What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-04-22 compared with 2021-03-31 · 1983 added, 1711 removed, 347 unchanged (91% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

maintain “disclosure controls and procedures”

as such term is defined in Rule 13a-15(e) under Exchange Act.

and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter

how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls

and procedures are met.

Additionally, in designing disclosure controls and procedures, our management necessarily was required

to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

The design of

any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and

there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

on their evaluations as of the end of the period covered by this report, our Chief Executive Officer and our Chief 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,

that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not

be prevented or detected.

management, including our Chief Executive Officer and our Chief 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 the end

of the periods covered by this report.

Based upon the evaluation, our Chief Executive Officer who also serves as our principal

financial and accounting officer have concluded that the disclosure controls and procedures as of December 31, 2020 were not effective

maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under Exchange Act.

and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how

well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures

The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of

future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluations as of the end of the period covered by this report, our Principal Executive Officer and Principal Financial

Officer concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required

to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time

periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer,

to allow timely decisions regarding required disclosure as a result of continuing material weaknesses in our internal control over financial

reporting described below.

A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood

that a material misstatement of annual or interim financial statements will not be prevented or detected.

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, 2021

and based upon the such evaluation, have concluded that the disclosure controls and procedures as of December 31, 2021 were not effective

due to the material weaknesses identified below.

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

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.

Report on Internal Control over Financial Reporting

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.

management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020.

The framework used by management in making that assessment was the criteria set forth in the documents entitled “2013 Internal

Controls –

Integrated Framework”

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures

were not effective as of December 31, 2020 and the material weaknesses in internal controls over financial reporting (“ICFR”)

existed as more fully described below.

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, which have caused management to conclude

that as of December 31, 2020 our ICFR were not effective at the reasonable assurance level:

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.

management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021.

The framework

used by management in making that assessment was the 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 assessment,

management concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December

31, 2021 and that material weaknesses in internal controls over financial reporting described below existed.

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

Management has identified the following material weaknesses:

are an insufficient number and lack of qualified accounting department and administrative personnel and support;

are insufficient written policies and procedures to ensure the correct application of accounting and financial reporting with

respect to GAAP and SEC disclosure requirements;

segregation of duties, oversight of work performed and lack of controls in our finance and accounting functions due to limited

Company’s systems that impact financial information and disclosures have ineffective information technology controls;

controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial

statements are reflected and properly recorded;

evaluation of (i) the disclosure controls and procedures, and (ii) our ICFR was not sufficiently comprehensive due to limited

Notwithstanding

the existence of these material weaknesses in our ICFR, management believes that the consolidated financial statements included

in this Form 10-K present in all material respects our financial condition, results of operations and cash flows for the periods

are insufficient written policies and procedures to ensure the correct application of accounting and financial reporting with respect

to GAAP and SEC disclosure requirements;

segregation of duties, oversight of work performed and lack of controls in our finance and accounting functions due to limited personnel;

Company’s systems that impact financial information and disclosures have ineffective information technology controls;

controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial statements

are reflected and properly recorded;

of disclosure controls and procedures was not sufficiently comprehensive due to limited personnel.

Control Remediation Efforts .

Management expects to remediate the material weaknesses identified above as follows:

to sufficient resources, management expects to remediate the material weaknesses identified above as follows:

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.

of duties will be analyzed and adjusted Company-wide as part of the internal controls implementation and documentation of

those controls and procedures that is expected to commence in 2021.

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.

of duties will be analyzed and adjusted Company-wide as part of the internal controls implementation and documentation of those controls

and procedures that is expected to commence in 2021.

Company plans on evaluating various accounting systems to enhance our system controls.

will continue to monitor and evaluate the effectiveness of our ICFR 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 ICFR.

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.

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.

in Internal Control over Financial Reporting

have been no changes in our ICFR during our last fiscal quarter that has materially affected, or is reasonably likely to materially

affect, our internal control over financial reporting.

have been no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter that has materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Regarding Foreign Jurisdictions that Prevent Inspections.

Executive Officers, and Corporate Governance.

following are our executive officers and directors .

President, and Chief Financial Officer

following are the names, ages and positions of our current executive officers and directors.

President, and Chief Financial Officer and Director

Executive Officer and Director

Key Employees

Blake Carmichael

Executive Officer and President of BLU3

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.

Since April 2004, Mr.

Carmichael has served as our Chairman and President, and from April 2004 until November

2020 he also served as our Chief Executive Officer.

He also serves as our Chief Financial Officer.

Carmichael is the holder

and co-holder of numerous patents, some of which are used by our company and several other major companies in the diving industry.

Carmichael was selected to serve on the board of directors for his general business management with specific experience in

2020 served as our Chief Executive Officer.

Carmichael has served as our Chief Financial Officer since 2017 and a director since

Carmichael was selected to serve as a director for his general business management experience with specific experience in the

diving industry.

Carmichael is the father of Blake Carmichael.

Constable as served as our Chief Executive Officer and member of our board of directors since November

Prior to joining our company, from August 2020 through the November 2020 Mr.

Constable provided consulting services.

Constable has over 16 years experience as serving as a Chief Financial Officer.

From 2003 through February 2020 he served as Chief

Financial Officer of John Keeler & Co., Inc., d/b/a Blue Star Foods, a privately held Florida corporation, an international

seafood company.

In 2018 John Keeler & Co., Inc.

merged into Blue Star Foods Corp., a Miami, Florida-based sustainable seafood

company (OTC Pink:

Constable served as Chief Financial Officer and a member of Blue Star Foods Corp.’s board

of directors from the closing of the merger through February 2020.

Prior thereto, from 1999 to 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.

Constable as served as our Chief Executive Officer and a director since November 2020.

Constable also currently

sits on the board of directors of Bon Natural Life, Ltd.

BON), and serves as the Chairman of the audit committee.

Prior to joining

our company, from August 2020 through the November 2020, Mr.

Constable provided business and financial consulting services.

through February 2020 Mr.

Constable served as Chief Financial Officer of John Keeler & Co., Inc., d/b/a 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

Constable served as Chief Financial Officer and a director of Blue Star Foods Corp.

February 2020.

Prior thereto,

from 1999 to 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,

Constable was a commercial banker at Mercantile Bankshares in Baltimore, Maryland, Finova Capital Corporation and Capital

Bank, both in south Florida.

During 2020 Mr.

Constable has also provided business and financial consulting services.

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.

Constable received his B.S.

in Finance with an Accounting Minor from the Merrick School of Business at the University of Baltimore.

Constable’s experience with public companies and over 30 year background in finance and accounting led to the decision

to appoint him to the board of directors.

Hyatt was appointed to the Company’s board of directors in March 2019.

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) and Hyatt Buick & GMC (since 2001).

In the past his ownerships also included Myrtle Beach Suzuki

(from 2004 until 2012), Sun Coast Mazda and Mitsubishi (from 2001 until 2009), Stone Mountain Chevrolet (from 2001 until 2009.

in Finance with an Accounting Minor from the Merrick School

of Business at the University of Baltimore in 1989.

Constable was selected to serve as a director for his experience with public

companies and over 30 years background in finance and accounting.

Hyatt has served as a director since March 2019.

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) and Hyatt Buick

& GMC (since 2001).

In the past his ownerships also included 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 has served as Wholesale Purchase Director with Lamar Ferrel Chevrolet, and from 1991 to 1994 as General

Manager of Bob Harris Ford.

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.

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.

Hyatt sits on the American Cross Heroes committee and is the winner of the

Jefferson Award (2017) for his community involvement.

Hyatt was selected to serve on the board of directors for his general

business management experience.

Hyatt has owned and operates the Gilligan Island Funland Golf amusement park.

Hyatt sits on the American Cross Heroes

committee and is the winner of the Jefferson Award (2017) for his community involvement.

Hyatt was selected to serve on the board

of directors for his general business management experience.

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.

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.

Blake Carmichael is the son of Robert

are no family relationships between any of the executive officers, directors and key employees other than as set

director is elected at our annual meeting of stockholders and holds office until the next annual meeting of stockholders, or until

his successor is elected and qualified.

If any director resigns, dies or is otherwise unable to serve out his or her term, or

if the Board increases the number of directors, the Board may fill any vacancy by a vote of a majority of the directors then in

office, although less than a quorum exists.

A director elected to fill a vacancy shall serve for the unexpired term of his or

her predecessor.

Our board of directors may consist of up to nine directors.

Leadership Structure and Board’s Role in Risk Oversight

board of directors is comprised of two members of our management and one independent director.

Given the size of our company,

our Board believes the current leadership structure is appropriate for our company.

As our company grows, we expect to expand

our board of directors through the appointment of independent directors.

Risk is inherent with every business, and how well a

business manages risk can ultimately determine its success.

We face a number of risks, including economic risk, liquidity risk,

product liability risk, operational risk, strategic risk and reputation risk.

Management is responsible for the day-to-day

management of the risks we face and have responsibility for the oversight of risk management in their dual roles as directors.

He joined our company in May 2017

as an electrical engineer with a primary focus to develop new battery powered hookah diving products.

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.

are no family relationships between any of the executive officers and directors.

of the Board of Directors

Stockholder Nominations;

Audit Committee Financial Expert

have not established any committees comprised of members of our board of directors, including an Audit Committee, a Compensation

Committee or a Nominating Committee, or any committee performing similar functions.

The functions of those committees are being

undertaken by our board of directors as a whole.

do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including

the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating

director nominees, nor do we have a policy regarding director diversity.

We have not adopted a policy regarding the handling of

any potential recommendation of director candidates by our stockholders, including the procedures to be followed.

Our Board has

not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate

to serve on our board of directors and we do not anticipate that any of our stockholders will make such a recommendation in the

While there have been no nominations of additional directors proposed, in the event such a proposal is made, all

members of our Board will participate in the consideration of director nominees.

In considering a director nominee, it is likely

that our Board will consider the professional and/or educational background of any nominee with a view towards how this person

might bring a different viewpoint or experience to our Board.

Constable is an “audit committee financial expert”

within the meaning of Item 401(e) of Regulation S-K.

an “audit committee financial expert”

is an individual member of the audit committee or board of directors who:

generally accepted accounting principles and financial statements;

able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;

experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our

financial statements;

internal controls over financial reporting;

audit committee functions.

securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are

not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include

“independent”

directors, nor are we required to establish or maintain an Audit Committee or other committee of our

board of directors.

following table provides information concerning the compensation paid to our independent directors for their services as members

of our board of directors during 2020.

Carmichael’s and Mr.

Constable’s director compensation is included in the

Executive Compensation table appearing later in this report.

For awards of stock, the aggregate grant date fair value is computed

in accordance with FASB ASC Topic 718.

The information in the following table excludes any reimbursement of out-of-pocket

travel and lodging expenses which we may have paid:

plan compensation

Mikkel Pitzner (1)

Jeffrey Guzy (2)

Pitzner resigned from our Board of Directors in January 2020.

Guzy resigned from our Board of Directors in November 2020.

with Section 16(a) of the Exchange Act

applicable to our company.

Company has adopted a formal code of ethics that applies to our principal executive officer and principal accounting officer,

all other officers, directors and employees.

The code of ethics was provided as an exhibit to the Annual Report on Form 10-K for

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.

aware of any other conflicts of interest with any of our executive officers or directors.

are not a “listed company” under SEC rules and are therefore not required to have an audit committee comprised of independent

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

following table provides information concerning the compensation paid to our independent director for services in such capacity during

the year ended December 31, 2021.

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.

No other director received compensation for serving in such capacity in 2021.

or paid in cash

plan compensation

Section 16(a) Reports

Company has not as yet adopted a code of ethics applicable to our principal executive officer, principal financial officer, principal

accounting officer or controller, or persons performing similar functions as required by the Sarbanes-Oxley Act of 2002 due to our small

size and limited resources and because management’s attention has been focused on matters pertaining to business operations.

Communications

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 25th Avenue, Suite 1, Pompano Beach, Florida 33069, Attention:

Shareholders who would like their submission directed to a member of the Board may so specify, and the communication

will be forwarded, as appropriate.

following table summarizes all compensation recorded by us in the past two years for:

principal executive officer or other individual serving in a similar capacity;

two most highly compensated executive officers other than our principal executive officer who were serving as executive officers

at December 31, 2020;

to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving

as an executive officer at December 31, 2020.

definitional purposes, these individuals are sometimes referred to as the “named executive officers.”

included in the “Stock Awards”

column represent 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 11

of the notes to our consolidated financial statements appear later in this report.

Information regarding his compensation

is set forth below.

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 25th Avenue, Suite 1, Pompano Beach, Florida 33069, Attention:

Christopher H.

Shareholders who would like their submission directed to a member of the Board may so specify, and the communication will be forwarded,

as appropriate.

following table provides certain information regarding compensation awarded to, earned by or paid to our Chief Executive Officer and

the other executive officer with compensation exceeding $100,000 during fiscal 2021 (each a “Named Executive Officer”).

Compensation Table

1 unchanged sentence

Non-qualified

Christopher H Constable,

President and CFO (2)

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

Carmichael served as our Chief Executive Officer from 2004 until November 2020 when Mr.

Constable joined our company.

Carmichael continues to serve as Chairman, President and Chief Financial Officer.

awards included $31,904 representing the fair value of 725,087 shares of common stock issued to Mr.

Carmichael for his participation

in the BLU3-VENT project.

On December 11, 2018, the Company awarded 20,000,000 common shares to Mr.

Carmichael as an incentive

bonus, subject to his continued employment through January 2, 2020.

Expense for the issuance was recognized over the full vesting

period, and accordingly, we recognized stock compensation expense of $188,144 during 2019 and stock compensation expenses of $1,280

April 14, 2020 the Company issued Mr.

Carmichael an option to purchase up to 125,000,000 shares of common stock at an exercise price

of $0.045 subject to vesting as discussed in note 11 of the audited financial statements attached to this report.

Company expensed $655,515 of the fair market value of these options in 2020.

continues to serve as Chairman, President and Chief Financial Officer.

the award of 725,087 shares of common stock issued to Mr.

Carmichael for his participation in the BLU3-VENT project.

On April 14, 2020 the Company issued Mr.

Carmichael an option to purchase

up to 125,000,000 shares of common stock at an exercise price of $0.045 subject to vesting as discussed in note 13 of the audited financial

statements attached to this report.

The Company expensed $874,022and $655,515 of the fair market value of these options in 2021 and 2020,

respectively.

On July 29, 2019 the Company issued Mr.

Carmichael five year options to purchase up to 20,761,904 shares of common stock at an exercise price of $0.018 per share, subject

to vesting over a period of six months.

We recognized stock option expense of $10,724 and $76,423 during 2020 and 2019.

Other Compensation for Mr.

Carmichael for 2020 includes (i) $18,000 in director compensation (ii) $21,720 in health insurance, and

(iii) an aggregate of $67,808 in royalties paid to an entity controlled by Mr.

Carmichael under the terms of an Exclusive License

All Other Compensation for Mr.

Carmichael for 2019 includes (i) $18,000 in director compensation (ii) $21,720 in health

insurance, and (iii) an aggregate of $50,642 in royalties paid to an entity controlled by Mr.

Carmichael under the terms of

an Exclusive License Agreement.

Carmichael five year options to purchase up to 20,761,904 shares of common stock

at an exercise price of $0.018 per share, subject to vesting over a period of six months.

We recognized stock option expense of $10,724

(i) $18,000 in director compensation (ii) $12,313 in health insurance, and (iii) an aggregate of $75,161 in royalties paid to an entity

controlled by Mr.

Carmichael under the terms of a license agreement with the Company.

(i) $18,000 in director compensation (ii) $21,720 in health insurance, and (iii) an aggregate of $67,808 in royalties paid to an

entity controlled by Mr.

Carmichael under the terms of a license agreement with the Company.

Constable has served as our Chief Executive Officer since November 2020.

includes stock issued to Mr.

Constable on behalf of Brandywine, LLC for consulting services prior to his employment.

issued 2,795,000 shares with a fair value of $45,659.

November 5, 2020 the Company entered into an option agreement with Mr.

Constable the details of which are disclosed in Note

11 of the audited financial statements included in this report.

The Company expensed vested options of 5,434,783 shares

with a fair value of $106,890.

Equity Awards at Fiscal Year End

following table provides information concerning unexercised stock options, stock that has not vested and equity incentive plan

awards for each named executive officer outstanding as of December 31, 2020, together with unexercised stock options, stock

that has not vested and equity incentive plan awards for each of our other executive officers outstanding as of December 31, 2020:

the grant date fair value of 2,795,000 shares of common stock issued to Mr.

Constable on behalf of Brandywine, LLC for consulting

services provided to the Company prior to his employment.

On November 5, 2020 the Company entered into an option agreement with Mr.

Constable the details of which are disclosed in Note 14 of the audited financial statements included in this report.

The Company expensed

vested options of 5,434,783 shares with a fair value of $106,890 in 2020 and the Company expensed 2,000,000 with a fair market value of

$82,734 in 2021.

On November 5, 2021 the Company entered an option agreement with Mr.

Constable the details of which are disclosed in

Note 13 of the audited financial statements included in this report.

The Company expensed vested options of 2,403,846 shares with a fair

value of $98,976 which was fully expensed in 2021.

health insurance premiums paid by the Company on behalf of Mr.

May 26, 2021, the Company adopted the Company’s Equity Compensation Plan (the “Plan”).

The Plan provides for the award

of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants

who provide services to the Company.

The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company’s

Board of Directors, or in the absence of an Administrator, by the Board.

The Company has reserved 25,000,000 for issuance under the Plan.

The term of the Plan is ten years.

Equity Awards at December 31, 2021

table below reflects all outstanding equity awards made to each Named Executive Officer that were outstanding at December 31, 2021.

Unexercisable

Christopher H.

of our executive officers

are not a party to an employment agreement with Mr.

His compensation is determined at the discretion of the board

of directors, of which he is a member, and is subject to change from time to time.

While his base compensation remained unchanged

in 2020 from 2019, in 2020 the board of directors has granted Mr.

Carmichael certain additional compensation.

In April 2020 the

Company entered into a Non-Qualified Stock Option Agreement with Mr.

Carmichael (the “Carmichael Option Agreement”).

Under the terms of the Carmichael Option Agreement, as additional compensation we granted Mr.

Carmichael an option to purchase

up to an aggregate of 125,000,000 shares of our common stock at an exercise price of $0.045 per share, of which the right to purchase

75,000,000 shares of common stock is subject to vesting upon the achievement of the net revenue milestones set forth below (the

“Net Revenue Portion of the Option”) and the right to purchase 50,000,000 shares of common stock is subject to vesting

upon official notice of the listing of our common stock on The Nasdaq Stock Market, the NYSE American LLC or

the right to purchase 25,000,000 shares of our common stock shall vest at such time as we report cumulative consolidated net revenues,

including revenues from related parties and revenues recognized by our company arising out of any subsequent acquisitions, mergers,

or other business combinations following the closing date of such transaction (the collectively, “Carmichael Net Revenues”),

in excess of $3,500,000 in the aggregate over four consecutive fiscal quarters commencing May 1, 2020 and ending on April 30,

2023 (the “Carmichael Net Revenue Period”);

the right to purchase an additional 25,000,000 shares of common stock shall vest at such time as we report cumulative Carmichael

Net Revenues in excess of $7,000,000 in the aggregate over four consecutive fiscal quarters during the Carmichael Net Revenue

the right to purchase an additional 25,000,000 shares of common stock shall vest at such time as we report cumulative Carmichael

Net Revenues in excess of $10,500,000 in the aggregate over four consecutive quarters during the Carmichael Net Revenue Period.

Carmichael Option Agreement provides that the Option is exercisable by Mr.

Carmichael on a cashless basis.

The option is not transferrable

Carmichael, and he must remain an employee of our company as an additional term of vesting.

Once a portion of the option

vests, it is exercisable by Mr.

Carmichael for 90 days.

Any portion of the option which does not vest during the Carmichael Net

Revenue Period lapses and Mr.

Carmichael has no further rights thereto.

May 21, 2020 the Board of Directors agreed to provide incentive compensation to six individuals who are either our employees or

independent contractors, including Mr.

Carmichael, for additional time spent by these individuals on our BLU3-Vent project.

recognition of the additional time devoted to this project, and to further incentivize him, Mr.

