Note 6 – 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.

On May 1, 2024, the Company entered into a securities purchase agreement with certain accredited investors. Pursuant to such agreements, the Company sold: (i) senior convertible notes in the aggregate original principal amount of $1,850,000, convertible into up to 115,625 shares of Common Stock, subject to adjustments as provided in the Notes, (ii) 23,125 shares of Common Stock (the “Commitment Shares”), (ii) warrants to initially acquire up to an aggregate of 115,625 additional shares of Common Stock (the “Warrants”) at an exercise price of $34.0 per share.

A convertible promissory note was issued to stockholder on April 15, 2024 for $200,000 at 12% with conversion price of $14.0 per share. The note included 14,286 warrants. The loan matured in July 2025 with principal and interest due semi-annually. Accrued interest of $27,370 was paid prior to August 15, 2024. 

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. The Series A was automatically redeemed after the Company’s 2025 annual stockholders’ meeting.

 Voting Rights

Dividends

Conversion into Common Stock

Redemption – at the sole discretion of the Company

Seniority 

In May - December 2025, the Company issued 1,300 shares of Series A-1 Preferred Stock in exchange for approximately $1,300,000, 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. The Company redeemed all 1,000 shares of Preferred A Stock. As of December 31, 2025, no shares of Preferred A Stock were issued and outstanding.

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. The Series C were subsequently cancelled. See Note 1.

During the year ended December 31, 2025, 3,979 shares of Preferred-B were converted into 328,779 shares of common stock.

Stock Plans

A summary of the Company’s stock option plan and changes during the year ended is as follows:

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 December 31, 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 stockholders 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:

* These prices are reflective of the price modification made on April 24, 2023.

The Company determined the grant date fair value of the options granted using the Black Scholes Method using the following assumptions:

The fair value of stock options granted in 2025 has been measured at 15,000 shares using the Black-Scholes option pricing model with the following assumptions: exercise price $6.04, expected life 10 years, expected volatility 254%, expected dividends 0%, risk free rate 4.0%.

Note 6 – Stockholders’ Equity, continued

During the year ended December 31, 2025, the fair value of options granted amounted to $90,531. As of December 31, 2025, the intrinsic value of stock options outstanding and exercisable was $0. Stock compensation expense for the years ended December 31, 2025 and 2024 was $264,981   and $1,411,883, respectively.

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 then Chief Financial Officer, and certain employees, with vesting terms consistent with the award agreements. All warrants are fully vested except those issued to the former Chief Executive Officer, Robert Nistico, for whom one-third (250,000) was vested as of December 31, 2025 and 500,000 vest in equal 62,500 share increments quarterly over a two-year period with the first such vesting date being October 31, 2025. As such, as of December 31, 2025, 437,500 of Mr. Nistico’s warrants were vested and 312,500 were unvested.

For the year ended December 31, 2025, the Company recorded stock-based compensation expense of $8,456,951, measured using the Black-Scholes option pricing model with the following assumptions: exercise price $1.40, expected life 5 years, expected volatility 254%, expected dividends 0%, risk free rate 4.37%.

The following is a summary of the Company’s warrant activity and reflects the 1 for 40 reverse split.

The fair value of warrants recognized in the period has been estimated using the Black-Scholes option pricing model with the following assumptions.