EDGAR 10-K Filing

Company CIK: 1166708
Filing Year: 2025
Filename: 1166708_10-K_2025_0001641172-25-015177.json

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ITEM 1. BUSINESS
Item 1. Business.
Unless specifically set forth to the contrary, when used in this report references to the “Company,” “we,” “our,” “us,” and similar terms refers to Brownie’s Marine Group, Inc., a Florida corporation, and its wholly owned subsidiaries, Trebor Industries, Inc., a Florida corporation (“Trebor”) doing business as Brownie’s Third Lung, Brownie’s High Pressure Compressor Services, Inc. a Florida corporation (“BHP”) doing business as LW Americas (“LWA”), BLU3, Inc., a Florida corporation (“BLU3”), Submersible Systems, Inc., a Florida corporation (“SSI”), doing business as Spare Air and Live Blue, Inc. (“LBI”), a Florida corporation.
Overview
The Company, through its wholly owned subsidiaries, designs, tests, manufactures and distributes tankless dive systems, rescue air systems and yacht-based self-contained underwater breathing apparatus (“SCUBA”) air compressor and nitrox generation fill systems and acts as the exclusive distributor in North and South America for Lenhardt & Wagner GmbH (“L&W”) compressors in the high-pressure breathing air and industrial gas markets. The Company is also the exclusive United States and Caribbean distributor for Chrysalis Trading CC, a South African manufacturer of fitness and dive equipment, which is doing business as Bright Weights (“Bright Weights”), of a dive ballast system produced in South Africa.
On September 3, 2021, the Company, entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Submersible Acquisition, Inc., a Florida corporation incorporated in 2017, and wholly owned subsidiary of the Company (“Acquisition Sub”), Submersible Systems, Inc., a Florida corporation (“Submersible” or “SSI”), and Summit Holdings V, LLC, a Florida limited liability company (“Summit”) and Tierra Vista Group, LLC, a Florida limited liability company (“Tierra Vista” and, together with Summit, the “Sellers”), the owners of all of the capital stock of Submersible, pursuant to which Acquisition Sub merged with and into Submersible (the “Merger”), and Submersible, the surviving corporation, became a wholly owned subsidiary of the Company.
Submersible is a manufacturer of high-pressure tanks and redundant air systems for aviation, manned submersibles, swift water rescue, military and recreational diving industries, based in Huntington Beach, California and sells its products to governments, militaries, private companies and the dive industry throughout the world.
On February 13, 2022 the Company formed LBI, which is being developed as a full retail, guided tour and training model utilizing the technology developed by BLU3 to provide new users and interested divers with guided tour experience, training, and the ability to purchase all of their diving and watersports needs.
On May 2, 2022, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Gold Coast Scuba, LLC, a Florida limited liability company (“Gold Coast Scuba”), Steven M. Gagas and William Frenier, the sole members of Gold Coast Scuba (together, the “LLC Members”) and LBI. Pursuant to the terms of the Asset Purchase Agreement, LBI acquired substantially all of Gold Coast Scuba’s assets and assumed certain non-material liabilities of the business associated with these assets. In addition, LBI assumed the lease for the premises for Gold Coast Scuba.
On or about the 4th of October, 2024 LBI sold the Gold Coast Scuba tradename and other IP rights and certain related inventory to Adventure Seeker Company.
The Company has five wholly owned subsidiaries focused on various sub-sectors of our industry as described below:
● Brownie’s Third Lung | Surface Supplied Air (“SSA”)
● BLU3, Inc. | Ultra-Portable Tankless Dive Systems
● LW Americas | High Pressure Gas Systems
● Submersible Systems, Inc. | Redundant Air Tank Systems
● Live Blue, Inc. | Guided Tours
Our wholly owned subsidiaries do business under their respective trade names on both a wholesale and retail basis from our headquarters and manufacturing facility in Pompano Beach, Florida, and a manufacturing facility in Huntington Beach, California.
Surface Supplied Air Products
Our Third Lung systems have been the market leader in gasoline powered, high-performance and more recently in battery powered surface supplied air (THIRD LUNG) diving systems. Taking full advantage of our proprietary compressor system, a series of traditional “fixed speed” electric compressors were developed for the built-in-boat market in 2005. In 2010, we introduced our variable-speed battery powered THIRD LUNG system which provides divers with gasoline-free all day shallow diving experiences. These systems provide performance and runtimes for up to 3 hours by utilizing a diver-sensitive variable speed technology that controls battery consumption based on diver demand.
The Company continues to pursue distributors and dealers in and outside of the United States in order to diversify the seasonality as well as geography risks. Additionally, we continue to pursue more aggressively the boat builder market to offer our variable speed, battery powered THIRD LUNG systems as an option on newly built boats of all sizes, expanding our market beyond the traditional consumer markets for our products.
Our SSA products include:
● Tankless Dive Systems: The Company produces a line of tankless dive products, commonly called hookah or recreational SSA systems. These systems allow one to four divers to enjoy the marine environment up to a depth of 45 feet without the bulk and weight of conventional SCUBA gear. We believe that the removal of barriers to entry into the sport of diving and the reduction of complicated and bulky SCUBA gear invites a broader range of the general public to participate more actively and enjoyably at their own pace and schedule. Our product is designed to reduce the effort required for its transport and use while exploring, cruising or traveling.
A line of land-based systems is available for light-duty commercial applications that demand portability and performance. In addition to the gasoline-powered units and the variable speed battery powered units, a series of AC electric powered systems is also available for light to commercial use. Powered by battery for portability or household current for unlimited dive duration, these units are used primarily by businesses that work in aquatic maintenance and marine environments.
● BIAS (Boat Integrated Air Systems): The Company developed several tankless products and complimentary accessories that it believes makes boat diving easier. The BIAS battery powered tankless kit allows boat builders, dealers and end users to seamlessly install a pre-packaged kit directly into the boat and our E-Reel, a level-winding battery powered hose reel system, provides compact storage of up to 150 feet of hose. Boaters can perform their own in-water maintenance and inspections or just dive for enjoyment. In addition to supplying air to divers, BIAS may be used for supporting air horns, inflating boat fenders/water toys and activating pneumatically operated doors.
Ultra-Portable Tankless Dive Systems
Through our wholly owned subsidiary BLU3, we develop and market portable battery-powered dive systems. The BLU3 line currently consists of two models, Nomad and Nomad Mini, targeting specific performance levels and price points. The original product of BLU3, called Nemo, has been phased out and replaced by Nomad Mini.
NOMAD dive system (“NOMAD”) began shipping in the third quarter of 2021. NOMAD MINI dive system (“NOMAD MINI”) began shipping in the third quarter of 2023. Both products are currently sold to consumers via our website, Amazon and through our network of dealers worldwide. The NOMAD is highly portable and has a maximum depth of 30 feet. NOMAD MINI has a maximum depth of 15 feet and is more portable than NOMAD and at a lower price point. NOMAD and NOMAD MINI have been marketed through BLU3’s internet presence and marketing campaigns as well as at industry and other trade shows across the country.
BLU3 products are sought after by consumers for a variety of applications that include boat maintenance, shore diving, traveling, underwater metal detecting and fossil hunting, pool leak detection and service, and more.
As of January 2024, BLU3 is the exclusive distributor for North and South America of the SeaNXT Elite sea scooter, made in France. The SeaNXT Elite sea scooter is a luxury water toy that is most popular in the yachting industry. BLU3 markets the SeaNXT Elite product to end-users as well as resellers throughout North and South America.
High Pressure Gas Systems
Through our wholly-owned subsidiary LW Americas, we design, manufacture, sell and install SCUBA tank fill systems for on-board yacht use under the brand “Yacht- Pro™”. Our systems provide complete diving solutions for yachts, including nitrox systems which allow yacht owners to fill tanks with oxygen enriched air on board. The Yacht-Pro™ compressor systems offer a completely marine-prepared, variable frequency drive (“VFD”) driven, automated alternative to other compressors on the market. We also design complete dive lockers, mixed gas production and distribution systems, and the Nitrox Maker™. Nitrox is oxygen-enriched air, which reduces the effects of nitrogen on divers and is the industry standard for dive professionals. The Nitrox Maker™ continuously generates oxygen rich breathing gas directly from low-pressure air with no stored oxygen or other gases required onboard. Our light duty compressor, the new Yacht Pro Essential is specifically designed as a turn-key kit for the boat builders and is optimized to integrate to onboard power systems and withstand the marine environment with all components and hardware impervious to spray from the elements. The Yacht Pro™ series contains models for both medium-duty applications, such as recreational divers and small groups, and heavy-duty use as found on research vessels, commercial operations and live-aboard dive boats. All Yacht Pro™ models come with the variable speed frequency drive reducing the initial start-up power demand typically associated with high pressure compressor systems.
August 2017, we entered into a five-year exclusive distribution agreement with L&W, which agreement automatically renews for successive five-year terms unless terminated as provided for in the agreement. Under the terms of the Exclusive Distribution Agreement, we were appointed the exclusive distributor of L&W’s complete product line in North America and South America, including the Caribbean. We are conducting this business direct to end-users and establishing sales, distribution and service centers for high pressure air and industrial gas systems in the dive, fire, CNG, military, scientific, recreational and aerospace industries under the brand name “L&W Americas/LWA”.
