(~~Name Of Small Business Issuer In Its Charter)~~Exact name of registrant as specified in its charter)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.Yes ☒ No ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§~~232-405~~232- 405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files.)Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K.¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter ~~June 30, 2015 ($0.0025),~~ was approximately $ ~~80,286.~~5,273,810.

There were ~~86,841,190~~439,545,865 shares of common stock outstanding as of ~~March 17, 2016.~~May 9, 2024.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING ~~STATEMENTS AND ASSOCIATED RISKS~~INFORMATION

~~Information included~~This Annual Report includes forward-looking statements that relate to future events or ~~incorporated by reference in this filing may contain forward-looking statements. This information may~~our future financial performance and involve known and unknown risks, uncertainties and other factors ~~which~~that may cause our actual results, levels of activity, performance or achievements to bediffer materially ~~different~~ from ~~the~~any future results, levels of activity, performance or achievements expressed or implied by ~~any~~these forward-looking statements. ~~Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,~~Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” ~~“believe,~~“intend,” ~~“intend”~~“plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or ~~“project”~~phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs.

You should read thoroughly this Annual Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in Part I. Item 1A. Risk Factors appearing elsewhere in this Report. Other sections of this Report include additional factors, which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the ~~negative~~extent to which any factor, or combination of ~~these words or other variations on these words or comparable terminology.~~

This filing contains forward-looking statements, including statements regarding, among other things, (a) our projected sales and profitability, (b) our Company’s growth strategies, (c) our Company's future financing plans and (d) our Company's anticipated needs for working capital. These statementsfactors, may ~~be found under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as in this annual report generally. Actual events or~~cause actual results ~~may~~to differ materially from those ~~discussed~~contained in any forward-looking statements. All forward-looking statements speak only as ~~a result~~ of ~~various factors, including, without limitation,~~ the ~~risks outlined under “Risk Factors” and matters described in this filing generally. In light of these risks and uncertainties, there can be~~date on which they are made. We undertake no ~~assurance~~obligation to update such statements to reflect events that occur or circumstances that exist after the ~~forward-looking statements contained in this filing will in fact occur.~~date on which they are made, except as required by applicable law.

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, ~~(referred to herein~~and its wholly owned subsidiaries, Trebor Industries, Inc., a Florida corporation (“Trebor”) doing business as ~~“BWMG”, “the Company”, “we”, or “Brownie’s”~~Brownie’s Third Lung, Brownie’s High Pressure Compressor Services, Inc. a Florida corporation (“BHP”) doing business as LW Americas (“LWA”), ~~does~~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.

The Company, through its wholly owned ~~subsidiary, Trebor Industries, Inc., d/b/a Brownie’s Third Lung, a Florida corporation. The Company~~subsidiaries, designs, tests, manufactures and distributes ~~recreational hookah diving, yacht based scuba~~tankless dive systems, rescue air systems and yacht-based self-contained underwater breathing apparatus (“SCUBA”) air compressor and ~~Nitrox Generation~~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 ~~scuba~~Summit Holdings V, LLC, a Florida limited liability company (“Summit”) and ~~water safety products. BWMG~~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 the 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 a 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.

The Company has five wholly owned subsidiaries focused on various sub-sectors of our industry as described below:

Our wholly owned subsidiaries do business under their respective trade names on both on a wholesale and retail basis ~~and does so~~ from ~~its~~our headquarters and manufacturing facility ~~located at 3001 NW 25~~^th ~~Avenue, Suite 1,~~in Pompano Beach, Florida, ~~33069. The Company’s common stock is quoted on the OTC Markets under the symbol “BWMG”. The Company’s website is~~~~www.Browniesmarinegroup.com~~~~. Information on the website is not~~and a ~~part of this report.~~manufacturing facility in Huntington Beach, California.

Mr. Robert Carmichael, our Chief Executive Officer, has operated Trebor as its President since 1986. Since April 16, 2004, Mr. Carmichael has served as President, Acting Principal Accounting Officer and Acting Chief Financial Officer of the Company. From March 23, 2004 to April 16, 2004, Mr. Carmichael served as the Company’s Executive Vice-President and Chief Operating Officer. The company was organized under the laws of the State of Nevada and effective October 22, 2015, the Company reincorporated to the State of Florida pursuant to a plan of conversion, effective October 22, 2015.

~~The Company’s diving and marine based products are generally marketed under the~~Surface Supplied Air Products

Our Third Lung ~~Brownie’s Tankfill,~~~~and~~~~Brownie’s Public Safety~~ ~~trade names.~~

From a garage based business making hookah diving systems in the late 1960s, the Company has grown into a niche manufacturing and distribution company with dive-oriented products loosely classified into three categories: Brownie’s Third Lung (low pressure hookah systems), Brownie’s Tankfill (high pressure and mixed gas systems), and Brownie’s Public Safety (first-responder/emergency personnel systems). The Company serves middle income boat owners, higher income yacht owners, and recreational, military and public safety divers.

The Company strives for meticulous attention to detail and high quality product innovation. We believe that within the boating/diving industry Brownie’s Marine Group is known as the industry standard for surface supplied “family” dive systems and Scuba Tankfill Systems for yacht diving. Brownie’s products and support services range from shallow-water dive systems and extend into deep-water with mixed gas support systems for exploration divers and submersibles/submarines.

The Company holds numerous patents and is dedicated to designing and building the world’s finest and most innovative products, and to setting the industry standard for the world’s best yacht-based diving systems. While Brownie’s Third Lung hookah diving units were the very first product sold by the Company, the Company recognized early on that there was a need for tank filling systems and unique diving applications. This realization was the catalyst for the addition of the two product categories: Brownie’s Tankfill and Brownie’s Public Safety. Brownie’s Tankfill designs, builds, and sells diving solutions from marine-ready tank filling compressors, Nitrox Makers™, complete dive lockers, and full submarine support systems. Brownie’s Public Safety features highly specialized diving gear for rescue and safety professionals and a unique automatic floatation device for body-armor that can also be integrated into foul weather jackets, traditional load bearing harnesses and other garments, such as the Garment Integrated Personal Flotation Device (GI-PFD) for use with body armor. The following paragraphs further describe the business and sales models for each of the categories of products sold:

~~Brownie’s Third Lung~~ ~~hookah~~ systems have ~~long~~ been ~~a dominant figure~~the market leader in gasoline powered, high-performance and ~~feature rich hookah~~more recently in the battery powered SSA diving systems. Taking full advantage of ~~the~~our proprietary compressor system, a ~~complete~~ series of traditional “fixed speed” electric compressors were developed for the built-in-boat market in 2005. ~~Prior to~~In 2010, ~~Brownie’s did not offer for sale a floating~~we introduced our variable-speed battery powered hookah due to the inadequate performance/runtime afforded by previous technology. After years of inventing, testing and development, Brownie’s introduced multiple battery powered models in 2010 that we believesystem which provides divers with gasoline-free all day shallow diving experiences. These systems provide performance and runtimes ~~as great as 300% better than the best devices previously on the market~~for up to 3 hours by utilizing a variable speed technology that controls battery consumption based on diver demand.

In 2022, we continued to expand our dealer network and our marketing efforts with both the consumer and our network of dealers. The Company continues to pursue distributors and dealers 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 SSA systems as an option on newly built boats, expanding our market beyond the traditional consumer markets for our products.

● 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 reduces 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 ~~hookah~~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.

Through our wholly owned subsidiary BLU3, we develop and market a next generation electric, surface supplied air shallow dive system that is completely portable to the user. The BLU3 line currently consists of two models, NEMO and NOMAD, targeting specific performance levels and price points.

NEMO dive systems are currently sold in various countries through Amazon, and also through dealers worldwide. NEMO, designed to be the world’s smallest dive system is capable of taking a diver to 10 feet for 60 to 90 minutes on one charge of its lithium-ion battery. NEMO is portable and its batteries are FAA compliant for airline travel.

NOMAD dive system (“NOMAD”) began shipping in the third quarter of 2021 and is currently sold to consumers via our website, Amazon and through our network of dealers worldwide. The NOMAD is highly portable and expands dive capability to up to 30 feet. NOMAD has been marketed through BLU3’s internet presence and marketing campaigns as well as at industry and other trade shows across the country.

BLU3 continues to innovate in the SSA sector and currently expects to introduce a new product to its line-up in 2024.

We believe the BLU3 product lines are changing the way that people get into the water and explore the next atmosphere. The units are ultra-portable and can travel with ~~gasoline-free all day shallow diving experiences.~~the consumer to their adventures, wherever they may be.

Through our wholly-owned subsidiary LW Americas, we design, manufacture, sell and ~~installs Scuba~~install SCUBA tank fill systems for on-board yacht use under the brand ~~“Yacht-Pro™~~“Yacht- Pro™”. ~~Brownie’s Tankfill provides~~Our systems provide complete diving ~~packages and dive training~~ solutions for ~~yachts. Brownie’s Tank Fill installs Nitrox~~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, ~~VFD (variable~~variable frequency ~~drive)-driven,~~drive (“VFD”) driven, automated alternative to other compressors on the market. ~~Brownie’s Tankfill~~We also ~~designs~~design complete dive lockers, mixed gas production and distribution systems, and the ~~unique~~ Nitrox Maker™. Nitrox is oxygen-enriched air, which reduces the effects of nitrogen on ~~divers; it~~divers and is the industry standard for dive professionals. The Nitrox Maker™ continuously generates ~~the~~ oxygen rich breathing gas directly from low-pressure ~~air;~~air with no stored oxygen or other gases ~~are~~ required onboard. We believe a parallel product analogy to this device is the fresh water-maker that swept through the yachting industry over the last two-decades. While less yacht owners may opt for diving systems then fresh water-makers, there is a broad market potential for yacht owners that will want to have an uninterrupted supply of the premium breathing gas. Recently, an increase in commercial NitroxMaker™ system sales has been seen as more diving operations and operators are responding to the demand from their customers to provide nitrox at diving destinations. In addition to the traditional yacht-based NitroxMaker™ systems the Company has now established a full line of commercial products to meet this need, the NMCS series.

~~Brownie’s Public Safety~~ designs, manufactures, distributes, and sells the RES (Rapid Entry System)/ HELO™ system, a complete mini SCUBA system designed for quick water rescues. The HELO™ system can be donned in less than 60 seconds and stored in a briefcase-size padded bag. Brownie's Public Safety includes the GI-PFD™ (Garment Integrated Personal Flotation Device™) System for body armor flotation. This system can reliably support the distressed or unconscious wearer in a true life-saving position. This patented device addresses a need as law-enforcement, coast guard and military personnel are beginning to wear heavy (life-threatening in the water) body armor during waterborne patrol, inspection, and surveillance missions. The system helps the personnel float in heavy armor, hopefully saving their lives. The Company is not currently pursuing aggressive expansion into this market until it has sufficient working capital to do so.

~~Surface Supplied Air Systems:~~ The Company produces a line of Surface Supplied Diving products, commonly called hookah systems. These systems allow one to four divers to enjoy the marine environment up to a depth of 90 feet/27 meters without the bulk and weight of conventional SCUBA gear. We believe that hookah diving holds greater appeal to families with children of diving age than does conventional SCUBA. The reduction of weight by eliminating the tank allows smaller divers, especially children, to participate more actively and enjoyably. The design of our product also reduces the effort required for both its transport and use. We believe the PELETON™ Hose System revolutionizes hose management for recreational surface supplied diving. It reduces the work required of any single diver by dispersing the load over the entire group. We use a single, larger diameter hose as a main downline with up to four individual hoses attached to it. This configuration not only reduces the weight and bulk of the hose required, but also reduces drag and entanglement. An entire line of deck-mounted systems is available for commercial applications that demand extremely high performance. In addition to the gasoline-powered units and the Variable Speed battery powered units mentioned above, a series of electric powered systems is also available for light to commercial duty. Powered by battery for portability or household current for virtually unlimited dive duration, these units are used primarily by businesses that work in a marine environment.

~~E-Reel and Built-in Battery Systems:~~ The Company developed two surface supplied air products that it believes makes boat diving even easier. The Built-in Battery System builds a battery powered electric unit into the boat, eliminating the need to transport the compressor/motor assembly. The need for a flotation tube is also removed, as the boat itself serves in that capacity. The E-Reel advances this idea by adding a reel system to provide compact storage of up to 150 feet/46 meters of hose. Boaters can perform their own in-water maintenance and inspections, or just dive for enjoyment. The hose is manually pulled from the reel supporting up to two divers to a depth of 50 feet/15 meters. When the dive is complete, the hose is automatically recoiled and stowed by the simple activation of a switch.

~~Brownie’s Integrated Air Systems (BIAS™):~~Compressed air can have many uses on a boat. The E-Reel and Built in Battery Systems discussed above are just a few examples of BIAS. In addition to supplying air to divers, integrated air systems provide for the inflating fenders, opening of doors, blowing of air horns, flushing toilets and more.

~~Kayak Diving Hose Kits:~~This product allows the use of a conventional SCUBA cylinder, but does not require the diver to wear it. The cylinder remains above the surface, in a kayak or boat, and a hose ranging from 20 feet/6 meters to 150 feet/46 meters allow the diver to explore the surrounding area.

~~Drop Weight Cummerbelt:~~ The patented Drop Weight Cummerbelt is available with all our diving systems, and brings a new dimension to weighting systems. The belt will accommodate waist sizes from 24 to 54 inches and is depth compensating. It features two pockets, each capable of holding up to 10 pounds of block or shot weight. Each pocket can be instantly released by either hand, allowing the diver to achieve positive buoyancy in an emergency while retaining the belt itself. Additionally, the design of this belt provides for expanded capability. By adding an optional sleeve that zips onto the back of the belt, an egress, or bailout system, can be added. The Egressor Add-on Kit contains the sleeve, a 6 or 13 cubic foot SCUBA cylinder, and a SCUBA regulator. In addition to the added safety inherent in this design, many other uses for this present themselves, such as propeller clearing, overboard item retrieval and pool maintenance, to name only a few.

~~Tankfill Compressors:~~ Many yacht owners enjoy the convenience and freedom of filling their own diving tanks with air, NITROX or custom mixed gases while out on cruise, freeing them from carrying extra cylinders or the need to locate a reputable source in various ports-of-call. Brownie’s Tankfill specializes in the design and installation of high-end custom systems to do just that. From surveying the vessel for installation requirements to custom fabrication of the necessary components, Tankfill provides all the services necessary to satisfy this market. We believe that every large vessel currently in service, being re-fitted, or being built is a potential customer. Through OEM relationships we have expanded our market to reach these customers. Our light duty compressor, the new Yacht ~~Pro™25~~Pro Essential is specifically designed as a turn-key kit for the boat builders and ~~built~~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 ~~Digital Frequency Drive,~~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 ~~is a Brownie’s Tankfill innovation. The Digital Frequency Drive eliminates~~agreement automatically renews for successive five-year terms unless terminated as provided for in the ~~spike previously experienced in starting~~agreement. Under the ~~compressor, eliminating~~terms of the ~~need to ration~~Exclusive Distribution Agreement, we were appointed the ~~boat’s electrical usage by shutting down components when the compressor is needed. Custom design work is done in-house for major product installations and in conjunction with other entities.~~

~~NitroxMaker™:~~ ~~We believe Nitrox has become the gas~~exclusive distributor of choice for informed recreational divers the world over. What was once only available from land-based gas mixing facilities is now easily accessible to the yacht diver. With a Brownie’s NitroxMaker™, the user dials-in a desired oxygen level from 21% to 40%, eliminating the need to transport and handle pure oxygen. The resulting diving gas mix is monitored with digital oxygen analyzers, removing the calculations required to blend or mix the gas.

~~Rapid Entry System (RES) and HELO~~™ ~~System:~~ ~~The Brownie’s Public Safety~~L&W’s complete product line ~~exists~~in North America and South America, including the Caribbean. We are conducting this business direct to ~~address the needs of the public safety dive market. The inherent speed~~end-users and ~~ease of donning our patented Drop Weight Cummerbelt with Egressor Add-on Kit identified it as a choice~~establishing sales, distribution and service centers for ~~rapid response for water-related emergencies. A first-responder or officer on-scene can initiate the location~~high pressure air and extraction of victims while the dive team is en-route, saving valuable time and increasing the chances for survival of victims. The RES is a small SCUBA system that can be quickly donned over clothes, usually in less than sixty seconds. Its small size allows it to be stored in areas that do not accommodate a full set of SCUBA gear. The 13 cubic foot aluminum tank can provide up to 15 minutes of air at the surface. The air cell remains stowed under the protective cover and can be partially inflated to achieve positive flotation. The cover’s specially designed break-away zipper bursts open to provide instant inflation yet “heals” and can be repacked and fastened quickly in the field. The HELO offers all the same features, but has been specially designed and modified for rescue divers working from helicopters. By placing the cylinder in the front and adding leg straps, the HELO allows divers to use the standard seating configurations. The advantages of this system over full sized SCUBA rigs are increased mobility for the diver and diminished space requirements for the gear. Since the bottle is mounted at the diver’s waist, the diver can more easily control his gear during deployment, further adding to the comfort and safety.

~~Currently, we believe that no company~~industrial gas systems in the dive, ~~industry~~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 ~~complete line~~network of jobbers, dealers, installers and high-pressure compressor distributors by leveraging our know-how, brand awareness, complimentary products and ~~services~~creating sustainable distribution and core product original equipment manufacturer (“OEM”) integration relationships.

In September 2021, the Company acquired SSI to ~~serve all divers’ needs. The dive equipment~~further expand its product offerings and manufacturing ~~industry~~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 ~~highly fragmented with multiple manufacturers producing very similar products. The top-ten volume leaders in~~equipped to add to the ~~dive manufacturing industry provide the same~~machining and product ~~mix: Scuba BC’s (buoyancy compensators), regulators, gauges, masks, fins, snorkels, wetsuits, and a few~~development capabilities of the ~~necessary accessories. These mature companies offer~~Company.

The SSI acquisition gives the ~~product selection~~Company access to a world-wide base of in excess of 400 dealers and distributors, GSA contracting capability, as well as the ~~“diving” market.~~

~~New markets and classes of divers have developed over~~direct source for the ~~years. The sport sector of~~redundant air needs for our Brownie’s Third Lung and ~~Kayak~~BLU3 diving ~~have emerged as a result~~equipment and expands warehousing capabilities, reducing freight costs for both sets of ~~snorkel divers~~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 ~~wanted~~area to ~~sustain depth or Scuba divers that wanted more time in shallow waters with enhanced efficiency.~~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 showcased, 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 to have 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 will be developed.

The scuba diving equipment market size has grown steadily in recent years. It may grow from $4.39 billion in 2023 to $4.6 billion in 2024 at an expected compound annual growth rate (CAGR) of 4.7% according to Business and Research Company.com. 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, 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.

The global luxury yacht market is estimated to be $8.73 billion in 2023 and expected to reach $9.19 billion in 2024 and is poised to grow at a CAGR of 4.1% from 2024 to 2028 to reach $10.78 billion, according to Business and Research Company.com, a market research firm, in their industry report dated January, 2024. 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 ~~markets are key~~market and yachting industries also continue to grow. Grandview Research estimates that the recreational boating market was valued at $44.5 billion in 2023 and is expected to grow at a CAGR of 5.4% through 2030.

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 Brownie’s brand. Each of these industries has experienced growth over the past several decades, but we believe each industry also has significant weaknesses. The dive industry has focused on the initial certification of divers for revenue. According to industry data, follow up has been poor; causing many divers to quit diving after their first experience. When the Company’s working capital reaches a sufficient level, BWMG intends to implement a follow-up program, facilitate proper selection of equipment for divers, and institute mentoring programs.Company believes should positively impact its market reach.

The boating industry was hard hit a couple years ago by the economic downturn coupled with the increase in fuel prices. We continue to work with boaters to enhance their on-water experience by exploiting the diving activities that they can easily add as an accessory to their investment in boating. Brownie’s OEM BIAS program will improve the overall value at the manufacturing level and consumer experience by elimination of waste during the design/build phase. They can blow their horns, open air-powered doors and dive directly from a BIAS package.Intellectual Property

According to Global Certification and Membership Statistics as updated February 2014 on the Professional Association of Diver Instructors (PADI) website, www.padi.com, worldwide PADI certifications of divers has grown annually from over 500,000 certifications in 1992, to consistently over 900,000 annual certifications annually from 2003 to 936,149 certifications in 2013. There are other scuba training organizations also issuing scuba dive training certifications, but PADI is the training organization issuing the largest number of certifications annually. (source: PADI)

Approximately 88.5 million people went boating in the US in 2013; this represents approximately 37% of the adult population in the United States. There were approximately 15.9 million boats in use in 2013, down slightly from approximately 16.0 million in use in 2012. (source: National Marine Manufacturers Association)

The Company has a product development and intellectual property program. It holds numerous patents and trademarks on its own and/or through licensing agreements with its chief executive officer and his affiliates.

The Company either owns or has licensed from ~~an entity,~~entities in which ~~the Chief Executive Officer~~Robert Carmichael, our Chairman, has an ownership interest, ~~the use of~~ the following registered and unregistered trade names, trademarks and service ~~marks for the terms of their indefinite lives:~~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, ~~and~~ browniespublicsafety, Peleton Hose System, Twin-Trim, and Kayak Diving Hose Kit, Bell Bottom Flag Bag, Brownie’s Dogsnare. SHERPA, BC keel, and Garment integrated personal flotation device (GI-PFD). Use of these trade names, trademarks, and service marks is exclusive to the Company and the Company’s related parties.Kit.

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 ~~and~~828,221 shares of common stock with a fair value of $18,635 in ~~process~~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 ~~following:~~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 November 1, 2022 the Company issued to the designees of STS 1,155,881 shares of common stock with a fair value of $30,000 in accordance with the STS Agreement. Royalty recorded under the Amendment was $138,643 and $203,621 for the years ended December 31, 2023 and 2022, respectively.

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.

In ~~2014 and 2015,~~2022, the Company was represented ~~either through their own presence~~directly or ~~by a dealer~~indirectly at ~~the following annual trade shows:~~ The ~~Miami Yacht and Brokerage Show, The Fort Lauderdale International Boat Show, 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, and the ~~Seattle Boat Show.~~HAI Heli-Expo, along with various other trade and industry shows. In 2023, the Company expanded its marketing reach via tradeshows by attending all shows attended in 2022, and attending Boot Dsseldorf in Europe, along with various other trade and industry shows.

~~The Company’s main website is www.browniesmarinegroup.com. Additionally,~~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.

We continuously work to provide our customers with both new and improved products. We offer research and development services to not only the related entities we license our patents and trademarks from, but also to other customers as well. R&D services for customers and the related entities are invoiced in the normal course of business. In addition, we are working on internal research and development projects as well as collaborating with others toward the goal of developing some of our own patentable products. Research and development costs for the year ended December 31, ~~2015~~2023 and ~~2014,~~December 31, 2022 and were ~~$8,739~~$13,880 and ~~$4,087, respectively.~~$18,393, respectively, none of which cost is borne directly by customers.

The SCUBA industry is self-regulating; therefore, the Company is not subject to government industry specific regulation. ~~Nevertheless, the~~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 ~~be a leader in promoting~~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. ~~There can be no assurance that the Company’s operation and profitability will not be subject to more restrictive regulation or increased taxation by federal, state, or local agencies in the future.~~

~~We are~~The Company has historically been predominantly a wholesale distributor to retail dive stores, marine stores, boat dealers, builders, and ~~shipyards. This includes approximately 160 active independent Brownie dealers. We retail our products to including, but not limited to,~~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 ~~commercial divers.~~pilots. The Company sells products to three entities owned by the brother of Robert Carmichael, the Company’s ~~Chief Executive officer,~~Chairman, and two ~~Company’s~~companies owned by ~~the Chief Executive Officer.~~Mr. Carmichael. Combined sales to these ~~five~~six entities for ~~the years ended December 31, 2015~~2023 and ~~2014,~~2022, represented ~~31.75%~~10.6% and ~~43.34%~~11.4%, respectively, of total net revenues. ~~A single non-related party entity represented 18.7%~~

The majority of ~~revenues for 2015.~~ 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 ~~no other customers for the year ended December 31, 2014 represented greater than 10% of net revenues.~~consumers and wholesale sales to OEM boat builders/resellers/brokers.

Principal raw materials for our business include machined parts such as rods, pistons, ~~bearings; hoses; regulators; compressors; engines;~~bearings, hoses, regulators, compressors, engines, high-pressure valves and ~~fittings;~~fittings, sewn ~~goods;~~goods, and various plastic parts including pans, covers, intake staffs, and quick release ~~connections.~~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.

We consider the most significant competitive factors in our business to be innovation, lifestyle, fair prices, ~~feature advantages,~~ shopping convenience, ~~the~~ variety of available of products, knowledgeable ~~sales personnel,~~and prompt customer service and rapid and accurate ~~fulfillment of orders, and prompt customer service.~~order fulfillment. We currently ~~recognize~~have one significant competitor ~~in hookah sales and~~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 ~~tankfill~~compressor systems sales. ~~Products from the hookah competitor~~In 2022 and ~~those from one of the tankfill competitors appear to be very similar to ours at first glance, but lack many of what we believe are our patently superior feature advantages. Brownie’s competitors~~2023 competition has surfaced in the ~~high pressure tankfill market are typically focused on traditional dive stores~~BLU3 business segment from companies such as AirBuddy, and fire department air service. Several are large multi-national companies that do not offer adaptation to the yacht market or Nitrox integration; both areas that Brownie’s long-term investments rise to a ~~level to suit the buyer’s needs.~~few other very low-cost Chinese manufactured competitors.

