What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2025-01-30 · 234 added, 158 removed, 607 unchanged (39% of the section changed)

Financial Statements (Unaudited)

Consolidated Balance Sheets as of Dec ember 29, 2024 and June 30, 2024

Consolidated Statements of Operations for the three and six months ended Dec ember 29, 2024 and Dec ember 31 , 2023

Consolidated Statements of Comprehensive Loss for the three and si x months ended D e c ember 29, 2024 and Dec ember 31 , 2023

Consolidated Statements of Shareholders' Equity for the six months ended Dec ember 29, 2024 and Dec ember 31 , 2023

Consolidated Statements of Cash Flows for the six months ended Dec ember 29, 2024 and Dec ember 31 , 2023

Consolidated Balance Sheets as of March 30 , 202 5 and June 30, 2024

Consolidated Statements of Operations for the three and nine months ended March 30, 2025 and March 31, 2024

Consolidated Statements of Comprehensive Loss for the three and nine months ended March 30, 2025 and March 31, 2024

Consolidated Statements of Shareholders' Equity for the nine months ended March 30, 2025 and March 31, 2024

Consolidated Statements of Cash Flows for the nine months ended March 30, 2025 and March 31, 2024

Notes to Unaudited Consolidated Financial Statements

3 unchanged sentences

Dollars, except share data in thousands)

December 29, 2024 June 30, 2024

March 30, 2025 June 30, 2024

Current assets:

4 unchanged sentences

Inventories 459.1 440.7

Income taxes receivable 0.3 0.5

Prepaid expenses 81.2 56.6

Investment tax credit receivable 586.2 —

Other current assets 249.5 180.3

6 unchanged sentences

Deferred tax assets 1.1 1.1

Investment tax credit receivable 865.0 641.8

Long-term investment tax credit receivable 133.5 641.8

Other assets 271.8 225.1

18 unchanged sentences

Preferred stock, par value $ 0.01 ;

3,000 shares authorized at December 29, 2024 and June 30, 2024;

3,000 shares authorized at March 30, 2025 and June 30, 2024;

none issued and outstanding

Common stock, par value $ 0.00125 ;

400,000 shares authorized at December 29, 2024 and June 30, 2024;

138,679 and 126,409 shares issued and outstanding at December 29, 2024 and June 30, 2024, respectively

400,000 shares authorized at March 30, 2025 and June 30, 2024;

155,623 and 126,409 shares issued and outstanding at March 30, 2025 and June 30, 2024, respectively

Additional paid-in-capital 4,085.2 3,821.9

6 unchanged sentences

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars, except share data)

December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Revenue, net $ 185.4 $ 200.7 $ 560.6 $ 606.5

11 unchanged sentences

Loss before income taxes ( 285.4 ) ( 148.8 ) ( 939.5 ) ( 398.1 )

Income tax (benefit) expense ( 0.1 ) 0.3 0.3 0.5

Income tax expense 0.1 0.1 0.4 0.6

Net loss from continuing operations ( 285.5 ) ( 148.9 ) ( 939.9 ) ( 398.7 )

8 unchanged sentences

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Net loss ($ 285.5 ) ($ 148.9 ) ($ 939.9 ) ($ 689.3 )

Other comprehensive income:

Net unrealized (loss) gain on available-for-sale securities ( 1.4 ) 11.0 5.9 12.9

Other comprehensive income (loss):

Net unrealized gain (loss) on available-for-sale securities 1.3 ( 0.5 ) 7.2 12.4

Comprehensive loss ( 284.2 ) ( 149.4 ) ( 932.7 ) ( 676.9 )

15 unchanged sentences

Stock-based compensation 99 — 19.7 — — 19.7

Exercise of stock options and issuance of shares 773 — 8.8 — — 8.8

Issuance of shares under employee stock purchase plan 773 — 8.8 — — 8.8

Issuance of shares under the at-the-market offering program, net of issuance costs 10,919 — 88.9 — — 88.9

Balance at December 29, 2024 138,679 $ 0.2 $ 3,960.9 ($ 3,582.8 ) ($ 5.7 ) $ 372.6

Net loss — — — ( 285.5 ) — ( 285.5 )

Net unrealized gain on available-for-sale securities — — — — 1.3 1.3

Tax withholding on vested equity awards — — ( 0.2 ) — — ( 0.2 )

Stock-based compensation 69 — 18.2 — — 18.2

Issuance of shares under the at-the-market offering program, net of issuance costs 16,875 — 106.3 — — 106.3

Balance at March 30, 2025 155,623 $ 0.2 $ 4,085.2 ($ 3,868.3 ) ($ 4.4 ) $ 212.7

The accompanying notes are an integral part of the consolidated financial statements

8 unchanged sentences

Tax withholding on vested equity awards — — ( 15.0 ) — — ( 15.0 )

Repurchased shares — — — — — —

Stock-based compensation 506 — 32.1 — — 32.1

3 unchanged sentences

Unrealized gain on available-for-sale securities — — — — 11.0 11.0

Comprehensive loss ( 133.7 )

Tax withholding on vested equity awards — — ( 2.0 ) — — ( 2.0 )

Stock-based compensation 104 — 29.8 — — 29.8

Exercise of stock options and issuance of shares 360 — 10.4 — — 10.4

Exercise of stock options and issuance of shares under employee stock purchase plan 360 — 10.4 — — 10.4

Balance at December 31, 2023 125,785 $ 0.2 $ 3,766.8 ($ 2,604.6 ) ($ 12.2 ) $ 1,150.2

Net loss — — — ( 148.9 ) — ( 148.9 )

Unrealized loss on available-for-sale securities — — — — ( 0.5 ) ( 0.5 )

Tax withholding on vested equity awards — — ( 0.7 ) — — ( 0.7 )

Stock-based compensation 48 — 22.5 — — 22.5

Balance at March 31, 2024 125,833 $ 0.2 $ 3,788.6 ($ 2,753.5 ) ($ 12.7 ) $ 1,022.6

The accompanying notes are an integral part of the consolidated financial statements

1 unchanged sentence

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024

Operating activities:

6 unchanged sentences

Stock-based compensation 62.7 63.9

Unrealized gain on equity investment ( 15.7 ) ( 5.4 )

Loss on disposal or impairment of long-lived assets 126.4 0.4

Premium discount on investments, net ( 6.2 ) ( 13.8 )

Unrealized loss (gain) on equity investment 9.2 ( 7.3 )