Carmichael received a total of

$31,904 of incentive compensation which was paid through the issuance of 725,087 shares of our common stock.

November 5, 2020 we entered into a three year employment agreement (the “Constable Employment Agreement”) pursuant

Constable serves as our Chief Executive Officer of the Company.

Pursuant to the Constable Employment Agreement, Mr.

Constable also agreed to serve on our Board of Directors and we agreed to nominate him to serve on the Board during the term of

the Constable Employment Agreement.

In consideration for his services, we agreed to (i) pay Mr.

Constable an annual base salary

of $200,000, payable in accordance with the customary payroll practices of the Company, and (ii) issuable upon execution of the

Constable Employment Agreement and on each anniversary of the date of the agreement during the term, issue him 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.

Initially he received

an initial stock option grant to purchase 5,434,783 shares of the Corporation’s common stock at an exercise price of $0.0184

per share pursuant to an option award agreement (the “Option Award Agreement”).

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

20,761,904 (1)

25,000,000 (2)

5,434,783 (3)

2,000,000 (4)

2,403,846 (5)

fully vested in January 2020

vest based upon certain corporate milestones as discussed in Note 13 of the financial

statements included in this Annual Report.

fully vested in November 2020

vest based upon certain corporate milestones as discussed in Note 13 of the financial

statements included in this Annual Report.

fully vested in November 2021

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.

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.

agreement may be terminated for cause, upon his death or disability, or by the Company without cause.

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

$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

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

(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.

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.

agreement may be terminated for “cause” (as defined in the Agreement), upon his death or disability, or by the Company without

Furthermore, Mr.

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,

Constable nor his estate (as the case may be) is entitled to any severance or other benefits following the date of

If the Company should terminate the agreement without cause or Mr.

Constable terminates for good reason, the Company

is obligated to continue to pay him his base salary for a period of six months.

The agreement also contains customary confidentiality,

non-disclosure and indemnification provisions.

Blake Carmichael is Compensated

is employed with the Company as a full time employee and CEO of BLU3 and focused on the operations of the Company’s BLU3

In September 2020, his salary was adjusted to $78,000 per year.

There is no written employment agreement between

the Company and Blake Carmichael.

Blake Carmichael also received a total of $37,369 of incentive compensation which was paid through the issuance of

849,305 shares of our common stock in for his additional time spent on our BLU3-Vent project.

Authorized for Issuance under Equity Compensation Plans

following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well

as any equity compensation plans not approved by our shareholders as of December 31, 2020.

of securities to be issued upon exercise of outstanding options, warrants and rights

average exercise price of outstanding options, warrants and rights

of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column

Plans approved by our shareholders:

Plans not approved by shareholders

see note 11 of the notes to our audited consolidated financial statements appearing later in this report for more information

on these outstanding options.

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.

Carmichael Employment Agreement

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.

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

voting securities consist of our common stock and our Series A Convertible Preferred Stock.

Each share of our Series A Convertible

Preferred Stock is convertible into a 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 Convertible

Preferred Stock are entitled to 250 votes for each share held.

Our common stock and Series A Convertible Preferred Stock votes

together as on any matters submitted to our shareholders for a vote.

following table sets forth certain information known to us with respect to the beneficial ownership of our voting securities by:

(1) all persons who are beneficial owners of 5% or more of any class of our voting securities;

(2) each of our directors;

each of our executive officers;

and (4) our directors and executive officers as a group.

percentage ownership in the following table is based on 337,107,415 shares of common stock and 425,000 shares of our Series

A Convertible Preferred Stock outstanding as of March 31, 2021.

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,

we have assumed the conversion of the shares of Series A Convertible Preferred Stock and the shares of common stock subject to

options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 31, 2021,

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 the address for each person below is c/o Brownie’s Marine Group, Inc., 3001

NW 25th Avenue, Suite 1, Pompano Beach, FL 33069.

and Address of Beneficial Owner

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 a 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.

Ownership of Certain Beneficial Owners and Management

following table sets forth, as of April 19, 2022, the number of shares of common stock and Series A Stock beneficially owned by

(i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company

to be the beneficial owner of more than 5% of the outstanding common stock;

(ii) each of our Named Executive Officers and (iii) all officers

and directors as a group.

Information relating to beneficial ownership of common stock by our principal stockholders and management is

based upon information furnished by each person using “beneficial ownership” concepts under the rules of the SEC.

rules, a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which

includes the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the

disposition of the security.

The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire

beneficial ownership within 60 days.

Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities,

and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest.

noted below, each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder’s

address is c/o Brownie’s Marine Group, Inc., 3001 NW 25th Avenue, Suite 1, Pompano Beach, Florida 33069.

The percentages below

are calculated based on 404,656,793 issued and outstanding shares of common stock and 425,000 shares of Series A Stock outstanding

as of April 19, 2022.

and Address of

and Nature of Beneficial Ownership

1 unchanged sentence

85,006,034 (1)

Christopher H.

9,838,629 (2)

133,847,065 (3)

All directors and executive officers

as a group (three persons)

180,882,882 (1)(2)(3)

5% Shareholders

directors and executive officers as a group (three persons)

228,781,648 (1)(2)(3)

135 Weston Road, Suite 328, Weston, Florida 33326

Holdings V, LLC

Bannerman Road, Suite D208

Tallahassee, Florida 32312

A Convertible Preferred Stock

Series A Convertible

Preferred Stock

All directors and executive officers

as a group (one person)

the following:

(i) 14,587,190 outstanding shares held by 940A, an entity over which Mr.

Carmichael has voting and dispositive

(ii) an aggregate of 23,320 shares issuable upon conversion of 425,000 shares of Series A Convertible Preferred Stock;

and (iii) options to purchase an aggregate of 20,761,904 shares of common stock at an exercise price of $0.018 per share.

Excludes unvested options to purchase 125,000,000 shares of common stock at an exercise price of $0.045 per share.

options to purchase an aggregate of 5,434,783 shares of common stock at an exercise price of $0.0184 per share, but excludes

(i) unvested five-year options to purchase shares of common stock vesting on the second and third anniversary of his employment

agreement equal $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, and (ii) unvested options to purchase 30,000,000 shares of common stock at an exercise

price of $0.0184 per share.

2,647,065 shares of outstanding shares held by Mr.

Hyatt’s minor child over which he has voting and dispositive

is 135 Weston Road, Suite 328, Weston, FL 33326.

A Convertible Preferred Stock

All directors and executive officers as a group (one person)

(i) 14,587,190 shares held by 940A Associates, Inc., a corporation over which Mr.

Carmichael is the sole owner and has voting and

dispositive power;

(ii) an aggregate of 23,320 shares issuable upon conversion of 425,000 shares of Series A Stock and (iii) options

to purchase an aggregate of 20,761,904 shares of common stock at an exercise price of $0.018 per share.

(iv) options to purchase

an aggregate of 25,000,000 shares of common stock at an exercise price of $0.045.

Does not include the voting power over 106,250,000

shares by virtue of Mr.

Carmichael beneficial ownership of 425,000 shares of Series A Stock.

(i) options to purchase an aggregate of 7,434,783 shares of common stock at an exercise price of $0.0184 per share, and (ii) options

to purchase 2,403,846 shares of common stock at an exercise price of $0.0401 per share.

3,847,065 shares of common stock held by Mr.

Hyatt’s daughter.

Relationships and Related Transactions, and Director Independence.

sell products to Brownie’s Southport Divers, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys, companies

owned by the brother of Mr.

Terms of sale are no more favorable than those extended to any of our other customers

with similar sales volumes.

Combined net revenues from these entities for 2020 and 2019, totaled $821,474 and $653,315, respectively.

Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht

Toys at December 31, 2020, was $29,443, $6,643 and $8,237, respectively.

Accounts receivable from Brownie’s SouthPort

Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys December 31, 2019, was $28,555, $10,914, and $4,973,

respectively.

also sell products to Brownie’s Global Logistics, LLC.

(“BGL”) and 940 Associates, Inc.

(“940 A”), entities

wholly-owned by Robert M.

Terms of sale are more favorable than those extended to our regular customers, but no more favorable

than those extended to our strategic partners.

Terms of sale to BGL approximate cost or include a nominal margin.

These terms are consistent

with those extended to our strategic partners.

Strategic partner terms on a per order basis include promotion of our technologies and

“Brownie’s”

brand, offered only on products or services not offered for resale, and must provide for reciprocal terms

or arrangements to us on strategic partners’

product or services.

BGL is fulfilling the strategic partner terms by providing exposure

for our technologies and “Brownie’s”

brand in the yachting and exploration community world-wide through its operations.

Combined net revenues from these three entities for 2020 and 2019 were $16,943 and $9,427, respectively.

In addition, from time to time

sell products to Brownie’s Southport Divers, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys, companies

owned by the brother of Robert Carmichael.

Combined net revenues from these entities for the years December 31, 2021 and 2020, totaled

$1,116,085 and $821,474, respectively.

Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach

Divers, and Brownie’s Yacht Toys at December 31, 2021, were $50,818, $7,195 and $17,779, respectively.

Accounts receivable from

Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys December 31, 2020, was

$29,443, $6,643, and $8,237, respectively.

also sell products to Brownie’s Global Logistics, LLC (“BGL”) and 940 Associates, Inc.

(“940 A”), entities

wholly-owned by Robert Carmichael.

Combined net revenues from these three entities for the years ended December 31, 2021 and 2020 were

$245 and $16,943, respectively.

In addition, from time to time Mr.

Carmichael purchases products from us for his personal use.

He either pays the amount at the time of purchase or we provide him a

courtesy account which he settles from time to time.

Accounts receivable from BGL, 940 A and Mr.

Carmichael totaled $23,321 at

December 31, 2020 and $4,320 and $12,603, respectively, at December 31, 2019.

owed BGL an accounts payable to related parties of $102,360 and $263,544 at December 31, 2020 and 2019, respectively, which

represents purchase of inventory including batteries for Sea Lion (battery operated unit) and Honda engines for our regular gasoline

powered units.

are a party to license agreements with 940 A to license the trademark “Brownies Third Lung”, “Tankfill”, “Brownies

Public Safety”

and various other related trademarks as listed in the agreements.

Total royalty fees paid to 940 A in 2020 and 2019

totaled $67,808 and $50,642, respectively.

Company has one independent director, Mr.

Hyatt, who is considered “independent”

as defined under Rule

5605 of the Nasdaq Marketplace Rules.

Accounts receivable

from BGL, 940 A and Mr.

Carmichael totaled $897 at December 31, 2021 and $23,321, respectively, at December 31, 2020.

owed BGL $32,267 and $102,360 at December 31, 2021 and 2020, 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, 2021, the Company also

had an amount due of $5,000 to Mr.

Carmichael for an advance to BLU3,Inc.

are a party to an exclusive license agreement, dated February 22, 2005, with 940 A to license the trademark “Brownies Third Lung”,

“Tankfill”, “Brownies Public Safety” and various other related trademarks as listed in the agreement.

The agreement

provides for a royalty to be paid equal to the greater of 2.5% on all sales of Trebor or $15,000 per quarter.

Total royalty fees paid

to 940 A in the years ended December 31, 2021 and 2020 totaled $75,161 and $67,808, respectively.

The Company had accrued royalties of

$7,735 and $4,280 for the years ended December 31, 2021 and 2020, respectively.

of December 31, 2021 Christopher Constable had an open accounts receivable balance of $428.

April 1, 2019, the Company entered into a director agreement with Charles Hyatt pursuant to which Mr.

Hyatt is paid $1,500 per quarter

for serving as a director.

January 9, 2020, the Company entered into a director agreement with Jeffrey Guzy pursuant to which Mr.

Guzy is paid $1,000 per month

for serving as a director and received an immediately exercisable three-year option to purchase 2,000,000 shares of common stock at an

exercise price of $.0229 per share.

January 6, 2020, the Company issued 2,647,065 shares of common stock to Grace Hyatt, the daughter of Charles Hyatt, a director, in a

private offering for proceeds of $45,000.

February 23, 2020, the Company issued 12,500,000 shares of common stock upon the exercise of a warrant at an exercise price of $0.01

per share to Charles Hyatt, a director, for proceeds of $125,000.

April 2, 2020, the Company issued 10,000,000 shares of common stock upon the exercise of a warrant at an exercise price of $0.01 per

share, to Charles Hyatt, a director, for proceeds of $100,000.

April 6, 2020, the Company issued 10,000,000 shares of common stock at a purchase price of $0.025 per share to Charles Hyatt, a director,

for proceeds of $250,000.

August 10, 2020, the Company engaged Brandywine, LLC (“Brandywine”) to provide accounting advisory and consulting services

pursuant to a letter agreement.

As compensation for such services, Brandywine was paid an hourly rate of $125.00 and was issued a total

number of 2,795,000 shares of common stock (10,000 shares for each hour billed) in August 2020.

Christopher Constable, our Chief Executive

Officer is the owner of Brandywine.

This agreement terminated upon the execution of the Constable Employment Agreement.

November 5, 2020, we entered into the Constable Employment Agreement with Christopher Constable, our Chief Executive Officer.

March 25, 2021, the Company issued 27,500,000 shares of common stock to Charles Hyatt, a director, in a private offering for proceeds

August 1, 2021, we entered into the Blake Carmichael Employment Agreement with Blake Carmichael, Chief Executive Officer of BLU3, and

son of Robert Carmichael, the Company’s Chairman, President and a director.

September 1, 2021, the Company issued 10,000,000 units, each unit (“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 $0.025 per share to Charles Hyatt

a director, in a private offering for proceeds of $250,000.

September 1, 2021, the Company issued 600,000 Units to Grace Hyatt, the adult child of Charles Hyatt, in a private offering for proceeds

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.

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.

Carmichael, the Chief Executive Officer of BLU3 is the son of Robert Carmichael, the Company’s Chairman, President and a director.

Company has one independent director, Charles Hyatt, who is considered “independent” as defined under Rule 5605 of the Nasdaq

Marketplace Rules.

Accounting Fees and Services.

1 unchanged sentence

Audit-Related Fees

All Other Fees

This category includes the audit of our annual financial statements, review of financial statements included

in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting

firm in connection with engagements for those fiscal years.

This category also includes advice on audit and accounting matters

that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related

This category consists of assurance and related services by the independent registered public accounting firm

that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under

“Audit Fees.”

The services for the fees disclosed under this category include consultation regarding our correspondence

with the Securities and Exchange Commission and other accounting consulting.

This category consists of professional services rendered by our independent registered public accounting firm

for tax compliance and tax advice.

The services for the fees disclosed under this category include tax return preparation and

technical tax advice.

Other Fees —

This category consists of fees for other miscellaneous items.

board of directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting

Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services.

are subject to pre-approval by the board, or, in the period between meetings, by a designated member of the board.

Any such approval

by the designated member is disclosed to the entire Board at the next meeting.

The audit and tax fees paid to the auditors with

respect to 2019 and 2018 were pre-approved by the entire board of directors.

fees consist of fees for professional services rendered for the audit of the Company’s consolidated financial statements included

in the Company’s Annual Report on Form 10-K and the review of financial statements included in the Company’s Quarterly Reports

on Form 10-Q.

The other fees of $37,500

consist of expenses associated with the audit of the Company’s acquisition in September, 2021.

Additionally we incurred tax related fees of $2,000 for each of the years ended December 31, 2021 and 2020.

Administration

of the Engagement;

Pre-Approval of Audit and Permissible Non-Audit Services

have not yet established an audit committee.

Until then, there are no formal pre-approval policies and procedures.

The audit and tax

fees paid to the auditors with respect to 2021 and 2020 were pre-approved by the entire board of directors.

percentage of hours expended on Liggett & Webb, PA’s respective engagement to audit our financial statements for the most recent

fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees

Financial Statements Schedules

(a) (1) Financial

consolidated financial statements and Report of Independent Registered Accounting Firm are listed in the “Index to Financial

Statements and Schedules”

beginning on page F-1.

(2) Financial

statement schedules

schedules for which provision is made in the applicable accounting regulations of the SEC are either not required under the related

instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the consolidated

financial statements herein.

(3) Exhibits.

exhibits that are required to be filed or incorporated by reference herein are listed in the Exhibit Index.

Merger Agreement,

dated June 18, 2002 by and among United Companies Corporation, Merger Co., Inc.

Merger Agreement, dated June 18, 2002 by and among United Companies Corporation, Merger Co., Inc.

and Avid Sportswear & Golf Corp.

Articles of Merger

of Avid Sportswear & Golf Corp.

Articles of Merger of Avid Sportswear & Golf Corp.

with and into Merger Co., Inc.

of Conversion

of Conversion (Nevada)

of Conversion (Florida)

of Incorporation (Florida)

of 2017 Secured Convertible Promissory Note

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.

Plan of Conversion

Articles of Conversion (Nevada)

Certificate of Conversion (Florida)

Articles of Incorporation (Florida)

Articles of Amendment

2021 Equity Compensation Plan

Form of 2017 Secured Convertible Promissory Note

10% Unsecured Convertible Debenture dated May 3, 2011

of Stock Option Grant to Robert M.

Carmichael dated July 29, 2019 +

of Stock Option Grant to Jeffrey Guzy dated January 9, 2020

Exchange Agreement, dated March 23, 2004 by and among the Company, Trebor Industries, Inc.

Form of Stock Option Grant to Robert Carmichael dated July 29, 2019 +

Form of Stock Option Grant to Jeffrey Guzy dated January 9, 2020

Share Exchange Agreement, dated March 23, 2004 by and among the Company, Trebor Industries, Inc.

and Robert M.

Non-Exclusive

License Agreement for the BC Keel trademark effective January 1, 2004 by and between The Carleigh Rae Corporation and Trebor

Industries Inc.

Non-Exclusive

License Agreement for the buoyancy compensator and weight belt dive system effective January 1, 2005 by and between 940 Associates,

and Trebor Industries Inc.

License Agreement for the Brownie’s Third Lung, Brownie’s Public Safety Tankfill, and Related trademarks and copyrights

effective January 1, 2005 by and between 940 Associates, Inc.

and Trebor Industries Inc.

Non-Exclusive

License Agreement for the drop weight dive belt effective January 1, 2005 by and between 940 Associates, Inc.

and Trebor Industries

Non-Exclusive

License Agreement for the garment integrated or garment attachable floatation aid and/or PDF effective January 1, 2004 by

and between The Carleigh Rae Corporation and Trebor Industries Inc.

Non-Exclusive

License Agreement for the inflatable dive marker and collection bag effective January 1, 2005 by and between 940 Associates

Exclusive License Agreement, effective January 1, 2005, between 940 Associates, Inc.

and Trebor Industries Inc.

Non-Exclusive

License Agreement for the SHERPA trademark and inflatable flotation aid/signal device technology effective January 1, 2004

by and between The Carleigh Rae Corporation and Trebor Industries Inc.

Non-Exclusive

License Agreement for tank-mounted weight, BC or PDF mounted trim weight or trim weight holding system effective January 1,

2004 by and between The Carleigh Rae Corporation and Trebor Industries, Inc.

Agreement commencing September 1, 2014 by and between Liberty Property Limited Partnership and Trebor Industries, Inc.

Lease Amendment

dated December 1, 2016 by and between Liberty Property Limited Partnership and Trebor Industries, Inc.

Distribution Agreement between Brownie’s Marine Group, Inc.

and Lenhardt & Wagner GmbH dated August 7, 2017

Agreement dated November 11, 2018 by and between Liberty Property Limited Partnership and Brownie’s Marine Group, Inc.

Agreement dated January 9, 2020 by and between Brownie’s Marine Group, Inc.

and Jeffrey Joseph Guzy

of Non-Qualified Stock Option Agreement dated April 14, 2020 by and between Brownie’s Marine Group, Inc.

of Restricted Stock Award Agreement for grants by Brownie’s Marine Group, Inc.

of restricted stock awards to employees

Note in the principal amount of $159,600 issued by Brownie’s Marine Group, Inc.

to South Atlantic Bank

License Agreement dated April 6, 2018 by and between Setaysha Technical Solutions, Inc.

and Brownie’s Marine Group,

1 to Patent License Agreement dated December 31, 2019 by and between Setaysha Technical Solutions, Inc.

and Brownie’s

Marine Group, Inc.

Relations Consulting Agreement dated April 9, 2020 by and between HIR Holdings, LLC and Brownie’s Marine Group, Inc .

