Quarterly report pursuant to Section 13 or 15(d)

Related Party Debt

v3.24.3
Related Party Debt
 9 Months Ended
Sep. 28, 2024
Debt Disclosure [Abstract]  
Related Party Debt Related Party Debt
Long-term debt payable to related parties (see Note 20) as of September 28, 2024 and December 30, 2023 consisted of the following (in $000’s):
September 28,
2024		 December 30,
2023
Isaac Capital Group $ —  $ 707 
Isaac Capital Group, 10% interest rate, matures December 31, 2024
319  — 
Live Ventures Incorporated, 10% interest rate, matures December 31, 2024
319  — 
Jon Isaac consulting agreement, 10% interest rate, matures March 4, 2026
 529 
Isaac Capital Group short-term demand advance, 10% interest rate
 50  — 
Novalk Apps SAA, LLP short-term demand advance, 10% interest rate
 110  — 
Total notes payable, related parties 1,327  707 
Less current portion (798) — 
Total long-term notes payable, related parties $ 529  $ 707 
Twelve months ending September 30,
2025 $ — 
2026 — 
Total future maturities of long-term debt, related parties $ — 
Isaac Capital Group LLC
On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “ICG Note”) in favor of ICG to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its approvals of the amendments on February 7, 2024. On March 6, 2024, ICG entered into a Note Purchase Agreement with an otherwise unaffiliated third party, under which the third party acquired the ICG Note. The terms and conditions of the ICG Note were not modified in connection with its acquisition by the third party. The principal amount of the ICG Note on the date of acquisition was approximately $1.2 million. On March 25, 2024, the third party converted $183,000 of the Company’s obligation under the ICG Note into
300,000 shares of the Company’s common stock. As of September 28, 2024, the amount outstanding on the ICG Note was approximately $319,000 (see Note 22).
On April 18, 2024, ICG made a short-term demand advance to the Company in the amount of $100,000. The advance bears interest at a rate of 10% per annum until repaid. As of September 28, 2024, the principal amount outstanding was $50,000 (see Note 22).
Live Ventures Incorporated
On February 7, 2024, the Company amended its outstanding related party promissory obligations (the “Live Note”) in favor of Live Ventures to add a convertibility provision. In accordance with Nasdaq Rules, the per-share conversion price for each obligation, as amended, was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its final approvals of the amendments on February 7, 2024. On March 6, 2024, Live Ventures entered into a Note Purchase Agreement with another otherwise unaffiliated third party, under which under which the third party acquired the Live Note. The terms and conditions of the acquired Live Note were not modified in connection with its acquisition by the third party. The principal amount of the Live Note on the date of acquisition was approximately $1.0 million. On March 22, 2024, the third party converted $183,000 of the Company’s obligation under the Live Note into 300,000 shares of the Company’s common stock. As of September 28, 2024, the amount outstanding on the Live Note was approximately $319,000 (see Note 22).
Jon Isaac
On March 4, 2024, the Company entered into a two-year Consulting Agreement with Jon Isaac, pursuant to which he will provide to the Company (the “Services”): (i) strategic financial advice, including growth strategies, capital allocation, and financial restructuring; (ii) sales and business development advice, including for the acquisition of new clients and new products through networking, referrals, and marketing efforts for our prospective products; (iii) in-depth research and market intelligence on specific industries, sectors, and market trends; (iv) financial models and financial analysis to support strategic decision-making; (v) assistance, through site visits, in the preparation of new client offers and bids for proposed projects; (vi) weekly update calls with management to align on progress of objectives and goals; (vii) enhanced non-confidential materials; (viii) business risk management support; and (ix) other services to which the Company and he may agree that will be memorialized in writing if, when, and as needed during the two-year term. In connection with the Consulting Agreement, the Company entered into a a two-year, straight 10% convertible promissory note in the initial principal amount of $500,000, with an interest rate of 10.0% and a per-share conversion price equivalent to the per-share value of the restricted common stock that he was granted ($1.16). The maturity date of the promissory note is March 4, 2026. As of September 28, 2024, the principal balance outstanding on the promissory note was $529,000 (see Note 22).
Novalk Apps SAA, LLP
On May 28, 2024 and June 3, 2024, Novalk Apps SAA, LLP (“Novalk”) made short-term demand advances in the amount of $120,000 and $100,000, respectively, to the Company. The advances bears interest at a rate of 10% per annum until repaid. As of September 28, 2024, the principal amount outstanding was $110,000 (see Note 22).
Tony Isaac
During June 3, 2024, Tony Isaac made a number of short-term demand advances in the aggregate amount of $62,000 to the Company. The advances bears interest at a rate of 10% per annum until repaid. As of September 28, 2024, the principal amount outstanding was fully repaid (see Note 22).