Sorry Wintersun.....not true. They are almost 1 Million behind in these payments with another $625,000 due at the end of this month. It may be true that there is no "contractual" penalty (ie extra interest or additional fees) but you can be sure he has every tool available to collect what's owed, just like any other creditor.
Due to SaaS vendor
As part of the acquisition of SaaS during Fiscal 2012, a promissory note of $5,000,000 was provided to
the SaaS vendor which is payable in eight equal installments on a quarterly basis ending September 30,
2013. To calculate the fair value of the non-interest bearing promissory note payable, principal payments
were discounted at market interest rates for similar instruments prevailing at the time of the issuance of
the respective instrument. An interest rate of 8% was used to calculate the fair value of the promissory
note payable and the related interest accretion. The difference between the fair value and face value will
be accreted over the repayment period using the effective interest method.
As at September 30, 2012 the Company has repaid $1,575,000 of the promissory note payable. The
Company paid $325,000 of the $625,000 due on June 30, 2012 and has not made the scheduled
September 30, 2012 payment of $625,000 due to liquidity constraints. There is no contractual penalty to
the Company for this delayed payment.