Communication Consulting Agreement dated April 9, 2020 by and between Impact IR Inc.

and Brownie’s Marine Group, Inc .

of Note Extension and Amendment Agreement dated May 29, 2020 for the $50,000 principal amount 6% Secured Convertible Promissory

Note by and between Curt Martin and Brownie’s Marine Group, Inc.

of Note Extension and Amendment Agreement dated May 29, 2020 for the $50,000 principal amount 6% Secured Convertible Promissory

Note by and between Joe Steinbron and Brownie’s Marine Group, Inc.

Agreement dated April 1, 2019 by and between Brownie’s Marine Group, Inc.

and Charles F.

of letter agreement for incentive compensation +

2 to Patent License Agreement dated June 30, 2020 by and between Setaysha Technical Solutions, Inc.

and Brownie’s

Marine Group, Inc.

of Employment Agreement dated November 5, 2020 by and between Christopher H.

Constable and Brownie’s Marine Group, Inc.

of Non-Qualified Stock Option Agreement Non-Plan dated November 5, 2020 by and between Brownie’s Marine Group, Inc.

and Christopher H.

Form of Note Extension

and Amendment Agreement dated December 21, 2020 for the $50,000 principal amount 6% Secured Convertible Promissory Note by

and between Joe Steinbron and Brownie’s Marine Group, Inc

Form of Note Extension

and Amendment Agreement dated December 21, 2020 for the $50,000 principal amount 6% Secured Convertible Promissory Note by

and between Curt Martin and Brownie’s Marine Group, Inc.

of the Registrant

Certification Pursuant

to Rule 13a-14(a)/15d-14(a)

Certification Pursuant

to Rule 13a-14(a)/15d-14(a)

Certification Pursuant

to Section 1350

XBRL Interactive Data File

Lease Agreement, dated September 1, 2014, between Liberty Property Limited Partnership and Trebor Industries, Inc.

Lease Amendment, dated December 1, 2016, between Liberty Property Limited Partnership and Trebor Industries, Inc.

Exclusive Distribution Agreement, dated August 7, 2017, between and Lenhardt & Wagner GmbH

Lease Agreement, dated November 11, 2018, between Liberty Property Limited Partnership and the Company

Director Agreement, dated January 9, 2020, between the Company and Jeffrey Guzy

Non-Qualified Stock Option Agreement, dated April 14, 2020, between the Company and Robert Carmichael +

Form of Restricted Stock Award Agreement

Promissory Note, dated May 12, 2020, in the principal amount of $159,600 issued to South Atlantic Bank

Patent License Agreement, dated April 6, 2018 between Setaysha Technical Solutions, Inc.

and the Company

1 to Patent License Agreement dated December 31, 2019, between Setaysha Technical Solutions, Inc.

and the Company

Investor Relations Consulting Agreement, dated April 9, 2020, between HIR Holdings, LLC and the Company.

Corporate Communication Consulting Agreement dated April 9, 2020, between Impact IR Inc.

and the Company.

Note Extension and Amendment Agreement, dated May 29, 2020, for the $50,000 principal amount 6% Secured Convertible Promissory Note between Curt Martin and the Company

Note Extension and Amendment Agreement, dated May 29, 2020, for the $50,000 principal amount 6% Secured Convertible Promissory Note by and between Joe Steinbron and the Company

Employment Agreement Dated August 1, 2021, between the Company and Blake Carmichael

Director Agreement, dated April 1, 2019, between the Company and Charles Hyatt

Employment Agreement dated September 3, 2021, between the Company and Christeen Buban

Form of letter agreement for incentive compensation +

2 to Patent License Agreement, dated June 30, 2020, between Setaysha Technical Solutions, Inc.

and the Company

Employment Agreement, dated November 5, 2020, between Christopher Constable and the Company.

Non-Qualified Stock Option Agreement Non-Plan, dated November 5, 2020, between the Company and Christopher Constable +

Note Extension and Amendment Agreement, dated December 21, 2020, for the $50,000 principal amount 6% Secured Convertible Promissory Note between Joe Steinbron and the Company

Extension and Amendment Agreement, dated December 21, 2020, for the $50,000 principal amount 6% Secured Convertible Promissory Note between

Curt Martin and the Company

First Amendment to Lease Agreement, dated December 1, 2016 between Trebor Industries, Inc.

and Liberty Property Limited Partnership

8% Convertible Promissory Note, dated September 3, 2021

Confidentiality, Non-Competition And Non-Solicitation Agreement, dated September 3, 2021, between the Company and Richard S.

Investment Banking Engagement Agreement, dated August 6, 2021, between the Company and Newbridge Securities Corporation

Certification Pursuant to Rule 13a-14(a)/15d-14(a)

Certification Pursuant to Section 1350

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith

Management Contract

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.

March 31, 2021

Brownie’s

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.

April 22, 2022

marine group, Inc.

4 unchanged sentences

Financial and Accounting Officer

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.

of the Board, President and Chief Financial Officer

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.

of the Board, President and Chief Financial Officer (Principal Executive Officer)

April 22, 2022

Christopher H.

Executive Officer and Director

Executive Officer)

April 22, 2022

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and Board of Directors of:

Brownie’s

Marine Group, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Brownie’s Marine Group, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2020 and 2019, the related consolidated statements of operations, changes in stockholders’

equity (deficit)

and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to

as the “consolidated financial statements”).

have audited the accompanying consolidated balance sheets of Brownie’s Marine Group, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in stockholders’ equity

and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively

referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations

and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally

accepted in the United States of America.

Paragraph –

Going Concern

The accompanying

consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its

operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles

generally accepted in the United States of America.

Paragraph – Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company has experienced net losses and has an accumulated deficit.

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 consolidated financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated 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.

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 consolidated financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated 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.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial

Accordingly, we express no such opinion.

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 including examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also include evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

that our audits provide a reasonable basis for our opinion.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting.

Accordingly, we

express no such opinion.

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 including examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also include evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audits provide

a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were

communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

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.

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of 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.

of Stock Options

1 unchanged sentence

using level three inputs.

To determine fair value of stock options, the Company determines the appropriate valuation methodology

and assumptions, including unobservable inputs.

Stock options are measured at fair value using a Black-Scholes valuation model

that uses significant assumptions, including the Company’s stock price, volatility, risk-free interest rate, probability

of vesting and probability of exercise occurrence through expiration date.

management’s estimate for the fair value of stock options was highly judgmental as it involved our assessment of the significant

assumptions used by the Company because the fair value calculations were sensitive to changes in assumptions described above,

and certain inputs used in the determination of fair values were based on unobservable data, including, but not limited to, the

volatility, probability of vesting and probability of exercise.

test the fair value of stock options, we performed audit procedures that included, among others, evaluating the methodologies

used in the valuation model and the significant assumptions used by the Company.

To determine fair value of stock options, the Company determines the appropriate valuation methodology and

assumptions, including unobservable inputs.

Stock options are measured at fair value using a Black-Scholes valuation model that uses

significant assumptions, including the Company’s stock price, volatility, risk-free interest rate, probability of vesting and probability

of exercise occurrence through expiration date.

management’s estimate for the fair value of stock options was highly judgmental as it involved our assessment of the significant

assumptions used by the Company because the fair value calculations were sensitive to changes in assumptions described above, and certain

inputs used in the determination of fair values were based on unobservable data, including, but not limited to, the volatility, probability

of vesting and probability of exercise.

test the fair value of stock options, we performed audit procedures that included, among others, evaluating the methodologies used in

the valuation model and the significant assumptions used by the Company.

Merger with Submersible Systems, Inc.

As described in Note 11 to the consolidated financial

statements, on September 3, 2021, the Company completed its merger with Submersible Systems, Inc.

The Company recognizes separately from

goodwill the assets acquired and the liabilities assumed at their acquisition date fair values under ASC 805, Business Combinations.

Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values

of the assets acquired and the liabilities assumed.

The Company uses its best estimates and assumptions to accurately value assets acquired

and liabilities assumed at the acquisition date.

The Company’s estimates are inherently uncertain and actual results may differ

from expectations.

The Company may record measurement period adjustments during the measurement period (one year from the acquisition

date) that result from obtaining additional information about the facts and circumstances that existed as of the acquisition date.

this additional information had been known, it would have affected the accounting for the business combination as of the acquisition

Auditing management’s estimate for the

fair value of the consideration paid, identifiable assets acquired, and liabilities assumed including an amount for goodwill was

highly judgmental as it involved our assessment of the significant assumptions used by the Company regarding certain future expected

cash flows and the valuation methodologies used by the valuation specialist engaged by the Company in determining the fair values of

these assets.

To test the fair value of consideration paid,

identifiable assets acquired, and liabilities assumed including an amount for goodwill, we performed audit procedures that included,

among others, evaluating the methodologies used in the valuation model and the significant assumptions used by the Company and the valuation

Liggett & Webb , P.A.

Public Accountants

have served as the Company’s auditor since 2018

Beach, Florida

BROWNIE’S

MARINE GROUP, INC.

1 unchanged sentence

BALANCE SHEETS

Current Assets

Accounts receivable

- related parties

Inventory, net

receivable - net

receivable - related parties

expenses and other current assets

Total current assets

Property, equipment

and leasehold improvements, net

Operating Lease Assets

Liabilities and stockholders’

equity (deficit)

Current liabilities

Accounts payable

and accrued liabilities

Accounts payable

- related parties

Customer deposits

and unearned revenue

Other liabilities

Operating lease

Current maturities

long term debt

Notes payable

current assets

equipment and leasehold improvements, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

payable and accrued liabilities

payable - related parties

deposits and unearned revenue

lease liabilities

maturities long term debt

debentures, net

Total current liabilities

Long term debt

operating lease liabilities

Commitments and

contingencies (see note 13)

Stockholders’

equity (deficit)

Preferred stock;

current liabilities

term debt, net of current

term convertible debentures, net

lease liabilities, net of current

and contingencies (see note 15)

Stockholders’

10,000,000 shares

425,000 issued

and outstanding as of December 31, 2021 and December 31, 2020.

$ 0.0001 par value;

1,000,000,000 shares authorized;

425,000 issued and outstanding as of December 31, 2020 and December 31, 2019.

Common stock;

1,000,000,000 shares authorized;

393,850,475 shares issued and outstanding at December 31, 2021 and 306,185,206

shares issued and 225,540,501 shares outstanding at December 31, 2019, respectively.

Common stock payable 138,941 shares

and 138,941 shares, respectively as of December 31, 2020 and December 31, 2019.

Additional paid-in

shares issued and outstanding at December 31, 2020, respectively.

stock payable 138,941 shares and 138,941 shares, respectively as of December 31, 2021 and December 31, 2020.

paid-in capital

( 14,544,604 )

( 12,956,137 )

stockholders’

equity (deficit)

liabilities and stockholders’

equity (deficit)

stockholders’ equity

liabilities and stockholders’ equity

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

BROWNIE’S

MARINE GROUP, INC.

3 unchanged sentences

revenues - related parties

Total net revenues

Cost of net revenues

- related parties

Royalties expense

- related parties

of revenues - related parties

expense - related parties

cost of revenues

Operating expenses

Selling, general

and administrative

general and administrative

and development costs

operating expenses

Loss from operations

Other expense, net

Loss on extinguishment

other expense - net

Loss income before provision for income

Provision for

from operations

( 1,852,703 )

( 1,333,060 )

Basic loss per common

income (expense), net

on settlement of debt

on the forgiveness of PPP loan

other (income) expense - net

income before provision for income taxes

( 1,588,467 )

( 1,351,619 )

for income taxes

$ ( 1,588,467 )

$ ( 1,351,619 )

loss per common share

Diluted loss per common share

Basic weighted average common shares

Diluted weighted average common

shares outstanding

Basic weighted average

common shares outstanding

Diluted weighted

average common shares outstanding

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

BROWNIE’S

MARINE GROUP, INC.

AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2020

Stockholders’

Balance, December 31, 2018

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Stock Payable

Stockholders’

December 31, 2019

$ ( 11,604,518 )

Shares issued for services

Unit offering

Stock Option Expense

Incentive Bonus Shares

Modification of debt

Balance, December 31, 2019

$ ( 243,421 )

Shares issued for services

Shares issued for cash

Shares issued

for exercise for warrants

Stock Option Expense

Incentive Bonus Shares

Incentive shares issued

Balance, December

issued for cash

issued for exercise of warrants

issued for services

Option Expense

bonus shares to CEO

shares issued to employee

$ ( 1,351,619 )

( 1,351,619 )

December 31, 2020

$ ( 12,956,137 )

issued for cash

issued for Acquisition

Discount Sellers Note

issued for services

Option Expense

and accrued interest

issuance for exclusivity

( 1,588,467 )

December 31, 2021

$ ( 14,544,604 )

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

BROWNIE’S

MARINE GROUP, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS

THE YEARS ENDED DECEMBER 31

Cash flows provided by operating activities:

Cash flows from operating activities:

$ ( 1,588,467 )

$ ( 1,351,619 )

Adjustments to reconcile net loss to

cash used in operating activities:

Depreciation and

Loss on debt extinguishment

Shares issued for

Stock Based Compensation-incentive

bonus shares issued to CEO and employees

Reserve (recovery)

Reserve for slow

moving inventory

Stock Based Compensation

Amortization of operating

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

Amortization of debt discount

Amortization of right-of-use asset

Shares issued for services

Incentive bonus shares issued to CEO and employees

Reserve (recovery) for bad debt

Reserve for slow moving inventory

Shares issued for exclusivity

Stock Based Compensation - Options

Gain on settlement of debt

Gain on the forgiveness of the PPP loans

Changes in operating assets and liabilities

Change in accounts

receivable, net

Change in accounts

receivable - related parties

Change in accounts receivable, net

Change in accounts receivable - related parties

Change in inventory

Change in prepaid

expenses and other current assets

Change in other

Change in accounts

payable and accrued liabilities

Change in customer

deposits and unearned revenue

Change in operating

lease liability

Change in other

in accounts payable - related parties

Net cash used in

operating activities

Change in prepaid expenses and other current assets

Change in other assets

Change in accounts payable and accrued liabilities

Change in customer deposits and unearned revenue

Change in long term lease liability

Change in other liabilities

Change in accounts payable - related parties

Net cash used in operating activities

Cash flows from investing activities:

of fixed assets

Net cash used in

investing activities

Cash acquired from acquisition

Purchase of fixed assets

Net cash provided (used in) by investing activities

Cash flows from financing activities:

Proceeds from sale of common stock

Proceeds from unit

Proceeds from exercise

Proceeds from issuance of common stock

Proceeds from issuance of units

Proceeds from exercise of Warrants

Proceeds of debt

Repayment on notes

Net cash provided

by financing activities

Repayment on notes payable

Repayment of debt

Net cash provided by financing activities

Net change in cash

Cash, beginning of

Cash, beginning of year

Cash, end of year

Supplemental disclosures

of cash flow information:

Cash Paid for

Supplemental disclosure

of non-cash financing activities:

Operating lease obtained

in exchange for liabilities

for purchase of vehicle

Supplemental disclosures of cash flow information:

Cash Paid for Interest

Cash Paid for Income Taxes

Supplemental disclosure of non-cash investing and financing activities:

Loan payable for purchase of vehicle

Shares issued for acquisition

Convertible note issued for acquisition

Beneficial conversion feature on the convertible notes issued for acquisition

Operating lease obtained for operating lease liability

Equipment obtained through financing

Shares issued for the conversion of convertible debentures and accrued interest

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

BROWNIE’S

MARINE GROUP, INC.

2 unchanged sentences

Description of business and summary of significant account policies

of business –Brownie’s Marine Group, Inc., a Florida corporation (hereinafter referred to as the “Company,”

“our”

or “BWMG”), designs, tests, manufactures and distributes recreational hookah diving, yacht based scuba

air compressor and nitrox generation systems, scuba and water safety products through its wholly owned subsidiary Trebor Industries,

Inc., a Florida corporation organized in 1981 (“Trebor”), and manufactures and sells high pressure air and industrial compressor

packages (“Legacy SSA Products”) through its wholly owned subsidiary Brownie’s High Pressure Compressor Services, Inc.,

a Florida corporation organized in 2017 (“BHPCS”).

In addition, in December 2017, the Company formed BLU3, Inc., a

Florida corporation organized in 2017 (“BLU3”), to develop and market innovation electric shallow dive systems (“Ultra

Dive Systems”).

When used herein, the “Company”

or “BWMG”

includes Brownie’s Marine

Group, Inc., and our wholly-owned subsidiaries Trebor, BHP and BLU3.

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”).

of fiscal year –

The Company’s fiscal year end is December 31.

of Consolidation -The consolidated financial statements include the accounts of BWMG and its wholly owned subsidiaries, Trebor,

BHP and BLU3.

of business – Brownie’s Marine Group, Inc., a Florida corporation (hereinafter referred to as” the “Company,”

or “BWMG”), (1) designs, tests, manufactures and distributes recreational hookah diving, scuba and water safety products

through its wholly owned subsidiary Trebor Industries, Inc., 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.

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.

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”).

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

of Consolidation -The consolidated financial statements include the accounts of BWMG and its wholly owned subsidiaries, Trebor, BHP,

BLU3 and SSI.

All significant intercompany transactions and balances have been eliminated in consolidation.

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.

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.

Concern –

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.

Concern – 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

We incurred net losses for the years ended December 31, 2021 and 2020 of $ 1,588,467

$1,351,619 and $1,421,740, respectively.

and $ 1,351,619 ,

respectively.

The Company had an accumulated deficit as of December 31, 2021 of $ 14,544,604 .

March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic.

In response to this declaration

and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying

degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.

These measures have had a significant adverse impact upon many sectors of the economy, including retail commerce.

we are not able to estimate the ultimate impact of the COVID-19 pandemic on our financial condition and future results of operations.

depending on the prolonged impact of the COVID-19 outbreak, this situation has had a significant impact on one of our operating

companies in our reported results of operations for the year ended December 31, 2020.

The extent to which the coronavirus

impacts our results and financial condition, however, will depend on future developments, which are highly uncertain and cannot be predicted,

including new information that may emerge and the actions to contain and treat its impacts, among others.

Company believes that existing operational cash flow may not be sufficient to fund presently anticipated operations, this raises

substantial doubt about our ability to continue as a going concern.

Therefore, the Company will seek to continue to raise additional

funds as needed and is currently exploring alternative sources of financing including commercial banks and other lending institutions.

The Company has issued a number of common shares and has historically issued convertible notes to finance working capital needs

and may continue to seek to raise additional capital through sale of restricted common stock or other securities or obtaining

short term loans.

The Company has no firm commitment for any additional capital and there are no assurances it will be successful

in obtaining additional funds.

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 –

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

receivable –

Accounts receivable consist of amounts due from the sale of all of our products to wholesale and

retail customers.

The allowance for doubtful accounts are estimates that are developed by using standard quantitative

measures based on historical losses, adjusting for current economic conditions and, in some cases, evaluating specific

customer accounts for risk of loss.

The establishment of reserves requires the use of judgment and assumptions regarding the

potential for losses on receivable balances.

Though the Company considers these balances adequate and proper, changes in

economic conditions in specific markets in which the Company operates and any specific customer collection issues the Company

identifies could have a favorable or unfavorable effect on required reserve balances.

The allowances for doubtful

accounts totaled $16,872 and $17,784 at December 31, 2020 and 2019, respectively.

The extent to which the coronavirus impacts our results and financial condition, however, will depend on future developments, which are

highly uncertain and cannot be predicted, including new information that may emerge and the actions to contain and treat its impacts,

among others.

Company believes that existing operational cash flow may not be sufficient to fund presently anticipated operations, this raises substantial

doubt about our ability to continue as a going concern.

Therefore, the Company will seek to continue to raise additional funds as needed

and is currently exploring alternative sources of financing including commercial banks and other lending institutions.

The Company has

issued common stock and has historically issued convertible notes to finance working capital needs and may continue to seek to raise

additional capital through sale of restricted common stock or other securities or obtaining short term loans.

The Company has no firm

commitment for any additional capital and there are no assurances it will be successful in obtaining additional funds.

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.

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

At December 31, 2021 and 2020, the Company had approximately $ 205,500

excess of the FDIC insured limit.

receivable – Accounts receivable consist of amounts due from the sale of all of our products to wholesale and retail customers.

