What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-05-09 compared with 2023-03-30 · 713 added, 1030 removed, 1219 unchanged (59% of the section changed)

40 unchanged sentences

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 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;

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;

● Insufficient

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.

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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.

has leveraged and will continue to leverage experienced consultants to assist with ongoing

GAAP and SEC compliance requirements.

We intend to expand our finance department through

the hiring of a certified public accountant to strengthen the segregation of duties, internal

controls and enhance our current staff.

● Segregation

of duties will be analyzed and adjusted Company-wide, where possible.

The Company is in the process of hiring additional personnel

in the accounting department as part of the internal controls implementation and documentation of those controls and procedures.

The Company is in the

process of hiring additional personnel in the accounting department as part of the internal

controls implementation and documentation of those controls and procedures.

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

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and administrative staff allowing improved internal control over financial reporting.

Annual Report does not include an attestation report of our registered public accounting firm regarding our internal control over financial

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the

SEC that exempt smaller reporting companies from this requirement.

in Internal Control over Financial Reporting

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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

Executive Officer, Chairman, President, and Chief Financial Officer and Director

Executive Officer and President of BLU3

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diving industry.

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

Constable sat

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

BON), and served as the Chairman of the audit committee until March,

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

On June 24, 2023,

Constable submitted his resignation as Chief Executive Officer effective July 7, 2023.

Constable remained a member of the Company’s

Board of Directors.

Constable sat on the board of directors of Bon Natural Life, Ltd.

BON), and served as the Chairman of

the audit committee until March, 2022.

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

Constable provided business and financial

consulting services.

Constable provided

business and financial consulting services.

From 2003 through February 2020 Mr.

Constable served as Chief Financial Officer of John Keeler & Co., Inc.,

d/b/a Blue Star Foods, a privately held international seafood company which in 2018 merged into Blue Star Foods Corp., a Miami,

Florida-based sustainable seafood company (NASDAQ:

Constable served as Chief Financial Officer and a director of Blue

Star Foods Corp until February 2020.

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 (NASDAQ:

Constable served as Chief Financial Officer and a director of

Blue Star Foods Corp until 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

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.

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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.

received his B.S.

Constable was a commercial banker at

Mercantile Bankshares in Baltimore, Maryland, Finova Capital Corporation and Capital Bank, both in south Florida.

Constable received

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.

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.

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on the board of directors for his general business management experience.

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

Since December 2017, Mr.

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South Florida Ocean Measurement Facility.

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

of the Board of Directors

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are not a “listed company” under SEC rules and therefore are 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.

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

following table provides information concerning the compensation paid to our Company’s non-employee director for services rendered

as a director during the year ended December 31, 2023.

or paid in cash

plan compensation

Christopher Constable

Charles Hyatt

Section 16(a) Reports

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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.

Robert Carmichael.

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

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Principal Position

Non-qualified

Robert Carmichael

Chairmen, President and CFO

CEO, Chairmen, President and CFO

Christopher Constable,

Represents the aggregate

grant date fair value of the shares of our common stock, computed in accordance with ASC Topic 718.

The assumptions made in the valuations

of the stock awards are included in Note 13 of the notes to our consolidated financial statements.

Represents (i) $18,000

in director compensation (ii) $12,313 in health insurance premiums paid on behalf of Mr.

Carmichael, and (iii) an aggregate of $75,161

in royalties paid to an entity controlled by Mr.

(1) Represents

the aggregate grant date fair value of the shares of our common stock, computed in accordance

with ASC Topic 718.

The assumptions made in the valuations of the stock awards are included

in Note 13 of the notes to our consolidated financial statements.

(2) Represents

(i) $18,000 in director compensation (ii) $5,686 in health insurance premiums paid on behalf

Carmichael, and (iii) an aggregate of $61,308 in royalties paid to an entity controlled

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

Represents (i) $18,000

in director compensation (ii) $5,686 in health insurance premiums paid on behalf of Mr.

Carmichael, and (iii) an aggregate of $61,308

in royalties paid to an entity controlled by Mr.

(3) Represents

(i) $18,000 in director compensation (ii) $5,921 in health insurance premiums paid on behalf

Carmichael, and (iii) an aggregate of $57,320 in royalties paid to an entity controlled

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

Represents a five-year option to purchase 2,403,846 shares of common stock.

Represents health insurance

premiums paid by the Company on behalf of Mr.

Represents a five-year option to purchase 3,968,254 shares of common stock.

(4) Represents

a five-year option to purchase 2,403,846 shares of common stock.

The option was forfeited upon Mr.

Constable’s resignation as Chief Executive Officer effective July 7, 2023.

(5) Represents

(i) $7,500 in director compensation (ii) $3,454 health insurance premiums paid by the Company

on behalf of Mr.

(6) Represents a portion of salary for 2023 due to Mr.

Constable submitted his resignation as Chief Executive Officer

effective July 7, 2023.

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

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Unexercisable

Exercise Price

Expiration Date

Robert Carmichael

20,761,904 (1)

25,000,000 (2)

5,434,783 (3)

5,000,000 (4)

2,403,846 (5)

3,968,254 (6)

Options fully vested in

Options vest based upon

certain corporate milestones as discussed in Note 13 of the financial statements included in this Annual Report.

Options fully vested in

November 2020

Options vest based upon

certain corporate milestones as discussed in Note 13 of the financial statements included in this Annual Report.

Options fully vested in

November 2021

Options fully vested in

November 2022

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.

Constable Employment Agreement

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customary confidentiality, non-disclosure and indemnification provisions.

June 24, 2023, Mr.

Constable voluntarily submitted his resignation as Chief Executive Officer effective July 7, 2023.

Constable remains

a member of the Company’s Board of Directors.

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.

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.

Security Ownership of

Certain Beneficial Owners and Management and Related Stockholder Matters

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 preferred stock, par value $0.001 per share, designated Series A Convertible Preferred

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Beneficial Owner

Amount and Nature of Beneficial Ownership

Beneficial Ownership

Percent of Class

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164,285,713 (2)

164,285,713 (3)

All directors and executive officers as a group (three persons)

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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 (iii) options to purchase an

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

50,000,000 shares of common stock at an exercise price of $0.045.

Does not include the voting power over 106,250,000 shares of common

stock by virtue of Mr.

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

Carmichael is the sole owner and has voting and

dispositive power;

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

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

an aggregate of 50,000,000 shares of common stock at an exercise price of $0.045.

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

shares of common stock by virtue of Mr.

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

Includes (i) options to

purchase an aggregate of 10,434,783 shares of common stock at an exercise price of $0.0184 per share, (ii) options to purchase 2,403,846

shares of common stock at an exercise price of $0.0401 per share and (iii) options to purchase 3,968,254 shares of common stock at

an exercise price of $.0252 per share.

Includes warrants to purchase

an aggregate of 17,142,858 shares of common at an exercise price of $.0175 per share.

Certain Relationships

and Related Transactions, and Director Independence.

warrants to purchase an aggregate of 17,142,855 shares of common at an exercise price of $.0175 per share.

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

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Divers, and Brownie’s Yacht Toys at December 31, 2023, were $5,901, $11,927 and $-0-, respectively.

Accounts receivable from

Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, 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 at December 31, 2022, were $16,875,

$6,773 and $15,532, respectively.

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

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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, 2022 and 2021 totaled $61,308 and $75,161, respectively.

The Company had accrued royalties of

$2,845 and $7,735 for the years ended December 31, 2022 and 2021, respectively.

On September 30, 2022, the Company

issued a convertible demand 8% promissory note in the principal amount of $66,793 to Robert Carmichael for funds to meet the working capital

needs of LBI.

Interest on the note is payable in shares of common stock of the Company at a conversion price equal to the 90 day value

weighted average price (“VWAP”) of the Company’s stock prior to the quarterly interest payment date.

The note holder

may demand payment or convert the outstanding principal at a conversion rate of $0.021 per share at any time.

The conversion rate was

calculated at a 35% discount to the 90 day VWAP of the Company’s stock as of the date of the note.

On March 25, 2021, the Company

issued 27,500,000 shares of common stock to Charles Hyatt, a director, in a private offering for proceeds of $275,000.

On 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.

On 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.

On September 1, 2021, the Company

issued 600,000 Units to Grace Hyatt, the adult child of Charles Hyatt, in a private offering for proceeds of $15,000.

The Company also had an amount due of $441 to Robert Carmichael

and $476 to Blake Carmichael as of December 31, 2023.

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

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

Total royalty fees paid to 940 A in the years ended December 31, 2023 and 2022 totaled $31,993 and $61,308, respectively.

The Company had accrued royalties of $2,238 and $2,845 for the years ended December 31, 2023 and 2022, respectively.

September 30, 2022, the Company issued a convertible demand 8% promissory note in the principal amount of $66,793 to Robert Carmichael

for funds to meet the working capital needs of LBI.

Interest on the note is payable in shares of common stock of the Company at a conversion

price equal to the 90 day value weighted average price (“VWAP”) of the Company’s stock prior to the quarterly interest

payment date.

The note holder may demand payment or convert the outstanding principal at a conversion rate of $0.021 per share at any

The conversion rate was calculated at a 35% discount to the 90 day VWAP of the Company’s stock as of the date of the note.

February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares upon the exercise of a warrant at $0.025 per share

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warrant at $0.025 per share in consideration of $15,000.

On March 14, 2022, the Company

issued 10,000,000 shares of common stock to Charles Hyatt, a director, upon exercise of a warrant at an exercise price of $0.04 per share

for proceeds of $250,000.

