| Notes and lines of credit consist of the following: |
Notes and lines of
credit consist of the following:
| | |
| | |
As of December 31, | |
| | |
| | |
2024 | | |
2023 | |
| | |
Rate | | |
Available | | |
Outstanding Balance | | |
Available
(restated) | | |
Outstanding Balance | |
| Libertyville Bank & Trust (1) | |
| 8.50 | % | |
$ | 30 | | |
$ | — | | |
$ | 30 | | |
$ | — | |
| Libertyville Bank & Trust (2) | |
| 8.50 | % | |
| 500 | | |
| — | | |
| 500 | | |
| — | |
| Beachcorp, LLC (3) | |
| 8.25 | % | |
| 5,604 | | |
| — | | |
| 3,298 | | |
| 2,810 | |
| Beachcorp, LLC (4) | |
| 8.25 | % | |
| 5,200 | | |
| 4,000 | | |
| 4,524 | | |
| 5,000 | |
| Strandler, LLC (5) | |
| 8.25 | % | |
| 1,000 | | |
| 1,000 | | |
| 1,000 | | |
| 1,000 | |
| Strandler, LLC (6) | |
| 9.25 | % | |
| — | | |
| — | | |
| 2,000 | | |
| 2,000 | |
| 1) | Since July 2014, we have maintained a bank-issued letter of credit for up to $30 in borrowings,
with interest at the prime rate plus 1%, to support our obligations under our Romeoville, Illinois facility lease agreement. No
borrowings have been incurred under this promissory note. It is our intention to renew this note annually. Because there were no
amounts outstanding on the note at any time during 2024 or 2023, we have recorded no related liability on our balance sheet. |
| 2) | On December 21, 2021, the existing credit agreement with Libertyville was converted for use to
support our obligations under our newly leased manufacturing and warehouse space in Bolingbrook, Illinois. Interest on drawn balances
will be at the prime rate plus 1%. This credit agreement has a maturity of December 22, 2025. We expect to renew this agreement
annually, as the lease requires. This credit agreement is secured by all the unencumbered assets of the Company and has superior
collateral rights to those credit facilities with Beachcorp, LLC and Strandler, LLC. |
| 3) | On January 28, 2022, the Company entered into an Amended and Restated Business Loan Agreement (the
“A&R Loan Agreement”), which amends and restates the Master Agreement between the Company and Beachcorp, LLC, and
a new promissory note in order to evidence the A/R Revolver facility, including an amendment to expand the limit on the A/R Revolver
Facility from $6,000 to $8,000, reduce the interest rate to the prime rate plus 0.75%, and extend the maturity of the A/R Revolver
Facility to March 31, 2024. On March 1, 2024, the Company entered into a Second Amendment to the Amended and Restated Business
Loan Agreement extending the maturity of the A/R Revolver Facility to October 1, 2025. On May 27, 2025, the Company entered into
a Third Amendment to the Amended and Restated Business Loan Agreement to expand the limit on the A/R Revolver Facility from $8,000
to $12,000, and extend its maturity to April 30, 2027. On September 30, 2026, the Company entered into a Fourth Amendment to the
Amended and Restated Business Loan Agreement to extend its maturity to May 31, 2028. |
| 4) | On January 28, 2022, the Company entered into the A&R Loan Agreement and a new revolving loan
agreement (“Inventory Facility”) with Beachcorp, LLC, and a new promissory note in order to evidence the Inventory
Facility. The maximum borrowing amount under the Inventory Facility was $4,000, with a borrowing base consisting of up to 50% of
the value of qualified inventory of the Company. The interest rate for the Inventory Revolver is at the prime rate plus 0.75%,
and it was set to mature on March 31, 2024. On November 13, 2023, the Company entered into a Replacement Promissory Note with Beachcorp,
LLC replacing the Inventory Facility promissory note executed on January 28, 2022. The maximum borrowing amount under the replacement
Inventory Facility was increased to $5,200, with a borrowing base consisting of up to 55% of the value of qualified inventory of
the Company. The interest rate for the replacement Inventory Revolver remains at the prime rate plus 0.75%. On March 1, 2024, the
company entered into a Second Amendment to the Business Loan Agreement extending the maturity of the Inventory Revolver Facility
to October 1, 2025. On May 27, 2025, the Company entered into a Third Amendment to the Business Loan Agreement to expand the limit
on the Inventory Revolver Facility from $5,200 to $10,000, and extend its maturity to April 30, 2027. On September 30, 2026, the
Company entered into a Fourth Amendment to the Business Loan Agreement to extend its maturity to May 31, 2028. As described above
in Note 3 (Restatement of Previously Issued Consolidated Financial Statements), the Company recently identified errors in its historical
accounting for labor and overhead included in inventories. As a result, inventories were overstated in past borrowing base calculations
under the Inventory Facility. Effective and dated as of August 17, 2026, Beachcorp, LLC provided a waiver of all breaches, defaults
and events of default under the Inventory Facility as a result of the inventory related accounting matters described in Note 3,
with respect to up to $3,000 per occurrence, of over-advances on the Inventory Revolving Loans. The Company does not expect there
to be any prospective impact on the compliance or availability of the Inventory Facility. |
| 5) | On January 28, 2022, the Company entered into an
additional Business Loan Agreement (the “New Term Loan Agreement”) with Strandler, LLC, which effectively transferred or
assigned the Term Loan to Strandler, LLC from Beachcorp, LLC. Interest on the New Term Loan is at the prime
rate plus 0.75%.
Strandler, LLC is also an affiliate of Bradford T. Whitmore. On March 1, 2024, the company entered into a Second Amendment to the
Business Loan Agreement extending the maturity of the Term Maturity Note to October
1, 2025. On May 27, 2025, the Company entered into a Third Amendment to the Business Loan Agreement extending the maturity of
the Term Maturity Note to April 30, 2027. On September 30, 2026, the Company entered into a Fourth Amendment to the Business Loan
Agreement extending the maturity of the Term Maturity Note to May 31, 2028. On November 4, 2026, Strandler, LLC assigned to Whitmore Holdings, LLC all of its rights as a lender under the New
Term Loan agreement. |
| 6) | On November 13, 2023, the Company entered into a new Promissory Note (the “Bridge Note”)
with Strandler, LLC. The maximum borrowing amount under the Bridge Note was $2,000. The interest rate for the Bridge Note was at
the prime rate plus 0.75%, and it was to mature on May 13, 2024. The Bridge Note was repaid in February 2024. |
|