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Note 9 - Debt

3 Months Ended

Mar. 31, 2024

(9)

Debt

Long-term obligations consists of the following (in thousands):

	March 31,			December 31,
	2024			2023
	(Unaudited)
Current:
Finance lease obligation, current portion	$	1,404		$	1,327
Equipment financing obligations, current portion		591			618
Note payable – related party, current portion		2,000			0
Working capital line of credit		500			500
Current portion of long-term debt and finance lease obligations	$	4,495		$	2,445

Long Term:
Finance lease obligation	$	1,647		$	1,852
Equipment financing obligations		1,197			1,333
Note payable – related party		7,000			6,500
Less unamortized debt issuance and modification costs		(20	)		(16	)
Long-term debt and finance lease obligations, net of unamortized debt costs	$	9,824		$	9,669

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 $9,000,000 in principal as of March 31, 2024 and $6,500,000 as of December 31, 2023 (the “Note”). 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 March 31, 2024, our principal commitment under the Note was $2,000,000 due on April 1, 2025, $2,000,000 on April 1, 2026 and the balance of $5,000,000 due on April 1, 2027. Interest on the 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, which was 9.56% as of March 31, 2024. The Note allows for a deferral of payment for up to 60% of the interest due on the Note to April 1, 2025.

During the first quarter of 2024, the Company amended the Note to increase the principal amount due on April 1, 2027 by $2,500,000. The amendment increased the aggregate amount previously loaned by GFCM to the Company from $6,500,000 to $9,000,000. This additional amount loaned to the Company in the first quarter of 2024 was approved by the Audit Committee and provided the Company necessary liquidity.

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 March 31, 2024, the Company had $3,051,000 outstanding under finance lease obligations for both property and machinery and equipment at its Sypris Technologies locations with maturities through 2028 and a weighted average interest rate of 8.8%.

Equipment Financing Obligations

As of March 31, 2024, the Company had $1,788,000 outstanding under equipment financing facilities, with a weighted average interest rate of 6.8% and payments due through 2028. Payments on the Company’s equipment financing obligations are due as follows (in thousands):

Next 12 months	$	695
12 to 24 months		521
24 to 36 months		432
36 to 48 months		330
48 to 60 months		36
Thereafter		0
Total payments		2,014
Less imputed interest		(226	)
Total equipment financing obligations	$	1,788