We are exclusively developing a sales, distribution and service capability to assist L&W with completing a worldwide network of L&W’s agencies and service centers.
In addition to breathing air compressors and related peripheral equipment, L&W also offers compressors, storage and purification systems to meet the high-pressure requirements for natural gas filling stations, and high-pressure inert gases such as argon, helium and nitrogen for industrial applications including welding and laser cutting, and for general laboratory use.
We believe the product lines from L&W, will allow LW Americas to offer high quality, competitive products into the first responder and industrial market that utilize compressed air. Our goal will be to build a network of jobbers, dealers, installers and high-pressure compressor distributors by leveraging our know-how, brand awareness, complimentary products and creating sustainable distribution and core product original equipment manufacturer (“OEM”) integration relationships.
Redundant Air Tank Systems
In September 2021, the Company acquired SSI to further expand its product offerings and manufacturing capabilities. SSI has been manufacturing redundant air systems for recreational divers, private companies and militaries throughout the world for more than 40 years. Their state-of-the-art manufacturing facility in Huntington Beach, California is equipped to add to the machining and product development capabilities of the Company.
The SSI acquisition gives the Company access to a world-wide base of in excess of 400 dealers and distributors, GSA contracting capability, as well as the direct source for the redundant air needs for our Brownie’s Third Lung and BLU3 diving equipment and expands warehousing capabilities, reducing freight costs for both sets of customers.
SSI continues to innovate their technologies to meet changing military and commercial needs and is in development of the next generation of their Helicopter Emergency Egress Device (“HEED”) product line, specifically designed for aircraft and military vehicle use. Additionally, SSI has found use for their products in the medical field and continues to develop customer relationships in that area to grow revenue and diversify its product and customer portfolio.
In February 2022, the Company incorporated LBI to begin its expansion into the retail, training and guided tour market. The Company’s vision for LBI is to become a fully integrated retail experience where the Company’s unique products can be show-cased, training can be offered, and a tourist model created. LBI will provide experienced based activities for the consumer in the various watersport activities it sells. In addition, LBI aims to provide training in those activities with the goal of having the consumer purchase the equipment, particularly the unique technologies provided by BLU3, from its retail stores. LBI looks to provide the full Live Blue experience for those consumers ready to enjoy all things watersports.
In May 2022, LBI acquired the assets of Gold Coast Scuba, a dive retail and training facility based in Lauderdale-By-The-Sea, Florida. This retail location is the base in which the Live Blue brand was initially developed.
In October, 2024 LBI sold the Gold Coast Scuba tradename and other IP rights and certain related inventory to Adventure Seeker Company. Adventure Seeker Company doing business as Gold Coast Scuba continues to operate certain aspects of the Live Blue model including demonstrations, training, and selling of all BMG products in the original Gold Coast Scuba location under a new lease arrangement with the property owner. GCS maintains full access to the support teas and products lines at all divisions of BMG as a Live Blue affiliate.
Diving and Snorkeling Industry
The scuba diving equipment market size has grown steadily in recent years. It was valued at $2.1 billion in 2023 and is projected to grow at a compounded annual growth rate (CAGR) of over 4% between 2024 and 2032. We believe the growth in the historic period can be attributed to post-pandemic recovery, rescue and safety equipment development, accessibility of diving courses, e-commerce penetration, the growing coastal tourism and a rise in disposable income.
The Company has entered the tourist market via a guided tour program within LBI that is currently intended to act as an incubator for a scalable franchise model. The Company believes that the guided tour model is an important building block in introducing its battery powered diving products to the consumer market. Additionally, this model will not only give consumers the opportunity to “try before you buy”, but also provide experiential training for the consumer to increase the enjoyment and safety of our diving products.
Yachting Industry
The global luxury yacht market was valued at $7.67 billion in 2023. The market is projected to grow from $8.75 billion in 2024 to $17.33 billion by 2023, exhibiting a CAGR of 8.9% during the forecast period according to Fortune Business Insights report published in February 2025.. The Company’s BIAS systems have been designed with this industry in mind. The Company markets directly to the yachting industry by leveraging its relationships with large yacht servicing companies, yacht builders and yacht brokerages.
The recreational sailing and boating market and yachting industries also continue to grow. The recreational boating market was valued at $38.2 billion in 2024 and is projected to reach $65.9 billion by 2034, with a CAGR of 5.6% according to Market .us.
High Pressure Compressor Line
According to Allied Market Research report published in February 2018, the North American high pressure compressor market is $880 million growing at an estimated CAGR of 3%.
The Company expects to continue to distribute L&W compressors through its YachtPro, and BIAS systems, while continuing to focus on the expansion of its distribution into non-marine related distribution channels that the Company believes should positively impact its market reach.
Intellectual Property
Trade Names
The Company either owns or has licensed from entities in which Robert Carmichael, our Chairman, has an ownership interest, the following registered and unregistered trade names, trademarks and service marks: Brownie’s Third Lung™, browniedive.com, Brownie’s, Brownie’s Third Lung oval symbol, browniedive, YachtPro, NitroxMaker™, BLU3, diveBLU3.com, BLU3 Nemo, BLU3-Vent, Submersible Systems, Spare Air, HEED 3, Snorkelator, easy dive, spareair.com, HELO, RES, Gold Coast Scuba, fast float rescue harness, tankfill.com, browniestankfill, browniestankfill.com, browniespublicsafety.com, browniespublicsafety, Peleton Hose System, Twin-Trim, and Kayak Diving Hose Kit.
The Company owns the following patents:
Patent number
Description
Issued Date
Expiration Date
Owned by
10,758,246
Abdominal Aortic Tourniquet
9/1/2020
3/17/2034
Trebor Industries, Inc.
9,782,182
Abdominal Aortic Tourniquet
10/10/2021
10/26/2033
Trebor Industries, Inc.
9,351,737
Abdominal Aortic Tourniquet
5/31/2016
3/2/2034
Trebor Industries, Inc.
11,265,625
Automated Self-Contained Hooka system with unobtrusive aquatic data recording
3/1/2022
10/30/2039
BLU3, Inc.
11,077,924
System for adjusting pressure limits based on depth of diver(s)
8/3/2021
3/20/2039
Brownie’s Marine Group, Inc.
11,767,089
System for adjusting pressure limits based on depth of diver(s)
9/26/2023
4/10/2041
Brownie’s Marine Group, Inc.
Application number
Description
Filed Date
Owned by
17/683,502
Automated Self-Contained Hooka system with unobtrusive aquatic data recording
3/1/2022
BLU3, Inc.
License Agreements
On April 6, 2018, the Company entered into a patent license agreement (the “STS Agreement”) with Setaysha Technical Solutions, LLC (“STS”) pursuant to which the Company licensed certain intellectual property, including patent rights, non-patent rights and know-how from STS for use in our ultra-portable tankless dive system products. Under the STS Agreement, the Company paid an initial license fee in April 2018 through the issuance of 759,422 shares of common stock with a fair value of $30,000. The STS Agreement further provides for royalties based on annual net revenues. On December 31, 2019, the Company entered into Addendum No. 1 to the STS Agreement (“Addendum No. 1”) which amended the payments due upon the first commercial sale of Nemo. Upon entering into Addendum No. 1, $8,250 was paid to STS in cash and $8,250 was paid on January 10, 2020. On February 6, 2020, the Company issued 828,221 shares of common stock with a fair value of $18,635 in satisfaction of $13,500 for the first commercial sale of the Nemo dive system. On June 30, 2020, the Company entered into Addendum No. 2 to the STS Agreement concerning STS’s assistance related to designing and commercializing certain diving products. Addendum No. 2 provides for a minimum yearly royalty of $60,000, or $15,000 per fiscal quarter, beginning in December 2019 and increasing by 2.15% per year. With the introduction of the NOMAD in the last quarter of 2021, the Company is obligated to pay an additional annual minimum royalty of $60,000 per year for the years 2022, 2023 and 2024, which increased the quarterly minimum royalty by $15,000 per quarter. On January 24, 2024, the Company entered into Addendum No. 3 to the STS Agreement. Addendum No. 3 delays the additional minimum yearly royalty of $60,000, or $15,000 per fiscal quarter from 2024 to 2025. Therefore, no additional minimum royalty was required during 2024, but will be required beginning the fiscal first quarter of 2025. 2025 will be the final year of the additional minimum royalty under the STS agreement. Royalty recorded under the Amended agreement was $125,159.32 and $138,643 for the years ended December 31, 2024 and 2023, respectively.
Marketing
Print Literature, Public Relations, and Advertising
We have in-house graphic design capability to create and maintain product support literature, catalogs, mailings, web-based advertising, newsletters, editorials, advertorials, and press releases. We also, from time-to-time, target specific markets by selectively advertising in journals and magazines that we believe reach our potential customers. In addition, we strive to issue press releases, newsletters, and social media postings periodically to keep the public informed of our latest products and related endeavors.
