Convertible Debt

12 Months Ended

Dec. 28, 2024

Debt Disclosure [Abstract]

Convertible Debt

10. Convertible Debt

On August 4, 2024, the Company entered into a securities purchase agreement (the “Lind Purchase Agreement”) with Lind Global Asset Management IX LLC (“Lind”), an entity managed by The Lind Partners, LLC, relating to (i) the issuance and sale to Lind of a senior convertible promissory note in the principal amount of $4.2 million for a purchase price of $3.5 million (the “Initial Lind Note”) and (ii) a subsequent contingent senior convertible promissory note in the amount of $1.8 million for a purchase price of $1.5 million (the “Subsequent Lind Note” and, together with the Initial Note, the “Notes” and together with the Lind Purchase Agreement and the Lind Notes, the “Lind Transaction Documents”). The Initial Lind Note was issued on August 7, 2024 and the Subsequent Lind Note has not been issued as of the date hereof. The Lind Notes are convertible into shares of the Company’s common stock, $0.01 par value (the “Common Stock” and such shares issued upon conversion, the “Note Shares”) at Lind’s option at an initial conversion price of $2.44, subject to any adjustments as set forth in the Lind Notes; provided that no adjustment shall result in a conversion price that is less than $0.39 per share.

Pursuant to the terms of the Lind Purchase Agreement, as of December 28, 2024, the Company issued 126,968 shares of Common Stock to Lind.

The total number of shares of Common Stock issuable pursuant to the terms of the Lind Transaction Documents was capped at (i) prior to the receipt of stockholder approval, 3,300,231 (equal to 19.99% of the number of shares of Common Stock outstanding as of August 4, 2024), and (ii) following the receipt of stockholder approval, 4,952,823 (equal to 30% of the number of shares of Common Stock outstanding as of August 4, 2024).

The $4.2 million convertible debt was issued with an original issue discount (“OID”) of $0.7 million. In addition, the Company incurred $0.9 million debt issuance costs, including $0.5 million legal expenses, $250 thousand relating to the First Incentive Share Installment (as defined in the Lind Purchase Agreement) and $105 thousand in commitment fees. During the year ended December 28, 2024, $146 thousand of the original issue discount and $182 thousand of debt issuance costs (as an interest expense) were recorded on a straight-line basis over the term of the debt. The accretion of the OID and amortization of debt issuance costs under that method is deemed materially consistent with the effective interest rate method.

As of December 28, 2024, the convertible note payable outstanding totaled $2.7 million of debt, net of the remaining balances of $0.6 million of OID and $0.7 million of debt issuance costs. As of December 28, 2024, the short term and long term debt (Notes Payable) were $1.7 million and $1.0 million, respectively.

On March 18, 2025, the Company entered into that certain repayment notice (the “Repayment Notice”) with Lind. Pursuant to the Repayment Notice and upon the subsequent delivery of a cash payment to Lind in the amount of $3,330,999.99, the Company thereafter fully discharged its outstanding obligations (other than certain indemnification obligations that survived pursuant to the terms of the Repayment Notice) under the Lind Purchase Agreement and terminated the Lind Note.

The following represents the payments of notes payables as of December 28, 2024 (in thousands):

Fiscal Year	Payments
2025		2,520
2026		1,470
Total payments		3,990
Less: Origination fees		(1,252	)
Total convertible note payable		2,738
Non-current portion of convertible note payable		(1,004	)
Current portion of convertible note payable	$	1,734