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Note 7 - Long-term Debt and Note Payable to Bank | 12 Months Ended
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Oct. 31, 2017
Notes to Financial Statements |
Long-term Debt [Text Block] |
( 7 ) | Long-term Debt and Note Payable to Bank
The Company has credit facilities consisting of a real estate term loan, as amended and restated (the “Virginia Real Estate Loan”), a supplemental real estate term loan, as amended and restated (the “North Carolina Real Estate Loan”) and a revolving credit note. On December 21, 2016, the Company entered into a Loan Modification Agreement (the “Agreement”) with Pinnacle Financial Partners, as successor to Bank of North Carolina, (“Pinnacle”) to modify the Credit Agreement dated April 26, 2016 entered into between the Company and Pinnacle, the Revolving Credit Note dated April 26, 2016 payable by the Company to Pinnacle and the term loans dated April 26, 2016 payable by the Company to Pinnacle. The Agreement with Pinnacle lowered the interest rate of the Virginia Real Estate Loan and the North Carolina Real Estate Loan to a fixed rate of 3.75% effective January 1, 2017 and resulted in lower monthly installment payments. On April 27, 2017, the Company entered into a Third Loan Modification Agreement with Pinnacle to modify the Credit Agreement dated April 26, 2016 entered into between the Company and Pinnacle and the term loans dated April 26, 2016. The Third Loan Modification Agreement revised the interest rates of the term loans and the applicable repayment installments and extended the maturity date. The fixed interest rate of each of the two term loans was revised to 3.95% from 3.75%, and the maturity date of the term loans was extended to May 1, 2024. All other terms of the term loans remain unaltered and remain in full force and effect. The real estate loans continue to be secured by a first priority lien on all of the Company’s personal property and assets, all money, goods, machinery, equipment, fixtures, inventory, accounts, chattel paper, letter of credit rights, deposit accounts, commercial tort claims, documents, instruments, investment property and general intangibles now owned or hereafter acquired by the Company and wherever located, as well as a first lien deed of trust on the Company’s real property. Long-term debt as of October 31, 201 7 and 2016 consists of the following:
|  | October 31, |
|  | 2017 |  |  | 2016 |
Virginia Real Estate Loan ($6.5 million original principal) payable in monthly installments of $31,812, including interest (at 3.95%), with final payment of $3,644,211 due May 1, 2024 |  | $ | 4,960,738 |  |  | $ | 5,165,785 |
North Carolina Real Estate Loan ($2.24 million original principal) payable in monthly installments of $10,963, including interest (at 3.95%), with final payment of $1,255,850 due May 1, 2024 |  |  | 1,709,595 |  |  |  | 1,780,209 |
Total long-term debt |  |  | 6,670,333 |  |  |  | 6,945,994 |
Less current installments |  |  | 250,726 |  |  |  | 294,214 |
Long-term debt, excluding current installments |  | $ | 6,419,607 |  |  | $ | 6,651,780 |
The Revolving Credit Note (“Revolver”) with Pinnacle provides the Company with a $7.0 million revolving line of credit (“Revolving Loan”) for the working capital needs of the Company. Under the Agreement and Revolver, Pinnacle provides the Company with one or more revolving loans in a collective maximum principal amount of $7.0 million. The Company may borrow, repay, and reborrow at any time or from time to time while the Revolving Loan is in effect. The Agreement with Pinnacle resulted in the lowering of the applicable margin in the Revolving Credit Note and established a floor on the interest rate for the Revolving Credit Note such that the rate will never be less than 2.50% per annum. The Revolving Loan accrues interest at LIBOR plus 2.50% (resulting in a 3.73% rate at October 31, 2017). The Revolving Loan is payable in monthly payments of interest only with principal and any outstanding interest due and payable at maturity. On February 28, 2017, the Company entered into a Second Loan Modification Agreement (the “Modification Agreement”) extending the maturity date of the Revolver to March 31, 2019, and removing certain previously existing provisions of the Revolving Loan that required reductions in availability originally contemplated to occur on February 28, 2017 and 2018. As a result, the collective maximum principal amount of the Revolving Loan will remain at $7.0 million. All other terms of the Revolving Loan remain unaltered and remain in full force and effect. Within the revolving loan limit of the Revolving Loan and the Modification Agreement, the Company may borrow, repay, and reborrow, at any time or from time to time until March 31, 2019. The Revolving Loan continues to be secured by a perfected first lien security interest on all assets, including but not limited to, accounts, as-extracted collateral, chattel paper, commodity accounts, commodity contracts, deposit accounts, documents, equipment, fixtures, furniture, general intangibles, goods, instruments, inventory, investment property, letter of credit rights, payment intangibles, promissory notes, software and general tangible and intangible assets owned now or later acquired. The Revolving Loan is also cross-collateralized with the Company’s real property. As of October 31, 201 7, the Company had $5.7 million of outstanding borrowings on its Revolving Loan and $1.3 million in available credit. As of October 31, 2016 the Company had $5.0 million of outstanding borrowings on its Commercial Loan (predecessor to the Revolving Loan with Pinnacle) and $2.0 million in available credit. The aggregate maturities of long-term debt for each of the five years subsequent to October 31, 2017 are: $250,726 in fiscal year 2018, $5,960,953 in fiscal year 2019, $271,598 in fiscal year 2020, $282,678 in fiscal year 2021 and $294,208 in fiscal year 2022.

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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