The allowance for doubtful accounts are estimates that are developed by using standard quantitative measures based on historical losses,

adjusting for current economic conditions and, in some cases, evaluating specific customer accounts for risk of loss.

The establishment

of reserves requires the use of judgment and assumptions regarding the potential for losses on receivable balances.

Though the Company

considers these balances adequate and proper, changes in economic conditions in specific markets in which the Company operates and any

specific customer collection issues the Company identifies could have a favorable or unfavorable effect on required reserve balances.

The allowances for doubtful accounts totaled $ 46,555 and $ 16,872 at December 31, 2021 and 2020, respectively.

– 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 reserve for obsolete or excess inventory.

Inventory on hand may exceed future

3 unchanged sentences

or competitive conditions could have a favorable or unfavorable effect on required reserve balances.

and equipment and leasehold improvements –

Property and equipment and leasehold improvement is stated at cost less accumulated

and equipment and leasehold improvements – Property and 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 or term of the lease, which are primarily 3 to 5 years.

The cost of repairs and maintenance is charged

to expense as incurred.

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

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).

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.

uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

account for our revenues in accordance with the Accounting Standard Codification topic

606, “Revenue from Contracts with Customers”

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).

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.

account for our revenues in accordance with the Accounting Standard Codification topic 606, “Revenue from Contracts with Customers”

and all the related amendments.

This standards core principal is that a company

should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which

the company expects to receive.

This standards core principal is that a company should recognize revenue when it transfers promised goods

or services to customers in an amount that reflects the consideration to which the company expects to receive.

recognize the sale of products under single performance obligations upon shipment of the units as that is when ownership is transferred

and our performance is completed.

Revenues from repair and maintenance activities is recognized when the repairs are completed

and the units have been shipped.

January 1, 2019, we adopted ASC 842 and all the related amendments using the modified retrospective method.

comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those

Revenues from repair and maintenance activities is recognized when the repairs are completed and the

units have been shipped.

account for leases in accordance with ASC 842.

lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations.

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 leases or contain leases.

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 leases or contain leases.

categorize leases with contractual terms longer than twelve months as either operating or finance.

5 unchanged sentences

We did not have any finance

leases as of December 31, 2020.

Our leases generally have terms that range from three years for equipment and three to six

years for property.

leases as of December 31, 2021 and 2020.

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

2 unchanged sentences

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.

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 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 term of the lease.

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.

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 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

term of the lease.

balance sheet information related to leases was as follows:

Operating Leases

of Supplemental Balance Sheet Information

Classification

December 31, 2020

Right-of-use assets

Operating lease assets

Current lease liabilities

Current operating lease liabilities

Non-current lease liabilities

Long-term operating lease liabilities

Total lease liabilities

lease liabilities

operating lease liabilities

lease liabilities

operating lease liabilities

lease liabilities

term and discount rate were as follows:

December 31, 2020

Weighted average remaining lease term (years)

Weighted average discount rate

of Operating Lease Liabilities

average remaining lease term (years)

Weighted average

discount rate

components of lease costs were as follows:

December 31, 2020

December 31, 2019

Operating lease cost

Variable lease cost

Total lease costs

of Lease Cost

disclosures of cash flow information related to leases were as follows:

December 31, 2020

December 31, 2019

Cash paid for operating lease liabilities

Operating right of use assets obtained in exchange for operating lease liabilities

of Cash Flow Information Related to Leases

paid for operating lease liabilities

right of use assets obtained in exchange for operating lease liabilities

of lease liabilities were as follows as of December 31, 2021:

Present value of lease liabilities

development costs –

Product development expenditures are charged to expenses as incurred.

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

Advertising and trade show expense incurred for the years ended December 31, 2020 and 2019, totaled $154,642 and $56,047

of Maturities of Operating Lease Liabilities

Systems Lease

Imputed interest

value of lease liabilities

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

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, 2021 and 2020, totaled $ 343,232

and $ 154,642

respectively.

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”).

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

3 unchanged sentences

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, 2020 and 2019 the Company incurred research and development costs of $115,156 and $67,161,

respectively.

deposits and unearned revenue 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.

Customer deposits and unearned revenue totaled $20,353 and $121,208 at December 31, 2020 and 2019,

respectively.

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.

the years ended December 31, 2021 and 2020, the Company incurred research and development costs of $ 75,439 and $ 115,156 , respectively.

deposits and unearned revenue 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

Additionally, returns of all other merchandise are subject to a 15 % restocking fee as stated on each sales invoice.

deposits and unearned revenue totaled $ 143,938 and $ 20,353 at December 31, 2021 and 2020, respectively.

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

4 unchanged sentences

quality programs and processes, including monitoring and evaluating the quality of its suppliers, to help minimize warranty obligations.

The Company provides our customers with an industry standard one year warranty on systems sold and recognizes a warranty reserve

based on gross sales multiplied by the historical warranty expense return rate.

The warranty reserve

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 reserve for warranty work of $13,680 and $13,695

at December 31, 2020 and 2019 respectively.

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

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 provides our customers with an industry standard one year warranty on systems sold and recognizes a warranty reserve based

on gross sales multiplied by the historical warranty expense return rate.

The warranty reserve 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 reserve for warranty work of $ 13,680 and $ 13,680 at December 31, 2021 and 2020 respectively.

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.

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 would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

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.

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.

the years ended December 31, 2020 and 2019, the Company recognized share based compensation with a fair value of $550,149 and

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 would make an

adjustment to the valuation allowance which would reduce the provision for income taxes.

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.

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.

value is determined through use of the quoted stock price.

the years ended December 31, 2021 and 2020, the Company recognized share based compensation with a fair value of $ 201,952

and $ 550,149 ,

respectively.

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

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:

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

2 unchanged sentences

in markets that are not active;

and model-derived valuations in which all significant inputs and significant value drivers are

observable in active markets.

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.

and model-derived valuations in which all significant inputs and significant value drivers are observable

in active markets.

3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or

Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted

1 unchanged sentence

management judgment or estimation.

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”

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.

December 31, 2020, and 2019, 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, other liabilities,

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.

December 31, 2021, and 2020, 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, other liabilities,

loans payable and convertible debentures, approximate fair value because of the short maturity of these instruments.

per common share –

Basic loss per share excludes any dilutive effects of options, warrants and convertible securities.

Basic loss per share is computed using the weighted-average number of outstanding common shares during the applicable period.

Diluted 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.

At December 31, 2020 and December 31, 2019, 210,500,305 and 98,498,711, respectively, potentially dilutive shares were

not recognized as their inclusion would be anti-dilutive.

These shares reflect shares potentially issuable under convertible note

agreements, outstanding warrants, outstanding stock options and the conversion of preferred stock.

per common share – Basic loss per share excludes

any dilutive effects of options, warrants and convertible securities.

Basic loss per share is computed using the weighted-average number

of outstanding common shares during the applicable period.

Diluted 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.

At December 31, 2021 and December 31, 2020, 254,577,924

and 210,500,305 ,

respectively, potentially dilutive shares were not recognized as their inclusion would be anti-dilutive.

These shares reflect shares

potentially issuable under convertible note agreements, outstanding warrants, outstanding stock options and the conversion of preferred

accounting pronouncements

Company has reviewed other ASU’s and has noted that they will have no material impact on its financial statements.

ASU 2019-12 Income Taxes (Topic

In December 2019, the FASB issued ASU

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to

simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in

Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years,

and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

The Company determined

that the standard has no impact on its consolidated financial statements and related disclosures.

consists of the following as of:

In-Transit Inventory

Raw materials

Work In Process

Finished goods

Total Inventory,

Total Inventory, net

of December 31, 2021 and 2020, the Company recorded reserves for obsolete or slow moving inventory of approximately $ 308,133

$227,657 and $175,957 respectively.

and $ 227,657

respectively.

Prepaid Expenses and Other Current Assets

expenses and other current assets consisted of the following:

Schedule of Prepaid Expenses and Other Current Assets

Prepaid inventory

Prepaid expenses

and other current assets

Total prepaid

expenses and other current assets

Prepaid expenses and other current assets

Total prepaid expenses and other current assets

Property and Equipment, Net

and equipment consist of the following as of:

Schedule of Property and Equipment

Tooling and equipment

Computer equipment and software

Leasehold improvements

Total property and equipment

depreciation and amortization

accumulated depreciation and amortization

Total property and equipment, net

and amortization expense totaled $21,005 and $9,282 for the years ended December 31, 2020 and 2019, respectively.

assets at December 31, 2020 of $13,649 consisted of refundable deposits of $6,649 and an unamortized license fee of $7,000.

assets at December 31, 2019 of $20,149 consisted of refundable deposits of $6,649 and an unamortized license fee of $13,500.

Customer Credit Concentrations

and amortization expense totaled $ 32,377

for the years ended December 31, 2021 and

2020, respectively.

Included in the depreciation and amortization expense for the year ending December 31, 2021 is $ 24,095 for amortization

of intangible assets.

assets at December 31, 2021 of $ 14,098 consisted

of refundable deposits of $ 14,098 .

Other assets at December 31, 2020 of $ 13,649 consisted

of refundable deposits of $ 6,649 and

an unamortized license fee of $ 7,000 .

Customer Credit and Vendor Concentrations

Company sells to three entities owned by the brother of Robert M.

3 unchanged sentences

Combined sales to these six entities for the years ended December 31, 2021 and 2020,

represented 18% and 22%, respectively, of total net revenues.

excess of 90% of our total net revenues are made up of product sales to customers within the state of Florida .

represented 17.9 %

respectively, of total net revenues.

Brownie’s Southport Divers, Inc.

represented concentration in outstanding accounts receivable of 25.3 %

of total outstanding accounts receivable as of December 31, 2021 and 19.8 %

as of December 31, 2020.

Brownie's Global Logistics, LLC represented concentration in outstanding accounts receivable of less than

10% of total outstanding accounts receivable as of December 31, 2021 and 12.8% as of December 31, 2020.

Additionally, the Company has a non-related party customer A that represented 10.6 %

of total outstanding accounts receivable as of December 31, 2021.

has a non-related party customers B that represented 10.6 % of total outstanding accounts receivable as of December 31, 2020.

The company had no customers that consisted of more than 10% of total

revenue for the years ended December 31, 2021 and 2020.

excess of 90 %

of our total net revenues are made up of product sales to customers within the state of Florida.

The Company has no vendor concentrations beyond 10% of total purchases

as of December 31, 2021 and 2020.

Related Party Transactions

Company sells products to Brownie’s Southport Divers, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys,

companies owned by the brother of Robert M.

Terms of sale are no more favorable than those extended to any of the Company’s

other customers with similar sales volumes.

Combined net revenues from these entities for years ended December 31, 2020 and 2019, totaled

sell products to Brownie’s Southport Divers, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys, companies

owned by the brother of Robert Carmichael.

Combined net revenues from these entities for the years December 31, 2021 and 2020, totaled

$ 1,116,085 and $ 821,474 , respectively.

Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach

Divers, and Brownie’s Yacht Toys at December 31, 2020, was $29,443, $6,643, and $8,237, respectively.

Accounts receivable

from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31,

2019, was $28,555, $10,914, and $4,973, respectively.

Company sells products to Brownie’s Global Logistics, LLC.

(“BGL”) and 940 Associates, Inc.

(“940 A”),

entities wholly-owned by Robert M.

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

These terms are consistent with those extended to the Company’s strategic partners.

Strategic partner terms on a per order

basis include promotion of BWMG’s technologies and “Brownie’s”

brand, offered only on products or services not

offered for resale, and must provide for reciprocal terms or arrangements to BWMG on strategic partners’

product or services.

is fulfilling the strategic partner terms by providing exposure for BWMG’s technologies and “Brownie’s”

in the yachting and exploration community world-wide through its operations.

Combined net revenues from these three entities for years

ended December 31, 2020, and 2019, were $16,943 and $9,427, respectively.

Accounts receivable from Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach

Divers, and Brownie’s Yacht Toys at December 31, 2021, were $ 50,818 , $ 7,195 and $ 17,779 , respectively.

Accounts receivable from

Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys December 31, 2020, was

$ 29,443 , $ 6,643 , and $ 8,237 , respectively.

also sell products to Brownie’s Global Logistics, LLC (“BGL”) and 940 Associates, Inc.

(“940 A”), entities

wholly-owned by Robert Carmichael.

Combined net revenues from these three entities for the years ended December 31, 2021 and 2020 were

$ 245 and $ 16,943 , respectively.

In addition, from time to time Mr.

Carmichael purchases products

from us for his personal use.

He either pays the amount at the time of purchase or we provide him a courtesy account which he settles

from time to time.

Accounts receivable from BGL, 940 A and Mr.

Carmichael totaled $23,321, and $4,230, which is net of

credit memo of $14,944 for 940 A at December 31, 2020, and December 31, 2019, respectively.

Company had accounts payable to related parties of $102,360 and $263,544 at December 31, 2020 and 2019, respectively.

payable at December 31, 2020 was due to BGL.

Company has Exclusive License Agreements with 940 A to license the trademark “Brownies Third Lung”, “Tankfill”,

“Brownies Public Safety”

and various other related trademarks as listed in the agreement.

This Exclusive License Agreement

provides that the Company will pay 940 A 2.5% of gross revenues per quarter as a royalty.

Total royalty expense for the years ended December

31, 2020 and 2019, totaled $67,808 and $50,642, respectively.

July 29, 2019 the Company agreed to pay the members of the Company’s Board of Directors, including Mr.

Carmichael purchases products from us for his personal use.

Accounts receivable

from BGL, 940 A and Mr.

Carmichael totaled $ 897 at December 31, 2021 and $ 23,321 , respectively, at December 31, 2020.

owed BGL $ 32,267 and

December 31, 2021 and 2020, 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, 2021, the Company also had an amount due of $ 5,000 to

Carmichael for an advance to BLU3,Inc.

are a party to an exclusive license agreement, dated February 22, 2005, with 940 A to license the trademark “Brownies Third Lung”,

“Tankfill”, “Brownies Public Safety” and various other related trademarks as listed in the agreement.

The agreement

provides for a royalty to be paid equal to the greater of 2.5 %

on all sales of Trebor or $ 15,000

Total royalty fees paid to 940 A in the years

ended December 31, 2021 and 2020 totaled $ 75,161

and $ 67,808 ,

respectively.

The Company had accrued royalties of $ 7,735 and $ 4,280 for the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021 Christopher Constable had an open accounts

receivable balance of $ 428 .

As of December 31, 2021, two employees had open accounts receivable

balances totaling $ 184 .

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, 2019, the Company has accrued $49,500 in Board of Directors’

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, 2020.

December 31, 2020, the Company had accrued an additional $36,000 in Board of Directors’

August 1, 2017, Mr.

Mikkel Pitzner was appointed to serve on the Company’s Board of Directors.

The Company agreed

Pitzner an annual fee of $6,000 and issued Mr.

Pitzner 5,000,000 shares of restricted common stock under a consulting

agreement expiring in January 2019.

During the year ended December 31, 2019 the Company issued 3,333,333 shares of restricted

common stock with a total fair value of $62,500.

During the year ended December 31, 2019, the Company recognized $31,250 of stock

compensation pursuant to this agreement.

Commencing in February 2019, the Company began paying Mr.

Pitzner, then a member of the

Company’s Board of Directors, $9,300 per month, inclusive of a $1,300 auto allowance, for consulting services.

These payments

were not covered by a written agreement.

In August 2019 the agreement with Mr.

Pitzner was terminated, and Mr.

has been paid in full.

August 1, 2017, the Company entered into a six month employment agreement with Blake Carmichael, the son of Robert M.

to serve as the Company’s products development manager, electrical engineer and marketing team member.

Under the terms of

the employment agreement, in addition to a monthly salary of $3,600, the Company issued Mr.

Carmichael 2,000,000 shares of common

stock valued at $25,000.

Carmichael was also entitled to performance bonuses at the discretion of the Board of Directors.

On January 31, 2018, Mr.

Carmichael’s written employment agreement expired.

He continues with the Company as a full-time

employee and serves as chief executive officer of BLU3.

In April 2018, his salary was adjusted to $75,000 per year.

written employment agreement between the Company and Mr.

December 2018, the Company issued 20,000,000 shares of common stock to Robert M.

Carmichael as an incentive bonus.

As the vesting of

the shares was subject to continued employment by Mr.

Carmichael through January 2, 2020, for the years ended December 31, 2020, the

Company treated the shares as issued but not as yet outstanding for the twelve months ended December 31, 2019.

Expense for the issuance

is being recognized over the full vesting period, and accordingly, the Company recognized stock compensation expense of $1,280 and $188,144

during the years ended December 31, 2020 and 2019.

March 3, 2009, the Company entered into a Patent Purchase Agreement with Robert M.

The Company purchased several patents

it had previously been paying royalties on and several related unissued patents.

In exchange for the purchase, the Company issued

Carmichael 234 stock options at a $1,350 exercise price expiring ten years from the effective date of grant.

The options expired

on March 2, 2019 without being exercised.

March 7, 2019 the Company entered into a Subscription Agreement with Mr.

Hyatt, an accredited investor, pursuant to

which the Company sold a unit of the securities consisting of 50,000,000 shares of common stock and 50,000,000 18 month common

stock purchase warrants exercisable at $0.01 per share (the “Hyatt Warrants”) in consideration of $500,000 in a private

The Company used the proceeds from the sale for product research and development and working capital purposes.

Company did not pay any fees or commissions in connection with the sale of the unit.

Subsequently, on March 29, 2019 Mr.

was appointed to the Company’s Board of Directors to fill a vacancy.

Effective July 29, 2019 the Company issued

options to purchase up to an aggregate of 12,457,142 shares of common stock to Mr.

The options were issued pursuant to

a stock option grant agreements and are exercisable at $0.018 per share for a period of five years from the date of issuance,

subject to vesting over a period of six months.

The fair value of the options totaled $52,280 using the Black-Scholes option pricing

model with the following assumptions:

i) risk free interest rate of 2.10%, ii) expected life of 5 years, iii) dividend yield of

0%, iv) expected volatility of 172%.

In August 2019 8,304,761 options belonging to Mr.

Pitzner were cancelled.

Stock option expense

recognized during for the year ended December 31, 2019 was $17,429.

Effective July 29, 2019 the Company issued

options to purchase up to an aggregate of 10,380,952 shares of common stock to Blake Carmichael.

The options were issued pursuant

to a stock option grant agreements and are exercisable at $0.018 per share for a period of five years from the date of issuance,

subject to vesting over a period of six months.

The fair value of the options totaled $43,582 using the Black-Scholes option pricing

model with the following assumptions:

i) risk free interest rate of 2.10%, ii) expected life of 5 years, iii) dividend yield of

director, an annual fee of $ 18,000 for serving on the Company’s Board of Directors for the year ending December 31, 2019.

December 31, 2020, the Company has accrued $ 85,500 in 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, 2020.

As of December 31, 2021,

the Company accrued an additional $ 36,000 in Board of Directors’ fees for a total of $ 121,500 in accrued fees.

December 2018, the Company issued 20,000,000

shares of common stock to Robert M.

as an incentive bonus.

As the vesting of the shares was subject to continued employment by Mr.

Carmichael through January 2, 2020, for

the years ended December 31, 2020, the Company treated the shares as issued but not as yet outstanding for the year ended December 31,

Expense for the issuance is being recognized over the full vesting period, and accordingly, the Company recognized stock compensation

expense of $ 1,280

during the year ended December 31, 2020 and was

fully expensed.

July 29, 2019 the Company issued options to purchase up to an aggregate of 10,380,952

shares of common stock to Blake Carmichael.

options were issued pursuant to a stock option grant agreements and are exercisable at $ 0.018

per share for a period of five

years from the date of issuance, subject to vesting

over a period of six months.

The fair value of the options totaled $ 43,582

using the Black-Scholes option pricing model

with the following assumptions:

(i) risk free interest rate of 2.10 %,

(ii) expected life of 5

years , (iii) dividend yield of 0 %,

(iv) expected volatility of 172 %.

Stock option expense recognized during for the years ended December 31, 2020 and 2019 was

$5,362 and $38,212, respectively.

Stock option expense recognized for the year ended December 31, 2020 was $ 5,362

and was fully expensed.

July 29, 2019 the Company issued Robert M.

Carmichael options to purchase up to 20,761,904 shares of common stock.