Overall, we are operating in a moderately competitive environment. ~~We believe that the~~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.

~~We currently~~As of April 16, 2024, we have ~~eleven (11) full time~~forty-one full-time employees, and ~~three (3) part time employees at our facility~~four part-time employees.

Our product lines have historically been seasonal in Pompano Beach, Florida. Three (3) are classified as exempt sales and administrative or management, and eleven (11) are classified as nonexempt factory or administrative support. We utilize consultants when needednature in the ~~absence of available in-house expertise. Our employees are not covered by a collective~~ ~~bargaining~~ ~~agreement.~~

~~The main product categories of our business, Brownie’s Third Lung and Brownie’s Tankfill, are seasonal in nature.~~United States. The peak season for ~~Brownie’s Third Lung’s~~the diving related products, BTL, BLU3, SSI and LBI is the second and third quarters of the year. The peak season for ~~Brownie’s Tankfill’s~~LWA high pressure products is typically the fourth and first quarters of the year. ~~Since~~The Company continues to address the ~~seasons complement one another, we are able~~seasonality of the business by expanding its reach beyond the traditional markets in the U.S. to ~~shift cross-trained factory and warehouse personnel between~~other areas of the ~~two product categories as needed. Thus,~~world that may somewhat offset the ~~Company is able to avoid the down time normally associated with seasonal business.~~seasonality.

~~Not~~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.

We incurred net losses of $1,248,115 and $1,892,891, respectively, for the year ended December 31, 2023 and 2022. On December 31, 2023, we had an accumulated deficit of $17,685,610. Revenues decreased by 11.6% for the year ended December 31, 2023, from 2022, and our gross profit margin decreased from 32.6% in 2022 to 27.8% in 2023, our gross profit is not sufficient to cover our operating expenses of $3,277,319 and $4,644,595 for the twelve months ending December 31, 2023 and 2022, respectively. Operating expenses include non-cash stock compensation expenses of $81,424 and $951,414 for the years ending December 31, 2023 and 2022, respectively. In the year ended December 31, 2023, our selling, general and administrative expenses, decreased 29.5% from 2022. 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 $1,248,000 and have used approximately $375,000 in net cash used in our operations in the year ended December 31, 2023 as well as an accumulated deficit of approximately $17,686,000. 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.

We generate revenues from sales to related parties, which accounted for 10.6% of our net revenues in 2023 and 11.4% of our net revenues in 2022. 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. For a detailed description of these material weaknesses and our remediation efforts and plans, see Part II, Item 9A-Controls and Procedures of this Annual Report. 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.

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 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.

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.

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 ~~smaller reporting companies. However,~~“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 ~~principal~~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.

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 ~~factors~~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 ~~described under Item 7. Management’s Discussion~~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 ~~Analysis of Financial Condition and Results of Operations.~~financial conditions, which could force us to curtail or cease our business operations.

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 103,389,724 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.

Our common stock is quoted on the OTCQB tier of the OTC Markets. There is a limited public market for our common stock and there can be no assurance 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 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.

The Company engages a third-party provider to maintain our systems and management participates in the assessment to identify any risks from cybersecurity threats. Our third-party provider monitors our firewall, network, system security and internal and external backups and reports any issues to the Company. The Company’s Board, together with management, is engaged in our cybersecurity monitoring managed by our third-party provider and it is constantly changing. Any issues are appropriately addressed timely. To date, we have not experienced any cybersecurity incidents that materially affected our business strategy, results of operations or financial condition.

Our Pompano Beach, Florida facilities are comprised of two adjoining properties totaling approximately ~~8,541~~16,566 square feet of leased space the bulk of which is factory and warehouse space. ~~Terms of the~~The initial 37-month lease ~~include a thirty-seven month term commencing~~covering approximately 8,541 square feet commenced on September 1, ~~2014;~~2014. The lease provided for payment of a $5,367 security ~~deposit;~~deposit, base rent of approximately $4,000 per month over the term of the lease plus sales ~~tax;~~tax, and payment of 10.76% of annual operating expenses ~~(i.e.~~for common areas ~~maintenance), which is approximately $2,000 per month~~maintenance, subject to periodic adjustment. On December 1, 2016, we entered into an amendment to the initial lease agreement, commencing on October 1, 2017, which extended the term of the lease for an additional 84 months, expiring September 30, 2024. The base rent was increased to $4,626 per month with a 3% annual escalation throughout the amended term.

On November 11, 2018, the Company entered a new 69-month lease agreement for an additional 8,025 square feet adjoining its existing facility in Pompano Beach, Florida. The new lease provided for a $6,527 security deposit, an initial base rent of approximately $4,848 per month escalating at 3% per year during the term of the lease plus Florida state sales tax and payment of 10.11% of the building’s annual operating expenses for common area maintenance, subject to adjustment as provided in the lease.

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, 2022. 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”) commencing October 1, 2022, The term of the sublease is through December 31, 2023 with a base monthly rent of $2,247 for the first twelve months with an 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.

On May 2, 2022, LBI, entered into a lease assignment agreement with Gold Coast Scuba, LLC and Vicnsons Realty Group, LLC whereby LBI is the assignee to the remainder of the lease for approximately 1,600 square feet of retail space located at 259 Commercial Blvd., Suites 2 and 3 in Lauderdale-By-The Sea, Florida. The lease is in its third year of a three-year term and has a $2,816 per month base rent. The lease provides an option to renew for an additional term of two years with an increase of base rent by 3.5%

We believe that the facilities are suitable for their intended purpose, are being efficiently utilized and provide adequate capacity to meet demand for the foreseeable future.

~~From time~~There are no pending legal proceedings to ~~time~~which we are ~~subject~~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 ~~legal proceedings, claims and litigation arising in the ordinary course of business, including matters relating~~us or has a material interest adverse to product liability claims. Such product liability claims sometimes involving wrongful death or injury have historically been covered by product liability insurance, which provided coverage for each claim up to $1,000,000. We currently do not have product liability coverage. See “Risk Factors” below.us.

As previously disclosed, we are co-defendants under an action filed by an individual in June 2013 in the Circuit Court of Broward County claiming personal injury resulting from use of a Brownie’s Third Lung. Plaintiff has claimed damages in excess of $1,000,000. The insurance carrier’s legal counsel indicates unfavorable outcome is possible, but not probable. We believe such claim is without merit and intend to continue to aggressively defend such action. In addition, as previously disclosed, we are also co-defendant under an action filed March 2015, in the Circuit Court of Broward County claiming personal injury resulting from the use of a Brownie’s Third Lung product. This claim falls outside the Company’s period of insurance coverage. The Company believes the claim to be a Workers Compensation claim relating exclusively against other defendant and without merit, and has retained counsel to aggressively defend this action.

~~On September 24, 2015, all claims and counterclaims by and between Undersea Breathing Systems, Inc. (“UBS”) and the Company were settled in full in the Circuit Court of the 15~~^th Judicial Circuit in and for Palm Beach County, FL, in the third quarter of 2015. The settlement included no payment or compensation due by the Company, UBS owing the Company certain tangible property within 14 days, mutual execution of general release, and stipulation for dismissal with prejudice with all parties to bear their own attorneys’ fees and costs.

The Company’s common stock is quoted on the OTCQB tier of the OTC Markets under the symbol “BWMG”. The Company’s high and low closing bid prices by quarter during 2014 and 2015, as provided by the OTC Markets (Pink) are provided below. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions. On March ~~17, 2016,~~29, 2024, the ~~quoted~~ closing sale price of our common stock was ~~$0.005~~$0.012 per share.

As of ~~March 17, 2016,~~May 9, 2024, the Company had ~~in excess of 325~~approximately 386 shareholders of record.

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 ~~the~~our financial condition, results of operations and other factors that the ~~Board~~board of ~~Directors~~directors will consider.

The following table provides information regarding our equity compensation plans as of December 31, 2023:

(1) Represents stock options granted to employees under the Equity Compensation Plan as described in Item 10 of this Annual Report. 25,000,000 shares are reserved for issuance under the Plan.

(2) Represents (i) five-year options granted to each of Robert Carmichael, Mikkel Pitzner and Blake Carmichael to purchase an aggregate of 35,295,237 shares of common stock at $0.018 per share, (ii) a three-year option to purchase 2,000,000 shares of common stock at $0.0229 per share to Jeffrey Guzy, a former director, (iii) a three-year option to purchase 2,000,000 shares of common stock at $0.0229 per share to Biz Launch Advisors, LLC, a former financial consultant, (iv) a three-year option to purchase an aggregate of 125,000,000 shares of common stock at $0.045 per share and a to Robert Carmichael, (v) a five-year option to purchase an aggregate of 21,759,400 shares of common stock at $0.0399 per share to Blake Carmichael, (vi) a five-year option to purchase 7,110,000 shares of common stock at $0.0531 per share to Christeen Buban, President of SSI.

~~In addition to those unregistered~~There were no sales of equity securities ~~previously disclosed in reports filed with the Securities and Exchange Commission~~ during the period covered by this ~~report, the Company sold securities without registration~~Report that were not registered under the Securities Act ~~of 1933 (the “Securities Act”)~~and were not previously reported in ~~reliance upon~~a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the ~~exemption provided in Section 4(a)(2) as described below. The securities were issued with a legend restricting their transferability absent registration of applicable exemption.~~Company.

During the year ended December 31, 2015, the Company issued 19,419,712 common shares with a fair value of $54,000 to Alexander Fraser Purdon, a related party, as employee compensation. In addition, the Company issued 396,891 common shares representing accrued interest on notes payable to our Chief Executive Officer.

~~The Company through its wholly owned subsidiary, Trebor Industries, Inc., d/b/a Brownie’s Third Lung, a Florida corporation, designs, tests, manufactures~~You should read the following discussion and ~~distributes recreational hookah diving, yacht based scuba air compressor~~analysis of our financial condition and ~~Nitrox Generation Systems, and scuba and water safety products. We sell~~results of operations together with our ~~products both on a wholesale and retail basis. Our headquarters and manufacturing facility is located in Pompano Beach, Florida. The Company does business as (dba) Brownie’s Third Lung.~~

~~The preparation of~~ financial statements and related notes appearing in ~~conformity~~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 ~~requires management to make~~(“GAAP”).

On December 22, 2022, the CPSC issued a ~~wide variety of estimates and assumptions that affect (i)~~recall notice for the ~~reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as~~Nomad tankless dive system, which is distributed by BLU3, Inc. As part of the ~~date~~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. However, in 2023 the Company adjusted the allowance down to $86,300 to reflect the actual impact on the Company’s financial ~~statements,~~condition.

Overall, our net revenues decreased 11.6% in 2023 from 2022, which included a decrease of 17.8% in sales to related parties. Our cost of revenues in 2023 was 71.9% of our total net revenues as compared to 67.4% in 2022. Included in our cost of revenues are royalty expenses we pay to Robert Carmichael which decreased 6.5% in 2023 from 2022. We reported ~~amounts~~a gross profit margin of 28.1% in 2023 as compared to 32.6% in 2022.

The following tables provide net revenues, costs of revenues, and gross profit margins for our segments for 2023 and 2022.

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 decreased 31.0% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

SG&A decreased by 31.0% for the years ended December 31, 2023 as compared to the year ended December 31, 2022. SG&A during those years are as follows:

Payroll decreases for the year ended December 31, 2023 can be attributed to a decrease in the BTL and BLU3 payroll which contributed the majority of the 8.1% decrease. BLU3 decreased its engineering staff in 2023 by one engineer. Additionally, the CEO resigned in Q2 of 2023 and the annual salary was not incurred.

Non-Cash Stock compensation expenses decreased 91.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The decrease can be attributed to fewer options being issued during the year as well as certain vesting criteria not being met in 2023 that were met in 2022.

Professional fees, representing legal, accounting and other professional fees, which we paid in a combination of cash, common stock, or stock options, decreased 20.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022. Accounting fees decreased, 30.3% in 2023, due to the change in audit firms for the year ended December 31, 2022. Additionally, legal fees decreased by 48.9% due to fewer stock awards for legal fees in 2023.

Advertising expense decreased 26.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The decrease is attributed to less spending on direct and internet advertising by BTL, BLU3 and SSI in 2023.

Other expenses decreased 9.9% for the year ended December 31, 2023 as compared the year ended December 31, 2022. The primary driver of the decrease to other expenses is the reserve for expenses related to the 2022 recall of the Nomad dive system. This reserve was decreased to reflect the actual expense of the recall in 2023.

R&D expenses for the year ended December 31, 2023 decreased 24.5% as compared to the year ended December 31, 2022. The decrease can be primarily attributed to the completion of the R&D for BLU3’s NOMAD in early 2022.

For the year ended December 31, 2023 interest expenses totaled approximately $78,700 as compared to approximately $42,500 in interest expense for the year ended December 31, 2022. This increase can be attributed to the increase in convertible debt related to the SSI acquisition, as well as the financing of tools and dyes for both the SSI and BLU3 operations.

We had cash of $431,112 on December 31, 2023.The following table summarizes total current assets, total current liabilities and working capital at December 31, 2023 as compared to December 31, 2022.

The decrease in our current assets on December 31, 2023 from December 31, 2022 primarily reflects decreases in cash and inventory of approximately $476,000. The decrease in inventory was due to inventory in BLU3 that was used for the sale of the Nomad dive system through the end of 2023.

The increase in our total current liabilities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 reflects an increase in customer deposits of approximately $88,206, an increase of approximately $79,011 in other liabilities, primarily attributed to the reserve for Nomad recall expenses of $160,500, and a decrease of 9,892 in operating lease liabilities with the signing of the SSI lease renewal, and an increase of $225,000 in related party demand note, due to the issuances of new notes.

Net cash used in operating activities for 2023 was primarily the result of a net loss of $1,248,115, as well as the change in long term lease liability of $258,034 for the year ended December 31, 2023 as compared to December 31, 2022. The cash used related to net loss was offset by $462,297 in depreciation and amortization expenses and $81,424 non-cash stock based compensation expenses during the ~~reporting periods covered~~year ended December 31, 2023.

Net cash used in investing activities for the year ended December 31, 2023 of $29,955 reflects primarily the cash used to purchase fixed assets. This compares to cash used to acquire assets of Gold Coast Scuba of $30,000, as well as the cash used to purchase fixed assets, net of debt totaling approximately $21,124, and fixed asset purchases of $11,040 for the year ended December 31, 2022.

Net cash provided by financing activities for the ~~financial statements. Our management routinely makes judgments and estimates about~~year ended December 31, 2023 reflects $200,000 in proceeds related to the ~~effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution~~sale of the ~~uncertainties increases, these judgments become even more subjective~~Company’s common stock and ~~complex. We have identified certain accounting policies that are most important~~units comprised of stock and $225,000 in proceeds from the issuance of demand notes. The increase in net cash was offset by repayments of notes payable and other debt of $73,533. This is compared to cash provided from the ~~portrayal~~sale of ~~our current financial condition~~common stock and ~~results~~units of ~~operations. Our significant accounting policies are as follows:~~

~~Use~~$305,000, proceeds from the exercise of ~~estimates~~ ~~- The preparation~~warrants of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements$265,000, and the ~~reported amounts~~repayment of ~~revenue~~debt and ~~expenses during~~notes payable totaling $54,988 for the ~~reporting period. Actual results could differ from those estimates.~~year ended December 31, 2022.

~~Reclassifications~~ – Certain reclassifications have been made to the 2014 financial statement amounts to conform to the 2015 financial statement presentation. Effective July 15, 2013, the Company effectuated a reverse stock split (1-for-1,350). Accordingly, the transactional number of shares and per share amounts referenced throughout this report has been retroactively stated unless otherwise noted.

~~Cash and equivalents~~ ~~– Only highly liquid investments with original maturities of 90 days or less are classified as cash and equivalents. These investments are stated at cost, which approximates market value.~~

Our audited consolidated financial statements ~~have been~~included in this Annual Report were prepared assuming ~~the Company~~we will continue as a going concern, ~~which contemplates~~and, accordingly, do not include adjustments relating to the recoverability and realization of assets and ~~the satisfaction~~classification of liabilities that might be necessary should we be unable to continue in ~~the normal course~~operation. The report of ~~business~~our independent registered public accounting firm on our audited consolidated financial statements for the ~~twelve-month period following the date of these financial statements. Although profitable for the years~~year ended December 31, ~~2015 and 2014, we have otherwise incurred losses since 2009. We have had a working capital deficit since 2009.~~

The Company is behind on payments due for matured convertible debentures, related parties notes payable, accrued liabilities and interest – related party, and certain vendor payables. The Company is handling delinquencies on a case by case basis. However, there can be no assurance that cooperation2023 includes an explanatory paragraph stating the Company has ~~received thus far will continue.~~

~~Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this~~net losses and an accumulated deficit which raises substantial doubt about ~~our~~its ability to continue as a going concern. ~~Therefore,~~If the Company ~~will need to raise additional funds and~~ is currently exploring alternative sources of financing. The Company has issued a number of convertible debentures as an interim measure to finance working capital needs and may continue to raise additional capital through sale of restricted common stock or other securities, and obtaining some short term loans. The Company has, in the past, paid for legal and consulting services with restricted stock to maximize working capital, and intends to continue this practice where feasible. In addition, the Company continues to explore additional cost saving measures.

~~If BWMG fails~~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. ~~The accompanying consolidated financial statements do not include any adjustments that may result from~~We have a history of losses, and an accumulated deficit of $17,685,610 as of December 31, 2023. Despite a working capital surplus of $233,814 at December 31, 2023, the ~~outcome of these uncertainties.~~

~~Inventory~~ – Inventory is stated at the lower of cost or fair market value. Cost is principally determined by using the average cost method that approximates the First-In, First-Out (FIFO) method of accounting for inventory. Inventory consists of raw materialscontinued losses and cash used in operations raise substantial doubt as ~~well as finished goods held for sale. The Company’s management monitors the inventory for excess and obsolete items and makes necessary valuation adjustments when indicated.~~

~~Furniture, Fixtures, Equipment and Leasehold Improvements~~– Furniture, Fixtures, Equipment and Leasehold Improvement is stated at cost less accumulated depreciation or amortization. Depreciation and amortization is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 5 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

~~Revenue recognition~~ – Revenues from product sales are recognized when the Company’s products are shipped or when service is rendered. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of cost incurred to date to estimated total cost of each contract. This method is used because management considers the percentage of cost incurred to date to estimated total cost to be the best available measure of progress on the contracts.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Revenue and costs incurred for time and material projects are recognized as the work is performed.

~~Product development costs~~ ~~– Product development expenditures are charged to expenses as incurred.~~

~~Advertising and marketing costs~~– The Company expenses the costs of producing advertisements and marketing material at the time production occurs, and expenses the costs of communicating advertisements and participating in trade shows in the period in which they occur.

~~Customer deposits and returns policy~~– The Company typically takes a minimum 50% deposit against custom and large tankfill systems prior to ordering and/or building the systems. The remaining balance due is payable upon delivery, shipment, or installation of the system. There is no provision for cancellation of custom orders once the deposit is accepted, nor return of the custom ordered product. Additionally, returns of all other merchandise are subject to a 15% restocking fee as stated on each sales invoice.

~~Income taxes~~ – The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

~~The Company records net deferred tax assets~~ to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

~~Comprehensive income~~ ~~– The Company has no components of other comprehensive income. Accordingly, net income equals comprehensive income for all periods presented.~~

~~Stock-based compensation~~ – The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes valuation model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued on the effective date of the agreement in accordance with generally accepted accounting principles, which includes determination of the fair value of the share-based transaction. The fair value is determined through use of the quoted stock price.

~~Fair value of financial instruments~~–Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

~~Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.~~

Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. Management considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, provided by multiple, independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the Company’s ~~perceived risk of that investment.~~

At December 31, 2015, and 2014, the carrying amount of cash, accounts receivable, accounts receivable – related parties, customer deposits and unearned revenue, royalties payable – related parties, other liabilities, other liabilities and accrued interest – related parties, notes payable, notes payable – related parties, and accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments.

~~Earnings per common share~~ – Basic earnings per share excludes any dilutive effects of options, warrants and convertible securities. Basic earnings per share is computed using the weighted-average number of outstanding common shares during the applicable period. Diluted earnings per share is computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory. ASU No. 2015-11 does not apply to inventory measurement using the last-in, last-out (LIFO) or retail methods. ASU No. 2015-11 applies to all other inventory measurement methods, which includes first-in, first-out (FIFO) or average cost. Previously, inventory valuation was at the lower of cost or fair market value. This ASU changes the valuation to lower or cost of net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of the business, less reasonably predictable costs of completion, disposal, and transportation. ASU is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. ASU 2015-11 should be applied prospectively with earlier application permitted. The Company opted for early adoption of ASU 2015-11 this period with no impact to financial condition, results of operations, or cash flows. The Company updated its consolidated financial statements to reflect inventory valuation at the lower of cost or net realizable value.

In August 2014, the Financial Accounting and Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-206): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU requires an entity’s management to assess its ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. This includes (1) providing a definition of the term substantial doubt, (2) requiring an evaluation every reporting period including interim periods, (3) providing principles for considering then mitigating effect of management’s plans, (4) requiring certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requiring an express statement and other disclosures when substantial doubt is not alleviated, and (6) requiring an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).concern. The ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early adoption permitted. The Company elected early adoption for the year ended December 31, 2014, with insignificant impact to both its current process for evaluatingCompany’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 ~~existing disclosures.~~

operations. The ~~Company believes there was no other new accounting guidance adopted, but not yet effective that either has not already been disclosed in prior reporting periods or is relevant~~failure to achieve the necessary levels of profitability and cash flows would be detrimental to the ~~readers~~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 ~~its financial statements.~~our operations.

The ~~following~~Company’s management discussion and analysis of ~~the Company’s~~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 ~~United States.~~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, ~~revenues~~sales and expenses, and related ~~disclosure of contingent assets and liabilities.~~footnote disclosures. On an on-going basis, the Company evaluates its estimates ~~including those related to allowance~~ for ~~doubtful accounts~~product returns, bad debts, inventories, income taxes, warranty obligations, litigation and ~~deferred income tax assets.~~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.

~~Results~~The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of ~~Operations~~its consolidated financial statements.

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 ~~Year Ended December 31, 2015, as Compared~~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.

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.

The Company records a valuation allowance to reduce its deferred tax assets to the ~~Year Ended December 31, 2014~~

~~Net revenues~~. For the year ended December 31, 2015, revenues remained relatively constant with net revenues of $2,759,643 as compared to net revenues of $2,735,841 for the year ended December 31, 2014, an increase of $23,802, or lessamount that is more likely than 1%. Sales to related parties totaled $876,188 and $1,185,603 for the same periods, respectively. Sales of tankfill systems and related sales were up approximately $251,967 for the year ended December 31, 2015 compared to 2014, and this increase was partially offset by an approximate $240,408 decline in hookah systems and related sales during the same period this change in product mix is not ~~believed~~ to be attributable to any particular identifiable sales trend or competitive pressures but rather normal fluctuations in market demand. Discontinuance of the Company’s product liability insurance has had negative impact on hookah sales to some of the Company’s dealers, but the Company believes sales of these products will rebound over time.

~~Cost of net revenues~~. For the year ended December 31, 2015, we had cost of net revenues of $1,831,989 as compared with cost of net revenues of $1,991,626 for the year ended December 31, 2014, a decrease of $159,637, or 8%. This was primarily attributable to approximately $11,869 decrease in overhead allocation primarily due to discontinuance of product liability insurance in the third quarter of 2014, which was an expense allocable as overhead; approximately $26,622 decrease in direct labor; approximately $19,870 decrease in subcontract labor; approximately $10,220 decrease in non-sales freight; and approximately $89,973 net decrease of primarily individually insignificant decreases in the majority of cost of net revenue accounts due to continuance of cost cutting measures by the Company to maximize working capital without sacrificing quality. In addition, although material costs increased due to quantity increase in sales, the increase was offset by an approximately 1% overall decline in material cost as a percentage of net revenues.

~~Gross profit.~~ For the year ended December 31, 2015, we had a gross profit of $927,654 as compared to gross profit of $744,215 for the year ended December 31, 2014, an increase of $183,439, or 25%. The increase in gross profit was primarily attributable to the decrease in cost of net revenues of $159,637 for the year ended December 31, 2015, as compared to the prior year as discussed above.

~~Operating expenses~~. For the year ended December 31, 2015, we had operating expenses of $679,721 as compared to operating expenses of $623,261 for the year ended December 31, 2014, an increase of $56,460, or 9%. The increase is primarily attributable to increase in legal expense of approximately $141,204 approximately $16,886 increase in rent, and partially offset by approximately $44,652 decrease in insurance expense related to discontinuance of product liability insurance and reduction of workers compensation insurance, and decrease in indirect labor of approximately $37,679. There were many other net increases and decreases in account balances not deemed individually insignificant. The vast majority of the legal expense increase was for the UBS legal proceeding during 2015, including legal defense and counterclaim settlement. The balance of the increase in legal is primarily a result of a credit to legal expense for overbilled amount during the year ended December 31, 2014 without comparable transaction during the year ended December 31, 2015. The decrease in direct labor for the year ended December 31, 2015 as compared to the same period in 2014 is a result of reduction in head count not replaced when the Company’s factory and headquarters relocated in October 2014.

