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Note 13 - Debt
 12 Months Ended
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.