Note 6 - Long-term Debt

12 Months Ended

Jan. 28, 2019

OTE

— LONG-TERM DEBT

In recent years, the Company has financed operations and property acquisitions through a combination of cash on hand, bank borrowings, real estate mortgages and loans from the principal shareholders.

Real Estate Mortgages

The Company finances certain restaurant properties with real estate mortgages. As of

January 28, 2019,

the Company had

six

properties mortgaged for total of

$2.5

million. As of

January 29, 2018,

the Company had

six

properties mortgaged for total of

$2.8

million. Note Payable to Officer

During the fiscal year ended

January 25, 2008,

the Company borrowed approximately

$1,400,000

from Mr. Wheaton, a principal shareholder, officer and director of the Company, for working capital requirements. The loan originally bore interest at

8.5%.

June 2008,

the Company borrowed an additional

$592,000

from Mr. Wheaton under the same terms. This resulted in an increase in the note balance from

$1,400,000

$1,992,000,

the balance as of

January 28, 2019

and

January 29, 2018,

respectively. The Company expensed

$195,000

to Mr. Wheaton for interest during Fiscal

2019

and Fiscal

2018.

The principal balance and any unpaid interest under the Mr. Wheaton note was due and payable in full on

June 5, 2012.

The loan was subsequently modified as a result of the Company’s bankruptcy filing and pursuant to the approved Bankruptcy Plan the principal balance was

not

eligible to be repaid until all obligations owed to other creditors have been fully satisfied. Interest accrued on the principal amount of

$1,992,000

and the interest of

$197,000

from

September 28, 2011

December 7, 2016

at the Bankruptcy Plan rate. When the Bankruptcy Court entered into a Final Decree and Order Closing the Bankruptcy Case of Star Buffet, Inc. on

December 7, 2016

the Company reverted back to the original interest rate of

8.5%.

Mortgages described in the following table are secured by underlying real estate. Certain mortgages have interest rates that will change from fixed to variable in a future year.

Real Estate Mortgages							Current			Interest
	January 28,			January 29,			Maturity	Monthly		Rate
Lender	2019			2018			Date	Payment		(fixed)

J.I.L Kingman, LLC	$	284,000		$	345,000		7/1/22	$	5,304		6.0	%
Farmers Bank & Trust Company		515,000			530,000		4/13/33		4,274		5.5	%
Dalhart Federal Savings & Loan		355,000			367,000		8/1/35		2,866		6.25	%
Dalhart Federal Savings & Loan		399,000			412,000		11/1/35		3,201		6.25	%
Fortenberry's Beef of Magee, Inc. (1)		244,000			265,000		4/5/19		3,231		7.0	%
Hurt Development, LLC		532,000			560,000		5/1/31		5,063		6.0	%
Robert E. Wheaton		156,000			308,000		11/9/19		14,839		11.5	%
Total Real Estate Mortgages	$	2,485,000		$	2,787,000
Other Debt
Other Debt - Miscellaneous	$	253,000		$	269,000
Note Payable to Officer		1,992,000			1,992,000
Total Other Debt	$	2,245,000		$	2,261,000
TOTAL DEBT	$	4,730,000		$	5,048,000
Less Current Maturities		(570,000	)		(338,000	)
Less Note Payable to Officer		(1,992,000	)		(1,992,000	)
Long Term Debt, Net of Current Maturities and Note Payable to Officer	$	2,168,000		$	2,718,000

(

)

Refinanced for

five

years in

April 2019.

Real estate mortgages, other debt and note payable to officer matures in fiscal years ending after

January 28, 2019

as follows:

Fiscal Year
2020	$	570,000
2021		166,000
2022		186,000
2023		188,000
2024		113,000
Thereafter		3,507,000
Total	$	4,730,000

STAR BUFFET INC 10-K