Note 11 - Capital Stock

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

11. Capital Stock

The Company’s Certificate of Incorporation, as amended, authorizes 4,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, and 200,000 shares of preferred stock have been designated as Series A Junior Participating Preferred Stock. During 2013, the Company did not issue any shares of Common Stock. During 2012, the Company issued 3,986 shares of Common Stock as compensation to members of its board of directors and 3,334 shares as compensation to executive officers, and increased other capital by $3,917 representing compensation expense of $11,237. As of December 31, 2013, 1,879,319 shares of Common Stock had been issued, of which 1,687,319 shares were outstanding.

On September 13, 2013, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware to authorize the issuance of up to 100,000 shares of Series C Preferred Stock and to establish the relative rights, preferences, qualifications, limitations and restrictions of such Series C Preferred Stock. The Certificate of Designation became effective upon such filing. The rights, preferences and privileges of the Series C Preferred Stock are as follows:

Dividends. Holders of Series C Preferred Stock are entitled to receive cash dividends at the annual rate of 6% per share and will be paid in preference to the holders of any other class or series of capital stock. Such dividends will begin accruing on the date of issuance and will be paid only when and if a dividend payment is declared by the Board of Directors. If the dividend has not been paid or set apart in full, the Company cannot purchase or redeem any class of capital stock (except the Series C Preferred Stock) unless the persons holding more than 60% of the outstanding shares of Series C Preferred Stock (the “Majority of Holders”) have given their consent.

Redemption. The Company may redeem the Series C Preferred Stock at any time, in whole or in part, for $5.00 per share, plus accrued and unpaid dividends. The Company may exercise such redemption right by providing notice to the holders of the Series C Preferred Stock at least 20, but not more than 50, days prior to the date on which such redemption is to occur. If the Company elects to redeem a portion, but not all, of the outstanding Series C Preferred Stock, such redemption may be made pro rata, by lot or in such other equitable manner as determined by the Company’s Board of Directors.

Amendment of Certificate of Designation. Without the consent of a Majority of Holders, the Company may not: amend or change the Certificate of Designation in a manner that affects adversely the rights and preferences of the holders of Series C Preferred Stock; authorize or issue any class of stock ranking senior to, or on a parity with, the Series C Preferred Stock with respect to payment of dividends or distribution of assets; or authorize the merger or consolidation of the Company or the sale of all or substantially all of its assets.

Voting Rights. The holders of Series C Preferred Stock shall have no voting rights, except upon matters for which a class vote is specifically required by law or as provided in the Certificate of Designation.

Conversion. Any time after January 11, 2014, a holder of Series C Preferred Stock may convert each share of such stock into the number of shares of the Company’s common stock as is determined by dividing $5.00 by the average of the closing price of the Company’s common stock for the 10 trading days immediately prior to the date of such conversion. Such conversion price may be adjusted from time to time as set forth in the Certificate of Designation.

Liquidation Preference. In the event of a “liquidation event,” as defined in the Certificate of Designation, the holders of Series C Preferred Stock are entitled to receive, in cash, a liquidating distribution of $5.00 per share, plus all accrued but unpaid dividends, before any distribution or payment may be made to the holders of shares of any other classes of capital stock.

On September 13, 2013, the Company issued 60,000 shares of its newly authorized Series C Preferred Stock to certain investors pursuant to a Purchase Agreement executed with those investors. The purchase price was $5.00 per share for aggregate consideration of $300,000. Net proceeds from the offering were used by the Company to fund working capital and for general corporate purposes. Paul Luber, a member of the Company’s board of directors, purchased 20,000 shares of Series C Preferred Stock for total consideration of $100,000.