2022 Incentive Award Plan—The 2022 Incentive Award Plan (“2022 Plan”), provides for the issuance of share-based awards, including stock options and restricted stock units (“RSUs”). Originally, the 2022 Plan reserved 15.7 million shares of common stock for awards. Pursuant to the evergreen provisions of the 2022 Plan effective the first day of each calendar year beginning January 1, 2026, the number of shares reserved for the 2022 Plan will be increased unless otherwise determined by the Company’s Board. Under this provision for the calendar year beginning January 1, 2026, the number of shares of the Company’s common stock reserved for awards under the 2022 Plan increased by 4.7 million shares, which was ratified by the Company's Board on March 11, 2026. Refer to Note 17, Shareholders' Equity and Stock-based Compensation, within the audited consolidated financial statements for the fiscal year ended January 3, 2026 included in the Company's Annual Report on Form 10-K for additional detail on the terms of the 2022 Plan.

Under the 2022 Plan, the Company granted 3.5 million stock options with an exercise price of $1.84 at a weighted average grant date fair value of $1.09 per stock option as well as 2.4 million RSUs at a weighted average grant date fair value of $1.84 per RSU during the three months ended April 4, 2026. Awards granted to employees during the three months ended April 4, 2026 have a service-based vesting condition for which the awards vest 25% upon the first anniversary of the grant date and the remaining in equal quarterly installments over the following three years, subject to the retirement eligibility of individual holders, and stock options have either a fixed 5-year or 10-year terms for exercise.

Stock-based Compensation Expense—Total stock-based compensation expense for all stock-based compensation awards was $2.5 million and $4.1 million during the three months ended April 4, 2026 and March 29, 2025, respectively, and was recognized in selling, general, and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. As of April 4, 2026, the total unrecognized stock-based compensation expense for stock options and RSUs, net of estimated forfeitures, was $14.1 million, which will be recognized over the remaining weighted average period of 3.5 years.