Tradeshows
In 2024, the Company was represented at The Palm Beach Boat Show, The Annapolis Motor and Sailing Shows, The Fort Lauderdale Boat show, Diving Equipment, Manufacturing show, The Seattle Boat Show, The Dubai Boat Show, Boot Dusseldorf and the HAI Heli-Expo, along with various other trade and industry shows.
Websites
We sell our products online through our and our subsidiaries websites and many of our products are marketed on some of our customers’ websites. In addition to these websites, numerous other websites have quick links to the Company’s website. Our products are available both domestically and internationally. Internet sales and inquiries are also supported by the Company.
Product Research and Development
Research and development costs for the year ended December 31, 2024 and December 31, 2023 and were $9,992 and $13,393, respectively, none of which cost is borne directly by customers.
Government Regulation
The SCUBA industry is self-regulating; therefore, the Company is not subject to government industry specific regulation. However, SSI, our tank manufacturing company is subject to Department of Transportation (“DOT”) regulation and testing of each of their tanks. The Company strives to promote safe diving practices within the industry and believes it is at the forefront of self-regulation through responsible diving practices. The Company is subject to all regulations applicable to “for profit” companies as well as all trade and general commerce governmental regulation. All required federal and state permits, licenses, and bonds to operate its facility have been obtained.
Distribution/Customers
The Company has historically been predominantly a wholesale distributor to retail dive stores, marine stores, boat dealers, builders, and the US and international militaries. Currently, the Company generates a significant amount of direct-to-consumer sales via its websites and its relationship with Amazon via BLU3, BTL and SSI. Retail sales customers include boat owners, recreational divers, commercial divers and pilots. The Company sells products to three entities owned by the brother of Robert Carmichael, the Company’s Chairman, and two companies owned by Mr. Carmichael. Combined sales to these six entities for 2023 and 2022, represented 10.6% and 11.4%, respectively, of total net revenues.
The majority of L&W high pressure compressors and NitroxMaker™ systems have been sold to commercial dive stores, dive operators (resorts and liveaboard dive boats), yacht builders, yacht owners, and high-pressure compressor distributors.
Sales of YachtPro™ compressor systems have been split between retail sales directly to consumers and wholesale sales to OEM boat builders/resellers/brokers.
Suppliers/Raw Materials
Principal raw materials for our business include machined parts such as rods, pistons, bearings, hoses, regulators, compressors, engines, high-pressure valves and fittings, sewn goods, and various plastic parts including pans, covers, intake staffs, and quick release connections which are typically purchased on a per order basis. Most materials are readily available from multiple vendors. Some materials require greater lead times than other materials. Accordingly, we strive to avoid out of stock situations through careful monitoring of these inventory lead times, and through avoiding single source vendors whenever possible. Principle suppliers include Lenhardt & Wagner GmbH, Xometry, Inc., Burgess Manufacturing Corp, Bix International, Inc., Carrol Stream Motor Company, Zhejiang Xiangyang Gear Electormechan, Co, Tian Li He Technology Co, Ltd, Xiamen Feipeng Insdustry Co. Ltd. and Catalina Cylinders, Inc.
Competition
We consider the most significant competitive factors in our business to be innovation, lifestyle, fair prices, shopping convenience, variety of available products, knowledgeable and prompt customer service and rapid and accurate order fulfillment. We currently have one significant competitor within the BTL business model, Airline by JSink, Inc. There are a variety of competitors, including Aqua Lung America, Coltri America and Bauer Compressors, Inc. in our redundant air tank systems and high-pressure compressor systems sales. In 2022 and 2023 competition has surfaced in the BLU3 business segment from companies such as AirBuddy, and a few other very low-cost Chinese manufactured competitors.
Overall, we are operating in a moderately competitive environment. The price structure for all the products we distribute compares favorably with the majority of our competitors based on quality and available features. We believe that our key competitive advantage is our ability to create new products and, in some cases, new markets.
Employees
As of June, 2025, we have thirty five full-time employees, and two part-time employees.
Seasonality
Our product lines have historically been seasonal in nature in the United States. The peak season for the diving related products, BTL, BLU3, SSI and LBI is the second and third quarters of the year. The peak season for LWA high pressure products is typically the fourth and first quarters of the year. The Company continues to address the seasonality of the business by expanding its reach beyond the traditional markets in the U.S. to other areas of the world that may somewhat offset the seasonality.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
Investing in our common stock involves risks. In addition to the other information contained in this report, you should carefully consider the following risks before deciding to purchase our common stock. The occurrence of any of the following risks might cause you to lose all or a part of your investment. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. Please refer to “Cautionary Statement Regarding Forward-Looking Statements” for more information regarding forward-looking statements.
FINANCIAL RISKS
We have a history of losses.
We incurred net losses of $254,066 and $1,248,115, respectively, for the year ended December 31, 2024 and 2023. On December 31, 2024, we had an accumulated deficit of $17,940,797. Revenues increased by 8.11% for the year ended December 31, 2024, from 2023, and our gross profit margin increased from 27.8% in 2023 to 41.6% in 2024. Our gross profit is not sufficient to cover our operating expenses of $3,573,279 and $3,277,319 for the twelve months ending December 31, 2024 and 2023, respectively. Operating expenses include non-cash stock compensation expenses of $159,992 and $81,424 for the years ending December 31, 2024 and 2023, respectively. In the year ended December 31, 2024, our selling, general and administrative expenses, increased 9.2% from 2023. There are no assurances that we will be able to increase our revenues to a level which supports profitable operations and provide sufficient capital to pay our operating expenses and other obligations as they become due.
Our auditors have disclosed substantial doubt as to our ability to continue as a going concern.
Our independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our audited consolidated financial statements for the year ended December 31, 2023. We have recurring losses from operations and had a net loss of approximately $254,066 and have used approximately $299,000 in net cash used in our operations in the year ended December 31, 2024 as well as an accumulated deficit of approximately $17,941,000. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our principal sources of liquidity are sales of equity and debt securities. We do not have any firm commitments to raise additional working capital. As we are a small company who stock is quoted on the OTC Markets, we expect to encounter difficulty in raising working capital upon terms and conditions satisfactory to us, if at all. If we are unable to obtain sufficient funding or generate sufficient revenues, our business and results of operations will be adversely affected, and we may be unable to continue as a going concern.
Our common stock is currently traded on the OTC Expert Market and is only eligible for unsolicited quotes.
Our commons stock is not eligible for proprietary broker-dealer quotations. Unsolicited-only stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Investors may have difficulty selling this stock.
We rely on revenues from related parties.
We generate revenues from sales to related parties, which accounted for 6.9% of our net revenues in 2024 and 11.2% of our net revenues in 2023. The loss of revenues from these related parties would have a material adverse impact on our business, results of operations and financial condition in future periods.
We depend on licenses with Robert Carmichael, our Chairman, who owns much of our intellectual property.
The Company has licensed from entities in which Robert Carmichael, our Chairman, has an ownership interest, the following registered and unregistered trade names, trademarks and service marks: Brownie’s Third Lung™, browniedive.com, Brownie’s, Brownie’s Third Lung oval symbol, browniedive, YachtPro. Failure to maintain such licenses with Mr. Carmichael would have a material adverse effect on the Company’s financial condition.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.
Our management has previously determined that we did not maintain effective internal controls over financial reporting. If the result of our remediation of the identified material weaknesses is not successful, or if additional material weaknesses are identified in our internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our stock price and potentially subject us to litigation.
The U.S. Consumer Products Safety Commission (“CPSC”) has issued a voluntary recall for one of our products.
On December 22, 2022, the CPSC issued a voluntary recall notice for the Nomad tankless dive system, which is distributed by BLU3, Inc. As part of the recall procedure, the CPSC has approved the Company’s proposed remedy for the recall and BLU3 will begin to receive units back from consumers to repair affected Nomad units. The Company has evaluated the costs of this recall and has deemed it necessary to set a reserve for those costs related to the recall of $160,500. In 2023 the Company finalized the recall and adjusted the reserve down to approximately $86,300 to reflect the actual impact on the Company’s financial condition. There have been no further recalls on our products in 2024.
BUSINESS AND OPERATIONAL RISKS
We are dependent upon certain key members of management and qualified employees and consultants.
Our success depends to a significant degree on the abilities and efforts of our senior management. and on our ability to attract, retain and motivate highly qualified marketing, technical, engineering and sales personnel and consultants. These people are in high demand and often have competing employment opportunities. The labor market for skilled employees is highly competitive and we may lose key employees or be forced to increase their compensation to retain these people. Employee turnover could significantly increase our recruitment, training and other related employee costs. The loss of key personnel, or the failure to attract qualified personnel, could result in delays in development or fulfillment of any current strategic and operational plans and have a material adverse effect on our business, financial condition or results of operations.
Our failure to obtain and enforce intellectual property protection may have a material adverse effect on our business.
Our success depends in part on our ability, and the ability of our patent and trademark licensors, and entities owned and controlled by Robert Carmichael to obtain and defend our intellectual property, including patent protection for our products and processes, preserve our trade secrets, defend and enforce our rights against infringement and operate without infringing the proprietary rights of third parties, both in the United States and in other countries. Despite our efforts to protect our intellectual proprietary rights, existing copyright, trademark and trade secret laws afford only limited protection.
