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Debt | 9 Months Ended
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Sep. 27, 2025
Debt Disclosure [Abstract] |
Debt | Debt Term Loan On July 24, 2023, the Company entered into a Credit Agreement (the "Credit Agreement") by and among the Company, as borrower, each lender from time to time party thereto and TCG Senior Funding L.L.C., an affiliate of The Carlyle Group, as administrative agent and collateral agent, providing for a $200.0 million senior secured term loan credit facility (the "Term Loan"). Total proceeds from the Term Loan were $188.2 million, net of $11.8 million of debt issuance costs. The Term Loan had an original maturity date of July 24, 2026. The Term Loan bears interest at a rate per annum equal to, at the Company's option, (i) a rate based on term SOFR plus a credit spread adjustment plus a 9.00% spread or (ii) a rate based on the base rate plus a rate adjustment plus an 8.00% spread. A portion of each spread equal to 2.5% is paid in kind by capitalizing such option into principal of the Term Loan. In the event of repayment, prepayment or acceleration of all or any portion of the Term Loan, the Company is required to pay to the lenders an additional amount which represents a minimum guaranteed return on the Term Loan that ranges between 1.30x and 1.75x of the principal in accordance with the provisions within the Credit Agreement. The minimum guaranteed return range is based on the date on which it is paid. As of September 27, 2025, the minimum guaranteed return rate was 1.7x. The Credit Agreement provides for mandatory prepayments of borrowings under certain circumstances, including non-ordinary course asset sales and incurrence of other indebtedness, subject to customary exceptions. The Credit Agreement contains customary affirmative covenants, including financial statement reporting requirements and delivery of compliance certificates. The Credit Agreement also contains customary negative covenants that limit the Company's and its subsidiaries' ability to, among other things, grant or incur liens, incur additional indebtedness, make certain restricted investments or payments, including payment of dividends on its capital stock and payments on certain permitted indebtedness, enter into certain mergers and acquisitions or engage in certain asset sales, subject in each case to certain exceptions. In addition, the Credit Agreement contains a financial covenant that the Company will not permit its consolidated core assets (comprising cash, accounts receivable and inventory), measured on the last day of each fiscal month, to be less than $250.0 million which amount is subject to increase or decrease upon certain triggers related to the payment or non-payment of any termination fees under the Merger Agreement (or fees in lieu of such termination fees) and the occurrence or non-occurrence of the Merger. During the first quarter of fiscal 2024, as a result of the termination of the Merger Agreement and receipt of the Parent Termination Fee of $94.0 million from Amazon on January 29, 2024, $35.0 million of such Parent Termination Fee was used immediately to repay a portion of the Term Loan, and $40.0 million of the Parent Termination Fee was set aside in a restricted account to be used for future repayments of the Term Loan subject to limited ability of the Company to utilize such amounts at the discretion of the lenders for the purchase of inventory in the third quarter of fiscal 2025. The $35.0 million repayment was applied to the principal, interest and the 1.4x minimum guaranteed return, reducing the principal balance of the loan to $176.1 million. With the termination of the Merger Agreement and the $35.0 million repayment, the applicable minimum guaranteed return ranges between 1.4x and 1.7x of the principal and the consolidated core assets financial covenant is reduced to $200.0 million. To access the $40.0 million of restricted cash for inventory purchases, on the day of such election, the Company must certify to its lenders that the Company has pro forma consolidated core assets of $275.0 million and no default or event of default under the Credit Agreement. During the third quarter of fiscal 2024, the Company elected to draw down $40.0 million of the restricted cash, which was repaid to the restricted account in March 2025. During the third quarter of fiscal 2025, with the Lenders' consent, the Company elected to draw down $31.0 million from the restricted cash account. Subsequently, on September 30, 2025, the Company drew down the remaining $5.0 million from the restricted cash account. On March 11, 2025, the Company entered into Amendment No. 1 to the Credit Agreement with TCG Senior Funding L.L.C., an affiliate of The Carlyle Group, as administrative agent and collateral agent (the "Agent") and the lenders party thereto (the "Lenders"). Pursuant to Amendment No. 1, the Lenders waived, until May 6, 2025 (the "Initial Waiver Period"), the Company's covenant obligations to (1) provide a report and opinion of the auditor with respect to the Company's annual consolidated financial statements for fiscal year 2024 without a qualification regarding the Company's ability to continue as a going concern (the "Going Concern Covenant") and (2) maintain a minimum level of core assets (the "Minimum Core Assets Covenant" and, together with the Going Concern Covenant, the "Specified Covenants"). On April 30, 2025, the Company entered into Amendment No. 2 to the Credit Agreement, which extended the Initial Waiver Period to June 6, 2025. In connection with Amendment No. 1, the Company returned to a controlled account for the benefit of the Agent and the Lenders the $40.0 million that it elected to withdraw from such controlled account during the third quarter of fiscal 2024 for the purchase of inventory, and the Agent deferred payment of the related $4.0 million use fee until the end of the Initial Waiver Period. Amendment No. 1 also required the Company to provide more frequent supplemental financial reporting to the Agent. Fees payable by the Company to the Lenders in connection with Amendment No. 1 include (1) $3.6 million (representing 2.0% of the aggregate principal amount of term loans outstanding), which was