Loss on disposal or impairment of property and equipment 152.7 1.0

Impairment of ROU Assets 4.8 —

Amortization of premium on investments, net ( 7.8 ) ( 21.4 )

Paid-in-kind interest on long-term debt 75.5 —

17 unchanged sentences

Proceeds from sale of short-term investments 39.4 52.7

Reimbursement of property and equipment purchases from long-term incentive agreement 42.0 79.4

Reimbursement of capital expenditures from incentives and investment credits 238.6 178.4

Proceeds from sale of business — 75.6

4 unchanged sentences

Proceeds from long-term debt borrowings 240.0 1,500.0

Payments of debt issuance costs ( 26.1 ) ( 46.0 )

Payments of debt issuance costs and commitment fees ( 40.2 ) ( 46.0 )

Proceeds from issuance of common stock 203.9 10.9

22 unchanged sentences

Shareholders' Equity

Subsequent Events

Note 1 – Basis of Presentation and New Accounting Standards

4 unchanged sentences

As discussed more fully below in Note 2, “Discontinued Operations,” on December 2, 2023, the Company completed the sale of certain assets comprising its RF product line.

The Company classified the results and cash flows of the RF product line as discontinued operations in its consolidated statements of operations and consolidated statements of cash flows for fiscal 2024.

Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to the Company's continuing operations.

1 unchanged sentence

The consolidated financial statements presented herein have been prepared by the Company and have not been audited.

In the opinion of management, all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations, comprehensive loss, shareholders' equity and cash flows at December 29, 2024, and for all periods presented, have been made.

In the opinion of management, all normal and recurring adjustments necessary to fairly state the consolidated financial position, results of operations, comprehensive loss, shareholders' equity and cash flows at March 30, 2025, and for all periods presented, have been made.

All material intercompany accounts and transactions have been eliminated.

The consolidated balance sheet at June 30, 2024 has been derived from the audited financial statements as of that date.

Certain prior period amounts in the accompanying consolidated financial statements and notes have been reclassified to conform to the current year presentation.

These reclassifications had no effect on previously reported net loss or shareholders’ equity.

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

2 unchanged sentences

GAAP for annual financial statements.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (fiscal 2024).

The results of operations for the three and six months ended December 29, 2024 are not necessarily indicative of the operating results that may be attained for the entire fiscal year ending June 29, 2025 (fiscal 2025).

The results of operations for the three and nine months ended March 30, 2025 are not necessarily indicative of the operating results that may be attained for the entire fiscal year ending June 29, 2025 (fiscal 2025).

In accordance with U.S.

GAAP, management considers whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern for the twelve months following the issuance date of its financial statements.

Based on the Company's current cash flow projections, the Company has concluded that the entity will be able to meet its obligations as they become due during that period.

As of March 30, 2025, the Company had approximately $ 6.5 billion of debt obligations, as further discussed in Note 9 "Long-term Debt." Considering the significant amount of the Company’s outstanding indebtedness and related debt service expense, the Company engaged external advisors to assist with the evaluation of a number of strategic alternatives, including a potential out-of-court or in-court capital restructuring.

These alternatives include, but are not limited to, restructuring, refinancing or amending the Company’s existing debt, seeking new financing or pursuing asset sales to bolster liquidity.

The Company has actively engaged in discussions and negotiations with certain holders of its indebtedness regarding the terms of a potential restructuring with a goal of not impacting its customers, vendors and employees in the ordinary course of business.

These discussions and negotiations are ongoing and the terms of any potential restructuring have not been agreed upon by the parties.

Notwithstanding the Company’s efforts, there can be no assurance that the Company will reach an agreement on acceptable terms and conditions with respect to a restructuring or other transaction in a timely manner or at all.

Any restructuring or other transaction, to which the Company may agree, may be conditioned on a requirement that the transaction be implemented through an in-court solution.

Although there can be no assurance that the Company will pursue or successfully complete a restructuring or other transaction, any restructuring or other transaction is expected to be costly, would likely be substantially dilutive to the Company’s existing shareholders and would likely limit the Company’s ability to utilize its net operating loss carry forwards (and/or other nonrefundable tax attributes).

The Company’s ability to generate and monetize certain refundable tax credits, such as the Advanced Manufacturing Investment Credits (AMIC), is not anticipated to be limited as a result of any potential strategic alternatives being pursued.

While the Company considers these strategic alternatives, the Company retains sufficient liquidity in the near term, with approximately $ 1,329.6 million of unrestricted cash and cash equivalents and short-term investments on its unaudited consolidated balance sheet as of March 30, 2025, compared to scheduled debt repayments and debt service costs of $ 575 million and $ 322 million, respectively, over the next 12 months.

The Company plans to submit for approximately $ 600 million in cash tax refunds related to the amounts eligible for reimbursement under the AMIC over the next 12 months.

The Company expects that its current operating forecast over the next 12 months will allow the Company to maintain operations and meet its obligations to customers, vendors and employees in the ordinary course of business.

However, due to the Company’s ongoing consideration of an in-court restructuring that would result in an event of default during the implementation of that potential solution, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern as of the issuance date, in accordance with the requirements of ASC 205-40, “Presentation of Financial Statements – Going Concern.”

The accompanying unaudited consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that the Company will be able to realize assets and settle liabilities and commitments in the normal course of business for twelve months following the date of this filing.

Accordingly, the accompanying unaudited consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Summary of Significant Accounting Policies

There were no material changes to our significant accounting policies during the six months ended December 29, 2024 compared to the significant accounting policies described in our fiscal 2024 Form 10-K.

There were no material changes to the Company's significant accounting policies during the nine months ended March 30, 2025 compared to the significant accounting policies described in the Company's fiscal 2024 Form 10-K.

Financial Statement Details

1 unchanged sentence

(in millions of U.S.

Dollars) December 29, 2024 June 30, 2024

Dollars) March 30, 2025 June 30, 2024

Billed trade receivables $ 161.4 $ 143.3

4 unchanged sentences

(in millions of U.S.

Dollars) December 29, 2024 June 30, 2024

Dollars) March 30, 2025 June 30, 2024

Raw material $ 150.9 $ 138.7

4 unchanged sentences

(in millions of U.S.

Dollars) December 29, 2024 June 30, 2024

Dollars) March 30, 2025 June 30, 2024

Reimbursement receivable on long-term incentive agreement $ 33.1 $ 85.8

Assets held for sale (1)

MACOM Shares (2)

Other 63.1 94.5

Other current assets $ 249.5 $ 180.3

During the third quarter of fiscal 2025, the Company determined three facilities met the held-for-sale criteria under Accounting Standards Codification (ASC) 360.

