Note 6 - Debt Obligations

12 Months Ended

Jan. 01, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 6 — DEBT OBLIGATIONS

Revolving Line of Credit

On December 21, 2018, the Company entered into a loan agreement, the QuickLogic Corporation Heritage Bank of Commerce Amended and Restated Loan and Security Agreement, (the "Loan Agreement") with Heritage Bank which among things, provides a revolving line of credit facility ("Revolving Facility") allowing the Company to draw advances up to $15.0 million. The Revolving Facility, as amended, includes a number of customary and restrictive financial covenants including maintaining certain minimum cash levels with the lender. The Revolving Facility bears an annual facility fee of $45 thousand payable on each December 31. Advances under the Revolving Facility bear a variable annual interest rate equal to one half of one percentage point (0.50%) above the prime rate. On December 31, 2022, the Company and Heritage Bank amended the maturity date for advances under the Revolving Facility to December 31, 2024. The Company had a $15.0 million outstanding balance on the Revolving Facility as of January 1, 2023 and January 2, 2022, with interest rates of 8.00% and 3.75% for years ended January 1, 2023 and January 2, 2022, respectively.

We were in compliance with all loan covenants under the Loan Agreement, as amended as of the end of the current reporting period.

Heritage 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.

Payroll Protection Program Loan

On May 6, 2020, the Company entered into a loan agreement with Heritage Bank (“PPP Loan”) for a loan of $1.2 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") as implemented by the U.S. Small Business Administration enacted on March 27, 2020.

The PPP Loan was evidenced by a promissory note (“Note”) dated May 6, 2020, maturing two years from the disbursement date. The Note bore interest at a rate of 1.00% per annum, with the first six months of interest deferred. Principal and interest were payable monthly commencing six months after the disbursement date. Principal and interest were allowed to be prepaid by the Company at any time prior to maturity with no prepayment penalties. The Note contained customary events of default relating to, among other things, payment defaults or breaches of the terms of the Note. Upon the occurrence of an event of default, the lender may require immediate repayment of all amounts outstanding under the Note. The Company applied for loan forgiveness in the fourth quarter of fiscal 2020, in accordance with the terms under the CARES Act. On January 26, 2021, the Company received a notice from Heritage Bank that amounts under the PPP Loan had been forgiven. The Company recorded the loan forgiveness under gain on forgiveness of PPP Loan on its consolidated statement of operations in the year ended January 2, 2022.