~~Other (income) expense, net~~. For the year ended December 31, 2015, we had other (income) expense, net of $18,280, as compared to other (income) expense, net of $26,541 for the year ended December 31, 2014, a change in other (income) expense, net of $8,261, or 31%. This account is comprised of interest expense that decreased $18,217 during the year ended December 31, 2015 compared to the year ended December 31, 2014 primarily attributable to the satisfaction of related party notes. Other (income) expense net is comprised of transactions that are generally of a non-recurring nature. The decrease in other income net of $9,955 is primarily due to transactions occurring during the year ended December 31, 2014, without comparable transactions during the same period in 2015.

~~Net income.~~For the year ended December 31, 2015, we had net income of $229,610 as compared to net income of $94,369 for the year ended December 31, 2014, an increase of $135,241, or 143%. The increase in net income is primarily attributable a decrease in the cost of net revenues as described above.

As of December 31, 2015, the Company had current assets (primarily consisting of inventory) of $958,001 and current liabilities of $1,232,943 or a current ratio of .78 to 1. This represents a working capital deficit of $274,942. As of December 31, 2014, the Company had cash and current assets of $774,291 and current liabilities of $1,356,642, or a current ratio of .57 to 1.

The consolidated financial statements included herein have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financial statements. Although we had net income for the years ended December 31, 2014 and 2015, we have otherwise incurred annual losses since 2009, and expect we may have losses in future periods. We have had a working capital deficit since 2009.

The Company is behind on payments due matured convertible debentures; accrued liabilities and interest – related parties; and certain vendor payables. The Company is handling delinquencies on a case by case basis. However, there can be no assurance that cooperationrealized. While the Company has ~~received thus far will continue.~~

~~The Company does not expect that existing cash flow will be sufficient to fund presently anticipated operations. This raises substantial doubt about~~considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the ~~Company’s ability to continue as a going concern during~~need for the twelve- month period following the date of the financial statements included herein. The Company will need to raise additional funds and is currently exploring alternative sources of financing. We have issued a number of convertible debentures as an interim measure to finance our working capital needs. We have historically paid for some legal and consulting services with restricted stock to maximize working capital. We intend to continue this practicevaluation allowance, in the ~~future when possible. We have implemented some cost saving measures and will continue to explore more to reduce operating expenses.~~

Net cash provided by operating activities totaled $147,461 and $157,757 for the years ended December 31, 2015 and 2014, respectively. For both 2015 and 2014, the increase in net cash from operating activities was primarily the result of earnings for the period. Cash generated from 2015 earnings of $229,610 was reduced primarily by a reduction in accounts payable and accrued liabilities during the period of $112,830 as well as an increase in prepared expenses and inventory levels dictated by anticipated sales levels. Cash flows in 2015 were also increased by a decrease in accounts receivable - related parties and increase in accrued royalties, payable to related parties.

Net cash used in financing activities totaled $12,622 and $126,202 at December 31, 2015 and 2014, respectively, and primarily reflects the repayments during the periods of principal payments on notes payable to related parties of $30,068 and $113,452, respectively. The net cash used in financing activities for 2015 was net of $27,000 proceeds of additional notes payable - related parties.

Net cash provided by operating activities for 2014 resulted primarily from 2014 earning of $94,369 coupled with an increase in other liabilities and accrued interest payable to related parties of $74,504 and advanced from related parties $34,617.

~~For both years ending December 31, 2015 and 2014,~~event the Company ~~has heavily depended upon the funding of related parties~~were to ~~maintain its operations.~~

If we fail to raise additional funds when needed, or do not have sufficient cash flows from sales, we may be required to scale back or cease operations, liquidate our assets and possibly seek bankruptcy protection. The accompanying consolidated financial statements do not include any adjustmentsdetermine that ~~may result from the outcome of this uncertainty.~~

~~The Company is subject to various risks that may materially harm its business, financial condition and results of operations. These may~~it would not be the only risks and uncertainties that the Company faces. Additional risks that we do not yet know of or that we currently think are immaterial may also impair our future business operations. If any of these risks or uncertainties actually occurs, the Company’s business, financial condition or operating results could be materially harmed. In that case, the trading price of the Company’s common stock could decline and you could loseable to realize all or part of ~~your investment.~~

~~Our ability to continue as a going concern is in substantial doubt absent obtaining adequate new debt or equity financing and achieving sufficient sales levels.~~

~~While we incurred~~its net income in 2015 and 2014, the Company has negative working capital, is behind on payments due for matured convertible debentures, related party notes payable, accrued liabilities and interest –related parties, and certain vendor payables. The Company is working out all matters of delinquency on a case by case basis. However, there can be no assurance that cooperation the Company has received thus far will continue. Our continued existence is dependent upon generating working capital and obtaining adequate new debt or equity financing. Because of our historical losses, we may not have working capital to permit us to remain in business through the end of the year, without improvements in our cash flow from operations or new financing. Working capital limitations continue to impinge on our day-to-day operations.

The optional conversion features of a series of convertible debentures issued by the Company could require the Company to issue a substantial number of shares of common stock, which will cause dilution to the Company’s stockholders and a potentially negative effect on our stock price.

Since October 4, 2010, the Company has issued convertible debentures to several lenders and other third parties. At December 31, 2015 the outstanding principal balance of these debentures was approximately $372,000. The debentures convert under various conversion formulas, all of which are at a significant discount to market price of our common stock. The conversion of any of the debentures will result in the issuance of a significant number of shares of our common stock which will cause dilution to our existing shareholders. Furthermore, the conversion at a significant discount to the market price of our common stock may have a negative effect on our stock price.

~~Our common stock may be affected by limited trading volume and may fluctuate significantly~~.

Our common stock is traded on the OTC Markets. There is a limited public market for our common stock and there can be no assurance 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 experiencedeferred tax assets in the future, ~~significant price and volume fluctuations, which could adversely affect~~an adjustment to the ~~market price of our common stock without regard~~deferred tax assets would be charged to ~~our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes~~income in the ~~overall economy or~~period such determination was made. Likewise, should the ~~condition~~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 ~~financial markets could cause~~deferred tax assets would increase income in the ~~price of our common stock to fluctuate substantially.~~period such determination was made.

~~Our company is~~The Company accrues a ~~voluntary filer with~~warranty reserve for estimated costs to provide warranty services. Warranty reserves are estimated using standard quantitative measures based on criteria established by the ~~Securities~~Company. Estimates of costs to service its warranty obligations are based on historical experience, expectation of future conditions and ~~Exchange Commission 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 are subject to Section 15(d) of the Exchange Act, we do not have a class of securities registered under Section 12(g) of the Exchange Act.~~known product issues. To the extent ~~that our duty~~the Company experiences increased warranty claim activity or increased costs associated with servicing those claims, revisions 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~~estimated warranty reserve 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 Securities Exchange Act of 1934. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactionsrequired. The Company engages in such securities is provided by the exchange or system). 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.

Our success largely depends on the efforts and abilities of Robert M. Carmichael, our President and Chief Executive Officer. Mr. Carmichael has been instrumental in securing our existing financing arrangements. Mr. Carmichael is primarily responsible for the development of our technology and the design of our products. The loss of the services of Mr. Carmichael could materially harm our business because of the cost and time necessary to recruit and train a replacement. Such a loss would also divert management attention away from operational issues. We do not presently maintain a key-man life insurance policy on Mr. Carmichael.

~~We require additional personnel and could fail to attract or retain key personnel~~.

In addition, our continued growth depends on our ability to attract and retain a Chief Financial Officer, a Chief Operations Officer, and additional skilled associates. We are currently utilizing the services of two professional consultants to assist the Chief Executive Officer with finance and operations. The loss of the services of these consultants prior to our ability to attract and retain a Chief Financial Officer or Chief Operations Officer or further assistance in these areas may have a material adverse effect upon us. Also, there can be no assurance that we will be able to retain our existing personnel or attract additional qualified associates in the future.

~~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, entities owned and controlled by Robert M. Carmichael, our President and Chief Executive Officer, to obtain and defend our intellectual property, including patent protection for our productsproduct quality programs and processes, ~~preserve our trade secrets, defend~~including monitoring and ~~enforce our rights against infringement and operate without infringing~~evaluating the ~~proprietary rights~~quality of ~~third parties, both in the United States and in other countries. Despite our efforts~~its suppliers, to ~~protect our intellectual proprietary rights, existing copyright, trademark and trade secret laws afford only limited protection.~~help minimize warranty obligations.

~~We may be unable to manage growth.~~

Off balance Sheet Arrangements

Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. If we fail to manage our growth effectively, our business, financial condition or operating results could be materially harmed, and our stock price may decline.

~~Reliance on vendors and manufacturers.~~

~~Dependence on consumer spending~~.

The success of the 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 affects 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, Brownie’s is not subject to government industry specific regulation. Nevertheless, Brownie’s 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. Brownie’s 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.

~~Bad weather could have an adverse effect on operating results~~.

~~Investors should not rely on an investment in our stock for the payment of cash dividends~~.

We have not paid any cash dividends on our capital stock and we do not anticipate paying cash dividends in the future. Investors should not make an investment in our common stock if they require dividend income. Any return on an investment in our common stock will be as a result of any appreciation, if any, in our stock price.

~~The manufacture and distribution of recreational diving equipment could result in product liability claims and we currently lack product liability insurance~~.

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 anticipate obtaining contractual indemnification from parties-~~supplying raw materials~~,manufacturing our products or marketing our products. In any event, any such indemnification if obtained will be limited by our terms and, as a practical matter, to the creditworthiness of the indemnifying party. We currently do not have any product liability insurance. 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.

Our management has previously determined that we did not maintain effective internal controls over financial reporting. For a detailed description of these material weaknesses and our remediation efforts and plans, see “Part II — Item 9A — Controls and Procedures.” 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.

We currently have no ~~independent directors, which poses a risk for us from a corporate governance perspective.~~off-balance sheet arrangements.

Robert Carmichael, our only executive officer, also serves as our only director. Our director and executive officer is required to make interested party decisions, such as the approval of related party transactions, his level of his compensation, and oversight of our accounting function. Our director and executive officer also exercise substantial control over all matters requiring stockholder approval, including the nomination of directors and the approval of significant corporate transactions. Due to our lack of independent directors, we have not implemented various corporate governance measures, the absence of which may cause stockholders to have more limited protections against transactions implemented by our board of directors, conflicts of interest and similar matters. Stockholders should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Our Chief Executive Officer beneficially owns approximately 55% of the combined voting power of our Common Stock and Series A Convertible Preferred Stock and is able to control voting issues and actions that may not be beneficial or desired by minority shareholders.

As of December 31, 2015, Robert Carmichael, our only executive officer, beneficially owns approximately 55% of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control.

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk.

Not required for smaller reporting companies.

Item 8.

Financial ~~Statements.~~Statements and Supplementary Data.

Our consolidated financial statements appear beginning at page F-1.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain ~~disclosure~~“disclosure controls and ~~procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934,~~procedures” as ~~amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act~~such term is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. The Company’s management, under the supervision and with the participation of Robert Carmichael, the Company's Chief Executive Officer and Chief Financial (and principal accounting) Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under Exchange Act. In designing and 15d-15(e) of the Exchange Act) as of December 31, 2015. Based upon that evaluation and the identification of the material weakness in the Company’s internal control over financial reporting as described below under “Management’s Report on Internal Control over Financial Reporting,” the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report.

~~Management’s Report on Internal Control over Financial Reporting~~

Management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2015, based on the 2013 criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2015, our internal control over financial reporting is not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles because of the Company’s limited resources and limited number of employees. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

~~This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting.~~

~~Limitations on Effectiveness of Controls and Procedures~~

~~Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that~~evaluating our disclosure controls and procedures, or our ~~internal~~management recognized that disclosure controls ~~will prevent all errors~~ and ~~all fraud. A control system,~~procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of ~~the control system~~disclosure controls and procedures are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any ~~system of~~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. ~~Over~~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, 2023 and based upon the such evaluation, have concluded that the disclosure controls and procedures as of December 31, 2023 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. ~~Because~~

Our management assessed the effectiveness of the ~~inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.~~

~~Changes in Internal Control over Financial Reporting~~

~~There were no changes to our~~Company’s internal control over financial reporting ~~(as defined~~as of December 31, 2023. The framework used by management in ~~Rules 13a-15(f) and 15d-15(f) under~~making that assessment was the ~~Exchange Act)~~criteria set forth in the documents entitled “2013 Internal Controls – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that ~~occurred~~assessment, management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2023 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;

●

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;

●

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 ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

None.

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

PART III

Item 10.

Directors, Executive Officers, and Corporate Governance.

The following ~~is a list~~are the names, ages and positions of our current executive officers and directors. ~~All directors serve one-year terms or until each of their successors are duly qualified and elected.~~

Name	Age	Position

Robert M. Carmichael	5362	~~President,~~ Chief Executive Officer, ~~Principal~~Chairman, President, and Chief Financial Officer and Director
Christopher H. Constable	57	Director
Charles F. Hyatt	55	Director
Key Employee
Blake Carmichael	29	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.

Robert M. Carmichael.Since April ~~16,~~ 2004, Mr. Carmichael has served as ~~BWMG’s~~our Chairman and President, ~~Chief Executive Officer, Principal Financial Officer,~~ and ~~Director. From March 23,~~from April 2004 ~~through April 16, 2004, Mr. Carmichael~~until November 2020 served as ~~the Company’s~~our Chief Executive ~~Vice-President and Chief Operating~~ Officer. Mr. Carmichael has served as ~~president of Trebor Industries~~our Chief Financial Officer since ~~1986.~~2017 and a director since 2005. Mr. Carmichael ~~is the holder and co-holder of numerous patents, some of which are used by Trebor Industries and several other major companies~~was selected to serve as a director for his general business management experience with specific experience in the diving industry.

~~Directors~~

~~Our~~Christopher H. Constable. Mr. Constable as served as our Chief Executive Officer and a director starting November 2020. On June 24, 2023, Mr. Constable submitted his resignation as Chief Executive Officer effective July 7, 2023. Mr. Constable remained a member of the Company’s Board of ~~Directors may consist of up to five (5) seats. Pursuant to our Bylaws, a majority~~Directors. Mr. Constable sat on the board of directors ~~may appoint~~ of Bon Natural Life, Ltd. (NASDAQ: BON), and served as the Chairman of the audit committee until March, 2022. Prior to joining our company, from August 2020 through the November 2020, Mr. Constable provided business and financial consulting services. From 2003 through February 2020 Mr. Constable served as Chief Financial Officer of John Keeler & Co., Inc., d/b/a ~~successor~~Blue Star Foods, a privately held international seafood company which in 2018 merged into Blue Star Foods Corp., a Miami, Florida-based sustainable seafood company (NASDAQ: BSFC). Mr. Constable served as Chief Financial Officer and a director of Blue Star Foods Corp until February 2020. Prior thereto, from 1999 to ~~fill~~2003, Mr. Constable was a consultant at Gateway Capital Corp., a business consulting firm, where he analyzed the financial and reporting capabilities of prospective lending customers with revenues from $10 to $100 million. Additionally, Mr. Constable was involved with loan workouts of facilities that required either liquidation or restructuring to ensure collectability for the financial institutions. From 1990 to 1999, Mr. Constable was a commercial banker at Mercantile Bankshares in Baltimore, Maryland, Finova Capital Corporation and Capital Bank, both in south Florida. Mr. Constable received his B.S. in Finance with an Accounting Minor from the Merrick School of Business at the University of Baltimore in 1989. Mr. Constable was selected to serve as a director for his experience with public companies and over 30 years background in finance and accounting.

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 ~~vacancy~~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 ~~without shareholder vote.~~

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. Christopher Constable is a “financial expert” within the meaning of the rules and regulations of the SEC.

~~Committees~~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, 2023.

	Fees earned or paid in cash		Stock awards		Option awards		Non-equity incentive plan compensation		Nonqualified deferred compensation earnings		All other compensation		Total
Name	($)		($)		($)		($)		($)		($)		($)

Christopher Constable		7,500				-								7,500
Charles Hyatt		18,000		-				-		-		-		18,000

Delinquent Section 16(a) Reports

Not applicable.

~~Currently, the~~

Code of Ethics

The Company has not established any committees of the Board of Directors. Because the board of directors consists of only one member, the board has not delegated any of its functions to committees. The entire board of directors acts as our audit committee as permitted under Section 3(a)(58)(B) of the Exchange Act. We do not have any independent directors who would qualify as an audit committee financial expert as defined under item 407 of Regulation S-K. We believe that it has been, and may continue to be, impractical to recruit independent directors unless and until we are significantly larger.

~~Compensation of Directors~~

~~None.~~

~~Compliance with Section 16(a) Of the Securities Act Of 1934~~

~~Not applicable to our Company.~~

~~Code of Ethics~~

~~The Company has~~yet adopted a ~~formal~~ code of ethics ~~that applies~~applicable to our principal executive officer, ~~and~~principal financial officer, principal accounting officer ~~all other officers, directors~~or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small size and ~~employees. The code of ethics was provided as an exhibit~~limited resources and because management’s attention has been focused on matters pertaining to the 10-K for the year ended December 31, 2008. The Company undertakes to provide to any person without charge, upon written request to the Company’s Chief Executive Officer, a copy of the code of ethics.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., 3001 NW 25^th25th Avenue, Suite 1, Pompano Beach, Florida 33069, Attention: ~~Mr.~~ 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.

Item 11.

Executive Compensation

The following table ~~shows all~~provides certain information regarding compensation awarded to, earned by or paid to our Chief Executive Officer and the ~~cash~~other executive officer with compensation ~~paid by the Company, as well as certain other compensation paid or accrued,~~exceeding $100,000 during the ~~years~~year ended December 31, 2014 and 2015 to the Company’s named executive officer. No restricted stock awards, long-term incentive plan payouts or other types of compensation, other than the compensation identified in the chart below, was paid to this executive officer during these fiscal years. Executivecompensation excludes certain transactions, which are disclosed under “Item 13. Certain Relationships and Related Transactions, and Director Independence.”2023 (each a “Named Executive Officer”).

Summary Compensation Table

Name and Principal
Position(s) Year Salary Bonus Stock
Awards Option
Awards Non-Equity
Incentive Plan
Compensation All Other
Compen-
sation Total

Robert M. Carmichael,
President, Principal 2014 $ 16,615 $ — $ — $ — $ — $ — $ 16,615
Executive Officer 2015 $ — $ — $ — $ — $ — $ 16,565* $ 16,565

*~~health insurance~~

											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	2021		120,000				-		-			-		-		84,994	(2)		204,994
CEO, Chairmen, President and CFO	2023		140,769						-			-		-		81,241	(3)		222,010
Christopher Constable,	2022		199,255				-		95,969	(4)		-		-		5,756	(5)		300,980
CEO	2023		119,074	(6)					-			-		-		10,954	(5)		130,028

(1)	Represents the aggregate grant date fair value of the shares of our common stock, computed in accordance with ASC Topic 718. The assumptions made in the valuations of the stock awards are included in Note 13 of the notes to our consolidated financial statements.

~~Outstanding Equity Awards at Fiscal Year End~~

(2)	Represents (i) $18,000 in director compensation (ii) $5,686 in health insurance premiums paid on behalf of Mr. Carmichael, and (iii) an aggregate of $61,308 in royalties paid to an entity controlled by Mr. Carmichael under the terms of a license agreement with the Company.

Option Awards Stock Awards
Name Number of
securities
underlying
unexercised
options (#)
exercisable Number of
securities
underlying
unexercised
option (#)
un-
exercisable Equity
Incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options (#) Option
exercise
price ($)
per share Option
expiration
date Number of
shares or
units of
stock that
have not
vested
(#) Market
value of
shares of
units of
stock that
have not
vested ($) Equity
Incentive
plan
awards:
Number of
unearned
shares,
units or
other
rights that
have not
vested (#) Incentive
plan
awards:
Market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested ($)

Robert M. Carmichael, Principal Executive Officer 234 $ 1,350 March 2, 2019

(3)	Represents (i) $18,000 in director compensation (ii) $5,921 in health insurance premiums paid on behalf of Mr. Carmichael, and (iii) an aggregate of $57,320 in royalties paid to an entity controlled by Mr. Carmichael under the terms of a license agreement with the Company.

(4)	Represents a five-year option to purchase 2,403,846 shares of common stock. The option was forfeited upon Mr. Constable’s resignation as Chief Executive Officer effective July 7, 2023.

~~Director Compensation~~

(5)	Represents (i) $7,500 in director compensation (ii) $3,454 health insurance premiums paid by the Company on behalf of Mr. Constable.

(6)	Represents a portion of salary for 2023 due to Mr. Constable submitted his resignation as Chief Executive Officer effective July 7, 2023.

~~None.~~

~~Employment Agreements~~

~~None.~~

~~Securities~~~~Authorized~~~~for Issuance under~~ Equity ~~Compensation Plans~~Plan

On ~~August 22, 2007,~~May 26, 2021, the Company adopted anthe Company’s Equity ~~Incentive~~Compensation Plan (the “Plan”). ~~Under~~The Plan provides for the ~~Plan, Stock Options may be granted~~award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to ~~Employees, Directors,~~officers, directors, employees and ~~Consultants in~~consultants who provide services to the ~~form~~Company. The terms of Incentive Stock Options or Nonstatutory Stock Options. Stock Purchase Rights, time vested and/performance invested Restricted Stock, and Stock Appreciation Rights and Unrestricted Shares may also be granted under the Plan. The initial maximum number of shares that may be issuedawards under the Plan ~~shall be 297 shares and no more than 71 Shares~~are made by the Administrator of ~~Common Stock may be granted to any one Participant with respect to Options, Stock Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to be issued~~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 may be either authorized and unissued or shares held in treasury by the Company.~~Plan. The term of the Plan ~~shall be~~is ten years. ~~The Board of Directors may amend, alter, suspend, or terminate the Plan~~

Outstanding Equity Awards at ~~any time.~~ December 31, 2023

The table below ~~includes information as of~~reflects all equity awards made to each Named Executive Officer that were outstanding on December 31, ~~2015.~~2023.

Name

Number of

Securities

Underlying

Unexercised

Options

(#)

Exercisable

Number of

Securities

Underlying

Unexercised

Options

(#)

Unexercisable

Equity Incentive

Plan Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)

Option

Exercise

Price

($)

Option Expiration Date

Robert Carmichael

20,761,904

(1)

0.018

7/29/2024

25,000,000

(2)

100,000,000

0.045

4/30/2023

	(1)	Options fully vested in January 2020
	(2)	Options vest based upon certain corporate milestones as discussed in Note 13 of the financial statements included in this Annual Report.

~~Equity Compensation Plan Information~~

Christopher Constable Employment Agreement

On November 5, 2020, we entered into a three-year employment agreement (the “Constable Employment Agreement”), which agreement will automatically renew for one-year successive terms unless either party notifies the other of its desire to terminate the agreement at least 60 days prior to the then current term. Pursuant to the Agreement, Mr. Constable will serve as our Chief Executive Officer and a director. In consideration for his services, Mr. Constable is entitled to an annual base salary of ~~December 31, 2015~~$200,000, payable in accordance with the customary payroll practices of the Company, and upon execution of the Constable Employment Agreement and on each anniversary thereof, a non- qualified immediately exercisable five-year stock option to purchase that number of shares equal to $100,000 of the value of the Company’s common stock at an exercise price equal to the market price of the common stock on the date of issuance. Pursuant to the Agreement, on November 5, 2020, we issued Mr. Constable an option to purchase 5,434,783 shares of common stock at an exercise price of $0.0184 per share pursuant to an option award agreement and upon the first anniversary we issued Mr. Constable an option to purchase 2,403,846 shares of common stock at an exercise price of $0.0401.

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a) Weighted – average
exercise price of
outstanding options,
warrants and rights
(b) Number of securities
remaining available for
future issuances under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Equity Compensation Plans Approved by Security Holders 297 $ 1,350 0
Equity Compensation Plans Not Approved by Security Holders — — —
Total 297 $ 1,350 0

In addition, Mr. Constable is entitled to receive four-year stock options to purchase shares of common stock at an exercise price equal to $0.0184 per share in the amounts listed below based upon the following performance milestones during the term of the Constable Employment Agreement: (i) 2,000,000 shares - if the Company’s total net revenues, as reported in its statement of operations in its financial statements in its filings with the SEC, including as a result of a stock or asset acquisition of a third party (“Net Revenues”) are in excess of $5,000,000, in the aggregate, for four consecutive fiscal quarters; (ii) 3,000,000 shares - if the Net Revenues are in excess of $7,500,000, in the aggregate, for four consecutive fiscal quarters; (iii) 5,000,000 shares - if the Net Revenues are in excess of $10,000,000, in the aggregate, for four consecutive fiscal quarters; and (iv) 20,000,000 shares - if the Company’s common stock is listed on the on NASDAQ or New York Stock Exchange. Mr. Constable is also entitled to participate in all benefit programs the Company offers to its executives, reimbursement for business expenses and three weeks of annual paid vacation.

The agreement may be terminated for “cause” (as defined in the Agreement), upon his death or disability, or by the Company without cause. Furthermore, Mr. Constable may terminate the Agreement for “good reason” (as defined in the agreement). If the Company terminates the agreement for cause, or if it terminates upon Mr. Constable’s death or disability, or if he voluntarily terminates the Agreement, neither Mr. Constable nor his estate (as the case may be) is entitled to any severance or other benefits following the date of termination. If the Company terminates the Agreement without cause or Mr. Constable terminates the Agreement for good reason, the Company is obligated to continue to pay Mr. Constable’s base salary for a period of six months. The Agreement also contains customary confidentiality, non-disclosure and indemnification provisions.

