Quarterly report pursuant to Section 13 or 15(d)

Debt

v3.22.2.2
Debt
 9 Months Ended
Oct. 03, 2022
Debt Disclosure [Abstract]  
Debt Debt
(in thousands) October 3, 2022 December 31, 2021
Term loan $ 55,321  $ 57,761 
Related party note 10,000  10,000 
Revolving line of credit 3,500  2,500 
Other notes payable 809  874 
Finance lease liability 976  — 
Total Debt $ 70,606  $ 71,135 
Less: Unamortized debt discount to related party note (893) (1,276)
Less: Unamortized debt issuance costs (934) (1,007)
Total Debt, net 68,779  68,852 
Less: Short-term borrowings, including finance leases (3,491) (3,331)
Total Long-term borrowings, including finance leases and related party note $ 65,288  $ 65,521 

Credit Agreement

The Company’s Credit Agreement with a syndicate of commercial banks provides up to $71.8 million in financing. The Credit Agreement, which terminates on June 15, 2024, provides the Company with lender financing structured as a $57.8 million term loan, a $4 million revolving loan, and a $10 million delayed draw term loan facility (the “Delayed Draw Term Loan Facility”) provided by a related party that is a significant stockholder. The terms of the Credit Agreement require the Company to repay the principal of the term loan in quarterly installments with the balance due at the maturity date.

The loan and revolving line of credit are secured by substantially all of the Company’s assets and incurs cash interest on outstanding amounts at 4.75% per annum through June 15, 2023 and 6.75% from June 16, 2023 through maturity. Pursuant to the terms of an amendment to the Credit Agreement effective as of March 9, 2022, certain of the covenants of the Credit Agreement were amended, and the Company, together with the other borrower and the guarantors party to the Credit Agreement, agreed to pay incremental deferred interest of 2% per annum, in the event that the obligations under the Credit Agreement are not repaid on or prior to June 15, 2023; provided, however, that if no event of default has occurred and is continuing then (1) no incremental deferred interest will be due if all of the obligations under the Credit Agreement have been paid on or prior to December 31, 2022, and (2) only 50% of the incremental deferred interest will be owed if all of the obligations under the Credit Agreement have been paid from and after January 1, 2023 and on or prior to March 31, 2023.

Please see Note 1, Organization and Summary of Significant Accounting Policies, for further discussion on the Credit Agreement, including regarding our potential default thereof.
Interest expense for the three and nine months ended October 3, 2022 was $2.2 million and $6.6 million. Included within interest expense for the three and nine months ended October 3, 2022 is amortization of debt issuance costs in the amount of $0.1 million and $0.4 million and the amortization of related party note debt discount in the amount of $0.1 million and $0.4 million. Additionally, included within interest expense for the three and nine months ended October 3, 2022 is non-cash interest expense on the redeemable preferred stock in the amount of $1.0 million and $2.8 million. Interest expense for the three and nine months ended September 30, 2021 was de minimis.