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Note 9 - Debt

6 Months Ended

Jul. 02, 2023

(9)

Debt

Debt outstanding consists of the following (in thousands):

	July 2,			December 31,
	2023			2022
	(Unaudited)
Current:
Finance lease obligation, current portion	$	1,169		$	1,102
Equipment financing obligations, current portion		557			398
Note payable – related party, current portion		2,000			2,500
Current portion of long term debt and finance lease obligations	$	3,726		$	4,000
Long Term:
Finance lease obligation	$	2,128		$	2,536
Equipment financing obligations		1,222			738
Note payable – related party		2,000			4,000
Less unamortized debt issuance and modification costs		(8	)		(11	)
Long term debt and finance lease obligations net of unamortized debt costs	$	5,342		$	7,263

Note Payable – Related Party

The Company has received the benefit of cash infusions from Gill Family Capital Management, Inc. (“GFCM”) in the form of a secured promissory note (the “Note”), with obligations totaling $4,000,000 and $6,500,000 in principal as of July 2, 2023 and December 31, 2022, respectively. 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 July 2, 2023, our principal commitment under the Note was $2,000,000 due on April 1, 2024 and the balance on April 1, 2026. Interest on the Note is payable quarterly, and the rate 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, which was 8.8% as of July 2, 2023. 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 2024.

Obligations under the 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 July 2, 2023, the Company had $3,297,000 outstanding under finance lease obligations for both property and machinery and equipment with maturities through 2026 and a weighted average interest rate of 8.6%.

Equipment Financing Obligations

As of July 2, 2023, the Company had $1,779,000 outstanding under equipment financing facilities, with effective interest rates ranging from 4.4% to 8.1% and payments due through 2028. Payments on the Company’s equipment financing obligations are due as follows (in thousands):

Next 12 months	$	661
12 to 24 months		533
24 to 36 months		370
36 to 48 months		278
48 to 60 months		177
Thereafter		0
Total payments		2,019
Less imputed interest		(240	)
Total equipment financing obligations	$	1,779