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Stockholders’ Equity
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
Stockholders’ Equity

Note 5– Stockholders’ Equity

 

Common Stock

 

On March 27, 2025, the Company implemented a 1.0 for 40.0 reverse stock split. The reverse stock split was authorized by the Company’s Board of Directors on March 14, 2025. All numbers of shares of common stock have been adjusted to reflect the split. The purpose of this reverse split was to ensure that the Company could meet the per share price requirements of the NYSE American.

 

During the nine-months September 30, 2025, we issued 55,500 shares valued at $141,595 in exchange for services, 586,037 shares for conversion of notes payable and accrued interest totaling $2,122,244.

 

Preferred Stock

 

The Company evaluated the classification of the Preferred Stock and related warrants issued with the Series A-1 Preferred Stock in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. Based on this assessment, management determined that the Preferred Stock and warrants meet the criteria for equity classification. Specifically, the instruments are not mandatorily redeemable, do not embody obligations to repurchase the Company’s shares by transferring assets, and do not require settlement in a variable number of shares with a monetary value that is fixed, tied to a variable other than the Company’s own stock, or indexed to something other than the Company’s stock. The warrants are indexed solely to the Company’s common stock and meet the scope exception under ASC 815-10-15. Accordingly, the Preferred Stock and related warrants have been classified as components of stockholders’ equity in the accompanying condensed consolidated financial statements.

 

The Company has issued four series of preferred stock: Series A, A-1, B, and C, each with distinct rights and preferences as outlined below. Note agreements were amended to be exchanged for Preferred B and the impact of those amendments is subject to further review.

 

Voting Rights

  

  ● Series A carries 25,000 votes per share but is limited solely to voting on the authorization of additional shares. It has no other voting rights. Series A is redeemable. Series A shares are held solely by Robert Nistico, Director, a related party.
  ● Series A-1 carries 180 votes per share.
  ● Series B and Series C do not carry any voting rights.

  

Dividends

 

  ● Series A does not accrue dividends.
  ● Series A-1 and Series B carry a fixed 12% annual dividend, payable quarterly in arrears, in either cash or payment-in-kind (PIK) at the Company’s discretion. These dividends are mandatory and take priority over any dividends on common stock, regardless of whether common stock dividends are declared.
  ● Series C does not accrue dividends.

 

Conversion into Common Stock

  

  ● Series A is not convertible.
  ● Series A-1 is convertible into common stock at 80% of the VWAP, subject to a floor of $1.25 and a ceiling of $4.00. A-1 is convertible into a range of 262,500 to 840,000 common shares.
  ● Series B is also convertible at 80% of the VWAP, with a floor of $1.25 and a ceiling of $6.00,and is convertible into a range of 2,118,333 to 10,168,000 common shares.
  ● Series C is convertible at a fixed price of $3.00, resulting in the potential issuance of 6,666,667 common shares upon conversion.

   

Redemption – at the sole discretion of the Company.

 

  ● Series A is redeemable by the Company.
  ● Series A-1 and Series B are redeemable by the Company after two years from the date of issuance, for $1,050,000 and $12,700,000, respectively.
  ● Series C is not redeemable.

  

Seniority

  

  ● Series B is the most senior class (Seniority Level 1).
  ● Series A-1 ranks junior to Series B (Seniority Level 2).
  ● Series C is the most junior class (Seniority Level 3).
  ● Series A is a governance-related instrument and does not participate in liquidation or dividend preferences.

  

In May - October 2025, the Company issued 1,050 shares of Series A-1 Preferred Stock in exchange for approximately $1,050,000, of which 150 shares were issued during July 2025 in exchange for $150,000. Series A-1 shares are convertible into common stock, subject to shareholder approval. Investors of A-1 Shares also received 262,500 1-year A Warrants exercisable into common stock at 80% of 5-day VWAP, and 262,500 5-year B Warrants exercisable into common stock at $4.00.

 

In June 2025, the Company issued 1,000 shares of Preferred A Stock to Robert Nistico, Director, a related party. Preferred A is super voting preferred, not convertible into common stock. Mr. Nistico is the sole holder of Preferred A.

