What changed in this filing

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Item 1A. Risk Factors

2024-05-09 compared with 2023-03-30 · 35 added, 52 removed, 248 unchanged (26% of the section changed)

8 unchanged sentences

incurred net losses of $1,248,115 and $1,892,891, respectively, for the year ended December 31, 2023 and 2022.

On December 31, 2022 we

had an accumulated deficit of $16,437,495.

While our revenues increased 37.7% for the year ended December 31, 2022 from 2021, and our

gross profit margin increased from 30.3% in 2021 to 32.6% in 2022, our gross profit is not sufficient to cover our operating expenses

of $4,644,596 and $3,742,262 for the twelve months ending December 31, 2022 and 2021, respectively.

Operating expenses include non-cash

stock compensation expenses of $962,474 and $1,154,801 for the years ending December 31, 2022 and 2021, respectively.

In the year ended

December 31, 2022, our selling, general and administrative expenses, increased 19.8% from 2021.

There are no assurances that we will

be able to increase our revenues to a level which supports profitable operations and provide sufficient capital to pay our operating

expenses and other obligations as they become due.

auditors have raised substantial doubts as to our ability to continue as a going concern .

On December 31, 2023,

we had an accumulated deficit of $17,685,610.

Revenues decreased by 11.6% for the year ended December 31, 2023, from 2022, and our gross

profit margin decreased from 32.6% in 2022 to 27.8% in 2023, our gross profit is not sufficient to cover our operating expenses of $3,277,319

and $4,644,595 for the twelve months ending December 31, 2023 and 2022, respectively.

Operating expenses include non-cash stock compensation

expenses of $81,424 and $951,414 for the years ending December 31, 2023 and 2022, respectively.

In the year ended December 31, 2023,

our selling, general and administrative expenses, decreased 29.5% from 2022.

There are no assurances that we will be able to increase

our revenues to a level which supports profitable operations and provide sufficient capital to pay our operating expenses and other obligations

as they become due.

auditors have disclosed substantial doubt as to our ability to continue as a going concern .

independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt relating to our

1 unchanged sentence

We have recurring losses from operations and had a net loss of approximately $1,248,000 and have used approximately

$678,400 in net cash in our operations in the year ended December 31, 2022 as well as an accumulated deficit of approximately

$375,000 in net cash used in our operations in the year ended December 31, 2023 as well as an accumulated deficit of approximately

These factors, among others, raise substantial doubt about our ability to continue as a going concern.

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depend on licenses with Robert Carmichael, our Chairman, who owns much of our intellectual property.

The Company has licensed from entities in which Robert

Carmichael, our Chairman, has an ownership interest, the following registered and unregistered trade names, trademarks and service marks:

Brownie’s Third Lung™, browniedive.com, Brownie’s, Brownie’s Third Lung oval symbol, browniedive, YachtPro.

to maintain such licenses with Mr.

Carmichael would have a material adverse effect on the Company’s financial condition.

Company has licensed from entities in which Robert Carmichael, our Chairman, has an ownership interest, the following registered and

unregistered trade names, trademarks and service marks:

Brownie’s Third Lung™, browniedive.com, Brownie’s, Brownie’s

Third Lung oval symbol, browniedive, YachtPro.

Failure to maintain such licenses with Mr.

Carmichael would have a material adverse effect

on the Company’s financial condition.

we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial

9 unchanged sentences

which could have an adverse effect on our stock price and potentially subject us to litigation.

Consumer Products Safety Commission

(“CPSC”) has issued a voluntary recall for one of our products.

22, 2022, the CPSC issued a voluntary recall notice for the Nomad tankless dive system, which is distributed by BLU3, Inc.

As part of the

recall procedure, the CPSC has approved the Company’s proposed remedy for the recall and BLU3 will begin to receive units back from

consumers to repair affected Nomad units.

The Company has evaluated the costs of this recall and has deemed it necessary to set a reserve

for those costs related to the recall of $160,500.

However, the Company is unable to currently calculate the full financial impact

to the Company over the long term, and whether it may have a material adverse impact on the financial condition of the Company in future

Consumer Products Safety Commission (“CPSC”) has issued a voluntary recall for one of our products.

December 22, 2022, the CPSC issued a voluntary recall notice for the Nomad tankless dive system, which is distributed by BLU3, Inc.

part of the recall procedure, the CPSC has approved the Company’s proposed remedy for the recall and BLU3 will begin to receive

units back from consumers to repair affected Nomad units.

The Company has evaluated the costs of this recall and has deemed it necessary

to set a reserve for those costs related to the recall of $160,500.

In 2023 the Company finalized the recall and adjusted the reserve

down to approximately $86,300 to reflect the actual impact on the Company’s financial condition.

AND OPERATIONAL RISKS

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or cease our business operations.

worldwide impact from the COVID-19 pandemic may negatively impact our business.

we have been relatively successful in navigating such impact to date, we have previously been affected by temporary manufacturing closures,

and employment and compensation adjustments.

There are also ongoing related risks to our business depending on the progression of the

pandemic, and recent trends in certain regions have indicated potential returns to limited or closed government functions, business activities

and person-to-person interactions.

Global trade conditions and consumer trends may further adversely impact us and our industries.

example, pandemic-related issues have exacerbated port congestion and intermittent supplier shutdowns and delays, resulting in additional

expenses to expedite delivery of critical parts.

Similarly, increased demand for personal electronics has created a shortfall of microchip

supply, and it is yet unknown how we may be impacted.

We cannot predict the duration or direction of current global trends from this

pandemic, the sustained impact of which is largely unknown, is rapidly evolving and has varied across geographic regions.

we continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, and we will

have to accurately project demand and infrastructure requirements globally and deploy our production, workforce and other resources accordingly.

issuance of shares of our common stock upon exercise of our outstanding options, warrants, convertible debt and Series A Convertible

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common stock is deemed to be “penny stock” as that term is defined under the Exchange Act.

Penny stocks generally are equity

securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges.

Our common stock

is covered by an SEC rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other

than established customers and accredited investors, which are generally institutions with assets in excess of $5,000,000, or individuals

with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.

Penny stocks generally are

equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges.

Our common stock is covered by an SEC rule that imposes additional sales practice requirements on broker-dealers who sell such

securities to persons other than established customers and accredited investors, which are generally institutions with assets in

excess of $5,000,000, or individuals with net worth in

excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.

Broker/dealers

16 unchanged sentences

by making a tender offer or otherwise) or otherwise attempting to obtain control of our company.

Staff Comments

applicable to smaller reporting companies.

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 1A. Risk Factors