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Business Combinations
 12 Months Ended
Dec. 28, 2025
Business Combinations [Abstract]  
Business Combinations

(3) Business Combinations

 

SunPower Businesses Acquisition

 

On August 5, 2024, the Company entered into an Asset Purchase Agreement (the “APA”) with SunPower Corporation and SunPower Corporation’s direct and indirect subsidiaries (collectively, the “SunPower Debtors”) providing for the sale and purchase of certain assets relating to the Blue Raven Solar business, New Homes Business and Non-Installing Dealer network previously operated by the SunPower Debtors. The APA was entered into in connection with a voluntary petition filed by SunPower Corporation under Chapter 11 of the United States Code, 11 U.S.C.§§ 101-1532. The transaction was approved on September 23, 2024, by the United States Bankruptcy Court for the District of Delaware. The Company completed the acquisition of the Acquired Assets (as defined in the APA) effective September 30, 2024, in the Company’s fourth quarter of fiscal year 2024, in consideration for a cash purchase price of $54.5 million (“SunPower Acquisition”). The assets and businesses acquired, including liabilities assumed, by the Company under the APA are referred to herein as the “SunPower Businesses.”

 

Prior to its acquisition, the SunPower Businesses operated as a solar technology and energy services provider that offered fully integrated solar, storage, and home energy solutions to customers in the United States through an array of hardware, software, and “Smart Energy” solutions. The financial results of the SunPower Businesses have been included in the Company’s consolidated financial statements since its date of acquisition. This transaction was accounted for as a business combination in accordance with ASC 805.

 

Transaction costs of $7.2 million incurred in connection with the close of the SunPower Businesses were expensed by the Company and included in general and administrative expenses on the Company’s statement of operations and comprehensive loss in the fiscal year ended December 29, 2024.

 

The provisional fair values of assets acquired and liabilities assumed initially recorded were based upon a preliminary valuation in the fiscal year ended December 29, 2024. Upon finalization of the fair values in the fiscal year ended December 28, 2025, the Company recorded adjustments to acquired inventory related to (1) the resolution of work-in-progress at various stages of completion as of the acquisition date for which further analysis was required in order to determine which systems could be sold to a financing partner, and (2) completed systems that were acquired as of the acquisition date for which uncertainty existed due to unsettled matters with the SunPower Bankruptcy Estate, which were resolved in connection with the Company’s settlement with the SunPower Bankruptcy Estate. The settlement of these matters resulted in adjustments to the provisional fair values of the inventory and intangibles with an offsetting adjustment to goodwill during the measurement period.

The following table summarizes the provisional and final fair values of identifiable assets acquired and liabilities assumed and measurement period adjustments (in thousands):

 

   Provisional
fair values as of December 29, 2024		   Measurement
period
adjustments in fiscal 2025		   Final
fair values		 
Net assets acquired:            
Cash  $1,000   $—   $1,000 
Accounts receivable   

11,999

    4,615    16,614 
Contract assets   

4,615

    

(4,615

)   — 
Inventories   27,706    20,682    48,388 
Prepaid expenses and other current assets   2,219    —    2,219 
Property and equipment   5,867    —    5,867 
Operating lease right-of-use assets   2,506    —    2,506 
Other noncurrent assets   541    —    541 
Intangibles   18,100    (2,206)   15,894 
Deferred revenue   (7,361)   —    (7,361)
Accounts payable   (5,270)   —    (5,270)
Accrued expenses and other current liabilities   (13,955)   —    (13,955)
Operating lease liabilities   (2,963)   —    (2,963)
Other long-term liabilities   (8,980)   —    (8,980)
Fair value of net assets acquired   36,024    18,476    54,500 
Goodwill recognized   18,476    (18,476)   — 
Consideration transferred  $54,500   $—   $54,500 

 

The provisional and final fair values of the intangible assets acquired and estimated useful lives were as follows:

 

