Bank Indebtedness

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Bank Indebtedness

The bank indebtedness of the Company consists of a secured line of credit with a limit of $35,000 bearing interest at the annual prime rate plus 1.25%, which as at September 30, 2014 and December 31, 2013 was 4.5%, and with monthly repayments determined as follows:

a) the greater of:

i) two percent (2%) of the outstanding principal balance outstanding on the last day of the billing period, or

ii) $100, and

b) accrued interest since the date of the last payment.

On termination of the line of credit, the amount will become due over a period determined by the creditor of between thirty-six and eighty-four months, or over three to seven years, which at the time of the agreement was determined to be forty-eight months, or four years.

The line of credit is subject to various non-financial covenants that would constitute an event of default, notably: ownership change or sale of the business; closure or failure to maintain the related checking account; insolvency or any bankruptcy proceedings; or, any other defaults on other contracts with the creditor or with any other financial institution.

Security for the line of credit is the cash in the chequing account held with the bank.

		September 30,			December 31,
		2014			2013
Line of credit	$	19,242		$	23,079
Less:  current portion - estimated based on (a)(i) above		(4,618	)		(5,539	)
	$	14,624		$	17,540

Principal repayments estimated based on (a)(i) above as at September 30, 2014:
2014 (remaining three months)	$	1,155
2015		5,213
2016		5,213
2017		3,043
	$	14,624