Our industry is characterized by frequent intellectual property litigation based on allegations of infringement of intellectual property rights. Although we are not aware of any intellectual property claims against us, we may be a party to litigation in the future.
Our intellectual property rights are valuable, and any inability to adequately protect, or uncertainty regarding validity, enforceability or scope of them could undermine our competitive position and reduce the value of our products and brand, and litigation to protect our intellectual property rights may be costly.
We attempt to strengthen and differentiate our product portfolio by developing new and innovative products and product improvements. As a result, our patents, trademarks, trade secrets, copyrights and other intellectual property rights are important assets to us. Various events outside of our control pose a threat to our intellectual property rights as well as to our products and services. For example, effective intellectual property protection may not be available in countries in which our products are sold. Also, although we have registered our trademark in various jurisdictions, our efforts to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Litigation might be necessary to protect our intellectual property rights and any such litigation may be costly and may divert our management’s attention from our core business. An adverse determination in any lawsuit involving our intellectual property is likely to jeopardize our business prospects and reputation. Although we are not aware of any of such litigation, we have no insurance coverage against litigation costs, and we would be forced to bear all litigation costs if we cannot recover them from other parties. All foregoing factors could harm our business, financial condition, and results of operations. Any unauthorized use of our intellectual property could harm our operating results.
We may be exposed to infringement or misappropriation claims by third parties, which, if determined against us, could adversely affect our business and subject us to significant liability to third parties.
Our success mainly depends on our ability to use and develop our technology and product designs without infringing upon the intellectual property rights of third parties. We may be subject to litigation involving claims of patent infringement or violations of other intellectual property rights of third parties. Holders of patents and other intellectual property rights potentially relevant to our product offerings may be unknown to us, which may make it difficult for us to acquire a license on commercially acceptable terms. There may also be technologies licensed to us and that we rely upon that are subject to infringement or other corresponding allegations or claims by third parties which may damage our ability to rely on such technologies. In addition, although we endeavor to ensure that companies that work with us possess appropriate intellectual property rights or licenses, we cannot fully avoid the risks of intellectual property rights infringement created by suppliers of components used in our products or by companies we work with in cooperative research and development activities. Our current or potential competitors may obtain patents that will prevent, limit or interfere with our ability to make, use or sell our products. The defense of intellectual property claims, including patent infringement suits, and related legal and administrative proceedings can be both costly and time consuming, and may significantly divert the efforts and resources of our technical personnel and management. These factors could effectively prevent us from pursuing some or all of our business operations and result in our customers or potential customers deferring, canceling or limiting their purchase or use of our products, which may have a material adverse effect on our business, financial condition and results of operations.
We may not be able to enforce our intellectual property rights throughout the world.
The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. This could make it difficult for us to stop the infringement or the misappropriation of our intellectual property rights. Many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts from other aspects of our business. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.
We rely on third party vendors and manufacturers.
We deal with suppliers on an order-by- order basis and have no long-term purchase contracts or other contractual assurances of continued supply or pricing. In addition, we have no long-term contracts with our manufacturing sources and compete with other companies for production facility capacity. Historically, we have purchased enough inventories of products or their substitutes to satisfy demand. However, unanticipated failure of any manufacturer or supplier to meet our requirements or our inability to build or obtain substitutes could force us to curtail or cease operations. Certain of our product components are manufactured in China. Due to Covid, and the logistics challenges existing currently, we have experienced delays and may experience continued delays in our supply chain, including component products, which are manufactured in China. Our senior management will continue to monitor our situation on a daily basis; however, we expect that these factors and others we have yet to experience may materially adversely impact our company, its business and operations for the foreseeable future.
We are dependent on consumer discretionary spending.
The success of our business depends largely upon a number of factors related to consumer spending, including current and future economic conditions affecting disposable consumer income such as employment, business conditions, tax rates, and interest rates. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which effects demand for our products. Any significant deterioration in overall economic conditions that diminishes consumer confidence or discretionary income can reduce our sales and adversely affect our financial results. The impact of weakening consumer credit markets; layoffs; corporate restructurings; higher fuel prices; declines in the value of investments and residential real estate; and increases in federal and state taxation can all negatively affect our results. There can be no assurance that in this type of environment consumer spending will not decline, thereby adversely affecting our growth, net sales and profitability or that our business will not be adversely affected by continuing or future downturns in the economy, boating industry, or dive industry. If declines in consumer spending on recreational marine accessories and dive gear are other than temporary, we could be forced to curtail or cease operations.
Government regulations may impact us.
The SCUBA industry is self-regulating, therefore, from an industry perspective the Company is not subject to government industry specific regulation. However, our tank manufacturing operation is required to comply with DOT, as well as being approved to sell in various countries outside of the United States. The Company strives to be a leader in promoting safe diving practices within the industry and is at the forefront of self-regulation through responsible diving practices. The Company is subject to all regulations applicable to “for profit” companies as well as all trade and general commerce governmental regulation. All required federal and state permits, licenses, and bonds to operate its facility have been obtained. There can be no assurance that our operations will not be subject to more restrictive regulations in the future, which could force us to curtail or cease operations.
Our failure to adequately protect personal information that is collected on our website and our third-party payment platforms could have a material adverse effect on our business.
A wide variety of local, state, national, and international laws, directives and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data (including with respect to the European Union’s General Data Protection Regulation and U.S. state laws such as the California Consumer Privacy Act). These data protection and privacy-related laws and regulations continue to evolve and may result in ever-increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions and increased costs of compliance. Our failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement actions against us, including fines, imprisonment of company officials and public censure, claims for damages by end-customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing end-customers and prospective end-customers), any of which could have a material adverse effect on our operations, financial performance, and business. Changing definitions of personal data and personal information, within the European Union, the United States, and elsewhere may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data. The evolving data protection regulatory environment may require significant management attention and financial resources to analyze and modify our information technology infrastructure to meet these changing requirements all of which could reduce our operating margins and impact our operating results and financial condition.
Bad weather could have an adverse effect on operating results.
Our business is significantly impacted by weather patterns. Unseasonably cool weather, extraordinary amounts of rainfall, or unseasonably rough surf, may decrease boat use and diving, thereby decreasing sales. Accordingly, our results of operations for any prior period may not be indicative of results of any future period.
The manufacture and distribution of recreational diving equipment could result in product liability claims.
We, like any other retailer, distributor and manufacturer of products that are designed for recreational sporting purposes, face an inherent risk of exposure to product liability claims in the event that the use of our products results in injury. Such claims may include, among other things, that our products are designed and/or manufactured improperly or fail to include adequate instructions as to proper use and/or side effects, if any. We do not obtain indemnification from parties supplying raw materials, manufacturing our products or marketing our products. In the event that we do not have adequate insurance or contractual indemnification, product liabilities relating to defective products could have a material adverse effect on our operations and financial conditions, which could force us to curtail or cease our business operations.
SHAREHOLDER RISKS
The issuance of shares of our common stock upon exercise of our outstanding options, warrants, convertible debt and Series A Convertible Preferred Stock may cause immediate and substantial dilution to our existing shareholders.
We presently have vested and unvested options, warrants, convertible debt and Series A Convertible Preferred Stock that if exercised would result in the issuance of an additional 50,824,019 shares of our common stock. The issuance of shares upon exercise of options will result in dilution to the interests of other shareholders.
Our common stock may be affected by limited trading volume and may fluctuate significantly.
The Company’s common stock was quoted on the OTCPink tier of the OTC Markets under the symbol “BWMG” until April 15, 2025. As of April 15, 2025, the Company’s common stock has traded on the Expert Market of the OTC. Our commons stock is not eligible for proprietary broker-dealer quotations on the Expert Market. Unsolicited-only stocks have a higher risk of wider spreads, increased volatility, and price dislocations. Investors may have difficulty selling our stock. There can be no assurance that we can regain quotation on a higher tier of the OTC Markets or that an active trading market for our common stock will develop. As a result, this could adversely affect our shareholders’ ability to sell our common stock in short time periods, or possibly at all. Thinly traded common stock can be more volatile than common stock traded in an active public market. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially
Our company is a voluntary filer with the SEC and in the event that we cease reporting under the Exchange Act, investors would have limited information available to them about the company.
While we voluntarily file reports with the SEC under Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we do not have a class of securities registered under Section 12(g) of the Exchange Act. To the extent that our duty to file Exchange Act reports has automatically suspended under Section 15(d) of the Exchange Act, as a voluntary filer, we may elect to cease reporting under the Exchange Act at such time which would limit the information available to investors and shareholders about the company.
Our common stock is deemed to be “penny stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.
Our common stock is deemed to be “penny stock” as that term is defined under the Exchange Act. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges. Our common stock is covered by an SEC rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors, which are generally institutions with assets in excess of $5,000,000, or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.
Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.
Our officers and directors are able to control the Company.
