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Subsequent Events
9 Months Ended
Sep. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

13. SUBSEQUENT EVENTS

 

On November 11, 2018, the Company entered a new lease agreement for approximately 8,025 square feet adjoining its existing facility in Pompano Beach, Florida. Terms of the new lease include a sixty-nine month term commencing on January 1, 2019, or the date the Company takes possession of the premises, if earlier; a $6,527 security deposit; initial base rent of approximately $4,848 per month escalating at 3% per year during the term of the lease plus Florida state sales tax and payment of 10.11% of the buildings annual operating expenses (i.e. common area maintenance) which is approximately $1,679 per month subject to adjustment as provided in the lease.

 

On November 15, 2018, the Company, Brownie’s Marine Group, Inc., entered into a Note Conversion Agreement with Joe Perez (the “Noteholder”) pursuant to which the Noteholder converted $526,000 of principal and accrued interest due him by the Company under the terms of a 10% unsecured convertible debenture dated May 3, 2011, into 50,000,000 shares of the Company’s common stock in full satisfaction of such obligation. The shares of common stock represent approximately 32% of the Company’s outstanding shares of common stock, giving effect to such issuance, and approximately 19% of shares entitled to vote on matters submitted to a vote of the Company’s shareholders. The issuance of the shares, however, will not result in a change of control of the Company as a result of the shares of the Company’s common stock and super-voting Series A Convertible Preferred Stock held by Mr. Robert M. Carmichael, an executive officer and member of the Company’s board of directors, who controls approximately 51% of the Company’s outstanding voting securities. The Company expects to record a loss on this conversion of this debt of approximately $249,000 during the quarter ending December 31, 2018.