Data I/O Corporation has taken a significant step in its growth strategy by entering into a loan agreement with Western Alliance Bank. This agreement, effective October 26, 2026, allows the company to access up to $7.5 million in a revolving loan facility. The funds will primarily be used for working capital and general business needs, especially following the recent acquisitions of V-Tek, Inc. and A&J Programming, Inc.

This move is crucial for Data I/O as it integrates its new subsidiaries into its operations. The loan agreement reflects a broader trend in the instruments for measuring and testing electricity and electronic signals industry, where companies are increasingly leveraging bank financing to support growth initiatives.

Background

Data I/O Corporation, based in Redmond, Washington, specializes in instruments for measuring and testing electricity and electronic signals, classified under SIC 3825. The company trades on the Nasdaq under the ticker symbol DAIO. As a smaller reporting company, Data I/O has been actively pursuing growth through strategic acquisitions, including the recent purchase of V-Tek and A&J, both of which are now subsidiaries.

What the Filing Says

The recent filing details the terms of the loan agreement with Western Alliance Bank. It states, "The Loan Agreement provides for a revolving loan facility of up to the lesser of $7.5 million and a borrowing base determined by reference to eligible accounts and eligible inventory." This agreement allows for advances to be repaid and reborrowed until October 26, 2028.

Impact

This loan agreement may significantly impact Data I/O's financial flexibility, enabling it to manage its cash flow effectively while pursuing growth opportunities. The company must maintain at least $3 million in unrestricted cash with Western Alliance and adhere to specific financial covenants, including a fixed charge coverage ratio of at least 1.25 to 1.00.

What's Next

The filing does not say what happens next. However, it is expected that Data I/O will focus on integrating V-Tek and A&J into its operations while utilizing the loan to enhance its market presence.