Carmichael options to purchase up to 20,761,904

shares of common stock.

The options were issued

pursuant to a Grant Agreement and are exercisable at $0.018 per share for a period of five years from the date of issuance, subject to

vesting over a period of six months.

The fair value of the options totaled $87,147 using the Black-Scholes option pricing model with

the following assumptions:

i) risk free interest rate of 2.10%, ii) expected life of 5 years, iii) dividend yield of 0%, iv) expected

volatility of 172%.

Stock option expense of $10,274 and $76,423 was recognized during the years ended December 31, 2020

and 2019, respectively.

In January 2020 the Company issued 2,647,065 shares

of common stock in exchange for $45,000 to an accredited investor and daughter of Mr.

pursuant to a Grant Agreement and are exercisable at $ 0.018

per share for a period of five

years from the date of issuance, subject to vesting

over a period of six months.

The fair value of the options totaled $ 87,147

using the Black-Scholes option pricing model

with the following assumptions:(i) risk free interest rate of 2.10 %,

(ii) expected life of 5

years , (iii) dividend yield of 0 %,

(iv) expected volatility of 172 %.

Stock option expense of $ 10,274

was recognized for the year ended December 31,

2020 and was fully expensed.

January 2020 the Company issued 2,647,065 shares of common stock in exchange for $ 45,000 to an accredited investor and daughter of Mr.

Hyatt, a member of our Board of Directors.

In February 2020 the Company issued 12,500,000

shares of common stock related to the exercise of common stock purchase warrants at an exercise price of $.01, for a total conversion

price of $125,000.

February 2020 the Company issued 12,500,000 shares of common stock related to the exercise of common stock purchase warrants at an exercise

price of $ .01 , for a total conversion price of $ 125,000 .

The shares were issued to Mr.

Hyatt, a member of the Board of Directors.

In April, 2020 the Company issued 10,000,000 shares

of common stock related to the exercise of common stock purchase warrant at an exercise price of $.01 per share.

The Company received

proceeds of $100,000 upon such exercise from Mr.

Also, in April 2020 the Company sold an aggregate

of 20,000,000 shares of its common stock at a purchase price $0.025 per share to Mr.

Hyatt, resulting in proceeds to the Company of $500,000.

On April 14, 2020 the Company entered into a Non-Qualified

Stock Option Agreement with Mr.

Under the terms of the option agreement, as additional compensation the Company granted Mr.

Carmichael an option to purchase up to an aggregate of 125,000,000 shares of the Company’s common stock at an exercise price of

$.045 per share.

This option is further detailed in Note 11.

During the year ended December 31, 2020 the Company expensed $655,515 in

relation to this option agreement.

On May 21, 2020, the Company issued to Mr.

Carmichael a total 725,087 shares with a fair value of $31,904 for

his work on the BLU3-VENT project.

August 31, 2020, September 30, 2020 and October 31, 2020 the Company issued and aggregate of 2,795,000 shares

with a fair market value of $45,292 to Christopher Constable on behalf of Brandywine, LLC in accordance with a consulting

contract dated August 10, 2020.

This consulting agreement was terminated upon the execution of Mr.

Constable’s employment agreement.

On November 5, 2020 the company entered into a

Non-Qualified Stock Option agreement with Christopher Constable as part of his employment agreement.

April, 2020 the Company issued 10,000,000 shares of common stock related to the exercise of common stock purchase warrant at an exercise

price of $ .01 per share.

The Company received proceeds of $ 100,000 upon such exercise from Mr.

in April 2020 the Company sold an aggregate of 10,000,000

shares of its common stock at a purchase

price $ 0.025

per share to Mr.

Hyatt, resulting in proceeds

to the Company of $ 250,000 .

April 14, 2020 the Company entered into a Non-Qualified Stock Option Agreement with Mr.

Under the terms of the option agreement,

the Company granted Mr.

Constable a 5-year option to purchase 5,434,783 shares of the Company’s common stock at an exercise price

of $.0184, the “Compensation Options”.

as additional compensation the Company granted Mr.

Carmichael an option to purchase up to an aggregate of 125,000,000

shares of the Company’s common stock at

an exercise price of $ .045

This option is further detailed in

During the years ended December 31, 2021 and December 31, 2020 the Company expensed $ 874,021

and $ 655,515

in relation to this option agreement, respectively.

May 21, 2020, the Company issued to Mr.

Carmichael a total 725,087

shares with a fair value of $ 31,904

for his work on the BLU3-VENT project.

August 31, 2020, September 30, 2020 and October 31, 2020 the Company issued and aggregate of 2,795,000

shares with a fair market value of $ 45,292

to Christopher Constable on behalf of Brandywine,

LLC in accordance with a consulting contract dated August 10, 2020.

This consulting agreement was terminated upon the execution of Mr.

Constable’s employment agreement.

November 5, 2020 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.

a 5-year option to purchase 5,434,783

shares of the Company’s common stock at

an exercise price of $ .0184 ,

the “Compensation Options”.

The Compensation Options were immediately vested.

The fair value of the options on

the date of the grant was $106,199 using the Black-Scholes option pricing model with the following assumptions:

i) risk free interest

rate of .16%, ii) expected life of 2.5 years, iii) dividend yield of 0%, iv) expected volatility of 341%.

Stock option expense recognized

during the year ended December 31, 2020 for this option was $106,890.

Also, on November 5, 2020 the Company entered into a Non-Qualified Option Agreement with Mr.

the terms of this option agreement, as additional compensations, the Company granted an option (the “Bonus Option”) to purchase

up to an aggregate of 30,000,000 shares of the Company’s common stock at an exercise price of $.0184 per share.

This option is

further detailed in Note 11.

During the year ended December 31, 2020, the company did not book any expense related to this option agreement.

The fair value of the options on the date of

the grant was $ 106,199

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .16 %,

ii) expected life of 2.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 341 %.

Stock option expense recognized during the year ended December 31, 2020 for this option was $ 106,890 .

on November 5, 2020 the Company entered into a Non-Qualified Option Agreement with Mr.

Under the terms of this option agreement,

as additional compensations, the Company granted an option (the “Bonus Option”) to purchase up to an aggregate of 30,000,000

shares of the Company’s common stock at

an exercise price of $ .0184

This option is further detailed in

During the year ended December 31, 2021, the company expensed $ 82,734

and $ 0 , respectively.

March 25, 2021, the Company issued 27,500,000 shares of common stock to Charles.

Hyatt, a member of our Board of Directors in consideration

of $ 275,000 .

of December 31, 2021, options to purchase 25,000,000

shares of common stock held by Mr.

vested in accordance with Carmichael Option agreement as further discussed in Note 13 of these financial statements.

August 1, 2021 as part of the Blake Carmichael Agreement (see Note 14) the Company entered into a Non-Qualified Stock Option

agreement with Blake Carmichael.

Under the terms of the 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”),

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.

For the year ended December 31, 2021

the company expensed a total of $ 21,810 .

September 1, 2021, the Company issued Charles Hyatt, a member of our Board of Directors, 10,000,000 units of the securities of the Company,

with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025 per share in

consideration of $ 250,000 .

September 1, 2021, the Company issued Grace Hyatt, the adult child of a member of our Board of Directors, 600,000 units of the securities

of the Company, with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025

per share in consideration of $ 15,000 .

Accounts Payable and Accrued Liabilities

payable and accrued liabilities consists of the following as of:

Accounts payable trade

Schedule of Accounts Payable and Accrued Liabilities

December 31, 2020

Accounts payable trade and other

Accrued payroll and fringe benefits

1 unchanged sentence

Accrued payroll taxes and withholding

Accrued Sales Tax

Accrued interest

3 unchanged sentences

liabilities consist of the following as of:

Asset purchase agreement

of Other Liabilities

December 31, 2021

December 31, 2020

Asset purchase agreement payable

Accrued expenses

Accrued vendor settlement

Accrued Board of Directors fees

Accrued legal

Convertible Debentures, and Loans Payable

debentures consist of the following at December 31, 2021:

Schedule of Convertible Debentures

debentures consist of the following at December 31, 2020:

Company borrowed $10,000 in exchange for a convertible debenture.

The lender at its option may convert all or part of the

note plus accrued interest into common stock at a price of 30% discount as determined from the average four highest closing

bid prices over the preceding five trading days.

The Company valued the beneficial conversion feature of the convertible debenture

at $4,286, which was accreted to interest expense over the period of the note.

As of February 22, 2021 the noteholder

requested conversion and the note was converted into 422,209 shares at a conversion price of $.035 per share.

December 1, 2017 the Company entered into a $50,000 principal amount 6% secured convertible promissory note, due December

Company borrowed $ 10,000

in exchange for a convertible

note (the “Hoboken Convertible Note”).

The holder at its option may convert all or part of the note plus accrued

interest into common stock at a price of 30 %

discount as determined from the average four highest closing bid prices over the preceding five trading days.

The Company valued

the beneficial conversion feature of the convertible debenture at $ 4,286 ,

which was accreted to interest expense over the period of the note.

On February 22, 2021, this note and accrued interest of $ 4,777

were converted by the

holder for 422,209

shares of common stock

in accordance with the terms of the note.

December 1, 2017, the Company issued a $ 50,000

principal amount 6 %

secured convertible promissory note, initially due December

1, 2018 , subject to extension.

The note is secured with such assets of the Company equal to the principal and accrued interest,

and is guaranteed by the Company’s wholly-owned subsidiaries, Trebor and BHP and the personal guarantee of Robert M.

conversion price under the note initially ranged from $0.02 per share if converted in the first year to $0.125 per share if

converted in year five.

The note is secured with such assets of the Company equal to the principal and accrued interest, is guaranteed by the Company’s

wholly-owned subsidiaries, Trebor and BHP and the personal guarantee of Mr.

conversion price under the note initially ranged from $ 0.02 per share if converted in the first year to $ 0.125 per share if converted

in year five.

The lender may convert at any time until the note 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 9.99% of the outstanding common stock of the Company at any one time.

In 2019, the maturity date of the note

was extended for one additional year to December 31, 2019 with a reduction in the conversion price to $0.01 per share.

Company recorded a loss on extinguishment of debt of $32,000 upon the modification of conversion price.

Subsequent to December

31, 2019, the maturity date was further extended to December 1, 2020 and on December 21, 2020, the maturity

date was further extended to December 31, 2021.

December 5, 2017 the Company entered into a $50,000 principal amount 6% secured convertible promissory note, due December

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 9.99 % of

the outstanding common stock of the Company at any one time.

In 2019, the maturity date of the note was extended for one additional

year to December 31, 2019 with a reduction in the conversion price to $ 0.01 per share.

The Company recorded a loss on extinguishment

of debt of $ 32,000 upon the modification of conversion price.

On June 10, 2021, this note and accrued interest of $ 10,554 were converted

by the holder for 6,055,358 shares of common stock in accordance with the terms of the note.

December 5, 2017, the Company issued a $ 50,000

principal amount 6 %

secured convertible promissory note, initially due December

4, 2018 , subject to extension.

The note is secured with such assets of the Company equal to the principal and accrued interest,

and is guaranteed by the Company’s wholly-owned subsidiaries, Trebor and BHP and the personal guarantee of Robert M.

conversion price under the note initially ranged from $0.02 per share if converted in the first year to $0.125 per share if

converted in year five.

The note is secured with such assets of the Company equal to the principal and accrued interest, is guaranteed by the Company’s

wholly-owned subsidiaries, Trebor and BHP and the personal guarantee of Mr.

conversion price under the note initially ranged from $ 0.02 per share if converted in the first year to $ 0.125 per share if converted

in year five.

The lender may convert at any time until the note 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 9.99% of the outstanding common stock of the Company at any one time.

In 2019, the note was extended for one

additional year to December 31, 2019 with a reduction in the conversion price to $0.01 per share.

The Company recorded a loss

on extinguishment of debt of $99,000 upon the modification of conversion price.

Subsequent to December 31, 2019, the maturity

date was further extended to December 31, 2020 2020 and on December 21, 2020, the maturity date was further

extended to December 31, 2021.

Company entered into a non-interest-bearing loan agreement of $200,000 with Mr.

Tom Gonzales on July 1, 2013.The loan is payable

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 9.99 % of

the outstanding common stock of the Company at any one time.

In 2019, the note was extended for one additional year to December 31,

2019 with a reduction in the conversion price to $ 0.01 per share.

The Company recorded a loss on extinguishment of debt of $ 99,000

upon the modification of conversion price.

The maturity date was further extended to December 31, 2021.

On August 18, 2021, this

note and accrued interest of $ 11,145 were converted by the holder for 6,114,516 shares of common stock in accordance with the terms

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 $ .051272

and shall be paid quarterly.

The note holder may convert any outstanding principal and unpaid interest at a conversion rate of $ .051272

at any time up to the

maturity date of the note.

The Company recorded $ 12,355

for the beneficial conversion

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 $ .051272

The note holder may convert any outstanding principal and unpaid interest at a conversion rate of $ .051272

at any time up to the

maturity date of the note.

The Company recorded $ 125

for the beneficial conversion

Company entered into a non-interest-bearing loan agreement of $ 200,000 with Tom Gonzales on July 1, 2013.The loan is payable upon demand.

During the years ended December 31, 2020 and 2020, the Company repaid $ 40,000 and $ 60,000 respectively.

balance was $40,000 and $100,000 as of December 31, 2020 and 2019 respectively.

Company entered into a non-interest-bearing loan of $10,000 with Hoboken Street Association on October 15, 2016.

The loan balance

was $10,000 as of December 31, 2020 and 2019 respectively.

On February 22, 2021 the debt on this note was forgiven as part

of the conversion of the convertible note due to Hoboken Street Association as discussed in the convertible note

section above.

September 30, 2019 BLU3 financed the purchase of certain plastic molding equipment through Marlin Capital Solutions (“Marlin

Capital”).

The loan balance was $0 and $40,000

as of December 31, 2021 and 2020, respectively.

Company issued an unsecured, non-interest-bearing note of $ 10,000

with Hoboken Street Association on October 15,

The note was forgiven as part of the conversion of the Hoboken Convertible Note on February 22, 2021 as described above.

recorded a gain on settlement of debt of $ 10,000 .

The note balance as of December 31, 2021 and December 31, 2020 was $ 0

and $ 10,000 ,

September 30, 2019, BLU3 financed the purchase of certain plastic molding equipment through Marlin Capital Solutions (“Marlin

The loan amount at inception was $ 96,725 .

It entered into an Equipment Finance Agreement with Marlin Capital

pursuant to which it agreed to make 36 equal monthly installments of $3,143.80.

The Equipment Finance Agreement contains customary

events of default.

The loan balance was $60,070 as of December 31, 2020.

Company entered into an Equipment Finance Agreement with Marlin Capital pursuant to which it agreed to make 36 equal

monthly installments of $ 3,143.80 .

The Equipment Finance Agreement contains customary events of default.

The loan balance was $ 25,079

as of December 31, 2021 and $ 60,070

as of December 31, 2020.

of Future Amortization of Loans Payable

Payment Amortization

2025 and thereafter

Total Loan Payments

Current portion

of Loan payable

Non-Current Portion

of Loan Payable

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.

The first payment was due on October 5, 2020.

loan balance as of December 31, 2020 was $52,118.

Current portion of Loan payable

Non-Current Portion of Loan Payable

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.

The loan balance as of December 31, 2021 was $ 43,122

and $ 52,118 as of December 31, 2020.

of Future Amortization of Loans Payable

Payment Amortization

2025 and thereafter

Total note payments

Current portion

of note payable

Non-Current Portion

of notes payable

May 12, 2020, we received an unsecured loan from Bank United in the principal amount of $159,600 (the “SBA Loan”),

under the Paycheck Protection Program (“PPP”), which was established under the recently enacted Coronavirus Aid, Relief,

and Economic Security Act (the “CARES Act”) administered by the U.S.

Current portion of note payable

Non-Current Portion of notes payable

May 19, 2021, the Company, through its wholly owned subsidiary BLU3, executed an equipment finance agreement to finance the purchase

of certain plastic molding equipment through Navitas Credit Corp.

The amount financed is $ 75,764

payable over 60

equal monthly installments of $ 1,611

(the “Navitas Note”).

The equipment

finance agreement contains customary events of default.

The agreement was fully funded as of December 31, 2021.

Schedule of Future Amortization of Loans Payable

Payment Amortization

Total Note Payments

Current portion of Note payable

Non-Current Portion of Note Payable

May 12, 2020, we received an unsecured loan from South Atlantic Bank in the principal amount of $ 159,600 (the “SBA Loan”),

under the Paycheck Protection Program (“PPP”), which was established under the recently enacted Coronavirus Aid, Relief,

and Economic Security Act (the “CARES Act”) administered by the U.S.

Small Business Administration.

The intent and

purpose of the PPP is to support companies, during the COVID-19 pandemic, by providing funds for certain specified business expenses,

with a focus on payroll.

As a qualifying business as defined by the SBA, we used the proceeds from this loan to primarily help

maintain our payroll and cover our rent and utilities as we navigated our business through the lockdowns associated with the COVID-19

pandemic until our return to normal operations earlier in 2020.

The intent and purpose

of the PPP is to support companies, during the COVID-19 pandemic, by providing funds for certain specified business expenses, with a

focus on payroll.

As a qualifying business as defined by the SBA, we used the proceeds from this loan to primarily help maintain our

payroll and cover our rent and utilities as we navigated our business through the lockdowns associated with the COVID-19 pandemic until

our return to normal operations earlier in 2020.

term of the note is two years , though it may be payable sooner in connection with an event of default under the note.

Loan carries a fixed interest rate of one percent per year, and a monthly payment of $8,983, with the first payment due seven

months from the date of initial cash receipt.

Under the CARES Act and the PPP, certain amounts of loans made under the PPP may

be forgiven if the recipients use the loan proceeds for eligible purposes, including payroll costs and certain rent or utility

costs, and meet other requirements regarding, among other things, the maintenance of employment and compensation levels.

the SBA Loan for qualifying expenses and have applied for forgiveness of the SBA Loan in accordance with the terms of the CARES

The loan balance as of December 31, 2020 was $159,600.

Company has applied for forgiveness through its lender, and the application has been processed.

The Company expects the

entire balance of the loan to be forgiven under the parameters of the CARES Act.

The lender has waived any payments on this loan,

until a decision on forgiveness is rendered by the U.S.

Small Business Administration.

Total loan payments

Current portion

of SBA Loan payable

Non-Current Portion

of SBA Loan payable

Shareholders’

Company had 306,185,206 and 225,540,501 common shares outstanding at December 31, 2020 and December 31, 2019,

The SBA Loan carries

a fixed interest rate of one percent per year, and a monthly payment of $ 8,983 , with the first payment due seven months from the date

of initial cash receipt.

Under the CARES Act and the PPP, certain amounts of loans made under the PPP may be forgiven if the recipients

use the loan proceeds for eligible purposes, including payroll costs and certain rent or utility costs, and meet other requirements regarding,

among other things, the maintenance of employment and compensation levels.

We used the SBA Loan for qualifying expenses and have applied

for forgiveness of the SBA Loan in accordance with the terms of the CARES Act.

On April 28, 2021, the Company was notified by South Atlantic

Bank that the SBA Loan was forgiven in full under the terms of the CARES Act.

The company recorded the forgiveness as a gain on the forgiveness

of the PPP loan of $ 159,600 on our consolidated income statement.

note balance as of December 31, 2021 and December 31, 2020 was $ 0

and $ 159,600 ,

respectively.

December 2018, the Company issued 20,000,000 shares of common stock to Robert M.

Carmichael as an incentive bonus with a fair

value of $200,000.

Loan – Submersible Systems, Inc.

May 12, 2020, SSI received an unsecured loan from City National Bank in the principal amount of $ 116,160 (the “Submersible SBA

Loan”), under the CARES Act.

term of the note is two years , though it may be payable sooner in connection with an event of default under the note.

The Submersible

SBA Loan carries a fixed interest rate of one percent per year , and a monthly payment of $ 6,925 , with the first payment due seven months

from the date of initial cash receipt.

As part of the forgiveness application and directly related to the acquisition of SSI by the Company,

SSI was required to place $ 121,953 in an escrow account until forgiveness is determined and City National Bank has been paid in full

On October 15, 2021, the Company was notified by City National Bank that the Submersible SBA Loan was forgiven in full under

the terms of the CARES Act.

