Stockholders’ Deficit

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders’ Deficit

Note 12. Stockholders’ Deficit

At December 31, 2023 and 2022, the Company had a stock option plan and non-plan options, which are described below.

Non-Plan Stock Options

On January 3, 2018, the Board of Directors voted to extend from March 13, 2018 to December 31, 2020, the expiration date for a total of 3,115,000 currently outstanding options previously issued to the Chairman, the President, the Vice President and two former employees of the Company. The Company recorded stock-based compensation expense of $21,570 for the year ended December 31, 2018. No share-based awards were issued or amended in 2019. On November 6, 2020, the Board of Directors voted to extend 2,965,000 of these outstanding options from December 31, 2020 to December 31, 2023. In December 2023, the Board of Directors voted to extend the expiration date of all options to December 31, 2025. As a result of the modification to the options, the Company recorded an additional $546,400 in stock based compensation expense for the year ended December 31, 2023. Accordingly, 150,000 of these 3,115,000 options expired at December 31, 2020.

On November 9, 2020, the Board of Directors voted to award 1,290,000 options to purchase common stock to its six current directors, including three officers of the Company, at a strike price of $0.46 per share with an expiration date of December 31, 2023, as follows: Martin Blount: 200,000; Daniel Burstyn: 40,000; Robert Crow: 100,000; Benjamin Harrell: 360,000; Gregory Harrison: 450,000 and Deborah Vitale: 140,000. All options are vested.

Stock Option Plan

On December 19, 1988, the Company adopted a stock option plan (the “Plan”) for its officers and management personnel under which options could be granted to purchase up to 1,000,000 shares of the Company’s common stock. Accordingly, the Company reserved 1,000,000 shares for issuance under the Plan. The exercise price may not be less than 100% of the market value of the shares on the date of the grant. The options expire within ten years from the date of grant. At December 31, 2023, no options from this plan were issued or exercised.

Summary of Stock Options

A summary of the status of the Company’s fixed Plan and non-plan options as of December 31, 2023 and 2022, and changes during the years ended December 31, 2023 and 2022 is presented below.

	Shares		Weighted Average Exercise Price
Outstanding as of January 1, 2022		4,555,000	$	0.41
Granted		-		-
Exercised		-		-
Expired		-		-
Forfeited		-		-
Outstanding as of December 31, 2022		4,555,000	$	0.41
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding as of December 31, 2023		4,555,000	$	0.41
Exercisable as of December 31, 2022		4,555,000	$	0.41
Exercisable as of December 31, 2023		4,555,000	$	0.41

The following tables summarize information about stock options outstanding and exercisable at December 31, 2023 and 2022:

		December 31, 2023
		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number Outstanding at 12/31/23		Weighted-Average Remaining Contractual Life (Yrs.)		Weighted Average Exercise Price		Number Exercisable at 12/31/23		Weighted Average Exercise Price
$	0.19		2,000,000		2.0	$	0.19		2,000,000	$	0.19
	0.30		750,000		2.0		0.30		750,000		0.30
	0.75		215,000		2.0		0.75		215,000		0.75
	1.75		300,000		2.0		1.75		300,000		1.75
	0.46		1,290,000		2.0		0.46		1,290,000		0.46
			4,555,000						4,555,000

		December 31, 2022
		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number Outstanding at 12/31/22		Weighted-Average Remaining Contractual Life (Yrs.)		Weighted Average Exercise Price		Number Exercisable at 12/31/22		Weighted Average Exercise Price
$	0.19		2,000,000		2.0	$	0.19		2,000,000	$	0.19
	0.30		750,000		2.0		0.30		750,000		0.30
	0.75		215,000		2.0		0.75		215,000		0.75
	1.75		300,000		2.0		1.75		300,000		1.75
	0.46		1,290,000		2.0		0.46		1,290,000		0.46
			4,555,000						4,555,000

Preferred Stock

Series S Preferred Stock

The Company has 926,000 shares outstanding of $.01 par value Series S Voting, Non-Convertible Preferred Stock which was issued to Austroinvest International, Inc. The Company is required to pay quarterly cumulative dividends of three percent per annum on these shares.

These shares may be redeemed at the option of the Company at $1.08 per share plus $.0108 per share for each quarter that such shares are outstanding for a total of $2.18 per share at December 31, 2023. The shares also have a $1.08 per share preference in involuntary liquidation of the Company. At December 31, 2023 and 2022, outstanding Series S preferred stock totaled 926,000 shares. Cumulative dividends in arrears at December 31, 2023 and 2022 amounted to and $375,000 and $345,000, respectively.

Series S-NR Preferred Stock

The Company has 900,000 shares outstanding of its $.01 par value Series S-NR Voting, Non-Convertible, Non-Redeemable, Preferred Stock, which was issued to Serco International Limited. The Company is required to pay quarterly, non-cumulative dividends of three percent per annum on these shares. Upon involuntary liquidation of the Company, the liquidation preference of each share is $1.11. At December 31, 2023 and 2022, outstanding Series S-NR preferred stock totaled 900,000 shares. Non-cumulative dividends in arrears at December 31, 2023 and 2022 amounted to $375,000 and $345,000, respectively.

Series S-PIK Preferred Stock

The Company has one million units outs, each unit consisting of one share of the Company’s $.001 par value common stock and two shares of the Company’s Series S-PIK Junior, cumulative, convertible, non-redeemable, non-voting $.01 par value preferred stock. Each share of Series S-PIK preferred stock is convertible into one share of the Company’s common voting stock at any time after February 15, 1995. No shares were converted during 2023 or 2022. The Series S-PIK preferred stock ranks junior to the Series S and Series S-NR preferred shares as to the distribution of assets upon liquidation, dissolution, or winding up of the Company. Upon liquidation of the Company, the S-PIK preferred stock will have a liquidation preference of $2.00 per share. A cumulative quarterly dividend of $0.04 per share is payable on Series S-PIK preferred stock. At December 31, 2023 and 2022, outstanding Series S-PIK preferred stock totaled 260,000 shares. Cumulative dividends in arrears at December 31, 2023 and 2022 amounted to $520,000 and $478,400, respectively.

Payment of Preferred Dividends

The Company did not pay any dividends due on its preferred stock in 2023 or 2022. However, payment of all cumulative and non-cumulative preferred stock dividends, outstanding at any time, is required before the Company can issue any dividends on its common stock.