On March 14, 2022, the Company issued 600,000 shares of common stock to

Grace Hyatt, the adult daughter of Charles Hyatt, a director, upon exercise of a warrant at an exercise price of $0.04 per share for proceeds

On December 13, 2022, the Company

issued 5,714,286 shares of common stock and a two-year warrant to purchase 5,714,286 shares of common stock at an exercise price of $0.0175

per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

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.

December 13, 2022, the Company issued 5,714,286 shares of common stock and a two-year warrant to purchase 5,714,286 shares of common

stock at an exercise price of $0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of $100,000.

September 14, 2023, The Company issued an on-demand note to Robert Carmichael, the CEO of the Company (the “Lender”) in the

principal amount of $50,000.

The on-demand note bears no interest and is payable upon request.

November 7, 2023, the Company issued a promissory note (the “Note”) to Charles Hyatt, a director of the Company (the “Lender”)

in the principal amount of $150,000.

The Note bears interest at the rate of 9.9% per annum, is payable in monthly installments, and matures

on August 7, 2024.

December 18, 2023, The Company issued an on-demand note to Robert Carmichael, the CEO of the Company (the “Lender”) in the

principal amount of $25,000.

The on-demand note bears no interest and is payable upon request.

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.

Principal Accounting

Fees and Services.

following table shows the fees that were billed for the audit and other services provided by Liggett & Webb, PA for 2022 (until October

10, 2022) and 2021.

Company has two independent director, Christopher Constable and Charles Hyatt, who are considered “independent” as defined

under Rule 5605 of the Nasdaq Marketplace Rules.

Accounting Fees and Services.

following table shows the fees that were billed for the audit and other services provided by Liggett & Webb, PA for 2022 (until

October 10, 2022).

As of October 10, 2022, Liggett & Webb, P.A.

resigned as the independent registered public accounting firm engaged

to audit the financial statements of the Company.

Also on such date, the Company’s Board of Directors engaged Assurance

Dimensions, Inc.

to serve as its independent registered public accounting firm to review its Quarterly Report on Form 10-Q for

the quarter ended September 30, 2022 and year ended December 31, 2022 year end audit.

resigned as the independent registered public accounting firm

engaged to audit the financial statements of the Company.

Also on such date, the Company’s Board of Directors engaged

Assurance Dimensions, Inc .

to serve as its independent registered public accounting firm to perform the year-end audit for the year

ended December 31, 2023 and December 31, 2022.

The following table shows the fees billed for the audit and other services for 2023

Audit-Related Fees

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on Form 10-Q.

other fees in 2021 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 $2,700 and $2,200 for the years ended December 31, 2022 and 2021, respectively.

incurred tax related fees of $5,000 and $2,700 with Liggett & Webb, P.A.

for the years ended December 31, 2023 and 2022,

respectively.

Administration

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fees paid to the auditors with respect to 2023 and 2022 were pre-approved by the entire board of directors.

percentage of hours expended on Assurance Dimensions 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

Exhibits, Financial

Statements Schedules

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.

with and into Merger Co., Inc.

percentage of hours expended on Assurance Dimensions respective engagement to audit our financial statements for the most recent fiscal

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

Financial Statements Schedules

Incorporated by Reference

Agreement and Plan of Merger and Reorganization, dated September 3, 2021, among the Company, Submersible Acquisition, Inc., Submersible Systems, Inc.

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Certification Pursuant to Section 1350

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase

Inline XBRL Taxonomy Extension Definition Linkbase

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase

Cover Page Interactive Data File (embedded within the

Inline XBRL document)

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

Form 10-K Summary

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 30, 2023

marine group, Inc.

/s/ Christopher

Christopher H.

Chief Executive Officer,

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registrant and in the capacities and on the dates indicated.

Chairman of the Board, President and Chief Financial

Officer (Principal Executive Officer)

March 30, 2023

Christopher H.

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

/s/ Christopher

Christopher H.

Executive Officer and Director

Executive Officer)

March 30, 2023

Financial Statements and Supplementary Data

Brownie’s Marine Group, Inc.

Index to Audited Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Statements and Supplementary Data Brownie’s Marine Group, Inc.

to Audited Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheet as of December 31, 2023 and 2022

Consolidated Statement of Operations for the years ended December 31, 2022 and 2021

Consolidated Statement of Stockholders' Equity for the years ended December 31, 2022 and 2021

Consolidated Statement of Cash Flows for the years ended December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2023 and 2022

Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

Notes to Consolidated Financial Statements

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on the Financial Statements

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

and Subsidiaries (the Company) as of December

31, 2022, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the year then

ended, and the related consolidated notes (collectively referred to as the financial statements).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations

and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

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

and Subsidiaries (the Company) as of

December 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ equity, and cash flow for each

of the years in the two-year period ended December 31, 2023, and the related consolidated notes (collectively referred to as the financial

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2023, and the results of its operations and its cash flow for each of the years in the two-year period ended December

31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Paragraph – Going Concern

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Note 1 to the financial statements, the Company had a net loss of approximately $1,248,115 and cash used in operating activities of

approximately $678,000 for the year ended December 31, 2022 as well as an accumulated deficit of approximately $16,437,000 as of December 31, 2022.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard

to these matters are described in Note 1.

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

of this uncertainty.

approximately $374,827 for the year ended December 31, 2023 as well as an accumulated deficit of approximately $17,685,610 as

of December 31, 2023.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are described in Note 1.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

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

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matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

of Impairment

of the Matter

Company is required to test the carrying amount of goodwill at least annually, or more frequently upon the occurrence of certain events.

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with its assessment.

we addressed the matter in our audit

audit procedures to address the risk of material misstatement relating to goodwill and intangible assets included, among others, evaluating

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have served as the Company’s auditor since 2022

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Stockholders and Board of Directors of:

Marine Group, Inc.

on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Brownie’s

Marine Group, Inc.

and Subsidiaries (the “Company”) as of December 31, 2021, the related consolidated statements of operations,

changes in stockholders’ equity and cash flows for the year 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, 2021, and the results of its operations and its cash flows

for the year 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.

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.

W e conducte d

ou r audit s i n

ac c ordanc e

wit h th e standard s

o f th e PCAOB .

Thos e s tan d ar d s

requir e tha t w e

pla n an d perfor m

th e a udit to obta i n

r e asonable as s u r a nc e

abou t whethe r th e

fina n cial stat e m e nts

ar e fre e o f

materia l misstatement , w h eth e r

du e t o erro r

Compa n y i s

n ot require d t o

w er e w e engage d

to p erform , a n audi t

o f it s interna l

c ontrol s o ve r

financia l re p o rting .

As part of our audit, we are required to obtain an understanding of internal control over financial

reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial

Accor d ingly , w e ex p r e ss

n o suc h opini on.

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.

of Stock Options

described in Note 13 to the consolidated financial statements, the Company measures fair value of stock options at fair value 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.

with Submersible Systems, Inc.

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.

If this additional information had been known, it would have affected the accounting for the

business combination as of the acquisition date.

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.

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 specialist.

/s/ Liggett & Webb, P.

have served as the Company’s auditor since 2018

Beach, Florida

April 22, 2022

Margate, Florida

MARINE GROUP, INC.

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Current Assets

Accounts receivable - net

Accounts receivable – net of allowances of $ 54,427 in 2023 and $ 28,558 in 2022

Accounts receivable - related parties

Accounts receivable

Inventory, net

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Property, equipment and leasehold improvements, net

Operating lease assets

Operating lease right-of-use assets

Intangible assets, net

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Related party convertible demand note, net

Current maturities loans payable

Convertible notes

Loans payable, current portion

Related party notes payable

Total current liabilities

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Preferred stock;

$ 0.001 par value:

10,000,000 shares authorized;

issued and outstanding as of December 31, 2022 and December 31, 2021, respectively.

425,000 issued and outstanding as of December 31, 2023 and December 31, 2022.

Common stock;

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1,000,000,000 shares authorized;

425,520,662 shares issued and outstanding at December 31, 2022 and 393,850,475 shares issued and outstanding at December 31, 2021.

437,742,050 shares issued and outstanding at December 31, 2023 and 425,520,662 shares issued and outstanding at December 31, 2022, respectively.

Common stock payable 138,941 shares and 138,941 shares, respectively as of December 31, 2023 and December 31, 2022.

