BWMG Brownies Marine Group Inc (PK)

On May 21, 2020 the Board of Directors of Brownie’s Marine Group, Inc. agreed to provide incentive compensation to six individuals who are either our employees or independent contractors for additional time spent by these individuals on our BLU3-VENT project. As previously announced, BLU3, Inc., our wholly-owned subsidiary, is engaged in the development of a mechanical ventilator (the “BLU3-VENT”) utilizing our proprietary breathing air pump and respiration detection sensor originally invented for our NEMO tankless diving system. We have submitted a technical proposal in response to the Department of Defense DIY Hack-A-Vent Innovation Challenge and other similar initiatives seeking innovative ways to rapidly produce ventilators during this time of critical demand due to COVID-19. We are working with Wright Brothers Institute (“WBI”) in connection with this project. On April 14, 2020, we received a purchase order from a third-party to produce several ventilator prototypes. The BLU3-VENT has undergone preliminary testing; however, it is not yet ready to be put on the market and the ultimate marketability of the BLU3-VENT is unknown at this time.

In recognition of the additional time devoted to this project, and to further incentivize these individuals, we agreed to compensate these individuals, who include Mr. Robert M. Carmichael, our CEO, and Mr. Blake Carmichael, the CEO of BLU3, Inc., in amounts representing the difference between the rate we expect to bill WBI for the time spent by these individuals on this project at competitive service rates of engineers, innovators and contractors, and the actual hourly rate of the employee or independent contractor paid by us. Of the aggregate of approximately $214,648 of incentive compensation, $53,668 will be paid in cash and the balance of $160,980 was paid through the issuance of an aggregate of 3,658,633 shares of our common stock valued at $0.044 per share. Mr. Robert Carmichael received a total of $31,904 of incentive compensation which was paid through the issuance of 725,087 shares of our common stock and Mr. Blake Carmichael received a total of $37,369 of incentive compensation which was paid through the issuance of 849,305 shares of our common stock.

The recipients are either accredited or sophisticated investors and the issuances were exempt from registration under the Securities Act of 1933, as amended, in reliance on exemptions provided by Section 4(a)(2) of that act. Each of the recipients entered into a letter agreement with us, the form of which is filed as Exhibit 10.1 to this report.