Note 14 – Series A Preferred Stock

Preferred Stock

The Company has 10,000,000 authorized shares of $0.001 par value “blank check” preferred stock, of which 500,000 shares have been designated Series A Preferred Stock. Each share of Preferred Stock is currently convertible into fifty (50) shares of the Company’s common stock. The Series A Preferred Stock accrues dividends at the rate of 6% per annum, payable annually in cash or additional shares of Series A Preferred Stock, at the Company’s election. As of June 30, 2020, there were 40,000 shares of Series A Preferred Stock issued and outstanding.

Preferred Stock Sales

On various dates between April 14, 2020 and June 29, 2020, the Company received total proceeds of $400,000 from the sale of 40,000 units, consisting in the aggregate of 40,000 shares of Series A Preferred Stock and five-year warrants to purchase 2,000,000 shares of common stock at an exercise price of $0.25 per share to fourteen accredited investors. The proceeds received were allocated between the Series A Preferred Stock and warrants on a relative fair value basis.