Company: CRWS
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001437749-25-034222
Chunk: 6

Company: CROWN CRAFTS INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 6
---
 of assets, investments and acquisitions, merger or consolidation transactions, transactions with affiliates, and changes in or amendments to the organizational documents for the Company and its subsidiaries.       8
  
  On  June 23, 2025, the Company and CIT amended the Company’s financing agreement with CIT to: (i) provide that, until the Company’s term loan is paid in full, the Company shall maintain at all times Excess Availability (as defined in the financing agreement) equal to or the greater of (a) the sum of the balance outstanding under the Company’s term loan plus $1.0 million or (b) $4.0 million (the “Availability Covenant”); and (ii) reinstate the fixed charge coverage ratio; provided however, that the fixed charge coverage ratio shall not be tested at any fiscal quarter end in which, during the immediately preceding fiscal quarter, the Company at all times has been in compliance with the Availability Covenant.  As of  September 28, 2025, the Company was in compliance with the Excess Availability requirements.   The balance on the $8.0 million term loan as of  September 28, 2025 was $5.7 million, including $2.0 million classified as current. The term loan was issued  July 19, 2024, is payable by the Company in 48 equal monthly installments and bears interest at SOFR plus 2.25% (6.5% at  September 28, 2025).
   Credit Concentration: The Company’s accounts receivable at  September 28, 2025 amounted to $18.4 million, net of allowances of $2.0 million. Of this amount, $16.1 million was due from CIT under the factoring agreements, which represents the maximum loss that the Company could incur if CIT failed completely to perform its obligations under the factoring agreements. The Company’s accounts receivable at  March 30, 2025 amounted to $24.5 million, net of allowances of $1.7 million. Of this amount, $21.9 million was due from CIT under the factoring agreements, which represented the maximum loss that the Company could have incurred if CIT had failed completely to perform its obligations under the factoring agreements.   Fair Value: The Company evaluates the fair value of its debt using the three level fair value heirarchy. Fair value should be based on the assumptions market participants would use when pricing the liability and establishes a fair value hierarchy