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NOTES PAYABLE
 6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
NOTES PAYABLE

 

NOTE 4. NOTES PAYABLE

 

On April 5, 2010, the Company issued a Senior Convertible Promissory Note (the “Note”) to an existing investor through a private placement. The Note includes an annual interest rate of 7.5 percent and (unless converted or prepaid, as noted below) all principal and interest are due and payable on its maturity date April 5, 2012 (“Maturity Date”). At any time prior to the Maturity Date, the investor may convert all or a portion of the outstanding principal and accrued interest at a conversion ratio of one share of Transdel’s common stock for each $1 (the fair market value of the Company’s common stock on April 5, 2010) owed. Also, at any time prior to the Maturity Date, the Company has the option to prepay the outstanding principal and accrued interest. The Company received gross proceeds from the issuance of the Note in the aggregate amount of $1,000,000. There were no discounts or commissions paid in connection with this private placement. Accrued interest on the Note was $92,670 at June 30, 2011 and interest expense for the three and six months ended June 30, 2011 was $18,698 and $37,191, respectively, and $17,671 for the three and six months ended June 30, 2011. Following the Company’s bankruptcy petition filed June 26, 2011, and subsequent to the period ended June 30, 2011, the change in ownership control following the issuance of preferred stock (see Note 10), the entire unpaid principal sum of this Note, together with its accrued and unpaid interest became immediately due and payable. Subsequent to the period ended June 30, 2011, the Company, the noteholder and its assignee entered into a waiver and settlement agreement described in Note 10.