On June 24, 2023, Mr. Constable voluntarily submitted his resignation as Chief Executive Officer effective July 7, 2023. Mr. Constable remains a member of the Company’s Board of Directors.

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.

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, ~~certain information~~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 ~~us with respect~~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 ~~our~~ common stock ~~by: (1) all persons who are~~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 ~~owners~~owner of ~~five percent (5%)~~a security if that person directly or ~~more~~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 ~~class~~security of ~~our voting securities; (2) each~~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 ~~our directors; (3) each~~the same securities, and a person may be deemed to be a beneficial owner of ~~our Named Executive Officers; and (4) all current directors and executive officers~~securities as ~~a group.~~

to which he or she may not have any pecuniary interest. Except as ~~otherwise indicated, and subject to applicable community property laws, the persons named in the table~~noted below, ~~have~~each person has sole voting and investment power with respect to ~~all shares of common stock held by them. Robert Carmichael owns 100% of~~ the Company’s Series A Convertible Preferred Stock, each share of which has the number of votes 250 per share. The preferred stock votes with the Company’s common stock, except as otherwise required under Florida law. Accordingly, Mr. Carmichael owns approximately 55% of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control.

Applicable percentage ownership in the following table is based on 86,841,190 shares of common stock outstanding as of March 7, 2016. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned ~~by a person~~ and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or exercisable within 60 days of March 7, 2016, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise disclosed these persons’each stockholder’s address is c/o Brownie’s Marine Group, Inc., 3001 NW 25^th25th Avenue, Suite 1, Pompano Beach, FLFlorida 33069. The percentages below are calculated based on 437,742,050 issued and outstanding shares of common stock and 425,000 shares of Series A Stock outstanding as of March 30, 2024.

Title of
Class Name and Address of Beneficial
Owner Amount and Nature of
Beneficial Ownership Percent
of Class
Executive Officers and Directors
Common Robert Carmichael 874,234 (1) *
Common All directors and executive officers as a group (1 person) 874,234 (1) *
5% Shareholders
Common Alexander F. Purdon 31,240,106 (2) 36 %

Executive Officers and Directors
Series A Convertible Preferred Stock Robert Carmichael 425,000 100 %
Series A Convertible Preferred Stock All directors and executive officers as a group (1 person) 425,000 100 %

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Named Executive Officers and Directors
Robert M. Carmichael		110,167,757	⁽¹⁾		25.2	%
Christopher H. Constable		-			0.0	%
Charles F. Hyatt		164,285,713	⁽²⁾		37.5	%
All directors and executive officers as a group (three persons)		274,453,470	⁽¹⁾⁽²⁾		62.7	%
5% or Greater Shareholder
Joseph Perez 135 Weston Road, Suite 328, Weston, Florida 33326		50,000,000			11.4	%
Summit Holdings V, LLC 3427 Bannerman Road, Suite D208 Tallahassee, Florida 32312		28,288,833			6.5	%
Series A Convertible Preferred Stock
Robert M. Carmichael		425,000			100	%
All directors and executive officers as a group (one person)		425,000			100	%

*(1)	~~Less than 1%.~~
~~(1)~~	~~Includes~~Includes: (i) 14,587,190 shares held by 940A Associates, Inc., a corporation over which Mr. Carmichael is the ~~following:~~sole owner and has voting and dispositive power; (ii) an aggregate of ~~234 shares of common stock underlying currently exercisable options exercisable at $1,350 per share; 42,182 shares of common stock payable by the Company under 2012 bonus awards; and 31,481~~23,320 shares issuable upon conversion of 425,000 shares of Series A ~~Preferred Stock.~~
~~(2)~~	~~Includes 1,854~~Stock (iii) options to purchase an aggregate of 20,761,904 shares of common stock ~~payable~~at an exercise price of $0.018 per share and (iv) options to purchase an aggregate of 50,000,000 shares of common stock at an exercise price of $0.045. Does not include the voting power over 106,250,000 shares of common stock by ~~the Company under 2012 bonus awards.~~virtue of Mr. Carmichael’s beneficial ownership of 425,000 shares of Series A Stock.
(2)	Includes warrants to purchase an aggregate of 17,142,855 shares of common at an exercise price of $.0175 per share.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

On October 30, 2013, the Company signed a secured promissory note, with Mikkel Pitzner, a former member of the board of directors for $85,000. The proceeds were used to settle the Branch Banking and Trust (“BBT”) Judgment. Terms of the promissory note include being secured by up to $200,000 in and to all of the Company’s right, title and interest in its fixed assets, inventory, receivables, and all documents including its books, records, and files; bearing interest at 21.21% per annum, due in monthly principal and interest payments of $8,585, and matured on November 1, 2014. The note was repaid on September 29, 2015. As further inducement to make the loan, Mr. Pitzner was granted an option to purchase 1,802,565 shares of the Company’s common stock for $.01 per share. The option was exercisable immediately and continued for a period ending two years from the agreement date with an option for cashless exercise based on a formula within the agreement. The closing price per share of the Company’s stock closing on the OTC Markets on the date of the agreement was $.025 per share. This option expired without exercise.

~~The Company sells~~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 ~~the Company’s Chief Executive Officer. Terms of sale are no more favorable than those extended to any of the Company’s other customers with similar sales volume.~~Robert Carmichael. Combined net revenues from these entities for ~~year ended~~the years December 31, ~~2015, were $825.491.~~2023 and 2022, totaled $806,824 and $977,145, respectively. Accounts receivable from Brownie’s ~~Southport~~SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, ~~2015, was $12,981, $4,678,~~2023, were $5,901, $11,927 and ~~$15,221,~~$-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.

~~The Company sells~~We also sell products to Brownie’s Global Logistics, ~~LLC.~~LLC (“BGL”) and 940 Associates, Inc. (“940 A”), entities affiliated with the Company’s Chief Executive Officer. Terms of sale are more favorable than those extended to BWMG’s regular customers, but no more favorable than those extended to Brownie’s strategic partners. Terms of sale to BGL approximate cost or include a nominal margin. These terms are consistent with those extended to Brownie’s strategic partners. Strategic partner terms on a per order basis include promotion of BWMG’s technologies and “Brownie’s” brand, offered only on product or services not offered for resale, and must provide for reciprocal terms or arrangements to BWMG on strategic partners’ product or services. BGL is fulfilling the strategic partner termswholly-owned by ~~providing exposure for BWMG’s technologies and “Brownie’s” brand in the yachting and exploration community word-wide through its operations.~~Robert Carmichael. Combined net revenues from these three entities for ~~year~~the years ended December 31, ~~2014~~2023 and ~~2015 was $181,355~~2022 were $1,799 and ~~$50,697~~$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 ~~has Exclusive License Agreements~~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 ~~Associates, Inc. (hereinafter referred to as “940A”), an entity owned by the Company’s Chief Executive Officer,~~A to license the trademark “Brownies Third Lung”, “Tankfill”, “Brownies Public Safety” and various other related trademarks as listed in the agreement. ~~Based~~The agreement provides for a royalty to be paid equal to the greater of 2.5% on ~~this license agreement, the Company pays 940A 2.5%~~all sales of ~~gross revenues~~Trebor or $15,000 per quarter. Total royalty ~~expense for~~fees paid to 940 A in the ~~above agreements~~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, ~~2015~~2023 and ~~2014, is $67,848 and $66,098,~~2022, respectively. ~~As of December 31, 2015,~~

On September 30, 2022, the Company ~~was approximately 27 months~~issued a convertible demand 8% promissory note in ~~arrears on royalty payments due. No default notice has been received and~~ the ~~Company plans~~principal amount of $66,793 to ~~make payments as able.~~

~~From 2011 through December 31, 2015,~~Robert Carmichael for funds to meet the ~~Company agreed to pay Alexander Purdon, an employee~~working capital needs of ~~the Company, employment compensation in restricted shares of stock in lieu of cash. The number of shares paid was based~~LBI. Interest on the weighted average price per share during the months the services were rendered. For the years ended December 31, 2015 and 2014, stock based compensation to Mr. Purdon was $54,000 and $54,000, respectively. Mr. Purdon received an aggregate of 31,238,252note 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 February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares upon the exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares upon the exercise of a warrant at $0.025 per share in consideration of $15,000.

On March 14, 2022, the Company issued 10,000,000 shares of common stock to Charles Hyatt, a director, upon exercise of a warrant at an exercise price of $0.04 per share for proceeds of $250,000.

On March 14, 2022, the Company issued 600,000 shares of common stock to Grace Hyatt, the adult daughter of Charles Hyatt, a director, upon exercise of a warrant at an exercise price of $0.04 per share for proceeds of $15,000.

On December 13, 2022, the Company issued 5,714,286 shares of common stock and a two-year warrant to purchase 5,714,286 shares of common stock at an exercise price of $0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

On September 14, 2023, The Company issued an on-demand note to Robert Carmichael, the CEO of the Company (the “Lender”) in the principal amount of $50,000. The on-demand note bears no interest and is payable upon request.

On November 7, 2023, the Company issued a promissory note (the “Note”) to Charles Hyatt, a director of the Company (the “Lender”) in the principal amount of $150,000. The Note bears interest at the rate of 9.9% per annum, is payable in monthly installments, and matures on August 7, 2024.

On December 18, 2023, The Company issued an on-demand note to Robert Carmichael, the CEO of the Company (the “Lender”) in the principal amount of $25,000. The on-demand note bears no interest and is payable upon request.

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 two independent director, Christopher Constable and Charles Hyatt, who are considered “independent” as defined under Rule 5605 of the ~~agreement.~~Nasdaq Marketplace Rules.

~~Director independence~~

~~We currently have no independent directors.~~

Item 14.

Principal Accounting Fees and Services.

~~Fees~~The following table shows the fees that were billed for the audit and other services provided by Liggett & Webb, PA for 2022 (until October 10, 2022). As of October 10, 2022, Liggett & Webb, P.A. resigned as the independent registered public accounting firm engaged to ~~Auditors Fiscal Year~~audit the financial statements of the Company. Also on such date, the Company’s Board of Directors engaged Assurance Dimensions, Inc. to serve as its independent registered public accounting firm to perform the year-end audit for the year ended December 31, ~~2015~~2023 and December 31, 2022. The following table shows the fees billed for the audit and other services for 2023 and 2022.

	2023		2022
Audit Fees	$	69,817	$	90,040
Audit-Related Fees		-		-
Tax Fees		5,000		2,700
Other		-		-
Total	$	74,817	$	92,740

Audit Fees~~: The aggregate~~

Audit fees ~~including expenses, billed by principal accountants~~consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements ~~during fiscal year ending December 31, 2015 and for the review of the Company’s financial information~~ included in its quarterly reports on Form 10-Q during the fiscal year ending December 31, 2015 or services that are normally provided in connection with statutory and regulatory filings or engagements during the fiscal year ending December 31, 2015 was $37,187.

~~Audit Related Fees: The aggregate fees, including expenses, billed by principal accountants for assurance and related services reasonably related to the performance of~~ the Company’s ~~audit or review of the Company’s financial statements during the year ended December 31, 2015 were $-0-.~~

~~Tax Fees: The aggregate fees, including expenses, billed by principal accountants for tax compliance, tax advice and tax planning during year 2015 was $-0-.~~

~~All Other Fees: The aggregate fees, including expenses, billed for all other services rendered to the Company by principal accountants during year 2015 was $-0-.~~

The Company has no audit committee. The Company's board of directors has considered whether the provisions of the services covered above under the captions is compatible with maintaining the auditor’s independence. All services were approved by the board of directors prior to the completion of the respective audit.

~~Fees to Auditors Fiscal Year ended December 31, 2014~~

~~Audit Fees~~: The aggregate fees, including expenses, billed by principal accountants for professional services rendered for the audit of the Company’s consolidated financial statements during fiscal year ending December 31, 2014 and for the review of the Company’s financial information included in its quarterly reports on Form 10-Q during the fiscal year ending December 31, 2014 or services that are normally provided in connection with statutory and regulatory filings or engagements during the fiscal year ending December 31, 2014 was $36,000.

~~Audit Related Fees~~: The aggregate fees, including expenses, billed by principal accountants for assurance and related services reasonably related to the performance of the Company’s audit or review of the Company’s financial statements during the year ended December 31, 2014 were $-0-.

~~Tax Fees: The aggregate fees, including expenses, billed by principal accountants for tax compliance, tax advice and tax planning during year 2014 was $3,000.~~

~~All Other Fees: The aggregate fees, including expenses, billed for all other services rendered to the Company by principal accountants during year 2014 was $-0-.~~

~~PART IV~~

~~Item~~~~15.~~

~~Exhibits, Financial Statements Schedules~~

~~Our consolidated financial statements appear beginning at F-1.~~

~~Exhibit No.~~	~~Description~~	~~Location~~
~~2.2~~	~~Merger Agreement, dated June 18, 2002 by and among United Companies Corporation, Merger Co., Inc. and Avid Sportswear & Golf Corp.~~	~~Incorporated by reference to Exhibit 2.02 Amendment No. 1 to Form S-4 filed June 24, 2002.~~

~~2.3~~	~~Articles of Merger of Avid Sportswear & Golf Corp. with and into Merger Co., Inc.~~	~~Incorporated by reference to Exhibit 2.03 Amendment No. 1 to Form S-4 filed June 24, 2002.~~

~~2.4~~	~~Plan of Conversion~~	~~Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on October 28, 2015~~

~~3.1~~	~~Articles of Conversion (Nevada)~~	~~Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on October 28, 2015.~~

~~3.2~~	~~Certificate of Conversion (Florida)~~	~~Incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed on October 28, 2015.~~

~~3.3~~	~~Articles of Incorporation (Florida)~~	~~Incorporated by reference to Exhibit 3.3 to Current Report on Form 8-K filed on October 28, 2015.~~

~~3.5~~	~~Articles of Amendment~~	~~Incorporated by reference to Exhibit 3.5 to Current Report on Form 8-K filed on December 16, 2015.~~

~~3.6~~	~~Bylaws~~	~~Incorporated by reference to Exhibit 3.4 to Current Report on Form 8-K filed on October 28, 2015.~~

~~10.1~~	~~Share Exchange Agreement, dated March 23, 2004 by and among the Company, Trebor Industries, Inc. and Robert Carmichael~~	~~Incorporated by reference to Exhibit 16.1 to Current Report on Form 8-K filed April 9, 2004~~

~~10.2~~	~~Non-Exclusive License Agreement –BC Keel Trademark~~	~~Incorporated by reference to Exhibit 10.18 to Form 10QSB for the quarter ended December 31, 2005 filed August 15, 2005.~~

~~10.3~~	~~Exclusive License Agreement - Brownie's Third Lung, Brownie's Public Safety, Tankfill, and Related Trademarks and Copyrights~~	~~Incorporated by reference to Exhibit 10.20 to Form 10QSB for the quarter ended December 31, 2005 filed August 15, 2005.~~

~~10.4~~	~~Exclusive License Agreement – Brownie’s Third Lung and Related Trademarks and Copyright~~	~~Incorporated by reference to Exhibit 10.26 to Form 10KSB for the year ended December 31, 2006 filed April 4, 2007.~~

~~10.5~~	~~Promissory Note dated January 1, 2007 payable to Robert M. Carmichael.~~	~~Incorporated by reference to Exhibit 10.32 to Form 10KSB for the year ended year ended December 31, 2006 filed April 4, 2007.~~

~~31.1~~	~~Certification Pursuant to Rule 13a-14(a)/15d-14(a)~~	~~Provided herewith.~~

~~31.2~~	~~Certification Pursuant to Rule 13a-14(a)/15d-14(a)~~	~~Provided herewith.~~

~~32.1~~	~~Certification Pursuant to Section 1350~~	~~Provided herewith.~~

~~32.2~~	~~Certification Pursuant to Section 1350~~	~~Provided herewith.~~

~~101~~	XBRL Interactive Data File *

* Attached as Exhibit 101 to this report are the following financial statements from 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 $5,000 and $2,700 with Liggett & Webb, P.A. for the ~~year~~years ended December 31, ~~2015, formatted in XBRL (eXtensible Business Reporting Language): (i)~~2023 and 2022, respectively.

Administration of the ~~Consolidated Balance Sheets, (ii)~~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 ~~Consolidated Statements~~auditors with respect to 2023 and 2022 were pre-approved by the entire board of ~~Operations, (iii) Consolidated Statements~~directors.

The percentage of ~~Stockholders’ Deficit (iv) the Consolidated Statements of Cash Flows, and (iv) related notes~~hours expended on Assurance Dimensions respective engagement to ~~these consolidated~~audit our financial statements ~~tagged as blocks of text.~~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%.

~~SIGNATURES~~PART IV

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	2021 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
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	10/1/22
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

~~In accordance with~~

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	*
21	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
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith

+ Management Contract

Item 16.

Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~March 29, 2016~~May 9, 2024	Brownie’s marine group, Inc.

	By:	/s/ Robert M. Carmichael
		Robert M. Carmichael
		~~President,~~ Chief Executive Officer, ~~Chief~~
		(Principal Executive Officer)

	By:	/s/ Robert M. Carmichael
		Robert M. Carmichael
		Chief Financial Officer,
		(Principal Financial and ~~Principal~~ Accounting ~~Officer~~Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

~~Date: March 29, 2016~~	~~By:~~	/s/ Robert M. Carmichael
		Robert M. Carmichael
		Chairman of the Board, President, Chief Executive Officer, Director, and Chief Financial Officer (Principal Executive Officer)

	Date: May 9, 2024

	/s/ Christopher H. Constable
	Christopher H. Constable
	Director

	Date: May 9, 2024

	/s/ Charles F. Hyatt
	Charles F. Hyatt
	Director

	Date: May 9, 2024

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~TABLE OF CONTENTS FOR CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014~~Financial Statements and Supplementary Data Brownie’s Marine Group, Inc.

Index to Audited Financial Statements

	~~PAGE(S)~~Page

Report Ofof Independent Registered Public Accounting Firm (PCAOB ID No. 5036)	F-2

Consolidated Balance ~~Sheets As Of~~Sheet as of December 31, ~~2015 And 2014~~2023 and 2022	F-3

Consolidated Statements Ofof Operations ~~For The Years Ended~~for the years ended December 31, ~~2015 And 2014~~2023 and 2022	F-4
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022	F-5
Consolidated Statements ~~Of Stockholders’ Deficit For The Years Ended~~of Cash Flows for the years ended December 31, ~~2015 And 2014~~2023 and 2022	~~F-5~~
	F-6
~~Consolidated Statements Of Cash Flows For The Years Ended December 31, 2015 And 2014~~	~~F-6~~

Notes ~~To The~~to Consolidated Financial Statements	~~F-8 TO F-21~~F-7

F-1

~~REPORTS~~

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors ~~and Stockholders~~ of

Brownie’s Marine Group, Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Brownie’s Marine Group, Inc.~~, Inc.~~ and Subsidiaries (the Company) as of December 31, ~~2015~~2023 and ~~2014,~~2022, and the related consolidated statements of operations, stockholders’ ~~deficit,~~equity, and cash ~~flows~~flow for each of the years in the two-year period ended December 31, ~~2015. Brownie’s Marine Group, Inc.’s management is responsible~~2023, and the related consolidated notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flow for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had a net loss of approximately $1,248,115 and cash used in operating activities of approximately $374,827 for the year ended December 31, 2023 as well as an accumulated deficit of approximately $17,685,610 as of December 31, 2023. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The financial ~~statements.~~statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on ~~these~~the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the ~~audits~~audit to obtain reasonable assurance about whether the financial statements are free of material ~~misstatement.~~misstatement, whether due to error or fraud. The ~~company~~Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. ~~Our~~As part of our audits, ~~included consideration~~we are required to obtain an understanding of internal control over financial reporting, ~~as a basis for designing audit procedures that are appropriate in the circumstances,~~ but not for the purpose of expressing an opinion on the effectiveness of the ~~company’s~~Company’s internal control over financial reporting. Accordingly, we express no such opinion. ~~An audit also includes~~

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

~~In our opinion,~~Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements ~~referred~~that were communicated or required to ~~above present fairly, in all~~be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material ~~respects,~~to the financial ~~position~~statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of ~~Brownie’s Marine Group, Inc.~~critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Description of ~~December 31, 2015 and 2014,~~the Matter

The Company is required to test the carrying amount of goodwill at least annually, or more frequently upon the occurrence of certain events. The Company is also required to assess the recoverability of its long-lived assets, including its amortizable intangible assets, whenever certain events occur or circumstances change that may be indicators of impairment. We identified this area as a critical audit matter because the annual goodwill impairment test and the ~~results~~evaluation of ~~its operations~~recovery of long-lived assets requires significant judgment regarding the evaluation of qualitative factors. Additionally, these assessments also require appropriate determination of reporting units and ~~its~~asset groups, including the allocation of acquired tangible and intangible assets to such groupings. The evaluation of a certain asset group also required comparison of future non-discounted cash flows ~~for each~~to the carrying value of the ~~years~~asset group, which required estimates of future cash flows associated with that asset group, including growth rates, profitability rates and estimates of other sources and uses of cash such as changes in working capital and capital expenditures. The Company engaged a third-party valuation specialist to assist with its assessment.

How we addressed the ~~two-year period~~matter in our audit

Our audit procedures to address the risk of material misstatement relating to goodwill and intangible assets included, among others, evaluating the appropriateness of asset groupings at the reporting unit level and asset group level. We also evaluated management’s assessment of qualitative factors associated with the reporting unit containing goodwill and associated with all relevant asset groups. Our procedures also included evaluating management’s forecast of non-discounted cash flows associated with a certain asset group where a qualitative factor required such further analysis. We also assessed the competence, independence, qualifications, experience, and capabilities of the third-party valuation specialist, and evaluated the appropriateness and reasonableness of the methodology and assumptions used by comparing them to external and historical data; testing the calculation and forecast model for mathematical accuracy; validating the appropriateness and reliability of inputs and amounts used; and evaluating the adequacy of the financial statement disclosures relating to goodwill, intangible assets and other long-lived assets, including disclosure of key assumptions and judgments. As a result of our testing, we did not take exception to management’s conclusion that no impairment should be recognized related to goodwill or long-lived assets for the year ended December 31, ~~2015, in conformity with accounting principles generally accepted in~~2023.

