Note 7 - Related Party Transactions

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

7

– Related Party Transactions

We have

$945,000

principal outstanding at

March 31, 2018

in promissory notes payable to MHW, net of remaining discount of

$91,000.

Per the terms of the notes, we paid interest of approximately $

29,000

and

$28,000

during the

three

-month periods ended

March 31, 2018

and

2017,

respectively. We have

$650,000

principal outstanding at

March 31, 2018

in promissory notes payable to MHW Partners, net of remaining discount of

$94,000.

Per the terms of the notes, we paid interest of

$20,000

during the

three

-month period ended

March 31, 2018.

Peter H. Woodward, the Chairman of our Board of Directors, is a principal of MHW Capital Management, LLC which is the investment manager of MHW and MHW Partners. MHW Capital Management LLC is entitled to a performance-related fee equal to

10%

of any appreciation in the valuation of the common stock in excess of the applicable strike price under the warrant issued to MHW.

We have

$300,000

in principal outstanding at

March 31, 2018

in promissory notes payable to M. Glen Ikeda, a shareholder in the Company. The loan matures

July 19, 2022

and bears

no

interest. We are permitted to make optional payments at any time without penalty. We issued Mr. Ikeda a warrant to purchase up to

954,231

shares of our common stock in connection with entering into the promissory note.