    Estimated
useful life		   Provisional
fair values
as of
December 29,
2024		     Measurement
period
adjustments
in fiscal
2025		     Final
fair values		  
Trademark – Blue Raven Solar   10 years   $ 8,400     $ (1,306 )   $ 7,094  
Trademark - SunPower   10 years     5,200       (900 )     4,300  
Developed technology   3 years     4,500       —       4,500  
Total       $ 18,100     $ (2,206 )   $ 15,894  

 

The fair values of the trademarks were estimated using the relief-from-royalty method. This approach measures the value of the asset based on the hypothetical royalties the Company would avoid paying if it had to license the trademark from a third party. The analysis considers the established history and longevity of the trade names, including the Blue Raven brand, in use since 2014, and the SunPower brand, which has been in the market for over 20 years. Key assumptions include projecting sales attributable to business enterprise value for each respective business, applying a 1% royalty rate derived from a profit-split analysis and benchmarking against the median of comparable licensing arrangements, and utilizing a 10-year economic life in line with management’s plans to continue using the brands for the foreseeable future.

 

The fair value of the developed technology was estimated using the cost approach, which measures the economic resources required to recreate the asset, including direct costs and necessary entrepreneurial incentives. Direct costs were based on management’s estimate of the fees and profit margin that would be required to engage external consultants to rebuild the technology. In addition, an opportunity cost was incorporated to reflect the hypothetical return foregone during the development period, representing the income that could have been earned had these funds been invested elsewhere. The total replacement cost was calculated assuming a weighted-average redevelopment period of 19 months.

 

The SunPower Acquisition contributed $83.8 million and $6.5 million in revenue and income before income taxes from continuing operations, respectively, for the period from the acquisition date to the fiscal year ended December 29, 2024.

Sunder Energy LLC Acquisition

 

On September 21, 2025, a subsidiary of the Company entered into a Membership Interest Purchase Agreement (“Sunder MIPA”) with Sunder Energy LLC (“Sunder”) and the seller, Chicken Parm Pizza LLC (“Seller/Member”), the sole member of Sunder. On September 24, 2025 (“Sunder Closing”), the Company completed the acquisition of the membership interests of Sunder for an aggregate consideration of $57.8 million (“Sunder Acquisition”). Per the terms of the Sunder MIPA, the Company acquired all of the outstanding membership interest of Sunder for (1) $20.7 million in cash, subject to certain working capital and other adjustments; (2) a promissory note to the Member in the principal amount of $20.0 million (“Seller Note”); and (3) 10.0 million shares of the Company’s common stock (valued at the closing share price on September 24, 2025, of $1.71 per share), consisting of (i) 3,333,334 shares of the Company’s common stock issued at the Sunder Closing and (ii) subject to approval of such issuances by the Company’s stockholders, (x) 3,333,333 shares of the Company’s common stock to be issued on the 12-month anniversary of the Sunder Closing and (y) 3,333,333 shares of the Company’s common stock to be issued on the 18-month anniversary of the Sunder Closing (“Deferred Sunder Consideration Shares”). In lieu of issuing the Deferred Sunder Consideration Shares, the Company, in its sole discretion, may elect to pay the Member a cash payment equal to the number of Deferred Sunder Consideration Shares otherwise issuable by the Company multiplied by the volume-weighted average price of the Company’s common stock as quoted on Nasdaq for the 30-trading day period ending two business days prior to the date on which the applicable Deferred Sunder Consideration Shares are otherwise issuable (“Cash in Lieu Amount”). If the Company elects to pay the Cash in Lieu Amount, 50% of the Cash in Lieu Amount will be paid on the three-month anniversary of the date on which the applicable Deferred Sunder Consideration Shares are otherwise issuable, with the remaining 50% of the Cash in Lieu Amount payable on the 6 month anniversary of the date on which the applicable Deferred Sunder Consideration Shares are otherwise issuable. The shares of the Company’s common stock issued and expected to be issued were valued at aggregate of $17.1 million at the date of acquisition. The common stock issued at the Sunder Closing was valued at $5.7 million and accounted for within Additional paid-in-capital on the Company’s consolidated balance sheet. The Deferred Sunder Consideration Shares payable is presented as noted below on the Company’s consolidated balance sheet as of December 28, 2025. The fair value of the Sunder deferred consideration was subsequently adjusted downward to $10.8 million from the Sunder Closing to December 28, 2025. The Company concluded that since the sellers joined the Company and represent members of management, they have a level of influence that is not insignificant, they are related parties of the Company, and therefore the Deferred Consideration and Seller Note are a related party obligations. 