The restricted cash in escrow was released in full by the bank as a result of this forgiveness on November

note balance as of December 31, 2021 and December 31, 2020 was $ 0

and $ 116,160

respectively.

with Submersible Systems, Inc.

September 3, 2021, the Company completed its merger with Submersible Systems, Inc.

Under the terms of the Merger Agreement, the

Company paid $ 1.79

million in consideration consisting of the issuance

of 27,305,442

shares of its common stock (valued at $ 1.4

million), the issuance of $ 350,000

unsecured convertible promissory notes in exchange for all of the equity of Submersible.

The 27,305,442

shares of the Company’s common stock issued

for the $ 1.44

million in consideration are subject to leak

out agreements whereby the shareholders are unable to sell or transfer based upon the following:

of Holding Period and Shares Eligible to be Sold

Holding Period from Closing Date

Percentage of shares

eligible to be sold or transferred

Up to 100.0 %

Leak-Out provision may be waived by the Company, upon written request by the holder of the common stock, if the Company is trading on

either 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 by a holder;

and (ii) the holder can only sell

through executing trades “On the Offer.”

transaction costs associated with the Merger were $ 65,000 in legal fees paid $ 40,000 in cash, and 1,190,476 shares of the Company’s

common stock with a fair value of $ 55,952 .

Value of Consideration Transferred and Recording of Assets Acquired

following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired, and liabilities assumed

including an amount for goodwill:

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

Common stock, 27,305,442 shares at fair market value

8% Unsecured, Convertible promissory note payable to seller

Total purchase price

Tangible assets acquired

Liabilities assumed

Net tangible assets acquired

Identified Intangible Assets

Customer Relationships

Non-compete agreements

Total Intangible Assets

Total purchase price

determining the number of shares of the common stock issued, the Company considered the value of the stock as defined the Merger Agreement

to be the calculated based on the volume weighted average price of a share of the Company’s common stock on the OTC Markets (“VWAP”)

for (i) 180 days prior to the date of the parties’ execution and delivery of the binding term sheet for the Merger or (ii) 180

days prior to the closing date of the Merger, whichever results in a lower VWAP.

Based on this calculation, the Company utilized calculation

(i) resulting in a conversion price of $ .051271831 .

This conversion price resulted in the issuance of 27,305,442 shares of common stock

with a fair value of $ 1,449,919 on the closing date.

was assessed at the time of closing as to its fair value, and it was determined that a step-up analysis was necessary in order to evaluate

the fair value of the inventory at the time of closing.

The step up represents the net profit that would be attained when the inventory

The key assumptions used in this analysis is a gross margin of 38.3% and selling costs of 5.0%, The analysis resulted in a necessary

step up of $31,000 at the time of closing .

represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized.

The goodwill arising from the acquisition is attributable to the value of the potential expanded market opportunity with new customers.

The goodwill is not expected to be deductible for tax purposes.

December 31, 2021, the Company has recorded an estimated fair value of the intangible assets and goodwill of $ 992,986 based on a preliminary

purchase price allocation prepared by management.

As a result, during the preliminary purchase price allocation period, which may be

up to one year from the business combination date, we may record adjustments to the assets acquired and liabilities assumed, with the

corresponding offset to goodwill.

After the preliminary purchase price allocation period, we record adjustments to assets acquired or

liabilities assumed subsequent to the purchase price allocation period in our operating results in the period in which the adjustments

were determined

Forma Information

following is the unaudited pro forma information assuming all business acquisitions occurred on January 1, 2021.

For all of the business

acquisitions depreciation and amortization have been included in the calculation of the below pro forma information based upon the actual

acquisition costs.

Schedule of Business Acquisition, Pro Forma Information

Year ended December 31, 2021

$ ( 1,560,900 )

Basic and Diluted Loss per Share

Basic and Diluted Weighted Average Common Shares Outstanding

information included in the pro forma amounts is derived from historical information obtained from the sellers of the businesses.

pro forma amounts above for basic and diluted weighted average shares outstanding have been adjusted to include the stock issued in connection

with the acquisition of SSI.

Goodwill and Intangible Assets, Net

following table sets for the changes in the carrying amount of the Company’ Goodwill for the year ended December 31, 2021

of Changes in Goodwill

Balance, January 1

Acquisitions of Submersible Systems, Inc.

Balance, December 31

following table sets for the components of the Company’s intangible assets at December 31, 2021:

Summary of Intangible Assets

Amortization Period (Years)

Accumulated Amortization

Net Book Value

Intangible Assets Subject to amortization

Customer Relationships

Non-Compete Agreements

aggregate amortization remaining on the intangible assets as of December 31, 2021 is a follows:

Schedule of Estimated Intangible Assets Amortization Expenses

Intangible Amortization

Shareholders’ Equity

Company had 393,850,475 and 306,185,206 common shares outstanding at December 31, 2021 and December 31, 2020, respectively.

December 2018, the Company issued 20,000,000

shares of common stock to Robert M.

as an incentive bonus with a fair value of $ 200,000 .

As the shares are subject to continued employment by Mr.

Carmichael through January 2, 2020, the Company has

treated the shares as issued but not as yet outstanding.

Expense for the issuance is being recognized over the full vesting period,

and accordingly, the Company recognized stock compensation expense of $1,280 and $188,144 for the years ended December 31, 2020

and 2019 respectively.

January 2019, the Company entered into an investment banking and corporate advisory agreement.

The term of the agreement was for one

year and provided for compensation of 2,700,000 common shares with a fair value of $29,700 plus related expenses.

The shares were issued

in February, 2019 and March 2019.

For the year ended December 31, 2019 the Company recorded $29,700 in stock based compensation

January 2019, the Company issued 1,000,000 common shares with a fair value of $12,500 to a consultant for general administrative

advisory services for the period from December 1, 2018 through April 30, 2019, of which $10,000 was expensed during year ended

December 31, 2019.

March 2019 the Company issued Mr.

Hyatt a unit of the securities of the Company, with the unit consisting of 50,000,000 shares

of common stock and 50,000,000 18 month common stock purchase warrants exercisable at $0.01 per share in consideration of $500,000.

The Company did not pay any fees or commissions in connection with the sale of the unit.

the year ended December 31, 2019, the Company issued 1,332,885 shares of common stock valued at $19,391 an average of ($0.0145)

per share for services to an employee related to an employment agreement that provided $10 per hour to be paid in common stock.

May 2019, the Company engaged a consultant to provide certain specified services under the terms of a letter agreement.

As compensation,

the Company issued 1,000,000 common shares with a fair value of $16,000 to a consultant which was expensed during the year ended

December 31, 2019.

July 17, 2019 the Company sold 2,500,000 shares of common stock for proceeds of $25,000 ($0.01 per share).

August 2019, the Company issued 318,747 common shares with a fair value of $5,000 to a consultant for general administrative advisory

services, which was expensed during the year ended December 31, 2019.

September 2019 the Company issued 1,250,000 shares of common stock valued at $20,375 ($0.016 per share) fair market value, pursuant

to an investor relations agreement.

October 2019, the Company issued 191,087 shares of common stock valued at $4,395, an average of $.023 per share for consulting

services for BLU3 operating manual.

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 which is being amortized on a straight-line basis over its five year term.

The Company issued 828,221

shares of common stock with a fair value of $18,635 in satisfaction of $13,500 for the first commercial sale in October, 2019.

January 2020 the Company issued 2,647,065 shares of common stock in exchange for $45,000 to an accredited investor and daughter

Carmichael through January 2, 2020.

Expense for the issuance was recognized

over the full vesting period, and accordingly, the Company recognized stock compensation expense of $ 1,280

year ended December 31, 2020 and was fully

January 2020 the Company issued 2,647,065 shares of common stock in exchange for $ 45,000 to an accredited investor and daughter of Mr.

Hyatt, a member of our Board of Directors.

February 2020 the Company issued 12,500,000 shares of common stock related to the exercise of common stock purchase warrants at

an exercise price of $.01, for a total conversion price of $125,000.

February 2020 the Company issued 12,500,000 shares of common stock related to the exercise of common stock purchase warrants at an exercise

price of $.01, for a total conversion price of $ 125,000 .

The shares were issued to Mr.

Hyatt, a member of the Board

of Directors.

Hyatt, a member of the Board of Directors.

June 9, 2020 the Company issued an aggregate of 330,636 shares of common stock to an employee for services performed in December 2019

1 unchanged sentence

The fair value of these shares was $ 9,520 .

April 2, 2020 the Company issued 10,000,000 shares of common stock related to the exercise of common stock purchase warrant at

an exercise price of $.01 per share.

April 2, 2020 the Company issued 10,000,000 shares of common stock related to the exercise of common stock purchase warrant at an exercise

price of $ .01 per share.

The Company received proceeds of $ 100,000 upon such exercise from Mr.

Hyatt, a member of

our Board of Directors.

April 10, 2020 the Company sold an aggregate of 20,000,000 shares of its common stock at a purchase price $0.025 per share to

two accredited investors, including Mr.

Hyatt, a member of our Board of Directors.

April 10, 2020 the Company sold an aggregate of 20,000,000 shares of its common stock at a purchase price $ 0.025 per share to two accredited

investors, including Mr.

Hyatt, in a private transaction, resulting in proceeds to the Company of $ 500,000 .

April 9, 2020, the Company issued to an investor relations consultant, 3,000,000 shares of common stock, with a fair market value

April 9, 2020, the Company issued, to a corporate communications consultant 2,000,000 shares of its common stock with a fair market

value of $89,000.

April 9, 2020, the Company issued to an investor relations consultant, 3,000,000 shares of common stock, with a fair market value of

April 9, 2020, the Company issued, to a corporate communications consultant 2,000,000 shares of its common stock with a fair market value

of $ 89,000 .

April 28, 2020, the Company issued 1,333,333 shares of its common stock as incentives to two employees.

The fair value of the

stock was $64,000.

May 21, 2020, the Company issued 3,658,633 shares of common stock with a fair market value of $160,980 to six individuals for

compensation related to the BLU3-VENT project.

The fair value of the stock was

May 21, 2020, the Company issued 3,658,633 shares of common stock with a fair market value of $ 160,980 to six individuals for compensation

related to the BLU3-VENT project.

Of the shares issued, Mr.

Carmichael received a total 725,087 shares with a fair

value of $31,904 and Blake Carmichael, CEO of BLU3, Inc.

Carmichael received a total 725,087 shares with a fair value of $ 31,904 and

Blake Carmichael, CEO of BLU3, Inc.

who is also Mr.

Carmichael’s adult son, received a total of 849,305

shares with a fair value of $37,369.

Carmichael’s adult son, received a total of 849,305 shares with a fair value

of $ 37,369 .

The balance of the shares were received by employees of the Company and independent contractors.

2 unchanged sentences

The fair value of these shares was $ 5,890 .

the third and fourth quarters of 2020 the Company issued 2,795,000 shares of its common stock to Christopher Constable

under the consulting agreement with Brandywine, LLC.

the third and fourth quarters of 2020 the Company issued 2,795,000 shares of its common stock to Christopher Constable under the consulting

agreement with Brandywine, LLC.

The aggregate fair value of these shares was $ 45,659 .

December 15, 2020, the Company issued 2,100,000 shares of its common stock with a fair value of $40,320 related

to an agreement with Newbridge Securities to provide investment banking and business advisory services.

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 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 as Series A Convertible Preferred Stock.

Each share of Series A Convertible Preferred Stock is convertible into a share

of the Company’s common stock at any time at the option of the holder at a conversion price of $18.23 per share.

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 vote together as on any matters submitted to our shareholders for a vote.

As and December

31, 2020 and 2019, the 425,000 shares of Series A Convertible Preferred Stock are owned by Robert M.

July 29, 2019 the Company issued options to purchase up to an aggregate of 12,457,142 shares of common stock to Mr.

options were issued pursuant to a stock option grant agreements and are exercisable at $0.018 per share for a period of five years from

the date of issuance, subject to vesting over a period of six months.

The fair value of the options totaled $52,280 using the

Black-Scholes option pricing model with the following assumptions:

i) risk free interest rate of 2.10%, ii) expected life of 5 years,

iii) dividend yield of 0%, iv) expected volatility of 172%.

In August 2019 8,304,761 options belonging to Mr.

Pitzner were cancelled.

Stock option expense recognized during for the year ended December 31, 2019 was $17,429.

December 15, 2020, the Company issued 2,100,000 shares of its common stock with a fair value of $ 40,320 related to an agreement with

Newbridge Securities to provide investment banking and business advisory services.

February 22, 2021, the Company issued 422,209 shares of common stock related to the conversion of a convertible debenture and accrued

interest of $ 14,777 .

March 1, 2021, the Company issued a consultant 3,000,000 shares of its common stock related to investor relation services at a fair value

of $ 120,000 .

March 25, 2021, the Company issued 27,500,000 shares of common stock to Mr.

Hyatt, a member of our Board of Directors, in

consideration of $ 275,000 .

February 28, 2021, the Company issued 116,279 shares of common stock to a consultant with a fair value of $ 5,000 for professional business

June 10, 2021, the Company issued 6,055,358 shares of common stock related to the conversion of a convertible debenture and accrued interest

of $ 60,554 .

August 18, 2021, the Company issued 6,114,516 shares of common stock related to the conversion of a convertible debenture and accrued

interest of $ 61,145 .

September 1, 2021, the Company issued Mr.

Hyatt, a member of our Board of Directors, 10,000,000 units of the securities of

the Company, with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025

per share in consideration of $ 250,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

September 1, 2021, the Company issued Ms.

Grace Hyatt, the adult child of a member of our Board of Directors, 600,000 units of the securities

of the Company, with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025

per share in consideration of $ 15,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

September, 2021, the Company issued 4,000,000

units of the securities of the Company to three

accredited investors, with the unit consisting of 1 share of common stock and 1 24 month common stock purchase warrants exercisable at

per share in consideration of $ 100,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

September 3, 2021, the Company issued 273,054 shares of common stock to Tierra Vesta Group as part of the purchase agreement of Submersible

Systems, Inc.

with a fair value of $ 14,499 .

September 3, 2021, the Company issued 27,032,388 shares of common stock to Summit Holdings V, LLC.

as part of the purchase agreement

of Submersible Systems, Inc.

with a fair value of $ 1,435,420 .

September 22, 2021, the Company issued a law firm 1,190,476 shares of common stock with a fair value of $ 55,952 as partial consideration

for its legal services related to acquisition of SSI.

November and December, 2021 the Company issued 597,006 shares of its common stock with a fair value of $ 21,000 to a consultant for services

related to the dive retail industry.

December 31, 2021 the Company issued 763,983 shares of its common stock with a fair market value of $ 36,690 to a vendor related to exclusive

distribution of its product line in the US and Caribbean.

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.

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 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 as Series A Convertible

Preferred Stock.

Each share of Series A Convertible Preferred Stock is convertible into a share of the Company’s common stock at

any time at the option of the holder at a conversion price of $ 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 vote together

as on any matters submitted to our shareholders for a vote.

As and December 31, 2021 and 2020, the 425,000 shares of Series A Convertible

Preferred Stock are owned by Robert Carmichael.

Compensation Plan

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 may also be granted under the

The maximum number of shares that may be issued under the Plan shall be 25,000,000 shares.

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.

Compensation Plan Information as of December 31, 2021:

Schedule of Equity Compensation Plan Information

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

Equity Compensation Plans Not Approved by Security Holders

July 29, 2019 the Company issued options to purchase up to an aggregate of 10,380,952 shares of common stock to Blake Carmichael.

5 unchanged sentences

yield of 0 %, iv) expected volatility of 172 %.

Stock option expense recognized during for the years ended December 31, 2020 and 2019 was

$5,362 and $38,212, respectively.

Stock option expense recognized during the year ended December 31, 2020 $ 5,362 , fully expensing

this option agreement.

July 29, 2019 the Company issued Robert M.

7 unchanged sentences

volatility of 172 %.

Stock option expense recognized for the years ended December 31, 2020 and 2019 was $10,724 and

$76,423, respectively.

January 6, 2020 the Company issued options to purchase up to 2,000,000 shares of common stock to Mr.

Stock option expense recognized for the year ended December 31, 2020 was $ 10,724 , fully expensing this option agreement.

January 6, 2020 the Company issued options to purchase up to 2,000,000

shares of common stock to Mr.

Jeffrey Guzy.

were issued pursuant to a stock option grant agreement and is exercisable at $0.0229 per share for a period of three years from the date

The options were immediately vested.

The fair value of the options on the date of the grant was $40,107 using the Black-Scholes

option pricing model with the following assumptions:

i) risk free interest rate of 1.55%, ii) expected life of 1.5 years, iii) dividend

yield of 0%, iv) expected volatility of 250%.

Stock option expense recognized during the year ended December 31, 2020 for this option

January 11, 2020 the Company issued options to purchase up to 2,000,000 shares of common stock to BizLaunch Advisors, LLC.

options were issued pursuant to a professional services agreement and are exercisable at $0.0229 per share for a period of three

options were issued pursuant to a stock option grant agreement and is exercisable at $ 0.0229

per share for a period of three

years from the date of issuance.

The options were immediately vested.

The options were

immediately vested.

The fair value of the options on the date of the grant was $ 40,107

$40,097 using the Black-Scholes option pricing model with the following assumptions:

i) risk free interest rate of 1.54%, ii)

expected life of 1.5 years, iii) dividend yield of 0%, iv) expected volatility of 250%.

Stock option expense recognized during

the year ended December 31, 2020 for this option was $40,097.

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of 1.55 %,

ii) expected life of 1.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 250 %.

Stock option expense recognized during the year ended December 31, 2020 for this option was $ 40,107

and was fully expensed at grant date.

January 11, 2020 the Company issued options to purchase up to 2,000,000

shares of common stock to BizLaunch Advisors,

The options were issued pursuant to a professional services agreement and are exercisable at $ 0.0229

per share for a period of three

years from the date of issuance.

The options were

immediately vested.

The fair value of the options on the date of the grant was $ 40,097

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of 1.54 %,

ii) expected life of 1.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 250 %.

Stock option expense recognized during the year ended December 31, 2020 for this option was $ 40,097

and was fully expensed at grant date.

April 14, 2020 the Company entered into a Non-Qualified Stock Option Agreement with Mr.

Carmichael (the “Carmichael Option

Agreement”).

Carmichael (the “Carmichael Option Agreement”).

Under the terms of the Carmichael Option Agreement, as additional compensation the Company granted Mr.

an option (the “Carmichael Option”) to purchase up to an aggregate of 125,000,000 shares of the Company’s common

stock at an exercise price of $.045 per share, of which the right to purchase 75,000,000 shares of common stock is subject to

vesting upon the achievement of the net revenue milestones set forth below (the “Net Revenue Portion of the Option”)

and the right to purchase 50,000,000 shares of common stock is subject to vesting upon official notice of the listing of the Company’s

common stock on The Nasdaq Stock Market, the NYSE American LLC or similar stock exchange.

The Net Revenue Portion of the Option

shall vest as follows:

right to purchase 25,000,000 shares of the Company’s common stock shall vest at such time as the Company reports cumulative

consolidated net revenues, including revenues from related parties and revenues recognized by the Company arising out of any

subsequent acquisitions, mergers, or other business combinations following the closing date of such transaction (the collectively,

“Net Revenues”), in excess of $3,500,000 in the aggregate over four consecutive fiscal quarters commencing May

1, 2020 and ending on April 30, 2023 (the “Net Revenue Period”);

right to purchase an additional 25,000,000 shares of common stock shall vest at such time as the Company reports cumulative

Net Revenues in excess of $7,000,000 in the aggregate over four consecutive fiscal quarters during the Net Revenue Period;

right to purchase an additional 25,000,000 shares of common stock shall vest at such time as the Company reports cumulative

Net Revenues in excess of $10,500,000 in the aggregate over four consecutive quarters during the Net Revenue Period.

Carmichael an option (the “Carmichael

Option”) to purchase up to an aggregate of 125,000,000 shares of the Company’s common stock at an exercise price of $ .045

per share, of which the right to purchase 75,000,000 shares of common stock is subject to vesting upon the achievement of the net revenue

milestones set forth below (the “Net Revenue Portion of the Option”) and the right to purchase 50,000,000 shares of common

stock is subject to vesting upon official notice of the listing of the Company’s common stock on The Nasdaq Stock Market, the NYSE

American LLC or similar stock exchange.

