Note 7 - Long-term Debt

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Long-term Debt [Text Block]

Note 7 – Long-term Debt

Long-term debt as of December 31 consists of the following:
	2021			2020
HSBC $10,387,500 Mortgage payable secured by real property Buildings and improvements at 555 N Research Drive, Central Islip, NY payable in monthly principal installments of $62,481 including Interest at a rate of 3.9148%. On July 26, 2021 the loan was satisfied.	$	-		$	9,315,246
PPP Loan $2,415,970, maturing on April 21, 2022, with interest accruing at 1% per annum. On June 10, 2021 the loan was forgiven.		-			2,415,970
HSBC $6,000,000 Mortgage payable secured by building Buildings and improvements at 355 South Technology Drive, Central Islip, NY payable in monthly principal installments of $25,000 plus interest. Interest presently accrues at our option, at the variable rate of LIBOR plus 1.75% or HSBC’s Prime rate minus 0.50% The loan was satisfied on March 1, 2022.		1,765,508			2,065,508
Total long-term debt	$	1,765,508		$	13,796,724
Less: Current maturities		(1,765,508	)		(690,667	)
Long-term debt	$	-		$	13,106,057

Future maturities of long-term debt as of December 31, 2021 are as follows:

2022	$	1,765,508
Total long-term debt	$	1,765,508

The Company has a loan agreement with HSBC which was secured by a mortgage against its Central Islip, NY Headquarters. The loan was payable in 120 consecutive equal monthly installments of $25,000 in principal plus interest and a final balloon payment upon maturity in March 1, 2022. The balances as of December 31, 2021 and December 31, 2020 were approximately $1.8 million and $2.1 million respectively. Interest accrued on the Loan, at the Company’s option, at the variable rate of LIBOR plus 1.75% or Prime less 0.5% (1.86% and 1.89% at December 31, 2021 and 2020, respectively). The Company was in compliance with its financial covenant under this mortgage at December 31, 2021. This loan was satisfied on March 1, 2022 (see Note 15)

On November 30, 2017, the Company purchased the premises located at 555 North Research Place, Central Islip, NY. The purchase price of the building was $13,850,000 exclusive of closing costs. The Company’s wholly-owned subsidiary, 555 N Research Corporation (the “Assignee”) and the Islip IDA, entered into a Fee and Leasehold Mortgage and Security

Agreement (the “Loan”) with HSBC in the amount of $10,387,500, which was used to finance a portion of the purchase price to acquire the premises located at 555 North Research Place, Central Islip, New York. The Loan was evidenced by the certain Note, dated November 30, 2017 (the “Note”), by and between Assignee and the Bank, and secured by a certain Fee and Leasehold Mortgage and Security Agreement (the “Mortgage”), dated November 30, 2017, as well as a collateral Assignment of Leases and Rents. The Note was payable in 60 consecutive equal monthly installments of $62,481 including interest at the fixed rate of 3.9148%, and a final balloon payment upon maturity in December 2022. On July 26, 2021, the Company closed on the sale of the 555 Building and satisfied the loan. (see Note 14).

On April 21, 2020, the Company entered into a loan agreement (the “Loan Agreement”) with HSBC Bank USA, National Association pursuant to which the Company was granted a loan in the principal amount of $2,415,970, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted by the United States Congress on March 27, 2020.

The PPP loan, the obligation of which is represented by a note issued by the Company, was to mature on April 21, 2022 and bore interest at a rate of 1% per annum. The note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the PPP, all or a portion of the Loan may be forgiven, based upon payments made in the first twenty-four weeks following receipt of the proceeds, related to payroll costs, continue group health care benefits, utilities and mortgage interest on other debt obligations incurred before February 15, 2020. The Company filed an application for forgiveness in April 2021 and on June 14, 2021 the Company received a notification from its lender that on June 10, 2021 the SBA approved the Company’s PPP Loan forgiveness application and remitted payment to the lender for the entire principal amount of the PPP Loan and accrued interest. As a result, the Company has recognized in the year ended December 31, 2021 a Gain on Debt Extinguishment in the amount of $2,443,418.