Note 7 - Preferred Stock

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Preferred Stock [Text Block]

7

.         

Preferred Stock

Series A

Convertible Preferred Stock

During

2014,

71

shares of our Series A Convertible Preferred Stock,

$1,000

stated value (“Series A Preferred Stock”), were converted into

202,857

shares of common stock. As of

December 31, 2016,

there were

no

shares of Series A Preferred Stock outstanding.

Series B Convertible Preferred Stock

Our Series B Convertible Preferred Stock,

$1,000

stated value (“Series B Preferred Stock”), has rights and privileges as set forth in the pertinent Certificate of Designation of Preferences, Rights and Limitations, including a liquidation preference equal to the stated value per share. The Series B Preferred Stock has

no

voting rights and is

not

entitled to a dividend.

During

2014,

1,550

shares of Series B Preferred Stock were converted into

4,428,571

shares of common stock. As of

December 31, 2016,

there were

100

shares of

Series B Preferred Stock outstanding, convertible at any time at the option of the holder into

285,714

shares of common stock.

Series C Convertible Preferred Stock

In

February 2015,

we issued

3,000

shares of our Series C Convertible Preferred Stock,

$1,000

stated value (“Series C Preferred Stock”), and warrants to purchase up to an aggregate of

51,333,331

shares of our common stock for total net proceeds of

$2,679,810.

We allocated

$1,695,869

of the purchase price to the fair value of the warrants issued in the transaction (recorded to Additional Paid-in Capital), and recorded the net amount of

$983,941

as the initial carrying value of the Series C Preferred Stock.

The Series C Preferred Stock has rights and privileges as set forth in the pertinent Certificate of Designation of Preferences, Rights and Limitations, including a liquidation preference equal to the stated value per share. The Series C Preferred Stock has

no

voting rights and is

not

entitled to a dividend.

The Series C Preferred Stock is convertible at any time at the option of the holders into shares of our common stock, and contains price adjustment provisions which

may,

under certain circumstances, reduce the conversion price if we sell, or grant options to purchase, our common stock at a price lower than the then conversion price of the Series C Preferred Stock. During

2016,

132

shares of Series C Preferred Stock were converted into

1,400,000

shares of common stock. As of

December 31, 2016,

there were

2,868

shares of

Series C Preferred Stock outstanding, convertible into

57,363,520

shares of common stock.