Our officers and directors and their affiliates own or have the right to vote a majority of the common stock of our company. As a result, they have significant influence over the management and affairs of the Company and control over matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets. Their interests may differ from the interests of other shareholders and thus result in corporate decisions that are disadvantageous to other shareholders. This concentration of ownership and influence in management and board decision-making could also harm the price of our capital stock by, among other things, discouraging a potential acquirer from seeking to acquire shares of our capital stock (whether by making a tender offer or otherwise) or otherwise attempting to obtain control of our company.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.

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ITEM 2. PROPERTIES
Item 2. Properties.
Davie, Florida
Until November 2024, the Company’s executive offices were located in Pompano Beach, Florida. The Company moved its facilities to Davie, Florida where it leases 19,065 square feet of production, warehouse, showroom and office space. under a 45 month sub-lease which commenced on November 1, 2024. The lease provides for an initial base monthly rent of $26,000 through September 30, 2025 and$31,000 thereafter for the balance of the term. The landlord has agreed to a monthly rent abatement of $3,639 per month through October 2026. The lease is considered a triple-net lease and is subject to “additional rent” which is comprised of the landlord’s operating costs, real estate taxes and insurance in accordance with the terms of the master lease. The Company paid a security deposit of $26,000 upon entering the sub-lease agreement.
Huntington Beach, California
Our Huntington Beach, California facility is comprised of a leased 13,000 square foot free standing building of which the bulk of the square footage is warehouse and manufacturing space. The initial lease, signed in January, 2013 was for five years with a base rent of $7,410.
On January 4, 2018, the Company entered into a sixty-one month term lease renewal for its facility in Huntington Beach, California, commencing on February 1, 2018. Base rent is approximately $9,300 per month for the first 12 months with a 2.5% annual escalation throughout the term. The Company paid a security deposit of $8,450 with the initial lease that the landlord continues to hold.
On September 14, 2022, SSI entered into a sixty-month lease renewal for its facility in Huntington Beach, California commencing on February 1, 2023. Base rent is approximately $17,550 per month for the first 24 months with an annual escalation clause of 3.0% thereafter. Obligations under the lease are guaranteed by the Company. The Company paid an additional security deposit of $10,727 upon entering into the lease.
On September 30, 2022, SSI entered into a sublease of its facility in Huntington Beach, California with Camburg Engineering, Inc.(“Tenant”). The term of the sublease is through December 31, 2023 with a base monthly rent of $2,247 for the first twelve months and 3% annual escalation thereafter. The Tenant also pays a monthly common area maintenance of $112. The Tenant provided a security deposit of $2,426 upon entering into the sublease. This sub-lease continues on a month to month basis.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosure.
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
The Company’s common stock was quoted on the OTCPink tier of the OTC Markets under the symbol “BWMG” since April 15, 2025. As of April 15, 2025, the Company common stock has traded on the Expert Market of the OTC. On June, 2025, the closing sale price of our common stock was $0.012 per share.
Holders of Common Stock
As of March 31, 2025, the Company had approximately 386 shareholders of record.
Dividends
We have not paid any dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We intend to retain any earnings, if any, to finance the growth of the business. We cannot assure you that we will ever pay cash dividends. Whether we pay any cash dividends in the future will depend on our financial condition, results of operations and other factors that the board of directors will consider.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information regarding our equity compensation plans as of December 31, 2024:
Equity Compensation Plan Information
Plan category Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and rights Weighted
average
exercise
price of outstanding
options, warrants
and rights
($) Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
Plans approved by our shareholders (1) 1,800,000 .0447 23,200,000
Plans not approved by shareholders (2) 28,869,400 .0448 -
(1) Represents stock options granted to employees under the Equity Compensation Plan. 25,000,000 shares are reserved for issuance under such Plan.
(2) Represents (i) a five-year option to purchase an aggregate of 21,759,400 shares of common stock at $0.0399 per share issued to Blake Carmichael, and (ii) a five-year option to purchase 7,110,000 shares of common stock at $0.0531 per share issued to Christeen Buban, President of SSI.
Recent Sales of Unregistered Securities
There were no sales of equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report. Actual future results may be materially different from what we expect. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.
The management’s discussion and analysis of our financial condition and results of operations are based upon our audited financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Reserve for Nomad Recall
On December 22, 2022, the CPSC issued a recall notice for the Nomad tankless dive system, which is distributed by BLU3, Inc. As part of the recall procedure, the CPSC has approved the Company’s proposed remedy for the recall and BLU3 will begin to receive units back from consumers to repair affected Nomad units. Additionally, BLU3 will re-start its manufacturing process for the Nomad tankless dive system utilizing the material and design changes approved during the recall process, and immediately re-establish the product in all of its sales channels. The Company has set an allowance for expenses related to this recall of $160,500. As of December 31, 2024 the company deemed that all units effected by the recall have been serviced or are no longer in service and has reduced the recall allowance to $0.
Results of Operations
Years Ended December 31, 2024 and 2023
Overall, our net revenues increased 7.88% in 2024 from 2023, which included a decrease of 29.8% in sales to related parties. Our cost of revenues in 2024 was 58.4% of our total net revenues as compared to 72.2% in 2023. Included in our cost of revenues are royalty expenses we pay to Robert Carmichael which decreased 10.6% in 2024 from 2023. We reported a gross profit margin of 41.6% in 2024 as compared to 27.8% in 2023.
Net Revenues
The following tables provide net revenues, costs of revenues, and gross profit margins for our segments for 2024 and 2023.
Year Ended December 31,
% change
Legacy SSA Products $ 1,897,358 $ 2,312,122 (17.9 )%
High Pressure Gas Systems 723,935 996,040 (27.3 )%
Ultra-Portable Tankless Dive Systems 2,466,550 1,904,687 29.5 %
Redundant Air Tank Systems 2,948,262 2,065,224 42.8 %
Guided Tour Retail 141,942 302,724 (53.1 ))%
Total revenue $ 8,178,047 $ 7,580,798 7.88 %
Cost of revenues as a percentage of net revenues
Year Ended December 31,
Legacy SSA Products 84.4 % 85.6 %
High Pressure Gas Systems 63.3 % 66.5 %
Ultra-Portable Tankless Dive Systems 67.8 % 72.6 %
Redundant Air Tank Systems 68.9 % 59.9 %
Guided Tour Retail 64.4 % 62.7 %
Gross profit margins
Year Ended December 31,
Legacy SSA Products 15.6 % 14.4 %
High Pressure Gas Systems 36.7 % 33.5 %
Ultra-Portable Tankless Dive Systems 32.2 % 27.4 %
Redundant Air Tank Systems 31.1 % 40.1 %
Guided Tour Retail 35.6 % 37.3 %
Operating Expenses
Operating expenses, consisting of selling, general and administrative (“SG&A”) expenses and research and development costs, are reported on a consolidated basis for our operating segments. Aggregate operating expenses increased 9.0% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Selling, General & Administrative Expenses (SG&A)
SG&A increased 9.2% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. SG&A during those years were as follows:
Expense Item % Change
Payroll $ 1,887,910 $ 1,788,890 5.5 %
Non-Cash Stock based compensation - options 151,492 81,424 86.1 %
Professional Fees 204,829 269,621 (24.0 )%
Advertising 427,037 365,604 16.8 %
All Others 902,105 757,899 19.0 %
Total SG&A $ 3,573,373 $ 3,263,439 9.7 %
Payroll increased by 8.9% for the year ended December 31, 2024 as compared to the year ended December 31, 2023 The increase can be attributed to a cost of living increase and year end bonuses. .
Non-Cash Stock based compensation expenses increased 12.4% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase can be attributed to the vesting of incentive based options for the President of SSI.
Professional fees, representing legal, accounting and other professional fees, which we paid in a combination of cash, common stock, or stock options, decreased 24.0% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Accounting fees increased 31.83% in 2024, due to a substantial increase in audit fees during the first three quarters of 2024, and legal fees decreased by 23.0% due to fewer stock awards for legal fees in 2024.
Advertising expense increased 16.8% for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase is attributed to increased expenses associated with trade shows , and increased direct and internet advertising by BTL, BLU3 and SSI in 2024.
Other expenses increased 19.0% for the year ended December 31, 2024 as compared the year ended December 31, 2023. primarily as a result of increase in repair and maintenance cost at the SSI facility in California.
Research & Development Expenses (R&D Expenses)
R&D expenses for the year ended December 31, 2024 decreased 28.0% as compared to the year ended December 31, 2023. The decrease can be primarily attributed to the focus on products that are not proprietary.
Other Expense
For the year ended December 31, 2024 interest expenses totaled approximately $79,600 as compared to approximately $78,700 in interest expense for the year ended December 31, 2023. This small increase can be attributed to a slight increase in interest bearing debt.
Liquidity and Capital Resources
We had cash of $417,678 on December 31, 2024.The following table summarizes total current assets, total current liabilities and working capital at December 31, 2024 as compared to December 31, 2023.
December 31, 2024 December 31, 2023 % of Change
Total Current Assets $ 3,030,924 $ 2,736,601 12.2 %
Total Current Liabilities $ 2,860,749 $ 2,502,787 18.5 %
Working Capital $ 170,175 $ 233,814 (55.0 )%
The increase in our current assets on December 31, 2024 from December 31, 2023 primarily reflects increases in accounts receivable, prepaid expenses and inventory of approximately $336,000.
