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NOTES PAYABLE AND CAPITAL LEASE OBLIGATION
12 Months Ended
Feb. 29, 2012
Notes to Financial Statements  
NOTES PAYABLE AND CAPITAL LEASE OBLIGATION

 

NOTE 6:    NOTES PAYABLE AND CAPITAL LEASE OBLIGATION

 

Obligations outstanding as of February 29, 2012 and February 28, 2011 consisted of the following:

 

       
    February 29,     February 28,  
    2012     2011  
Line of credit with a bank with a maximum borrowing of $100,000 is collateralized by all business assets. Any principal amounts outstanding accrue interest at the bank's index rate (approximately 5.00% as of February 28, 2011) plus 2% per annum. Automatically renews every year.     $ -     $ 50,000  
                 
Capital lease for equipment requiring monthly payments of principal and interest of $491 through October 2016 bearing interest at an annual rate of 7.5%     22,922          
                 
Bagging machine financed for production. Lease term is 27 months at an annual interest rate of 33% and was due January 2011.     -       3,037  
      22,922       53,037  
  Less current portion     (4,331)       (53,037)  
  Long term portion   $ 18,591     $ -  

 

As of February 29, 2012, the Company has a separate line of credit with a bank for borrowings up to $300,000, with no outstanding borrowings as of February 29, 2012, however the line will expire on June 1, 2012 and the Company has no intent to renew.

 

Future maturities of the capital lease obligation as of February 29, 2012 are $4,331 in 2013, $4,667 in 2014, $5,030 in 2015, $5,420 in 2016 and $3,474 in 2017.