 

The consideration is summarized as follows (in thousands): 

 

Consideration    
Cash  $20,689 
Seller note   20,000 
Fair value of 3,333,334 shares of the Company’s common stock (classified within Additional paid-in-capital)   5,700 
Deferred Sunder Consideration Shares (fair value of 6,666,666 shares of the Company’s common stock):     
Classified within Deferred consideration, current with related party   5,700 
Classified within Deferred consideration, noncurrent with related party   5,700 
Fair value of total consideration  $57,789 

  

The Company financed a portion of the transaction through the issuance of $22.0 million of 7.0% senior unsecured convertible notes (the “September 2025 Notes”) and a $20.0 million Seller Note. Refer to Note 10 – Borrowings and Derivative Liabilities for details regarding these obligations.

 

Sunder is a solar sales company. The Company acquired Sunder as a strategic acquisition to expand its overall market share and its penetration into more U.S. states. The financial results of Sunder have been included in the Company’s consolidated financial statements since its date of acquisition.

 

The provisional fair values of assets acquired and liabilities assumed were based upon a preliminary valuation, and the Company’s estimates and assumptions have been revised during the measurement period to refine the fair values of the assets acquired and liabilities assumed based upon the facts and circumstances existing at the date of acquisition which resulted in the measurement period adjustments noted below. The purchase price accounting remains open for the components of working capital, identification and valuation of intangibles and allocation of goodwill. The Company has elected the practical expedient within ASC 805-20-30-27 through 805-20-30-30 to recognize and measure contract liabilities in accordance with ASC 606 – Revenue from Contracts with Customers (“ASC 606”) as if it had originated the acquired contract. Thus, the amount of any contract liabilities immediately prior to the acquisition will be the comparable amounts recognized in the determination of assets acquired and liabilities assumed by the Company.

The following table summarizes the provisional fair value of identifiable assets acquired and liabilities assumed (in thousands):

 

   Provisional
fair values
as of
September 24,
2025		   Measurement
period
adjustments in
fiscal
2025		   Provisional
fair values
as of
December 28,
2025		 
Net assets acquired:            
Accounts receivable  $257   $540   $797 
Prepaid expenses and other current assets   387    2,652    3,039 
Property and equipment   241    
—
    241 
Operating lease right-of-use assets   313    
—
    313 
Other noncurrent assets   552    (417)   135 
Intangibles   25,922    11,578    37,500 
Contract liabilities   (11,073)   (600)   (11,673)
Accounts payable   (184)   (19)   (203)
Accrued expenses and other current liabilities   (1,322)   (2,528)   (3,850)
Operating lease liabilities   (215)   (117)   (332)
Fair value of net assets acquired   14,878    11,089    25,967 
Consideration transferred   57,789    
—
    57,789 
Goodwill recognized  $42,911   $(11,089)  $31,822 

  

As of the date of acquisition, the intangible assets acquired and estimated useful lives were as follows:

 

    Estimated
useful life		   Provisional
fair values
as of
September 24,
2025		     Measurement
period
adjustments in
fiscal
2025		     Provisional
fair values
as of
December 28,
2025		  
Customer relationships   10 years   $ 9,279     $ 21,321     $ 30,600  
Trademark - Sunder   10 years     2,427       3,673       6,100  
Developed technology - Sunder   2 years     14,216       (13,416 )     800  
Total       $ 25,922     $ 11,578     $ 37,500  

 

The fair value of customer relationships was estimated using the excess earnings method, which measures the cash flows attributable to existing customers after deducting all supporting expenses and contributory asset charges. The assumptions used included revenue included all business enterprise valuation sales, reduced by a 5% attrition rate based on historical customer turnover, with operating expenses estimated as a percentage of sales and no sales-and-marketing adjustment since such efforts do not directly support existing customers. Contributory asset charges were applied for the use of working capital, fixed assets, workforce, trademarks, and internal-use software, and cash flows were projected over the period in which customer relationships were expected to produce meaningful benefit, with the economic life extending until those cash flows became minimal.

