Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Preferred Stock and Warrants

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Note 14 - Preferred Stock and Warrants
3 Months Ended
Jun. 26, 2021
Notes to Financial Statements  
Preferred Stock [Text Block]

Note 14.       Preferred Stock and Warrants

 

Series E Senior Convertible Voting Perpetual Preferred Stock

 

On March 26, 2018, the Company issued and sold 42,800 shares of a newly designated series of 6.0% Series E Senior Convertible Voting Perpetual Preferred Stock (“Series E Shares”) to approximately 15 investors in a private placement for gross proceeds of approximately $1.1 million. Net proceeds to the Company after fees and expenses were approximately $1.0 million. During the 2019 fiscal year, the Company issued and sold an additional 56,200 Series E Shares resulting in additional gross proceeds of $1,405,000 or approximately $1.2 million after fees and expenses of approximately $212,000.

 

Holders of Series E Shares are entitled to receive, when and if declared by the Company’s Board of Directors, cumulative preferential dividends, payable semiannual in cash at a rate per annum equal to 6.0% of the initial purchase price of $25.00 per share or in-kind (at the Company’s election) through the issuance of shares of the Company’s common stock, based on the 10 day volume weighted average price of the common stock. The deemed dividend is reflected on the face of the income statement as a decrease in net income (or an increase in the case of a net loss) to arrive at net income (loss) attributable to common shareholders.

 

Series E Exchange

 

The Company completed a private exchange offer on November 7, 2019, issuing an aggregate of 896,636 shares of common stock in exchange for 88,600 Series E Shares and the unpaid dividends accrued thereon. The shares of common stock issued in the exchange were issued in reliance on the exemption from registration set forth in Section 3(a)(9) of the Securities Act of 1933 (“Securities Act”), though other exemptions may be available.

 

During the three months ended June 26, 2021, the Company issued an additional 35,000 shares of common stock in exchange for 3,500 Series E Shares. As a result, 5,700 Series E Shares with an aggregate liquidation preference of $214,000 remained outstanding as of June 26, 2021. See Note 8.

 

The table below presents Preferred Stock information as of June 26, 2021 and March 27, 2021:

 

Preferred Stock

 

Designated

   

Shares

   

Shares

   

Liquidation

 

As of June 26, 2021

 

Shares

   

Issued

   

Outstanding

   

Preference

 

Series B

    10,000       9,997       9,245     $ 2,136  

Series C

    3,500       3,425       3,425       500  

Series D

    6,000       5,112       5,112       731  

Series E

    100,000       100,000       5,700       214  

Total at June 26, 2021

    119,500       118,534       23,482     $ 3,581  

 

Preferred Stock

 

Designated

   

Shares

   

Shares

   

Liquidation

 

As of March 27, 2021

 

Shares

   

Issued

   

Outstanding

   

Preference

 

Series B

    10,000       9,997       9,245     $ 2,136  

Series C

    3,500       3,425       3,425       500  

Series D

    6,000       5,112       5,112       731  

Series E

    100,000       100,000       9,200       345  

Total at March 27, 2021

    119,500       118,534       26,982     $ 3,712