| Notes and Loans Payable |
NOTE 13 - NOTES AND LOANS PAYABLE
A summary of notes payable at April
30, 2011 and October 31, 2010 is as follows:
| |
|
April 30, 2011 |
|
|
October 31, 2010 |
|
| The Company has a secured convertible debenture for $12M with a life of 7 years from February 26, 2008, maturing at 130% of face value, and with interest payable every six months, starting in February 2009, at a rate of 8.5%; During the term, the debentures are convertible into our common stock at the option of the Noteholders at a conversion price of $1.05. We may also force the conversion of these Notes into our common stock after two years in the event that we obtain a listing on a national exchange and our stock price closes on 40 consecutive trading days at or above $2.50 between the second and third anniversaries of this agreement; $2.90 between the third and fourth anniversaries of this agreement; and $3.50 after the fourth anniversary of this agreement or where the daily volume weighted average price of our stock as quoted on OTCBB or any other US National Exchange on which our securities are then listed has, for at least 40 consecutive trading days closed at the agreed price. The Company has failed to comply with certain covenants contained in the debenture agreement. |
|
$ |
13,879,357 |
|
|
$ |
13,972,214 |
|
| |
|
|
|
|
|
|
|
|
| Between 2010 and 2011, our subsidiaries entered into a series of individual agreements for working capital. Pursuant to the terms of these various agreement the Company repaid the loan plus 20% of the amount borrowed. |
|
|
1,665,082 |
|
|
|
451,302 |
|
| |
|
|
|
|
|
|
|
|
| The Company, through its UK subsidiary Coda Octopus Products Ltd has a 7 year unsecured loan note for £100,000; interest rate of 12% annually; repayable at borrower’s instigation or convertible into common stock when the share price reaches $3. |
|
|
166,648 |
|
|
|
160,350 |
|
| |
|
|
|
|
|
|
|
|
| Total |
|
|
15,711,087 |
|
|
|
14,583,866 |
|
| |
|
|
|
|
|
|
|
|
| Less current portion |
|
|
15,544,439 |
|
|
|
14,423,516 |
|
| |
|
|
|
|
|
|
|
|
| Total |
|
$ |
166,648 |
|
|
$ |
160,350 |
|
On March 16, 2009, the Company and the
holder of the secured convertible debenture (“the Noteholder”) entered into a Cash Control Framework Agreement, pursuant
to which it is assumed that, subject to the Company being fully compliant with the terms of this agreement and those set out in
the Transaction Documents entered into between the Company and the Noteholder on February 21, 2008, no adverse actions will be
taken by the Noteholder. The agreement provides, among other things, for the placement of approximately $2.15 million into a segregated
cash account. Under the terms of the agreement, we may request the release of funds from the account from time to time for working
capital purposes, subject to the Noteholder’s consent and agreed upon terms and conditions.
On or around August 23, 2010, the Company
failed to make a scheduled interest payment under the senior convertible debentures. This constituted an event of default under
the Loan Note Instrument and the Cash Control Framework Agreement resulting in the Noteholder making a demand for the special purpose
amount of $6,000,000 which was advanced to the Company for an approved acquisition under the original Loan Note Instrument and
for which it had failed to make.
See Note 15 of the Unaudited Condensed
Consolidated Financial Statement for current information on the current status of Notes and Loan Payable reported in this Note
13.
|