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THE YEARS ENDED DECEMBER 31

Cost of revenues

Net revenues - related parties

Total net revenues

Cost of net revenues

Cost of net revenues - related parties

Cost of net revenues

Royalties expense - related parties

Royalties expense

Total cost of revenues

Operating expenses

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Other (income) expense, net

Gain on settlement of debt

Gain on the forgiveness of PPP loan

Interest expense

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AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS’ EQUITY

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Stockholders Equity

Preferred Stock

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Accumulated Deficit

Stockholders’

Stockholders’ Equity

Balance, December 31, 2021

$ ( 14,544,604 )

Units issued for cash

Shares issued for cash

Shares issued for acquisition

Debt Discount on sellers note

Shares issued for the purchase of units

Shares issued for exercise of warrants

Shares issued for Asset Purchase

Shares issued for Royalty agreement

Shares issued for accrued interest in convertible notes

Shares issued for employee bonus

Shares issued for services

Beneficial Conversion Feature

Stock Option Expense

Debentures and accrued interest

Shares issued for exclusivity

( 1,892,891 )

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Shares issued for the purchase of units

Shares issued for exercise of warrants

Shares issued for Asset Purchase

Shares issued for Royalty Agreement

Shares issued for accrued interest in convertible notes

Shares issued for employee bonus

Shares issued for services

Beneficial conversion feature

Stock Option Expense

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AND SUBSIDIARIES

STATEMENT OF CASH FLOWS

THE YEARS ENDED DECEMBER 31

CONSOLIDATED STATEMENT OF CASH FLOWS

THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Cash flows provided by operating activities:

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Shares issued for royalty

Allowance (recovery) for bad debt

Allowance (recovery) for doubtful accounts

Allowance for slow moving inventory

Allowance for Nomad recall

Shares issued for exclusivity

Stock Based Compensation – Options

Shares issued for employee bonus

Stock based compensation – stock grant

Shares issued for accrued interest in convertible notes

Gain on settlement of debt

Gain on forgiveness of PPP loan

Changes in operating assets and liabilities

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Net cash used in operating activities

Cash flows used in investing activities:

Cash flows provided by (used) in investing activities:

Cash used in asset acquisition

Cash acquired in business acquisition

Cash used in purchase of fixed assets, net of debt

Purchase of fixed assets

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Proceeds from issuance of units

Proceeds from exercise of Warrants

Proceeds of related party demand note

Proceeds of convertible note

Repayment of notes payable

Repayment of debt

Net cash provided by financing activities

Net (decrease) Increase in cash

Net decrease in cash

Cash, beginning balance

Cash, end of period

Cash, end of Year

Supplemental disclosures of cash flow information:

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Operating lease obtained for operating lease liability

Shares issued for asset acquisition

Convertible notes issued for acquisition

Common Stock issued for asset acquisition

Beneficial conversion feature on notes issued for acquisition

Shares issued for payment of convertible note interest

Fixed asset purchase through the issuance of debt

Prepayment for equipment through financing

Shares issued for the conversion of convertible notes and accrued interest

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

accompanying notes are an integral part of these financial statements

MARINE GROUP, INC.

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TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 AND 2022

Description of business and summary of significant accounting policies

of business – Brownie’s Marine Group, Inc., a Florida corporation (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.

of business – Brownie’s Marine Group, Inc., a Florida corporation (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

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LBI utilizes technology developed by BLU3 to provide new users and interested divers a guided tour

On May 2, 2022, the Company entered into

an asset purchase agreement (the “Asset Purchase Agreement”) with Gold Coast Scuba, LLC, a Florida limited liability company

(“Gold Coast Scuba”), Steven M.

Gagas and William Frenier, the sole members of Gold Coast Scuba (together, the “LLC

Members”) and LBI.

Pursuant to the terms of the Asset Purchase Agreement, LBI acquired substantially all of Gold Coast Scuba’s

assets and assumed certain non-material liabilities of the business associated with these assets.

In addition, LBI assumed the lease

for the premises for Gold Coast Scuba as part of this asset acquisition.

On May 2, 2022, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Gold

Coast Scuba, LLC, a Florida limited liability company (“Gold Coast Scuba”), Steven M.

Gagas and William Frenier, the sole

members of Gold Coast Scuba (together, the “LLC Members”) and LBI.

Pursuant to the terms of the Asset Purchase Agreement,

LBI acquired substantially all of Gold Coast Scuba’s assets and assumed certain non-material liabilities of the business associated

with these assets.

In addition, LBI assumed the lease for the premises for Gold Coast Scuba as part of this asset acquisition.

of Presentation – The consolidated financial statements of the Company have been prepared in accordance with the accounting

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The Company had an accumulated deficit as of December 31, 2023 of $ 17,685,610 .

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 for the twelve months after the date that the financial statements were issued.

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 common stock or other securities or obtaining short term loans.

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

the Company 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.

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 for the twelve months after the date that the financial statements were issued.

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 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.

the Company 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.

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Accounts at each

institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 per EIN.

At December 31, 2022

and 2021, the Company had approximately $ 0 and $ 205,500 , respectively, in 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 allowances 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 $ 28,558 and $ 46,555 at December 31, 2022 and 2021, respectively.

institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000

At December 31, 2023 and 2022, the Company

had approximately $ 25,000 and $- 0 -,

respectively, in excess of the FDIC insured limit.

receivable – The Company manufactures and sells its products to a broad range of customers, primarily retail

Few customers are provided with payment terms of 30 days.

The Company has tracked historical loss information for its trade

receivables and compiled historical credit loss percentages for different aging categories (current, 1–30 days past due,

31–60 days past due, 61–90 days past due, and more than 90 days past due).

In accordance with ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), management believes that the historical

loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at December 31, 2023, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss

percentages (i.e., the similar risk characteristics of its customers and its lending practices have not changed significantly over time).

As a result, management applied the applicable credit loss rates to determine the expected credit loss estimate for each aging category.

Accordingly, the allowances for doubtful accounts totaled

at December 31, 2023 and 2022, 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 allowances for obsolete or excess inventory.

Inventory on hand may exceed future

demand either because the product is outdated or because the amount on hand is more than will be used to meet future needs.

allowances are estimated by the individual operating companies using standard quantitative measures based on criteria established by the

Though the Company considers these allowance balances to be adequate, changes in economic conditions, customer inventory levels

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

Inventory on hand may exceed

future demand either because the product is outdated or because the amount on hand is more than will be used to meet future needs.

Inventory allowances are estimated by the individual operating companies using standard quantitative measures based on criteria

established by the Company.

Though the Company considers these allowance balances to be adequate, changes in economic conditions,

customer inventory levels or competitive conditions could have a favorable or unfavorable effect on required allowance

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

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Goodwill is not amortized;

instead, goodwill is tested for impairment on an annual basis,

or more frequently if the Company believes indicators of impairment exist.

The Company first assesses qualitative factors such as

macro-economic conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is

more-likely-than-not that the fair value of a reporting unit is less than its carrying value.

If the Company determines that the

fair value is less than the carrying value, the Company will recognize an impairment charge based on the excess of a reporting

unit’s carrying value over its fair value.

instead, goodwill is tested for impairment on an annual basis, or

more frequently if the Company believes indicators of impairment exist.

The Company first assesses qualitative factors such as macro-economic

conditions, industry and market conditions, cost factors as well as other relevant events, to determine whether it is more-likely-than-not

that the fair value of a reporting unit is less than its carrying value.

If the Company determines that the fair value is less than the

carrying value, the Company will recognize an impairment charge based on the excess of a reporting unit’s carrying value over its

As of December 31, 2023 and 2022, there was no such impairment.

Intangible assets are comprised

of customer relationships, trademarks and non-compete agreements acquired in a business combination.

The Company amortizes intangible

assets with a definitive life over their respective useful lives.

Assets with indefinite lives are tested for impairment on an annual

basis, or more frequently if the Company believes indicators of impairment exist.

Unlike goodwill and indefinite-lived intangible assets, the accounting

rules do not provide for an annual impairment test in determining whether fixed assets (e.g., property, plant, and equipment) and finite-lived

intangible assets (e.g., customer lists) are impaired.

Instead, they require that a triggering event occur before testing an asset for

Once a triggering event has occurred, the impairment test employed is based on whether the intent is to hold the asset for

continued use or to hold the asset for sale.

If the intent is to hold the asset for continued use, the impairment test involves a comparison

of undiscounted cash flows against the carrying value of the asset as an initial test.

If the carrying value of such asset exceeds the

undiscounted cash flow, the asset would be deemed to be impaired.

Impairment would then be measured as the difference between the fair

value of the fixed or amortizing intangible asset and the carrying value to determine the amount of the impairment.

As of December 31,

2022 and 2021, there was no such impairment.

assets are comprised of customer relationships, trademarks and non-compete agreements acquired in a business combination.

amortizes intangible assets with a definitive life over their respective useful lives.

Assets with indefinite lives are tested for impairment

on an annual basis, or more frequently if the Company believes indicators of impairment exist.

goodwill and indefinite-lived intangible assets, the accounting rules do not provide for an annual impairment test in determining whether

fixed assets (e.g., property, plant, and equipment) and finite-lived intangible assets (e.g., customer lists) are impaired.

they require that a triggering event occur before testing an asset for impairment.

Once a triggering event has occurred, the impairment

test employed is based on whether the intent is to hold the asset for continued use or to hold the asset for sale.

If the intent is to

hold the asset for continued use, the impairment test involves a comparison of undiscounted cash flows against the carrying value of

the asset as an initial test.

If the carrying value of such asset exceeds the undiscounted cash flow, the asset would be deemed to be

Impairment would then be measured as the difference between the fair value of the fixed or amortizing intangible asset and

the carrying value to determine the amount of the impairment.

As of December 31, 2023 and 2022, there was no such impairment.

Company recognizes revenue in accordance with ASC Topic 606 Revenue from Contracts with Customers .

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when performance obligations under the terms of a contract with the customer are satisfied.

The Company typically satisfies its performance obligations in contracts

with customers upon shipment of the goods.

Generally, payment is due upon receipt of the invoice and the contracts do not have significant

financing components.

Product sales occur once control or title

is transferred based on the commercial terms.

Revenue is measured as the amount of consideration the Company expects to receive in exchange

for transferring goods.

Product sales are recorded net of variable consideration, such as provisions for returns, discounts and promotional

Such provisions are calculated based on the actual allowances given.

Management believes that adequate provision has been

made for cash discounts, returns, spoilage and promotional allowances based on the Company’s historical experience.

The Company typically satisfies its performance

obligations in contracts with customers upon shipment of the goods.

Generally, payment is due upon receipt of the invoice and the contracts

do not have significant financing components.

Product sales occur once control or title is transferred based on the commercial terms.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods.

Product sales are

recorded net of variable consideration, such as provisions for returns, discounts and promotional allowances.

