Note 20 - Subsequent Events
|12 Months Ended|
Mar. 25, 2017
|Notes to Financial Statements|
|Subsequent Events [Text Block]||
April 27, 2017,the Company entered into a loan agreement with PFG. Under the terms of the agreement, PFG made a term loan to Giga-tronics in the principal amount of
$1,500,000,with funding occurring on
April 28, 2017.
The loan has a
two-year term, with interest only payments for the term of the loan. The principal amount of the loan plus any accrued interest will be due upon maturity. The loan bears interest at an aggregate per annum rate equal to
16%per annum, fixed, which is comprised of cash interest reflecting a
9.5%per annum rate and deferred interest reflecting a
6.5%per annum rate. The Company will pay the cash interest monthly and will accrue deferred interest on the unpaid principal balance. The deferred interest will be due and payable upon maturity. In addition, the Company agreed to pay PFG a charge of up to
$100,000due and payable upon maturity,
$76,000of which was earned on
April 27, 2017and
$24,000of which is earned at the rate of
$1,000per month on the
firstday of each month if the loan principal (of any amount) is outstanding during any day of the prior month. If the Company meets or exceeds certain revenue and net income minimums in fiscal
2018,the amount could be reduced by
25percent. To stay in compliance with the loan terms, the Company must meet certain financial covenants associated with minimum quarterly revenues and monthly minimum shareholders’ equity. The lender can accelerate the maturity of the loan in case of a default. The Company can prepay the loan before maturity at any time without fee or penalty.
In connection with its loan to the Company, PFG will receive up to
250,000shares of common stock,
190,000of which was earned on
April 27, 2017and
60,000of which is earned at the rate of
2,500per month on the
firstday of each month if the loan principal (of any amount) is outstanding during any day of the prior month.
The Company has pledged all its assets as collateral for the loan made by PFG, including all its accounts, inventory, equipment, deposit accounts, intellectual property and all other personal property. The PFG loan is subordinate to the Bridge Bank line of credit (see Note
7,Accounts Receivable Line of Credit).
May 23, 2017,the Company renewed its accounts receivable line of credit with Bridge Bank. The
$2.5million line which expired on
May 7 2017,was renewed through
May 6, 2019.The renewal terms for the accounts receivable line is consistent with the current line as described in Note
7,Accounts Receivable Line of Credit.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/presentationRef