XML 22 R11.htm IDEA: XBRL DOCUMENT v3.22.1
Note 5 - Debt Obligations
 3 Months Ended
Apr. 03, 2022
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 5 — Debt Obligations

 

Revolving Line of Credit

 

As of April 3, 2022 and January 2, 2022, the Company had $15.0 million of revolving debt outstanding with an interest rate of 4.00% and 3.75% per annum, respectively. Heritage Bank has a first priority security interest in substantially all of the Company's tangible and intangible assets to secure any outstanding amounts under the agreement. The Company was in compliance with all loan covenants under the agreement as of the end of the current reporting period. Interest expense recognized were $24 thousand and $32 thousand for the three months ended April 3, 2022 and April 4, 2021, respectively.
 

On April 4, 2022, the Company entered into a Fifth Amendment (the "Amendment") to the December 21, 2018 Amended and Restated Loan and Security Agreement (as amended, the "Agreement") with Heritage Bank. The purpose of the Fifth Amendment was primarily to clarify certain terms of the Agreement as follows: (i) added a definition of "Remaining Months Liquidity" to be defined as the Borrower's unrestricted cash maintained at Bank (including cash in the Pledged Account) minus the outstanding principal amount of the Advances, divided by the absolute value of the average trailing three (3) month EBITDA; (ii) as well as revise the minimum cash and remaining months liquidity financial covenants. The minimum cash covenant was revised such that the balance of unrestricted cash in the pledged account shall at all times exceed the principal amount of all advances owed that are outstanding at any time. The remaining months liquidity covenant specified that it should not be less than nine months. The Company does not believe that the clarifications of the terms in the Amendment will have a material impact on the Company's liquidity or utilization of the revolving loan under the Agreement.