Long-term Debt and Capital Lease Obligations

12 Months Ended

Dec. 31, 2018

Long-term Debt and Capital Lease Obligations

Long-term debt at December 31 consists of the following:

	2018			2017
Note payable to lender	$	5,817,308		$	6,169,872
Revolving line of credit		—			700,000
Less unamortized finance costs		(29,354	)		(53,916	)
Less current portion		(352,560	)		(1,052,560	)
	$	5,435,394		$	5,763,396

On December 6, 2015 the Company’s financing agreement with a third party lender was modified to include renewal for the existing principal balance of $

4,875,000

, along with an advance of an additional $2,000,000. The new term note expires December 6, 2020. At December 31, 2018, $5,817,308 was outstanding under the note. The term note requires monthly principal payments of $29,380 plus interest of 3% over the one month Libor index (5.32% at December 31, 2018). The term note is collateralized by all current and subsequently acquired real and personal property. The term note requires the Company to maintain a Debt Service Ratio, as defined, of 1.25%. The Company was in default of this covenant as of December 31, 2018; however, the Company received a waiver for this default from its lender. The debt service covenant will be re-measured at December 31, 2019. Management believes, based on its expectations, that the Company will be in compliance with the debt service covenant at that date; however, there can be no assurances that it will be in compliance. Should the Company not be in compliance at December 31, 2019, it will seek a waiver or modification of the covenant. In addition, under the terms of the loan agreement, the Company has certain remedies available to it by which it can cure the default, and it is management’s intent to do so if necessary.

On April 24, 2017, the Company entered in to a revolving line of credit agreement with the same third party lender with maximum borrowings of $1,500,000 to be used as working capital as needed. The agreement is cross collateralized with the existing term note under the same terms and conditions. Amounts borrowed under the revolving line of credit will bear interest at 3% over the one month LIBOR index. (5.32% at December 31, 2018). The line of credit will terminate on December 6, 2020. As of

December 31, 2018

, the Company had no outstanding borrowings on this agreement.

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

Future maturities of note payable to lender as of December 31, 2018 were as follows:

	Years ending December 31,
2019		352,560
2020		5,464,748
	$	5,817,308

On March 1, 2018, the Company entered into a capital lease obligation for equipment in the amount of $332,206. The assets associated with this lease cost $461,506, of which $129,300 was reduced through the Company’s trade-in of existing equipment. This capital lease is secured by the equipment purchased, matures in February 2023 and requires monthly payments of $6,500, including interest at 6.5%. At December 30, 2018, the amount due on this capital lease obligation was $284,038.

On April 1, 2018, the Company entered into a capital lease obligation for equipment in the amount of $156,942. The assets associated with this lease cost $178,942, of which $22,000 was reduced through the Company’s trade-in of existing equipment. This capital lease is secured by the equipment purchased, matures in March 2023 and requires monthly payments of $3,071, including interest at 6.5%. At December 31, 2018, the amount due on this capital lease obligation was $136,520.

Future minimum payments under the capital lease obligations as of December 31, 2018 are as follows:

Years ending December 31,
2019	$	114,852
2020	$	114,852
2021	$	114,852
2022	$	114,852
2023	$	22,216
Less interest		(61,066	)
Less current portion		(90,167	)
	$	330,391