| Interest Advancesand Promissory Notes Payable |
3. Interest, Advances and Promissory Notes Payable
a) Interest payable
A summary of the interest payable activity is as follows:
|
Balance, December 31, 2012
|
|
$
|
1,569,321
|
|
|
Interest incurred on promissory notes payable
|
|
|
505,571
|
|
|
Other
|
|
|
125
|
|
|
Balance, December 31, 2013
|
|
|
2,075,017
|
|
|
Interest incurred on judgement against Company (note 6(b))
|
|
|
29,583
|
|
|
Interest incurred on promissory notes payable
|
|
|
128,893
|
|
|
Balance, March 31, 2014 (unaudited)
|
|
$
|
2,233,493
|
|
Interest payable is to the following:
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2014
(unaudited)
|
|
|
2013
|
|
|
Relatives of directors
|
|
$
|
1,123,080
|
|
|
$
|
1,046,523
|
|
|
Non-related parties
|
|
|
1,110,413
|
|
|
|
1,028,494
|
|
|
|
|
$
|
2,233,493
|
|
|
$
|
2,075,017
|
|
Historically, all interest payable incurred is from interest incurred at the stated rate of promissory notes issued by the Company. The payment terms, security and any interest payable are based on the underlying promissory notes payable that the Company has outstanding.
b) Advances payable
A summary of the advances payable activity is as follows:
|
Balance, December 31, 2012
|
|
$
|
105,613
|
|
|
Advances accrued
|
|
|
30,000
|
|
|
Advances repaid from proceeds of line of credit
|
|
|
(20,000
|
)
|
|
Transfer of balance to accounts payable
|
|
|
(115,613
|
)
|
|
Balance, December 31, 2013 and March 31, 2014 (unaudited)
|
|
$
|
-
|
|
c ) Promissory notes payable:
|
Promissory notes payable
|
|
March 31,
2014
(unaudited)
|
|
|
December 31,
2013
|
|
|
|
|
|
|
|
|
|
|
Unsecured promissory notes payable to unrelated lenders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i.
|
Interest at 1% per month, repayable on March 31, 2009, due on
demand
|
|
$
|
450,000
|
|
|
$
|
450,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ii.
|
Interest at 1% per month, with $50,000 repayable on December
31, 2004, $75,000 repayable on August 18, 2007, $75,000
repayable on November 19, 2007 and the balance due on demand.
All are due on demand, accruing interest at the same rate.
|
|
|
887,455
|
|
|
|
887,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iii.
|
Interest at 0.625% per month, with $50,000 repayable on October
5, 2004, $40,000 repayable on December 31, 2004, and $60,000
repayable on July 28, 2006, all due on demand
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iv.
|
Non-interest-bearing, repayable on July 17, 2005, due on demand
|
|
|
270,912
|
|
|
|
270,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
v.
|
Non-interest-bearing loan repayable at $25,000 per month
beginning October 2009, none repaid to date
|
|
|
310,986
|
|
|
|
310,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
vi.
|
Interest at 0.667% per month due January 15, 2011, none repaid to
date
|
|
|
125,000
|
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promissory notes payable, secured by a guarantee from a director and
relative of a director, bearing interest at 1% per month, with $200,000
repayable on July 31, 2003, all due on demand
|
|
|
230,000
|
|
|
|
230,000
|
|
|
Total Arm's Length Promissory Notes
|
|
$
|
2,424,353
|
|
|
$
|
2,424,353
|
|
d) Promissory notes payable to related parties:
|
Relatives of Directors
|
|
March 31, 2014
(unaudited)
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
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Promissory notes payable to relatives of directors
collateralized by a general security agreement on all the
assets of the Company, due on demand:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i.
|
Interest at 1% per month
|
|
$
|
845,619
|
|
$
|
845,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ii.
|
Interest at 1.25% per month
|
|
|
51,347
|
|
|
51,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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iii.
|
Interest at the U.S. bank prime rate plus 1%
|
|
|
500,000
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Promissory notes payable, unsecured, to relatives of a director, bearing
interest at 1% per month, due on demand
|
|
|
1,465,000
|
|
|
1,465,000
|
|
|
Total Related Party Promissory Notes
|
|
$
|
2,861,966
|
|
$
|
2,861,966
|
|
e) Interest expense
During the three months ended March 31, 2014, the Company incurred interest expense of $327,259 (2013: $301,247) substantially as follows:
|
-
|
$158,476 (2013: $126,393) incurred on promissory notes payables as shown in note 3(c);
|
|
-
|
$170,627 (2013: $125,884) incurred on lines of credit payable
|
|
-
|
($2,300) (note 6(b)) (2013: $48,478) incurred from the calculation of imputed interest on accounts payable outstanding for longer than one year, advances payable and promissory notes payable, which had no stated interest rate;
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