Such provisions are calculated

based on the actual allowances given.

Management believes that adequate provision has been made for cash discounts, returns, spoilage

and promotional allowances based on the Company’s historical experience.

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

Schedule of Total Revenue between Related Party and Non-related Party Revenue

of Related Party and Non-related Party Revenue

Revenues - related parties

Total Revenues

See further disaggregate

revenue disclosures by segment and product type in Note 16.

of sales consists of the cost of the components of finished goods, the costs of raw materials utilized in the manufacture of products,

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party royalty expense is as follows:

of Cost of Sales for Related Party and Non-Related Party as well as the Related Party and Non-Related Party Royalty Expense

of Related Party and Non-Related Party Cost of Revenue

Cost of revenues

Cost of revenues - related parties

Cost of revenues

Royalty expense - related parties

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All other leases are categorized as operating leases.

We did not have

any finance leases as of December 31, 2022 and 2021.

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

three to six years for property.

We elected the accounting policy to include both the lease and non-lease components of our

agreements as a single component and account for them as a lease.

We did not have any

finance leases as of December 31, 2023 and 2022.

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

to six years for property.

We elected the accounting policy to include both the lease and non-lease components of our agreements as a

single component and account for them as a lease.

liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings

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balance sheet information related to leases was as follows:

Schedule of Supplemental Balance Sheet Information

of Supplemental Balance Sheet Information

Operating Leases

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term and discount rate were as follows:

Schedule of Operating Lease Liabilities

of Operating Lease Liabilities

December 31, 2023.

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components of lease costs were as follows:

Schedule of Lease Cost

of Lease Cost

December 31, 2023

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

Schedule of Cash Flow Information Related to Leases

of Cash Flow Information Related to Leases

December 31, 2023

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

Schedule of Maturities of Operating Lease Liabilities

of Maturities of Operating Lease Liabilities

Trebor Industries

Submersible Systems Lease

Submersible Systems

Live Blue, Inc.

1 unchanged sentence

Present value of lease liabilities

Detailed information on leases can be found in Note

information on leases can be found in Note 15.

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

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the years ended December 31, 2023 and 2022, the Company incurred research and development costs of $ 13,880 and $ 18,393 , respectively.

deposits and unearned revenue and returns policy – The Company typically takes a minimum 50 %

deposit against large tankfill systems prior to ordering and/or building the systems.

It will also take deposits for

large rescue tank orders for both domestic and international customers.

The remaining balance due is payable upon delivery,

shipment, or installation of the system.

Additionally, returns of all other merchandise are subject to a 15 %

restocking fee as stated on each sales invoice.

Customer deposits totaled $ 167,534

and $ 143,938

deposits and unearned revenue and returns policy – The Company typically takes a minimum 50 % deposit against large tankfill

systems prior to ordering and/or building the systems.

It will also take deposits for large rescue tank orders for both domestic and

international customers.

The remaining balance due is payable upon delivery, shipment, or installation of the system.

Additionally, returns

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

Customer deposits totaled $ 255,740 and

$ 167,534 at December 31, 2023 and 2022, respectively.

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

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

The Company provides its customers with an industry standard one year warranty on systems sold and recognizes a warranty allowance based

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

The warranty reserve charged to cost of net revenues and is

The warranty allowance charged to cost of net revenues and is

included in accrued expenses and is deemed sufficient to absorb any material or labor costs that might be incurred on sales recorded

during the period.

The Company recorded a reserve for warranty work of $ 27,651 and $ 13,680 at December 31, 2022 and 2021, respectively.

The Company recorded a allowance for warranty work of $ 40,468 and $ 27,651 at December 31, 2023 and 2022, respectively.

taxes – The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred

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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, it would make an

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

that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, it 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

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December 31, 2023, and 2022, the carrying amount of cash, accounts receivable, accounts receivable – related parties, accounts

payable and accrued liabilities, accounts payable-related parties, customer deposits and unearned revenue, other liabilities, lease

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

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

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

per share is computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the

payable and accrued liabilities, accounts payable-related parties, customer deposits and unearned revenue, other liabilities, lease 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

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

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, 2022 and December

31, 2021, 266,722,242 and 254,577,924 , 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.

December 31, 2023 and December 31, 2022, 107,761,177 and 266,722,242 ,

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.

accounting pronouncements

2016-13 Current Expected Credit Loss (ASC326)

December 2021, the FASB issued and update to ASU No.

December 2021, the FASB issued an update to ASU No.

2016-13 the Current Expected Credit Losses (CECL) standard (ASC 326), which is designed

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Estimated Credit Losses (ECL) and requires enhanced financial statement disclosures.

This guidance is effective January 1, 2023.

Company is evaluating the changes from this standard to determine the impact on its consolidated financial statements and related disclosures.

This guidance was adopted on January 1, 2023, with

no effect to the financial statements.

2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own

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consists of the following as of:

Schedule of Inventory

In-Transit Inventory

Raw materials

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Rental Equipment

Allowance for Obsolete or Excess Inventory

Total Inventory, net

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expenses and other current assets consisted of the following:

Schedule of Prepaid Expenses and Other Current Assets

of Prepaid Expenses and Other Current Assets

Prepaid inventory

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and equipment consist of the following as of:

Schedule of Property and Equipment

of Property and Equipment

Tooling and equipment

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Total property and equipment, net

and amortization expense totaled $ 149,120

for the years ended December 31, 2022 and 2021, respectively.

Included in the depreciation and amortization expense for the year

ending December 31, 2022 and 2021 is $ 80,597 and $ 24,095

for amortization of intangible assets, respectively.

assets at December 31, 2022 of $ 30,724 consisted

of refundable deposits .

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

and amortization expense totaled $ 155,837 and $ 149,120 for the years ended December 31, 2023 and 2022, respectively.

Included in the

depreciation and amortization expense for the year ending December 31, 2023 and 2022 is $ 76,394 and $ 80,597 for amortization of intangible

assets, respectively.

assets at December 31, 2023 and December 31, 2022 of $ 30,724

consisted of refundable deposits.

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represented 10.6 % and 11.4 %, respectively, of total net revenues.

Southport Divers, Inc.

represented concentration in outstanding accounts receivable of 10.1 % of total outstanding accounts receivable

as of December 31, 2022 and 25.3 % as of December 31, 2021.

Brownie’s Global Logistics, LLC represented concentration in outstanding

accounts receivable of less than 10 % of total outstanding accounts receivable as of December 31, 2022 and 2021.

Related Parties represented concentration in

outstanding accounts receivable of 8.6 % of

total outstanding accounts receivable as of December 31, 2023 and 10.1 %

as of December 31, 2022.

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

of total outstanding accounts receivable as of December 31, 2023 and 2022.

Additionally,

the Company has a non-related party customer, Amazon, that represented 4.8 % of total outstanding accounts receivable as of December 31,

from Amazon accounted for 12.0 % of revenue for the twelve months ended December 31, 2022, but did not exceed 10 % of total revenue for

the year ended December 31, 2021.

Company has two vendors that for the year ended December 31, 2022 supplied more than 10% each of the Company’s overall

from Amazon accounted for 10.5 %

of revenue for the twelve months ended December 31, 2023, and 12 %

of total revenue for the year ended December 31, 2022, respectively.

Company has one vendor that for the year ended December 31, 2023, and two vendors for the year ended December 31, 2022, that supplied

more than 10% each of the Company’s overall purchases.

L&W supplied 14.4 %

of overall purchases for the year ended December 31, 2023.

Tian Li He Technology supplied 11.9 %

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of overall purchases for the year ended December 31, 2022.

There were no vendor concentrations beyond 10 %

of total purchases for the year ended December 31, 2021.

Related Party Transactions

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Divers, and Brownie’s Yacht Toys at December 31, 2023, were $ 12,766 , $ 11,927 and $ 6,790 , respectively.

Accounts receivable from

Brownie’s SouthPort Diver’s, Inc., Brownie’s Palm Beach Divers, and Brownie’s Yacht Toys at December 31, 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 at December 31, 2022, were $ 16,875 ,

$ 6,773 and $ 15,532 , respectively.

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

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Carmichael for an advance to BLU3,Inc.

The Company also had an amount due of $ 441 to Robert Carmichael

and $ 476 to Blake Carmichael as of December 31, 2023.

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

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$- 0 - and $ 655,516 in relation to this option agreement, respectively.

As of December 31, 2022, there were 50,000,000 shares vested

from this option.

As of December 31, 2023, the aggregate total of 125,000,000 options

expired on April 30, 2023.

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

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31, 2022, the Company expensed $- 0 - and $ 63,267 , respectively.

As of December 31, 2022, there were 5,000,000 shares vested from this

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 .

August 1, 2021 as part of the Blake Carmichael Agreement (see Note 15) 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”), 33.3%

of the shares subject to the Option vest upon the execution of the agreement, 33% at the first anniversary date and 33% upon the

second anniversary date and (ii)(ii) a 5 -year

option to purchase up to 18,000,000

shares to vest annually on a contract year basis, based upon the achievement of certain financial metrics tied to revenue and

EBITDA, which for the years ended December 31, 2022 and December 31, 2021 the Company expensed $ 49,692

and $ 21,810 , respectively.

September 1, 2021, the Company issued Charles Hyatt, a member of the Company’s Board of Directors, 10,000,000

units, with each unit consisting 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 in consideration of $ 250,000 .

September 1, 2021, the Company issued Grace Hyatt, the adult child of Charles Hyatt, 600,000

units of the securities of the Company, with each unit consisting of one share of common stock and a two-year warrant to purchase

one share of common stock at an exercisable at $ 0.025

per share in consideration of $ 15,000 .

