Quarterly report pursuant to Section 13 or 15(d)

Debt

 v2.3.0.11
Debt
6 Months Ended
Jun. 30, 2011
Debt  
Debt Disclosure [Text Block]

NOTE 7 - CONVERTIBLE DEBENTURES

 

            On July 31, and September 2, 1998, the Company sold its 8% convertible debenture in the aggregate principal amount of $1,500,000 to an accredited investor pursuant to an exemption from registration under Section 4(2) and/or Regulation D.

 

            The material terms of the Company' convertible debentures provide for the payment of interest at 8% per annum payable quarterly, mandatory redemption after 3 years from the date of issuance at 130% of the principal amount.  Subject to adjustment, the debentures are convertible into Common Stock at the lower of a fixed conversion price ($1.82 per share for $900,000 principal amount of debentures; $1.61 per share for $600,000 principal amount of debentures) or 75% of the average closing bid price for the Company's Common Stock for the 5 trading days preceding the date of the conversion  notice.  Repayment of the indebtedness is secured by a general lien on the assets of the Company and guarantee by 5 of the Company's subsidiaries.         

           

            Total issue costs were $156,551.20 which were amortized over the initial terms of the debt with a maturity date of July 31 and September 2, 2001.

Short-term Debt [Text Block]

NOTE 2 - SHORT-TERM NOTES PAYABLE

 

            Short-Term Notes Payable consist of loans from unrelated entities as of June 30, 2011 and December 31, 2010.  The notes are payable one year from the date of issuance together with interest at 6.50% A.P.R.