6. SHORT-TERM LOANS

6 Months Ended

May 31, 2014

Debt Disclosure [Abstract]

6. SHORT TERM LOAN

	As at November 30, 2013		Advances and Reclassification		Interest Accrued		Repayments		Foreign Exchange Adjustments		As at  May 31, 2014
Term loan (July 2013)	$	1,506,560	$	—	$	—	$	—	$	(30,880)	$	1,475,680
Term loan (Dec 2013)		—		135,705		2,506		—		2,640		140,851
Promissory note (i)		52,533		—		1,600		—		—		54,133
Promissory note (ii)		402,558		—		4,099		(397,400)		(9,257)		—
Promissory note (iii)		—		1,667,477		55,898		—		—		1,723,375
	$	1,961,651	$	1,803,182	$	60,004	$	(429,971)	$	(827)	$	3,394,039

 Term loan (July 2013)

On July 12, 2013, Methes Canada entered into a term loan facility agreement with a lender (the “Agreement”) pursuant to which Methes Canada is able to borrow up to $1,475,680  (historical amount of $1,540,640 or CDN$1,600,000) for a term of 12 months at an interest rate of 12% per annum (the “July 2013 Facility”). Under the terms of the Agreement, interest is payable monthly and outstanding principal is due at maturity. Outstanding principal would be prepayable after six months upon 30 days’ notice and payment of a penalty equal to one-month's interest. The July 2013 Facility is collateralized by a security agreement from Methes Canada on certain of its assets except for accounts receivable and inventory and a first collateral mortgage on its real property located at Sombra, Ontario.  The July 2013 Facility prohibits payment of debt owed by the Company to certain of its stockholders and a director (see note 5) during the life of the facility and contains other customary debt covenants. As at May 31, 2014, the Company was in compliance with these covenants.

Interest expense incurred during the three and six months ended May 31, 2014 was $43,850 and $87,568 (three and six months ended May 31, 2013 - $nil and $nil).

Term loan (December 2013)

On December 16, 2013, Methes Canada entered into a one year term Mortgage Loan Agreement for $1,844,600 (CDN$2,000,000) bearing interest at 9% per annum for the purposes of discharging the existing July 2013 Facility (CDN$1,600,000).  The difference will be used to upgrade the Mississauga facility for the production of biodiesel.  Interest only is to be paid monthly and the term is renewable for an additional year.  As at May 31, 2014, monies advanced from this loan totaled $138,345 (historical amount of $135,705 or CDN$150,000).  

Interest expense incurred during the three and six months ended May 31, 2014 was $2,506 and $2,506 (three and six months ended May 31, 2013 - $nil and $nil).

Promissory Notes:

(i)	In January 2010, the Company borrowed $40,000 from a lender and issued to the lender a demand promissory note in the principal amount of $40,000 bearing interest at 8% per annum.  Repayment of the loan and payment of the accrued interest is due upon demand.  Interest expense incurred during the three and six months ended May 31, 2014 was $800 and $1,600 (three and six months ended May 31, 2013 - $800 and $1,600).
(ii)	On January 26, 2013, the Company borrowed $368,920 (historical amount of  $397,400 or  CDN $400,000) from a lender and issued to the lender a demand promissory note in the principal amount of CDN $400,000 bearing interest at 8% per annum (the "January 2013 Note"). Repayment of the loan and payment of the accrued interest is due upon demand. During the six months ended May 31, 2014 total principal payments of $397,400 (CDN$400,000) and total interest of $32,571 (CDN$34,057) were made against the note (now paid in full), as follows:       - On January 17, 2014, the Company converted $128,000 USD (CDN $139,845) of the outstanding principal due on the January 2013 Note into 34,688 shares of Common Stock based at the closing market price of $3.69 per share of Common Stock on January 17, 2014.     - On January 30, 2014, the Company paid $153,871 USD (CDN $172,000) against the outstanding principal balance through borrowing a note payable from another lender.        - On May 30, 2014, the Company paid the remaining balance of $81,305 USD (CDN $88,155). Interest expense incurred during the three and six months ended May 31, 2014 was $1,569 and $4,099 (three and six months ended May 31, 2013 - $7,914 and $10,576).
(iii)	Previously, this loan was classified as a payable to related party as the lender held stocks of the Company.  As at May 31, 2014, no stocks are held by the lender and therefore this loan has been re-classified under the short-term loans.  A total principal of $1,280,000 and accrued interest of $215,477 as at November 30, 2013 were reclassified to short-term loans. On January 28, 2014, the Company borrowed $172,000 from this lender and issued to the lender a demand promissory note in the principal amount of $172,000 bearing interest at 8% per annum.  Repayment of the loan and payment of the accrued interest is due upon demand. As at May 31, 2014, a total principal of $1,452,000 and accrued interest of $271,375 were outstanding. This loan bears interest at 8% per annum.  Repayment of the loan and payment of the accrued interest is due upon demand. Interest expense incurred during the three and six months ended May 31, 2014 was $29,040 and $55,898 (three and six months ended May 31, 2013 - $20,800 and $48,000).