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Note 7 - Notes Payable
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3 Months Ended |
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Nov. 30, 2011
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| Debt Disclosure [Text Block] |
7. NOTES
PAYABLE
On
November 30, 2011, notes payable consists of the
following:
During
the period July 2009 to February 2010, the company had
secured from existing shareholders a $150,000 bridge loan
at an annual interest rate of nine percent (9%) which
matured on September 8, 2009 (the "Bridge Loan") and
$1,214,000 of the term loan at an annual interest rate of
nine percent (9%) to mature on or about September 10, 2010
(the "Term 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. The Term Loan amount has since been
reduced to $864,000 (excluding interest) and the due date
of the loan was extended to December 31,
2011. As of November 30, 2011, the total amount
due under the Bridge Loan including interest is $178,110
and the total amount due under the Term Loan including
interest is $1,010,822. Also reported under Notes
Payable is a $250,000 short term loan from KeHE advanced in
May 2011 (See Note 9-Long Term Debt). The
Company has defaulted on repayment of the Term Loan by the
maturity date, however, has the full support of each of the
lenders who have agreed to forbear until such time as the
Company completes a secondary offering. In
November 2011, the company obtained a short term loan of
$150,000 from a lender for purposes of obtaining advance
product for seasonal sales. The loan was to be
repaid in three installments before December 31,
2011. Interest accrued at eight percent (8%) and
is to be repaid no later than January 31, 2012.
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