The assets included in each of the disposal groups were measured at the lower of their carrying value or fair value less costs to sell.

Refer to Note 2, "Discontinued Operations," and Note 7, "Fair Value of Financial Instruments," to the consolidated financial statements included herein for additional information.

Assets Held for Sale

The Company classifies an asset as held for sale when all of the criteria set forth in the Accounting Standards Codification (ASC) Topic 360:

Property, Plant and Equipment ("ASC 360") have been met.

The criteria are as follows:

(i) management, having the authority to approve the action, commits to a plan to sell the property;

(ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary;

(iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated;

(iv) the sale of the property is probable and is expected to be completed within one year;

(v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value;

and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

At the time the Company classifies a property as held for sale, the Company ceases recording depreciation and amortization.

A property classified as held for sale is measured and reported at the lower of its carrying amount or its estimated fair value less cost to sell.

As of March 30, 2025, the Company recorded $ 83.2 million in assets held for sale included within other current assets on the consolidated balance sheet and an immaterial loss was recorded in Loss on disposal or impairment of long-lived assets within the accompanying consolidated statement of operations.

The assets held for sale consisted of three properties including buildings, building improvements and land of idled properties located in Farmer's Branch, Texas and Durham, North Carolina and the Company's property located in Research Triangle Park, North Carolina (the RTP Facility).

The disposal of properties classified as held for sale does not represent a strategic shift that has (or will have) a major effect on our operations or financial results and therefore does not meet the criteria for classification as a discontinued operation.

The sale of the assets is expected to occur within the next twelve months.

Investment Tax Credit Receivable

The Company expects to receive refundable federal investment tax credits through the United States CHIPS and Science Act of 2022 (the CHIPS Act) in connection with ongoing expansion projects.

As of December 29, 2024, the Company has recorded a receivable for and reduced property and equipment, net by $ 865.0 million as a result of the expected refundable tax credits in connection with the CHIPS Act.

In the second quarter of fiscal 2025, the United States Department of Treasury released final regulations related to the Advanced Manufacturing Investment Credit under Section 48D of the Internal Revenue Code, and the Internal Revenue Service issued Announcement 2024-40 confirming the treatment of CHIPS Act grants for purposes of Section 48D.

The Company accounted for the impact of the final regulations and the announcement as part of a change in estimate and increased the investment tax credit receivable by $ 68.6 million and recorded $ 5.8 million of contra-depreciation expense which is the cumulative amount that would have been recognized had the receivable been recorded at the time the corresponding assets were placed in service.

The Company is eligible for AMIC in connection with ongoing expansion projects.

The AMIC is a refundable federal tax credit provided under Internal Revenue Code Section 48D, which was enacted by the United States CHIPS and Science Act of 2022 (the CHIPS Act).

In the third quarter of fiscal 2025, the Company received $ 192.1 million in cash tax refunds related to its fiscal 2023 and fiscal 2024 federal tax filings, inclusive of $ 5.6 million of interest income.

As of March 30, 2025, the Company has recorded a short-term and long-term receivable of $ 586.2 million and $ 133.5 million, respectively, and the Company has reduced property and equipment, net by $ 906.2 million as a result of expected proceeds under the AMIC.

Accounts Payable and Accrued Expenses

(in millions of U.S.

Dollars) December 29, 2024 June 30, 2024

Dollars) March 30, 2025 June 30, 2024

Accounts payable, trade $ 59.3 $ 53.0

3 unchanged sentences

Accounts payable and accrued expenses $ 392.6 $ 523.6

Other Current Liabilities

(in millions of U.S.

Dollars) March 30, 2025 June 30, 2024

Accrued interest $ 51.8 $ 7.3

RF Supply Agreement Liabilities (1)

Other 52.3 23.6

Other current liabilities $ 179.7 $ 77.9

Refer to Note 2, "Discontinued Operations," to the consolidated financial statements included herein for additional information.

Other Operating Expense

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Restructuring costs and other exit costs $ 32.2 $ — $ 85.0 $ —

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Legal settlements $ 17.0 — $ 17.0 —

Restructuring and other exit costs 10.0 $ — $ 95.0 $ —

Executive severance costs — — 1.4 —

3 unchanged sentences

Accumulated Other Comprehensive Loss, net of taxes

Accumulated other comprehensive loss, net of taxes, consisted of $ 5.7 million and $ 11.6 million of net unrealized losses on available-for-sale securities as of December 29, 2024 and June 30, 2024, respectively.

Accumulated other comprehensive loss, net of taxes, consisted of $ 4.4 million and $ 11.6 million of net unrealized losses on available-for-sale securities as of March 30, 2025 and June 30, 2024, respectively.

Amounts for both periods include a $ 2.4 million loss related to tax on unrealized loss on available-for-sale securities.

Non-Operating Expense, net

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Interest income ( 19.4 ) ( 30.1 ) ( 58.6 ) ( 108.9 )

Interest expense, net of capitalized interest 85.4 59.5 230.4 185.5

Loss on customs matter (1)

Loss on Wafer Supply Agreement — 6.9 9.2 20.4

Unrealized gain on equity investment ( 15.7 ) ( 5.4 ) ( 15.7 ) ( 5.4 )

Unrealized loss (gain) on equity investment 24.9 ( 1.9 ) 9.2 ( 7.3 )

Other, net — 0.3 1.7 1.3

1 unchanged sentence

$ 90.9 $ 42.4 $ 191.9 $ 98.7

(1) In the third quarter of fiscal 2024, the Company accrued a liability for payment of customs duties totaling approximately $ 7.7 million for alleged undervalued duties related to transactions by the Company's former Lighting Products business unit from 2012 to 2017.

Statements of Cash Flows - non-cash activities

Six months ended

Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024

Decrease in property, plant and equipment from investment tax credit receivables $ 264.5 $ 348.0

Decrease in property, plant and equipment from long-term incentive related receivables — 107.3

Proceeds on sale of business received in US corporation common stock — 60.8

Proceeds on sale of business received in U.S.

corporation common stock — 60.8

Receivables in connection with short-term investment maturities — 15.0

Decrease in property, plant and equipment from insurance receivable — 2.2

Lease asset and liability additions 35.2 1.8

Lease asset and liability modifications, net 2.9 0.9

Lease terminations — ( 1.4 )

Lease asset impairment ( 4.8 ) —

Commitment fee payable for 2030 Senior Notes 15.2 —

Fees payable in connection with at-the-market program 2.4 —

Recently Adopted Accounting Pronouncements

Accounting Pronouncements Pending Adoption

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

Improvements to Tax Disclosures, which requires disaggregated information about an entity’s income tax rate reconciliation as well as information regarding cash taxes paid both in the United States and foreign jurisdictions.