The Net Revenue Portion of the Option shall vest as follows:

right to purchase 25,000,000 shares of the Company’s common stock shall vest at such time as the Company reports cumulative

consolidated net revenues, including revenues from related parties and revenues recognized by the Company arising out of any subsequent

acquisitions, mergers, or other business combinations following the closing date of such transaction (the collectively, “Net

Revenues”), in excess of $ 3,500,000 in the aggregate over four consecutive fiscal quarters commencing May 1, 2020 and ending

on April 30, 2023 (the “Net Revenue Period”);

right to purchase an additional 25,000,000 shares of common stock shall vest at such time as the Company reports cumulative Net Revenues

in excess of $ 7,000,000 in the aggregate over four consecutive fiscal quarters during the Net Revenue Period;

right to purchase an additional 25,000,000 shares of common stock shall vest at such time as the Company reports cumulative Net Revenues

in excess of $ 10,500,000 in the aggregate over four consecutive quarters during the Net Revenue Period.

Carmichael Option Agreement provides that the Carmichael Option is exercisable by Mr.

3 unchanged sentences

Carmichael, and he must remain an employee of the Company as an additional term of vesting.

Once a portion of the Carmichael Option vests, it is exercisable by Mr.

portion of the Carmichael Option vests, it is exercisable by Mr.

Carmichael for 90 days.

Any portion of the Carmichael

Option which does not vest during the Net Revenue Period lapses and Mr.

Any portion of the Carmichael Option which does

not vest during the Net Revenue Period lapses and Mr.

Carmichael has no further rights thereto.

1 unchanged sentence

i) risk free interest rate of .26 %, ii) expected life of 1.5 years, iii) dividend yield of 0 %, iv) expected volatility of

The Company analyzed the likelihood that the vesting qualifications would be met, and as of September 30, 2020 deemed that there

The Company analyzed the likelihood that the vesting qualifications would be met, and as of December 31, 2021 deemed that there

was a 35% chance that the options would vest.

Therefore, stock option expense recognized during the year ended December 31, 2020 for

this option was $655,515.

November 5, 2020 the company entered into a Non-Qualified Stock Option agreement with Christopher Constable the “Constable

Option Agreement”

as part of his employment agreement.

Therefore, stock option expense recognized during the years ended December 31, 2021 and

December 31, 2020 was $ 874,022 and $ 655,515 respectively.

November 5, 2020 the company entered into a Non-Qualified Stock Option agreement with Christopher Constable the “Constable Option

Agreement” as part of his employment agreement.

Under the terms of the option agreement, the Company granted Mr.

Constable a 5 year option to purchase 5,434,783 shares of the Company’s common stock at an exercise price of $.0184, the

“Compensation Options”.

Constable a 5

year option to purchase 5,434,783

shares of the Company’s common stock at

an exercise price of $ .0184 ,

the “Compensation Options”.

The Compensation Options were immediately vested.

The fair value of the options on the date

of the grant was $106,199 using the Black-Scholes option pricing model with the following assumptions:

i) risk free interest

rate of .16%, ii) expected life of 2.5 years, iii) dividend yield of 0%, iv) expected volatility of 341%.

option expense recognized during the year ended December 31, 2020 for this option was $106,890.

The fair value of the options on the date of

the grant was $ 106,199

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .16 %,

ii) expected life of 2.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 341 %.

Stock option expense recognized during the year ended December 31, 2020 for this option was $ 106,890

and was fully expensed on grant date.

part of the Constable Option Agreement the company also granted Mr.

Constable an option (the “Bonus Option”) to purchase

up to an aggregate of 30,000,000 shares of the Company’s common stock at an exercise price of $.0184 per share, of which

the right to purchase 10,000,000 shares of common stock is subject to vesting upon the achievement of the net revenue milestones

set forth below (the “Net Revenue Portion of the Option”) and the right to purchase 20,000,000 shares of common stock

is subject to vesting upon official notice of the listing of the Company’s common stock on The Nasdaq Stock Market, the

NYSE American LLC or similar stock exchange.

Constable an option (the “Bonus Option”) to purchase

up to an aggregate of 30,000,000 shares of the Company’s common stock at an exercise price of $ .0184 per share, of which the right

to purchase 10,000,000 shares of common stock is subject to vesting upon the achievement of the net revenue milestones set forth below

(the “Net Revenue Portion of the Option”) and the right to purchase 20,000,000 shares of common stock is subject to vesting

upon official notice of the listing of the Company’s common stock on The Nasdaq Stock Market, the NYSE American LLC or similar

stock exchange.

The Net Revenue Portion of the Option shall vest as follows:

right to purchase 2,000,000 shares of the Company’s common stock shall vest at such time as the Company reports cumulative

consolidated net revenues, including revenues from related parties and revenues recognized by the Company arising out of any

subsequent acquisitions, mergers, or other business combinations following the closing date of such transaction (the collectively,

“Net Revenues”), in excess of $5,000,000 in the aggregate over four consecutive fiscal quarters commencing January

1, 2021 and ending on April 30, 2023 (the “Net Revenue Period”);

right to purchase an additional 3,000,000 shares of common stock shall vest at such time as the Company reports cumulative

Net Revenues in excess of $7,500,000 in the aggregate over four consecutive fiscal quarters during the Net Revenue Period;

right to purchase an additional 5,000,000 shares of common stock shall vest at such time as the Company reports cumulative

Net Revenues in excess of $10,000,000 in the aggregate over four consecutive quarters during the Net Revenue Period.

right to purchase 2,000,000 shares of the Company’s common stock shall vest at such time as the Company reports cumulative

consolidated net revenues, including revenues from related parties and revenues recognized by the Company arising out of any subsequent

acquisitions, mergers, or other business combinations following the closing date of such transaction (the collectively, “Net

Revenues”), in excess of $ 5,000,000 in the aggregate over four consecutive fiscal quarters commencing January 1, 2021 and ending

on April 30, 2023 (the “Net Revenue Period”);

right to purchase an additional 3,000,000 shares of common stock shall vest at such time as the Company reports cumulative Net Revenues

in excess of $ 7,500,000 in the aggregate over four consecutive fiscal quarters during the Net Revenue Period;

right to purchase an additional 5,000,000 shares of common stock shall vest at such time as the Company reports cumulative Net Revenues

in excess of $ 10,000,000 in the aggregate over four consecutive quarters during the Net Revenue Period.

Constable Option Agreement provides that the Compensation Options and Bonus Options are exercisable by Mr.

Constable on a cashless

Constable on a cashless basis.

The Carmichael Option is not transferrable by Mr.

Carmichael, and he must remain an employee of the Company as an additional

term of vesting.

Once a portion of the Carmichael Option vests, it is exercisable by Mr.

Constable 4 years.

fair value of the Bonus Options on the date of the grant was $578,082 using the Black-Scholes option pricing model with

the following assumptions:

i) risk free interest rate of .14%, ii) expected life of 2.0 years, iii) dividend yield of 0%, iv)

expected volatility of 312.2%.

The Company analyzed the likelihood that the vesting qualifications would be met, and as of December 31,

2020 deemed that there was a 0% chance that the options would vest, as the measurement period does not begin until January 1, 2021.

stock option expense recognized during the year ended December 31, 2020 for this option was $0.

summary of the Company’s stock option as of December 31, 2020 and 2019, and changes during the years ended December

31, 2020 and 2019 is presented below:

Exercise Price

Life in Years

Outstanding at December 31, 2018

Outstanding –

December 31, 2019

Exercisable –

December 31, 2019

Outstanding at December 31, 2019

Outstanding –

December 31, 2020

Exercisable –

Constable, and he must remain an employee of the Company as an additional term

Once a portion of the Constable Option vests, it is exercisable by Mr.

Constable for 4 years.

fair value of the Bonus Options on the date of the grant was $ 578,082 using the Black-Scholes option pricing model with the following

i) risk free interest rate of .14 %, ii) expected life of 2.0 years, iii) dividend yield of 0 %, iv) expected volatility of

The Company analyzed the likelihood that the vesting qualifications would be met, and as of December 31, 2021 deemed that there

was a 14% chance that the options would vest, as the measurement period does not begin until January 1, 2021.

Therefore, stock option

expense recognized during the years ended December 31, 2021 and December 31, 2020 was $ 82,734 and $ 0 , respectively.

June 14, 2021 the Company issued options to purchase up to an aggregate of 1,125,000

shares of common stock to various employees under

The options were issued pursuant to a stock option grant agreements and are exercisable at $ 0.036

per share for a period of four years from the

date of issuance, with 12.5% of the options vesting each fiscal quarter over a period of two

The fair value of the options totaled

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .21 %,

ii) expected life of 2

years, iii) dividend yield of 0 %,

iv) expected volatility of 304.77%.

The stock options expense recognized for the Year ended December 31, 2021 was $ 13,843 .

August 1, 2021 as part of the Blake Carmichael Employment Agreement (as defined below), the Company entered into a Non-Qualified

Stock Option agreement with Blake Carmichael.

Under the terms of the Blake Carmichael Employment agreement, the Company will enter into

an option contract that will grant Blake Carmichael a 5 year option to purchase 3,759,400

shares of the Company’s common stock at

an exercise price of $ .0399 ,

(the “BC Compensation Options”).

The BC Compensation Options vest 33.3% upon the execution of the agreement, 33% at the first

anniversary date and 33% upon the second anniversary date.

The fair value of the options on the date of the grant was $ 149,076

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .25 %,

ii) expected life of 2.5 years, iii) dividend yield of 0 %,

iv) expected volatility of 346.36 %.

The Company expensed $ 49,692

as of December 31, 2021.

part of the Blake Carmichael Agreement the company entered into a Non-Qualified Stock option agreement (the “BC Bonus Options”)

that will grant Blake Carmichael a 5-year option to purchase up to 18,000,000

shares to be vested annually on a contract year

basis, based upon the achievement of certain financial metrics tied to Revenue and EBITA.

The fair value of the BC Bonus Options was

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .25 %,

ii) expected life of 2.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 346.36 %,

v) exercise price of .0399 per share.

The measurement period for these options began in August, 2021.

As of December 31, 2021 the Company

deemed that there was an opportunity for 3% of the total option to vest and an option expense of $ 21,810

was expensed for the year ended

December 31, 2021.

summary of the Company’s warrants as of December 31, 2020 and 2019, and changes during the years ended December 31,

the Third Quarter, 2021 the Company issued options to purchase up to an aggregate of 175,000

shares of common stock to two employees under

The options were issued pursuant to stock option grant agreements and are exercisable at a range of $ .044

per share for a periods ranging from three

years of from the date of issuance, with quarterly

vesting periods over one to two years.

The fair value of the options totaled $ 7,149

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate from .155 %

ii) expected life of 1.5

years, iii) dividend yield of 0 % ,

iv) expected volatility of 249.38 %

The stock options expense recognized for the year ended December 31, 2021 was $ 2,989 .

September 3, 2021 the Company issued options to purchase up to an aggregate of 300,000

shares of common stock to Christeen Buban, President

of SSI under the Plan.

The options were issued pursuant to the Buban Agreement and a stock option grant agreement and is exercisable

per share for a period of five

years from the date of issuance, with 12.5 %

of the options vesting each fiscal quarter over a period of two years.

The fair value of the options totaled $ 15,814

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .315 %,

ii) expected life of 2.5 years, iii) dividend yield of 0 %,

iv) expected volatility of 339.21 %.

The stock options expense recognized for the year ended December 31, 2021 was $ 3,953 .

part of the Buban Agreement the company is also obligated to enter into a Non-Qualified Stock option agreement (the “Buban Bonus

Options”) that will grant Mrs.

Buban a 5 -year

option to purchase up to 7,110,000

shares to be vested annually on a contract year

basis, based upon the achievement of certain financial metrics tied to Revenue and EBITA.

The fair value of the Buban Bonus Options was

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .3150 %,

ii) expected life of 2.5

years, iii) dividend yield of 0 %,

iv) expected volatility of 339.21 %,

v) exercise price of .0531 per share.

The measurement period for these options began on September 3, 2021.

The company deemed that there

was no option expense to be recognized for the year ended December 31, 2021.

September 3, 2021 the Company issued options to purchase up to an aggregate of 500,000

shares of common stock to various employees of

SSI under the Plan.

The options were issued pursuant to a stock option grant agreement and is exercisable at $ 0.0531

per share for a period of four years from the

date of issuance, with 12.5 %

of the options vesting each fiscal quarter over a period of two

The fair value of the options totaled

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .21 %,

ii) expected life of 2

years, iii) dividend yield of 0 %,

iv) expected volatility of 276.1 %.

The stock options expense recognized for the year ended December 31, 2021 was $ 6,300 .

the Fourth Quarter, 2021 the Company issued options to purchase up to an aggregate of 100,000

shares of common stock to two employees under

The options were issued pursuant to stock option grant agreements and are exercisable at a range of $ .040

per share for a period of four

years of from the date of issuance, with quarterly

vesting periods over two years.

The fair value of the options totaled $ 3,863

using the Black-Scholes option pricing model

with the following assumptions:

i) risk free interest rate of .204 %

ii) expected life of 2

years, iii) dividend yield of 0 %,

iv) expected volatility of 249.38 %

The stock options expense recognized for the year ended December 30, 2021 was $ 482 .

November 5, 2021 the company entered into a Non-Qualified Stock Option agreement with Christopher Constable the “Constable Option

Agreement” as part of his employment agreement.

Under the terms of the option agreement, the Company granted Mr.

Constable a 5

year option to purchase 2,403,846 shares of the Company’s common stock at an exercise price of $ .041 , the “Compensation Options”.

The Compensation Options were immediately vested.

The fair value of the options on the date of the grant was $ 98,976 using the Black-Scholes

option pricing model with the following assumptions:

i) risk free interest rate of .53 %, ii) expected life of 2.5 years, iii) dividend

yield of 0 %, iv) expected volatility of 269.12 %.

Stock option expense recognized during the year ended December 31, 2021 for these options

were $ 98,976 .

summary of the Company’s stock option as of December 31, 2021 and 2020, and changes during the years ended December 31, 2021

and 2020 is presented below:

Exercise Price

Schedule of Option Activity

Life in Years

Outstanding at December 31, 2019

Outstanding –

December 31, 2019

Exercisable –

December 31, 2019

Exercise Price

Outstanding – December 31, 2020

Exercisable – December 31, 2020

Life in Years

Outstanding at December 31, 2020

(22,500,000 )

(30,108,725 )

Outstanding –

December 31, 2020

Exercisable –

December 31, 2020

Outstanding – December 31, 2021

Exercisable – December 31, 2021

February 25, 2020, Mr.

Hyatt, a member of the Company’s Board of Directors, partially exercised a warrant for the acquisition

of 12,500,000 shares at $.01 per share for proceeds to the Company of $125,000.

Hyatt, a member of the Company’s Board of Directors, partially exercised a warrant for the acquisition of

12,500,000 shares at $ .01 per share for proceeds to the Company of $ 125,000 .

April 2, 2020 Mr.

Hyatt purchased 10,000,000 shares related to the exercise of an outstanding common stock purchase warrant at

an exercise price of $.01 per share.

Hyatt purchased 10,000,000 shares related to the exercise of an outstanding common stock purchase warrant at an exercise

price of $ .01 per share.

The Company received proceeds of $ 100,000 upon such exercise.

On September 7, 2020 the balance

of 27,500,000 in common stock purchase warrant owned by Mr.

On September 7, 2020 the balance of 27,500,000

in common stock purchase warrant owned by Mr.

Hyatt, expired.

the first quarter of 2020 warrants to purchase 2,608,725 shares of common stock held by two investors expired.

September 1, 2021, the Company issued Mr.

Hyatt, a member of our Board of Directors, 10,000,000 units of the securities of

the Company, with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025

per share in consideration of $ 250,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

September 1, 2021, the Company issued Ms.

Grace Hyatt, the adult child of a member of our Board of Directors, 600,000 units of the securities

of the Company, with the unit consisting of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025

per share in consideration of $ 15,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

September, 2021, the Company issued 4,000,000 units of the securities of the Company to three accredited investors, with the unit consisting

of 1 share of common stock and 1 two year common stock purchase warrants exercisable at $ 0.025 per share in consideration of $ 100,000 .

The Company did not pay any fees or commissions in connection with the sale of the unit.

summary of the Company’s warrants as of December 31, 2021 and 2020, and changes during the years ended December 31, 2021

and 2020 is presented below:

of Warrants Activity

Number of Warrants

Exercise Price

Contractual Life in Years

Aggregate Intrinsic Value

Outstanding at December 31, 2019

( 22,500,000 )

( 30,108,725 )

Outstanding – December 31, 2020

Exercisable – December 31, 2020

Number of Warrants

Exercise Price

Contractual Life in Years

Aggregate Intrinsic Value

Outstanding at December 31, 2020

Outstanding – December 31, 2021

Exercisable – December 31, 2021

Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized.

5 unchanged sentences

components of the provision for income tax expense are as follows for the years ended:

Schedule of Provision for Income Tax Expense

Current taxes

1 unchanged sentence

Change in deferred taxes

valuation allowance

for income tax expense

following is a summary of the significant components of the Company’s deferred tax assets and liabilities at December 31,

2020 and 2019:

Change in valuation allowance

Provision for income tax expense

following is a summary of the significant components of the Company’s deferred tax assets and liabilities at December 31, 2021

Summary of Significant Components of Deferred Tax Assets and Liabilities

Deferred tax assets:

based compensation

Allowance for

doubtful accounts

slow moving inventory

operating loss carryforward

Equity based compensation

Allowance for doubtful accounts

Reserves for slow moving inventory

Net operating loss carryforward

Total deferred tax assets

assets net of valuation allowance

Valuation allowance

( 1,504,200 )

( 1,544,400 )

Deferred tax assets, net of valuation allowance

effective tax rate used for calculation of the deferred taxes as of December 31, 2021 was 25.35 %.

The Company has established

a 100% valuation allowance against deferred tax assets of $1,544,400, due to the uncertainty regarding realization

The Company has established a 100 %

valuation allowance against deferred tax assets of $ 1,504,200 ,

due to the uncertainty regarding realization reserve against the deferred tax assets.

The change in valuation allowance was an increase

of $ 40,100 .

The Company has approximately $ 3,465,000

loss carryforward that expire through 2037 and $ 1,607,000

carryforward indefinitely, but is limited to 80% of taxable income in any one year .

effective tax rate used for calculation of the deferred taxes as of December 31, 2020 was 25.35 %.

The Company has established a 100 %

valuation allowance against deferred tax assets of $ 1,544,400

due to the uncertainty regarding realization

reserve against the deferred tax assets.

The change in valuation allowance was an increase of $ 38,100 .

has approximately $3,465,000 of net loss carryforward that expire through 2037 and $1,807,000 that carryforward

indefinitely, but is limited to 80% of taxable income in any one year.

effective tax rate used for calculation of the deferred taxes as of December 31, 2019 was 25.35%.

The Company has established

a 100% valuation allowance against deferred tax assets of $1,583,000 due to the uncertainty regarding

realization reserve against the deferred tax assets.

The change in valuation allowance

was an increase of $239,300.

significant differences between the statutory tax rate and the effective tax rates for the Company for the years ended are as

significant differences between the statutory tax rate and the effective tax rates for the Company for the years ended are as follows:

Schedule of Differences Between Statutory Tax Rate and Effective Tax Rate

Statutory tax rate

1 unchanged sentence

Permanent differences

Change in valuation

Effective tax

Change in valuation allowance

Effective tax rate

The Company’s income

tax returns for 2017 through 2021 remain subject to examination by the Internal Revenue Services and state tax authorities.

Commitments and Contingencies

August 14, 2014, the Company entered into a thirty-seven-month term lease for its initial facilities in Pompano Beach, Florida,

commencing on September 1, 2014.

August 14, 2014, the Company entered into a thirty-seven-month term lease for its initial facilities in Pompano Beach, Florida, commencing

on September 1, 2014.

Terms included payment of $ 5,367 security deposit;

base rent of approximately $4,000 per month

over the term of the lease plus sales tax;

base rent of approximately $ 4,000 per month over the term of

the lease plus sales tax;

and payment of 10.76 % of annual operating expenses (i.e.

common areas maintenance),

which was approximately $2,000 per month subject to periodic adjustment.