The increase in our total current liabilities for the year ended December 31, 2024 as compared to the year ended December 31, 2023 reflects an increase in customer deposits of approximately $212,699, an increase of approximately $307,915 related party demand debt with the increase in loans from the Company’s chief executive officer, an increase in the operating lease liabilities in connection with the lease for the Davie, Florids facility. These increases are offset by decreases in accounts payable of $102,491, current maturities of long term debt of $64,136, accounts payable related parties of $33,103 and other liabilities of 31,184, and the release of the reserve for Nomad recall expenses of approximately $86,000.
Summary Cash Flows
Years Ended December 31,
Net cash used in operating activities $ (299,093 ) $ (374,827 )
Net cash used in investing activities $ (21,1400 ) $ (29,955 )
Net cash provided by financing activities $ 307,305 $ 351,467
Net cash used in operating activities for 2024 was primarily the result of a net loss of $254,066, as well as the decrease in long term lease liability of $290,363, the reduction of accounts payable of $157,533, the increase of accounts receivable of $135, 455, and the increase in prepaid expenses of $137,770. The cash used related to net loss was offset by $124,930 in depreciation and amortization, and $151,492 in stock related compensation expense during the year ended December 31, 2024.
Net cash used in investing activities for the year ended December 31, 2024 of $21,140 was for the leasehold improvements for the Company’s new Davie, Florida facility.
Net cash provided by financing activities for the year ended December 31, 2024 reflects $307,915 in proceeds from related party demand notes.
Going Concern
Our audited consolidated financial statements included in this Annual Report were prepared assuming we will continue as a going concern, and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. The report of our independent registered public accounting firm on our audited consolidated financial statements for the year ended December 31, 2024 includes an explanatory paragraph stating the Company has net losses and an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. If the Company is unable to raise additional funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back, delay or cease operations, liquidate assets and possibly seek bankruptcy protection. We have a history of losses, and an accumulated deficit of $17,949,435 as of December 31, 2024. Despite a working capital surplus of $105,210 at December 31, 2024, the continued losses and cash used in operations raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to continue to increase revenues, control expenses, raise capital, and to continue to sustain adequate working capital to finance its operations. The failure to achieve the necessary levels of profitability and cash flows would be detrimental to the Company. We are continuing to engage in discussions with potential sources for additional capital, however, our ability to raise capital is somewhat limited based upon our revenue levels, net losses and limited market for our common stock. If we fail to raise additional funds when needed, or if we do not have sufficient cash flows from operations, we may be required to scale back or cease certain of our operations.
Critical Accounting Estimates
The Company’s management discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of its assets, liabilities, sales and expenses, and related footnote disclosures. On an on-going basis, the Company evaluates its estimates for product returns, bad debts, inventories, income taxes, warranty obligations, litigation and other subjective matters impacting the financial statements. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Allowance for Doubtful Accounts
Allowances for doubtful accounts are estimated based on estimates of losses related to customer accounts receivable balances. Estimates are developed by using standard quantitative measures based on historical losses, adjusting for current economic conditions and, in some cases, evaluating specific customer accounts for risk of loss. The establishment of reserves requires the use of judgment and assumptions regarding the potential for losses on receivable balances. Though the Company considers these balances adequate and proper, changes in economic conditions in specific markets in which the Company operates and any specific customer collection issues the Company identifies could have a favorable or unfavorable effect on required allowance balances.
Inventories
The Company values inventory at the lower of cost (determined using the first-in first-out method) or net realizable value. Management’s judgment is required to determine the allowance for obsolete or excess inventory. Inventory on hand may exceed future demand either because the product is outdated or because the amount on hand is more than will be used to meet future needs. Inventory allowances are estimated by the individual operating companies using standard quantitative measures based on criteria established by the Company. Though the Company considers these reserve balances to be adequate, changes in economic conditions, customer inventory levels, or competitive conditions could have a favorable or unfavorable effect on required allowance balances.
Deferred Taxes
The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. While the Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. Likewise, should the Company determine that it would be able to realize its deferred tax assets in the future in excess of its net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made.
Warranties
The Company accrues a warranty reserve for estimated costs to provide warranty services. Warranty reserves are estimated using standard quantitative measures based on criteria established by the Company. Estimates of costs to service its warranty obligations are based on historical experience, expectation of future conditions and known product issues. To the extent the Company experiences increased warranty claim activity or increased costs associated with servicing those claims, revisions to the estimated warranty reserve would be required. The Company engages in product quality programs and processes, including monitoring and evaluating the quality of its suppliers, to help minimize warranty obligations.
Off balance Sheet Arrangements
We currently have no off-balance sheet arrangements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not required for smaller reporting companies.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
Our consolidated financial statements appear beginning on page of the Annual Report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under Exchange Act. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Based on their evaluations as of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses in our internal control over financial reporting described below. A material weakness is a deficiency, or combination of deficiencies, which results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.
Our management, including our Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of the design and operations of our disclosure controls and procedures (defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) as of December 31, 2024 and based upon the such evaluation, have concluded that the disclosure controls and procedures as of December 31, 2024 were not effective due to the material weaknesses identified below.
To address these material weaknesses, management performed additional procedures to ensure the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. The framework used by management in making that assessment was the criteria set forth in the documents entitled “2014 Internal Controls - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2024 and that material weaknesses in internal controls over financial reporting described below existed.
A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCOAB”) Audit Standard No. 5, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses:
● There are an insufficient number and lack of qualified accounting department and administrative personnel and support;
● There are insufficient written policies and procedures to ensure the correct application of accounting and financial reporting with respect to GAAP and SEC disclosure requirements;
● There is insufficient segregation of duties, oversight of work performed and lack of controls in our finance and accounting functions due to limited personnel;
● The Company’s systems that impact financial information and disclosures have ineffective information technology controls;
● There are inadequate controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial statements are reflected and properly recorded; and
● Evaluation of disclosure controls and procedures was not sufficiently comprehensive due to limited personnel.
Internal Control Remediation Efforts.
Subject to sufficient resources, management expects to remediate the material weaknesses identified above as follows:
● Management has leveraged and will continue to leverage experienced consultants to assist with ongoing GAAP and SEC compliance requirements. We intend to expand our finance department through the hiring of a certified public accountant to strengthen the segregation of duties, internal controls and enhance our current staff.
● Segregation of duties will be analyzed and adjusted Company-wide, where possible. The Company is in the process of hiring additional personnel in the accounting department as part of the internal controls implementation and documentation of those controls and procedures.
● The Company plans on evaluating various accounting systems to enhance our system controls.
We will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We do not, however, expect that the material weaknesses in our disclosure controls will be remediated until such time as we have added to our accounting and administrative staff allowing improved internal control over financial reporting.
This Annual Report does not include an attestation report of our registered public accounting firm regarding our internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that exempt smaller reporting companies from this requirement.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during our fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers, and Corporate Governance.
The following are the names, ages and positions of our current executive officers and directors.
Name
Age
Position
Robert M. Carmichael
Chief Executive Officer, Chairman, President, and Chief Financial Officer and Director
Charles F. Hyatt
Director
Key Employee
Blake Carmichael
Chief Executive Officer and President of BLU3
Our directors are elected for a term of one year and serve until such director’s successor is duly elected and qualified. Each executive officer serves at the pleasure of the board of directors.
Robert M. Carmichael. Since April 2004, Mr. Carmichael has served as our Chairman and President, and from April 2004 until November 2020 served as our Chief Executive Officer. Mr. Carmichael has served as our Chief Financial Officer since 2017 and a director since 2005. Mr. Carmichael was selected to serve as a director for his general business management experience with specific experience in the diving industry.
Charles F. Hyatt. Mr. Hyatt has served as a director since March 2019. Mr. Hyatt is involved in the automotive industry and present owner of several franchise car dealerships in Myrtle Beach, South Carolina, including Myrtle Beach Hyundai (since 1999). In the past his ownerships also included Hyatt Buick & GMC (from 2001 to 2022), Myrtle Beach Suzuki (from 2004 until 2012), Sun Coast Mazda and Mitsubishi (from 2001 until 2009), Stone Mountain Chevrolet (from 2001 until 2009. From 1994 to 1997, Mr. Hyatt served as Wholesale Purchase Director with Lamar Ferrel Chevrolet, and from 1991 to 1994 as General Manager of Bob Harris Ford. From 1988 to 1990, Mr. Hyatt was the Demonstration Director of Auto Dialysis, and from 1986 to 1998, the General Manager/Operational Partner of Ken Hyatt Dodge, Chrysler and Plymouth. Since 2013, Mr. Hyatt has owned and operates the Gilligan Island Funland Golf amusement park. Mr. Hyatt sits on the American Cross Heroes committee and is the winner of the Jefferson Award (2017) for his community involvement. Mr. Hyatt was selected to serve on the board of directors for his general business management experience.
There are no family relationships between any of the executive officers and directors.
