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Note 11 - Subsequent Events | 3 Months Ended
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Aug. 30, 2015
Notes to Financial Statements |
Subsequent Events [Text Block] |
11. | Subsequent Events
On September 4, 2015, Lifecore entered into a new lease whereby it has leased a 65,000 square foot building in Chaska, MN approximately two miles from its current facility. The initial term of the lease is seven years with two five-year options. The lease contains a buy out option at any time after year seven with the purchase price equal to then mortgage balance on the lessor’s loan secured by the building. The lease will be accounted for as a capital lease with an initial capital asset and related capital lease liability of approximately $3.8 million, and a monthly expense of approximately $38,000 over the initial lease term. Lifecore and the lessor will be making capital improvements over the next couple of months and thus the lease does not become effective until November 1, 2015. Lifecore initially plans to use the building for storage and final packaging. On September 28, 2015, Apio borrowed $1.3 million from GE Capital to finance a portion of Apio's equipment capacity expansion. This short-term borrowing is an interest only, progress payment draw, with an interim interest rate of LIBOR plus 1.75% (currently 1.94%). This initial draw, plus any subsequent draws determined as necessary by the Company, are expected to be refinanced into a single fixed-rate equipment term loan at the end of the construction period, which is currently estimated to be around April 2016. The eventual equipment term loan is expected to be due in five years, with a seven-year amortization. This loan was made pursuant to the existing GE Capital equipment financing commitment letter entered into on May 15, 2015 (see Note 7).

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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