SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

22. SUBSEQUENT EVENTS

On November 2, 2012, the Board of Directors consented to expand the Board of Directors’ (BOD) compensation plan to include any employee, non-executive members. In addition, they consented to grant equity based bonuses to certain key employees and consultants as an incentive to retain their services. Stock incentive bonuses will vest, and be paid out on May 2, 2013, contingent upon continued employment or service. The stock bonus price per share was calculated as $.0009 based on last closing price per the OCBB for a total of $75,100. The number of shares that will be set aside and reserved for this transaction is 80,500,000. Of the 80,500,000 shares, 50,000,000 shares were awarded to the Chief Executive Officer, or $45,000 of the $75,100. The Company will accrue operating expense ratably from the time of the awards through May 2, 2013, when vested. In addition, the BOD agreed to convert the BOD fee due Mr. Mikkel Pitzner of $22,500 for the nine months ended September 30, 2012, to stock issuable immediately at the $.0009 per share market price, or 25,000,000 shares.

Effective November 1, 2012, the Company entered into a one year lease on the real estate the Company occupies as it manufacturing and headquarters. The terms of the lease are base rent of $3,750 plus sales tax, and either party can cancel the lease with 90 days written notice.

Effective October 31, 2012, the Company entered into another convertible debenture with the lender referred to in Note 11. CONVERTIBLE DEBENTURES , Ref (4). The $78,500 convertible debenture bears interest at 8% per annum, and matures on August, 2, 2013. Shares are convertible at a 39% discount to market price beginning 180 days after the effective date of the note. Other terms and conditions are the same as those of the other two debentures outstanding with this holder. The Company valued the beneficial conversion feature (BCF) of the convertible debenture at $50,189, its intrinsic value. Accordingly, the $78,500 debenture is discounted by the amount of the BCF. The Company will accrete the discount to the convertible debenture through its maturity, and will recognize interest expense until paid in full or converted. The Company reserved 443,000,000 shares of common stock as a requirement of the transaction.

Conversions of debentures to common stock occurred from October 1, 2012 to November 7, 2012. The stock was issued upon partial conversion of a convertible note without restrictive legend pursuant to Rule 144, as the holder acquired convertible note issued by the Company more than six months prior to the date of conversion and did not pay any additional consideration for the shares. Conversions were as follows (ref. number corresponds to lender reference number in Note 11. CONVERTIBLE DEBENTURES):

Ref (11) lender -

On October 24, 2012, the lender converted $2,365 debenture to 8,600,000 shares

Ref (9) lender-

On October 1, 2012, the lender converted $2,310 debenture to 8,400,000 shares

On October 4, 2012, the lender converted $2,310 debenture to 8,400,000 shares

On October 15, 2012, the lender converted $2,365 debenture to 8,600,000 shares

On October 19, 2012, the lender converted $2,365 debenture to 8,600,000 shares

On October 24, 2012, the lender converted $2,180 debenture to 7,927,273 shares

Ref (12) lender-

On October 5, 2012, the lender converted $2,255 debenture to 8,200,000 shares

On October 19, 2012, the lender converted $2,365 debenture to 8,600,000 shares

On October 8, 2012, the Company issued 500,823 shares of restricted common stock for $551 legal services.

On October 25, 2012, the Company entered into an Agreement with Triton Submarines, LLC (“Triton”) to pay a referral fee based on a percentage of sales to new customers referred by Triton.

On October 26, 2012, the Company issued Florida Dive Industries, Inc. 2,200,000 shares escrowed related to purchase of Dive Store Assets. See Note 7. ASSET PURCHASE.