Note 5 - Deferred Compensation

3 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

5.

     DEFERRED COMPENSATION:

The Company owes deferred compensation to various employees, former employees and consultants totaling

$1,078,134

and

$523,628

as of

September 30, 2019

and

2018,

respectively. Included in the deferred compensation balances as of

September 30, 2019,

are

$450,508

and

$189,467

owed Bassani and Smith respectively, pursuant to extension agreements effective

January 1, 2015,

whereby unpaid compensation earned after

January 1, 2015,

accrues interest at

4%

per annum and can be converted into shares of the Company’s common stock at the election of the employee during the

first

five

calendar days of any month. The conversion price shall be the average closing price of the Company’s common stock for the last

10

trading days of the immediately preceding month. The deferred compensation owed Bassani and Smith as of

September 30, 2018

was

$314,654

and

$6,300,

respectively. The Company also owes various consultants, pursuant to various agreements, for deferred compensation of

$365,659

and

$129,190

as of

September 30, 2019

and

2018,

respectively, with similar conversion terms as those described above for Bassani and Smith, with the exception that the interest accrues at

3%

per annum. Bassani and Smith have each been granted the right to convert up to

$300,000

of deferred compensation balances at a price of

$0.75

per share until

December 31, 2019 (

to be issued pursuant to the

2006

Plan). Smith also has the right to convert all or part of his deferred compensation balance into the Company’s securities (to be issued pursuant to the

2006

Plan) “at market” and/or on the same terms as the Company is selling or has sold its securities in its then current (or most recent if there is

no

current) private placement. The Company also owes a former employee

$72,500,

which is

not

convertible and is non-interest bearing.

The Company recorded interest expense of

$7,620

(

$5,242

with related parties) and

$3,650

(

$2,968

with related parties) for the

three

months ended

September 30, 2019

and

2018,

respectively.