Note 9 - Dividends Payable

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note Disclosure [Text Block]

9.	Dividends Payable

During the quarter ended

March 31, 2020,

we accrued

$13,000

in dividends payable to the holders of our

Preferred Stock,

$13,000

in dividends payable to the holders of our Series

Preferred Stock and

$7,000

in dividends payable to the holders of our Series

Preferred Stock. As of

March 31, 2020,

we have

$33,000

in accrued and unpaid dividends.

Delaware law provides that we

may

only pay dividends out of our capital surplus or, if

surplus is available, out of our net profits for the fiscal year the dividend is declared and/or the preceding fiscal year. These dividends continue to accrue on all our outstanding shares of preferred stock, regardless of whether we are legally able to pay them. If we are unable to pay dividends on our preferred stock, we will be required to accrue an additional late fee penalty of

18%

per annum on the unpaid dividends for the Series

Preferred Stock and Series

Preferred Stock. Our late CEO, our Interim CEO and current CFO, and

one

outside board member who are holders of our Series

and Series

Preferred Stock have waived any possible late fee penalties. In addition to this late penalty, the holders of our Series

Preferred Stock and Series

Preferred Stock could elect to present us with written notice of our failure to pay dividends as scheduled, in which case we would have

days to cure such a breach. In the event that we failed to cure the breach, the holders of these shares of preferred stock would then have the right to require us to redeem their shares of preferred stock for a cash amount calculated in accordance with their respective certificates of designation. If we were required to redeem all shares of Series

Preferred Stock and Series

Preferred Stock as of

March 31, 2020,

the aggregate redemption price we would owe would be

$1.7

million.