Note 8 - Debt

6 Months Ended

Jul. 31, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

8. DEBT

	July 31, 2021			January 31, 2021
	(in thousands)
Mortgage note payable	$	12,103		$	12,366
Less current maturities		(12,103	)		(527	)
Less loan origination costs, net		-			(14	)
Long-term debt	$	-		$	11,825
Note payable for FTZ Corp. acquisition	$	2,431		$	-

Mortgage note payable

Effective May 30, 2012, QAD Ortega Hill, LLC, a consolidated entity of QAD Inc., entered into a variable rate credit agreement (the 2012 Mortgage) with Mechanics Bank (formerly Rabobank, N.A.), to refinance a pre-existing mortgage. The 2012 Mortgage has an original principal balance of $16.1 million and bears interest at the one month LIBOR rate plus 2.25%. One month LIBOR was 0.09% at July 31, 2021. The 2012 Mortgage matures in June 2022 and is secured by the Company’s headquarters located in Santa Barbara, California. In conjunction with the 2012 Mortgage, QAD Ortega Hill, LLC entered into an interest rate swap with Mechanics Bank. The swap agreement has an initial notional amount of $16.1 million and a schedule matching that of the underlying loan that synthetically fixes the interest rate on the debt at 4.31% for the entire term of the 2012 Mortgage. The terms of the 2012 Mortgage provide for QAD Ortega Hill, LLC to make net monthly payments of $88,100 consisting of principal and interest and one final payment of $11.7 million when the loan matures on June 1, 2022. The unpaid balance as of July 31, 2021 was $12.1 million.

Note Payable for FTZ Corp. acquisition

The Company owes $2.4 million as part of the consideration for the FTZ Corp. acquisition. The note is payable to the sellers of FTZ Corp. over four years and accrues interest at 4%. The note is classified as part of “Other liabilities” in the accompanying Condensed Consolidated Balance Sheets.