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Note 7 - Debt Obligations
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Debt Disclosure [Text Block]

NOTE 7 — DEBT OBLIGATIONS

 

Revolving Line of Credit

 

On December 21, 2018 , the Company entered into a loan agreement, the QuickLogic Corporation Heritage Bank of Commerce Amended and Restated Loan and Security Agreement (as amended, the "Loan Agreement") with Heritage Bank which among other things, provided a revolving line of credit facility ("Revolving Facility") allowing the Company to draw advances up to $15.0 million. The Revolving Facility, as amended, includes a number of customary and restrictive financial covenants including maintaining certain minimum cash levels with the lender. On December 8, 2023, the Company entered into the Seventh Amendment to the Loan Agreement, which increased the line of credit to $20.0 million, extended the maturity date from  December 31, 2024 to December 31, 2025, and increased the annual facility fee to  $60 thousand from $45 thousand, payable each December 31st. Advances under the Revolving Facility bear a variable annual interest rate equal to  one half of one percentage point (0.50%) above the prime rate. On December 31, 2023, the Company had a  $20.0 million outstanding balance on the Revolving Facility with an interest rate of 9.00%. On January 1, 2023, the Company had a  $15.0 million outstanding balance on the Revolving Facility with an interest rate of 8.00%.
 
The Company was in compliance with all loan covenants under the Loan Agreement, as of the end of the current reporting period.
 
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 Loan Agreement.
 

Paycheck Protection Program Loan

 

On May 6, 2020, the Company entered into a loan agreement with Heritage Bank (“PPP Loan”) for a loan of $1.2 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") as implemented by the U.S. Small Business Administration and enacted on March 27, 2020.

 

The PPP Loan was evidenced by a promissory note (“Note”) dated May 6, 2020, maturing two years from the disbursement date. The Note bore interest at a rate of 1.00% per annum, with the first six months of interest deferred. Principal and interest were payable monthly commencing six months after the disbursement date. Principal and interest were allowed to be prepaid by the Company at any time prior to maturity with no prepayment penalties. The Note contained customary events of default relating to, among other things, payment defaults or breaches of the terms of the Note. Upon the occurrence of an event of default, the lender may require immediate repayment of all amounts outstanding under the Note. The Company applied for loan forgiveness in the fourth quarter of fiscal 2020, in accordance with the terms under the CARES Act. On January 26, 2021, the Company received a notice from Heritage Bank that amounts under the PPP Loan had been forgiven. The Company recorded the loan forgiveness under gain on forgiveness of PPP Loan on its consolidated statement of operations in the year ended January 2, 2022.

 

Financing Arrangements

 

The Company previously classified certain licensed tooling software as leased assets and liabilities under ROU assets and financing lease liabilities. Upon further analysis, the Company determined it is more appropriate to classify these amounts as financing arrangements. The amount of fixed assets, net purchased through financing arrangements on the balance sheet were $1.4 million and $0.9 million as of December 31, 2023 and January 1, 2023, respectively. The corresponding note payable amount for these financing arrangements was $1.4 million and $0.9 million as of December 31, 2023 and January 1, 2023, respectively. Payments related to financing arrangements were $0.7 million, $0.5 million, and $0.4 million for the years ended December 31, 2023,  January 1, 2023, and January 2, 2022, respectively. The Company's outstanding financing arrangements as of December 31, 2023 have remaining terms of 0.91 years to 2.25 years, with a weighted average remaining term of 1.81 years. Stated interest rates for its financing arrangements outstanding as of December 31, 2023 range from 3.75% to 9.89%, with a weighted average interest rate of 8.34%. The Company's outstanding financing arrangements as of January 1, 2023 had remaining terms of 1.67 years to 2.01 years, with a weighted average remaining term of 1.91 years. Stated interest rates for its financing arrangements outstanding as of January 1, 2023 ranged from 3.75% to 6.75%, with a weighted average interest rate of 5.95%.

 

Amounts due to be paid in Fiscal Years 2024 and 2025 are $1.0 million and $0.5 million, respectively, less amounts representing interest of $0.1 million results in the total notes payable amount of $1.4 million.