RELATED PARTY TRANSACTIONS

12 Months Ended

Oct. 31, 2011

RELATED PARTY TRANSACTIONS [Text Block]

18. RELATED PARTY TRANSACTIONS

At October 31, 2011, all of Canal’s Long-Term Debt is held by the company’s Chief Executive Officer. After year end management negotiated a three year extension of these notes which pay interest at a rate of 10% per annum and come due May 15, 2015. Canal has incurred interest expense on these notes of $85,000 and $126,000 for the years ended October 31, 2011 and 2010, respectively. At various times during fiscal 2011 certain holders of these notes agreed to defer interest payments. This deferred interest liability accrued additional interest at a rate of 10% per annum, while outstanding and will be repaid as funds become available in fiscal 2012. As of October 31, 2011, the balance due under these notes was $847,000 all of which is classified as long-term debt related party.