November 5, 2021 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

Constable a five -year

option to purchase 2,403,846

shares of the Company’s common stock at an exercise price of $ .0416 ,

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 %,

and (iv) expected volatility of 324.5 %.

Stock option expense recognized during the year ended December 31, 2021 for this option was $ 98,976 .

As of December 31, 2023, there were 5,000,000 shares vested from this option.

August 1, 2021 as part of the Blake Carmichael Agreement (see Note 15) 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”), 33.3%

of the shares subject to the Option vest upon the execution of the agreement, 33% at the first anniversary date and 33% upon the second

anniversary date and (ii)(ii) a 5-year option to purchase up to 18,000,000 shares to vest annually on a contract year basis, based upon

the achievement of certain financial metrics tied to revenue and EBITDA, which for the years ended December 31, 2023 and December 31,

2022 the Company expensed $ 49,448 and $ 49,448 , respectively.

February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares upon the exercise of a warrant at $ 0.025 per share

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and (iv) expected volatility of 256 %.

Stock option expense recognized during the year ended December 31, 2022 for this option was $ 95,969 .

December 13, 2022, the Company issued 5,714,285

units, each unit consists of one share of common stock and a two-year warrant to purchase one share of common stock at an exercise

price of $ 0.0175

per share to Charles Hyatt a director, in a private offering for proceeds of $ 100,000 .

Stock option expense recognized during the years ended December 31, 2023 and December 31, 2022 for this option was $- 0 - and $ 95,969 , respectively.

December 13, 2022, the Company issued 5,714,285 units, each unit consists of one share of common stock and a two-year warrant to purchase

one share of common stock at an exercise price of $ 0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of

January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, a Company director, an aggregate of 11,428,570 units, with

each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock

at an exercise price of $ 0.0175 per share in consideration of $ 200,000 .

September 14, 2023, the Company issued a convertible demand 8 % promissory note in the principal amount of $ 50,000 to Robert Carmichael

for funds to meet the working capital needs of BLU3.

There is no amortization schedule for the note, and interest is payable in shares

of common stock of the Company at a conversion price equal to the 90 day value weighted average price (“VWAP”) of the Company’s

stock prior to the quarterly interest payment date.

The note holder may demand payment or convert the outstanding principal at a conversion

rate of $ 0.01351 per share at any time.

The conversion rate was calculated at a 35 % discount to the 90 day VWAP of the Company’s

stock as of the date of the note.

The Company recorded $- 0 - for the beneficial conversion feature.

As this conversion rate is a fixed

rate, the embedded conversion feature is not a derivative liability.

The outstanding balance on this note was $ 50,000 as of September

November 14, 2023, the Company borrowed funds through the issuance of a promissory note (the Note) in the principal amount of $ 150,000 to

Charles Hyatt, a Company director, for working capital requirements and payment of certain expenses in connection with the Company’s

business combinations.

The maturity date of the Note is May 7, 2024 (the “Maturity Date”).

The Note bears interest

at a rate of 9.9 % per annum, and a default interest of 18 % per annum.

Interest payments shall be due and payable on a monthly

The Company may prepay the Note in whole or in part, at any time without premium or penalty.

December 18, 2023, the Company issued an on demand promissory note of $ 25,000 to to Robert Carmichael for funds to meet the working capital

needs of BLU3.

The promissory note bears no interest and is payable on demand.

March 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending March 31, 2023.

The fair value of these shares was $ 1,336 .

June 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending June 30, 2023.

The fair value of these shares was $ 1,287 .

September 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible

demand note for the three months ending September 30, 2023.

The fair value of these shares was $ 1,287 .

December 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending December 31, 2023.

The fair value of these shares was $ 1,287 .

Accounts Payable and Accrued Liabilities

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Accrued warranty expense

Accrued payroll taxes and withholding

Accrued Sales Tax

4 unchanged sentences

liabilities consist of the following as of:

of Other Liabilities

Schedule of Other Liabilities

December 31, 2023

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Accrued Board of Directors fees

Further information regarding the recall reserve fee

can be found in note 15.

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

Convertible Promissory Notes and Loans Payable

2 unchanged sentences

Schedule of Convertible Debentures

debentures consist of the following at December 31, 2021:

The 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 into 422,209 shares of common stock in accordance with the terms of the note.

On 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, is guaranteed by the Company’s

wholly-owned subsidiaries, Trebor and BHP and the personal guarantee of Mr.

The 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.

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.

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

into 6,055,358 shares of common stock in accordance with the terms of the note.

On 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, is guaranteed by the Company’s

wholly owned subsidiaries, Trebor and BHP and the personal guarantee of Mr.

The 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.

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.

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 into 6,114,516 shares of common stock in accordance with the terms of the note.

On September 3, 2021, the

Company issued a $ 346,500 note payable to Summit Holding V, LLC as part of the acquisition of SSI.

The note carries 8 % unsecured

convertible promissory note, due September 3, 2024 .

Payments on the note are to be equivalent to 50 % of the adjusted net profit of

Submersible Systems, Inc., payable calendar quarterly commencing on December 31, 2021.

Interest is payable in company stock at the

conversion price of $ 0.051272 and shall be paid quarterly.

The note holder may convert any outstanding principal and unpaid interest

at a conversion rate of $ 0.051272 at any time up to the maturity date of the note.

breakdown of current and long-term amounts due are as follows for the convertible promissory notes as of December 31, 2023:

Convertible Promissory Notes

Summit Holdings

Robert Carmichael

Total Loan Payments

Portion of Loan Payable

$ ( 343,413 )

$ ( 399,355 )

Portion of Loan Payable

September 3, 2021, the Company issued a $ 346,500 note payable to Summit Holding V, LLC as part of the acquisition of SSI.

carries 8 % unsecured convertible promissory note, due September 3, 2024 .

Payments on the note are to be equivalent to 50 % of the

adjusted net profit of Submersible Systems, Inc., payable calendar quarterly commencing on December 31, 2021.

Interest is payable

in company stock at the conversion price of $ 0.051272 and shall be paid quarterly.

The note holder may convert any outstanding principal

and unpaid interest at a conversion rate of $ 0.051272 at any time up to the maturity date of the note.

The Company recorded $ 12,355

for the beneficial conversion feature.

September 3, 2021, the Company issued a three-year 8 % unsecured convertible promissory note

for $ 3,500 to Tierra Vista Partners, LLC as part of the acquisition of SSI.

Payments on the

note are to be equivalent to 50 % of the adjusted net profit of SSI, payable calendar quarterly

commencing on December 31, 2021 .

Interest is payable quarterly in common stock of the Company

at the conversion price of $ 0.051272 per share.

The note holder may convert any outstanding

principal and unpaid interest at a conversion rate of $ 0.051272 at any time up to the maturity

date of the note.

The Company recorded $ 125 for the beneficial conversion feature.

September 30, 2022, the Company issued a convertible demand 8 % promissory note in the principal

amount of $ 66,793 to Robert Carmichael for funds to meet the working capital needs of LBI.

There is no amortization schedule for the note, and interest is payable in shares of common

stock of the Company at a conversion price equal to the 90 day VWAP of the Company’s

stock prior to the quarterly interest payment date .

This note is classified as a current

liability as the note holder may demand payment or convert the outstanding principal at a

conversion rate of $ 0.021 per share at any time.

The Company recorded $ 19,250 for the beneficial

conversion feature.

of Future Amortization of Notes Payable

Payment Amortization

Schedule of Future Amortization of Notes Payable

Total Note Payments

1 unchanged sentence

Non-Current Portion of Notes Payable

On September 3, 2021, the

Company issued a three-year 8 % unsecured convertible promissory note for $ 3,500 to Tierra Vista Partners, LLC as part of the acquisition

Payments on the note are to be equivalent to 50 % of the adjusted net profit of SSI, payable calendar quarterly commencing

on December 31, 2021.

Interest is payable quarterly in common stock of the Company at the conversion price of $ 0.051272 per share.

The note holder may convert any outstanding principal and unpaid interest at a conversion rate of $ 0.051272 at any time up to the

maturity date of the note.

September 3, 2021, the Company issued a three-year 8 % unsecured convertible promissory note

for $ 3,500 to Tierra Vista Partners, LLC as part of the acquisition of SSI.

Payments on the

note are to be equivalent to 50 % of the adjusted net profit of SSI, payable calendar quarterly

commencing on December 31, 2021.

Interest is payable quarterly in common stock of the Company

at the conversion price of $ 0.051272 per share.

The note holder may convert any outstanding

principal and unpaid interest at a conversion rate of $ 0.051272 at any time up to the maturity

date of the note.

The Company recorded $ 125 for the beneficial conversion feature.

Schedule of Future Amortization

of Notes Payable

Payment Amortization

Schedule of Future Amortization of Notes Payable

Total Note Payments

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Non-Current Portion of Notes Payable

On September 30, 2022,

the Company issued a convertible demand 8 % promissory note in the principal amount of $ 66,793 to Robert Carmichael for funds to meet

the working capital needs of LBI.

There is no amortization schedule for the note, and interest is payable in shares of common stock

of the Company at a conversion price equal to the 90 day VWAP of the Company’s stock prior to the quarterly interest payment

This note is classified as a current liability as the note holder may demand payment or convert the outstanding principal at

a conversion rate of $ 0.021 per share at any time.

The Company recorded $ 19,250 for the beneficial conversion feature.

of Future Amortization of Loans Payable

September 30, 2022, the Company issued a convertible demand 8 % promissory note in the principal

amount of $ 66,793 to Robert Carmichael for funds to meet the working capital needs of LBI.

