Note 8 - Debt

12 Months Ended

Dec. 31, 2018

Disclosure Text Block [Abstract]

Note 8 -Debt

Note 8 –Debt

Long-term debt consisted of the following as of December 31, 2018 and 2017:

	2018	2017
First mortgage note payable due in monthly installments of $23 (interest  at 5.75%) through January 1, 2024; payment and rate subject to  adjustment every 3 years, next adjustment January 14, 2021	$ 1,221	$ 1,422
Second mortgage note payable due in monthly installments of $4 (interest  at 5.99%) through October 1, 2028; payment and rate subject to  adjustment every 5 years, next adjustment October 1, 2023	319	342
Total debt	1,540	1,764
Current portion of long-term debt	(237)	(224)
Long-term debt, net of current portion	$ 1,303	$ 1,540

Principal maturities on total debt are as follows:

Years Ending December 31,
2019	$    237
2020	251
2021	267
2022	283
2023	299
Thereafter	203
Total debt	$ 1,540

Mortgage Notes

The first mortgage note payable represents the balance on a $3,200 note (“First Mortgage Note”) issued on January 14, 2004 by Spitz. The First Mortgage Note requires repayment in monthly installments of principal and interest over 20 years.  On January 14, 2006 and each third anniversary thereof, the interest rate on the First Mortgage Note is adjusted to the greater of 5.75% or 3% over the Three-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“3YCMT”).  The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term.  On January 14, 2018, the 3YCMT was 2.09% and the interest rate on the First Mortgage Note remained at 5.75% per annum. As a result, the monthly installment amount remained at $23.

The second mortgage note payable represents the balance on a $500 note (“Second Mortgage Note”) issued on September 11, 2008 by Spitz. The Second Mortgage Note requires repayment in monthly installments of principal and interest over 20 years. On October 1, 2013 and each fifth anniversary thereof, the interest rate on the Second Mortgage Note is adjusted to the greater of 5.75% or 3% over the Five-Year Constant Maturity Treasury Rate published by the United States Federal Reserve (“5YCMT”).  The monthly installment is recalculated on the first month following a change in the interest rate. The recalculated monthly installment is equal to the monthly installment sufficient to repay the principal balance, as of the date of the change in the interest rate, over the remaining portion of the original 20-year term.  On October 1, 2018, the fifth anniversary of the Second Mortgage Note, the 5YCMT was 2.99%. As a result, interest was adjusted to 5.99%. The monthly installment remains at $4.

The Mortgage Notes are secured by the real property occupied by Spitz pursuant to a Mortgage and Security Agreement.  The real property had a carrying value of $3,973 as of December 31, 2018. The Mortgage Notes are guaranteed by E&S.

Line of Credit

The Company is a party to a line-of-credit agreement with a commercial bank which permits borrowings of up to $1,100 to fund Spitz working capital requirements. Under the line of credit agreement, interest is charged on amounts borrowed at the lender’s prime rate less 0.25%.  Any borrowings under the Credit Agreement are secured by Spitz real and personal property and all of the outstanding shares of Spitz common stock. The line-of-credit agreement and mortgage notes (with the same commercial bank) contain cross default provisions whereby a default on either agreement will result in a default on both agreements. There were no borrowings outstanding under the line-of-credit agreement as of December 31, 2018.