v3.26.1
Fair Value of Financial Instruments
 9 Months Ended
Mar. 29, 2026
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 March 29, 2026, except as otherwise noted below. There were no transfers between Level 1 and Level 2 during the nine months ended March 29, 2026.
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 hierarchyMarch, 29, 2026June 29, 2025
Assets:
Money market funds1$36.8 $61.8 
U.S. treasury securities1201.3 224.6 
MACOM Shares1— 102.0 
Municipal bonds2104.8 79.2 
Corporate bonds2221.3 196.8 
Commercial paper253.6 28.3 
Certificates of deposit2$22.7 $5.0 
Liabilities:
Forward equity contract2$— $— 
Warrants3— — 
Embedded derivative on New 2L Renesas Convertible Notes3$— $— 
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. With all Regulatory Approvals obtained in January 2026, and the shares being delivered, the forward equity contract was extinguished as of March 29, 2026, after being remeasured at fair value date as of the date on which the Regulatory Approvals were received, with changes in fair value recognized in "Non-operating income, net" in the Consolidated Statements of Operations.
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 the Regulatory Approvals. Before the Regulatory Approvals were obtained, 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 exception under ASC 815. Accordingly, this feature was 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 was 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, and most recently as of the date on which the Regulatory Approvals were received, with changes in fair value recognized in “Non-operating income, net" in the Consolidated Statements of Operations. The fair value of the embedded derivatives was determined using the Goldman Sachs binomial lattice model and was classified within Level 3 of the fair value hierarchy because the valuation model involves 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 the date on which the Regulatory Approvals were received was 60.0%.
Upon receipt of the Regulatory Approvals in January 2026, the embedded derivative met the equity classification criteria under ASC 815 and ASC 480. Accordingly, the Company reclassified the embedded derivative from liabilities to additional paid‑in capital at its fair value as of the reclassification date of $87.9 million. The reclassification did not result in the recognition of a gain or loss in the statement of operations. Subsequent to the January 2026 reclassification, the embedded derivative is no longer subject to fair value remeasurement.
Stock Warrant Liability
Prior to the receipt of the Regulatory Approvals, the stock warrants held by Renesas could only be settled for cash such that they were accounted for as derivative liabilities under ASC 815. The warrants were subsequently remeasured at fair value as of the date on which the Regulatory Approvals were received, with changes in fair value recognized in "Non-operating income, net" in the Consolidated Statements of Operation. The fair value of the warrant liability was determined using a Black-Scholes model and was 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 the date on which the Regulatory Approvals were received, was 70.0%.
During the three months ended March 29, 2026, the Company reclassified its stock warrant liability to equity following the receipt of all required regulatory approvals. Upon reclassification, the stock warrant liability was no longer subject to fair value remeasurement. Refer to Note 2 "Emergence from Voluntary Reorganization under Chapter " for more information.
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
(2.1)(6.6)
Reclassification to equity(31.5)(87.9)
Balance as of March 29, 2026——
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, and the stock warrant liability.