RELATED PARTY TRANSACTIONS

3 Months Ended

Apr. 30, 2012

RELATED PARTY TRANSACTIONS [Text Block]

17. RELATED PARTY TRANSACTIONS

At April 30, 2012, all of Canal’s Long-Term Debt was held by the company’s Chief Executive Officer. The notes pay interest at a rate of 10% per annum and come due May 15, 2015. Canal has incurred interest expense on these notes of approximately $45,000 and $42,000 for the six month periods ended April 30, 2012 and 2011, respectively. At various times during fiscal 2012 the holder of these notes agrees to defer interest payments. This deferred interest liability accrues additional interest at a rate of 10% per annum, while outstanding and is repaid as funds become available. As of April 30, 2012, the balance due under these notes was $564,000 all of which is classified as long-term debt related party. Accrued interest of $84,600 and $84,700 is included in salaries and interest payable-officers at April 30, 2012 and October 31, 2011, respectively.