Borrowings |
9 Months Ended |
|---|---|
Sep. 27, 2025 | |
| Borrowings | |
| Borrowings |
Note 2 – Borrowings Convertible Notes Payable On September 8, 2025, the Company entered into a purchase agreement (“Purchase Agreement”) with certain investors, pursuant to which the Company issued convertible notes (the “Convertible Notes”) with an aggregate principal amount of $25,000 and issued and sold $10,733 in gross proceeds of common stock (see “Note 3 - Stockholders’ Equity and Share-Based Compensation”). The Convertible Notes accrue interest quarterly at a rate of two percent (2%) per annum, payable in kind. The maturity date is September 10, 2028. The outstanding Convertible Notes principal balance, plus any unpaid and accrued interest, is convertible at the option of the investors into shares of common stock of the Company at the maturity date, at a conversion price of $1.20 per share (“Conversion Price”). As of September 27, 2025, the Convertible Notes payable balance was $25,024. The Company assessed all terms and features of the Convertible Notes in order to identify any potential embedded features that would require bifurcation. The Company determined that the conversion options of the Convertible Notes, including the conversion feature of the $1.20 Conversion Price, was clearly and closely related to the debt host and did not require separate accounting. Additionally, this feature did not meet the definition of a derivative under ASC 815, Derivatives and Hedging, and as a result, did not require separate accounting as a derivative.
Credit Facility The Company maintains an asset-based revolving credit facility that provides for, among other things, a revolving commitment, which is subject to a borrowing base derived from certain receivables, inventory, and property and equipment. On September 8, 2025, the Company and JPMorgan Chase Bank entered into the First Amendment to the Amended and Restated Credit Agreement and the First Amendment to the Amended and Restated Pledge and Security Agreement (together, the “First Amendment”), which amends the Company’s existing Amended and Restated Credit Agreement, dated as of June 17, 2022 (as amended, the “Amended Credit Agreement”). The First Amendment provides for the revolving commitment in an aggregate principal amount of $25,000 (formerly $75,000), a sublimit of $2,500 for the issuance of letters of credit and allows for an uncommitted ability to increase the revolving commitment by an additional $125,000, subject to certain terms and conditions (collectively, the “Amended Credit Facility”). The Amended Credit Facility now matures on September 8, 2026 (formerly June 17, 2027). As of September 27, 2025 and December 28, 2024, our outstanding revolving loan balance was $0 and $0, respectively. During the thirty-nine weeks ended September 27, 2025, we borrowed and subsequently paid down $20,565 from the revolving loan under the Amended Credit Facility. As of September 27, 2025 and December 28, 2024, the outstanding standby letters of credit balance was $680, respectively, and we had $0 of our trade letters of credit outstanding in accounts payable in our consolidated balance sheets. Loans drawn under the Amended Credit Facility bear interest, at the Company’s option, at a per annum rate equal to either (a) Adjusted Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 3.00% per annum, or (b) an “alternate prime base rate” plus an applicable margin of 1.50% per annum. As of September 27, 2025, the Company’s SOFR based interest rate was 7.26% and the Company’s prime based rate was 8.75%. A commitment fee, based upon unused availability under the Amended Credit Facility bearing interest at a rate of 0.50% per annum, is payable monthly. The Covenant Testing Trigger Period (as defined under the Amended Credit Agreement) means the period commencing on any day that excess availability is less than $5,000 for consecutive business days and will continue until excess availability has been greater than, or equal to, $5,000 at all times for 45 consecutive days. In addition, upon the occurrence of a Covenant Testing Trigger Period, the Company shall be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0, continuing until excess availability has been greater than or equal to $5,000 for 45 consecutive days. |