputs relating to the Company’s estimate of its expected stock volatility which was developed based on the historical volatility of a publicly traded set of peer companies. The expected volatility inputs utilized for the fair value measurements of the Embedded Derivatives upon the Effective Date and as of December 28, 2025 was 60.0%.
The Embedded Derivative was presented within "Convertible notes, net" on the consolidated balance sheet as of December 28, 2025.
Stock Warrant Liability
Prior to the receipt of Regulatory Approval, and as of December 28, 2025 the stock warrants held by Renesas could only be settled for cash such that they are accounted for as derivative liabilities under ASC 815. The warrant was subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in "Non-operating income, net" in the Consolidated Statements of Operation. The fair value of the warrant liability is determined using a Black-Scholes model and is classified within Level 3 of the fair value hierarchy. The Stock Warrant Liability was classified as a Level 3 measurement within the fair value hierarchy because the valuation models involve the use of unobservable inputs relating to the Company’s estimate of its expected stock volatility which was developed based on the historical volatility of a publicly traded set of peer companies. The expected volatility inputs utilized for the fair value measurements of the Stock Warrant upon the Effective Date and as of December 28, 2025 was 70.0%.
The Stock Warrant Liability was presented within "Long-term warrant" on the consolidated balance sheet as of December 28, 2025.
Level 3 Rollforward
The following is a rollforward of balances for liabilities classified as recurring Level 3 fair value measurements:
(in millions of U.S. Dollars)
Stock Warrant Liability
Embedded Derivative
Balance as of June 29, 2025 (Predecessor)— — 
Issuance at September 29, 2025 (See Note 2 and Note 3)
$33.6$94.5
Changes in fair value
0.69.0
Balance as of December 28, 2025
34.2103.5
Please refer to Note 2, "Emergence from Voluntary Reorganization Under Chapter 11," and Note 3, "Fresh Start Accounting," for additional information on the Forward Equity Contracts, the Embedded Derivative, and the Stock Warrant Liabilit