The amendments should be applied prospectively, with retrospective application permitted.

The amendments are effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impacts of adopting this guidance on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Segment Reporting Disclosures, to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

3 unchanged sentences

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company does not expect the adoption of this standard to have a material impact on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

The amendments should be applied prospectively, with retrospective application permitted.

The amendments are effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impacts of adopting this guidance on its financial statement disclosures.

1 unchanged sentence

Disaggregation of Income Statement Expenses, to require additional disclosures of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses.

The ASU is effective on a prospective basis, with the option for

retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and early adoption is permitted.

In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and early adoption is permitted.

The Company is currently evaluating the impacts of adopting this guidance on its financial statement disclosures.

9 unchanged sentences

The Company and MACOM also entered into certain ancillary and related agreements, including (i) an Intellectual Property Assignment and License Agreement, which assigned to MACOM certain intellectual property owned by the Company and its affiliates and licensed to MACOM certain additional intellectual property owned by the Company, (ii) a Transition Services Agreement (the RF TSA), pursuant to which the Company provides MACOM certain limited transition services following the RF Closing, (iii) a Master Supply Agreement, pursuant to which the Company will continue to operate the RTP Fab and supply MACOM with Epi-wafers and fabrication services (the RF Master Supply Agreement) through the date on which the RTP Fab Transfer is complete (the RTP Fab Transfer Date), (iv) a Long-Term Epi Supply Agreement (the Long-Term Epi Supply Agreement), pursuant to which MACOM will purchase from the Company Epi-wafers from the RTP Fab Transfer Date until the fifth anniversary of the RTP Fab Transfer Date, (v) an Epi Research and Development Agreement, pursuant to which the Company will provide MACOM certain research and development activities and other technical manufacturing support services related to the RF Business during the period between the RF Closing and expiration of the Long-Term Epi Supply Agreement, and (vi) a Real Estate License Agreement (the RF RELA), which allows MACOM to use certain portions of the RTP Fab to conduct the RF Business through the RTP Fab Transfer Date.

In connection with the RTP Fab Transfer, the Company and MACOM will enter into a Lease Agreement (the RTP Fab Lease Agreement), which allows MACOM to lease the premises of the RTP Fab for a period of 15 years after the RTP Fab Transfer Date.

In connection with the sale of the RTP Facility, an affiliate of MACOM is expected to enter into a Lease Agreement with the purchaser of the RTP Facility and the Company will enter into a Sublease Agreement with the MACOM lessor, which will allow Wolfspeed to lease the premises of the RTP Fab until the RTP Fab Transfer Date (except for the portion covered by the RF RELA, which MACOM will retain).

Because the RF Business Divestiture represented a strategic shift that had and will continue to have a major effect on the Company’s operations and financial results, the Company classified the results of the RF Business as discontinued operations in the Company’s consolidated statements of operations for fiscal 2024.

The Company ceased recording depreciation and amortization of long-lived assets that conveyed in the RF Purchase Agreement upon classification as discontinued operations in August 2023.

The RTP Fab is not considered within the RF Business Divestiture disposal group and the current and long-term assets associated with the RTP Fab are not classified as held for sale from discontinued operations in the consolidated balance sheets.

The following table presents the financial results of the RF Business as loss from discontinued operations, net of income taxes in the Company's consolidated statements of operations:

Three months ended Six months ended

Nine months ended

(in millions of U.S.

Dollars) December 31, 2023 December 31, 2023

Dollars) March 31, 2024

Revenue, net $ 59.6

8 unchanged sentences

Loss before income taxes and loss on sale ( 79.6 )

(Gain) loss on sale ( 16.0 ) 204.0

Loss on sale 204.0

Loss before income taxes ( 283.6 )

1 unchanged sentence

Net loss ($ 290.6 )

At the inception of the RF Master Supply Agreement, the Company recorded a supply agreement liability of $ 95.0 million, of which $ 45.2 million was outstanding as of December 29, 2024.

The supply agreement liability is recognized in other current liabilities on the consolidated balance sheet as of December 29, 2024 and in other current liabilities and other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

A receivable of $ 5.8 million in connection with the RF Master Supply Agreement is included in other current assets in the consolidated balance sheet as of December 29, 2024.

Additionally, the Company recorded a supply agreement liability of $ 58.0 million for the Long-Term Epi Supply Agreement, which is recognized in other long-term liabilities in the consolidated balance sheets.

At the inception of the RF Master Supply Agreement, the Company recorded a supply agreement liability of $ 95.0 million, of which $ 34.3 million and $ 67.0 million was outstanding as of March 30, 2025 and June 30, 2024, respectively.

The supply agreement liability is recognized in other current liabilities on the consolidated balance sheet as of March 30, 2025 and in other current liabilities and other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

A receivable of $ 6.5 million and $ 4.6 million in connection with the RF Master Supply Agreement is included in other current assets in the consolidated balance sheet as of March 30, 2025 and June 30, 2024, respectively.

Additionally, the Company recorded a supply agreement liability of $ 58.0 million for the Long-Term Epi Supply Agreement, which is recognized in other current liabilities and other long-term liabilities on the consolidated balance sheet as of March 30, 2025 and in other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

The Company recorded a liability of $ 38.0 million for the future transfer of assets in connection with the RTP Fab Transfer.

This liability is recognized in other current liabilities on the consolidated balance sheet as of December 29, 2024 and in other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

This liability is recognized in other current liabilities on the consolidated balance sheet as of March 30, 2025 and in other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

LED Business Divestiture

4 unchanged sentences

In fiscal 2024, the Company entered into an amendment to the Wafer Supply Agreement to terminate the agreement as of September 30, 2024.

For the three and six months ended December 29, 2024, the Company recognized a net loss of $ 9.2 million in non-operating expense, net related to the Wafer Supply Agreement.

For the three and six months ended December 31, 2023, the Company recognized a net loss of $ 6.6 million and $ 13.5 million in non-operating expense, net related to the Wafer Supply Agreement.

For the three and nine months ended March 30, 2025, the Company recognized a net loss of $ 0.0 million and $ 9.2 million, respectively, in non-operating expense, net related to the Wafer Supply Agreement.

