Note 5. Convertible Preferred Stock

3 Months Ended

Mar. 31, 2013

Preferred Stock [Text Block]

5.     Convertible Preferred Stock.  The shareholders have authorized 10,000,000 shares of preferred stock shares for issuance. The Board of directors authorized the issuance of up to 10,000 shares of Series 2010-A 10% Convertible Preferred Stock on July 29, 2010.  Each preferred share is convertible into 1,000 common shares ($100 stated value per share divided by $0.10).  Dividends are payable quarterly at 10% per annum in cash or stock at the option of the preferred stock holder.  Stock dividend payments are valued at the higher of $0.10 per share of common stock or the average of the two highest volume weighted average closing prices for the 5 consecutive trading days ending on the trading day that is immediately prior to the dividend payment date.

The Company accrued $8,098 of dividends on preferred stock during the first quarter of 2013.

The Company accrued $30,851 of dividends on preferred stock during 2012 and $8,098 during the first quarter of 2013 for a total of $38,949.