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Note 13 - Debt | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Long-term Debt [Text Block] |
( 13 ) | Debt
Long-term obligations consists of the following (in thousands):
|  | December 31, |
|  | 2020 |  |  | 2019 |
Current: |  |  |  |  |  |  |  |
Finance lease obligation, current portion |  | $ | 393 |  |  | $ | 684 |
PPP Loan, current portion |  |  | 1,186 |  |  |  | 0 |
Current portion of long term debt and finance lease obligations |  | $ | 1,579 |  |  | $ | 684 |
Long Term: |  |  |  |  |  |  |  |
Finance lease obligations |  | $ | 1,927 |  |  | $ | 2,351 |
PPP Loan |  |  | 2,372 |  |  |  | 0 |
Note payable – related party |  |  | 6,500 |  |  |  | 6,500 |
Less unamortized debt issuance and modification costs |  |  | (23 | ) |  |  | (37 | )
Long term debt and finance lease obligations, net of unamortized debt costs |  | $ | 10,776 |  |  | $ | 8,814 |
The weighted average interest rate for outstanding borrowings at December 31, 2020 and 2019 was 5.5% and 8.0%, respectively. The Company had no capitalized interest in 2020 or 2019. Interest paid during the years ended December 31, 2020 and 2019 totaled approximately $369,000 and $526,000, respectively. Paycheck Protection Program During the second quarter of 2020, the Company secured a $3,558,000 term loan (the “PPP Loan”) with BMO Harris Bank National Association (“BMO”). Proceeds from the PPP Loan have been used to retain workers and maintain payroll and make lease and utility payments. The PPP Loan is evidenced by a promissory note in favor of BMO, as lender, with a principal amount of $3,558,000 that bears interest at a fixed annual rate of 1.00%. The term of the PPP Loan is two years, with no payments due under the PPP Loan until July 2021, although interest will accrue during the deferment period. Beginning July 2021, the Company will pay equal monthly installments of principal and interest in the amount necessary to fully amortize the PPP Loan through the Maturity Date, less any amount of potential forgiveness. Recent legislation under the Paycheck Protection Program Flexibility Act of 2020 provides for an extension of the maturity date up to five years, an extension of the principal and interest deferral period to the date of a loan forgiveness determination and modifications to the debt amortization schedule if the Company and BMO reach an agreement on modified terms. The PPP Loan may be accelerated upon the occurrence of an event of default. The PPP Loan is unsecured and guaranteed by the U.S. Small Business Administration (the “SBA”). The Company may apply for forgiveness of the PPP Loan, with the amount which may be forgiven equal to the sum of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company during the 24 -week period beginning upon receipt of funds from the PPP Loan, subject to limitations and calculated in accordance with the terms of the CARES Act. Any forgiveness of the PPP Loan shall be subject to approval of the SBA and will require the Company and BMO to apply to the SBA for such treatment in the future. During the fourth quarter of 2020, the Company applied for forgiveness for the total amount due on the PPP Loan, but no assurance can be provided that we will obtain forgiveness of the PPP Loan in whole or in part. As a result, the Company is taking the approach that a portion of the PPP Loan is short-term and a portion is long-term, and has reflected such borrowing on the Company's consolidated balance sheet, as appropriate. The Company will record any amounts of the loan that are forgiven as a gain on extinguishment in the period in which legal release is received. Note Payable – Related Party The Company has received the benefit of cash infusions from Gill Family Capital Management, Inc. (“GFCM”) in the form of secured promissory note obligations totaling $6,500,000 in principal as of December 31, 2020 and 2019. GFCM is an entity controlled by the Company's Chairman, President and Chief Executive Officer, Jeffrey T. Gill, and one of our directors, R. Scott Gill. GFCM, Jeffrey T. Gill and R. Scott Gill are significant beneficial stockholders of the Company. The promissory note bears interest at a rate of 8.0% per year through March 31, 2019 and, thereafter is reset on April 1 st of each year, at the greater of 8.0% or 500 basis points above the five -year Treasury note average during the preceding 90 -day period, in each case, payable quarterly. The note allows for up to an 18 -month deferral of payment for up to 60% of the interest due on the portion of the notes maturing in April of 2021 and 2023. During the first quarter of 2020, the Company provided notice to GFCM of its intention to elect to defer the specified portion of the interest payments due beginning on April 6, 2020. During the fourth quarter of 2020, the Company amended its secured promissory note obligation with GFCM to, among other things: (i) extend the maturity dates by one year for (a) $2,500,000 of the obligation from April 1, 2021 to April 1, 2022, ( b) $2,000,000 of the obligation from April 1, 2023 to April 1, 2024 and (c) the balance of the obligation from April 1, 2025 to April 1, 2026; ( ii) extend the allowance for up to an 18 -month deferral of payment for up to 60% of the interest due on the notes maturing in April of 2022 and 2024; (iii) provide for the reinstatement of a first security interest in the assets of Sypris Electronics, LLC; and (iv) provide for payment on January 4, 2021 of any accrued but unpaid interest for 2020. All other terms of the promissory note, as amended, remain in place. Obligations under the promissory note are guaranteed by all of the subsidiaries and are secured by a first priority lien on substantially all assets of the Company, including those in Mexico. Finance Lease Obligations On March 9, 2016, the Company completed the sale of its 24 -acre Toluca property for 215,000,000 Mexican Pesos, or approximately $12,182,000 in U.S. dollars. Simultaneously, the Company entered into a ten -year lease of the 9 acres and buildings currently occupied by the Company and needed for its ongoing business in Toluca. As a result of the Toluca Sale-Leaseback, the Company has a finance lease obligation of $2,139,000 for the building as of December 31, 2020. In February 2019, the Company entered into a 60 -month capital lease for $269,000 for new machinery at its Sypris Technologies facility in the U.S. The balance of the finance lease obligation as of December 31, 2020 was $181,000.

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