For the three and nine months ended March 31, 2024, the Company recognized a net loss of $ 6.9 million and $ 20.4 million, respectively, in non-operating expense, net related to the Wafer Supply Agreement.

Note 3 – Revenue Recognition

Contract liabilities and distributor-related reserves were $ 67.9 million as of December 29, 2024 and $ 88.0 million as of June 30, 2024.

Contract liabilities and distributor-related reserves were $ 60.1 million as of March 30, 2025 and $ 88.0 million as of June 30, 2024.

Contract liabilities are recorded within contract liabilities and distributor-related reserves and other long-term liabilities on the consolidated balance sheets.

3 unchanged sentences

Revenue from these two product lines is as follows:

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Power Products $ 107.5 $ 102.1 $ 295.4 $ 311.0

5 unchanged sentences

Disaggregated continuing operations revenue from external customers by geographic area is as follows:

Three months ended Six months ended

December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Three months ended Nine months ended

March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

(in millions of U.S.

17 unchanged sentences

Operating Leases:

December 29, 2024 June 30, 2024

March 30, 2025 June 30, 2024

Right-of-use asset (1)

14 unchanged sentences

Three months ended

Six months ended

Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Operating lease expense

4 unchanged sentences

Cash flow information consisted of the following (1) :

Six months ended

Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024

Cash (used in) provided by operating activities from continuing operations:

6 unchanged sentences

Lease Liability Maturities

Maturities of operating and finance lease liabilities as of December 29, 2024 were as follows (in millions of U.S.

Maturities of operating and finance lease liabilities as of March 30, 2025 were as follows (in millions of U.S.

Fiscal Year Ending Operating Leases Finance Leases Total

16 unchanged sentences

(2) Weighted average discount rate of finance leases without the 49-year ground lease is 3.86 %.

On December 1, 2023 and in connection with the RF Business Divestiture discussed in Note 2, “Discontinued Operations,” the Company entered into the RF RELA pursuant to which the Company leases to MACOM approximately 25,659 square feet of its property and certain facilities in the Research Triangle Park, North Carolina for a total of $ 0.7 million per year.

The lease term is the earlier of (i) 24 full fiscal months following the RF Closing or (ii) the date on which the Company and MACOM enter into the RTP Fab Lease Agreement.

The Company in its sole discretion may extend the term for two additional periods of 12 months by providing notice to MACOM at least six months prior to the last day of the then-current term.

In addition, the Company leases space to a third party at one of its owned facilities.

As of March 30, 2025, the Company has entered into an agreement containing operating leases for bulk gas equipment.

This arrangement contains approximately $ 35 million of additional ROU liability obligations that have not yet commenced.

The Company expects these operating leases will commence in future periods with initial lease terms of 15 years.

On December 1, 2023 and in connection with the RF Business Divestiture discussed in Note 2, “Discontinued Operations,” the Company entered into the RF RELA pursuant to which the Company leases to MACOM approximately 25,659 square feet of the RTP Facility for a total of $ 0.7 million per year.

The RF RELA is expected to be terminated by the parties in connection with the sale of the RTP Facility discussed under Note 1, "Basis of Presentation and New Accounting Standards - Financial Statement Details - Assets Held for Sale."

Lease Impairment

For the three and nine months ended March 30, 2025, the Company recorded $ 4.8 million of non-cash impairment charges for the abandonment of right-of-use (ROU) assets as a result of the ongoing factory consolidation and optimization initiatives.

The impairment of the ROU assets is included in "Loss on disposal or impairment of other long-lived assets" within the accompanying consolidated statement of operations.

Refer to Note 13 - "Restructuring" to the consolidated financial statements included herein .

Note 5 – Commitments and Contingencies

6 unchanged sentences

District Court for the Middle District of North Carolina, alleging infringement of U.S.

7,498,633 (the '633 Patent), entitled "High-voltage power semiconductor device," and 8,035,112 (the '112 Patent), entitled "SIC power DMOSFET with self-aligned source contact." In the complaint, Purdue also alleges willful infringement, and seeks unspecified monetary damages and attorneys’ fees.

7,498,633 (the '633 Patent), entitled "High-voltage power semiconductor device," and 8,035,112 (the '112 Patent), entitled "SIC power DMOSFET with self-aligned source contact." In the complaint, Purdue also alleged willful infringement, and sought unspecified monetary damages and attorneys’ fees.

In August 2022, Purdue voluntarily withdrew all allegations as to the '112 Patent after having disclaimed all rights to that patent.

The Company denies Purdue’s remaining allegations and has developed numerous defenses, including non-infringement, multiple invalidity grounds, and unenforceability due to inequitable conduct before the U.S.

Patent & Trademark Office.

Discovery in this matter concluded in September 2024;

the parties are currently in the middle of summary judgment briefing, and the trial will most likely occur in the second half of 2025.

Due to the stage of the case, the Company is unable to estimate the possible range of loss, if any, at this time.

On November 15, 2024, the Company and certain current and former executive officers were named as defendants in a securities class action lawsuit captioned Gary Zagami v Wolfspeed, Inc., et al., Case No.

On February 25, 2025, the Company entered into a confidential settlement agreement with Purdue resolving all remaining claims against the Company.

A stipulation for dismissal was filed with the court, and the court dismissed the case with prejudice on March 17, 2025.

The Company recorded the entire financial impact of the settlement during the third quarter of fiscal 2025 as the loss became probable and estimable when the settlement was made.

On November 15, 2024, the Company and certain of its current and former executive officers were named as defendants in a securities class action lawsuit captioned Gary Zagami v Wolfspeed, Inc., et al., Case No.

6:24-cv-01395, which was filed in the United States District Court for the Northern District of New York.

1 unchanged sentence

The complaint seeks unspecified compensatory damages and other relief.

On January 8, 2025, two additional lawsuits were filed in the United States District Court for the Northern District of New York by shareholders regarding these same matters and name as defendant the Company and current and former officers.

On April 21, 2025, a derivative action was filed by a putative shareholder purportedly on behalf of the Company in the United States District Court for the Middle District of North Carolina against certain current and former directors and officers of the Company (collectively, “Derivative Action Defendants”), with substantially similar allegations and defendants as the other matters.

The Company denies allegations of wrongdoing and intends to vigorously defend against the claims in the above-referenced actions.