We have served as the ~~United States of America.~~Company’s auditor since 2022

Margate, Florida

May 9, 2024

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

F-2

~~/s/ RBSM, LLP~~

~~Henderson, Nevada~~

~~March 29, 2016~~

BROWNIE’S MARINE GROUP, INC. AND ~~SUBSIDIARY~~SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,
2015 2014
ASSETS

Current assets
Cash $ 141,822 $ 19,188
Accounts receivable, net of $11,000 and $47,000 allowance for doubtful accounts, respectively 59,474 41,693
Accounts receivable – related parties 41,270 71,325
Inventory 654,213 606,213
Prepaid expenses and other current assets 58,012 30,195
Other current assets – related parties 3,020 5,444
Deferred tax asset, net – current 190 233
Total current assets 958,001 774,291

Property and equipment, net 85,712 108,506

Deferred tax asset, net – non-current 2,330 2,330
Other assets 6,649 31,049

Total assets $ 1,052,692 $ 916,176

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities
Accounts payable and accrued liabilities $ 349,946 $ 462,776
Customer deposits and unearned revenue 25,238 40,385
Royalties payable – related parties 152,546 127,661
Other liabilities 231,551 232,738
Other liabilities and accrued interest – related parties 84,500 93,521
Convertible debentures, net 371,965 376,645
Notes payable – current portion 6,099 8,749
Notes payable – related parties - current portion 11,098 14,167
Total current liabilities 1,232,943 1,356,642

Long-term liabilities
Notes payable – long-term portion 6,133 12,231

Total liabilities 1,239,076 1,368,873

Commitments and contingencies

Stockholders’ deficit
Preferred stock; $0.001 par value: 10,000,000 shares authorized; 425,000 issued and outstanding 425 425
Common stock; $0.0001 par value; 1,000,000,000 shares authorized; 86,825,138 and 60,471,929 shares issued and outstanding at December 31, 2015 and 2014, respectively 8,681 6,047
Common stock payable; $0.0001 par value; 195,610 and 195,610 shares, respectively 20 20
Additional paid-in capital 8,665,565 8,631,496
Accumulated deficit (8,861,075 ) (9,090,685 )
Total stockholders’ deficit (186,384 ) (452,697 )

Total liabilities and stockholders’ deficit $ 1,052,692 $ 916,176

	December 31, 2023			December 31, 2022
ASSETS
Current Assets
Cash	$	431,112		$	484,427
Accounts receivable – net of allowances of $54,427 in 2023 and $28,558 in 2022		84,140			111,844
Accounts receivable - related parties		32,130			55,428
Accounts receivable		32,130			55,428
Inventory, net		1,998,807			2,421,885
Prepaid expenses and other current assets		190,412			192,130
Total current assets		2,736,601			3,265,714

Property, equipment and leasehold improvements, net		342,681			339,546
Operating lease right-of-use assets		844,083			1,133,092
Intangible assets, net		573,955			646,422
Goodwill		249,986			249,986
Other assets		30,724			30,724

Total assets	$	4,778,030		$	5,665,484

Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	789,702		$	829,456
Accounts payable - related parties		46,578			37,539
Customer deposits and unearned revenue		255,740			167,534
Other liabilities		451,954			372,943
Operating lease liabilities		259,154			269,046
Related party convertible demand note, net		52,484			49,147
Convertible notes		346,871			-
Convertible notes		346,871			-
Loans payable, current portion		75,304			66,486
Related party notes payable		225,000			-
Total current liabilities		2,502,787			1,792,151

Loans payable, net of current portion		64,656			143,960
Convertible notes, net of current portion		-			342,943
Operating lease liabilities		615,915			864,057
Total liabilities		3,183,358			3,143,111

Commitments and contingent liabilities (see note 15)		-			-

Stockholders’ equity
Preferred stock; $0.001 par value: 10,000,000 shares authorized; 425,000 issued and outstanding as of December 31, 2023 and December 31, 2022.		425			425
Common stock; $0.0001 par value; 1,000,000,000 shares authorized; 437,742,050 shares issued and outstanding at December 31, 2023 and 425,520,662 shares issued and outstanding at December 31, 2022, respectively.		43,775			42,553
Common stock payable 138,941 shares and 138,941 shares, respectively as of December 31, 2023 and December 31, 2022.		14			14
Additional paid-in capital		19,236,068			18,916,876
Accumulated deficit		(17,685,610	)		(16,437,495	)
Total stockholders’ equity	$	1,594,672		$	2,522,373

Total liabilities and stockholders’ equity	$	4,778,030		$	5,665,484

~~See Accompanying Notes to Consolidated Financial Statements~~The accompanying notes are an integral part of these consolidated financial statements

F-3

BROWNIE’S MARINE GROUP, INC. AND ~~SUBSIDIARY~~SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,
2015 2014

Net revenues
Net revenues $ 1,883,455 $ 1,550,238
Net revenues - related parties 876,188 1,185,603
Total net revenues 2,759,643 2,735,841

Cost of net revenues
Cost of net revenues 1,764,140 1,925,528
Royalties expense - related parties 67,849 66,098
Total cost of net revenues 1,831,989 1,991,626

Gross profit 927,654 744,215

Operating expenses
Selling, general and administrative 670,982 619,174
Research and development costs 8,739 4,087
Total operating expenses 679,721 623,261

Income from operations 247,933 120,954

Other (income) expense, net
Other (income) expense, net (19,753 ) (29,709 )
Interest expense 37,018 39,726
Interest expense - related parties 1,015 16,524
Total other (income) expense, net 18,280 26,541

Net income before provision for income taxes 229,653 94,413

Provision for income tax expense 43 44

Net income $ 229,610 $ 94,369

Basic income per common share $ 0.00 $ 0.00
Diluted income per common share $ 0.00 $ 0.00

Basic weighted average common shares outstanding 75,892,714 27,745,173
Diluted weighted average common shares outstanding 120,730,254 73,650,957

FOR THE YEARS ENDED DECEMBER 31

~~See Accompanying Notes to Consolidated Financial Statements~~

	2023			2022
Net revenues
Net revenues	$	6,773,974		$	7,595,581
Net revenues - related parties		806,824			981,791
Net revenues		806,824			981,791
Total net revenues		7,580,798			8,577,372

Cost of net revenues
Cost of net revenues		4,889,769			5,055,947
Cost of net revenues - related parties		387,160			462,297
Cost of net revenues		387,160			462,297
Royalties expense - related parties		57,320			61,308
Royalties expense		138,643			203,621
Total cost of revenues		5,472,892			5,783,173

Gross profit		2,107,906			2,794,199

Operating expenses
Selling, general and administrative		3,263,439			4,626,202
Research and development costs		13,880			18,393
Total operating expenses		3,277,319			4,644,595

Loss from operations		(1,169,413	)		(1,850,395	)

Other (income) expense, net
Interest expense		(78,702	)		(42,496	)
Total other (income) expense - net		(78,702	)		(42,496	)

Loss income before provision for income taxes		(1,248,115	)		(1,892,891	)

Provision for income taxes		-			-

Net loss	$	(1,248,115	)	$	(1,892,891	)

Basic loss per common share	$	(0.00	)	$	(0.00	)
Diluted loss per common share	$	(0.00	)	$	(0.00	)

Basic weighted average common shares outstanding		436,199,516			410,509,853

Diluted weighted average common shares outstanding		436,199,516			410,509,853

The accompanying notes are an integral part of these consolidated financial statements

F-4

BROWNIE’S MARINE GROUP, INC. AND ~~SUBSIDIARY~~SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ ~~DEFICIT~~EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Preferred Stock Common Stock Common Stock
Payable Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Deficit

Balance, December 31, 2013 (restated) 425,000 $ 425 5,672,051 $ 567 195,610 $ 20 $ 8,478,092 $ (9,185,054 ) $ (705,950 )

Conversion of related party employee compensation payable to stock — — 10,842,129 1,084 — — 52,916 — 54,000

Conversion of accrued interest on convertible debentures to stock — — 1,544,778 154 — — 3,848 — 4,002

Conversion of convertible debentures to stock — — 42,427,377 4,243 — — 98,022 — 102,265

Retirement of shares returned by non-employee Board of Director — — (14,406 ) (1 ) — — (1,382 ) — (1,383 )

Net Income — — — — — — — 94,369 94,369

Balance, December 31, 2014 425,000 425 60,471,929 6,047 195,610 20 8,631,496 (9,090,685 ) (452,697 )

Conversion of related party employee compensation payable to stock — — 19,419,712 1,941 — — 52,059 — 54,000

Conversion of convertible debentures to stock — — 2,340,000 234 — — 4,446 — 4,680

Conversion of accrued interest on convertible debentures to stock — — 4,200,000 420 — — 5,860 — 6,280

Dissolution of joint venture agreement — — — — — — (24,740 ) — (24,740 )

Stock receivable underlying Board of Director fees rescinded — — — — — — (4,532 ) — (4,532 )

Conversion of related party interest to stock — — 396,891 39 — — 976 — 1,015

Cancellation of dissolved joint venture shares — — (3,394 ) — — — — — —

Net Income — — — — — — — 229,610 229,610

Balance, December 31, 2015 425,000 $ 425 86,825,138 $ 8,681 195,610 $ 20 $ 8,665,565 $ (8,861,075 ) $ (186,384 )

	Shares Outstanding		Par		Shares Outstanding		Par		Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders Equity
	Preferred Stock				Common Stock				Common Stock Payable				Additional					Total
	Shares Outstanding		Par		Shares Outstanding		Par		Shares		Amount		Paid-in Capital		Accumulated Deficit			Stockholders’ Equity
Balance, December 31, 2021		425,000	$	425		393,850,475	$	39,386		138,941	$	14	$	17,132,434	$	(14,544,604	)	$	2,627,655
Shares issued for the purchase of units		-		-		14,255,951		1,426		-		-		303,574		-			305,000
Shares issued for exercise of warrants		-		-		10,600,000		1,060		-		-		263,940		-			265,000
Shares issued for Asset Purchase		-		-		3,084,831		308		-		-		119,692		-			120,000
Shares issued for Royalty agreement		-		-		1,155,881		116		-		-		29,884		-			30,000
Shares issued for accrued interest in convertible notes		-		-		784,253		78		-		-		38,306		-			38,384
Shares issued for employee bonus		-		-		280,000		28		-		-		11,032		-			11,060
Shares issued for services		-		-		1,509,271		151		-		-		47,350		-			47,501
Beneficial Conversion Feature		-		-		-		-		-		-		19,250		-			19,250
Stock Option Expense		-		-		-		-		-		-		951,414		-			951,414
Net loss		-		-		-		-		-		-		-		(1,892,891	)		(1,892,891	)
Balance, December 31, 2022		425,000		425		425,520,662	$	42,553		138,941	$	14	$	18,916,876	$	(16,437,495	)	$	2,522,373
Balance		425,000		425		425,520,662	$	42,553		138,941	$	14	$	18,916,876	$	(16,437,495	)	$	2,522,373
Shares issued for the purchase of units		-		-		11,428,570		1,143		-		-		198,857		-			200,000
Shares issued for accrued interest in convertible notes		-		-		792,818		79		-		-		38,911		-			38,990
Stock Option Expense		-		-		-		-		-		-		81,424		-			81,424
Net Loss		-		-		-		-		-		-		-		(1,248,115	)		(1,248,115	)
Balance, December 31, 2023		425,000		425		437,742,050	$	43,775		138,941	$	14	$	19,236,068	$	(17,685,610	)	$	1,594,672
Balance		425,000		425		437,742,050	$	43,775		138,941	$	14	$	19,236,068	$	(17,685,610	)	$	1,594,672

~~See Accompanying Notes to Consolidated Financial Statements~~The accompanying notes are an integral part of these consolidated financial statements

F-5

BROWNIE’S MARINE GROUP, INC. AND ~~SUBSIDIARY~~SUBSIDIARIES

CONSOLIDATED ~~STATEMENTS~~STATEMENT OF CASH FLOWS

Year Ended December 31,
2015 2014

Cash flows provided by operating activities:
Net income $ 229,610 $ 94,369
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 21,531 21,570
Amortization of leasehold improvements 13,468 2,599
Change in deferred tax asset, net 43 44
Accretion of convertible debenture discounts — 3,334
Shares issued for accrued interest 6,280 —
Shares issued for accrued interest – related party 1,014 —
Share based compensation – related party 54,000 —
Forgiveness of share based compensation – related party (4,531 ) —
Dissolution of joint venture (24,740 ) —
Loss on disposal of fixed assets — 26,041
Changes in operating assets and liabilities:
Change in accounts receivable, net (17,781 ) (11,395 )
Change in accounts receivable - related parties 30,055 34,617
Change in inventory (48,000 ) 22,389
Change in prepaid expenses and other current assets (27,817 ) 5,945
Change in other current assets - related parties 2,424 473
Change in other assets 24,400 (3,414 )
Change in accounts payable and accrued liabilities (112,830 ) (43,768 )
Change in customer deposits and unearned revenue (15,147 ) (59,225 )
Change in other liabilities (382 ) (858 )
Change in other liabilities and accrued interest - related parties (9,021 ) 74,504
Change in royalties payable - related parties 24,885 (9,468 )
Net cash provided by operating activities 147,461 157,757

Cash flows from investing activities:
Purchase of fixed assets (12,205 ) (82,451 )
Net cash used in investing activities (12,205 ) (82,451 )

Cash flows from financing activities:
Repayment against short-term loans (805 ) (18,413 )
Proceeds from notes payable — 18,216
Principal payments on note payable (8,749 ) (12,553 )
Proceeds from notes payable - related parties 27,000 —
Principal payments on note payable - related parties (30,068 ) (113,452 )
Net cash (used in) provided by financing activities (12,622 ) (126,202 )

Net change in cash 122,634 (50,896 )

Cash, beginning of period 19,188 70,084

Cash, end of period $ 141,822 $ 19,188

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

~~See Accompanying Notes to Consolidated Financial Statements~~

	2023			2022
Cash flows provided by operating activities:
Net loss	$	(1,248,115	)		(1,892,891	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		162,976			149,120
Amortization of debt discount		10,312			5,304
Amortization of right-of-use asset		289,009			241,995
Common stock issued for services		-			47,501
Shares issued for royalty		-			30,000
Allowance (recovery) for doubtful accounts		25,870			-
Allowance for slow moving inventory		21,694			26,207
Allowance for Nomad recall		(160,500	)		160,500
Stock Based Compensation – Options		81,424			951,414
Stock based compensation – stock grant		-			11,060
Shares issued for accrued interest in convertible notes		38,990			38,385
Changes in operating assets and liabilities
Change in accounts receivable, net		1,834			11,426
Change in accounts receivable – related parties		23,298			21,873
Change in inventory		401,385			(443,412	)
Change in prepaid expenses and other current assets		(61,971	)		99,017
Change in other assets		-			(16,626	)
Change in accounts payable and accrued liabilities		(39,755	)		85,073
Change in customer deposits and unearned revenue		88,206			23,596
Change in long term lease liability		(258,034	)		(242,690	)
Change in other liabilities		239,511			14,519
Change in accounts payable – related parties		9,039			272
Net cash used in operating activities		(374,827	)		(678,357	)

Cash flows provided by (used) in investing activities:
Cash used in asset acquisition		-			(30,000	)
Cash used in purchase of fixed assets, net of debt		-			(21,124	)
Purchase of fixed assets		(29,955	)		(11,040	)
Net cash used in investing activities		(29,955	)		(62,164	)

Cash flows from financing activities:
Proceeds from issuance of units		200,000			305,000
Proceeds from exercise of Warrants		-			265,000
Proceeds of related party demand note		225,000
Proceeds of convertible note		-			66,793
Repayment of debt		(73,533	)		(54,988	)
Net cash provided by financing activities		351,467			581,805

Net decrease in cash		(53,315	)		(158,716	)

Cash, beginning balance		484,427			643,143
Cash, end of Year	$	431,112			484,427

Supplemental disclosures of cash flow information:
Cash Paid for Interest	$	39,712			42,496
Cash Paid for Income Taxes	$	-			-

Supplemental disclosure of non-cash financing activities:
Operating lease obtained for operating lease liability	$	-		$	920,615
Common Stock issued for asset acquisition	$	-		$	120,000
Beneficial conversion feature on notes issued for acquisition	$	-		$	19,250
Fixed asset purchase through the issuance of debt	$	-		$	84,500
Prepayment for equipment through financing	$	-		$	63,689

The accompanying notes are an integral part of these financial statements

F-6

BROWNIE’S MARINE GROUP, INC. AND ~~SUBSIDIARY~~SUBSIDIARIES

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

Year Ended December 31,
2015 2014

Supplemental disclosures of cash flow information:
Cash paid for interest $ 10,609 $ 14,437

Cash paid for income taxes $ — $ —

Supplemental disclosures of non-cash investing activities and future operating activities:

Conversion of convertible debentures to stock $ — $ 102,265

Conversion of accrued payroll to stock - related party $ 54,000 $ 54,000

Conversion of accrued interest and fees on convertible debentures to stock $ 6,280 $ 4,002

Conversion of accrued interest on note payable – related party $ 1,014 $ —

Retirement of shares returned by non-employee Board of Director $ — $ 1,383

Dissolution of joint venture $ 24,740 $ —

Forgiveness of share based compensation – related party $ 4,531 $ —

~~See Accompanying Notes to Consolidated Financial Statements~~

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Description of business and summary of significant accounting policies~~

DECEMBER 31, 2023 AND 2022

Note 1. Description of business ~~–Brownie’s~~ and summary of significant accounting policies

Description of business – Brownie’s Marine Group, Inc., ~~(hereinafter referred to as the~~a Florida corporation (the “Company,” ~~“our”~~ or “BWMG”), (1) designs, tests, manufactures and distributes recreational hookah diving, ~~yacht based scuba air compressor and nitrox generation systems, and~~ scuba and water safety products through its wholly owned subsidiary Trebor Industries, Inc. ~~The~~, a Florida corporation organized in 1981 (“Trebor” or “BTL”), (2) manufactures and sells high pressure air and industrial compressor packages, yacht based scuba air compressor and nitrox generation systems through its wholly owned subsidiary Brownie’s High Pressure Compressor Services, Inc., a Florida corporation organized in 2017 (“BHP”), doing business as LW Americas (“LWA”) and (3) develops and markets portable battery powered surface supplied air dive systems through its wholly owned subsidiary BLU3, Inc., a Florida corporation (“BLU3”). 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 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 organized in 2017, 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 the military and recreational diving industries, based in Huntington Beach, California and sells its products ~~both on~~to governments, militaries, private companies and the dive industry throughout the world.

On February 13, 2022 the Company filed with the Florida Department of State, articles of incorporation for a ~~wholesale~~new wholly owned subsidiary, Live Blue, Inc. (“LBI”). LBI utilizes technology developed by BLU3 to provide new users and ~~retail basis,~~interested divers a guided tour experience. 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 ~~does so from its headquarters~~William Frenier, the sole members of Gold Coast Scuba (together, the “LLC Members”) and ~~manufacturing facility in Pompano Beach, Florida. The Company does~~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 as ~~(dba) Brownie’s Third Lung, the dba name~~part of ~~Trebor Industries, Inc. The Company’s common stock is quoted on the OTC Markets (Pink) under the symbol “BWMG”.~~this asset acquisition.

Basis of Presentation – The consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). ~~In the opinion of management all normal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented have been included.~~

Definition of fiscal year – The Company’s fiscal year end is December 31.

Principles of Consolidation -The consolidated financial statements include the accounts of BWMG and its wholly owned subsidiaries, Trebor, BHP, BLU3, SSI and LBI. All significant intercompany transactions and balances have been eliminated in consolidation.

Use of estimates - – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Going Concern ~~–The~~ – The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these financial statements. ~~Although profitable~~We incurred net losses for the years ended December 31, ~~2015~~2023 and ~~2014, we have otherwise incurred losses since 2009. We have had a working capital deficit since 2009.~~

2022 of $1,248,115 and $1,892,891, respectively. The Company ~~is behind on payments due for matured convertible debentures, related parties notes payable, accrued liabilities and interest – related parties, and certain vendor payables.~~ had an accumulated deficit as of December 31, 2023 of $17,685,610.

The Company ~~is handling delinquencies on a case by case basis. However, there can be no assurance that cooperation the Company has received thus far will continue.~~

~~Because the Company does not expect~~believes that existing operational cash flow ~~will~~may not be sufficient to fund presently anticipated operations, this raises substantial doubt about our ability to continue as a going ~~concern.~~concern for the twelve months after the date that the financial statements were issued. Therefore, the Company will ~~need~~seek to continue to raise additional funds as needed and is currently exploring alternative sources of ~~financing.~~financing including commercial banks and other lending institutions. The Company has issued ~~a number of~~common stock and has historically issued convertible ~~debentures as an interim measure~~notes to finance working capital needs and may continue to seek to raise additional capital through sale of ~~restricted~~ common stock or other securities ~~and~~or obtaining ~~some~~ short term loans. The Company has ~~in the past, paid~~no firm commitment for ~~legal and consulting services with restricted stock to maximize working~~any additional capital and ~~intends to continue this practice where feasible. In addition,~~there are no assurances it will be successful in obtaining additional funds.

If the Company ~~continues to explore additional cost saving measures.~~

~~If BWMG~~ fails to raise additional funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back or cease operations, liquidate assets and possibly seek bankruptcy protection. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Cash and equivalents – Only highly liquid investments with original maturities of 90 days or less are classified as cash and equivalents.

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per EIN. At December 31, 2023 and 2022, the Company had approximately $25,000 and $-0-, respectively, in excess of the FDIC insured limit.

F-7

Accounts receivable – ~~Accounts receivable consist of amounts due from the sale of all of our~~The Company manufactures and sells its products to ~~wholesale~~a broad range of customers, primarily retail stores. Few customers are provided with payment terms of 30 days. The Company has tracked historical loss information for its trade receivables and ~~retail customers. The allowance~~compiled historical credit loss percentages for different aging categories (current, 1–30 days past due, 31–60 days past due, 61–90 days past due, and more than 90 days past due).

In accordance with ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), management believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at December 31, 2023, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its lending practices have not changed significantly over time). As a result, management applied the applicable credit loss rates to determine the expected credit loss estimate for each aging category. Accordingly, the allowances for doubtful accounts ~~are estimated based on historical customer experience~~totaled $54,427 and ~~industry knowledge.~~

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~$28,558 at December 31, 2023 and 2022, respectively.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Inventory – ~~Inventory is stated~~The Company values inventory at the lower of cost ~~or fair market value. Cost is principally determined by~~(determined using the ~~average cost method that approximates~~first-in first-out method) or net realizable value. Management’s judgment is required to determine the ~~First-In, First-Out (FIFO) method of accounting~~allowances for obsolete or excess inventory. Inventory ~~consists of raw materials as well as finished goods held for sale. The Company’s management monitors~~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 allowance balances to be adequate, changes in economic conditions, customer inventory ~~for excess~~levels or competitive conditions could have a favorable or unfavorable effect on required allowance balances.

Property and ~~obsolete items~~equipment and ~~makes necessary valuation adjustments when indicated.~~

~~Furniture, Fixtures, Equipment~~leasehold improvements – Property and ~~Leasehold Improvements– Furniture, Fixtures, Equipment~~equipment and ~~Leasehold Improvement~~leasehold improvement is stated at cost less accumulated depreciation or amortization. Depreciation and amortization is provided principally on the straight-line method over the estimated useful lives of the assets or term of the lease, which are primarily 3 to 5 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

Goodwill

The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects. Goodwill is not amortized; instead, goodwill is tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors such as macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. As of December 31, 2023 and 2022, there was no such impairment.

Intangible assets

Intangible assets are comprised of customer relationships, trademarks and non-compete agreements acquired in a business combination. The Company amortizes intangible assets with a definitive life over their respective useful lives. Assets with indefinite lives are tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist.

Unlike goodwill and indefinite-lived intangible assets, the accounting rules do not provide for an annual impairment test in determining whether fixed assets (e.g., property, plant, and equipment) and finite-lived intangible assets (e.g., customer lists) are impaired. Instead, they require that a triggering event occur before testing an asset for impairment. Once a triggering event has occurred, the impairment test employed is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. If the intent is to hold the asset for continued use, the impairment test involves a comparison of undiscounted cash flows against the carrying value of the asset as an initial test. If the carrying value of such asset exceeds the undiscounted cash flow, the asset would be deemed to be impaired. Impairment would then be measured as the difference between the fair value of the fixed or amortizing intangible asset and the carrying value to determine the amount of the impairment. As of December 31, 2023 and 2022, there was no such impairment.

Revenue ~~recognition~~ ~~– Revenues~~Recognition

The Company recognizes revenue in accordance with ASC Topic 606 Revenue from ~~product~~Contracts with Customers. The Company recognizes revenue when performance obligations under the terms of a contract with the customer are satisfied. The Company typically satisfies its performance obligations in contracts with customers upon shipment of the goods. Generally, payment is due upon receipt of the invoice and the contracts do not have significant financing components. Product sales occur once control or title is transferred based on the commercial terms. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. Product sales are ~~recognized when~~recorded net of variable consideration, such as provisions for returns, discounts and promotional allowances. Such provisions are calculated based on the actual allowances given. Management believes that adequate provision has been made for cash discounts, returns, spoilage and promotional allowances based on the Company’s historical experience.

A breakdown of the total revenue between related party and non-related party revenue is as follows:

Schedule of Related Party and Non-related Party Revenue

	2023		2022
Revenues	$	6,773,974	$	7,595,581
Revenues - related parties		806,824		981,791
Total Revenues	$	7,580,798	$	8,577,372

F-8

Cost of Sales

Cost of sales consists of the cost of the components of finished goods, the costs of raw materials utilized in the manufacture of products, in-bound and out-bound freight charges, direct manufacturing labor as well as certain internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products, inventory allowance for excess and obsolete products, and royalties paid on licensing agreements. Components account for the largest portion of the cost of sales. Components include plastic molded parts, gas powered engines, aluminum pressure bottles, electronic parts, batteries and packaging materials.

The breakdown of cost of sales to include cost of sales for related party and non-related party as well as the related party and non-related party royalty expense is as follows:

Schedule of Related Party and Non-Related Party Cost of Revenue

	2023		2022
Cost of revenues	$	4,889,769	$	5,055,947
Cost of revenues - related parties		387,160		462,297
Cost of revenues		387,160		462,297
Royalty expense - related parties		57,320		61,308
Royalty expense		138,643		203,620
Total cost of revenues	$	5,472,892	$	5,783,173

Operating Expenses

Operating expenses include selling expenses such as warehousing expenses after manufacture, as well as expenses for advertising, and other marketing expenses. Operating expenses also include such costs as payroll costs, travel costs, professional service fees (including legal fees), depreciation and other general and administrative costs.

Lease Accounting

We account for leases in accordance with ASC 842.

The lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. We did not reassess whether any contracts entered into prior to adoption are ~~shipped~~leases or ~~when service~~contain leases.

We categorize leases with contractual terms longer than twelve months as either operating or finance leases. Finance leases are generally those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. We did not have any finance leases as of December 31, 2023 and 2022. Our leases generally have terms that range from three years for equipment and three to six years for property. We elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease.

F-9

Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.

When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is ~~rendered. Revenues from fixed-price contracts~~reasonably certain that we will exercise the option, we consider these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the ~~percentage-of-completion method, measured by~~term of the percentage of cost incurred to date to estimated total cost of each contract. This method is used because management considers the percentage of cost incurred to date to estimated total cost to be the best available measure of progress on the contracts.lease.

