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Note Q - Equity | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Stockholders' Equity Note Disclosure [Text Block] | NOTE Q — EQUITY 1. Preferred Stock Within the limits and restrictions provided in the Company’s Certificate of Incorporation, the Board of Directors has the authority, without further action by the shareholders, to issue up to 5,000,000 shares of preferred stock, $.0001 par value per share, in one or more series, and to fix, as to any such series, any dividend rate, redemption price, preference on liquidation or dissolution, sinking fund terms, conversion rights, voting rights, and any other preference or special rights and qualifications. As of December 31, 2019, 100,000 shares of preferred stock have been designated as Series A- 1 Convertible Preferred Stock, of which 90,000 were issued in 2015 and 0 remain outstanding, and 105,000 shares of preferred stock have been designated as Series B- 1 Convertible Preferred Stock, of which 105,000 were issued in 2015 and 0 remain outstanding. Series A- 1 Convertible Preferred Stock On October 22 and 29, 2015, the Company issued 84,500 shares of Series A- 1 Stock at a purchase price of $100.00 per share, for aggregate gross proceeds of $8,450,000. On November 11, 2015, 5,500 additional shares of Series A- 1 Stock were issued at a purchase price of $100.00 per share, for gross cash proceeds of $550,000. In 2017, the holder of the Series A- 1 Stock converted $540,000 in accrued dividends payable into 150,000 shares common stock and converted 27,404 Series A- 1 Stock into 761,222 shares of common stock. Between January 1, 2018 and May 31,2018, the holder of the Series A- 1 Stock converted all remaining shares of the Series A- 1 Stock into an aggregate of 1,738,778 shares of common stock and purchased an aggregate of 98,893 shares of common stock in consideration of the conversion of $356,015 of accrued dividends payable on the Series A- 1 Stock. As a result of the forgoing conversions, at December 31, 2018 and 2019 there are no longer any issued and outstanding shares of Series A- 1 Stock. Overall balances and conversion of Series A- 1 Stock and accrued dividends into common stock has been as follows:
|  | Series A-1 |  |  | Accrued Dividends |
Balance – January 1, 2017 |  |  | 90,000 |  |  | $ | 270,000 |
Accrual of dividends – Q1 2017 |  |  | - |  |  |  | 135,000 |
Accrual of dividends – Q2 2017 |  |  | - |  |  |  | 135,000 |
Accrual of dividends – Q3 2017 |  |  | - |  |  |  | 135,000 |
Conversion into common stock – September 2017 |  |  | - |  |  |  | (540,000 | )
Conversion into common stock – October 2017 |  |  | (27,404 | ) |  |  | - |
Accrual of dividends – Q4 2017 |  |  | - |  |  |  | 101,658 |
Balance – December 31, 2017 |  |  | 62,596 |  |  | $ | 236,658 |
Accrual of dividends – Q1 2018 |  |  | - |  |  |  | 93,894 |
Conversion into common stock – April 2018 |  |  | (39,088 | ) |  |  | (330,552 | )
Accrual of dividends – Q2 2018 (until final conversion) |  |  | - |  |  |  | 25,463 |
Conversion into common stock – May 2018 |  |  | (23,508 | ) |  |  | (25,463 | )
Balance – December 31, 2018 and December 31, 2019 |  |  | - |  |  | $ | - |
Series B- 1 Convertible Preferred Stock On November 11, 2015, the Company issued 105,000 shares of Series B- 1 Stock at a purchase price of $100.00 per share, for gross proceeds of $10,500,000. Between March 23, 2018 and May 23, 2018, holders of shares of Series B- 1 Stock converted all shares of Series B- 1 Stock into an aggregate of 2,916,668 shares of common stock and purchased an aggregate of 131,229 shares of common stock in consideration of the conversion of $472,426 of accrued dividends payable on the Series B- 1 Stock. As a result of the forgoing conversions, at December 31, 2018 and 2019 there are no longer any issued and outstanding shares of Series B- 1 Stock. Overall balances and conversion of Series B- 1 Stock and accrued dividends into common stock has been as follows:
|  | Series B-1 |  |  | Accrued Dividends |
Balance – January 1, 2017 |  |  | 105,000 |  |  | $ | 131,250 |
Accrual of dividends – Q1 2017 |  |  | - |  |  |  | 65,625 |
Accrual of dividends – Q2 2017 |  |  | - |  |  |  | 65,625 |
Accrual of dividends – Q3 2017 |  |  | - |  |  |  | 65,625 |
Accrual of dividends – Q4 2017 |  |  | - |  |  |  | 65,625 |
Balance – December 31, 2017 |  |  | 105,000 |  |  |  | 393,750 |
Conversion into common stock – March 2018 |  |  | (60,420 | ) |  |  | (417,084 | )
Accrual of dividends – Q1 2018 |  |  | - |  |  |  | 62,268 |
Accrual of dividends – Q2 2018 (until final conversion) |  |  | - |  |  |  | 16,408 |
Conversion into common stock – May 2018 |  |  | (44,580 | ) |  |  | (55,342 | )
Balance – December 31, 2018 and December 31, 2019 |  |  | - |  |  | $ | - |
2. Common Stock Holders of common stock have equal rights to receive dividends when, as and if declared by the Board of Directors, out of funds legally available therefor. Holders of common stock have one vote for each share held of record and do not have cumulative voting rights. Holders of common stock are entitled, upon liquidation of the Company, to share ratably in the net assets available for distribution, subject to the rights, if any, of holders of any preferred stock then outstanding. Shares of common stock are not redeemable and have no preemptive or similar rights. All outstanding shares of common stock are fully paid and nonassessable. Issuances of Common Stock See Note N for common stock issued as commitment fees for notes payable during the 2019 fiscal year. On August 22, 2018, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC (the “Underwriter”) with respect to the issuance and sale of an aggregate of 1,200,000 units (“Units”) with each unit consisting of one share of common stock and a warrant to purchase 0.75 shares of common stock at an exercise price of $1.50 per share, in an underwritten public offering pursuant to the Underwriting Agreement. Each Unit was sold for a price of $1.50. The Warrants