| Debt Disclosure [Text Block] |
8.
NOTES
PAYABLE and CURRENT PORTION OF LONG TERM
DEBT
Notes payable
and current portion of long-term debt at May 31 consisted
of:
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2012
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2011
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Bridge
Loan, (a)
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$
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150,000
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$
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150,000
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Term
Loan, (b)
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834,000
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894,000
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KeHE
Loan-current portion, (c)
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250,000
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250,000
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Total
Notes payable
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$
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1,234,000
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$
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1,294,000
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(a)
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In
July 2009, we secured from an existing
shareholder a $150,000 bridge loan at an annual
interest rate of nine percent (9%) which matured on
September 8, 2009 (the "Bridge
Loan"). The Company has defaulted on
repayment of the Bridge Loan by the maturity date,
however, the lender has agreed to forbear
collection until such time as the Company completes
a secondary offering. As of May 31,
2012,and May 31, 2011, the total amount due under
the Bridge Loan including interest is $184,878 and
$171,341, respectively.
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(b)
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During
the period July 2009 to February 2011, we
secured from several existing shareholders a term
loan in the aggregate amount of $1,214,000 at an
annual interest rate of nine percent (9%) to mature
on or about September 10, 2010 (the "Term
Loan"). The Term Loan amount has since
been reduced to $834,000 (excluding interest) and
the due date of the loan was extended to December
31, 2011. The Company has defaulted on
repayment of the Term Loan by the maturity date,
however, all but one lender has agreed to forbear
collection until such time as the Company completes
a secondary offering. As of May 31, 2012
and May 31, 2011, the total amount due under the
Term Loan including interest is $1,017,169 and
$1,002,389 respectively.
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(c)
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Also
reported under Notes Payable is a $250,000 short
term loan from KeHE advanced in May 2011 (See Note
13-Long Term Debt). The Company
has defaulted on repayment of the short term loan
by the maturity date, however, has the full support
of KeHE which has agreed to forbear until such time
as the Company completes a secondary
offering. As of May 31, 2012 and May 31,
2011, the current portion of
the $250,000 loan from KeHE, net of
unamortized debt discount is $0
and $47,744, respectively.
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In
November 2011, we obtained a short term loan of $150,000
from a lender for purposes of obtaining advance product for
seasonal sales. The loan was repaid in three
installments before December 31, 2011 as well as interest
in the amount of $756.16 representing eight percent (8%)
interest over the course of the loan.
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