~~Contract costs include all direct material and labor costs and those indirect costs~~Supplemental balance sheet information related to ~~contract performance, such~~leases was as ~~indirect labor, supplies, tools, repairs,~~follows:

Schedule of Supplemental Balance Sheet Information

Operating Leases	Classification	December 31, 2023		December 31, 2022
Right-of-use assets	Operating lease assets	$	844,083	$	1,133,092

Current lease liabilities	Current operating lease liabilities	$	259,154	$	269,046
Non-current lease liabilities	Long-term operating lease liabilities		615,915		864,057
Total lease liabilities		$	875,069	$	1,133,103

Lease term and ~~depreciation costs. General and administrative~~discount rate were as follows:

Schedule of Operating Lease Liabilities

	December 31, 2023.			December 31, 2022
Weighted average remaining lease term (years)		3.47			4.47
Weighted average discount rate		6.59	%		6.82	%

The components of lease costs ~~are charged~~were as follows:

Schedule of Lease Cost

	December 31, 2023		December 31, 2022
Operating lease cost	$	109,125	$	246,571
Variable lease cost		-		-
Total lease costs	$	109,125	$	246,571

Supplemental disclosures of cash flow information related to ~~expense~~leases were as ~~incurred. Provisions for estimated losses~~follows:

Schedule of Cash Flow Information Related to Leases

	December 31, 2023		December 31, 2022
Cash paid for operating lease liabilities	$	468,138	$	340,471
Operating right of use assets obtained in exchange for operating lease liabilities	$	844,083	$	920,615

F-10

Maturities of lease liabilities were as follows as of December 31, 2023:

Schedule of Maturities of Operating Lease Liabilities

	Trebor Industries Office Lease			BMG Office Lease			Submersible Systems Lease			Live Blue, Inc.		Total lease payments
2024		51,064			51,956			210,600			-		313,620
2025		-			-			216,397			-		216,397
2026		-			-			222,886			-		222,886
2027		-			-			229,566			-		229,566
Thereafter		-			-			19,177					19,177
Total		51,064			51,956			898,626			-		1,001,646
Less: Imputed interest		(2,549	)		(2,593	)		(121,435	)		-		(126,577	)
Present value of lease liabilities	$	48,515		$	49,363			777,191		$	-	$	875,069

Detailed information on ~~uncompleted contracts are made~~leases can be found in the period in which such losses are determined. Change in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Revenue and costs incurred for time and material projects are recognized as the work is performed.Note 15.

Product development costs – Product development expenditures are charged to expenses as incurred.

Advertising and marketing costs– The Company expenses the costs of producing advertisements and marketing material at the time production occurs, and expenses the costs of communicating advertisements and participating in trade shows in the period in which they occur. Advertising and trade show expense incurred for the years ended December 31, ~~2015,~~2023 and ~~2014,~~2022, totaled ~~$8,497~~$365,604 and ~~$3,686,~~$499,441, respectively.

Research and development costs – The Company accounts for research and development costs in accordance with the Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. During the years ended December 31, 2023 and 2022, the Company incurred research and development costs of $13,880 and $18,393, respectively.

Customer deposits and unearned revenue and returns policy– The Company typically takes a minimum ~~50%~~50% deposit against ~~custom and~~ large tankfill systems prior to ordering and/or building the systems. It will also take deposits for large rescue tank orders for both domestic and international customers. The remaining balance due is payable upon delivery, shipment, or installation of the system. ~~There is no provision for cancellation of custom orders once the deposit is accepted, nor return of the custom ordered product.~~ Additionally, returns of all other merchandise are subject to a ~~15%~~15% restocking fee as stated on each sales invoice. Customer deposits totaled $255,740 and $167,534 at December 31, 2023 and 2022, respectively.

Warranty policy – Under the provisions of the Financial Accounting Standards Board (“FASB”) ASC 460, Guarantor’s Guarantees, the Company accrues a liability for estimated warranty policy costs based on 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. The Company provides its customers with an industry standard one year warranty on systems sold and recognizes a warranty allowance based on gross sales multiplied by the historical warranty expense return rate. The warranty allowance charged to cost of net revenues and is included in accrued expenses and is deemed sufficient to absorb any material or labor costs that might be incurred on sales recorded during the period. The Company recorded a allowance for warranty work of $40,468 and $27,651 at December 31, 2023 and 2022, respectively.

Income taxes – The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

F-11

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, ~~they~~it would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Comprehensive income~~ ~~– The Company has no components of other comprehensive income. Accordingly, net income equals comprehensive income for all periods presented.~~

Stock-based compensation – The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes valuation model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued on the effective date of the agreement in accordance with generally accepted accounting principles, which includes determination of the fair value of the share-based transaction. The fair value is determined through use of the quoted stock price.

~~For~~During the years ended December 31, ~~2015~~2023 and ~~2014,~~2022, the Company ~~compensated and/or converted all accrued payroll to stock for one related party employee totaling $54,000 and $54,000, respectively.~~

~~Beneficial conversion features on convertible debentures~~ ~~– The~~recognized share based compensation with a fair value of $81,424 and $962,446, respectively.

Usage of Authorized but Unissued Shares of Common Stock - The Company has issued options, warrants and convertible promissory notes which are convertible into shares of common stock in certain situations the total of which exceeds the current authorization. The Company has adopted a policy for the sequence of usage of remaining authorized but unissued shares of common stock ~~upon~~(the “Sequencing Policy”) which ~~to base~~outlines the ~~beneficial~~order in which the conversion ~~feature (BCF) computation has been determined through use~~ of these equity-linked instruments may be settled in shares. Under the ~~quoted~~Company’s Sequencing Policy, the most recently issued equity-linked securities, including stock ~~price.~~options, warrants, and convertible promissory notes, are settled in shares first.

Fair value of financial instruments–Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 - Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and ~~model-derived~~model- derived valuations in which all significant inputs and significant value drivers are observable in active markets.

At December 31, ~~2015,~~2023, and ~~2014,~~2022, the carrying amount of cash, accounts receivable, accounts receivable – related parties, accounts payable and accrued liabilities, accounts payable-related parties, customer deposits and unearned revenue, ~~royalties payable – related parties,~~ other liabilities, ~~other~~lease liabilities, ~~and accrued interest – related parties, notes payable, notes payable – related parties, and accounts~~loans payable and ~~accrued liabilities~~convertible debentures, approximate fair value because of the short maturity of these instruments.

F-12

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Earnings~~Loss per common share – Basic ~~earnings~~loss per share excludes any dilutive effects of options, warrants and convertible securities. Basic ~~earnings~~loss per share is computed using the ~~weighted-average~~weighted- average number of outstanding common shares during the applicable period. Diluted ~~earnings~~loss per share is computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. ~~Potentially~~At December 31, 2023 and December 31, 2022, 107,761,177 and 266,722,242, respectively, potentially dilutive shares ~~included in dilutive earnings per share totaled 44,837,540 and 45,905,784 at December 31, 2015 and 2014, respectively.~~were not recognized as their inclusion would be anti-dilutive. These shares reflect shares potentially issuable under ~~convertable~~convertible note agreements, ~~during~~outstanding warrants, outstanding stock options and the ~~periods~~conversion of preferred stock.

New accounting pronouncements

ASU 2016-13 Current Expected Credit Loss (ASC326)

In December 2021, the FASB issued an update to ASU No. 2016-13 the Current Expected Credit Losses (CECL) standard (ASC 326), which is designed to provide greater transparency and ~~195,610 shares payable~~understanding of credit risk by incorporating estimated, forward-looking data when measuring lifetime Estimated Credit Losses (ECL) and requires enhanced financial statement disclosures. This guidance was adopted on January 1, 2023, with no effect to ~~a related party at both December 31, 2015 and 2014, respectively.~~the financial statements.

~~New accounting pronouncements~~–ASU 2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts on an Entity’s Own Equity.

In ~~July 2015,~~August 2020, the ~~Financial~~FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting ~~Standards Board issued Accounting Standards Update (ASU) No. 2015-11, Inventory (Topic 330), Simplifying~~for Convertible Instruments and Contracts on an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the ~~Measurement of Inventory.~~derivative scope exception, which will permit more equity contracts to qualify for the exceptions. The ASU ~~No. 2015-11 does not apply to inventory measurement using~~also simplifies the last-in, last-out (LIFO) or retail methods. ASU No. 2015-11 applies to all other inventory measurement methods, which includes first-in, first-out (FIFO) or average cost. Previously, inventory valuation was at the lower of cost or fair market value. This ASU changes the valuation to lower of cost ordiluted net ~~realizable value. Net realizable value is defined as the estimated selling prices~~income per share calculation in ~~the ordinary course of the business, less reasonably predictable costs of completion, disposal, and transportation. ASU~~certain areas. The new guidance is effective for fiscal years beginning after December 15, ~~2016, and~~2023, including interim periods within those fiscal ~~years. ASU 2015-11 should be applied prospectively with earlier application~~years, and early adoption is permitted. The Company ~~opted for early~~is currently evaluating the impact of the adoption of ~~ASU 2015-11 this period with no impact to financial condition, results of operations, or cash flows. The Company updated its~~the standard on the consolidated financial ~~statements to reflect inventory valuation at the lower of cost or net realizable value.~~statements.

~~In August 2014,~~Other accounting standards that have been issued or proposed by the Financial Accounting and Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-206): Disclosures of Uncertainties about an Entity’s AbilityFASB or other standards-setting bodies that do not require adoption until a future date are not expected to ~~Continue as~~have a Going Concern. The ASU requires an entity’s management to assess its ability to continue as going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. This includes (1) providing a definition of the term substantial doubt, (2) requiring an evaluation every reporting period including interim periods, (3) providing principles for considering then mitigating effect of management’s plans, (4) requiring certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requiring an express statement and other disclosures when substantial doubt is not alleviated, and (6) requiring an assessment for a period of one year after the date that thematerial impact on our financial statements upon adoption or are ~~issued (or available to be issued)~~not applicable. The ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter with early adoption permitted. The Company elected early adoption for the year ended December 31, 2014, with insignificant impact to both its current process for evaluating ability to continue as going concern and to its existing disclosures.

The Company believes there was no other new accounting guidance adopted, but not yet effective that either has not already been disclosed in prior reporting periods or is relevant to the readers of our financial statements.

~~INVENTORY~~F-13

Note 2. Inventory

Inventory consists of the following as of:

Schedule of Inventory

					2023			2022
	December 31				December 31,
	2015		2014		2023			2022

Raw materials	$	422,115	$	331,879	$	1,063,888		$	1,207,957
Work in process		—		—
Work In Process						63,258			80,727
Finished goods		232,098		274,334		1,004,160			1,302,995
	$	654,213	$	606,213
Rental Equipment						55,893			55,893
Allowance for Obsolete or Excess Inventory						(188,392	)		(225,687	)
Total Inventory, net					$	1,998,807		$	2,421,885

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~As of December 31, 2023 and 2022, the Company recorded allowances for obsolete or slow moving inventory of approximately $188,392 and $225,687, respectively.

~~PREPAID EXPENSES AND OTHER CURRENT ASSETS~~

Note 3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Schedule of Prepaid Expenses and Other Current Assets

December 31
2015 2014

Prepaid inventory $ 42,076 $ 21,508
Prepaid insurance 8,819 8,112
Prepaid other current assets 7,117 575
$ 58,012 $ 30,195

	2023		2022
	December 31,
	2023		2022

Prepaid inventory	$	109,943	$	42,660
Prepaid expenses and other current assets		80,469		149,470
Total prepaid expenses and other current assets	$	190,412	$	192,130

~~PROPERTY AND EQUIPMENT, NET~~

Note 4. Property and Equipment, Net

Property and equipment ~~consists~~consist of the following as of:

Schedule of Property and Equipment

	December 31,						2023			2022
	2015			2014			December 31,
							2023			2022
Factory and office equipment	$	62,633		$	62,633
Tooling		59,149			52,344

Tooling and equipment							$	661,951		$	586,597
Computer equipment and software		23,932			23,932			51,770			40,621
Vehicles		44,160			44,160			79,557			79,557
Leasehold improvements		43,779			38,379			62,927			65,748
		233,653			221,448
Total property and equipment								856,206			777,523
Less: accumulated depreciation and amortization		(147,941	)		(112,942	)		(513,525	)		(432,977	)
	$	85,712		$	108,506
Total property and equipment, net							$	342,681		$	339,546

Depreciation and amortization expense totaled ~~$21,531~~$155,837 and ~~$13,468~~$149,120 for the years ended December 31, 2023 and 2022, respectively. Included in the depreciation and amortization expense for the year ~~ended~~ending December 31, ~~2015~~2023 and ~~$21,570~~2022 is $76,394 and ~~$2,599~~$80,597 for ~~the year ended December 31, 2014,~~amortization of intangible assets, respectively.

~~OTHER ASSETS~~

Note 5. Other Assets

Other assets ~~of $6,649~~ at December 31, ~~2015,~~ 2023 and December 31, 2022 of $30,724consisted of refundable deposits. ~~Other assets of $31,049 at December 31, 2014 consisted of $24,740 investment in joint venture,~~

Note 6. Customer Credit and ~~$6,309 refundable deposits. See Note 16.~~Vendor Concentrations

~~CUSTOMER CREDIT CONCENTRATIONS~~

The Company sells to three entities owned by the brother of Robert M. Carmichael ~~the Company’s Chief Executive officer,~~ and ~~two Company’s~~three companies owned by ~~the Chief Executive Officer~~Robert M. Carmichael as further discussed in Note 7.~~RELATED PARTIES TRANSACTIONS.~~7 - Related Parties Transactions. Combined sales to these ~~five~~six entities for the years ended December 31, ~~2015~~2023 and ~~2014,~~2022, represented ~~31.75%~~10.6% and ~~43.34%~~11.4%, respectively, of total net revenues. ~~A single~~

Related Parties represented concentration in outstanding accounts receivable of 8.6% of total outstanding accounts receivable as of December 31, 2023 and 10.1% as of December 31, 2022. Brownie’s Global Logistics, LLC represented concentration in outstanding accounts receivable of less than 10% of total outstanding accounts receivable as of December 31, 2023 and 2022.

F-14

Additionally, the Company has a non-related party ~~entity~~customer, Amazon, that represented ~~18.7%~~4.8% of ~~revenues~~total outstanding accounts receivable as of December 31, 2023.

Revenue from Amazon accounted for ~~2015. Sales to no other customers~~10.5% of revenue for the twelve months ended December 31, 2023, and 12% of total revenue for the year ended December 31, ~~2014 represented greater than 10% of net revenues.~~2022, respectively.

~~RELATED PARTIES TRANSACTIONS~~

~~Notes payable – related parties~~

December 31,
2015 2014
Promissory note payable to Chief Executive Officer, unsecured, payable in twelve monthly principal payments of $2,250 beginning June 15, 2015, with interest at 10% per annum with payments monthly in shares of stock based on the monthly weighted average price of the stock, maturing May 15, 2016. $ 11,098 $ —
Promissory note payable to non-employee member of the Board of Director, secured by up to $200,000 in company assets, bearing interest at 21% with monthly principal and interest payments of $8,585, matured November 1, 2014. — 14,167

Less amounts due within one year 11,098 14,167

Long-term portion of notes payable $ — $ —

$ 11,098 $ 14,167

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

Effective April 22, 2015, the Company issued Mr. Carmichael, Chief Executive Officer of the Company, an unsecured promissory note presented in the table above in consideration for a $27,000 advance. For purposes of calculating the interest due monthly on the note, the weighted average price per share during the monthly period from the historical data as quoted on www.quotemedia.com for BWMG shall be used. Interest shall be calculated as the unpaid principal balance times the daily rate for the number of the days in the period times the average weighted price per share for the monthly period. The Company ~~borrowed and is using the proceeds~~has one vendor that for ~~tooling and inventory of new product. For~~ the year ended December 31, ~~2015,~~2023, and two vendors for the ~~Company converted $1,015 accrued interest on the note payable – related party to 396,891 shares of restricted stock.~~

On October 30, 2013, the Company signed a secured promissory note, with Mikkel Pitzner, the non-employee Board of Director (“BOD”) for $85,000. As further inducement to make the loan, Mr. Pitzner was granted an option to purchase 1,802,565 sharesyear ended December 31, 2022, that supplied more than 10% each of the Company’s ~~common stock~~overall purchases. L&W supplied 14.4% of overall purchases for ~~$.01 per share. The option expired October~~the year ended December 31, ~~2015 without being exercised, in whole or in part. During~~2023. Tian Li He Technology supplied 11.9% of overall purchases and L&W supplied 11.7% of overall purchases for the ~~third quarter~~year ended ~~September 30, 2015, the Company paid off the remaining balance due under the note payable – related party.~~December 31, 2022.

~~Net revenues and accounts receivable – related parties~~ ~~– The Company sells~~Note 7. Related Party Transactions

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 ~~the Company’s Chief Executive Officer. Terms of sale are no more favorable than those extended to any of the Company’s other customers with similar sales volumes.~~Robert Carmichael. Combined net revenues from these entities for the years ~~ended~~ December 31, ~~2015~~2023 and ~~2014,~~2022, totaled ~~$825,491~~$806,824 and ~~$948,090,~~$981,791, respectively. Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, ~~2015, was $12,981, $4,678,~~2023, were $12,766, $11,927 and ~~$15,221,~~$6,790, respectively. Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, ~~2014, was $42,882, $4,128,~~2022, were $16,875, $6,773 and ~~$8,451,~~$15,532, respectively.

~~The Company sells~~We also sell products to Brownie’s Global Logistics, ~~LLC.~~LLC (“BGL”) and 940 Associates, Inc. (“940 A”), ~~fully owned~~entities wholly-owned by the Company’s Chief Executive Officer. Terms of sale are more favorable than those extended to BWMG’s regular customers, but no more favorable than those extended to Brownie’s strategic partners. Terms of sale to BGL approximate cost or include a nominal margin. These terms are consistent with those extended to Brownie’s strategic partners. Strategic partner terms on a per order basis include promotion of BWMG’s technologies and “Brownie’s” brand, offered only on product or services not offered for resale, and must provide for reciprocal terms or arrangements to BWMG on strategic partners’ product or services. BGL is fulfilling the strategic partner terms by providing exposure for BWMG’s technologies and “Brownie’s” brand in the yachting and exploration community word-wide through its operations.Robert Carmichael. Combined net revenues from these three entities for the years ended December 31, ~~2015,~~2023 and ~~2014,~~2022 were ~~$50,697~~$1,799 and ~~$181,355,~~$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 $647at December 31, ~~2015,~~2023 and ~~December 31, 2014 was $6,443 and $2,107, respectively. Accounts receivable from 3D Buoy was $1,948~~$2,408 at December 31, ~~2015.~~2022.

~~Royalties expense – related parties~~ –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, 2023, the Company also had an amount due of $5,000 to Mr. Carmichael for an advance to BLU3,Inc. The Company ~~has Exclusive License Agreements~~also had an amount due of $441 to Robert Carmichael and $476 to Blake Carmichael as of December 31, 2023.

On September 30, 2022, the Company issued a convertible demand 8% promissory note in the principal amount of $66,793 to Robert Carmichael for funds to meet the working capital needs of LBI. There is ~~disclosed on~~no amortization schedule for the ~~face~~note, and interest is payable in shares of common stock of the Company at a conversion price equal to the 90 day value weighted average price (“VWAP”) of the Company’s ~~Consolidated Statements~~stock prior to the quarterly interest payment date. The note holder may demand payment or convert the outstanding principal at a conversion rate of ~~Operations.~~$.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. The Company recorded $19,250 for the beneficial conversion feature. As this conversion rate is a fixed rate, the embedded conversion feature is not a derivative liability.

Effective July 29, 2019 the Company agreed to pay the members of the Company’s Board of Directors, including Mr. Carmichael, a management director, an annual fee of $18,000 for serving on the Company’s Board of Directors for the year ending December 31, 2019. As of December 31, ~~2015,~~2021, the Company ~~was approximately 27 months~~had accrued $112,500 in ~~arrears on royalty payments due. No default notice has been received and~~Board of Directors’ fees. On August 21, 2020 the Company’s Board of Directors approved the continuation of the 2019 Board compensation policy for the year ending December 31, 2023. As of December 31, 2023, the Company ~~plans to make payments as able.~~accrued an additional $36,000 in Board of Directors’ fees for a total of $184,500 in accrued fees.

F-15

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~Equity based compensation to employee– During November 2013, Alexander F. Purdon, an employee~~On April 14, 2020 the Company entered into a Non-Qualified Stock Option Agreement with Mr. Carmichael. Under the terms of the option agreement, as additional compensation the Company ~~exceeded 10% ownership whereby he was reclassified~~granted Mr. Carmichael an option to ~~related party. The Company pays Mr. Purdon’s employment compensation in restricted~~purchase up to an aggregate of 125,000,000 shares of the Company’s common stock ~~in lieu~~at an exercise price of ~~cash. The number of shares paid is based on the weighted average price~~$.045 per ~~share during the months the services were rendered. For~~share. During the years ended December 31, ~~2015~~2023 and 2014, stock based compensation to Mr. Purdon was $54,000 and $54,000, respectively. In addition, of the $129,500 employee bonuses declared payable for 2012 year end, which is payable in stock or cash to be determined by the Board of Directors, Mr. Purdon is due $17,500. Lastly, of 61,852 total shares of common stock attributable to incentive retention bonuses declared by the Board of Directors in 2012, which vested as of May 2013, Mr. Purdon is payable 1,852 shares of stock, which were valued at $2,250. These shares are included in shares payable on the statement of stockholders’ deficit.

~~Patent purchase agreements~~– In the first quarter of 2010, the Carleigh Rae Corporation (herein referred to as “CRC”), an entity that the Company’s Chief Executive Officer has an ownership interest, transferred ownership rights toDecember 31, 2022 the Company expensed $-0- and $655,516 in relation to this option agreement, respectively. As of ~~patents previously subject to Non-Exclusive License Agreements. Effective~~ December ~~24, 2010,~~31, 2023, the aggregate total of 125,000,000 options expired on April 30, 2023.

Also, on November 5, 2020 the Company ~~finalized and executed~~entered into a Non-Qualified Option Agreement with Mr. Constable. Under the terms of this option agreement, as additional compensations, the Company granted an option (the “Bonus Option”) to purchase ~~from CRC for payment~~up to an aggregate of ~~$25,500 and nominal~~30,000,000 shares of the Company’s common ~~stock. In addition,~~stock at an exercise price of $.0184 per share. During the ~~principals of CRC were entitled to a percentage of future sales amounting to $8,250 of products~~years ended December 31, 2023 and December 31, 2022, the Company ~~was to receive in conjunction with two patent infringement lawsuits settled in the third quarter~~expensed $-0- and $63,267, respectively. As of ~~2010. SeeOther liabilities and accrued interest– related parties~~ ~~below for inclusion of $6,017 remaining~~December 31, 2023, there were 5,000,000 shares vested from the original $8,250 liability due the Principals of CRC. By acquiring the IP the Company (i) has an opportunity to further develop the IP, (ii) has the ability to incorporate the IP into current and future products, and (iii) has the opportunity to license the IP to third parties. The obligation was satisfied in the fourth quarter of 2015.this option.

~~Other liabilities and accrued interest– related parties~~

~~Other liabilities and accrued interest– related parties consists~~On August 1, 2021 as part of the ~~following at:~~

December 31,
2015 2014

Year-end 2012 bonus payable to Chief Executive Officer $ 67,000 $ 67,000
Year-end 2012 bonus payable to employee 17,500 17,500
Accrued interest on note payable non-employee Director — 3,004
Due to Principals of Carleigh Rae Corp., net — 6,017
$ 84,500 $ 93,521

~~Stock options outstanding from patent purchase~~ ~~– Effective March 3, 2009,~~Blake Carmichael Agreement (see Note 15) the Company entered into a Patent Purchase Agreement with Robert M. Carmichael, the Chief Executive Officer of the Company. The Company purchased several patents it had previously been paying royalties on and several related unissued patents. In exchange for the Intellectual Property (“IP), the Company issued Mr. Carmichael 234 stock options at a $1,350 exercise price expiring ten years from the effective date of grant, or March 2, 2019. None of the options have been exercised to-date.

~~ASSET PURCHASE~~

~~On February 3, 2012, the Company entered into an asset purchase~~Non-Qualified Stock Option agreement with ~~Florida Dive Industries, Inc. (“Seller”). On March 5, 2012, the same parties executed an amendment to the agreement (collectively, the “FDI Agreement”).~~Blake Carmichael. Under the terms of the ~~Agreement,~~Blake Carmichael agreement, Blake Carmichael is entitled to (i) a five-year option to purchase 3,759,400 shares of the Company’s common stock at an exercise price of $0.0399 (the “BC Compensation Options”), 33.3% of the shares subject to the Option vest upon the execution of the agreement, 33% at the first anniversary date and 33% upon the second anniversary date and (ii)(ii) a 5-year option to purchase up to 18,000,000 shares to vest annually on a contract year basis, based upon the achievement of certain financial metrics tied to revenue and EBITDA, which for the years ended December 31, 2023 and December 31, 2022 the Company ~~acquired certain diving~~expensed $49,448 and ~~related inventory, and Seller provided a three year non-compete agreement within a 10-mile wide radius.~~ $49,448, respectively.

On ~~May 31, 2013,~~February 2, 2022, the Company ~~closed~~issued Charles Hyatt, a director, 10,000,000 shares upon the ~~dive store~~exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares upon the exercise of a warrant at $0.025 per share in consideration of $15,000

On November 5, 2022 the Company entered into a Non-Qualified Stock Option agreement with Christopher Constable as part of his employment agreement as the Company’s Chief Executive Officer. Under the terms of the option agreement, the Company granted Mr. Constable a five-year option to purchase 3,968,254 shares of the Company’s common stock at an exercise price of $.0252 the “Compensation Options”. The Compensation Options were immediately vested. The fair value of the options on the date of the grant was $95,969 using the Black-Scholes option pricing model with the following assumptions: (i) risk free interest rate of .4.64%, (ii) expected life of 2.5 years, (iii) dividend yield of 0% and ~~vacated~~(iv) expected volatility of 256%. Stock option expense recognized during the ~~premises. As of~~years ended December 31, ~~2014,~~2023 and December 31, 2022 for this option was $-0- and $95,969, respectively.

On December 13, 2022, the Company ~~had paid Seller $9,643 toward~~issued 5,714,285 units, each unit consists of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

On January 18, 2023 and February 18, 2023, the ~~$22,500 cash~~Company issued to Charles Hyatt, a Company director, an aggregate of 11,428,570 units, with each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price ~~leaving~~of $0.0175 per share in consideration of $200,000.

