SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

22.	SUBSEQUENT EVENTS

On March 19, 2012, the Company received a notice of conversion pursuant to $50,000 convertible debenture [Convertible Debenture (5) in Note 10. Convertible Debentures] for conversion of 100% of the $50,000 principal balance to common stock. The conversion price was $.017 per share for 2,941,176 shares. Along with the conversion notice, the Company was provided a notice of default for failure to pay interest when due and deliver Warrants. The amount of interest due as of the notice of default is approximately $5,500. The Company is working toward curing the default.

On February 3, 2012, the Company entered into an asset purchase agreement with Florida Dive Industries, Inc. (“Seller”). On March 5, 2012, the same parties executed an amendment (“Amendment”) to the agreement (collectively, the“Agreement”). Under the terms of the Agreement, the Company acquired certain diving and related inventory, and Seller provided a three year non-compete agreement within a 10-mile wide radius. In addition, the Company assumed a commercial lease obligation for a retail dive store in Boca Raton, Florida beginning in April 1, 2012. The lease is automatically renewable on an annual basis through May 31, 2014, with 90 days written notice assuming the Leasee is in compliance with all terms of the lease. The lease amount is base rental plus an allocated amount of common areas maintenance (‘CAM”). Base rental increases annually by the greater of 5% or the annual consumer price index. The current monthly rental including CAM at the time of assignment is approximately $3,200.

As a purchase price, the Company shall pay Seller, on a monthly basis, beginning April 1, 2012, and thereafter until May 13, 2012, in equal payments, the total cash purchase price of $22,500. In addition, the Company shall issue Seller 2,200,000 shares of restricted stock as part of the purchase price as provided for in the Amendment. The fair market value of the Company’s 2,200,000 shares of restricted stock on March 5, 2012, was $59,400, or $.027 per share. Both the restricted stock and the monthly payments due Seller shall be maintained in an escrow account for six months as a purchase price holdback for contingent liabilities not otherwise settled by Seller. If such items including rent and any building or zoning code violations have not been paid by Seller during this period, the Company will settle said liabilities with the purchase price holdback.

On February 2, 2012, the Company entered into a consulting agreement for financial and public relations services. The term of the agreement is for twelve (12) months and either party may cancel the agreement with 30 days written notice. Payment shall be monthly in the form of $10,000 cash, or $20,000 worth of common stock based on the weighted average of the Company’s stock for the month at a 30% discount. Payment in cash or stock is at the option of the Company.

On January 25, 2012, the Company borrowed $37,500 for a convertible debenture from the same lender as discussed in Note 10. Convertible Debentures, item (4). The convertible debenture has the same general terms and conditions as the previous two debentures granted this same lender. The Company issued and reserved 185,000,000 shares of common stock to cover future conversions of debt related to this debenture.