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Note 10 - Debt | 9 Months Ended
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Oct. 03, 2021
Notes to Financial Statements |
Long-term Debt [Text Block] |
(10) | Debt
Debt outstanding consists of the following (in thousands):
|  | October 3, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
|  | (Unaudited) |  |  |  |  |
Current: |  |  |  |  |  |  |  |
Finance lease obligation, current portion |  | $ | 453 |  |  | $ | 393 |
Equipment financing obligations, current portion |  |  | 307 |  |  |  | 0 |
PPP Loan, current portion |  |  | 0 |  |  |  | 1,186 |
Note payable – related party, current portion |  |  | 2,500 |  |  |  | 0 |
Current portion of long term debt and finance lease obligations |  | $ | 3,260 |  |  | $ | 1,579 |
Long Term: |  |  |  |  |  |  |  |
Finance lease obligation |  | $ | 1,712 |  |  | $ | 1,927 |
Equipment financing obligations |  |  | 760 |  |  |  | 0 |
PPP Loan |  |  | 0 |  |  |  | 2,372 |
Note payable – related party |  |  | 4,000 |  |  |  | 6,500 |
Less unamortized debt issuance and modification costs |  |  | (17 | ) |  |  | (23 | )
Long term debt and finance lease obligations net of unamortized debt costs |  | $ | 6,455 |  |  | $ | 10,776 |
Paycheck Protection Program During the second quarter of 2020, the Company secured a $3,558,000 term loan (the “PPP Loan”) with BMO Harris Bank National Association (“BMO”). Proceeds from the PPP Loan were used to retain workers and maintain payroll and make lease and utility payments. The PPP Loan is evidenced by a promissory note in favor of BMO, as lender, with a principal amount of $3,558,000 that bears interest at a fixed annual rate of 1.00%. During the fourth quarter of 2020, the Company applied for forgiveness of the PPP Loan, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the 24-week period beginning upon receipt of funds from the PPP Loan, subject to limitations and calculated in accordance with the terms of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). On June 28, 2021, the Company received notice from BMO that BMO had received confirmation from the U.S. Small Business Administration (the “SBA”) that the application for forgiveness of the PPP Loan had been approved. The loan forgiveness request in the amount of $3,558,000 was applied to the Company’s entire outstanding PPP Loan balance with BMO. During the nine months ended October 3, 2021, the Company recorded a gain on the forgiveness of the PPP Loan and accrued interest in the amount of $3,599,000. Note Payable – Related Party The Company has received the benefit of cash infusions from Gill Family Capital Management, Inc. (“GFCM”) in the form of secured promissory note obligations totaling $6,500,000 in principal as of October 3, 2021 and December 31, 2020. GFCM is an entity controlled by the Company’s Chairman, President and Chief Executive Officer, Jeffrey T. Gill, and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. As of October 3, 2021, our principal commitment under the Note was $2,500,000 due on April 1, 2022, $2,000,000 on April 1, 2024 and the balance on April 1, 2026. Interest on the promissory note is reset on April 1 of each year, at the greater of 8.0% or 500 basis points above the five-year Treasury note average during the preceding 90-day period, in each case, payable quarterly. The note allows for up to an 18-month deferral of payment for up to 60% of the interest due on the portion of the notes maturing in April of 2022 and 2024. During the first quarter of 2020, the Company provided notice to GFCM of its intention to elect to defer the specified portion of the interest payments due beginning on April 6, 2020. All accrued but unpaid interest was paid on January 4, 2021. Obligations under the promissory note are guaranteed by all of the subsidiaries and are secured by a first priority lien on substantially all assets of the Company, including those in Mexico. Finance Lease Obligations As of October 3, 2021, the Company had $2,165,000 outstanding under finance lease obligations for both property and machinery and equipment at its Sypris Technologies locations with maturities through 2025 and a weighted average interest rate of 10.04%. Equipment Financing Obligations As of October 3, 2021, the Company had $1,067,000 outstanding under equipment financing facilities, with effective interest rates ranging from 4.55% to 8.06% and payments due through 2026.

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