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LONG-TERM DEBT
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
LONG-TERM DEBT

NOTE 7 – LONG-TERM DEBT

 

Long-term debt consists of the following at December 31, 2021 and 2020:

 

   December 31, 
   2021   2020 
         
Northwest Farm Credit Services Loan #4  $1,109,860   $1,240,453 
Northwest Farm Credit Services Loan #5   4,425,236    4,743,819 
Toyota Credit Corporation   -    956 
Long-Term Debt, Gross   5,535,096    5,985,228 
Debt issuance costs   (132,483)   (145,731)
Current portion of long-term debt   (472,420)   (450,040)
           
Long-Term Debt  $4,930,193   $5,389,457 

 

The Company has two long term debt agreements with Farm Credit Services (“FCS”) with an aggregate outstanding balance of $5,535,096 and $5,984,272 as of December 31, 2021 and 2020, 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, 2021, 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 had an outstanding loan with Toyota Credit Corporation which matured and was paid in full in February 2021, at zero interest, with an outstanding balance of $0 and $956 as of December 31, 2021 and 2020, respectively.

 

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

 

      
2022  $472,420 
2023   496,970 
2024   522,798 
2025   549,971 
2026   578,559 
Thereafter   2,914,378 
      
Future minimum principal payments of long-term debt total  $5,535,096 

 

The weighted-average interest rates on the aforementioned borrowings for the fiscal years ended December 31, 2021 and 2020 was 5.12% and 5.11% respectively.