 

The fair value of the trademark was estimated using the relief-from-royalty method. This approach measures the value of the asset based on the hypothetical royalties the Company would avoid paying if it had to license the trademark from a third party. The assumptions used to value the trademark included projected sales based upon the business enterprise valuation considered attributable to the trademark, a royalty rate of 1.0% supported by a profit-split analysis and benchmarking against comparable licensing arrangements in the solar and broader energy industries and a useful economic life of 10 years consistent with management’s expectations for continued use and the anticipated longevity of the brand’s market relevance.

 

The fair value of Sunder’s developed technology was estimated using the cost approach, which measures value based on the cost to reproduce or replace the existing software in its current state. The analysis considered the historical direct development costs, including Sunder’s ongoing investment of approximately since late 2023, representing labor, design, coding, and testing efforts required to build the technology. In addition to direct costs, the valuation incorporated opportunity costs, which reflect the portion of the software expected to be added, modified, or removed over time based on management’s estimates of ongoing development needs. Together, these inputs approximate the current replacement cost of the technology, adjusted for necessary updates and functional improvements.

Goodwill represents the excess of the preliminary estimated consideration transferred over the fair value of the net tangible and intangible assets acquired that is associated with the excess cash flows that the acquisition is expected to generate in the future. The goodwill is tax deductible.

 

Sunder contributed $14.4 million and $6.2 million in revenue and income before income taxes from continuing operations, respectively, for the period from the acquisition date to the fiscal year ended December 28, 2025. 

 

Ambia Energy LLC Acquisition

 

On November 21, 2025, the Company entered into a Membership Interest Purchase Agreement (the “Ambia MIPA”) with Ambia and Ambia Holdings, Inc., a Delaware corporation and the sole member of Ambia (“Ambia Holdings”) to acquire Ambia (the “Ambia Acquisition”). Ambia was the sole operating entity within Ambia Holdings.

 

The Company, Ambia and Ambia Holdings completed the closing under the Ambia MIPA on November 21, 2025 (the “Ambia Closing”). At the Ambia Closing, the Company acquired all of the outstanding membership interests of Ambia from Ambia Holdings for: (a) 10,243,924 shares of common stock of the Company (the “Ambia Closing Consideration Shares”), issued at the Ambia Closing to Ambia Holdings; and (b) an agreement to issue an additional $9.375 million of shares of the Company’s common stock on each of the six-month anniversary of the Ambia Closing and the 12-month anniversary of the Ambia Closing (collectively such additional shares of common stock, the “Deferred Ambia Consideration Shares”). The issuance of the Deferred Ambia Consideration Shares is subject to approval by the Company’s stockholders following the Ambia Closing.

 

The actual number of Deferred Ambia Consideration Shares issuable by the Company on the six- and 12-month anniversaries of the Ambia Closing will be determined based on the 20-day trailing volume-weighted average price of the Company’s common stock after market close on the business day immediately prior to the issuance date of the applicable shares (the “VWAP Value”); provided that the VWAP Value for the calculation of the actual number of Deferred Ambia Consideration Shares issuable by the Company will not be more than $2.8102 per share or less than $1.4988 per share. Additionally, the number of Deferred Ambia Consideration Shares issuable by the Company is subject to adjustment pursuant to customary working capital and balance sheet adjustment terms and subject to offset for certain indemnifiable damages in accordance with the Ambia MIPA.

 

The fair value of the deferred consideration shares at the Ambia Closing was $16.9 million. The Company’s closing share price for its common stock of $1.61 on November 21, 2025 was used to fair value the shares issued at the Ambia Closing. The total consideration is summarized as follows (in thousands):

 

Consideration    
Fair value of 10,243,924 shares of the Company’s common stock issued at Ambia Closing (classified within Additional paid-in capital)  $16,493 
Deferred Ambia Consideration Shares (Classified within Deferred consideration, current)   16,879 
Fair value of total consideration  $33,372 

 

Ambia is a residential solar energy system installer and operates in various markets throughout the United States.

