Stockholders’ Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders’ Equity

Note 13. Stockholders’ Equity

Common Stock

On February 22, 2021, the Company issued 422,209 shares of common stock related to the conversion of a convertible note and accrued interest of $14,777.

On March 1, 2021, the Company issued a consultant 3,000,000 shares of its common stock related to investor relation services at a fair value of $120,000.

On March 25, 2021, the Company issued 27,500,000 shares of common stock to Charles F. Hyatt, a member of our Board of Directors, in consideration of $275,000.

On February 28, 2021, the Company issued 116,279 shares of common stock to a consultant with a fair value of $5,000 for professional business services.

On June 10, 2021, the Company issued 6,055,358 shares of common stock related to the conversion of a convertible note and accrued interest of $60,554.

On August 18, 2021, the Company issued 6,114,516 shares of common stock related to the conversion of a convertible note and accrued interest of $61,145.

On September 1, 2021, the Company issued Charles Hyatt, a member of our Board of Directors, 10,000,000 units of the Company, with the unit consisting of one share of common stock and a two- year warrant to purchase one share of common stock at an exercise price of $0.025 per share in consideration of $250,000. The Company did not pay any fees or commissions in connection with the sale of the unit.

On September 1, 2021, the Company issued Grace Hyatt, the adult child Charles Hyatt, 600,000 units of the Company, with each unit consisting of one share of common stock and a two- year warrant to purchase one share of common stock at an exercise price of $0.025 per share in consideration of $15,000. The Company did not pay any fees or commissions in connection with the sale of the unit.

In September, 2021, the Company issued 4,000,000 units of the Company to three accredited investors, with each unit consisting of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.025 per share in consideration of $100,000. The Company did not pay any fees or commissions in connection with the sale of the unit.

On September 3, 2021, the Company issued 273,054 shares of common stock to Tierra Vesta Group as part of the purchase agreement of Submersible Systems, Inc. with a fair value of $14,499.

On September 3, 2021, the Company issued 27,032,388 shares of common stock to Summit Holdings V, LLC. as part of the purchase agreement of Submersible Systems, Inc. with a fair value of $1,435,420.

On September 22, 2021, the Company issued a law firm 1,190,476 shares of common stock with a fair value of $55,952 as partial consideration for its legal services related to acquisition of SSI.

In November and December, 2021 the Company issued 597,006 shares of its common stock with a fair value of $21,000 to a consultant for services related to the dive retail industry.

On December 31, 2021 the Company issued 763,983 shares of its common stock with a fair market value of $36,690 to a vendor related to exclusive distribution of its product line in the US and Caribbean.

On January 17, 2022, the Company issued a law firm 1,000,000 shares of common stock with a fair value of $27,500 as part of the agreed upon compensation for a representation agreement.

On January 31, 2022, the Company issued a consultant 121,212 shares of common stock with a fair value of $4,000 for consulting services related to the dive industry.

On February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares from the exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares from the exercise of a warrant at $0.025 per share in consideration of $15,000.

On February 28, 2022, the Company issued a consultant, 85,106 shares of common stock with a fair value of $4,000 for consulting services related to the dive industry.

On May 3, 2022, the Company issued 3,084,831 shares of common stock pursuant to the asset purchase agreement with Gold Coast Scuba, LLC with a fair value of $120,000.

On May 31, 2022, the Company issued a consultant, 302,953 shares of common stock with a fair value of $12,000 for consulting services related to the dive industry.

On June 17, 2022, the Company issued 280,000 shares of common stock to an employee as a retirement gift. The fair value of this stock was $11,060.

On June 30, 2022, the Company issued 449,522 shares of common stock to the holders of convertible notes for payment of interest through June 30, 2022. The fair value of these shares was $23,048.

On September 7, 2022, the Company issued to two accredited investors, 8,541,666 units of the Company, with each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.024 per share in consideration of $205,000. The Company did not pay any fees or commissions in connection with the sale of the units.

On September 30, 2022, the Company issued 136,527 shares of common stock to the holders of convertible notes for payment of interest for the three months ending September 30, 2022. The fair value of these shares was $7,000.

On November 1, 2022, the Company issued an aggregate of 1,155,881 shares to the designated shareholders in accordance with the amended STS Agreement. The fair value of these shares was $30,000.

On December 13, 2022, the Company issued 5,714,286 units, each unit consists of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

On December 31, 2022, the Company issued 198,204 shares of common stock to the holders of convertible notes for payment of interest for the three months ending December 31, 2022. The fair value of these shares was $8,336.

Preferred Stock

During the second quarter of 2010, the holder of the majority of the Company’s outstanding shares of common stock approved an amendment to the Company’s Articles of Incorporation authorizing the issuance of 10,000,000 shares of blank check preferred stock. The blank check preferred stock as authorized has such voting powers, designations, preferences, limitations, restrictions and relative rights as may be determined by our Board of Directors of the Company from time to time in accordance with the provisions of the Florida Business Corporation Act. In April 2011 the Board of Directors designated 425,000 shares of the blank check preferred stock as Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock is convertible into a share of the Company’s common stock at any time at the option of the holder at a conversion price of $18.23 per share. Holders of shares of Series A Convertible Preferred Stock are entitled to 250 votes for each share held. The Company’s common stock and Series A Convertible Preferred Stock vote together as on any matters submitted to our shareholders for a vote. As and December 31, 2022 and 2021, the 425,000 shares of Series A Convertible Preferred Stock are owned by Robert Carmichael.

