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Note 11 - Dividends
12 Months Ended
Dec. 31, 2012
Notes to Financial Statements  
Note 11 - Dividends

The Company accrued and recorded dividends payable on the 520,160 shares of 5% Series B Preferred Stock for the period ended December 31, 2012 and 2011. Dividends have not been declared and cannot be paid as long as the Company has an outstanding balance on its revolving line of credit.

 

ASC 470 provides for preferred stock to be accreted to its redemption value over the longer of the term to maturity, which is not present in the Series D Preferred, or the date of the first conversion. Since the Series D Preferred is convertible on the issuance date, a day-one deemed dividend of $1,063,636 was recorded to accrete the Series D Preferred to its redemption value (See Note 6).