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7. LONG TERM DEBT

12 Months Ended

Dec. 31, 2018

Long-term debt consists of:

	December 31,
	2018			2017

Northwest Farm Credit Services Loan #4		1,483,733			1,597,002
Northwest Farm Credit Services Loan #5		5,333,195			5,605,725
Toyota Credit Corporation		23,906			35,381
		6,840,834			7,238,108
Debt issuance costs		(172,225	)		(185,473	)
Current portion of long-term debt		(417,293	)		(397,251	)

	$	6,251,316		$	6,655,384

The Company has two long term debt agreements with Farm Credit Services with an aggregate outstanding balance of $6,816,928 and $7,202,727 as of December 31, 2018 and 2017, respectively. The outstanding loans require monthly principal and interest payments of $62,067 for the life of the loans, at annual fixed interest rates of 4.75% and 5.21%, and with maturity dates of 2028 and 2032. The general purposes of these loans were to make capital improvements to the winery and vineyard facilities.

The loan agreements contain covenants, which require the Company to maintain certain financial ratios and balances. At December 31, 2018, the Company was in compliance with these covenants. In the event of future noncompliance with the Company’s debt covenants, FCS would have the right to declare the Company in default, and at FCS’ option without notice or demand, the unpaid principal balance of the loan, plus all accrued unpaid interest thereon and all other amounts due shall immediately become due and payable.

The Company has an outstanding loan with Toyota Credit Corporation maturing in February 2021, at zero interest, with an outstanding balance of $23,906 and $35,381 as of December 31, 2018 and 2017, respectively. The purpose of this loan was to purchase a vehicle.

Future minimum principal payments of long-term debt mature as follows for the years ending December 31:

2019		417,293
2020		438,377
2021		450,039
2022		472,418
2023		496,968
Thereafter		4,565,739

	$	6,840,834

The weighted-average interest rates on the aforementioned borrowings for the fiscal years ended December 31, 2018 and 2017 was 5.09% and 5.09% respectively.