Item 1.01 Entry into a Material Definitive Agreement
Guaranty
On September 30, 2022, Brownie's Marine Group, Inc. (the "Company") executed a
guaranty of lease, dated September 30, 2022 (the "Guaranty"), to guarantee the
payment and performance obligations of Submersible Systems, Inc., a Florida
corporation and a wholly-owned subsidiary of the Company ("Submersible"), under
a five-year standard industrial/commercial multi-tenant lease between
Submersible and Slater Palms, LLC, dated September 30, 2022, for approximately
13,000 square feet of office, warehouse and manufacturing space located at 7413
Slater Avenue, Huntington Beach, California (the "Lease"). Among other things,
the Lease provides for an initial base rent of $17,550.
Convertible Demand Note
On September 30, 2022, the Company issued a convertible demand promissory note
to Robert Carmichael ("Carmichael") in the principal amount of $66,793 (the
"Demand Note"). The note is convertible at any time at the election of
Carmichael into shares of common stock, par value $0.0001 per share, of the
Company at a conversion price equal to a 35% discount to the volume weighted
average price of such common stock for the 90 days immediately preceding the
date of the Demand Note. Such number of shares issuable upon conversion is
subject to adjustment for certain corporate actions as described in the Demand
Note.
Item 3.02 Unregistered Sales of Equity Securities
Reference is made to the disclosure set forth under Item 1.01 above, which
disclosure is incorporated herein by reference.
The common stock issuable upon the conversion of the Demand Note will be exempt
from registration under Section 4(a)(2) under of the Securities Act of 1933, as
amended, as transactions by an issuer not involving any public offering.
Item 4.01 Changes in Registrant's Certifying Accountant.
Effective as of October 10, 2022, Liggett & Webb, P.A. ("Liggett & Webb")
resigned as the independent registered public accounting firm engaged to audit
the financial statements of the Company. Also on such date, the Company's Board
of Directors engaged Assurance Dimensions, Inc. to serve as its independent
registered public accounting firm to review its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2022.
The reports of Liggett & Webb on the financial statements of the Company for the
fiscal years ended December 31, 2021 and December 31, 2020, did not contain any
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles, except that such reports
included an explanatory paragraph with respect to the Company's ability to
continue as a going concern.
During the years ended December 31, 2021 and December 31, 2020, and the
subsequent interim periods from January 1, 2022 through the date of this report,
there were no (a) disagreements (as defined in Item 304(a)(1)(iv) of Regulation
S-K) with Liggett & Webb on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to Liggett & Webb's satisfaction, would have
caused Liggett & Webb to make reference to the subject matter thereof in
connection with its reports for such years; or (b) reportable events, as
described under Item 304(a)(1)(v) of Regulation S-K.
During the years ended December 31, 2021 and December 31, 2020, and through the
date of this report, neither the Company nor anyone on its behalf has previously
consulted with Assurance regarding either (a) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements,
and neither a written report was provided nor oral advice was provided to the
Company that Assurance concluded was an important factor considered by the
Company in reaching a decision as to the accounting, auditing or financial
reporting issue; or (b) any matter that was either the subject of a disagreement
(as defined in paragraph 304(a)(1)(iv) of Regulation S-K and the related
instructions thereto) or a reportable event (as described in paragraph
304(a)(1)(v)) of Regulation S-K).
The Company provided Liggett & Webb with a copy of the disclosures it is making
in this Current Report on Form 8-K and requested from Liggett & Webb a letter
addressed to the Securities and Exchange Commission indicating whether it agrees
with such disclosures. A copy of Liggett & Webb's letter dated October 10, 2022
is filed herewith as Exhibit 16.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
4.1 Demand Note, dated September 30, 2022, issued by the Company to
Robert Carmichael
10.1 Lease between Submersible and Slater Palms, LLC, dated September
14, 2022, and Guaranty from the Company, dated September 30, 2022
16.1 Letter from Liggett & Webb, dated October 10, 2022, to the
Securities and Exchange Commission
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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BROWNIE'S MARINE GROUP, INC. 
