| Long-Term Debt and Other Short-Term Borrowings |
Note 11. Long-Term Debt and Other Short-Term Borrowings
Long term debt and other short-term borrowings consisted of the following at March 31, 2023 and December 31, 2022:
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March 31,
2023
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December 31,
2022
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Long-term debt: |
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On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Petroleum, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $2,241,758, bearing interest at 6%, payable interest only through July 24, 2021, then on August 24, 2021, payable in monthly installments of principal and interest of $43,438, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Petroleum, LLC and a guarantee of payment by Viking. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $1,430,320 at March 31, 2023 and $12,224 at December 31, 2022. |
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243,305 |
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1,766,422 |
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On July 24, 2019, the Company through its wholly owned subsidiary, Mid-Con Drilling, LLC, executed a promissory note payable to Cornerstone Bank in the amount of $1,109,341, bearing interest at 6%, payable interest only through July 24, 2021, then on August 24, 2021, payable in monthly installments of principal and interest of $21,495, with a final payment due on a maturity date of July 24, 2025. The note is secured by a first mortgage on all of the assets of Mid-Con Drilling, LLC and a guarantee of payment by Viking. On March 10, 2023, the promissory note was amended to include a conversion feature and to include Viking as an additional obligor. See Note 13. The balance shown is net of unamortized discount of $661,816 at March 31, 2023 and $12,190 at December 31, 2022. |
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111,182 |
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813,571 |
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On July 1, 2020, the Company received a loan of $150,000 from the U.S. Small Business Administration. The loan bears interest at 3.75% and matures on July 28, 2050. The loan is payable in monthly installments of $731 with the remaining principal and accrued interest due at maturity. Installment payments were originally due to start 12 months from the date of the note but the date was extended to January 2023. Accrued interest from the original installment due date to January 2023 was capitalized to the loan principal balance. |
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164,010 |
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163,623 |
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Total long-term debt |
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518,497 |
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2,743,616 |
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Less current portion and debt discount |
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(96,926 |
) |
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(637,335 |
) |
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$ |
421,571 |
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$ |
2,106,281 |
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Principal maturities of long-term debt for the next five years and thereafter are as follows:
Twelve-month period ended March 31, |
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Principal |
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Unamortized Discount |
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Net |
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2024 |
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$ |
652,909 |
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$ |
(555,983 |
) |
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$ |
96,926 |
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2025 |
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693,208 |
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(590,355 |
) |
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102,853 |
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2026 |
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1,109,052 |
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(945,797 |
) |
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163,255 |
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2027 |
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3,069 |
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- |
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3,069 |
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2028 |
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3,186 |
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- |
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3,186 |
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Thereafter |
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149,208 |
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- |
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149,208 |
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$ |
2,610,632 |
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$ |
(2,092,135 |
) |
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$ |
518,497 |
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Bank Credit Facility
Simson-Maxwell has an operating credit facility with TD Bank, secured by accounts receivable and inventory, bearing interest at prime plus 2.25% on Canadian funds up to CAD $5,000,000 and the bank’s US dollar base rate plus 2.25% on US funds, plus a monthly administration fee of CAD 500. The balance outstanding under this credit facility is CAD $4,638,917 ($3,429,485) and CAD $4,139,785 ($3,111,350) as of March 31, 2023 and December 31, 2022, respectively.
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