Key Employee
Blake Carmichael. Since December 2017, Mr. Carmichael has served as Chief Executive Officer of BLU3. He joined our company in May 2017 as an electrical engineer with a primary focus to develop new battery powered hookah diving products. Mr. Carmichael graduated from Florida Atlantic University in May 2017 with a Bachelor of Science in Electrical Engineering. During college, he worked in 2014 and 2015 as a participant in the University of Central Florida / Lockheed Martin College Work Experience Program as a systems engineer with a focus on testing for infrared imaging systems used in military aircraft. In the summer of 2016, he participated in the Naval Surface Warfare Center’s Naval Research Enterprise Intern Program with a focus on integrating underwater vehicles for survey and recovery at the South Florida Ocean Measurement Facility.
Committees of the Board of Directors
We have not established an Audit Committee, Compensation Committee or a Nominating Committee The entire Board participates in the nomination and audit oversight processes and considers executive and director compensation. Given the size of the Company, the entire Board is involved in such decision-making processes. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors.
We are not a “listed company” under SEC rules and therefore are not required to have an audit committee comprised of independent directors.
Compensation of Directors
The following table provides information concerning the compensation paid to our Company’s non-employee director for services rendered as a director during the year ended December 31, 2024.
Fees
earned or
paid in
cash Stock
awards Option
awards Non-equity
incentive
plan
compensation
Nonqualified
deferred
compensation
earnings
All other
compensation Total
Name ($) ($) ($) ($) ($) ($) ($)
Charles Hyatt 18,000 -
- - - 18,000
Chris Constable (1)
(1) Mr. Constable resigned as a director on May 21, 2024.
Delinquent Section 16(a) Reports
Not applicable.
Code of Ethics
The Company has not as yet adopted a code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small size and limited resources and because management’s attention has been focused on matters pertaining to business operations.
Shareholder Communications
Although we do not have a formal policy regarding communications with our Board, shareholders may communicate with the Board by writing to us at Brownie’s Marine Group, Inc., 4061 SW , 47th Ave , Davie, Florida 33314, Attention: Robert Carmichael. Shareholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.
Insider Trading Policies
The Company has adopted insider trading policies and procedures governing the purchase, sales or other dispositions of its securities by directors, officers, employees, or the Company that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and any listing standards applicable to the Company. A copy of the Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The following table provides certain information regarding compensation awarded to, earned by or paid to our Chief Executive Officer and the other executive officer with compensation exceeding $100,000 during the year ended December 31, 2023 (each a “Named Executive Officer”).
Summary Compensation Table
No equity Non-
qualified
Stock Option incentive
plan deferred
compensation All other
Name and
Salary Bonus Awards Awards compensation earnings compensation Total
Principal Position Year ($) ($) ($)(1) ($)(1) ($) ($) ($) ($)
Robert Carmichael 127,464
- - - - 89,937 (1) 217,401
CEO, Chairmen, President and CFO 160,564
- - - 80,389 (2) 240,953
Christopher Constable, 119,074 (6)
- - - 10,954 (3) 130,028
CEO
(1) Represents (i) $18,000 in director compensation (ii) $13,305 in health insurance premiums paid on behalf of Mr. Carmichael, and (iii) an aggregate of $58,632 in royalties paid to an entity controlled by Mr. Carmichael under the terms of a license agreement with the Company.
(2) Represents (i) $18,000 in director compensation (ii) $15,872 in health insurance premiums paid on behalf of Mr. Carmichael, and (iii) an aggregate of $46,517 in royalties paid to an entity controlled by Mr. Carmichael under the terms of a license agreement with the Company.
(3) Represents (i) $7,500 in director compensation (ii) $3,454 health insurance premiums paid by the Company on behalf of Mr. Constable.
(4) Mr. Constable resigned as Chief Executive Officer on June 24, 2023.
Equity Plan
On May 26, 2021, the Company adopted the Company’s Equity Compensation Plan (the “Plan”). The Plan provides for the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants who provide services to the Company. The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company’s Board of Directors, or in the absence of an Administrator, by the Board. The Company has reserved 25,000,000 for issuance under the Plan. The term of the Plan is ten years.
Outstanding Equity Awards at December 31, 2024
There was no equity awards made to the Named Executive Officer that were outstanding on December 31, 2024.
Blake Carmichael Employment Agreement
On August 1, 2021, we entered into a three-year employment agreement with Blake Carmichael (the “Blake Carmichael Employment Agreement”) pursuant to which Mr. Carmichael will continue to serve as Chief Executive Officer of BLU3. In consideration for his services, Blake Carmichael will receive (i) an annual base salary of $120,000, payable in accordance with the customary payroll practices of the Company, and (ii) a cash bonus equal to 5% of the net income of BLU3 payable quarterly, beginning with the first full calendar quarter after the execution of the agreement, and (iii) a non-qualified five-year stock option to purchase 3,759,400 shares of common stock at an exercise price $0.0399, 33.3% of which stock subject to the option vested immediately upon grant, 33.3% vests on the second anniversary and 33.3% vests on the third anniversary of the agreement. In addition, Blake Carmichael was granted a five-year stock option to purchase up to 18,000,000 shares of common stock at an exercise price of $0.0399 per share which vests upon the achievement of certain annual financial metrics as set forth in the Agreement. This agreement includes a provision for automatic renewal at the end of the initial term with each party required to provide a notice of intent not to renew no less than 30 days prior to the end of the term.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Our voting securities consist of our common stock and preferred stock, par value $0.001 per share, designated Series A Convertible Preferred Stock (the “Series A Stock”). Each share of Series A Stock is convertible into one share of our common stock at any time at the option of the holder at a conversion price of $18.23 per share. Holders of our common stock are entitled to one vote for each share held, and holders of our Series A Stock are entitled to 250 votes for each share held. Our common stock and Series A Stock vote together as on any matters submitted to our shareholders for a vote.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 30, 2024, the number of shares of common stock and Series A Stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each of the Company’s directors (iii) each Named Executive Officer and (iv) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC. Under these rules, a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest. Except as noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s address is c/o Brownie’s Marine Group, Inc., 4061 SW 47th Avenue, Davie, Florida, 33314 based on 437,742,050 issued and outstanding shares of common stock and 425,000 shares of Series A Stock outstanding as of May 19, 2025.
Name and Address of
Beneficial Owner Amount and
Nature of
Beneficial Ownership Percent of Class
Named Executive Officers and Directors
Robert M. Carmichael 45,299,847 (1) 9.2 %
Charles F. Hyatt 147,142,855 30.1 %
All directors and executive officers as a group (three persons) 192,422,702 (1) 39.3 %
5% or Greater Shareholder
Joseph Perez
135 Weston Road, Suite 328, Weston, Florida 33326 50,000,000 10.2 %
Summit Holdings V, LLC
3427 Bannerman Road, Suite D208
Tallahassee, Florida 32312 35,587,553 (2) 7.5 %
Series A Convertible Preferred Stock
Robert M. Carmichael 425,000 100 %
(1) Includes: (i) 14,587,190 shares held by 940A Associates, Inc., a corporation over which Mr. Carmichael is the sole owner and has voting and dispositive power; (ii) an aggregate of 23,320 shares issuable upon conversion of 425,000 shares of Series A Stock (iii) 1,861,327 shares related to the conversion option of the convertible note to LBI with an outstanding balance of $39,088 with a conversion price of $0.021, and (iv) 3,700,962 shares related to the conversion option of the note to BLU3 with an outstanding principal balance of $50,000 at a conversion rate of $0.01351. Does not include the voting power over 106,250,000 shares of common stock by virtue of Mr. Carmichael’s beneficial ownership of 425,000 shares of Series A Stock.
(2) Includes 6,758,075 shares related to the conversion option of the convertible note to SSI with a balance of $346,500 with a conversion price of $0.051272.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
We sell products to Brownie’s Southport Divers, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys, companies owned by the brother of Robert Carmichael. Combined net revenues from these entities for the years December 31, 2023 and 2022, totaled $806,824 and $977,145, respectively. Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, 2023, were $5,901, $11,927 and $-0-, respectively. Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, 2022, were $16,875, $6,773 and $15,532, respectively.
We also sell products to Brownie’s Global Logistics, LLC (“BGL”) and 940 Associates, Inc. (“940 A”), entities wholly-owned by Robert Carmichael. Combined net revenues from these three entities for the years ended December 31, 2023 and 2022 were $1,799 and $4,646, respectively. In addition, from time to time Mr. Carmichael purchases products from us for his personal use. Accounts receivable from BGL, 940 A and Mr. Carmichael totaled $647 at December 31, 2023 and $2,408 at December 31, 2022.
We owed BGL $-0- and $2,980 at December 31, 2023 and 2022, respectively, which represents purchase of inventory including batteries for Sea Lion (battery operated unit) and Honda engines for our regular gasoline powered units. As of December 31, 2022, the Company also had an amount due of $5,000 to Mr. Carmichael for an advance to BLU3,Inc. The Company also had an amount due of $441 to Robert Carmichael and $476 to Blake Carmichael as of December 31, 2023.