paid in kind via an increase of the outstanding principal amount of the Term Loan and (2) issuing to the Lenders on the date of Amendment No. 1 warrants to purchase an aggregate of 1,840,503 shares of the Company's common stock (equal to six percent of its outstanding common stock as of March 10, 2025), with an exercise price of $0.01 per share. These warrants were accounted for at fair value of $11.6 million on the issuance date and recorded as debt issuance cost in other expense, net on the consolidated statement of operations. On June 5, 2025, the Company entered into Amendment No. 3 to the Credit Agreement, which further extended the Initial Waiver Period to August 14, 2025. Fees payable by the Company to the Lenders in connection with Amendment No. 3 included (1) $4.0 million in cash held in the restricted cash account, which was entirely applied to reduce the outstanding principal amount of the Term Loan and (2) issuing to the Lenders on the date of Amendment No. 3 warrants to purchase an aggregate of 1,556,323 shares of the Company's common stock (equal to five percent of its outstanding common stock as of June 4, 2025), with an exercise price of $0.01 per share. These warrants were accounted for at fair value of $5.2 million on the issuance date and recorded as debt issuance cost in other income (expense), net on the consolidated statement of operations. On August 6, 2025, the Company entered into Amendment No. 4 to the Credit Agreement, which further extended the Initial Waiver Period to September 19, 2025. On September 12, 2025, the Company entered into Amendment No. 5 to the Credit Agreement, which further extended the Initial Waiver Period to October 24, 2025. On October 22, 2025, the Company entered into Amendment No. 6 to the Credit Agreement, which further extended the Initial Waiver Period to December 1, 2025. No event of default will occur under the Credit Agreement as a result of failure to comply with the Specified Covenants during the Extended Waiver Period, provided that the Company is still obligated to comply with the Specified Covenants after the end of the Extended Waiver Period and if it does not, unless the Lenders further extend such waiver by the end of the Extended Waiver Period, an Event of Default will occur. In late October 2025, the Lenders agreed to defer all cash interest due on October 28, 2025 (approximately $5.1 million) until November 28, 2025. See Note 2, Liquidity Risks and Uncertainties, for further information. The Credit Agreement also contains customary events of default (subject to certain exceptions, thresholds and grace periods), such as the failure to pay obligations when due, breach of certain covenants, including the financial covenant, cross-default or cross-acceleration of certain indebtedness, bankruptcy-related defaults, judgment defaults, and the occurrence of certain change of control events involving the Company. The occurrence of an event of default may result in the termination of the Credit Agreement and acceleration of repayment obligations with respect to any outstanding loans or letters of credit under the Term Loan. The obligations under the Term Loan are guaranteed by the Company and certain of its subsidiaries located in the United States, United Kingdom, Japan, France and Spain. In addition, the obligations under the Term Loan are secured by a first priority lien on substantially all tangible and intangible property of the Company and the guarantors and pledges of the equity of certain subsidiaries, in each case subject to certain exceptions, limitations and exclusions from the collateral. Upon initial issuance, the Company elected to account for the Term Loan under the fair value option. The primary reason for electing the fair value option is for simplification and cost-benefit considerations of accounting for the Term Loan at fair value in its entirety versus bifurcation of the embedded features. The fair value of the Term Loan was determined using a discounted cash flow model which represents Level 3 measurements. The significant assumptions used in the discounted cash flow model include the amount and timing of future cash flows, expected interest rate volatility and the discount rate. Under the fair value election, debt issuance costs are expensed as incurred, and the debt liability is subsequently valued at fair market value, including paid in kind interest, during each reporting period until its settlement. At September 27, 2025, in connection with the Company's negotiations with the Lenders and the counterparty to a potential sale transaction, all cash payments, including principal and interest, were assumed to be deferred until settlement of the Term Loan. Therefore, accrued cash interest was included in the fair value of the debt at September 27, 2025. In late October 2025, the Lenders agreed to defer all cash interest due on October 28, 2025 (approximately $5.1 million) until November 28, 2025. The Company's outstanding debt as of September 27, 2025 was as follows (in thousands):
| Classification |  | Term Loan
Term Loan at fair value at December 28, 2024 |  |  | $ | 200,604 |
Repayment |  |  | (4,000) |
Change in fair value of term loan due to instrument-specific credit risk | Other comprehensive loss |  | 9,767 |
Remaining changes in fair value | Other expense |  | (1,079) |
Term Loan at fair value as of September 27, 2025 |  |  | $ | 205,292 |
During the three and nine months ended September 27, 2025, the Company recorded $1.6 million and $11.7 million of interest expense, respectively, related to the quarterly cash interest. During the three and nine months ended September 28, 2024, the Company recorded $5.4 million and $16.2 million of interest expense, respectively, related to the quarterly cash interest. These interest expenses were recorded in other expense, net on the consolidated statements of operations. The interest expense was calculated using the rate based on term SOFR plus a credit spread adjustment plus a 9.00% spread. As of September 27, 2025, the accrued interest was included in the fair value of the debt and there was no accrued interest expense on the consolidated balance sheet.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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