v3.26.1
Note 8 - Debt Obligations
6 Months Ended
Jun. 28, 2026
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 8 — Debt Obligations

 

Revolving Line of Credit

 

In the second quarter of 2026, the Company entered into (i) a Loan and Security Agreement (the "Credit Agreement"), by and between Sunflower Bank, N.A. ("Sunflower Bank") and (ii) a Promissory Note of the Company (the "Note"), providing for a $10.0 million secured revolving credit facility ("Revolving Credit Facility"). The Revolving Credit Facility matures on April 24, 2029 and accrues interest at a rate equal to the greater of (i) 5.50% and (ii) Prime Rate plus 0.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay an annual facility fee of $30 thousand.

 

Financial covenants of the Revolving Credit Facility require the Company to (i) maintain its Primary Operating Account and all other U.S.-based bank accounts with Sunflower Bank, (ii) maintain at all times a balance of unrestricted cash in the Pledged Account not less than the principal amount of all cash advances under the Revolving Credit Facility, and (iii) maintain at all times, but subject to periodic reporting as of the last day of each quarter, not less than seven months of Remaining Months Liquidity ("RML"). For the purposes of the Revolving Credit Facility, RML means (i) unrestricted cash maintained at Lender (including cash in the Company's Pledged Account) minus the outstanding principal amount of the cash advances under the Revolving Credit Facility, divided by (ii) average trailing three (3) month EBITDA using the three months ending as of the most recent calendar quarter-end. The Company was in compliance with the Revolving Credit Facility loan covenants as of June 28, 2026.

 

As of  June 28, 2026, the Company had $5.0 million of revolving debt outstanding with Sunflower Bank, with an interest rate of 7.25% per annum. Related interest expenses and annual facility fees recognized were $8 thousand and $8 thousand for the three and six months ended June 28, 2026, respectively.

 

As of December 28, 2025, the Company had $15.0 million of revolving debt outstanding with Heritage Bank, with an interest rate of 7.25% per annum. Related interest expenses and annual facility fees recognized were $45 thousand and $63 thousand for the three and six months ended June 28, 2026, respectively. Related interest expenses and annual facility fees recognized were $71 thousand and $121 thousand for the three and six months ended June 29, 2025, respectively.

 

The Company terminated its revolving line of credit with Heritage Bank of Commerce in May 2026.

 

Financing Arrangements

 

The Company has acquired certain assets consisting of tooling for performance under revenue contracts with customers, with smaller amounts related to IT infrastructure components, that were financed through financing arrangements. The following table provides details for assets financed through financing arrangements as of June 28, 2026, and December 28, 2025 (in thousands):

 

  

June 28,

  

December 28,

 
  

2026

  

2025

 

Assets purchased through financing arrangements

 $4,790  $5,229 

Less: Accumulated depreciation

  (1,951)  (2,315)

Assets purchased through financing arrangements, net

 $2,839  $2,914 
         

Corresponding note payable for financing arrangements

 $2,568  $2,796 
         

Minimum remaining term for outstanding financing arrangements

  0.35   0.01 

Maximum remaining term for outstanding financing arrangements

  2.46   2.59 

Weighted average remaining term for outstanding financing arrangements

  1.66   1.49 
         

Minimum stated interest rate for outstanding financing arrangements

  7.25%  8.00%

Maximum stated interest rate for outstanding financing arrangements

  9.00%  9.89%

Weighted average stated interest rate for outstanding financing arrangements

  7.81%  8.64%

 

The following table provides detail on payments related to financing arrangements for the three and six months ended June 28, 2026 and June 29, 2025 (in thousands):

  

Three Months Ended

  

Six Months Ended

 
  

June 28,

  

June 29,

  

June 28,

  

June 29,

 
  

2026

  

2025

  

2026

  

2025

 

Payments related to financing arrangements

 $538  $573  $1,385  $1,089 

 

The following table provides the details of future payments for assets purchased through financing arrangements as of  June 28, 2026 (in thousands):

  

Financing Arrangements

 

2026 (remaining period)

 $935 

2027

  1,369 

2028

  455 

Total payments

  2,759 

Less: Interest

  (191)

Present value of financing arrangements

 $2,568