CONVERTIBLE PROMISSORY NOTES
|9 Months Ended|
Sep. 30, 2012
|CONVERTIBLE PROMISSORY NOTES [Abstract]|
|CONVERTIBLE PROMISSORY NOTES||
NOTE 2-CONVERTIBLE PROMISSORY NOTES
In February 2008 the Company issued 7% convertible promissory notes (the "Notes") in the aggregate principal amount of $150,000 pursuant to a subscription agreement, dated January 25, 2008, as amended, between Silvergraph and certain accredited investors. The Notes were amended several times between February 2008 and December 20, 2011. On August 24, 2012, the Notes were consolidated into a new note (the "Consolidated Note"), whereby the Notes were cancelled. There are five (5) holders of the Consolidated Note. Each holder of the Consolidated Note holds a Twenty Percent interest in the Consolidated Note. The total principle of the Consolidated Note is $350,599.53.
As of September 30, 2012, the significant terms of the Consolidated Note are as follows:
1. Payments: The Company will pay all interest due and owing by adding such amounts to the outstanding principal balance of the Consolidated Note, thereby increasing the outstanding principal balance of the Consolidated Note. All the payments-in-kind shall accrue interest as though such amounts were original principal indebtedness. The Company may pay any principal payments in cash prior to maturity.
2. Maturity: The principal and all accrued interest shall be due and payable on or before December 31, 2012.
3. Conversion: The Holders of the Consolidated Note are entitled, at their individual option, at any time or from time to time, and in whole or in part, acting individually, to convert the outstanding principal amount of the Consolidated Note, or any portion of the principal amount thereof, and any accrued interest, into shares of the common stock of the Company at a conversion price of $0.004 per share. A Holder may not convert any outstanding amounts due under the Consolidated Note if at the time of such conversion the amount of common stock issued for the conversion, when added to other shares of the Company common stock owned by a Holder as an individual, or which can be acquired by a Holder upon exercise or conversion of any other instrument, would cause the Holder, as an individual, to own more than four and nine-tenths percent (4.9%) of the Company's outstanding common stock. The Consolidated Note also cannot be converted if the number of shares to be issued on conversion, when added to the number of shares then outstanding, will exceed the authorized common stock.
4. Event of Default: In the event of an occurrence of any event of default specified below, the principal and all accrued interest shall become immediately due and payable without notice. The occurrence of any of the following events shall constitute an event of default under this Note:
a. The Company fails to make any payment when due.
b. If the Company shall default in the payment or performance of any other material obligation of this Note or other debt of the Company.
c. If the Company or an operating wholly-owned subsidiary of the Company shall file a petition to take advantage of any insolvency act; make an assignment for the benefit of its creditors; commence a proceeding for the appointment of a receiver, trustee, liquidator or conservator of itself of a whole or any substantial part of its property; file a petition or answer seeking reorganization or arrangement or similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or of any state.
The entire disclosure for short-term debt.
Reference 1: http://www.xbrl.org/2003/role/presentationRef