Common and Preferred Stock

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 6. Common and Preferred Stock

Common Stock

During 2018, the non-employee board members received 67,487 shares of common stock of the Company with an aggregate value of $121,380. This was recorded as non-cash stock compensation expense in the financial statements.

During 2017, the non-employee board members received compensation of 84,406 shares and officers received 4,500 shares of common stock of the Company. The stock had an aggregate value of $81,484 and was recorded as non-cash stock compensation expense in the financial statements.

Preferred Stock

Shares of preferred stock authorized and outstanding at December 31, 2018 and 2017, were as follows:

	Shares			Shares
	Authorized			Outstanding
Cumulative Preferred Stock		10,000			-
Voting Preferred Stock		125,000			-
Cumulative Non-Voting Preferred Stock		125,000	(a)		24,152

(a) Includes 700 shares of Series A Preferred Stock and 100,000 shares of Convertible Series B Preferred Stock authorized for issuance.

In January 1996, the Company completed an offering of 70,000 shares of $10 stated value 1995 Series B 10% cumulative non-voting convertible preferred stock. The shares are convertible to common shares at the rate of $5.00 per share. At the Company’s option, the Series B shares are redeemable at 103% of the stated value plus the amount of any accrued and unpaid cash dividends.

There was 24,152 shares outstanding of Series B convertible preferred stock at December 31, 2018 and 2017. In June 2018, the Board of Directors approved a cash dividend in the amount of $24,152 to shareholders of record as of June 8, 2018 that was paid in July 2018. The Board of Directors voted to authorize the payment of a cash dividend of $24,152 on convertible preferred stock, Series B, to shareholders of record as of December 31, 2018 to be paid in June 2019. Included in accrued expenses at December 31, 2018 was the accrual of $24,152 for the dividend to be paid in 2019.

The Company had accrued dividends of $265,672 at December 31, 2018 and 2017. These amounts were included in convertible preferred stock, Series B on the balance sheet at December 31, 2018 and 2017.

Earnings Per Share

Basic income (loss) per share is calculated as income available (loss attributable) to common shareholders divided by the weighted average of common shares outstanding. Diluted earnings per share is calculated as diluted income available (loss attributable) to common stockholders divided by the diluted weighted average number of common shares outstanding. Diluted weighted average number of common shares gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. Diluted earnings per share exclude all diluted potential shares if their effect is anti-dilutive. For the year ended December 31, 2017, all convertible and preferred stock and common stock options listed in Note 7 were excluded from diluted earnings per share due to being out-of-the-money or anti-dilutive.

Following is a summary of employee and director outstanding stock options outstanding and preferred stock, Series B at December 31.         

	2018		2017
Options		407,566		381,447
Preferred Stock, Series B		24,152		24,152
		431,718		405,599

The following is provided to reconcile the earnings per share calculations:

	2018		2017
Income (loss) applicable to common stock	$	883,717	$	(18,061	)
Weighted average common shares outstanding - basic		4,223,865		4,138,516
Effect of dilutions - stock options		33,266		-
Weighted average shares outstanding - diluted		4,257,131		4,138,516