| Schedule of Compromise and Reorganization Items, Net |
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 | | $ | — | |
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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | 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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