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OBLIGATIONS
12 Months Ended
Dec. 30, 2018
Debt Disclosure [Abstract]  
OBLIGATIONS

 

NOTE 5-OBLIGATIONS

 

 

 

December 30,

2018

 

 

December 31,

2017

 

 

 

(in thousands)

 

Debt and capital software lease obligations:

 

 

 

 

 

 

 

 

Revolving line of credit

 

$

15,000

 

 

$

6,000

 

Capital software leases

 

 

424

 

 

 

654

 

 

 

 

15,424

 

 

 

6,654

 

Current portion of debt and capital software lease obligations

 

 

(15,316

)

 

 

(6,299

)

Long term portion of debt and capital software lease obligations

 

$

108

 

 

$

355

 

 

Revolving Line of Credit

On September 28, 2018, the Company entered into a Loan and Security Agreement (the "Loan Agreement") with Heritage Bank. The Loan Agreement provided for, among other things, a revolving credit facility with aggregate commitments of $9,000,000 (the “Revolving Facility”). The maturity date for loans under the Revolving Facility is September 28, 2020.

On December 21, 2018, the Company entered into an Amended and Restated Loan and Security Agreement (the "Amended and Restated Loan Agreement") with Heritage Bank to replace in its entirety the Loan Agreement entered on September 28, 2018. The Amended and Restated Loan Agreement increases the revolving credit facility from $9,000,000 to $15,000,000. Further, the Amended and Restated Loan Agreement eliminates the requirement of maintaining at all times Remaining Months Liquidity of nine months and replaces with a new covenant of maintaining at least $3,000,000 in unrestricted cash at Heritage Bank. The Company is in compliance with all loan covenants as of December 30, 2018.

The Bank has a first priority security interest in substantially all of the Company’s tangible and intangible assets to secure any outstanding amounts under the Loan Agreement.

On September 25, 2015, the Company entered into the Second Amendment to the Third Amended and Restated Loan and Security Agreement dated September 25, 2015 ("the SVB Loan Agreement") with Silicon Valley Bank ("the Bank") to extend the line of credit for two years through September 25, 2017. The Second Amendment to the SVB Loan Agreement provides for committed loan advances of up to $6.0 million, subject to increases at the Company’s election of up to $12.0 million. Upon each advance, the Company can elect a prime rate advance, which is the prime rate plus the prime rate margin, or a LIBOR rate advance, which is LIBOR plus the LIBOR rate margin. On February 10, 2016, the Company entered into a Third Amendment to Third and Restated Loan and Security Agreement to further modify the covenants. On August 31, 2017, the Company entered into a Fourth Amendment to the Third Amended and Restated Loan and Security Agreement with the Bank to extend the line of credit for one year through September 24, 2018 and replaces the financial covenants of third amendment with new financial covenants. This amendment requires the Company to maintain (i) unrestricted cash or cash equivalents at the Bank or at any of its affiliates at all times in an amount of at least $6,000,000; and (ii) a ratio of quick assets to the results of (i) current liabilities minus (ii) the current portion of deferred revenue plus (iii) the long-term portion of the obligations of at least 1.40 to 1.00, tested as of the last day of each month. 

The Bank has a first priority security interest in substantially all of the Company’s tangible and intangible assets to secure any outstanding amounts under the SVB Loan Agreement. The SVB Loan Agreement also has certain restrictions including, among others, restrictions on the incurrence of other indebtedness, the maintenance of depository accounts, the disposition of assets, mergers, acquisitions, investments, the granting of liens, cash balances with subsidiaries and the payment of dividends. The Company complied with all the financial covenants of the SVB Loan Agreement as of the loan maturity date. The Line of Credit facility with Silicon Valley Bank, which matured on September 24, 2018, was fully paid off in July 2018.

Capital Leases

Following table summarizes the capital lease liabilities as of December 30, 2018 and December 31, 2017:

 

 

 

2018

 

 

2017

 

 

 

(In thousands)

 

Three-year design software lease dated July 2018 at an interest of 7.64%

 

$

115

 

 

$

 

Three-year design software lease dated December 2017 at an interest of

   6.48%

 

 

49

 

 

 

146

 

Two-year design software lease dated December 2017 at an interest of 6.30%

 

 

131

 

 

 

256

 

Three-year design software lease dated May 2017 at an interest of 5.48%

 

 

87

 

 

 

170

 

Three-year design software lease dated February 2017  at an interest of

   5.57%

 

 

42

 

 

 

82

 

 

 

$

424

 

 

$

654

 

Less: current portion

 

 

316

 

 

 

299

 

 

 

$

108

 

 

$

355

 

 

 

Future minimum lease commitments under the Company’s capital leases are as follows:

 

 

Capital leases

 

 

 

(in thousands)

 

Fiscal Years

 

 

 

 

2019

 

$

316

 

2020

 

 

108

 

 

 

$

424