Equity Compensation Plan

On May 26, 2021 the Company adopted an Equity Compensation Plan (the “Plan”). Under the Plan, stock options may be granted to employees, directors, and consultants in the form of incentive stock options or non-statutory stock options, stock purchase rights, time vested and/performance invested restricted stock, and stock appreciation rights and unrestricted shares. The maximum number of shares that may be issued under the Plan is 25,000,000 shares. The term of the Plan is ten years.

The Company also issued options outside of the plan that were not approved by the security holders. These options may be granted to employees, directors, and consultants in the form of incentive stock options or non-qualified stock options.

Equity Compensation Plan Information as of December 31, 2022:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted – average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a) (c)
Equity Compensation Plans Approved by Security Holders		3,467,647	$	.0400		21,532,353
Equity Incentive Options issued outside of the Equity Compensation Plan		234,971,520		.0359		—
Total		238,439,167	$	.0360		21,532,353

Options

The Company has issued options to purchase approximately 238,439,167 shares at an average price of $0.036 with a fair value of approximately $99,000. For the years ended December 31, 2022 and 2021, the Company issued options to purchase 5,710,901 and 33,473,246 shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

For the years ended December 31, 2022 and 2021, the Company recognized an expense of approximately $951,400 and $1,154,800, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a Black-Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of December 31, 2022, the Company had approximately $3,774,300 of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.5 years. The Company uses straight-line amortization of compensation expense over the requisite service period for time-based options. For performance-based options the Company evaluates the likelihood of a vesting qualification being met, and will establish the expense based on that evaluation. The maximum contractual term of the Company’s stock options is 5 years. The Company recognizes forfeitures as they occur. There are options to purchase approximately 11,558,800 shares that have vested as of December 31, 2022.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

	Year ended December 31,
	2022			2021
Expected volatility		215.2% - 266.8	%		249.4 – 346.4	%
Expected term		2.0 – 2.50 Years			2 - 2.50 Years
Risk-free interest rate		0.3% - 1.4	%		0.25% - .53	%
Forfeiture Rate		0.17	%		0.03	%

The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

A summary of the status of the Company’s outstanding stock options as of December 31, 2022 and 2021 and changes during the periods ending on that date is as follows

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of Options			Exercise Price		Contractual Life in Years		Intrinsic Value
Outstanding at December 31, 2020		199,730,020		$	0.0323		2.84
Granted		33,473,246			0.0430
Forfeited		(75,000	)		0.0360
Exercised		-			-
Cancelled					-
Outstanding – December 31, 2021		233,128,266		$	0.0362		2.23
Exercisable – December 31, 2021		76,068,249		$	0.0284		2.30	$	795,201
Granted		5,710,901			0.0281
Forfeited		(400,000	)		0.0354
Exercised		-			-
Cancelled		-			-
Outstanding – December 31, 2022		238,439,167		$	0.0360		1.43
Exercisable – December 31, 2022		111,558,754		$	0.0321		1.33	$	68,994

The following table summarizes information about employee stock options outstanding at December 31, 2022

Range of Exercise Price		Number outstanding at December 31, 2022		Weighted average remaining life		Weighted average exercise price		Number exercisable at December 31, 2022		Weighted average exercise price		Weighted average remaining life
$	0.018 - $0.0225		70,730,020		2.21	$	0.0182		45,730,020	$	0.0181		1.87
$	0.0229 - $0.0325		9,093,254		2.54	$	0.0251		9,018,254	$	0.0250		0.99
$	0.0360 - $0.0425		25,530,893		3.57	$	0.0398		6,047,980	$	0.0396		3.53
$	0.0440 - $0.0531		133,085,000		0.52	$	0.0455		50,762,500	$	0.0451		0.36
	Outstanding options		238,439,167		1.43		0.0360		111,558,754		0.0321		1.33

As of December 31, 2022, the Company had approximately $3,774,300 of unrecognized pre-tax non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.5 years.

Warrants

On September 1, 2021, the Company issued Charles Hyatt 10,000,000 units, each unit consisted of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.025 per share in consideration of $250,000.

On September 1, 2021, the Company issued Grace Hyatt, the adult child of Charles Hyatt, 600,000 units, each unit consisted of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.025 per share in consideration of $15,000.

On September, 2021, the Company issued 4,000,000 units to three accredited investors, each unit consisting of one share of common stock and a two-year warrant to purchase one share of common stock at $0.025 per share in consideration of $100,000.

On February 2, 2022, the Company issued Charles Hyatt 10,000,000 shares of common stock upon the exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, 600,000 shares of common stock upon the exercise of a warrant at $0.025 per share in consideration of $15,000.

On September 7, 2022, the Company issued an aggregate of 8,541,666 units to two accredited investors. Each unit consisted of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.024 per share in consideration of $205,000.

On December 13, 2022, the Company issued to Charles Hyatt, 5,714,285 units. Each unit consisted of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.0175 per share in consideration of $100,000.

A summary of the Company’s warrants as of December 31, 2022 and 2021, and changes during the years ended December 31, 2022 and 2021 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining
	Number of Warrants			Exercise Price		Contractual Life in Years		Aggregate Intrinsic Value
Outstanding at December 31, 2020		-		$	-		-
Granted		14,600,000			0.0250
Forfeited		-			-
Exercised		-			-
Cancelled		-			-
Outstanding – December 31, 2021		14,600,000		$	0.0250		1.67
Exercisable – December 31, 2021		14,600,000		$	0.0250		1.67	$	153,300
Granted		14,255,951			0.0214
Forfeited		-			-
Exercised		(10,600,000	)		0.0250
Cancelled					-
Outstanding – December 31, 2022		18,255,951		$	0.0245		1.55
Exercisable – December 31, 2022		18,255,951		$	0.0245		1.55	$	12,000