BWMG Brownies Marine Group Inc (PK)

On April 14, 2020 Brownie’s Marine Group, Inc. entered into a Non-Qualified Stock Option Agreement with Mr. Robert M. Carmichael, its Chief Executive Officer (the “Carmichael Option Agreement”). Under the terms of the Carmichael Option Agreement, as additional compensation we granted Mr. Carmichael an option (the “Option”) to purchase up to an aggregate of 125,000,000 shares of our common stock at an exercise price of $.045 per share, of which the right to purchase 75,000,000 shares of common stock is subject to vesting upon the achievement of the net revenue milestones set forth below (the “Net Revenue Portion of the Option”) and the right to purchase 50,000,000 shares of common stock is subject to vesting upon official notice of the listing of our common stock on The Nasdaq Stock Market, the NYSE American LLC or similar stock exchange. The Net Revenue Portion of the Option shall vest as follows:

● the right to purchase 25,000,000 shares of our common stock shall vest at such time as we report cumulative consolidated net revenues, including revenues from related parties and revenues recognized by our company arising out of any subsequent acquisitions, mergers, or other business combinations following the closing date of such transaction (the collectively, “Net Revenues”), in excess of $3,500,000 in the aggregate over four consecutive fiscal quarters commencing May 1, 2020 and ending on April 30, 2023 (the “Net Revenue Period”);

● the right to purchase an additional 25,000,000 shares of common stock shall vest at such time as we report cumulative Net Revenues in excess of $7,000,000 in the aggregate over four consecutive fiscal quarters during the Net Revenue Period; and

● the right to purchase an additional 25,000,000 shares of common stock shall vest at such time as we report cumulative Net Revenues in excess of $10,500,000 in the aggregate over four consecutive quarters during the Net Revenue Period.

The Carmichael Option Agreement provides that the Option is exercisable by Mr. Carmichael on a cashless basis. The Option is not transferrable by Mr. Carmichael, and he must remain an employee of our company as an additional term of vesting. Once a portion of the Option vests, it is exercisable by Mr. Carmichael for 90 days. Any portion of the Option which does not vest during the Net Revenue Period lapses and Mr. Carmichael has no further rights thereto.

The Carmichael Option Agreement and the granting of the Option was approved by the independent members of our Board of Directors. If vested and exercised, the Option will result in a change of control of our company. The foregoing terms and conditions of the Carmichael Option Agreement are qualified in their entirety by reference to the agreement which is filed as Exhibit 10.1 to this report and incorporated herein by such reference.