17.	JOINT VENTURE EQUITY EXCHANGE AGREEMENT

In December 2014, the Company received notice from Pompano Dive Center, LLC. (“PDC”) of intent to cancel the Joint Venture Equity Exchange Agreement described below effective January 1, 2015, in accordance with the terms of the agreement. After notice, BWMG awaited the return of the stock PDC held in BWMG to fulfil terms of dissolution. PDC returned the stock at the end of the second quarter of 2015 and the Company cancelled it at the beginning of third quarter of 2015. The cancellation is reflected on the face of the statement of stockholders’ equity. Market value of the 3,394 shares of stock PDC held that were returned was $0. The Company had recorded the decline in value of the stock in the second quarter of 2014 by reversing the $24,740 long term asset (purchase option) tied to the stock provided PDC discussed below, with corresponding reduction in additional paid in capital to write the asset down to fair market value.

On November 7, 2011, the Company entered into a Joint Venture Equity Exchange Agreement (“Agreement”) with PDC. PDC owns a retail store, several dive boats, and has a classroom for training divers. Under the terms of the Agreement, the Company will provide PDC with an assortment of Brownie’s Third Lung products on consignment, and PDC will act as a training and demonstration site for Brownie’s Third Lung products.

Beginning in 2012, both parties ceased operating under the consignment inventory arrangement. Inventory not sold was returned, and inventory was purchased for sale. See Note: 7 RELATED PARTIES TRANSACTIONS - Net revenues and accounts receivable – related parties for further information related to pre-2015 related party information. Terms of sale to PDC were no more favorable than those granted other dealers of the Company’s products.

In addition, the Agreement provided for a non-binding letter of intent for the possible acquisition of PDC in exchange for BWMG’s stock for the yet to be agreed upon value of PDC. In anticipation of a possible purchase, the Agreement provided BWMG with a 33% interest in PDC. As part of the transaction, BWMG issued 3,394 restricted shares of its common stock with fair market value on the date of the transaction of $24,740 to PDC, reflected in other assets in the long-term portion of the Company’s balance sheet.

If BWMG purchased PDC, the stock issued by BWMG would have been credited to the purchase price. Further, PDC was required to remit no later than 45 days from the end of each quarter, a 33% share in pre-tax net profits. At least 50% of the total pre-tax profits were required for distribution under the Agreement, and BWMG was not required to share in losses.

Terms of the above included upon termination of this Agreement by either party and/or a written purchase and sales agreement not consummated by the parties, then the parties’ respective interests in each other’s business would revert back to the original party. Accordingly, when this happened, PDC would relinquish the interest acquired in BWMG through this Agreement and BWMG wouldl do the same. All property at PDC owned by BWMG would be returned to BWMG at that time as well. The Company accounted for the investment in PDC under the Cost basis because the joint venture was cancellable at any time by either party with return of respective interest transferred to each as per the joint venture agreement; the possible acquisition of PDC was in the form of a non-binding letter of intent; each entities assets and liabilities remained their owned; and BWMG was not to share in any of PDC losses or additional expenses unless otherwise approved; and the management and operation of PDC remained with PDC. Since inception of the Agreement and through termination PDC reported pre-tax net losses, there was no profit sharing due the Company in accordance with the Agreement.