We are a party to an exclusive license agreement, dated February 22, 2005, with 940 A to license the trademark “Brownies Third Lung”, “Tankfill”, “Brownies Public Safety” and various other related trademarks as listed in the agreement. The agreement provides for a royalty to be paid equal to the greater of 2.5% on all sales of Trebor or $15,000 per quarter. Total royalty fees paid to 940 A in the years ended December 31, 2023 and 2022 totaled $31,993 and $61,308, respectively. The Company had accrued royalties of $2,238 and $2,845 for the years ended December 31, 2023 and 2022, respectively.
On September 30, 2022, the Company issued a convertible demand 8% promissory note in the principal amount of $66,793 to Robert Carmichael for funds to meet the working capital needs of LBI. Interest on the note is payable in shares of common stock of the Company at a conversion price equal to the 90 day value weighted average price (“VWAP”) of the Company’s stock prior to the quarterly interest payment date. The note holder may demand payment or convert the outstanding principal at a conversion rate of $0.021 per share at any time. The conversion rate was calculated at a 35% discount to the 90 day VWAP of the Company’s stock as of the date of the note.
On September 14, 2023, The Company issued an on-demand note to Robert Carmichael, Company’s Chief Executive Officern the principal amount of $50,000. The note bears no interest and is payable upon request.
On November 7, 2023, the Company issued a promissory note to Charles Hyatt, a director of the Company in the principal amount of $150,000. The note bears interest at the rate of 9.9% per annum, is payable in monthly installments,. Pursuant to an amendment dated November 13, 2024, the date of note was extended from August 7, 2024 to May 5, 2025.
On December 18, 2023, The Company issued a-demand note to Robert Carmichael, in the principal amount of $25,000. The on-demand note bears no interest and is payable upon request.
On February 5, 2024, , the Company issued a promissory note to Charles Hyatt, a director, in the principal amount of $280,000. The note bears interest at the rate of 9.9% per annum, is payable on demand. Pursuant to an amendment dated November 13, 2024, the maturity date of the note was extended from August 6, 2024 to May 5, 2025.
Blake Carmichael, the Chief Executive Officer of BLU3 is the son of Robert Carmichael, the Company’s Chairman, President and a director.
Director Independence
The Company has one independent director, Charles Hyatt, who is considered “independent” as defined under Rule 5605 of the Nasdaq Marketplace Rules.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
The following table shows the fees that were billed for the audit and other services provided by Assurance Dimensions, Inc. (“Assurance”) for the year ended December 31, 2023 prior to the engagement on October 4, 2024 of Bush & Associates CPA, LLC (“Bush”) as the Company’s. independent registered public accounting firm engaged to audit the financial statements of the Company. for the year ended December 31, 2024. The following table shows the fees billed for the audit and other services for 2024 and 2023.
Audit Fees $ 65,059 $ 69,817
Audit-Related Fees
-
Tax Fees
5,000
Other - -
Total $ 65,059
$ 74,817
Audit Fees
Audit fees consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K and the review of financial statements included in the Company’s Quarterly Reports on Form 10-Q.
We incurred tax related fees of $5,500 and $5,000 with Liggett & Webb, P.A. for the years ended December 31, 2024 and 2023.
Administration of the Engagement; Pre-Approval of Audit and Permissible Non-Audit Services
We have not yet established an audit committee. Until then, there are no formal pre-approval policies and procedures. The audit and tax fees paid to the auditors with respect to 2024 and 2023were pre-approved by the entire board of directors.
The percentage of hours expended on Bush and Associates respective engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statements Schedules
Incorporated by Reference
No.
Exhibit Description
Form
Date
Filed
Exhibit
Number
2.4
Agreement and Plan of Merger and Reorganization, dated September 3, 2021, among the Company, Submersible Acquisition, Inc., Submersible Systems, Inc. and the Shareholders of Submersible Systems, Inc.
8-K
9/9/21
10.1
2.4
Plan of Conversion
8-K
10/28/15
2.1
3.1
Articles of Conversion (Nevada)
8-K
10/28/15
3.1
3.2
Certificate of Conversion (Florida)
8-K
10/28/15
3.2
3.3
Articles of Incorporation (Florida)
8-K
10/28/15
3.3
3.5
Articles of Amendment
8-K
12/16/15
3.5
3.6
Bylaws
8-K
10/28/15
3.4
4.1
Equity Compensation Plan
10-Q
8/16/21
4.1
4.2
Form of 2017 Secured Convertible Promissory Note
10-K
4/17/18
4.2
4.3
10% Unsecured Convertible Debenture dated May 3, 2011
8-K
11/20/18
4.3
4.5
Form of Stock Option Grant to Robert Carmichael dated July 29, 2019 +
8-K
8/1/19
4.5
4.6
Form of Stock Option Grant to Jeffrey Guzy dated January 9, 2020
8-K
1/10/20
4.1
4.7
$66,793 Convertible Demand Note, dated September 30, 2022
8-K
10/12/22
4.1
4.8
Amendment to $150,000 Promissory Note, dated November 13, 2024
8-K
11/19/24
4.1
4.9
Amendment to $280,000 Promissory Note, dated November 13, 2024
8-K
11/19/24
4.2
10.1
Share Exchange Agreement, dated March 23, 2004 by and among the Company, Trebor Industries, Inc. and Robert M. Carmichael
8-K
4/9/04
16.1
10.2
Commercial Multi-Tenant Lease, dated September 14, 2022 between Submersible Systems, Inc. and Slater Palms LLC
8-K
10/12/22
10.1
10.3
Exclusive License Agreement, effective January 1, 2005, between 940 Associates, Inc. and Trebor Industries Inc.
10-QSB
8/15/05
10.20
10.4
Lease Agreement, dated September 1, 2014, between Liberty Property Limited Partnership and Trebor Industries, Inc.
10-K
4/17/18
10.11
10.5
Lease Amendment, dated December 1, 2016, between Liberty Property Limited Partnership and Trebor Industries, Inc.
10-K
4/22/22
10.5
10.6
Exclusive Distribution Agreement, dated August 7, 2017, between and Lenhardt & Wagner GmbH
10-K
6/7/19
10.15
10.7
Lease Agreement, dated November 11, 2018, between Liberty Property Limited Partnership and the Company
10-K
6/7/19
10.16
10.9
Non-Qualified Stock Option Agreement, dated April 14, 2020, between the Company and Robert Carmichael +
8-K
4/17/20
10.1
10.10
Form of Restricted Stock Award Agreement
8-K
4/30/20
10.1
10.11
Promissory Note, dated May 12, 2020, in the principal amount of $159,600 issued to South Atlantic Bank
8-K
5/13/20
10.1
10.12
Patent License Agreement, dated April 6, 2018 between Setaysha Technical Solutions, Inc. and the Company
10-K
6/29/20
10.17
10.13
Addendum No. 1 to Patent License Agreement dated December 31, 2019, between Setaysha Technical Solutions, Inc. and the Company
10-K
6/29/20
10.18
10.18
Employment Agreement Dated August 1, 2021, between the Company and Blake Carmichael
10-Q
11/22/21
10.22
10.19
Director Agreement, dated April 1, 2019, between the Company and Charles Hyatt
8-K
4/4/19
10.1
10.20
Employment Agreement dated September 3, 2021, between the Company and Christeen Buban
8-K
11/22/21
10.23
10.21
Form of letter agreement for incentive compensation +
8-K
6/1/20
10.1
10.22
Addendum No. 2 to Patent License Agreement, dated June 30, 2020, between Setaysha Technical Solutions, Inc. and the Company
10-Q
8/26/20
10.1
10.23
Employment Agreement, dated November 5, 2020, between Christopher Constable and the Company. +
8-K
11/12/20
10.2
10.24
Non-Qualified Stock Option Agreement Non-Plan, dated November 5, 2020, between the Company and Christopher Constable
8-K
11/12/20
10.1
10.27
First Amendment to Lease Agreement, dated December 1, 2016 between Trebor Industries, Inc. and Liberty Property Limited Partnership
10-K
4/22/22
10.27
10.28
8% Convertible Promissory Note, dated September 3, 2021
8-K
9/9/21
4.1
10.29
Confidentiality, Non-Competition And Non-Solicitation Agreement, dated September 3, 2021, between the Company and Richard S. Kearney
8-K
9/9/21
10.2
10.30
Investment Banking Engagement Agreement, dated August 6, 2021, between the Company and Newbridge Securities Corporation
10-Q
11/22/21
10.21
10.31
Asset Purchase Agreement, dated May 2, 2022, among the Company, Gold Coast Scuba, LLC, LLC Members and Live Blue, Inc.
8-K
5/3/22
10.67
10.32
Form of Subscription Agreement
8-K
9/12/22
10.1
10.33
Form of Common Stock Purchase Warrant
8-K
9/12/22
10.2
10.34
Lease Agreement, dated September 14, 2022, between Slater Palms, LLC and the Company
*
10.35
Sublease Agreement, dated September 20, 2022, between Camburg Engineering, Inc. and the Company
*
Subsidiaries
*
31.1
Certification Pursuant to Rule 13a-14(a)/15d-14(a)
*
31.2
Certification Pursuant to Rule 13a-14(a)/15d-14(a)
*
32.1
Certification Pursuant to Section 1350
*
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith
+ Management Contract