There is no amortization schedule for the note, and interest is payable in shares of common

stock of the Company at a conversion price equal to the 90 day VWAP of the Company’s

stock prior to the quarterly interest payment date.

This note is classified as a current

liability as the note holder may demand payment or convert the outstanding principal at a

conversion rate of $ 0.021 per share at any time.

The Company recorded $ 19,250 for the beneficial

conversion feature.

Schedule of Future Amortization of Loans Payable

Capital BLU3 ()

2 unchanged sentences

Non-Current Portion of Loan Payable

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 .

The 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 $ 0 as of December 31, 2022 and $ 25,079 as of December 31, 2021.

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, 2022 was $ 31,023 and $ 43,122 as

of December 31, 2021.

May 19, 2021, 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 1”).

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,

2023 was $ 19,855 and $ 31,023 as of December 31, 2022.

May 19, 2021, 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 1”).

The equipment finance agreement contains customary events of default.

The loan balance as of

December 31, 2022 was $ 54,930 and $ 70,157 as of December 31, 2021.

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.

term of the note is two years , though it may be payable sooner in connection with an event of default under the note.

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, 2022 and December 31, 2021 was $ 0 .

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 , but may become due and payable upon an event of default under the note.

The Submersible SBA

Loan carries a fixed interest rate of 1% 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 by the SBA.

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 8, 2021.

note balance as of December 31, 2022 and December 31, 2021 was $ 0 .

June 29, 2022, SSI executed an equipment financing agreement with NFS Leasing (“NFS Leasing”) to secure replacement production

The total purchase price of the molds was $ 84,500 of which $ 63,375 was financed by NFS Leasing on August 15, 2022.

The loan balance as of December 31, 2023 was $ 38,481 and $ 54,930 as of December 31, 2022.

June 29, 2022, SSI executed an equipment financing agreement with NFS Leasing (“NFS

Leasing”) to secure replacement production molds.

The total purchase price of the molds

was $ 84,500 of which $ 63,375 was financed by NFS Leasing on August 15, 2022.

The financing

agreement has a 33 month term beginning in August 2022 with a monthly payment of $ 2,571 .

The financing agreement contains customary

events of default, is guaranteed by the Company and NFS Leasing has a lien on all of the assets of SSI.

The financing agreement contains customary events of default, is guaranteed by the Company

and NFS Leasing has a lien on all of the assets of SSI.

The loan balance as of December 31,

2023 and December 31, 2022 was $ 38,607 and $ 60,804 , respectively.

December 12, 2022, BLU3 executed an equipment finance agreement to finance the purchase of certain plastic molding equipment through

Navitas Credit Corp.

The amount financed is $ 63,689 payable over 36 equal monthly installments of $ 2,083

(“Navitas 2”).

December 12, 2022, BLU3 executed an equipment finance agreement to finance the purchase of

certain plastic molding equipment through Navitas Credit Corp.

amount financed is $ 63,689 payable over 36 equal monthly installments of $ 2,083 (“Navitas

The equipment finance agreement contains customary events of default.

The loan balance as of December

31, 2022 was $ 63,689 and $ 0 as of December 31, 2021.

balance as of December 31, 2023 was $ 44,839 and $ 63,689 as of December 31, 2022.

Business Combinations

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 in 8 % 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 $ 1.45 million in consideration are subject to leak out agreements whereby the shareholders

are unable to sell or transfer shares based upon the following:

of Holding Period and Shares Eligible To 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 (“VWAP”) of a share of the Company’s

common stock on the OTC Markets 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

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.

Pro Forma Information

The following unaudited pro forma information assumes

all business combinations 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

December 31, 2021

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.

The pro forma amounts above for basic and diluted weighted average common shares outstanding have been adjusted to include the stock

issued in connection with the acquisition of SSI.

Coast Scuba, LLC Asset Acquisition

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of Holding Period and Shares Eligible To Sold

Holding Period

from Closing Date

Percentage of shares

eligible to be sold or transferred

Up to 100.0 %

Period from Closing Date

to be sold or transferred

leak-out restriction may be waived by the Company upon written request by a LLC Member, if the Company’s common stock is trading

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

agreement was structured as an asset purchase agreement, we also assumed the operations of Gulf Coast Scuba resulting in the recognition

the agreement was structured as an asset purchase agreement, we also assumed the operations of Gulf Coast Scuba resulting in the recognition

of a business combination.

During 2022 we recognized revenue of $ 212,876

and net loss of ($ 75,579 )

associated with this business.

The business combination was not material for purposes of disclosing pro forma financial information.

In connection with this transaction, we recognized the following assets and liabilities:

Summary of Asset Acquisition

During 2023 we recognized revenue of $ 302,724 and net loss of ( $ 88,561 ) associated with this business.

business combination was not material for purposes of disclosing pro forma financial information.

In connection with this transaction,

we recognized the following assets and liabilities:

of Asset Acquisition

Rental Inventory

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following table sets forth the changes in the carrying amount of the Company’ Goodwill for the years ended December 31, 2023 and

Summary of Changes in Goodwill

of Changes in Goodwill

Balance, January 1

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following table sets forth the components of the Company’s intangible assets at December 31, 2023:

Summary of Intangible Assets

Amortization Period (Years)

Accumulated Amortization

of Intangible Assets

Period (Years)

Net Book Value

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Non-Compete Agreements

$ ( 169,045 )

aggregate amortization remaining on the intangible assets as of December 31, 2023 is a follows:

Schedule of Estimated Intangible Assets Amortization Expenses

Intangible Amortization

Stockholders’ Equity

February 22, 2021, the Company issued 422,209 shares of common stock related to the conversion of a convertible note 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 Charles F.

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 note 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 note and accrued

interest of $ 61,145 .

On September 1, 2021, the Company issued Charles Hyatt, a member of our Board of Directors, 10,000,000 units of the Company, with the unit consisting 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 in consideration of

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

September 1, 2021, the Company issued Grace Hyatt, the adult child Charles Hyatt, 600,000

units of the Company, with each unit consisting 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 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 Company to three accredited investors, with each unit consisting 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 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.

of Estimated Intangible Assets Amortization Expense

Stockholders’ Equity Common Stock

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

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related to the dive industry.

February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares from the exercise of a warrant at $ 0.025 per share

in consideration of $ 250,000 .

On February 2, 2022, the Company issued Charles Hyatt, a director, 10,000,000 shares from the exercise

of a warrant at $ 0.025 per share in consideration of $ 250,000 .

February 2, 2022, the Company issued Grace Hyatt, the adult child of Charles Hyatt, a director, 600,000 shares from the exercise of a

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The fair value of these shares was $ 7,000 .

On November 1, 2022, the Company issued an aggregate

of 1,155,881 shares to the designated shareholders in accordance with the amended STS Agreement.

November 1, 2022, the Company issued an aggregate of 1,155,881 shares to the designated shareholders in accordance with the amended STS

The fair value of these shares was $ 30,000 .

December 13, 2022, the Company issued 5,714,286 units, each unit consists of one share of common stock and a two-year

warrant to purchase one share of common stock at an exercise price of $ 0.0175 per share to Charles Hyatt a director, in a private offering

for proceeds of $ 100,000 .

On December 31, 2022, the Company issued 198,204 shares

of common stock to the holders of convertible notes for payment of interest for the three months ending December 31, 2022.

The fair value

of these shares was $ 8,336 .

December 13, 2022, the Company issued 5,714,286 units, each unit consists of one share of common stock and a two-year warrant to purchase

one share of common stock at an exercise price of $ 0.0175 per share to Charles Hyatt a director, in a private offering for proceeds of

December 31, 2022, the Company issued 198,204 shares of common stock to the holders of convertible notes for payment of interest for

the three months ending December 31, 2022.

The fair value of these shares was $ 8,336 .

January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, a Company director, an aggregate of 11,428,570 units, with

each unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock

at an exercise price of $ 0.0175 per share in consideration of $ 200,000 .

March 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending March 31, 2023.

The fair value of these shares was $ 1,336 .

June 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending June 30, 2023.

The fair value of these shares was $ 1,287 .

September 30, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible

demand note for the three months ending September 30, 2023.

The fair value of these shares was $ 1,287 .

December 31, 2023, the Company issued 61,677 shares of common stock to Robert Carmichael for payment of interest on the convertible demand

note for the three months ending December 31, 2023.

The fair value of these shares was $ 1,287 .

the second quarter of 2010, the holder of the majority of the Company’s outstanding shares of common stock approved an amendment

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Compensation Plan

On May 26, 2021 the Company adopted an Equity Compensation Plan (the “Plan”).

Under the Plan, stock options may be granted to employees, directors, and consultants in the form of incentive stock options or non-statutory

stock options, stock purchase rights, time vested and/performance invested restricted stock, and stock appreciation rights and unrestricted

The maximum number of shares that may be issued under the

Plan is 25,000,000 shares.

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

Under the Plan, stock options may be granted to

employees, directors, and consultants in the form of incentive stock options or non-statutory stock options, stock purchase rights, time

vested and/performance invested restricted stock, and stock appreciation rights and unrestricted shares.

The maximum number of shares

that may be issued under the Plan is 25,000,000 shares.

The term of the Plan is ten years.

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Compensation Plan Information as of December 31, 2023:

Schedule of Equity Compensation Plan Information

of Equity Compensation Plan Information

Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)

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Equity Incentive Options issued outside of the Equity Compensation Plan

Company has issued options to purchase approximately 238,439,167

shares at an average price of $ 0.036

with a fair value of approximately $ 99,000 .