 

The provisional fair values of assets acquired and liabilities assumed were based upon the facts and circumstances existing at the date of acquisition. The purchase price accounting remains open for the valuation of the customer relationship and allocation of goodwill. The Company elected the practical expedient within ASC 805-20-30-27 through 805-20-30-30 to recognize and measure contract liabilities in accordance with ASC 606 as if it had originated the acquired contract. Thus, the amount of any contract liabilities immediately prior to the acquisition will be the comparable amounts recognized in the determination of assets acquired and liabilities assumed by the Company.

The provisional fair values of identifiable assets acquired and liabilities assumed are identified below (in thousands):

 

   Provisional
fair values
as of
December 28,
2025		 
Net assets acquired:    
Cash and cash equivalents  $1,350 
Accounts receivable   1,368 
Contract assets - unbilled receivables   1,143 
Prepaid expenses and other current assets   797 
Property and equipment, net   2,230 
Intangible assets   4,300 
Operating lease right-of-use assets   2,563 
Other noncurrent assets   182 
Accounts payable   (2,806)
Accrued expenses and other current liabilities   (2,917)
Contract liabilities   (1,675)
Operating lease liabilities, noncurrent   (2,702)
Finance lease liabilities   (1,269)
Fair value of net assets acquired   2,564 
Fair value of common stock issued (classified within Additional paid-in-capital)   16,493 
Fair value of Deferred Ambia Consideration Shares (Accrued expenses and other current liabilities)   16,879 
Consideration transferred   33,372 
Goodwill recognized  $30,808 

 

As of the date of acquisition, the intangible assets acquired and estimated useful lives were as follows:

 

   Estimated
useful life		  Provisional
Fair values
as of
December 28,
2025		 
Customer relationships (Backlog)  1 year (1)  $3,400 
Trademarks - Ambia  1 year   900 
Total     $4,300 

 

(1) Useful life is based upon customer consumption, expected to occur within one year.

 

Trademarks were derived using the relief from royalty method based upon the following key assumptions; (i) all sales based upon the business enterprise value; (ii) a royalty rate of 1% based upon profit split analysis and comparable licensing royalty agreements and (iii) an economic life of the Ambia name through the end of 2026, the Ambia name will only be used in certain small markets and that all sales, marketing and branding will be done under the SunPower brand name in relatively short order.

 

Customer relationships (backlog) was derived using the excess earnings method based upon the following key assumptions: (i) backlog meets the appropriate contractual criteria; (ii) sales were based upon the backlog of sales; (iii) expenses were based upon a percentage of sales with an adjustments for sales and marketing expenses, upon which management estimates that 100% of Ambia’s sales and marketing expenses are directed at acquiring new customers and is not required to support the backlog; (iv) charges were taken for the use of working capital, fixed assets, workforce and trademarks; (v) the economic life of the backlog is to the end of fiscal 2026 based upon management’s estimate of average deal length.

Goodwill represents the excess of the preliminary estimated consideration transferred over the fair value of the net tangible and intangible assets acquired that is associated with the excess cash flows that the acquisition is expected to generate in the future. The goodwill is tax deductible.

 

Ambia contributed $7.0 million and $2.8 million in revenue and loss before income taxes from continuing operations, respectively, for the period from the acquisition date to the fiscal year ended December 28, 2025.

 

Unaudited Pro Forma Financial Information

 

The following unaudited pro forma financial information represents the consolidated financial statements of the Company for the periods presented, as if the SunPower Businesses acquisition occurred on January 1, 2023 and the Sunder and Ambia acquisitions occurred on December 30, 2024.

 

The unaudited pro forma combined financial information does not give effect to any cost savings, operating synergies or revenue synergies that may result from the acquisitions. The pro forma results do not necessarily reflect the actual results of operations of the combined business (in thousands):

 

   Unaudited 
   Fiscal Year Ended 
   December 28,   December 29, 
   2025   2024 
         
Pro forma revenue  $429,689   $480,427 
Pro forma net loss from continuing operations   (59,168)   (312,801)