5 unchanged sentences

Additionally, the Company has agreed, under a separate agreement (the SUNY Agreement), to sponsor the creation of two endowed faculty chairs and fund a scholarship program at SUNY Polytechnic Institute.

As of December 29, 2024, the annual cost of satisfying the objectives of the GDA and the SUNY Agreement, excluding the direct and indirect costs associated with employment, varies from $ 2.2 million to $ 5.2 million per year through fiscal 2031.

As of December 29, 2024, the Company has reduced property and equipment, net by a total of $ 500.0 million as a result of GDA reimbursements, of which $ 467.2 million has been received in cash and an additional $ 32.8 million in receivables are recorded in other current assets and in other assets in the consolidated balance sheet.

Supply Commitments

As of March 30, 2025, the annual cost of satisfying the objectives of the GDA and the SUNY Agreement, excluding the direct and indirect costs associated with employment, varies from $ 2.2 million to $ 5.2 million per year through fiscal 2031.

As of March 30, 2025, the Company has reduced property and equipment, net by a total of $ 500.0 million as a result of GDA reimbursements, of which $ 467.2 million has been received in cash and an additional $ 32.8 million in receivables are recorded in other current assets in the consolidated balance sheet.

Supply Commitments and Capacity Deposits

From time to time, the Company may enter into agreements with its suppliers which require the Company to commit to a minimum of product purchases or make capacity reservation deposits.

In fiscal 2023, the Company entered into an agreement with a supplier which requires a minimum commitment of product purchases on a take-or-pay basis of $ 200.0 million over the life of the contract.

During the three and six months ended December 29, 2024, the Company purchased $ 5.8 million and $ 12.5 million, respectively, of product under this agreement.

As of December 29, 2024, the minimum future product purchases have been satisfied for fiscal 2025, and the remaining future product purchases for fiscal years 2026, 2027 and 2028 are $ 36.0 million, $ 50.1 million and $ 73.7 million, respectively.

During the third quarter of fiscal 2025, the Company amended the agreement to extend the term of the contract through December 2029 and modify the remaining minimum annual purchase commitments.

During the three and nine months ended March 30, 2025, the Company purchased $ 4.5 million and $ 17.0 million, respectively, of product under this agreement.

As of March 30, 2025, the remaining future product purchases for fiscal years 2025, 2026, 2027, 2028 and 2029 are $ 3.2 million, $ 41.1 million, $ 38.0 million, $ 40.0 million and $ 42.0 million, respectively.

In addition, the Company will pay quarterly capacity reservation deposits through the second quarter of fiscal 2026.

The capacity reservation deposits will total $ 60.0 million and are refundable through credits on future product purchases.

As of December 29, 2024, the Company has paid $ 48.9 million in connection with the agreement, which is recognized in prepaid expenses and other long-term assets on the consolidated balance sheet.

As of March 30, 2025, the Company has paid $ 52.9 million in connection with the agreement, which is recognized in prepaid expenses and other long-term assets on the consolidated balance sheet.

In fiscal 2024, the Company entered into an agreement with another supplier which requires a minimum commitment of product purchases on a take-or-pay basis of $ 86.4 million over the life of the contract.

During the three and six months ended December 29, 2024, the Company purchased $ 7.2 million and $ 14.4 million, respectively, of product under this agreement which satisfied the minimum future product purchases for the period.

During the three and nine months ended March 30, 2025, the Company purchased $ 7.2 million and $ 21.6 million, respectively, of product under this agreement which satisfied the minimum future product purchases for the period.

Minimum future product purchase for the remainder of fiscal 2025 and fiscal years 2026 and 2027 are $ 7.2 million, $ 28.8 million and $ 9.6 million, respectively.

The Company reviews the terms of all its long-term supply agreements and assesses the need for any accruals for estimated losses on adverse purchase commitments, such as lower of cost or net realizable value adjustments that will not be recovered by future sales prices and the recoverability of assets related to capacity deposits, as necessary.

Note 6 – Investments

(in millions of U.S.

December 29, 2024

March 30, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Credit Loss Allowance Estimated Fair Value

3 unchanged sentences

Certificates of deposit 17.0 — — — 17.0

Commercial paper 3.0 — — — 3.0

Total short-term investments $ 601.5 $ 0.6 ($ 2.7 ) $ — $ 599.4

11 unchanged sentences

The following tables present the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position (in millions of U.S.

December 29, 2024

March 30, 2025

Less than 12 Months Greater than 12 Months Total

14 unchanged sentences

Number of securities with an unrealized loss 141 66 207

Additionally, the Company held six cash equivalent securities with an aggregate fair value of $ 14 million in unrealized loss positions as of December 29, 2024.

Additionally, the Company held four cash equivalent securities with an aggregate fair value of $ 23 million in unrealized loss positions as of March 30, 2025.

The aggregate unrealized loss was less than $ 0.1 million.

The Company does not include accrued interest in estimated fair values of short-term investments and does not record an allowance for credit losses on receivables related to accrued interest.

Accrued interest receivable was $ 9.9 million and $ 11.6 million as of December 29, 2024 and June 30, 2024, respectively, and is recorded in other current assets on the consolidated balance sheets.

Accrued interest receivable was $ 9.0 million and $ 11.6 million as of March 30, 2025 and June 30, 2024, respectively, and is recorded in other current assets on the consolidated balance sheets.

When necessary, write-offs of noncollectable interest income are recorded as a reversal to interest income.

There were no write-offs of noncollectable interest income during the three and six months ended December 29, 2024 and December 31, 2023.

There were no write-offs of noncollectable interest income during the three and nine months ended March 30, 2025 and March 31, 2024.

The Company evaluates its investments for expected credit losses.

The Company believes it is able to and intends to hold each of the investments held with an unrealized loss as of December 29, 2024 until the investments fully recover in market value.

No allowance for credit losses was recorded as of December 29, 2024.

The contractual maturities of short-term investments as of December 29, 2024 were as follows:

The Company believes it is able to and intends to hold each of the investments held with an unrealized loss as of March 30, 2025 until the investments fully recover in market value.

No allowance for credit losses was recorded as of March 30, 2025.

The contractual maturities of short-term investments as of March 30, 2025 were as follows:

(in millions of U.S.

4 unchanged sentences

Certificates of deposit 17.0 — — 17.0

Commercial paper 3.0 — — 3.0

Total short-term investments $ 475.0 $ 122.0 $ 2.4 $ 599.4

11 unchanged sentences

GAAP hierarchy:

December 29, 2024 June 30, 2024

March 30, 2025 June 30, 2024

(in millions of U.S.