On December 1, 2016, we entered into an amendment to

the initial lease agreement, commencing on October 1, 2017, extending the term 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.

November 11, 2018, the Company entered a new lease agreement for approximately 8,025 square feet adjoining its existing facility

in Pompano Beach, Florida.

Terms of the new lease include a sixty-nine month term commencing on January 1, 2019, or the date the

Company took possession of the premises, if earlier;

common areas maintenance), which was approximately

$ 2,000 per month subject to periodic adjustment.

On December 1, 2016, we entered into an amendment to the initial lease agreement, commencing

on October 1, 2017, extending the term 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 month lease renewal for its facility in Huntington Beach, CA, commencing on February 1, 2018.

Terms included base rent

of approximately $ 9,300 Gross per month for the first 12 months and increasing 2.5 % annual escalation throughout the amended term.

Company paid a security deposit of $ 8,450 with the initial lease that ended with the renewal.

November 11, 2018, the Company entered a new lease agreement for approximately 8,025 square feet adjoining its existing facility in Pompano

Beach, Florida.

Terms of the new lease include a sixty-nine month term commencing on January 1, 2019, or the date the Company took possession

of the premises, if earlier;

a $ 6,527 security deposit;

initial base rent of approximately $4,848 per

month escalating at 3% per year during the term of the lease plus Florida state sales tax and payment of 10.11% of the buildings

annual operating expenses (i.e.

common area maintenance) which is approximately $1,679 per month subject to adjustment as provided

in the lease.

Company, Trebor and other third parties, were each named as a co-defendants under actions initially filed in March 2015 in the

Circuit Court of Broward County under Case No.

CACE-15-03238 and CACE -16-0000242 by the Estate of Ernesto Rodriguez, claiming

wrongful death and products liability resulting in the decedent’s drowning death while using a Brownie’s Third Lung

This claim was settled in June 2020 for $50,000, and further modified into a lump sum payment of $44,200 (88.4% of the

original settlement amount) which was paid in full on August 25, 2020.

April 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.

Effective December 31, 2019, the Company entered into Addendum No.

1 to the STS Agreement (“Addendum No.

initial base rent of approximately $ 4,848 per month escalating at 3 % per year

during the term of the lease plus Florida state sales tax and payment of 10.11 % of the buildings annual operating expenses (i.e.

area maintenance) which is approximately $ 1,679 per month subject to adjustment as provided in the lease.

Company, Trebor and other third parties, were each named as a co-defendants under actions initially filed in March 2015 in the Circuit

Court of Broward County under Case No.

CACE-15-03238 and CACE -16-0000242 by the Estate of Ernesto Rodriguez, claiming wrongful death

and products liability resulting in the decedent’s drowning death while using a Brownie’s Third Lung product.

was settled in June 2020 for $ 50,000 , and further modified into a lump sum payment of $ 44,200 ( 88.4 % of the original settlement amount)

which was paid in full on August 25, 2020.

April 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.

Effective December 31, 2019, the Company entered into

1 to the STS Agreement (“Addendum No.

1”) to amend the payment due upon the first commercial sale of NEMO.

In accordance with Addendum No.

1, $8,250 was paid in cash and

$8,250 was accrued as of December 31, 2019, and paid during the year ended December 31, 2020.

The Company issued 828,221

shares of common stock in satisfaction of $13,500 for the first commercial sale of NEMO with a fair value of $19,635.

June 30, 2020, the Company entered into Addendum No.2 to the Patent License Agreement (“Addendum No.2”) This addendum

is to set limits and expectations of the assistance from STS rated to designing and commercializing NextGen diving products, and

that STS receive deferred consideration for uncompensated services.

2 also states that if the Company terminate the

STS Agreement before December 31, 2024, then the Company will pay STS $180,000 , less cumulative royalties paid in excess of $334,961

for years 2019, 2020, 2021, 2022, 2023 and 2024.

accordance with Addendum No.

1, $ 8,250 was paid in cash and $ 8,250 was accrued as of December 31, 2019, and paid during the year ended

December 31, 2020.

The Company issued 828,221 shares of common stock in satisfaction of $ 13,500 for the first commercial sale of NEMO

with a fair value of $ 19,635 .

Effective June 30, 2020, the Company entered into Addendum No.2 to the Patent License Agreement (“Addendum

No.2”) This addendum is to set limits and expectations of the assistance from STS rated to designing and commercializing NextGen

diving products, and that STS receive deferred consideration for uncompensated services.

2 also states that if the Company

terminate the STS Agreement before December 31, 2024 , then the Company will pay STS $ 180,000 , less cumulative royalties paid in excess

of $ 334,961 for years 2020, 2021, 2022, 2023 and 2024.

June 30, 2020, the Company entered into Amendment No.

2 to the STS Agreement.

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%

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.

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 ,

per fiscal quarter, beginning in December 2019

and increasing by 2.15 %

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 should terminate the agreements with STS prior to December

then the Company is obligated to pay STS $180,000, less cumulative royalties paid in excess of $334,961 for the years 2019 through

Royalty recorded in relation to this agreement totaled $53,929 and $48,963 for the years ended December

31, 2020 and 2019, respectively.

April 9, 2020 the Company entered into an Investor Relations Consulting Agreement with HIR Holdings, LLC pursuant to which the

Company engaged the firm to provide investor relations services.

The term of the agreement is for a minimum guaranteed period

of six months, and thereafter is cancellable by either party upon 30 days’

notice to the other party.

As compensation the

Company issued the consultant 3,000,000 shares of its common stock, valued at $133,500, and is responsible for reimbursement of

certain pre-approved expenses.

31, 2023, then the Company is obligated to pay STS $ 180,000 ,

less cumulative royalties paid in excess of $ 334,961

for the years 2020 through 2024.

recorded in relation to this agreement totaled $ 157,855

for the years ended December 31, 2021 and

2020, respectively.

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.

April 9, 2020 the Company entered into an Investor Relations Consulting Agreement with HIR Holdings, LLC pursuant to which the Company

engaged the firm to provide investor relations services.

The term of the agreement is for a minimum guaranteed period of six months,

and thereafter is cancellable by either party upon 30 days’ notice to the other party.

As compensation the Company issued the consultant

3,000,000 shares of its common stock, valued at $ 133,500 , and is responsible for reimbursement of certain pre-approved expenses.

April 9, 2020 the Company also entered into a Corporate Communications Consulting Agreement with Impact IR Inc.

pursuant to which

the Company also engaged this firm to provide investor relations services.

pursuant to which the

Company also engaged this firm to provide investor relations services.

The term of the agreement is six months.

As compensation

the Company issued the consultant 2,000,000 shares of its common stock valued at $89,000.

As compensation the Company

issued the consultant 2,000,000 shares of its common stock valued at $ 89,000 .

June 9, 2020 the Company entered into an advertising and marketing agreement with Figment Design.

The term of the agreement is

for one year, and thereafter renew or cancel the agreement in writing 60 days before the final date.

The Company will be billed

$5,275 for June and July 2020 and $8,840 from August 2020 to July 2021.

The term of the agreement is for one

year, and thereafter renew or cancel the agreement in writing 60 days before the final date.

The Company will be billed $ 5,275 for June

and July 2020 and $ 8,840 from August 2020 to July 2021.

This contract was not renewed at the expiration date.

August 1, 2020, BLU3 entered into an advertising and marketing agreement with Figment Design.

The term of the agreement is for

one year beginning August 1, 2020, and thereafter renew or cancel the agreement in writing 60 days before the final date.

Design will bill BLU3 $3,500 per month as retainer and $1,500 to $2,000 for monthly ad spend.

The term of the agreement is for one year

beginning August 1, 2020, and thereafter renew or cancel the agreement in writing 60 days before the final date.

Figment Design will

bill BLU3 $ 3,500 per month as retainer and $ 1,500 to $ 2,000 for monthly ad spend.

This agreement was terminated with 30 day notice prior

to its expiration.

August 1, 2020, BLU3 entered into a marketing agreement with This Way Media PTY, Ltd.

The term of this agreement is for 11 months

and can be cancelled with 30 days notice during the first 90 days of the agreement.

After the first 90 days, the agreement can

be cancelled with 60 days’

notice after the completion of the term of the agreement.

BLU3 will pay This Way Media PTY, LTD

$500 per month, and 5% of each affiliate sale.

August 10, 2020, the Company engaged Brandywine, LLC to provide certain accounting advisory and consulting services to it under

the terms of a letter agreement.

As compensation for the services, we agreed to pay Brandywine, LLC an hourly rate of $125.00

and issue it 10,000 shares of our common stock for each hour billed, which such shares are issuable to a designee of Brandywine,

LLC in its discretion, and reimburse it for pre-approved expenses.

The agreement may be terminated by either party upon 15 days’

notice, and contains customary indemnification provisions.

This agreement was terminated on November 5, 2020 upon entering into

an employment agreement as detailed below, a total number of 2,795,000 shares were issued under this agreement as of December

On November 5, 2020 the Company and Christopher H.

Constable entered into a three year employment agreement (the

“Constable Employment Agreement”) pursuant to which the Mr.

Constable shall serve as Chief Executive Officer of the

term of this agreement is for 11 months and can be cancelled with 30 days notice during the first 90 days of the agreement.

the first 90 days, the agreement can be cancelled with 60 days’ notice after the completion of the term of the agreement.

will pay This Way Media PTY, LTD $500 per month, and 5% of each affiliate sale .

This agreement expired on July 1, 2021.

is currently in negotiation to renew this agreement, but continues to pay the originally agreed upon amount and receive content

from the vendor

August 10, 2020, the Company engaged Brandywine, LLC to provide certain accounting advisory and consulting services to it under the terms

of a letter agreement.

As compensation for the services, we agreed to pay Brandywine, LLC an hourly rate of $ 125.00 and issue it 10,000

shares of our common stock for each hour billed, which such shares are issuable to a designee of Brandywine, LLC in its discretion, and

reimburse it for pre-approved expenses.

The agreement may be terminated by either party upon 15 days’ notice, and contains customary

indemnification provisions.

This agreement was terminated on November 5, 2020 upon entering into an employment agreement as detailed

below, a total number of 2,795,000 shares were issued under this agreement as of December 31, 2020 This agreement was terminate upon

the execution of the Constable Employment Agreement.

November 5, 2020 the Company and Christopher Constable entered into a three year employment agreement (the “Constable Employment

Agreement”) pursuant to which the Mr.

Constable shall serve as Chief Executive Officer of the Company.

Previously, Mr.

Constable had provided advisory services to the Company through the agreement with Brandywine LLC.

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) issuable 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 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.

Therefore, the Executive shall receive an initial stock option grant to purchase

5,434,783 shares of the Corporation’s common stock at an exercise price of $0.0184 per share pursuant to an option award

agreement (the “Option Award Agreement”).

had provided advisory services to the Company through the agreement with Brandywine LLC.

In consideration for his services, Mr.

shall receive (i) an annual base salary of $ 200,000 , payable in accordance with the customary payroll practices of the Company, and (ii)

issuable 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 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.

Therefore, the Executive shall

receive an initial stock option grant to purchase 5,434,783 shares of the Corporation’s common stock at an exercise price of $ 0.0184

per share pursuant to an option award agreement (the “Option Award Agreement”).

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 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 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 on NASDAQ

or New York Stock Exchange.

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.

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 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

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;

20,000,000 shares - if the Company’s common stock is listed on the on NASDAQ or New York Stock Exchange.

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.

agreement may be terminated for cause, upon his death or disability, or by the Company without cause.

Furthermore, Mr.

may terminate the agreement for “good reason”

as defined in the agreement.

If the Company terminates the Constable

Employment 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.

Constable may

terminate the agreement for “good reason” as defined in the agreement.

If the Company terminates the Constable Employment

Agreement for cause, or if it terminates upon Mr.

Constable’s death or disability, or if he voluntarily terminates the agreement,

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 should terminate the Constable Employment Agreement without cause or if Mr.

terminates for good reason, the Company is obligated to continue to pay him his base salary for a period of six months.

The Constable

Employment Agreement also contains customary confidentiality, non-disclosure and indemnification provisions.

Constable terminates for good reason, the

Company is obligated to continue to pay him his base salary for a period of six months.

The Constable Employment Agreement also contains

customary confidentiality, non-disclosure and indemnification provisions.

to the Constable Employment Agreement, Mr.

Constable also agreed to serve on the Company’s Board of Directors and the Company

agreed to nominate him to serve on the Board during the term of the Constable Employment Agreement.

Constable also agreed to serve on the Company’s Board of Directors and the Company agreed

to nominate him to serve on the Board during the term of the Constable Employment Agreement.

December 15, 2020 the Company engaged Newbridge Securities Corporation to provide Investment Banking and Corporate Advisory services.

The term of this agreement is for twelve months and can be terminated by either party with 14 day written notice.

As compensation

for this agreement the Company issued 2,100,000 shares of common stock with a fair market value of $40,320.

Company has three operating segments as described below:

Legacy SSA Products, which sells recreational hookah diving systems.

As compensation for

this agreement the Company issued 2,100,000 shares of common stock with a fair market value of $ 40,320 .

March 1, 2021, the Company entered into an investor relations consulting agreement with BGM Equity Partners, LLC.

The 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.

May 20, 2021, the Company entered into an exclusive distribution agreement with Chrysalis Trading CC doing business as Bright Weights

for exclusive distribution of the Bright Weights diving products in the United States and Caribbean.

The term of the agreement is 2 years

and will renew at the two-year anniversary date for an additional two-year term.

There are no minimum purchase commitments in this agreement.

The company paid to the sole shareholder of Chrysalis Trading CC 500,000 shares of its common stock at a fair market value of $ 36,690

for this exclusivity.

August 1, 2021, the Company and Blake Carmichael entered into a three year employment agreement (the “Blake Carmichael Employment

Agreement”) pursuant to which Mr.

Carmichael shall continue to serve as Chief Executive Officer of 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) Issuable upon execution of the Employment Agreement, a non-qualified five -year stock

option to purchase 3,759,400 shares at $ .0399 .

33.3% of the stock option vests immediately, 33.3% vests on the second anniversary of

the contract and 33.3% on the third anniversary of the agreement .

addition, Blake Carmichael shall be entitled to receive a five -year stock options to purchase up to 18,000,000 shares of common stock

at an exercise price equal to $ 0.0399 per share that will vest upon defined financial metrics that are measured on a contract year basis.

The metrics defined in the agreement escalate the shares available to vest based upon a revenue measurement, expediency measurement and

an EBITDA measurement.

August 6, 2021 the Company entered into a six-month, non-exclusive mergers and acquisitions services agreement with Newbridge Securities

merger agreement shall pay seven percent commission for the first two million dollars paid in aggregate consideration and six percent

on the aggregate consideration above two million dollars .

The fee shall be paid in the common stock of the Company.

The equity received is subject to a holding period of six months from the closing

date of the transaction.

No payment has been issued in relation to this agreement.

September 3, 2021, SSI and Christeen Buban entered into a three-year employment agreement (the “Buban Employment Agreement”)

pursuant to which Mrs.

Buban shall serve as the President of SSI.

In consideration for his services, Mrs.

Buban shall receive (i) an

annual base salary of $ 110,000 , payable in accordance with the customary payroll practices of the Company, (ii) a car allowance and cell

phone allowance totaling $ 10,800 per year, (iii) a five -year stock option issued under the Plan to purchase 300,000 shares at $ .0531 .

The options vest quarterly over the next eight calendar quarters.

addition, Mrs.

Buban shall be entitled to receive a five -year stock options to purchase up to 7,110,000 shares of common stock at an

exercise price equal to $ 0.0531 that will vest upon defined financial metrics that are measured on a contract year basis.

defined in the agreement escalate the shares available to vest based upon a revenue measurement, expediency measurement and an EBITDA

Company was a defendant in that certain lawsuit styled Basil Vann, as Personal Representative of the Estate of Jeffrey William

Brownie’s Marine Group, Inc., filed on May 6, 2019 in the Circuit Court of the 17 th Judicial Circuit in

and for Broward County, Florida.

The complaint, which relates to consulting services provided to the Company by the deceased between

2005 and 2017, alleges breach of contract and quantum meruit and is seeking $ 15,870.97

in unpaid consulting fees together with interest.

In April 2020, the Company filed a Motion to Dismiss, and at a hearing held in May

2021, the Court struck certain allegations contained in the complaint, the parties agreed that the quantum meruit allegation is

deemed to be an alternative to the breach of contract allegation, but permitted certain other allegations to stand.

entered mediation pursuant to the Court’s order.

This action was settled for $ 10,000

on July 12, 2021.

The company has a balance of $ 5,000 remaining on this obligation as of December 31, 2021.

Company has four operating segments as described below:

Legacy SSA Products, which sells recreational multi-diver surface supplied air diving systems.

High Pressure Gas Systems, which sells high pressure air and industrial gas compressor packages.

Ultra Portable Tankless Dive Systems, which sells next generation electric surface supply air diving systems and electric shallow

dive system that are battery operated and completely portable to the user.

Net Revenues:

Legacy SSA Products

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

Cost of Revenues:

Legacy SSA Products

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

cost of revenues

Gross Profit(loss):

Legacy SSA Products

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

gross profit(loss)

Segment Depreciation:

Legacy SSA Products

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

segment depreciation

Segment (loss) from Operations:

Legacy SSA Products

Ultra Portable Tankless Dive Systems, which sells next generation electric surface supply air diving systems and electric shallow dive

system that are battery operated and completely portable to the user.

Redundant Air Tank Systems, which manufactures and distributes a line of high pressure tanks, redundant and rescue air systems for the

military and recreational diving industries

Schedule of Segment Reporting Information

SSA Products High

Pressure Gas Systems

Portable Tankless Dive Systems

Air Tank Systems

Cost of Revenue

( 2,161,396 )

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

segment (loss) from operations

( 1,783,857 )

( 1,437,512 )

Segment assets:

Legacy SSA Products

High Pressure Gas Systems

Ultra Portable

Tankless Dive Systems

( 4,337,820 )

( 3,091,584 )

(Loss) from operations

$ ( 1,778,463 )

$ ( 1,063,871 )

$ ( 238,313 )

$ ( 125,215 )

( 1,852,703 )

$ ( 1,333,060 )

Subsequent Events

February 22, 2021 the holder of the convertible promissory note in the principal amount of $10,000 issued a notice

of conversion.

The note in the principal amount and interest of $14,777 was converted at a conversion price of $.035 for

a total 422,209 shares of common stock.

Further, the conversion notice stated that this conversions satisfied all of debt

due to the lender, which would include an additional note of $10,000 that was not convertible and unsecured.

March 1, 2021 the Company entered into an Investor Relations Consulting Agreement with BGM Equity Partners, LLC pursuant to which

the Company engaged the firm to provide investor relations services.

The term of the agreement is for a minimum guaranteed period

of six months, and thereafter is cancellable by either party upon 30 days notice to the other party.

As compensation the Company

issued the consultant 3,000,000 shares of its common stock, valued at $120,000, and is responsible for reimbursement of certain

pre-approved expenses.

March 25, 2021 Charles F.

Hyatt, a member of the board of directors, purchased 27,500,000 shares of common stock

at a purchase price of $0.01 per shares for aggregate proceeds of $275,000.

The Company did not pay any commissions

or finders fees and is using the proceeds for working capital.

February 2022 the Company issued 10,000,000

shares of common stock to Charles Hyatt, a

director, upon the exercise of a common stock purchase warrant at an exercise price of $ 0.025

for $ 250,000 .

February, 2022 the Company issued 600,000

shares of common stock related to Grace Hyatt,

the adult daughter of a director upon the exercise of a common stock purchase warrant at an exercise price of $ 0.025

for $ 15,000 .

January 31, 2022 and February 28, 2022 the Company issued an aggregate of 206,318 shares of its common stock with a fair value of $ 21,000

to a consultant for services related to the dive retail industry.

On January 19, 2022, SSI entered into a capital

lease with Alliance Funding Group to secure a new piece of essential equipment for its operation.

The lease has a 36 month term with

a monthly payment of $ 3,522 .

At the end of the lease SSI has the option to purchase the equipment for $3,522 plus applicable taxes.

total purchase price of machine was $108,675.

February 13, 2022 the Company filed with the Florida Department of State, the articles of incorporation for a new wholly owned subsidiary,

Live Blue, Inc.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures