Quarterly report pursuant to Section 13 or 15(d)

Loans and Notes Payable

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Loans and Notes Payable
6 Months Ended
Apr. 30, 2017
Debt Disclosure [Abstract]  
Loans and Notes Payable

NOTE 9 – LOANS AND NOTES PAYABLE

 

Loans and notes payable consisted of the following at April 30, 2017 and October 31, 2016:

 

 

    2017     2016  
On February 21, 2008 the Company issued a convertible senior secured debenture with a face value of $12 million (“Secured Debentures”). The Secured Debentures under its original terms matured on February 21, 2015 and has been subject to a series of extensions, most recently to May 1, 2018. The Secured Debentures accrued annual interest of 8.5%.                
                 
On April 28, 2017, the Company repaid in full all outstanding amounts due under the Secured Debentures. The Secured Debentures were paid using the $8,000,000 proceeds of the recently concluded Secured Loan from HSBC Bank NA (see below for further information) and the accrued and unpaid interest under the Secured Debentures of approximately $1,133,261 was satisfied through the issuance to the holder of the Secured Debentures of 1,000 shares of Series C Convertible Preferred Stock, par value $0.001, with a stated value of $1,000 each (the “Preferred Stock”). The Company paid the remaining balance in cash.   $ -     $ 9,744,123  
                 
Secured note payable to HSBC with interest payable at 4.56% per annum on the 28th day of each month and the Company is required to make monthly principal and interest payment of $149,350. Additionally, within 150 days of the end of each fiscal year the Company is required to pay an additional amount of $700,000 which reduces the principal outstanding under the Secured Loan. The maturity date is April 28, 2022. However, based on the payment scheduled in the Loan Agreement, it is expected that the Loan will be repaid in full in approximately 45 months.     8,000,000           

 

One of the subsidiaries has an unsecured working capital loan from the CEO of the Group for working capital. The note is due on May 31st, 2018 and carries an interest rate of 4.5%     1,000,000       -  
                 
In the fiscal year ended 2016, the Company had a 10 year secured mortgage for $527,675, secured by a building in the UK that required monthly principal payments of $4,018 along with interest at 2.75%, and was due to mature in October 2023. The conversion rate varied according to exchange rates fluctuations. This mortgage was secured by our building, located in Portland UK. This mortgage was paid in full on December 13, 2016.     -       281,801  
                 
Total     9,000,000       10,025,924  
Less: current portion     (2,163,197 )     (846,994 )
Total Long-Term Loans and Notes Payable   $ 6,836,803     $ 9,178,930