2 unchanged sentences

Money market funds $ 113.1 $ — $ 113.1 $ 87.3 $ — $ 87.3

Municipal bonds — 7.8 7.8 — — —

Corporate bonds — 4.3 4.3 — — —

10 unchanged sentences

Total short-term investments 224.8 374.6 599.4 552.7 576.0 1,128.7

Other current assets:

MACOM Shares 70.1 — 70.1 — — —

Total current assets 70.1 — 70.1 — — —

Other long-term investments:

US corporation common stock 95.0 — 95.0 79.3 — 79.3

MACOM Shares — — — 79.3 — 79.3

Total other long-term investments $ — $ — $ — $ 79.3 $ — $ 79.3

Total assets $ 423.0 $ 402.2 $ 825.2 $ 729.3 $ 576.0 $ 1,305.3

Other long-term investments consists of the MACOM Shares which the Company received as partial consideration in connection with the RF Business Divestiture.

As of March 30, 2025, other current assets and as of June 30, 2024, other long-term investments consist of the MACOM Shares which the Company received as partial consideration in connection with the RF Business Divestiture.

These shares are remeasured to fair value each period with changes in the fair value of the shares recognized in non-operating expense (income), net.

Note 8 – Goodwill and Intangible Assets

There were no changes to goodwill during the three and six months ended December 29, 2024.

The Company performs an annual assessment of its goodwill during the fourth quarter of each calendar year or more frequently if indicators of potential impairment exist, such as an adverse change in business climate, declines in market capitalization or a decline in the overall industry demand, that would indicate it is more likely than not that the fair value of its single reporting

unit is less than its carrying value.

There were no changes to goodwill during the three and nine months ended March 30, 2025.

If the Company determines that it is more likely than not that the fair value of its single reporting unit is less than the carrying value, the Company measures the amount of impairment as the amount the carrying value of its single reporting unit exceeds the fair value, up to the carrying value of goodwill, by using a discounted cash flow method and market approach method.

Although the Company’s market capitalization further declined in the second quarter of fiscal 2025, the Company does not believe that it is more likely than not that the fair value of its single reporting unit is less than its carrying value.

Although the Company’s market capitalization further declined in the third quarter of fiscal 2025, the Company does not believe that it is more likely than not that the fair value of its single reporting unit is less than its carrying value.

Using the market capitalization approach, which the Company expects would be similar to the discounted cash flow method, the fair value of the single reporting unit is estimated based on the trading price of the Company’s stock at the test date, which is further adjusted by an acquisition control premium representing the synergies a market participant would obtain when obtaining control of the business.

4 unchanged sentences

The following table presents the components of intangible assets, net:

December 29, 2024 June 30, 2024

March 30, 2025 June 30, 2024

(in millions of U.S.

6 unchanged sentences

Note 9 – Long-term Debt

December 29, 2024 June 30, 2024

March 30, 2025 June 30, 2024

(in millions of U.S.

16 unchanged sentences

(2) Presented in long-term debt

As of December 29, 2024, the Company was in compliance with all covenants relating to the senior secured notes due 2030 (the 2030 Senior Notes) and the Unsecured Customer Refundable Deposit Agreement entered into in July 2023 with a customer (the CRD Agreement).

As of March 30, 2025, the Company was in compliance with all covenants relating to the senior secured notes due 2030 (the 2030 Senior Notes) and the Unsecured Customer Refundable Deposit Agreement entered into in July 2023 with a customer (the CRD Agreement).

2030 Senior Notes Amended and Restated Indenture

18 unchanged sentences

The interest expense, net recognized related to the corporate debt holdings and the deposits under the CRD Agreement is as follows:

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Interest expense, net of capitalized interest $ 70.2 $ 51.7 $ 193.6 $ 161.4

2 unchanged sentences

The Company capitalizes interest in connection with ongoing capacity expansions.

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Interest expense capitalized

6 unchanged sentences

The details of the computation of basic and diluted loss per share are as follows:

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars, except share data) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars, except share data) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Net loss from continuing operations ($ 285.5 ) ($ 148.9 ) ($ 939.9 ) ($ 398.7 )

5 unchanged sentences

Diluted net loss per share is the same as basic net loss per share for the periods presented due to potentially dilutive items being anti-dilutive given the Company's net loss.

For the three and six months ended December 29, 2024, 9.5 million and 9.2 million of weighted average shares, respectively, were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive.

For the three and six months ended December 31, 2023, 3.9 million and 3.8 million of weighted average shares, respectively, were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive.

For the three and nine months ended March 30, 2025, 6.4 million and 6.5 million of weighted average shares, respectively, were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive.

For the three and nine months ended March 31, 2024, 4.0 million and 3.9 million of weighted average shares, respectively, were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive.

Note 11 – Stock-Based Compensation

Total stock-based compensation expense was classified in the consolidated statements of operations as follows:

Three months ended Six months ended

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 31, 2023 December 29, 2024 December 31, 2023

Dollars) March 30, 2025 March 31, 2024 March 30, 2025 March 31, 2024

Cost of revenue, net $ 9.7 $ 7.6 $ 27.2 $ 20.0

9 unchanged sentences

The Company assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets by jurisdiction.

As of December 29, 2024, the Company has concluded that it is necessary to recognize a full valuation allowance against its U.S.

As of March 30, 2025, the Company has concluded that it is necessary to recognize a full valuation allowance against its U.S.

deferred tax assets.

3 unchanged sentences

As of June 30, 2024, the Company's liability for unrecognized tax benefits was $ 9.4 million.

During the six months ended December 29, 2024, the Company recognized a $ 0.9 million increase to the liability for unrecognized tax benefits primarily due to an increase in generated research and development credits.

As a result, the total liability for unrecognized tax benefits as of December 29, 2024 was $ 10.3 million.

During the nine months ended March 30, 2025, the Company recognized a $ 0.5 million decrease to the liability for unrecognized tax benefits.

As a result, the total liability for unrecognized tax benefits as of March 30, 2025 was $ 8.9 million.

If any portion of this $ 8.9 million is recognized, the Company will then include that portion in the computation of its effective tax rate.

8 unchanged sentences

Note 13 - Restructuring

During the first quarter of fiscal 2025, the Company initiated a headcount reduction and facility closure and consolidation plan intended to optimize its cost structure as the Company accelerates its transition from 150mm to 200mm silicon carbide devices (the 2025 Restructuring Plan).

