Company: CULP
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0000950170-25-035191
Chunk: 23

Company: CULP INC
Filing Date: 2025-03-07
Form: 10-Q
Item: Item 1
Chunk 23
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 China - RMB Credit AgreementEffective November 5, 2024, we entered into a credit agreement (“Agreement”) denominated in RMB that provides 10.0 million RMB ($1.4 million USD as of January 26, 2025) for an unsecured working capital loan and 25.0 million RMB ($3.5 million USD as of January 26, 2025) for letters of credit, guarantees, and other financing arrangements secured by trade accounts receivable associated with the company’s operations located in China.  The working capital loan and letters of credit expire on November 6, 2025, and July 31, 2025, respectively.   Interest is charged under the Agreement based on the LPR in China minus 50 basis points at the time of borrowing which represents 2.60%.   As of January 26, 2025, the amount outstanding under the working capital loan, which represents the total amount available, was 10.0 million RMB ($1.4 million USD). The working capital loan was used to fund certain working capital expenditures incurred in China.   As of January 26, 2025, there were no outstanding for letters of credit under the Agreement. OverallOur loan agreements require, among other things, that we maintain compliance with certain financial covenants. As of January 26, 2025, we were in compliance with our financial covenants.Interest payments of $16,000 were made during the nine-month period ended January 26, 2025. There were no interest payments during the nine-month period ended January 28, 2024.

12. Fair ValueASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:Level 1 – Quoted market prices in active markets for identical assets or liabilities;Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; andLevel 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.The determination of