Debt Financing

A summary of the Company’s long term debt as of March 31, 2015 is as follows (dollars in thousands):


			Interest
Fixed Rate Debt	Balance		Rate		Maturity

Lender
Great Western Bank	$	8,398	4.50	%	6/2015
GE Capital Franchise Finance LLC		7,757	7.17	%	12/2015
Citigroup Global Markets Realty Corp		11,759	5.97	%	11/2015
GE Capital Franchise Finance LLC		4,007	4.75	%	2/2018
Middle Patent Capital, LLC		8,300	12.50	%	6/2015
GE Capital Franchise Finance LLC		11,207	7.17	%	2/2017
Cantor		5,908	4.25	%	11/2017
Morgan Stanley		28,358	5.83	%	12/2017
Total fixed rate debt	$	85,694
Less: debt associated with hotel properties held for sale		21,162
Total long-term debt	$	64,532

On January 15, 2015, the Company sold a Super 8 in West Plains, Missouri (49 rooms) for gross sale proceeds of $1.5 million. Net proceeds were used to pay off the associated loan with Great Western Bank.

On January 29, 2015, the Company sold a Super 8 in Green Bay, Wisconsin (83 rooms) for gross sale proceeds of $2.2 million. Net proceeds were used to pay off the associated debt with GE and reduce the balance of the revolving credit facility with Great Western Bank.

On February 17, 2015, the maturity date of the Company’s $7.8 million GE loan was extended to December 15, 2015. A required principal payment of $0.3 million was paid on the loan in February 2015.

On March 16, 2015, the Company sold a Super 8 in Columbus, Georgia (74 rooms) for gross sale proceeds of $0.9 million. Net proceeds were used to pay off the associated loan with GE.

On March 19, 2015, the Company sold a Sleep Inn in Omaha, Nebraska (90 rooms) for gross sale proceeds of $2.9 million. Net proceeds were used to pay off the associated loan with Elkhorn Valley Bank.

At March 31, 2015, the Company had long-term debt of $64.5 million associated with assets held for use, consisting of notes and mortgages payable, with a weighted average term to maturity of 1.9 years and a weighted average fixed interest rate of 5.8%. The Company has no variable interest rate loans as of March 31, 2015. Debt is classified as held for use if the properties collateralizing it are not held for sale. Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below as due within the next year irrespective of whether the notes and mortgages evidencing such debt mature within the next year. Aggregate annual principal payments on debt associated with assets held for use for the remainder of 2015 and thereafter, and debt associated with assets held for sale, are as follows (in thousands):



	Held For Sale		Held For Use		TOTAL
Remainder of 2015	$	21,162	$	19,237	$	40,399
2016		0		2,150		2,150
2017		0		42,721		42,721
2018		0		424		424
2019		0		0		0
Thereafter		0		0		0
	$	21,162	$	64,532	$	85,694

At March 31, 2015 the Company had $40.4 million of principal due in 2015. Of this amount, $37.7 million of principal is due in 2015 pursuant to the notes and mortgages evidencing such debt. The remaining $2.7 million is associated with loans on assets held for sale and is not contractually due in 2015 unless the related assets are sold. The maturities comprising the $37.7 million consist of:

a $7.8 million balance on a mortgage loan with GE Capital Franchise Finance LLC (“GE”);

a $8.4 million balance on a revolving line of credit with Great Western Bank;

an $8.3 million balance on a mortgage loan with Middle Patent Capital, LLC;

a $11.8 million balance on a mortgage loan with Citigroup Global Markets Realty Corp.; and

approximately $1.4 million of principal amortization on mortgage loans.

The maturity date on the $7.8 million GE loan has been extended to December 15, 2015 and a required principal payment of $0.3 million was paid on the loan in February, 2015. All of the GE loans are cross collateralized and the 13 assets securing the loans outstanding at March 31, 2015 are treated as a pool. As of March 31, 2015, the Company had six GE hotel assets classified as held for sale. The required principal payment upon the sale of these six hotels is approximately $11.4 million. Upon sale the Company believes the net proceeds from the sale of these hotels will be sufficient to satisfy the debt with GE maturing in 2015. In April of 2015, after the close of the first quarter of 2015, the Company sold two of the GE encumbered assets that were held for sale and $4.1 million of the sales proceeds were applied to the balance of the $7.8 million loan. If the four remaining hotels are not sold, the Company will attempt to refinance the debt with GE.

The $8.3 million loan with Middle Patent Capital, LLC is secured by two held for sale hotels located in Alexandria, Virginia. On April 13, 2015, the Company entered into an agreement to sell these hotels for a purchase price of $19.0 million. The sale is subject to completion of an inspection period without termination of the agreement by the purchaser and customary closing conditions. If these hotels are sold pursuant to this agreement, the Company believes the net proceeds from the sale of these hotels will be sufficient to satisfy the debt with Middle Patent Capital, LLC maturing in 2015. If the hotels are not sold pursuant to this agreement, the Company will attempt to refinance the debt with Middle Patent Capital, LLC or another lender.

The Company’s plan is to refinance the other debt maturing in 2015 with current or future lenders.

We are required to comply with certain financial covenants for some of our lenders. As of March 31, 2015, we were in compliance with our financial covenants. As a result, we are not in default of any of our loans.