On September 14, 2023, the Company issued a convertible demand 8% promissory note in the principal amount of $50,000 to Robert Carmichael for funds to meet the working capital needs of BLU3. There is no amortization schedule for the note, and interest 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 $0.01351 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. The Company recorded $-0- for the beneficial conversion feature. As this conversion rate is a fixed rate, the embedded conversion feature is not a derivative liability. The outstanding balance on this note was $50,000 as of ~~$12,857 included~~September 30, 2023.

F-16

On November 14, 2023, the Company borrowed funds through the issuance of a promissory note (the Note) in ~~other liabilities~~the principal amount of $150,000 to Charles Hyatt, a Company director, for working capital requirements and payment of certain expenses in connection with the Company’s business combinations. The maturity date of the Note is May 7, 2024 (the “Maturity Date”). The Note bears interest at a rate of 9.9% per annum, and a default interest of 18% per annum. Interest payments shall be due and payable on a monthly basis. The Company may prepay the Note in whole or in part, at any time without premium or penalty.

On December 18, 2023, the Company issued an on demand promissory note of $25,000 to to Robert Carmichael for funds to meet the working capital needs of BLU3. The promissory note bears no interest and is payable on demand.

On March 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand note for the three months ending March 31, 2023. The fair value of these shares was $1,336.

On June 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand note for the three months ending June 30, 2023. The fair value of these shares was $1,287.

On September 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand note for the three months ending September 30, 2023. The fair value of these shares was $1,287.

On December 31, ~~2015~~2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand note for the three months ending December 31, 2023. The fair value of these shares was $1,287.

Note 8. Accounts Payable and ~~2014, respectively.~~

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~Accrued Liabilities

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~ACCOUNTS PAYABLE AND ACCRUED LIABILITIES~~

Accounts payable and accrued liabilities ~~of $349,946 at December 31, 2015,~~ consists of ~~$59,916 accounts payable trade, $27,245 accrued payroll~~the following as of:

Schedule of Accounts Payable and ~~fringe benefits, $45,000 accrued year-end bonuses, $36,520 accrued payroll taxes and withholding, and $181,266 accrued interest.~~ Accrued Liabilities

	December 31, 2023		December 31, 2022

Accounts payable trade and other	$	491,424	$	504,393
Accrued payroll and fringe benefits		236,590		262,113
Accrued warranty expense		40,468		27,651

Accrued Sales Tax		21,220		35,299
Accrued interest		-		-
Total	$	789,702	$	829,456

Balances due certain vendors are ~~also due in arrears to varying degrees.~~

Accounts payable and accrued liabilities of $462,776 at December 31, 2014, consists of $196,027 accounts payable trade, $31,669 accrued payroll and fringe benefits, $45,000 accrued year-end bonuses, $39,242 accrued payroll taxes and withholding, and $150,837 accrued interest. Accrued payroll taxes and withholding were approximately nine months in arrears at December 31, 2014. Balances due certain vendors are also due in arrears to varying degrees. The Company is handling all delinquent accounts on a ~~case by case~~case-by-case basis.

~~10.~~

~~OTHER LIABILITIES~~

Note 9. Other Liabilities

Other liabilities of $231,551 at December 31, 2015, consists of $215,782 short-term loans, $12,857 payable for assets purchased pursuant to FDI Agreement, and $2,912 on-line training liability. Other liabilities of $232,738 at December 31, 2014, consist ~~of $216,586 short-term loans, $12,857 payable for assets purchased pursuant to FDI Agreement and $3,295 on-line training liability.~~

~~11.~~

~~NOTES PAYABLE,~~

~~Notes payable consists~~ of the following as of:

Schedule of ~~December 31, 2015:~~Other Liabilities

	December 31, 2023		December 31, 2022

Accrued expenses	$	267,454	$	63,943
Accrued recall reserve fee		-		160,500
Accrued Board of Directors fees		184,500		148,500
Total	$	451,954	$	372,943

Promissory note payable, secured by vehicle underlying loan having carrying value of $17,760 at December 31, 2014, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017. $ 12,232

Less amounts due within one year 6,099

Long-term portion of notes payable $ 6,133

Further information regarding the recall reserve fee can be found in note 15.

~~As of December 31, 2015, principal payments on the notes payable are as follows:~~

2016 $ 6,099
2017 6,133
2018 —
2019 —
2020 —
Thereafter —
$ 12,232

The unsecured note payable in the table below in the December 31, 2014, note payable balance resulted from conversion of a vendor payable dating back to February 2011. The note payable was restructured once in June 2012 to reduce the monthly payments and to extend the maturity.

~~Notes payable consists of the following as of December 31, 2014:~~

Promissory note payable, unsecured, bearing interest at 5% simple interest per annum, due in weekly principal and interest payments of $250, maturing on March 10, 2015. $ 2,764

Promissory note payable, secured by vehicle underlying loan having carrying value of $17,760 at December 31, 2014, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017. 18,216
20,980

Less amounts due within one year 8,749

Long-term portion of notes payable $ 12,231

~~BROWNIE’S MARINE GROUP, INC. AND SUBSIDIARY~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~12.~~

~~CONVERTIBLE DEBENTURES~~F-17

Convertible Promissory Notes consist of the following at December 31, ~~2015:~~2023:

~~Convertible debentures consist~~A breakdown of ~~the following at December 31, 2014:~~

On February 10, 2012, the holder of this debenture entered into an agreement with a third party to sell/assign the $125,000 principal balance, plus accrued interest. The purchase was to be in installments with transfer/assignment of the debenture upon payment, referred to as “Closings”. The first Closing was on or about February 15, 2012 for $7,500, with that amount assigned/transferred. The second Closing, occurred 90 days after the first closing for $11,750 paid/assigned. All subsequent Closings were to be for $11,750current and ~~occur in 30 day increments after the second Closing. This was to continue until the full principal balance of $125,000, plus accrued interest is purchased/assigned.~~

The conversion price under the debentures is $0.37125 and the lender may convert at any time until the debenture plus accrued interest is paid in full. Various other fees and penalties apply if payments or conversions are not done timely by the Company. The lender will be limited to maximum conversion of 4.99% of the outstanding Common Stock of the Company at any one time.

~~The components of the provision for income tax expense~~long-term amounts due are as follows for the ~~years ended:~~convertible promissory notes as of December 31, 2023:

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 Live Blue, Inc. Pursuant to the terms of the Asset Purchase Agreement, Live Blue 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 as part of this asset acquisition.

In consideration for the assets purchased, the Company paid $150,000 to the LLC Members. The purchase price was paid by (a) the issuance to the LLC Members of an aggregate of 3,084,831 shares of the Company’s common stock (the “Consideration Shares”) with a fair market value of $120,000; and (b) a cash payment of $30,000.

The Consideration Shares are subject to leak out agreements whereby the shareholders are unable to sell or transfer shares based upon the following:

The leak-out restriction may be waived by the Company upon written request by a LLC Member, if the Company’s common stock is trading on the NYSE American or Nasdaq, and has a rolling 30-day average trading volume of 50,000 shares per day; provided, however, that (i) only up to 5% of the previous days total volume can be sold in one day and (ii) only through executing trades “On the Offer.”

The transaction costs associated with the acquisition were $10,000 in legal fees paid in cash.

While the agreement was structured as an asset purchase agreement, we also assumed the operations of Gulf Coast Scuba resulting in the recognition of a business combination. During 2023 we recognized revenue of $302,724 and net loss of ($88,561) associated with this business. The business combination was not material for purposes of disclosing pro forma financial information. In connection with this transaction, we recognized the following assets and liabilities:

The following ~~is a summary~~table sets forth the changes in the carrying amount of the ~~significant~~Company’ Goodwill for the years ended December 31, 2023 and 2022:

The following table sets forth the components of the Company’s ~~deferred tax~~intangible assets ~~and liabilities~~ at December 31, ~~2015:~~2023:

The ~~effective tax rate used for calculation of~~aggregate amortization remaining on the ~~deferred taxes~~intangible assets as of December 31, ~~2015~~2023 is a follows:

On January 17, 2022, the Company issued a law firm 1,000,000 shares of common stock with a fair value of $27,500 as part of the agreed upon compensation for a representation agreement.

On January 31, 2022, the Company issued a consultant 121,212 shares of common stock with a fair value of $4,000 for consulting services related to the dive industry. On February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares from the exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares from the exercise of a warrant at $0.025 per share in consideration of $15,000.

On February 28, 2022, the Company issued a consultant, 85,106 shares of common stock with a fair value of $4,000 for consulting services related to the dive industry.

On May 3, 2022, the Company issued 3,084,831 shares of common stock pursuant to the asset purchase agreement with Gold Coast Scuba, LLC with a fair value of $120,000.

On May 31, 2022, the Company issued a consultant, 302,953 shares of common stock with a fair value of $12,000 for consulting services related to the dive industry.

On June 17, 2022, the Company issued 280,000 shares of common stock to an employee as a retirement gift. The fair value of this stock was ~~34%~~$11,060.

On June 30, 2022, the Company issued 449,522 shares of common stock to the holders of convertible notes for payment of interest through June 30, 2022. The fair value of these shares was $23,048.

On September 7, 2022, the Company issued to two accredited investors, 8,541,666 units of the Company, with each unit consisting of one share of common stock and a two- year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.024 per share in consideration of $205,000. The Company ~~has established a valuation allowance against deferred tax assets~~did not pay any fees or commissions in connection with the sale of ~~$1,120,842 or 99.8%, due~~the units.

On September 30, 2022, the Company issued 136,527 shares of common stock to the ~~uncertainty regarding realization, comprised primarily~~holders of ~~a 100% reserve against~~convertible notes for payment of interest for the ~~net operating carryforward, 100% reserve against~~three months ending September 30, 2022. The fair value of these shares was $7,000.

On November 1, 2022, the ~~allowance for doubtful accounts, and 97% reserve against the deferred tax assets attributable~~Company issued an aggregate of 1,155,881 shares to the ~~equity based compensation.~~designated shareholders in accordance with the amended STS Agreement. The fair value of these shares was $30,000.

~~The significant differences between~~On December 13, 2022, the ~~statutory tax rate~~Company issued 5,714,286 units, each unit consists of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise price of $0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

On December 31, 2022, the ~~effective tax rates~~Company issued 198,204 shares of common stock to the holders of convertible notes for payment of interest for the three months ending December 31, 2022. The fair value of these shares was $8,336.

On January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, a Company director, an aggregate of 11,428,570 units, with each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.0175 per share in consideration of $200,000.

On March 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand note for the ~~years ended are as follows:~~three months ending March 31, 2023. The fair value of these shares was $1,336.

On September 30, 2023, the ~~significant components~~Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the ~~Company’s deferred tax assets and liabilities at~~convertible demand note for the three months ending September 30, 2023. The fair value of these shares was $1,287.

~~The effective tax rate used~~2023, the Company issued 61,677 shares of common stock to Robert Carmichael for ~~calculation~~payment of interest on the ~~deferred taxes as of~~convertible demand note for the three months ending December 31, ~~2014~~2023. The fair value of these shares was ~~34%~~$1,287. The Company has established a valuation allowance against deferred tax assets of $1,202,911 (Restated) or 99.8%, due to the uncertainty regarding realization, comprised primarily of a 100% reserve against the net operating carryforward, 100% reserve against the allowance for doubtful accounts, and 97% reserve against the deferred tax assets attributable to the equity based compensation.

During the second quarter of 2010, the holder of the majority of the Company’s outstanding shares of common stock approved an amendment to the Company’s Articles of Incorporation authorizing the issuance of 10,000,000 shares of blank check preferred stock. The blank check preferred stock as authorized has such voting powers, designations, preferences, limitations, restrictions and relative rights as may be determined by our Board of Directors of the ~~Company. The~~ Company ~~authorized~~from time to time in accordance with the provisions of the Florida Business Corporation Act. In April 2011 the Board of Directors designated 425,000 shares of the blank check preferred stock ~~for the purpose~~as Series A Convertible Preferred Stock. Each share of added flexibility in seeking capital and potential acquisition targets. The amendment authorizing the issuance of shares of preferred stock grants the Board authority, without further action by our stockholders, to designate and issue preferred stock in one or more series and to designate certain rights, preferences and restrictions of each series, any or all of which may be greater than the rights of the common stock. As of December 31, 2015, and December 31, 2014, the 425,000 shares of preferred stock are owned by the Company’s Chief Executive Officer. The preferred shares have 250 to 1 voting rights over the common stock, and areSeries A Convertible Preferred Stock is convertible into ~~31,481 shares~~a share of ~~common stock. The preferred stock votes with~~ the Company’s common stock ~~except as otherwise required under Florida law. Accordingly, Mr. Carmichael will have approximately 55%~~at any time at the option of the ~~combined voting power~~holder at a conversion price of ~~the Common~~$18.23 per share. Holders of shares of Series A Convertible Preferred Stock are entitled to 250 votes for each share held. The Company’s common stock and Series A Convertible Preferred Stock ~~voting~~vote together as on any matters submitted to our shareholders for a ~~single class~~vote. As and December 31, 2022 and 2021, the 425,000 shares of Series A Convertible Preferred Stock are owned by Robert Carmichael.

On May 26, 2021 the Company adopted an Equity Compensation Plan (the “Plan”). Under the Plan, stock options may be granted to employees, directors, and consultants in the form of incentive stock options or non-statutory stock options, stock purchase rights, time vested and/performance invested restricted stock, and stock appreciation rights and unrestricted shares. The maximum number of shares that may be issued under the Plan is 25,000,000 shares. The term of the Plan is ten years.

The Company also issued options outside of the plan that were not approved by the security holders. These options may be granted to employees, directors, and consultants in the form of incentive stock options or non-qualified stock options.

The Company has issued options to purchase approximately 67,439,637 shares at an average price of $0.029 with a fair value of approximately $99,000. For the years ended December 31, 2023 and 2022, the Company issued options to purchase -0- and 5,710,901 shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

For the years ended December 31, 2023 and 2022, the Company recognized an expense of approximately $81,424and $951,400, respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a Black-Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. The Company uses straight-line amortization of compensation expense over the requisite service period for time-based options. For performance-based options the Company evaluates the likelihood of a vesting qualification being met, and will ~~control~~establish the ~~outcome~~expense based on that evaluation. The maximum contractual term of ~~any corporate transaction or other matter submitted to~~ the ~~shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control.~~

~~From time to time the Company~~Company’s stock options is subject to legal proceedings, claims and litigation arising in the ordinary course of business, including matters relating to product liability claims. Such product liability claims sometimes involving wrongful death or injury have historically been covered by product liability insurance, which provided coverage for each claim up to $1,000,000. During the third quarter of 2014, the Company did not renew its product liability insurance since the renewal policy amount was cost prohibitive.5 years. The Company recognizes forfeitures as they occur. There are options to purchase approximately 41,057,753 shares that have vested as of December 31, 2023.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black-Scholes option-pricing model is ~~currently seeking a new insurance carrier or alternative means to satisfy this potential liability exposure,~~affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

The expected volatility was determined with reference to ~~fulfil~~ the ~~sales terms~~historical volatility of ~~some~~the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of ~~our customers,~~options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

A summary of the status of the Company’s outstanding stock options as of December 31, 2023 and 2022 and changes during the periods ending on that date is as follows

The following table summarizes information about employee stock options outstanding at December 31, 2023

As of December 31, 2023, the Company had approximately $1,504,700 of unrecognized pre-tax non-cash compensation expense related to options to performance based options to purchase shares, which ~~require~~ the ~~insurance coverage.~~Company expects to recognize, based on a weighted-average period of 2.1 years. The Company uses straight-line amortization of compensation expense over the requisite service period for time-based options. For performance-based options the Company evaluates the likelihood of a vesting qualification being met, and will establish the expense based on that evaluation. Stock option expense recognized during the year ended December 31, 2023 and December 31, 2022 was $81,424 and 951,414, respectively.

On February 2, 2022, the Company issued Charles Hyatt 10,000,000 shares of common stock upon the exercise of a warrant at $0.025 per share in consideration of $250,000.

On February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, 600,000 shares of common stock upon the exercise of a warrant at $0.025 per share in consideration of $15,000.

On September 7, 2022, the Company issued an ~~action filed by~~aggregate of 8,541,666 units to two accredited investors. Each unit consisted of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an ~~individual~~exercise price of $0.024 per share in ~~June 2013~~consideration of $205,000.

On December 13, 2022, the Company issued to Charles Hyatt, 5,714,285 units. Each unit consisted of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.0175 per share in consideration of $100,000.

On January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, an aggregate of 11,428,570 units, with each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $0.0175 per share in consideration of $200,000.

A summary of the Company’s warrants as of December 31, 2023 and 2022, and changes during the years ended December 31, 2023 and 2022 is presented below:

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 ~~Circuit Court~~event the Company were to determine that it would not be able to realize all or part of ~~Broward County claiming personal injury resulting from use of a Brownie’s Third Lung. Plaintiff has claimed damages~~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 ~~$1,000,000. The insurance carrier’s legal counsel indicates unfavorable outcome is possible, but not probable. We believe such claim is without merit and intend~~its net recorded amount, an adjustment to ~~continue to aggressively defend such action. In addition, as previously disclosed, we are also co-defendant under an action filed March 2015,~~the deferred tax assets would increase income in the ~~Circuit Court~~period such determination was made.

The components of ~~Broward County claiming personal injury resulting from~~ the ~~use~~provision for income tax expense are as follows for the years ended:

The following is a ~~Brownie’s Third Lung product. This claim falls outside~~summary of the significant components of the Company’s ~~period~~deferred tax assets and liabilities at December 31, 2023 and 2022:

Summary of ~~insurance coverage.~~Significant Components of Deferred Tax Assets and Liabilities

The effective tax rate used for calculation of the deferred taxes as of December 31, 2023 was 25.35%. The Company ~~believes~~has established a 100% valuation allowance against deferred tax assets of approximately $2,531,800, due to the ~~claim~~uncertainty regarding realization reserve against the deferred tax assets. The change in valuation allowance was an increase of $347,400. The Company has approximately $3,346,650 of net loss carryforward that expire through 2037 and $4,651,143 that carryforward indefinitely but is limited to be80% of taxable income in any one year.

The effective tax rate used for calculation of the deferred taxes as of December 31, 2022 was 25.35%. The Company has established a ~~Workers Compensation claim relating exclusively~~100% valuation allowance against ~~other defendant~~deferred tax assets of $2,184,400due to the uncertainty regarding realization reserve against the deferred tax assets. The change in valuation allowance was an increase of $347,400.

The significant differences between the statutory tax rate and ~~without merit,~~the effective tax rates for the Company for the years ended are as follows:

Schedule of Differences Between Statutory Tax Rate and ~~has retained counsel~~Effective Tax Rate

The Company’s income tax returns for 2019 through 2023 remain subject to ~~aggressively defend this action.~~examination by the Internal Revenue Services and state tax authorities.

On August 14, 2014, the Company entered into a ~~new~~thirty-seven month lease ~~commitment. Terms of the new lease include thirty-seven month term~~for its facilities in Pompano Beach, Florida, commencing on September 1, ~~2014;~~2014. Terms included payment of ~~$5,367~~a $5,367 security deposit; base rent of approximately ~~$4,000~~$4,000 per month over the term of the lease plus sales tax; and payment of ~~10.76%~~10.76% of annual operating expenses ~~(i.e. common~~(common areas maintenance), which iswas approximately ~~$2,000~~$2,000 per month subject to periodic adjustment.

~~Base rent expense, attributable~~ On December 1, 2016, the Company entered into an amendment to the ~~Company’sheadquarters~~initial lease agreement, commencing on October 1, 2017, extending the term of the lease for an additional eighty-four months, expiring September 30, 2024. The base rent was increased to $4,626 per month with a 3% annual escalation throughout the amended term.

On January 4, 2018, the Company entered into a sixty-one monthlease renewal for its facility ~~totaled~~in Huntington Beach, California commencing on February 1, 2018. Terms included base rent of approximately ~~$48,000~~$9,300 per month for the first 12 months with an annual escalation clause of 2.5% thereafter. The Company paid a security deposit of $8,450upon entering into the lease.

On November 11, 2018, the Company entered a sixty-nine month lease commencing on January 1, 2019 for approximately 8,025 square feet adjoining its existing facility in Pompano Beach, Florida. Terms of the new lease include a $6,527 security deposit; initial base rent of approximately $4,848 per month escalating at 3% per year during the term of the lease plus Florida state sales tax and ~~$47,000~~10.11% of the buildings annual operating expenses (common area maintenance) which is approximately $1,679 per month, subject to adjustment as provided in the lease.

On May 2, 2022, LBI entered into a lease assignment agreement with Gold Coast Scuba, LLC and Vicnsons Realty Group, LLC whereby LBI is the assignee to the remainder of the lease for the property located at 259 Commercial Blvd., Suites 2 and 3 in Lauderdale-By-The Sea, Florida. The lease is in its third year of a three-year term and has a $2,816 per month base rent. The lease provides an option to renew for an additional term of two years with an increase of base rent by 3.5%.

On September 14, 2022, SSI entered into a sixty-month lease renewal for its facility in Huntington Beach, California effective February 1, 2022. Terms included base rent of 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 June 30, 2020, the Company entered into Amendment No. 2 to its Patent License Agreement with Setaysha Technical Solutions, LLC (“STS”). The amendment set certain limits and expectations of the assistance from STS related to designing and commercializing certain diving products and revised the royalty payments due to STS as consideration for uncompensated services. The Company is obligated to pay STS a minimum yearly royalty of $60,000, or $15,000 per fiscal quarter, beginning in December 2019 and increasing by 2.15% per year. The minimum royalty was temporarily increased to $60,000 for fiscal years 2022, 2023 and 2024, with a fourth quarter true up against earned royalties. In addition, if the Company terminates the Agreement with STS prior to December 31, 2023, the Company is obligated to pay STS $180,000, less cumulative royalties paid in excess of $200,174 for the years 2019 through 2024. In accordance with the amendment, the Company will pay additional minimum royalties of $60,000 per year or $15,000 per quarter for the years 2022 through 2024. On November 1, 2022 the Company issued to the designees of STS 1,155,881 shares of common stock with a fair value of $30,000 in accordance with the Patent License Agreement. Royalty recorded under this Agreement was $138,643 and $203,621 for twelve months ended December 31, ~~2015~~2023 and ~~2014,~~December 31, 2022, respectively. As included in other liabilities, accrued royalties under this agreement were $41,151 and $18,870 at December 31, 2023 and 2022, respectively.

On June 9, 2020, the Company entered into a one-year advertising and marketing agreement with Figment Design for $8,840 per month which agreement terminated on July 31, 2021.

On November 5, 2020, the Company entered into a three-year employment agreement with Christopher Constable (the “Constable Employment Agreement”) pursuant to which Mr. Constable serves as Chief Executive Officer of the Company. Previously, Mr. Constable had provided advisory services to the Company through an agreement with Brandywine LLC. In consideration for his services, Mr. Constable shall receive (i) an annual base salary of $200,000, payable in accordance with the customary payroll practices of the Company, and (ii) upon execution of the Employment Agreement and on each anniversary of the date of the Agreement during the term, a non-qualified immediately exercisable five-year option to purchase that number of shares equal to $100,000 of the value of the Company’s common stock at an exercise price equal to the market price of the Company’s common stock on the date of issuance. Accordingly, on November 5, 2020, Mr. Constable was issued an option to purchase 5,434,783 shares of the common stock at an exercise price of $0.0184 per share and on November 5, 2021, Mr. Constable was issued an option to purchase 2,403,846 shares of the Company’s common stock at an exercise price of $0.0401 per share.

In addition, Mr. Constable shall be entitled to receive four-year stock options to purchase shares of common stock at an exercise price equal to $0.0184 per share in the following amounts based upon the following performance milestones during the term of the Constable Employment Agreement: (i) 2,000,000 shares – if the Company’s total net revenues, as reported in its statement of operations in its financial statements in its filings with the SEC, including as a result of a stock or asset acquisition of a third party (“Net Revenues”) are in excess of $5,000,000, in the aggregate, for four consecutive fiscal quarters; (ii) 3,000,000 shares – if the Company’s Net Revenues are in excess of $7,500,000, in the aggregate, for four consecutive fiscal quarters; (iii) 5,000,000 shares – if the Company’s Net Revenues are in excess of $10,000,000, in the aggregate, for four consecutive fiscal quarters; and (iv) 20,000,000 shares – if the Company’s common stock is listed on the NASDAQ or New York Stock Exchange.

On June 24, 2023, Christopher Constable submitted his resignation as Chief Executive Officer of Brownie’s Marine Group, Inc., a Florida corporation (the “Company”) effective July 7, 2023. Mr. Constable will remain a member of the Company’s Board of Directors and in a consulting capacity until further notice. Mr. Constable’s resignation did not arise from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

On March 1, 2021, the Company entered into an investor relations consulting agreement with BGM Equity Partners, LLC. The ~~following~~term of the agreement is twelve months. As compensation, the Company issued 3,000,000 shares of its common stock valued at $120,000 to BGM Equity Partners. The agreement expired on March 1, 2022.

On August 1, 2021, the Company and Blake Carmichael entered into a ~~achieved~~three-year employment agreement (the “Blake Carmichael Employment Agreement”) pursuant to which Mr. Carmichael shall serve as Chief Executive Officer of ~~future minimum rental payments required under our lease~~BLU3. In consideration for his services, Blake Carmichael shall 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. (iii) upon execution of the Employment Agreement, a non-qualified five-year stock option to purchase 3,759,400 shares at $0.0399, 33.3% of which shares vest immediately, 33.3% vest on the second anniversary, and 33.3% vest on the third anniversary of the agreement ~~on August 14, 2014:~~.