 

In June 2025, the Company exchanged previously issued convertible notes, $10,580,336 of principal and $2,090,105 interest for 126,710 shares of Preferred Stock B, eliminating $7,699,596 of current liabilities and $2,070,712 of long-term liabilities. These liabilities were previously carried net of unamortized discounts. Debt agreements were amended to be exchanged for Preferred B. The Series B shares are convertible into common stock, subject to shareholder approval. The note discount on the date of conversion was 1,843,519, The loss on extinguishment of debt was $5,560,482 recorded in accordance with ASC 470. The fair market value of the Preferred Stock B utilized in the computation of the loss on extinguishment was $16,387,404.

 

In June 2025, the Company acquired certain assets, including all contractual water rights to the aquifer located in Garabito, Puntarenas, Costa Rica. The Company issued 20,000 shares of Series C Preferred Stock as consideration, at an initial stated value of $1,000 per share. Management determined that the transaction is an asset acquisition under ASC 805, as substantially all of the fair value is concentrated in a single identifiable asset—the water rights—and no substantive processes were acquired.. The acquisition of the water rights was recorded at a cost of $20 million, which is the fair value of the Series C preferred shares issued as consideration for the acquisition of the water rights. The Series C shares are convertible into common stock, subject to shareholder approval.

 

During August 2025, 1,535 shares of Preferred-B were converted into 113,295 shares of common stock.

  

Stock Plan

 

2020 Plan adjusted for the 1 for 40 reverse split.

 

In July 2020, the Board adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which provides for the grant of Options, Restricted Stock Awards, Stock Appreciation Rights, Performance Units and Performance Bonuses to consultants and eligible recipients. The total number of shares that may be issued under the 2020 plan was 152,383 as of September 30, 2025.

 

The 2020 Plan has an “evergreen” feature, which provides for the annual increase in the number of shares issuable under the plan by an amount equal to 5% of the number of issued and outstanding common shares at year end, unless otherwise adjusted by the board. In October 2023, the shareholders voted to increase the number of shares issuable under the Plan to 7.5%. At January 1, 2024 and 2025, the number of shares issuable under the 2020 plan increased by 83,119 and 125,238 shares, respectively.

 

The following is a summary of the Company’s stock option activity:

 

                    
Options   2025  2024
   Number of Options  Weighted Average Exercise Price  Number of Options  Weighted Average Exercise Price
             
Balance - January 1*   216,212   $29.60    106,475   $45.20 
                     
Granted   15,000    6.04    15,750    23.60 
Exercises   —    —    —    — 
Cancelled   12,500    13.20    —    — 
                     
Balance – March 31,    218,712   $28.78    122,225   $42.40 
                     
Granted   —    —    96,375    13.20 
Exercises   —    —    —    — 
Cancelled   —    —    —    — 
                     
Balance – June 30,    218,712    28.78    218,600   $29.60 
                     
Granted   —    —    —    — 
Exercises   —    —    —    — 
Cancelled   4,458    13.20    —    — 
                     
Balance – September 30,    214,254   $29.13    218,600   $29.60 
                     
 Exercisable – September 30,    190,494   $31.08    171,379   $32.80 

 

The fair value of stock options granted in 2025 has been measured at $90,531 using the Black-Scholes option pricing model with the following assumptions: exercise price $6.0, expected life 10 years, expected volatility 254%, expected dividends 0%, risk free rate 4.00%.

 

During the three-month period ended September 30, 2025 and September 30, 2024, the Company did not grant any options to employees under the 2020 plan. During the nine-month period ended September 30, 2025 and September 30, 2024, stock-based compensation was recorded $250,027 and $112,125 respectively. The remaining unamortized stock-based compensation as of September 30,2025 was $201,822.

  

On July 31, 2025, the Board of Directors approved the issuance of 5,150,000 warrants to directors, officers, and employees with an exercise price of $0.80 per share and a ten-year term. The awards included grants to directors, the President, the Chief Financial Officer, and certain employees, with vesting terms consistent with the award agreements. All warrants are fully vested except those issued to directors and the former Chief Executive Officer, whose 750,000-warrant award remains subject to performance and continued service vesting conditions. For the three months ended September 30, 2025, the Company recorded stock-based compensation expense of $7,549,543, measured using the Black-Scholes option pricing model with the following assumptions: exercise price $0.80, expected life 5 years, expected volatility 254%, expected dividends 0%, risk free rate 4.37%.

  

Common Stock Issuable, Liability to Issue Stock and Shareholder Advances

 

The shareholder advances in the amount of $0.2 million were exchanged to 2,444 shares of Preferred Stock B in June 2025.