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Note 6 - Loan Payable | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Debt Disclosure [Text Block] |
6. | Loan Payable
The Company secured a non-revolving credit line for up to $3,000,000 (the “Original Line”) with a bank, which closed on March 21, 2018. There was an interest only phase for the first eight months of the loan (“Interest-Only Phase”). On January 24, 2019, the Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of January 20, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of January 20, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”). The Company amended and extended the Original Line which included extending the maturity date of the Interest-Only Phase to the earlier of April 30, 2020 or upon drawing down a total of $3,000,000 after which it automatically converts to a permanent loan maturing on the earlier of April 30, 2027 or 84 months after conversion to a permanent loan (the “Permanent Phase”). The interest rate during the Interest-Only Phase is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points ( 1% rounded up to the nearest 1/8 percent), but in no event less than the initial interest rate in effect on the closing date ( 6.5% ). During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7 -year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points ( 2% ) rounded up to the nearest 1/8 percent, plus principal based on a 20 -year amortization period. The Permanent Phase interest rate currently would be 3.25%. The first advance of $1.1 million was used to finance the tenant improvements pursuant to the amended and expanded signed lease with Stony Brook University Hospital (“SBU Hospital”). An additional advance of $1.1 million was drawn on March 29, 2019 to finance the buildouts on leases signed through December 31, 2018. The balance of the loan can be drawn upon for improvements to be completed by the Company, as landlord, pursuant to future leases with the State University of New York or institutions affiliated with it (or other tenants subject to the bank’s approval) anytime during the Interest-Only Phase. To secure access to additional working capital through the final sale date of the Flowerfield industrial buildings, the Company secured a second loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $3,000,000, which closed on January 24, 2019. There is an interest only phase for the first twenty-four months of the loan (“Interest-Only Phase”) after which it automatically converts to a permanent loan maturing on January 20, 2028 ( 84 months after conversion to a permanent loan) (the “Permanent Phase”). The interest rate during the Interest-Only Phase shall be a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points ( 1% rounded up to the nearest 1/8 percent), but in no event less than the initial interest rate in effect on the closing date ( 6.5% ). During the Permanent Phase, the Company will pay interest at a fixed rate based on the Federal Home Loan Bank rate for a 7 -year maturity as made available by the Federal Home Loan Bank of New York plus a margin of 200 basis points ( 2% ) rounded up to the nearest 1/8 percent, plus principal based on a 20 -year amortization period. Permanent Phase interest rate currently would be 3.25%. Two advances of $1,000,000 and $500,000 were drawn on September 30 and December 31, 2019, respectively. The balance of $1,419,932, net of closing costs of $80,068, is available to be drawn down. Both lines are secured by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases. As of December 31, 2019, the Company is in compliance with the loan covenants. The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain secured by the subdivided industrial park lot only. The loan payable matures upon the earlier of the sale of the Flowerfield Industrial Park or as follows:
Years Ending December 31, |  |  |  |
2020 |  | $ | 66,000 |
2021 |  |  | 138,630 |
2022 |  |  | 143,204 |
2023 |  |  | 147,928 |
2024 |  |  | 152,807 |
Thereafter |  |  | 3,131,499 |
Total |  | $ | 3,780,068 |
To secure access to additional working capital through the final sale date of the Cortlandt Property lots (“Lots”), the Company, through its subsidiary GSD Cortlandt, LLC (“GSD Cortlandt”) signed a commitment letter for a third loan evidenced by a non-revolving business line of credit agreement and promissory note with the Original Line bank for up to $2,500,000, which is scheduled to close in the second quarter of 2020. The term is 24 months, with an option to extend for an additional 12 months. The interest rate is a variable rate equal to the daily highest prime rate published by the Wall Street Journal plus 100 basis points ( 1% ), rounded up to the nearest 1/8 percent), but in no event less than four and three quarters percent ( 4.75% ). The ability to draw upon the line is limited to certain amounts, contingent upon whether GSD Cortlandt delivered signed contracts for one or both Lots. The line is secured by the Cortlandt property (approximately 14 acres) and cross collateralized by approximately 31.8 acres of the Flowerfield Industrial Park including the related buildings and leases. The Company anticipates modifying the terms of the loans following the completion of the subdivision so that the loans remain cross collateralized by the subdivided industrial park lot only. Effective February 27, 2020, the Company entered into an engagement letter with a national real estate finance firm (the “Firm”) pursuant to which the Firm agreed to assist the Company secure financing with prospective lenders, and the Company agreed to pay the Firm an origination fee equal to one percent ( 1% ) of any loan secured by the Company with any lender introduced to the Company by the Firm other than designated excluded lenders with whom the Company has a preexisting relationship. The intended use of this facility is to finance tenant improvements on new leases, if any, and a reserve for additional working capital.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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