Long-term debt and Capital Lease Obligation

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-term debt and Capital Lease Obligation

Note 5. Long-term Debt and Capital Lease Obligation

On June 06, 2014 the Company entered into a new financing agreement with a third party lender for $5,000,000. The proceeds were used to retire the existing term note due June 12, 2014 of $4,386,000. The remaining proceeds were used to pay closing costs and provide additional working capital. The new term note expires June 1, 2019. Interest only payments at a rate of 3% over the one month Libor index (3.15% at June 30,2014) are required for the first twelve months. After year one, the term note requires monthly principal payments of $20,833 plus interest of 3% over the one month Libor index. The term note is collateralized by all current and subsequently acquired real and personal property. Subsequent to June 30, 2014, the loan agreement was modified to state that the measurement date for the fixed charge coverage ratio begins on December 31, 2014.

Operating costs and planned expenditures for capital additions and improvements are expected to be adequately funded by the Company’s and its affiliates’ current cash reserves and cash generated by resort operations.

On January 15, 2014, the Company entered into a capital lease obligation for equipment in the amount of $150,000. The capital lease is secured by the equipment purchased, matures in December 2018 and requires monthly payments of $3,024, including interest at 7.75%. At June 30, 2014, the amount due on the capital lease obligation was $135,335.

On January 15, 2014, the Company entered into a capital lease obligation for equipment in the amount of $102,000. The capital lease is secured by the equipment purchased, matures in December 2018 and requires monthly payments of $2,233, including interest at 11.30%. At June 30, 2014, the amount due on the capital lease obligation was $94,184.

On December 13, 2012, the Company entered into a capital lease obligation for equipment in the amount of $80,479. The capital lease is secured by the equipment purchased, matures in November 2017 and requires monthly payments of $1,426, including interest at 2.44%. At June 30, 2014, the amount due on the capital lease obligation was $56,039.

On December 2, 2012, the Company entered into a capital lease obligation for equipment in the amount of $255,874. The assets associated with this lease cost $294,724, of which $38,850 was reduced through the Company’s trade-in of existing equipment. This capital lease is secured by the equipment purchased, matures in December 2017 and requires monthly payments of $4,995, including interest at 6.41%, beginning in January 2013. At June 30, 2014, the amount due on the capital lease obligation was $187,499.