13. Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Equity

13. STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock at a par value of $0.001.

On February 22, 2019, the Company designated 2,000,000 shares of its preferred stock as 10% Series A Convertible preferred stock, par value $0.001 per share (“Series A Stock”). The Series A Stock is convertible, at any time, into five shares of common stock of the Company.

On each of February 27, 2019 and March 11, 2019, the Company received $400,000 from the sale of 400,000 shares of Series A Stock to accredited investors in private offerings pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D, as promulgated under the Securities Act of 1933, as amended (the “Securities Act”). As an inducement to purchase the Series A Stock, each investor also received 2,000,000 restricted shares of the Company’s common stock.

On April 2, 2019, the Company received $125,000 from the sale of 125,000 shares of Series A Stock to an accredited investor in a private offering pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D, as promulgated under the Securities Act. As an inducement to purchase the Series A Stock, the investor also received 625,000 restricted shares of the Company’s common stock.

As a result of the issuance of the Series A Stock, we recorded a beneficial conversion feature and other discounts as a deemed dividend on our income statement of $740,899.

As of September 30, 2019, an aggregate 925,000 shares of Series A Stock were issued and outstanding. No shares of preferred stock were issued and outstanding as of December 31, 2018.

Common stock

The Company is authorized to issue 500,000,000 shares of common stock at a par value of $0.001 and had 152,317,806 and 138,553,655 shares of common stock issued and outstanding as of September 30, 2019, and December 31, 2018, respectively.

On June 12, 2019, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of Florida to increase the Company’s authorized shares of common stock from 200,000,000 shares to 500,000,000 shares, which amendment was approved by the Company’s board of directors on April 4, 2019 and its shareholders by consent solicitation on May 31, 2019.

Common Stock Issued in Private Placements

During the nine-month period ended September 30, 2019, the Company issued 4,950,000 shares of common stock and warrants to purchase 4,950,000 shares of common stock at an exercise price of $0.25 in private placements for proceeds of $495,000.

During the nine-month period ended September 30, 2018 the Company issued 304,870 shares of stock in private placements for proceeds of $76,218 with a share price of approximately $0.25 per share.

Common Stock Issued in Connection with the Exercise of Warrants

During the nine months ended September 30, 2019, no common stock purchase warrants were exercised.

During the nine months ended September 30, 2018, the Company issued 256,455 shares of common stock for proceeds of $61,500 under a series of stock warrant exercises with an exercise price of $0.24 per share.

Common Stock Issued in Exchange for Consulting, Professional and Other Services

During the nine months ended September 30, 2019, the Company did not issue any of its shares of common stock to employees, officers, and directors. The Company issued 2,664,058 shares of common stock with a fair value of $606,796 to consultants and other professionals in lieu of cash payments for services provided to the Company.

During the nine months ended September 30, 2018, the Company issued 595,321 shares of common stock with a fair market value of $292,443 to employees, officers and directors in lieu of cash payments. Additionally, the Company issued 834,500 shares of common stock with a fair value of $402,250 to consultants and other professionals in lieu of cash payments for services provided to the Company.

Each share issuance made in exchange for services was valued based upon the trading price of the Company’s common stock on the OTC markets on the date the services were performed.

Common Stock Issued in lieu of Cash for Loans Payable and Other Accrued Obligations

During the nine months ended September 30, 2019, the Company issued 564,833 shares of common stock with a fair market value of $389,440 to satisfy loans payable and other accrued obligations. See Note – Accounts Payable and Accrued Liabilities for more information.

During the nine months ended September 30, 2018, the Company issued 1,898,530 shares of common stock with a fair market value of $671,376 to satisfy loans payable and other accrued obligations.

Common Stock Issued in Connection with the Issuance of Convertible Debentures

During the nine months ended September 30, 2019, the Company issued 160,260 shares of common stock as a result of certain penalties incurred in connection with certain unsecured, convertible note agreements. The fair value of the shares aggregated $32,418 and was recorded as interest expense in the Company’s consolidated financial statements.

During the nine months ended September 30, 2018, the Company issued 538,093 shares of common stock with a fair market value of $264,179 to investors as an inducement to lend in connection with the issuance of its unsecured, convertible notes. The fair value of the shares was recorded as interest expense in the Company’s consolidated financial statements. 

Common Stock Issued in the Acquisition of a Business

During the nine months ended September 30, 2018, the Company issued 150,000 shares valued at $52,000 in connection with the acquisition of the assets of Bonnie Boat & Friends.

Common Stock Issued in Connection with the Amendments of the Terms of a Promissory Note

During each of the nine months ended September 30, 2019 and September 30, 2018, the Company issued 800,000 shares valued at $480,000 and $220,000 respectively, in connection with the amendment to the $4.0 million TDA Sellers Note. See Note 12 – Debt for more information.

During the nine months ended September 30, 2018, the Company also issued 5,000 shares valued at $2,250 in connection with the amendment of a $40,000 promissory note.

Stock Purchase Warrants

The stock purchase warrants have been accounted for as equity in accordance with FASB ASC 480, Accounting for Derivative Financial Instruments Indexed to, and potentially settled in, a company’s own stock, distinguishing liabilities from equity.

The following table reflects all outstanding and exercisable warrants at September 30, 2019, and December 31, 2018. All stock warrants are exercisable for a period between three and five years from the date of issuance.

	Number of Warrants Outstanding			Weighted Avg. Exercise Price		Weighted Avg. Contractual Life (Yrs.)
Balance January 1, 2017		7,608,154		$	0.26		0.75
Warrants issued		567,166		$	1.50		2.00
Less: Warrants exercised		(7,107,765	)	$	0.24
Warrants forfeited		(29,190	)	$	0.24
December 31, 2017		1,038,365		$	1.36		2.38
Warrants issued		–			–
Warrants exercised		(256,455	)		–
Balance 31, 2018		781,910		$	1.36		1.38
Warrants issued		4,950,000			0.25		3.00
Warrants forfeited		–			–
Warrants exercised		–			–
Balance September 30, 2019		5,731,910		$	0.40		1.87

Stock Options

The following table represents all outstanding and exercisable stock options as of September 30, 2019.

	Options Issued		Options Forfeited		Options Outstanding		Vested Options		Exercise Price		Weighted Average Remaining Life in Years
		10,862,850		3,961,500		6,901,350		6,901,350	$	0.24		3.97
		9,695,250		9,695,250		–		–	$	0.36		–
		938,250		938,250		–		–	$	0.48		–
		13,135,500		–		13,135,500		13,135,500	$	0.72		0.41
		5,481,000		–		5,481,000		5,481,000	$	0.78		1.75
Total		40,112,850		14,595,000		25,517,850		25,517,850	$	0.60		2.34

The Company did not issue any stock options during the nine months ended September 30, 2019 or for the nine months ended September 30, 2018.

For the nine months ended September 30, 2019 and 2018, the Company recorded no expense and $920, respectively in stock-based compensation expense related to these stock options.