have a term of five years and are immediately exercisable. Pursuant to the Underwriting Agreement, the Company granted the Underwriters a 45 -day option to purchase up to an additional 180,000 shares of Common Stock and/or 135,000 Warrants to cover over-allotments, if any (the “Over-Allotment”). On August 22, 2018, the Underwriter exercised its Over-Allotment option in full on both the Common Stock and the Warrants. Pursuant to this agreement, 1,380,000 shares of common stock and warrants to purchase 1,035,000 shares of stock were issued on August 24, 2018 for aggregate gross proceeds of $2,070,000. The gross proceeds were reduced by a 7% commission ( $144,900 ) and $50,000 of underwriting expenses to net to $1,875,100 cash received. Costs of $143,945 were incurred during 2018 in relation to the issuance of common stock. Also see preferred stock section above for conversions of shares of preferred stock and accrued dividends into shares of common stock in 2018. Issuances to Directors, Executive Officers & Consultants During the year ended December 31, 2019, the Company issued 36,897 shares of common stock to its directors in lieu of payment of board fees, valued at $35,013. During the year ended December 31, 2018, the Company issued 20,976 shares of common stock to its directors in lieu of payment of board fees, valued at $37,532. Employees’ exercise options During 2019 and 2018, no employee stock options were exercised. Securities Purchase Agreement dated November 13, 2014 Pursuant to a Securities Purchase Agreement, dated November 13, 2014, by and between the Company and a number of private and institutional investors, the Company issued to certain private investors 664,584 shares of common stock and warrants to purchase an additional 996,877 shares of common stock for aggregate gross proceeds of $1,595,000. The warrants had a term of five years and an initial exercise price of $3.60 per share, and were fully exercisable since February 2015. The warrants had customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than $3.60 per share. The anti-dilution adjustment provision was not triggered by certain “exempt issuances” which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers. On August 24, 2018 the Company issued Common Stock and Warrants to investors at a purchase price of $1.50 per unit which triggered the anti-dilution protection provision under this Securities Purchase Agreement. As a result, the total number of outstanding and fully vested warrants was increased from 996,877 to 2,392,502, and the exercise price was reduced from $3.60 to $1.50 per share. The Company recognized a non-cash deemed dividend of $1,288,139 in 2018 in connection with these adjustments. The warrants expired in November 2019. Securities Purchase Agreement dated September 23, 2015 On September 23, 2015, the Company issued a warrant to purchase 69,445 shares of common stock in connection with the issuance of a promissory note. The warrants are immediately exercisable at an initial exercise price of $3.60 per share and have a term of five years. The warrants have customary anti-dilution protections including a "full ratchet" anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than $3.60 per share. The anti-dilution adjustment provision was not triggered by certain "exempt issuances" which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers. On August 24, 2018 the Company issued Common Stock and Warrants to the investors at a purchase price of $1.50 per unit which triggered the anti-dilution protection provision under this Securities Purchase Agreement. As a result, the total number of outstanding and fully vested warrants was increased from 69,445 to 166,668, and the exercise price was reduced from $3.60 to $1.50 per share. The Company recognized a non-cash deemed dividend of $140,827 in 2018 in connection with these adjustments. In February 2020, the Company entered into a convertible note at a conversion price of $1.15 that triggered the anti-dilution feature under Securities Purchase Agreement dated September 23, 2015. Additionally, the Company entered into an amendment (as discussed in Note N) that reduced the conversion price of the Amended Note to $0.65, thus triggering the anti-dilution feature under the Securities Purchase Agreement dated September 23, 2015. In the first quarter of 2020, the total number of outstanding and fully vested warrants will increase, the exercise price will ultimately reduce to $0.65 per share, and the Company will record a non-cash deemed dividend in connection with both triggering events. 3. Warrants The Company has issued warrants to certain creditors, investors, investment bankers and consultants. A summary of warrant activity is as follows:
|  | Total Warrants |  |  | Weighted average exercise price |  |  | Weighted average remaining life (in years) |  |  | Aggregate intrinsic value |
Outstanding, as of December 31, 2017 |  |  | 1,398,969 |  |  |  | 3.81 |  |  |  | 2.06 |  |  |  |  |
Granted |  |  | 1,035,000 |  |  |  | 1.50 |  |  |  |  |  |  |  |  |
Increase due to trigger of anti-dilution provision feature |  |  | 1,492,848 |  |  |  | 1.50 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Forfeited |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Expired |  |  | (145,841 | ) |  |  | 6.00 |  |  |  |  |  |  |  |  |
Outstanding, as of December 31, 2018 |  |  | 3,780,976 |  |  |  | 1.59 |  |  |  | 2.05 |  |  |  | — |
Granted |  |  | 2,000,000 |  |  |  | 1.50 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Forfeited |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Expired |  |  | (2,392,502 | ) |  |  | 1.50 |  |  |  |  |  |  |  |  |
Outstanding, as of December 31, 2019 |  |  | 3,388,474 |  |  |  | 1.60 |  |  |  | 3.94 |  |  |  | — |
Vested or expected to vest at December 31, 2019 |  |  | 3,388,474 |  |  |  | 1.60 |  |  |  |  |  |  |  | — |
Exercisable at December 31, 2019 |  |  | 3,388,474 |  |  |  | 1.60 |  |  |  |  |  |  |  | — |

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