In addition, Blake Carmichael shall be entitled to receive 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 that will vest upon annual financial metrics based upon a revenue measurement, expediency measurement and an EBITDA measurement.

On September ~~24, 2015 all claims~~3, 2021, SSI and ~~counterclaims by and between Undersea Breathing Systems, Inc. (“UBS”~~Christeen Buban entered into a three-year employment agreement (the “Buban Employment Agreement”) ~~and~~pursuant to which Ms. Buban shall serve as the President of SSI. In consideration for her services, Mrs. Buban shall receive (i) an annual base salary of $110,000, payable in accordance with the customary payroll practices of the Company, ~~were settled~~(ii) a car allowance and cell phone allowance of $10,800 per year, (iii) a five-year option issued under the Plan to purchase 300,000 shares of common stock of the Company at $0.0531 per share, which option vests quarterly over the eight calendar quarters.

In addition, Mrs. Buban shall be entitled to receive a five-year stock option to purchase up to 7,110,000 shares of common stock of the Company at an exercise price of $0.0531 per share, which vests upon the attainment of certain defined annual financial metrics, as set forth in ~~full~~the Buban Employment Agreement.

On May 2, 2022, the Company entered into a two-year employment agreement with Steven Gagas (the “Gagas Employment Agreement”) pursuant to which Mr. Gagas shall serve as the General Manager of the dive shop currently operating within LBI. In consideration for his services Mr. Gagas shall receive an annual salary of $50,000.

On January 17, 2022, the Company entered into an agreement with The Crone Law Group, PC (“CLG”) for the provision of legal services. In consideration therefor, the Company will pay CLG a monthly flat fee of $3,000 for the SEC reporting work, and its normal hourly rate for any other legal work and issued 1,000,000 shares of common stock with a fair market value of $27,500 to CLG.

On December 22, 2022, the U.S. Consumer Products Safety Commission (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 an allowance of $160,500 for such costs. 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.

The Company was a defendant in an action, Basil Vann, as Personal Representative of the Estate of Jeffrey William Morris v. Brownie’s Marine Group, Inc., filed on May 6, 2019 in the Circuit Court of the 15^th17th Judicial Circuit, Broward County, Florida. The complaint, related to consulting services provided to the Company by the deceased between 2005 and 2017, alleged breach of contract and quantum meruit and sought $15,870.97in unpaid consulting fees together with interest. In April 2020, the Company filed a Motion to Dismiss, and ~~for Palm Beach County, FL,~~at a hearing held in May 2021, the Court struck certain allegations contained in the ~~third quarter of 2015. The settlement included~~complaint, the ~~Company owing UBS nothing, UBS owing~~parties agreed that the ~~Company certain tangible property within 14 days, mutual execution of general release, and stipulation for dismissal with prejudice with all parties~~quantum meruit allegation is deemed to ~~bear their own attorneys’ fees and costs.~~

~~Prior~~be an alternative to the ~~above settlement in full on July 1, 2014, the amended complaint for damages in excess~~breach of ~~$15,000 filed by UBS on December 10, 2013 in the Circuit Court of the 15~~^th ~~Judicial Circuit in and for Palm Beach County, FL was partially dismissed as~~contract allegation but permitted certain other allegations to ~~Count IV, Default on Promissory Note Against BWMG.~~stand. The complaint against the Company sought to compel purchase of Medal Model No. 4241 membranes or equivalent pursuant to pricing agreement in 2011. UBS was the holder of the convertible debenture referenced in Note 12.~~CONVERTIBLE DEBENTURES~~ Ref (2). Under the complaint, UBS asserted the Company was to purchase no less than 24 membranes from the company per year for $2,000 and $1,000, cash and Company stock, respectively, per membrane. The Company took delivery, paid cash, and issued stock for 14 Medal Model No 4241 membranesparties entered mediation pursuant to the stated pricing in 2011, plus issued an additional $24,000 stock toward future purchases of 24 membranes. However, the Company had not purchased or taken delivery of additional membranes. At the same time the stockCourt’s order. This action was ~~issued the Company granted UBS a convertible debenture of $76,000 and reduced its balance to $48,000 when the~~settled for $10,000 on July 12, 2021. The Company paid ~~$28,000 cash and took delivery~~monthly installments of the 14 membranes. Therefore, UBS had $24,000 worth of stock and a $48,000 convertible debenture for which the Company took no membrane deliveries. Associated with the dismissal of Count IV, the Company reversed in the third quarter of 2014, related prepaid inventory and convertible debenture resulting in a loss on$1,000. The settlement ~~of $14,850, which~~ was ~~accrued as of June 30, 2014.~~

On November 7, 2011, the Company entered into a Joint Venture Equity Exchange Agreement (“Agreement”) with Pompano Dive Center, LLC. (“PDC”). PDC owns a retail store, several dive boats, and has a classroom for training divers. Under the terms of the Agreement, the Company would provide PDC with an assortment of Brownie’s Third Lung products on consignment, and PDC will act as a training and demonstration site for Brownie’s Third Lung products. Beginning in 2012, both parties ceased operating under the consignment inventory arrangement. Inventory not sold was returned, and inventory was purchased for sale. Terms of sale to PDC are no more favorable than those granted other dealers of the Company’s products.

In December 2014, the Company received notice from Pompano Dive Center, LLC. (“PDC”) of intent to cancel the Joint Venture Equity Exchange Agreement described below effective January 1, 2015, in accordance with the terms of the agreement. After notice, BWMG awaited the return of the stock PDC held in BWMG to fulfil terms of dissolution. PDC returned the stock at the end offully paid during the second quarter of ~~2015 and~~2022.

On February 8, 2024, Brownies Marine Group, Inc. (the “Company”), issued a promissory note (the “Note”) to Charles Hyatt, a director of the Company ~~cancelled it~~(the “Lender”) in the principal amount of $280,000. The Note bears interest is payable in monthly installments at the ~~beginning~~rate of ~~third quarter~~9.9%per annum and matures on August 7, 2024.

The proceeds of ~~2015. The cancellation is reflected~~the Note will primarily be used for general working capital purposes.

Events of default on the ~~face~~Note include insolvency and failure to pay principal or interest when due and upon the occurrence of ~~the statement~~an event of ~~stockholders’ equity. Market value of the 3,394 shares of stock PDC held that were returned was $0. The Company had recorded the decline in value of the stock~~default as described in the ~~second quarter of 2015 by reversing~~Note, the ~~$24,740 long term asset (purchase option) tied to~~outstanding interest and principal will become immediately due and payable. The default interest rate on the ~~stock provided PDC discussed below, with corresponding reduction in additional paid in capital to write the asset down to fair market value.~~

~~On August 22, 2007, the Company adopted an Equity Incentive Plan (the “Plan”)~~Note is 18%. ~~Under the Plan, Stock Options may~~The Note can be granted to Employees, Directors, and Consultants in the form of Incentive Stock Options or Nonstatutory Stock Options. Stock Purchase Rights, time vested and/performance invested Restricted Stock, and Stock Appreciation Rights and Unrestricted Shares may also be granted under the Plan. The initial maximum number of shares that may be issued under the Plan shall be 297 shares, and no more than 75 Shares of Common Stock may be granted to any one Participant with respect to Options, Stock Purchase Rights and Stock Appreciation Rights during any one calendar year period. Common Stock to be issued under the Plan may be either authorized and unissued or shares held in treasury by the Company. The term of the Plan shall be ten years. The Board of Directors may amend, alter, suspend, or terminate the Planrepaid at any ~~time. All 297 options were issued under the plan prior to January 1, 2010, and to-date all remain outstanding.~~time without penalty or premium.

On November 2, 2012, the Board of Directors consented to grant equity based bonuses to certain key employees and consultants as an incentive to retain their services. Stock incentive bonuses were to vest, and be paid out on May 2, 2013, contingent upon continued employment or service. The stock bonus price per share was calculated based on last closing price as reported on per the OTCBB prior to the grant date for a total of $75,100. Shares were set aside and reserved for this transaction. As disclosed in Note 7.~~RELATED PARTIES TRANSACTIONS~~, $45,000 and $2,250 of the $75,100 bonuses, or 37,038 and 1,854 shares, were awarded to the Chief Executive Officer and the related party employee, respectively. The Company accrued operating expense ratably from the time of the awards through May 2, 2013, when vested. Of the 61,852 vested shares, only 5,185 have been issued to-date. The rest are reflected in shares payable balance on the Statement of Stockholders’ Deficit and the Balance Sheet.

For the year ended December 31, 2015, non-related parties interest expense of $37,018 is comprised of $36,708 interest on convertible debentures and $310 interest on notes payable and other interest. For the year ended December 31, 2014, non-related parties interest expense of $39,726 is comprised of approximately $38,809 interest on convertible debentures and approximately $917 interest on notes payable and other interest.

~~On January 14, 2016, Mr. Robert Carmichael, Chief Executive Officer, was issued 16,052 shares of restricted common stock for $73 accrued interest on notes payable-related party.~~

3001 NW 25th Avenue, Suite 1, Pompano Beach, Florida		33069

~~3001 NW 25~~^th ~~Avenue, Suite 1, Pompano Beach, Florida~~		~~33069~~
(Address of ~~Principal Executive Offices)~~principal executive offices)		(Zip Code)

Large accelerated filer¨	☐	Accelerated file	¨☐
Non-accelerated filer¨	~~(Do not check if a smaller reporting company)~~ ☒	Smaller reporting company	x☒
		Emerging growth company	☐

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.

	·	~~Water safety and survival~~
	·	~~Garment integrated flotation devices or life jacket~~
	·	~~Collar for improved life jacket performance~~
	·	~~Combined signaling and ballast for personal flotation device~~
	·	~~Inflatable dive marker and collection bag.~~
	·	~~Three dimensional dive flag~~
	·	~~Novel dive raft and float system for divers~~
	·	~~Drop weight Cummerbelt~~
	·	~~Buoyancy compensator~~
	·	~~Utility backpack~~
	·	~~Transport harness or like garment with adjustable one size component for use by a wide range of individuals~~
	·	~~Active control releasable ballast~~

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
None		Not applicable		Not applicable

		Page No.
	Part I	3

Item 1.	Business.	3
Item 1A.	Risk Factors.	10
Item 1B.	Unresolved Staff Comments.	16
Item 1C	Cybersecurity	16
Item 2.	Properties.	16
Item 3.	Legal Proceedings.	16
Item 4.	Mine Safety Disclosures.	16

	Part II	17

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	17
Item 6.	Reserved.	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	24
Item 8.	Financial Statements and Supplementary Data.	24
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	24
Item 9A.	Controls and Procedures.	24
Item 9B.	Other Information.	26
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	26

	Part III	26

Item 10.	Directors, Executive Officers and Corporate Governance.	26
Item 11.	Executive Compensation.	28
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.	30
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	32
Item 14.	Principal Accounting Fees and Services.	33

	Part IV	34

Item 15.	Exhibits, Financial Statement Schedules.	34
Item 16.	Form 10-K Summary	35
	Signatures	36

	●	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

	Calendar Year 2014
	High Bid		Low Bid
First Quarter	$	.015	$	.005
Second Quarter	$	.034	$	.003
Third Quarter	$	.005	$	.003
Fourth Quarter	$	.004	$	.002

	Calendar Year 2015
	High Bid		Low Bid
First Quarter	$	.004	$	.002
Second Quarter	$	.003	$	.002
Third Quarter	$	.003	$	.001
Fourth Quarter	$	.007	$	.002

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)		3,275,000		.0410		21,725,000
Plans not approved by shareholders (2)		64,164,6377		.0293		-

	Year Ended December 31,
	2023		2022		% change

Legacy SSA Products	$	2,312,122	$	2,601,622		(11.1	)%
High Pressure Gas Systems		996,040		1,118,081		(10.9	)%
Ultra-Portable Tankless Dive Systems		1,904,687		3,052,192		(37.6	)%
Redundant Air Tank Systems		2,065,224		1,592,601		29.7	%
Guided Tour Retail		302,724		212,876		42.2	%
Total revenue	$	7,580,798	$	8,577,372		(11.6	)%

Expense Item	2023		2022		% Change
Payroll	$	1,788,890	$	1,946,985		(8.1	)%
Non-Cash Stock based compensation – options		81,424		998,474		(91.8	)%
Professional Fees		269,621		340,221		(20.8	)%
Advertising		365,604		499,441		(26.8	)%
All Others		757,899		841,081		(9.9	)%
Total SG&A	$	3,263,439	$	4,626,202		(29.5	)%

	December 31, 2023		December 31, 2022		% of Change
Total Current Assets	$	2,736,601	$	3,265,714		(16.2	)%
Total Current Liabilities	$	2,502,787	$	1,792,151		39.7	%
Working Capital	$	233,814	$	1,473,563		(84.1	)%

	Years Ended December 31,
	2023			2022

Net cash used in operating activities	$	(374,827	)	$	(678,357	)
Net cash (used in) investing activities	$	(29,955	)	$	(62,164	)
Net cash provided by financing activities	$	351,467		$	581,805

Name and Principal Position(s)	Year		Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		All Other Compen- sation		Total

Robert M. Carmichael, President, Principal		2014	$	16,615	$	—	$	—	$	—	$	—	$	—	$	16,615
Executive Officer		2015	$	—	$	—	$	—	$	—	$	—	$	16,565*	$	16,565

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted – average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuances under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity Compensation Plans Approved by Security Holders		297	$	1,350		0
Equity Compensation Plans Not Approved by Security Holders		—		—		—
Total		297	$	1,350		0

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Executive Officers and Directors
Common	Robert Carmichael		874,234	(1)		*
Common	All directors and executive officers as a group (1 person)		874,234	(1)		*
5% Shareholders
Common	Alexander F. Purdon		31,240,106	(2)		36	%

Executive Officers and Directors
Series A Convertible Preferred Stock	Robert Carmichael		425,000			100	%
Series A Convertible Preferred Stock	All directors and executive officers as a group (1 person)		425,000			100	%

	Preferred Stock				Common Stock						Common Stock Payable				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Shares		Amount		Capital			Deficit			Deficit

Balance, December 31, 2013 (restated)		425,000	$	425		5,672,051		$	567			195,610	$	20	$	8,478,092		$	(9,185,054	)	$	(705,950	)

Conversion of related party employee compensation payable to stock		—		—		10,842,129			1,084			—		—		52,916			—			54,000

Conversion of accrued interest on convertible debentures to stock		—		—		1,544,778			154			—		—		3,848			—			4,002

Conversion of convertible debentures to stock		—		—		42,427,377			4,243			—		—		98,022			—			102,265

Retirement of shares returned by non-employee Board of Director		—		—		(14,406	)		(1	)		—		—		(1,382	)		—			(1,383	)

Net Income		—		—		—			—			—		—		—			94,369			94,369

Balance, December 31, 2014		425,000		425		60,471,929			6,047			195,610		20		8,631,496			(9,090,685	)		(452,697	)

Conversion of related party employee compensation payable to stock		—		—		19,419,712			1,941			—		—		52,059			—			54,000

Conversion of convertible debentures to stock		—		—		2,340,000			234			—		—		4,446			—			4,680

Conversion of accrued interest on convertible debentures to stock		—		—		4,200,000			420			—		—		5,860			—			6,280

Dissolution of joint venture agreement		—		—		—			—			—		—		(24,740	)		—			(24,740	)

Stock receivable underlying Board of Director fees rescinded		—		—		—			—			—		—		(4,532	)		—			(4,532	)

Conversion of related party interest to stock		—		—		396,891			39			—		—		976			—			1,015

Cancellation of dissolved joint venture shares		—		—		(3,394	)		—			—		—		—			—			—

Net Income		—		—		—			—			—		—		—			229,610			229,610

Balance, December 31, 2015		425,000	$	425		86,825,138		$	8,681			195,610	$	20	$	8,665,565		$	(8,861,075	)	$	(186,384	)

Promissory note payable, secured by vehicle underlying loan having carrying value of $17,760 at December 31, 2014, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017.	$	12,232

Less amounts due within one year		6,099

Long-term portion of notes payable	$	6,133

2016	$	6,099
2017		6,133
2018		—
2019		—
2020		—
Thereafter		—
	$	12,232

Promissory note payable, unsecured, bearing interest at 5% simple interest per annum, due in weekly principal and interest payments of $250, maturing on March 10, 2015.	$	2,764

Promissory note payable, secured by vehicle underlying loan having carrying value of $17,760 at December 31, 2014, bearing interest at 1.9% per annum, due in monthly principal and interest payments of $523, maturing on December 5, 2017.		18,216
		20,980

Less amounts due within one year		8,749

Long-term portion of notes payable	$	12,231

											Period		Period
				Origination		Origination			Period End		End		End		Accrued
Maturity	Interest			Principal		Discount			Principal		Discount		Balance,		Interest
Date	Rate			Balance		Balance			Balance		Balance		Net		Balance		Ref.
5/27/2011		10	%	$	125,000	$	(53,571	)	$	58,750		-	$	58,750	$	34,709		(1	)
5/5/2012		5	%		300,000		(206,832	)		300,000		-		300,000		140,000		(3	)
8/31/2013		5	%		10,000		(4,286	)		10,000		-		10,000		2,183		(4	)
2/10/2014		10	%		5,500		-			472		-		472		216		(5	)
2/10/2014		10	%		39,724		-			2,743		-		2,743		4,158		(6	)
									$	371,965	$	-	$	371,965	$	181,266

					Origination		Original			Period End		Period End			Period End		Accrued
Origination	Maturity	Interest			Principal		Discount			Principal		Discount			Balance,		Interest
Date	Date	Rate			Balance		Balance			Balance		Balance			Net		Balance		Reg.
9/03/21	9/03/24		8	%	$	346,500	$	(12,355	)	$	346,500	$	(3,087	)	$	343,413		-		(1	)
9/03/21	9/03/24		8	%	$	3,500	$	(125	)		3,500		(42	)		3,458		-		(2	)
9/30/22	Demand		8	%	$	66,793	$	(19,250	)		71,734		(19,250	)		52,484		-		(3	)
										$	421,734	$	(22,379	)	$	399,355	$	-

Origination Date	Maturity Date	Interest Rate			Origination Principal Balance		Origination Discount Balance			Period End Principal Balance		Period End Discount Balance		Period End Balance, Net		Accrued Interest Balance		Reg.
11/27/2010	5/27/2011		10	%	$	125,000	$	(53,571	)	$	58,750		—	$	58,750	$	28,829		(1	)
10/31/2012	8/2/2013		8	%		78,500		(50,189	)		4,680		—		4,680		6,280		(2	)
5/3/2011	5/5/2012		5	%		300,000		(206,832	)		300,000		—		300,000		110,000		(3	)
8/31/2011	8/31/2013		5	%		10,000		(4,286	)		10,000		—		10,000		1,679		(4	)
3/14/2012	2/10/2014		10	%		5,500		—			472		—		472		167		(5	)
2/10/2012	2/10/2014		10	%		39,724		—			2,743		—		2,743		3,882		(6	)
										$	376,645	$	—	$	376,645	$	150,837

	Summit Holdings V,			Tierra Vista Partners,			Robert Carmichael
	LLC Note			LLC Note			Note			Total
2023	$	-		$	-		$	71,734		$	71,734
2024		346,500			3,500			-			350,000
Discount		(3,087	)		(42	)		(19,250	)		(22,379	)
Total Loan Payments	$	343,413		$	3,458		$	52,484		$	399,355
Current Portion of Loan Payable	$	(343,413	)	$	(3,458	)	$	(52,484	)	$	(399,355	)
Non-Current Portion of Loan Payable	$	-		$	-		$	-		$	-

(1)	On September 3, 2021, the Company issued a $346,500 note payable to Summit Holding V, LLC as part of the acquisition of SSI. The note carries 8% unsecured convertible promissory note, due September 3, 2024. Payments on the note are to be equivalent to 50% of the adjusted net profit of Submersible Systems, Inc., payable calendar quarterly commencing on December 31, 2021. Interest is payable in company stock at the conversion price of $0.051272 and shall be paid quarterly. The note holder may convert any outstanding principal and unpaid interest at a conversion rate of $0.051272 at any time up to the maturity date of the note. The Company recorded $12,355 for the beneficial conversion feature.
(2)	On September 3, 2021, the Company issued a three-year 8% unsecured convertible promissory note for $3,500 to Tierra Vista Partners, LLC as part of the acquisition of SSI. Payments on the note are to be equivalent to 50% of the adjusted net profit of SSI, payable calendar quarterly commencing on December 31, 2021. Interest is payable quarterly in common stock of the Company at the conversion price of $0.051272 per share. The note holder may convert any outstanding principal and unpaid interest at a conversion rate of $0.051272 at any time up to the maturity date of the note. The Company recorded $125 for the beneficial conversion feature.
(3)	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. There is no amortization schedule for the note, and interest is payable in shares of common stock of the Company at a conversion price equal to the 90 day VWAP of the Company’s stock prior to the quarterly interest payment date. This note is classified as a current liability as the note holder may demand payment or convert the outstanding principal at a conversion rate of $0.021 per share at any time. The Company recorded $19,250 for the beneficial conversion feature.

	Payment Amortization
2024	$	346,500
Total Note Payments	$	346,500
Current portion of note payable		(346,500	)
Non-Current Portion of Notes Payable	$	-

	Marlin Capital BLU3 ()		Mercedes BMG (1)			Navitas 1 BLU3 (2)			PPP Loan BMG ()		PPP loan SSI ()		NFS SSI (3)			Navitas 2 BLU3 (4)			Total

2024		-		11,168			16,629			-		-		26,279			21,228			75,304
2025		-		8,687			15,845			-		-		12,328			21,789			58,649
2026		-		-			6,007			-		-		-			-			6,007
Total Loan Payments	$	-	$	19,855		$	38,481		$	-	$	-	$	38,607		$	44,839		$	139,960
Current Portion of Loan Payable	$	-	$	(11,168	)	$	(16,629	)	$	-	$	-	$	(26,279	)	$	(21,228	)	$	(75,304	)
Non-Current Portion of Loan Payable	$	-	$	8,687		$	21,852		$	-	$	-	$	12,328		$	21,789		$	64,656

	(1)	On August 21, 2020, the Company executed an installment sales contract with Mercedes Benz Coconut Creek for the purchase of a 2019 Mercedes Benz Sprinter delivery van. The installment agreement is for $55,841 with a zero interest rate payable over 60 months with a monthly payment of $931 and is personally guaranteed by Mr. Carmichael. The loan balance as of December 31, 2023 was $19,855 and $31,023 as of December 31, 2022.

	(2)	On May 19, 2021, subsidiary BLU3, executed an equipment finance agreement to finance the purchase of certain plastic molding equipment through Navitas Credit Corp. (“Navitas”). The amount financed is $75,764 payable over 60 equal monthly installments of $1,611 (the “Navitas 1”). The equipment finance agreement contains customary events of default. The loan balance as of December 31, 2023 was $38,481 and $54,930 as of December 31, 2022.

	(3)	On June 29, 2022, SSI executed an equipment financing agreement with NFS Leasing (“NFS Leasing”) to secure replacement production molds. The total purchase price of the molds was $84,500 of which $63,375 was financed by NFS Leasing on August 15, 2022. The financing agreement has a 33 month term beginning in August 2022 with a monthly payment of $2,571. The financing agreement contains customary events of default, is guaranteed by the Company and NFS Leasing has a lien on all of the assets of SSI. The loan balance as of December 31, 2023 and December 31, 2022 was $38,607 and $60,804, respectively.

	(4)	On December 12, 2022, BLU3 executed an equipment finance agreement to finance the purchase of certain plastic molding equipment through Navitas Credit Corp. (“Navitas”). The amount financed is $63,689 payable over 36 equal monthly installments of $2,083 (“Navitas 2”). The equipment finance agreement contains customary events of default. The loan balance as of December 31, 2023 was $44,839 and $63,689 as of December 31, 2022.

Holding Period from Closing Date	Percentage of shares eligible to be sold or transferred
6 months	Up to 25.0	%
9 months	Up to 50.0	%
12 months	Up to 100.0	%

	Fair Value
Rental Inventory	$	48,602
Fixed Assets		50,579
Retail Inventory		60,819
Right of use asset		29,916
Lease liability		(29,916	)
Net Assets Acquired	$	160,000

	2023		2022
Balance, January 1	$	249,986	$	249,986
Acquisitions of Submersible Systems, Inc.		-		-
Balance, December 31	$	249,986	$	249,986

Deferred tax assets:
Equity based compensation	$	97,276
Allowance for doubtful accounts		9,520
Net operating loss carryforward		1,015,748
On-line training certificate reserve		818
Total deferred tax assets		1,123,362
Valuation allowance		(1,120,842	)

Deferred tax assets net of valuation allowance		2,520

Less deferred tax assets – non-current, net of valuation allowance		2,330

Deferred tax assets – current, net of valuation allowance	$	190

	Amortization Period (Years)		Cost		Accumulated Amortization			Net Book Value
Intangible Assets Subject to amortization
Trademarks		15	$	121,000	$	(18,779	)	$	102,221
Customer Relationships		10		600,000		(140,000	)		460,000
Non-Compete Agreements		5		22,000		(10,266	)		11,734
Total			$	743,000	$	(169,045	)	$	573,955