For the years ended December 31, 2022 and 2021, the Company issued options to purchase 5,710,901

Company has issued options to purchase approximately 67,439,637 shares at an average price of $ 0.029 with a fair value of approximately

For the years ended December 31, 2023 and 2022, the Company issued options to purchase - 0 - and 5,710,901 shares, respectively.

Upon exercise, shares of new common stock are issued by the Company.

the years ended December 31, 2023 and 2022, the Company recognized an expense of approximately $ 81,424

and $ 951,400 ,

shares, respectively.

Upon exercise, shares of

new common stock are issued by the Company.

the years ended December 31, 2022 and 2021, the Company recognized an expense of approximately $ 951,400 and $ 1,154,800 , respectively,

of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations)

determined by application of a Black-Scholes option pricing model with the following inputs:

exercise price, dividend yields, risk-free

interest rate, and expected annual volatility.

As of December 31, 2022, the Company had approximately $ 3,774,300 of unrecognized pre-tax

non-cash compensation expense related to options to purchase shares, which the Company expects to recognize, based on a weighted-average

period of 1.5 years.

The Company uses straight-line amortization of compensation expense over the requisite service period for time-based

For performance-based options the Company evaluates the likelihood of a vesting qualification being met, and will establish

the expense based on that evaluation.

The maximum contractual term of the Company’s stock options is 5 years.

The Company recognizes

forfeitures as they occur.

There are options to purchase approximately 11,558,800 shares that have vested as of December 31, 2022.

respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement

of Operations) determined by application of a Black-Scholes option pricing model with the following inputs:

exercise price, dividend

yields, risk-free interest rate, and expected annual volatility.

The Company uses straight-line amortization of compensation expense

over the requisite service period for time-based options.

For performance-based options the Company evaluates the likelihood of a vesting

qualification being met, and will establish the expense based on that evaluation.

The maximum contractual term of the Company’s

stock options is 5

The Company recognizes forfeitures as

There are options to purchase approximately 41,057,753

shares that have vested as of December 31, 2023.

Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances.

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0.16 % - 4.64 %

0.3 % - 1.4 %

Forfeiture Rate

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Exercisable – December 31, 2022

( 170,999,530 )

Outstanding – December 31, 2023

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

of Exercise Price of Employee Stock Options Outstanding

Summary of Exercise Price of Employee Stock Options Outstanding

Range of Exercise Price

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Outstanding options

of December 31, 2022, the Company had approximately $ 3,774,300 of unrecognized pre-tax non-cash compensation expense related to options

to purchase shares, which the Company expects to recognize, based on a weighted-average period of 1.5 years.

September 1, 2021, the Company issued Charles Hyatt 10,000,000 units, each unit consisted 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 in consideration of $ 250,000 .

September 1, 2021, the Company issued Grace Hyatt, the adult child of Charles Hyatt, 600,000 units, each unit consisted 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 in consideration

of $ 15,000 .

September, 2021, the Company issued 4,000,000 units to three accredited investors, each unit consisting of one share of common stock

and a two-year warrant to purchase one share of common stock at $ 0.025 per share in consideration of $ 100,000 .

of December 31, 2023, the Company had approximately $ 1,504,700

of unrecognized pre-tax non-cash compensation

expense related to options to performance based options to purchase shares, which the Company expects to recognize, based on a weighted-average

period of 2.1 years.

The Company uses straight-line amortization of compensation expense over the requisite service period for time-based

For performance-based options the Company evaluates the likelihood of a vesting qualification being met, and will establish

the expense based on that evaluation.

Stock option expense recognized during the year ended December 31, 2023 and

December 31, 2022 was $ 81,424 and 951,414 , respectively.

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

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Each unit consisted of one share of

common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $ 0.024

per share in consideration of $ 205,000 .

common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $ 0.024 per share

in consideration of $ 205,000 .

December 13, 2022, the Company issued to Charles Hyatt, 5,714,285 units.

Each unit consisted of one share of common

stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price of $ 0.0175 per share in

consideration of $ 100,000 .

Each unit consisted of one share of common stock and a two-year

common stock purchase warrant to purchase one share of common stock at an exercise price of $ 0.0175 per share in consideration of $ 100,000 .

January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, an aggregate of 11,428,570 units, with each unit consisting

of one share of common stock and a two-year common stock purchase warrant to purchase one share of common stock at an exercise price

of $ 0.0175 per share in consideration of $ 200,000 .

summary of the Company’s warrants as of December 31, 2023 and 2022, and changes during the years ended December 31, 2023 and 2022

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Schedule of Warrants Activity

Number of Warrants

Exercise Price

Contractual Life in Years

Life in Years

Outstanding at December 31, 2021

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Reserve for recall

Total deferred tax liability

Total deferred tax asset (liability)

Total deferred tax

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The Company has established a 100 %

valuation allowance against deferred tax assets of approximately $ 2,184,400 ,

due to the uncertainty regarding realization reserve against the deferred tax assets.

The change in valuation allowance was an

increase of $ 680,108 .

The Company has approximately $ 3,346,650

loss carryforward that expire through 2037 and $ 2,125,933

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, 2021 was 25.35 %.

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

valuation allowance against deferred tax assets of approximately $ 2,531,800 , due to the uncertainty regarding realization reserve against

the deferred tax assets.

The change in valuation allowance was an increase of $ 347,400 .

The Company has approximately $ 3,346,650 of net

loss carryforward that expire through 2037 and $ 4,651,143 that carryforward indefinitely but is limited to 80% of taxable income in any

effective tax rate used for calculation of the deferred taxes as of December 31, 2022 was 25.35 % .

The Company has established a 100 % valuation

allowance against deferred tax assets of $ 2,184,400 due

to the uncertainty regarding realization reserve against the deferred tax assets.

The change in valuation allowance was an increase

of $ 347,400 .

significant differences between the statutory tax rate and the effective tax rates for the Company for the years ended are as follows:

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was increased to $ 4,626 per month with a 3 % annual escalation throughout the amended term.

January 4, 2018, the Company entered into a sixty-one month lease renewal for its facility in Huntington Beach, California commencing

on February 1, 2018.

Terms included base rent of approximately $ 9,300 per month for the first 12 months with an annual escalation clause

of 2.5 % thereafter.

The Company paid a security deposit of $ 8,450 upon entering into the lease.

January 4, 2018, the Company entered into a sixty-one

month lease renewal for its facility in

Huntington Beach, California commencing on February 1, 2018.

Terms included base rent of approximately $ 9,300 per

month for the first 12 months with an annual escalation clause of 2.5 %

The Company paid a security deposit of $ 8,450 upon

entering into the lease.

November 11, 2018, the Company entered a sixty-nine month lease commencing on January 1, 2019 for approximately 8,025 square feet adjoining

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operating expenses (common area maintenance) which is approximately $ 1,679 per month, subject to adjustment as provided in the lease.

On May 2, 2022, LBI entered into a lease assignment

agreement with Gold Coast Scuba, LLC and Vicnsons Realty Group, LLC whereby LBI is the assignee to the remainder of the lease for the

property located at 259 Commercial Blvd., Suites 2 and 3 in Lauderdale-By-The Sea, Florida.

May 2, 2022, LBI entered into a lease assignment agreement with Gold Coast Scuba, LLC and Vicnsons Realty Group, LLC whereby LBI is

the assignee to the remainder of the lease for the property located at 259 Commercial Blvd., Suites 2 and 3 in Lauderdale-By-The

Sea, Florida.

The lease is in its third year of a three-year term and has a $ 2,816 per month base rent.

The lease provides an option to renew for an additional term of two years with an increase

of base rent by 3.5 %.

On September 14, 2022, SSI entered into a sixty-month

lease renewal for its facility in Huntington Beach, California effective February 1, 2022.

Terms included base rent of approximately

$ 17,550 per month for the first 24 months with an annual escalation clause of 3.0 % thereafter.

Obligations under the lease are guaranteed

by the Company.

The Company paid an additional security deposit of $ 10,727 upon entering into the lease.

On September 30, 2022, SSI entered into a sublease

of its facility in Huntington Beach, California with Camburg Engineering, Inc.(“Tenant”) commencing October 1, 2022, The term

of the sublease is through December 31, 2023 with a base monthly rent of $ 2,247 for the first twelve months with an 3 % annual escalation

The lease provides an option

to renew for an additional term of two years with an increase of base rent by 3.5 %.

September 14, 2022, SSI entered into a sixty-month lease renewal for its facility in Huntington Beach, California effective February

Terms included base rent of approximately $ 17,550 per month for the first 24 months with an annual escalation clause of 3.0 %

Obligations under the lease are guaranteed by the Company.

The Company paid an additional security deposit of $ 10,727 upon

entering into the lease.

September 30, 2022, SSI entered into a sublease of its facility in Huntington Beach, California with Camburg Engineering, Inc.(“Tenant”)

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

months with an 3 % annual escalation thereafter.

The Tenant also pays a monthly common area maintenance of $ 112 .

The Tenant provided a security deposit of $ 2,426 upon entering

into the sublease.

The Tenant provided a

security deposit of $ 2,426 upon entering into the sublease.

June 30, 2020, the Company entered into Amendment No.

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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 terminates the Agreement with STS prior to December 31,

2023, the Company is obligated to pay STS $ 180,000 ,

less cumulative royalties paid in excess of $ 200,174

for the years 2019 through 2024.

In accordance

with the amendment, the Company will pay additional minimum royalties of $ 60,000

per year or $ 15,000

per quarter for the years 2022 through 2024.