The actions taken under the 2025 Restructuring Plan will ultimately result in the closure of the Company's 150mm device fabrication facility in Durham, North Carolina as well as a realignment of related activities across the geographic regions in which the Company operates.

The Company also recently initiated plans to consolidate its manufacturing footprint for epitaxy products by winding down operations at its facility in Farmer's Branch, Texas during fiscal 2025.

The Company is taking steps to optimize the allocation of resources across various functional groups.

The Company expects these actions will result in a total headcount reduction of approximately 20 % over the next three to nine months .

In the second quarter of fiscal 2025, the Company implemented an early exit program for a limited number of eligible employees based on their age and years of service.

The costs that will be incurred as a result of the 2025 Restructuring Plan include severance and employee benefit costs, voluntary termination benefits, and other exit costs that qualify as exit and disposal costs under U.S.

The severance costs incurred during the first quarter of fiscal 2025 were provided under an ongoing benefit arrangement and were therefore recorded once they were both probable and reasonably estimable in accordance with the provisions of ASC 712-10, “Nonretirement Postemployment Benefits”.

Additionally, the Company has incurred, and over the next 9 months will continue to incur, additional facility closure-related costs related to these activities, including asset-related charges and fixed manufacturing costs that will be eliminated as a result of this plan and other incremental costs to exit facilities.

Including these additional facility closure-related costs, the Company expects to incur approximately $ 400 million to $ 450 million of total costs, including approximately $ 60 million of involuntary and voluntary severance costs, $ 125 million of other closure-related cash costs, and approximately $ 250 million of asset-related charges and other non-cash costs.

The Company also initiated plans to consolidate its manufacturing footprint for epitaxy products by winding down operations at its facility in Farmer's Branch, Texas during fiscal 2025.

In addition, the Company is taking steps to optimize the allocation of resources across various functional groups.

The Company also implemented a voluntary separation program for a limited number of eligible employees based on their age and years of service.

During the third quarter of fiscal 2025, the Company increased the scope of the planned headcount reductions, primarily in its Materials Products operations.

The 2025 Restructuring Plan is expected to result in a cumulative total headcount reduction of approximately 20 %.

As of March 30, 2025, the 2025 Restructuring Plan resulted in a cumulative total headcount reduction of approximately 15 %, and the remainder is expected to occur over the next six months.

The costs that will be incurred as a result of the 2025 Restructuring Plan primarily include severance and employee benefit costs, voluntary termination benefits, and other exit costs that qualify as exit and disposal costs under ASC 420, "Exit or Disposal Cost Obligations".

The involuntary severance costs incurred were provided under an ongoing benefit arrangement and were therefore recorded once they were both probable and reasonably estimable in accordance with the provisions of ASC 712-10, “Nonretirement Postemployment Benefits”.

Additionally, the Company has incurred, and over the next six months will continue to incur, additional facility closure-related costs related to these activities, including asset-related charges, fixed manufacturing costs that will be eliminated as a result of this plan, and other incremental costs related to the exit of certain facilities.

Including these additional facility closure-related costs, the Company expects to incur approximately $ 450 million to $ 500 million of total costs, including approximately $ 60 million of involuntary and voluntary severance costs, $ 190 million of other closure-related cash costs, and approximately $ 250 million of charges related to long-lived assets and other non-cash costs, including accelerated depreciation and impairments upon abandonment or disposal of machinery and equipment.

The Company expects to realize approximately $ 200 million of annualized cost savings upon completion of these initiatives.

A summary of the charges recognized in the consolidated statements of operations through the second quarter of fiscal 2025 resulting from these restructuring activities is shown below:

Three months ended Six months ended

A summary of the charges recognized in the consolidated statements of operations through the third quarter of fiscal 2025 resulting from these restructuring activities is shown below:

Three months ended Nine months ended

(in millions of U.S.

Dollars) December 29, 2024 December 29, 2024

Dollars) March 30, 2025 March 30, 2025

Accelerated depreciation

$ 11.7 $ 23.4

Other closure-related costs

Total cost of revenue, net $ 16.8 $ 82.5

$ 31.4 $ 65.7

Impairments on abandoned assets (1)

1 unchanged sentence

Severance (2)

$ 15.0 $ 51.5

Accelerated depreciation (3)

Other closure-related costs

Total other operating expense

$ 32.2 $ 85.0

Other operating expense $ 10.0 $ 95.0

$ 57.5 $ 332.7

(1) Presented in loss on disposal or impairment of other assets

(2) Employee severance and benefit costs include the early exit program payments

A summary of the balance sheet activity related to these restructuring activities recognized in accounts payable and accrued expenses in the unaudited consolidated balance sheet as of December 29, 2024 follows:

(1) Presented in "Loss on disposal or impairment of long-lived assets"

(2) Employee severance and benefit costs include the early exit program activity

(3) Includes net impact of change in salvage value and estimated useful life related to 150mm fab tooling and equipment

(in millions of U.S.

Dollars) As of June 30, 2024

December 29, 2024

March 30, 2025

Employee severance and benefit costs (1)

2 unchanged sentences

— 1.1 ( 1.1 ) —

$ — $ 59.6 ($ 38.6 ) $ 21.0

(1) Employee severance and benefit costs includes the early exit program activity

3 unchanged sentences

Morgan Securities LLC and Wells Fargo Securities, LLC (the Managers).

As of December 29, 2024, the Company sold approximately 10.9 million shares of common stock under the ATM Program and received proceeds of approximately $ 91.4 million.

The program concluded on January 14, 2025 and the Company completed the sale of approximately $ 200 million of common stock and, as such, the ATM automatically terminated in accordance with the terms of the Equity Distribution Agreement.

1 unchanged sentence

The Company intends to use the net proceeds for general corporate purposes.

Note 15 - Subsequent Events

Employee Stock Purchase Plan

In April 2025, the Compensation Committee approved the termination of the Employee Stock Purchase Plan ("ESPP"), which was effective immediately.

There were no shares purchased under the ESPP during the three months ended March 30, 2025.

Inducement Award Plan

In May 2025, the Board of Directors adopted the 2025 Inducement Award Plan (the “Inducement Plan”) and reserved 2,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan.

The Inducement Plan provides for the grant of equity-based awards, including stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares and performance stock units, and other awards.

Each award under the Inducement Plan is intended to qualify under Section 303A.08 of the New York Stock Exchange Company Listed Manual as a material employment inducement grant or as a limited exemption applicable to awards in the context of qualifying corporate acquisitions or mergers.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements