Debt Financing |
9 Months Ended |
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Jul. 03, 2022 | |
| Debt Disclosure [Abstract] | |
| Debt Financing |
Note 5 - Debt Financing
Credit Facility — PNC Bank (formerly BBVA, USA)
On April 12, 2022, the Company and its subsidiary, Optex Systems, Inc. (“Optex”, and with the Company, the “Borrowers”), entered into an Amended and Restated Loan Agreement (the “Loan Agreement”) with PNC Bank, National Association, successor to BBVA USA (the “Lender”), pursuant to which the Borrowers’ existing revolving line of credit facility was decreased from $2.25 million to $1.125 million, and the maturity date was extended from April 15, 2022 to April 15, 2023. Obligations outstanding under the credit facility accrue interest at a rate equal to the Lender’s prime rate minus 0.25%.
The Loan Agreement contains customary events of default and negative covenants, including but not limited to those governing indebtedness, liens, fundamental changes, investments, and restricted payments. The Loan Agreement also requires the Borrowers to maintain a fixed charge coverage ratio of at least 1.25:1. The credit facility is secured by substantially all of the operating assets of the Borrowers as collateral. The Borrowers’ obligations under the credit facility are subject to acceleration upon the occurrence of an event of default as defined in the Loan Agreement.
The outstanding balance on the Facility was zero as of July 3, 2022 and October 3, 2021. For the three and nine months ended July 3, 2022, the total interest expense against the outstanding line of credit balance was zero. For the three and nine months ended June 27, 2021, the total interest expense against the outstanding line of credit balance was $4 thousand and $9 thousand, respectively.
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