On November 1, 2022 the Company issued to the designees of STS 1,155,881 shares of common stock with a fair value of $30,000 in accordance

with the Patent License Agreement.

Royalty recorded under this Agreement was $ 203,621

and $ 157,855

for twelve months ended December 31, 2022 and

a minimum yearly royalty of $ 60,000 , or $ 15,000 per fiscal quarter, beginning in December 2019 and increasing by 2.15 % per year.

minimum royalty was temporarily increased to $ 60,000 for fiscal years 2022, 2023 and 2024, with a fourth quarter true up against earned

In addition, if the Company terminates the Agreement with STS prior to December 31, 2023, the Company is obligated to pay

STS $ 180,000 , less cumulative royalties paid in excess of $ 200,174 for the years 2019 through 2024.

In accordance with the amendment,

the Company will pay additional minimum royalties of $ 60,000 per year or $ 15,000 per quarter for the years 2022 through 2024.

1, 2022 the Company issued to the designees of STS 1,155,881 shares of common stock with a fair value of $ 30,000 in accordance with the

Patent License Agreement.

Royalty recorded under this Agreement was $ 138,643 and $ 203,621 for twelve months ended December 31, 2023 and

December 31, 2022, respectively.

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Employment Agreement:

(i) 2,000,000 shares – if the Company’s total net revenues, as reported in its statement of operations

in its financial statements in its filings with the SEC, including as a result of a stock or asset acquisition of a third party (“Net

Revenues”) are in excess of $ 5,000,000 , in the aggregate, for four consecutive fiscal quarters;

(ii) 3,000,000 shares – if

the Company’s Net Revenues are in excess of $ 7,500,000 , in the aggregate, for four consecutive fiscal quarters;

(iii) 5,000,000

shares – if the Company’s Net Revenues are in excess of $ 10,000,000 , in the aggregate, for four consecutive fiscal quarters;

and (iv) 20,000,000 shares – if the Company’s common stock is listed on the NASDAQ or New York Stock Exchange.

(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;

3,000,000 shares – if the Company’s Net Revenues are in excess of $ 7,500,000 , in the aggregate, for four consecutive

fiscal quarters;

(iii) 5,000,000 shares – if the Company’s Net Revenues are in excess of $ 10,000,000 , in the aggregate,

for four consecutive fiscal quarters;

and (iv) 20,000,000 shares – if the Company’s common stock is listed on the NASDAQ

or New York Stock Exchange.

On June 24, 2023, Christopher Constable submitted his resignation as Chief Executive Officer of Brownie’s Marine

Group, Inc., a Florida corporation (the “Company”) effective July 7, 2023.

Constable will remain a member of the Company’s

Board of Directors and in a consulting capacity until further notice.

Constable’s resignation did not arise from any disagreement

with the Company on any matter relating to the Company’s operations, policies or practices.

March 1, 2021, the Company entered into an investor relations consulting agreement with BGM Equity Partners, LLC.

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The agreement expired on March 1, 2022.

August 1, 2021, the Company and Blake Carmichael entered into a three-year employment agreement (the “Blake Carmichael Employment

Agreement”) pursuant to which Mr.

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 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) upon execution of the Employment Agreement, a non-qualified five-year stock option to purchase

3,759,400 shares at $ 0.0399 , 33.3% of which shares vest immediately, 33.3% vest on the second anniversary, and 33.3% vest on the third

anniversary of the agreement .

In consideration for

his services, Blake Carmichael shall receive (i) an annual base salary of $ 120,000 ,

payable in accordance with the customary payroll practices of the Company, and (ii) a cash bonus equal to 5% of the net income of

BLU3 payable quarterly, beginning with the first full calendar quarter after the execution of the agreement.

(iii) upon execution of

the Employment Agreement, a non-qualified five-year stock option to purchase 3,759,400 shares

at $ 0.0399 , 33.3%

of which shares vest immediately, 33.3% vest on the second anniversary, and 33.3% vest on the third anniversary of the

addition, Blake Carmichael shall be entitled to receive a five-year stock option to purchase up to 18,000,000 shares of common stock

1 unchanged sentence

and an EBITDA measurement.

August 6, 2021, the Company entered into a six-month, non-exclusive mergers and acquisitions services agreement with Newbridge Securities

Corporation which provides for a 7 % commission for the first $ 2,000,000 paid in aggregate purchase price consideration and 6 % on an aggregate

purchase price in excess of $ 2,000,000 for any merger or acquisition target sourced by Newbridge, to be paid in common stock of the Company.

Such agreement expired by its terms.

September 3, 2021, SSI and Christeen Buban entered into a three-year employment agreement (the “Buban Employment Agreement”)

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forth in the Buban Employment Agreement.

On May 2, 2022, the Company entered into a two-year

employment agreement with Steven Gagas (the “Gagas Employment Agreement”) pursuant to which Mr.

Gagas shall serve as the General

Manager of the dive shop currently operating within LBI.

In consideration for his services Mr.

May 2, 2022, the Company entered into a two-year employment agreement with Steven Gagas (the “Gagas Employment Agreement”)

pursuant to which Mr.

Gagas shall serve as the General Manager of the dive shop currently operating within LBI.

In consideration for

his services Mr.

Gagas shall receive an annual salary of $ 50,000 .

January 17, 2022, the Company entered into an agreement with The Crone Law Group, PC (“CLG”) for the provision of legal services.

In consideration therefor, the Company will pay CLG a monthly flat fee of $ 3,000 for the SEC reporting work, and its normal

hourly rate for any other legal work and issued 1,000,000 shares of common stock with a fair market value of $ 27,500 to CLG.

22, 2022, the U.S.

Consumer Products Safety Commission (the “CPSC”) issued a voluntary recall notice for the Nomad tankless

dive system, which is distributed by BLU3, Inc.

As part of the recall procedure, the CPSC has approved the Company’s proposed remedy

for the recall and BLU3 will begin to receive units back from consumers to repair affected Nomad units.

The Company has evaluated the

costs of this recall and has deemed it necessary to set an allowance of $ 160,500 for such costs.

In consideration therefor, the Company will pay CLG a monthly flat fee of $ 3,000 for the SEC reporting work, and its normal hourly rate

for any other legal work and issued 1,000,000 shares of common stock with a fair market value of $ 27,500 to CLG.

December 22, 2022, the U.S.

Consumer Products Safety Commission (the “CPSC”) issued a voluntary recall notice for the

Nomad tankless dive system, which is distributed by BLU3, Inc.

As part of the recall procedure, the CPSC has approved the

Company’s proposed remedy for the recall and BLU3 will begin to receive units back from consumers to repair affected Nomad

The Company has evaluated the costs of this recall and has deemed it necessary to set an allowance of $ 160,500

for such costs.

In 2023 the Company finalized the recall and adjusted the reserve down to approximately $ 86,300 to reflect the actual

impact on the Company’s financial condition.

Company was a defendant in an action, Basil Vann, as Personal Representative of the Estate of Jeffrey William Morris v.

Marine Group, Inc., filed on May 6, 2019 in the Circuit Court of the 17th Judicial Circuit, Broward County, Florida.

The complaint, related to consulting services provided to the Company by the deceased between 2005 and 2017, alleged breach of contract and quantum

meruit and sought $ 15,870.97 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.

The parties entered mediation pursuant to the Court’s order.

The complaint, related

to consulting services provided to the Company by the deceased between 2005 and 2017, alleged breach of contract and quantum meruit and

sought $ 15,870.97 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.

The parties entered

mediation pursuant to the Court’s order.

This action was settled for $ 10,000 on July 12, 2021.

paid monthly installments of $ 1,000 .

The Company paid monthly installments

The settlement was fully paid during the second quarter of 2022.

Company has five operating segments as described below:

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.

Redundant Air Tank Systems,

which manufactures and distributes a line of high-pressure tanks and redundant air systems for the military and recreational diving

Guided Tour and Retail,

which provides guided tours using the BLU3 technology, and also operates as a retail store for the diving community.

of Segment Reporting Information

Year ended December 31

Legacy SSA Products

High Pressure Gas Systems

Ultra-Portable Tankless Dive Systems

Redundant Air Tank Systems

Guided Tour Retail

Total Company

Cost of Revenue

( 1,941,570 )

( 2,161,396 )

( 1,866,850 )

( 1,437,512 )

( 1,109,340 )

( 5,783,173 )

( 4,337,820 )

Depreciation/Amortization

Income (loss) from operations

$ ( 1,161,446 )

$ ( 1,778,463 )

$ ( 193,777 )

$ ( 340,435 )

$ ( 125,215 )

( 1,850,397 )

$ ( 1,852,703 )

Subsequent Events

January 18, 2023 and February 18, 2023, the Company issued to Charles Hyatt, an aggregate of 11,428,570

units, with each

unit consisting of one share of common stock and a two-year common stock purchase warrant to purchase one share of common

stock at an exercise price of $ 0.0175

per share in consideration of $ 200,000 .

February 8, 2024, Brownies Marine Group, Inc.

(the “Company”), issued a promissory note (the “Note”) to Charles

Hyatt, a director of the Company (the “Lender”) in the principal amount of $ 280,000 .

The Note bears interest is payable in

monthly installments at the rate of 9.9 %per annum and matures on August 7, 2024 .

proceeds of the Note will primarily be used for general working capital purposes.

of default on the Note include insolvency and failure to pay principal or interest when due and upon the occurrence of an event of default

as described in the Note, the outstanding interest and principal will become immediately due and payable.

The default interest rate on

the Note is 18 %.

The Note can be repaid at any time without penalty or premium.

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