Note 8 - Common Stock and Preferred Stock

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8 – COMMON AND PREFERRED STOCK

The Company is authorized to issue 70 million shares of Common Stock at a $0.01 par value.  As of December 31, 2020, and December 31, 2019, the Company had 36,902,361 and 28,480,567 shares issued and outstanding, respectively. 

The Company has issued a total of 10,000 shares of Series 1 Preferred Stock to certain holders (“Holders”) under the Conversion and Exchange Agreements (see Note 6 – “Long-Term Debt”).  Each preferred share is convertible at any time at the option of the Holder into 405.05 shares of Common Stock.  During the year ended December 31, 2020, Holders of Series 1 Preferred Stock exercised their option to convert 2,469 shares of Series 1 Preferred Stock into 1,000,068 shares of Common Stock.

In January 2013, the Company revised its then existing agreement with the law firm of Brownstein Hyatt Farber Schreck LLP (“Brownstein”), a related party.  Under this agreement, the Company is to issue up to a total of 400,000 shares of the Company’s common stock, with 200,000 shares earned to date and 100,000 shares to be earned upon the achievement of each of two remaining milestones as follows:

i. 100,000 shares earned upon the signing of binding agreements for more than 51% of the Water Project’s annual capacity, which is not yet earned; and

ii. 100,000 shares earned upon the commencement of construction of all of the major facilities contemplated in the Final Environmental Impact Report necessary for the completion and delivery of the Water Project, which is not yet earned.

All shares earned upon achievement of any of the remaining two milestones will be payable three years from the date earned.

Additionally, the Company incurred direct expenses to Brownstein of approximately $1.5 million and $2.3 million in 2020 and 2019, respectively.