What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-04-10 compared with 2025-06-16 · 70 added, 69 removed, 125 unchanged (53% of the section changed)

27 unchanged sentences

Ended December 31, 2025 and 2024

our net revenues increased 7.88% in 2024 from 2023, which included a decrease of 29.8% in sales to related parties.

Our cost of revenues

in 2024 was 58.4% of our total net revenues as compared to 72.2% in 2023.

Included in our cost of revenues are royalty expenses we pay

to Robert Carmichael which decreased 10.6% in 2024 from 2023.

We reported a gross profit margin of 41.6% in 2024 as compared to 27.8%

Overall, our net revenues decreased 7.99% in 2025 from 2024, which included

an increase of 12.47% in sales to related parties.

Our cost of revenues in 2025 was 62.60% of our total net revenues as compared to 59.55%

Included in our cost of revenues are royalty expenses we pay to Robert Carmichael which decreased 13.19% in 2025 from 2024.

reported a gross profit margin of 37.4% in 2025 as compared to 40.4% in 2024.

following tables provide net revenues, costs of revenues, and gross profit margins for our segments for 2025 and 2024.

22 unchanged sentences

reported on a consolidated basis for our operating segments.

Aggregate operating expenses increased 9.0% for the year ended December

Aggregate operating expenses decreased 1 4.3% for the year ended December

31, 2025 as compared to the year ended December 31, 2024.

General & Administrative Expenses (SG&A)

increased 9.2% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

decreased 14.13% for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

SG&A during those years were

1 unchanged sentence

Professional Fees

increased by 8.9% for the year ended December 31, 2024 as compared to the year ended December 31, 2023 The increase can be

attributed to a cost of living increase and year end bonuses.

Stock based compensation expenses increased 12.4% for the year ended December 31, 2024 as compared to the year ended December 31,

The increase can be attributed to the vesting of incentive based options for the President of SSI.

fees, representing legal, accounting and other professional fees, which we paid in a combination of cash, common stock, or stock

options, decreased 24.0% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Payroll decreased by 39.2% for the year ended December 31, 2025 as compared

to the year ended December 31, 2024.

The decrease can be attributed to controls on overtime expenses, changes in personnel and no year-end

bonuses for SSI personnel.

Non-Cash Stock based compensation expenses increased 16.9 for the year ended

December 31, 2025 as compared to the year ended December 31, 2024.

The reason for this increase is that the Board of Directors

were issued stock for their accrued service for prior year and nine months of 2025.

fees, representing legal, accounting and other professional fees, which was paid in a combination of cash, common stock, or stock

options, increased 18.5% for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

Accounting fees

increased 31.83% in 2024, due to a substantial increase in audit fees during the first three quarters of 2024, and legal fees

decreased by 23.0% due to fewer stock awards for legal fees in 2024.

expense increased 16.8% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase is

attributed to increased expenses associated with trade shows , and increased direct and internet advertising by BTL, BLU3 and SSI in

expenses increased 19.0% for the year ended December 31, 2024 as compared the year ended December 31, 2023.

primarily as a result of

increase in repair and maintenance cost at the SSI facility in California.

decreased 21.6% in 2025, due to the financial review for 2025 being done by one audit firm rather than two firms for the 2024

Legal fees increased 40.0% due to work in connection with a prior lease closing and ISO audit for SSI in 2025.

expense decreased 14.4% for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease is

attributed to decreased expenses associated with trade shows, although direct and internet advertising by BTL, BLU3 and SSI

increased in 2025.

expenses increased 12.8% for the year ended December 31, 2025 as compared the year ended December 31, 2024 primarily as a result of

an increase in rent for both locations, new lease for BMG headquarters in , Davie, Florida and increase in repair and maintenance

cost at the SSI facility in California.

& Development Expenses (R&D Expenses)

1 unchanged sentence

The decrease can be primarily

attributed to the focus on products that are not proprietary.

the year ended December 31, 2024 interest expenses totaled approximately $79,600 as compared to approximately $78,700 in interest expense

attributed to the Company’s focus on non-proprietary products.

the year ended December 31, 2025, interest expenses totalled approximately $66,899 as compared to approximately $87,374 in interest expense

for the year ended December 31, 2024.

This small increase can be attributed to a slight increase in interest bearing debt.

This decrease can be attributed to a decrease in interest bearing debt.

An income tax expense of $17,302 is included in other expenses for 2025.

We had no taxes in prior years.

and Capital Resources

had cash of $417,678 on December 31, 2024.The following table summarizes total current assets, total current liabilities and working

capital at December 31, 2024 as compared to December 31, 2023.

December 31, 2024

December 31, 2023

had cash of $307,885 on December 31, 2025.

The following table summarizes total current assets, total current liabilities and

working capital at December 31, 2025 as compared to December 31, 2024.

Total Current Assets

1 unchanged sentence

Working Capital

increase in our current assets on December 31, 2024 from December 31, 2023 primarily reflects increases in accounts receivable, prepaid

expenses and inventory of approximately $336,000.

increase in our total current liabilities for the year ended December 31, 2024 as compared to the year ended December 31, 2023

reflects an increase in customer deposits of approximately $212,699, an increase of approximately $307,915 related party demand debt

with the increase in loans from the Company’s chief executive officer, an increase in the operating lease liabilities in connection with the lease for the Davie, Florids facility.

These increases are offset by

decreases in accounts payable of $102,491, current maturities of long term debt of $64,136, accounts payable related parties of

$33,103 and other liabilities of 31,184, and the release of the reserve for Nomad recall expenses of approximately

small increase in our current assets on December 31, 2025 from December 31, 2024 primarily reflects increases in accounts receivable,

decrease in expenses and increase in inventory of approximately $277,652 and decrease in prepaid expenses of $146,412.

decrease in our total current liabilities for the year ended December 31, 2025 as compared to the year ended December 31, 2024

reflects a decrease in customer deposits of approximately $254,600, a decrease of approximately $9,055 related party accounts payable, an

increase in the operating lease liabilities in connection with the lease for the Davie, Florida facility.

These increases are offset

by decreases in accounts payable of $90,420 and an increase in current maturities of long term debt of $104,667 and a decrease in other

liabilities of $246,516.

Years Ended December 31,

1 unchanged sentence

Net cash used in investing activities

Net cash provided by financing activities

cash used in operating activities for 2024 was primarily the result of a net loss of $254,066, as well as the decrease in long term lease

liability of $290,363, the reduction of accounts payable of $157,533, the increase of accounts receivable of $135, 455, and the increase

in prepaid expenses of $137,770.

The cash used related to net loss was offset by $124,930 in depreciation and amortization, and $151,492

in stock related compensation expense during the year ended December 31, 2024.

cash used in investing activities for the year ended December 31, 2024 of $21,140 was for the leasehold improvements for the

Company’s new Davie, Florida facility.

cash provided by financing activities for the year ended December 31, 2024 reflects $307,915 in proceeds from related party demand notes.

audited consolidated financial statements included in this Annual Report were prepared assuming we will continue as a going concern,

and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities

that might be necessary should we be unable to continue in operation.

The report of our independent registered public accounting firm

on our audited consolidated financial statements for the year ended December 31, 2024 includes an explanatory paragraph stating the Company

has net losses and an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.

If the Company

is unable to raise additional funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back,

delay or cease operations, liquidate assets and possibly seek bankruptcy protection.

We have a history of losses, and an accumulated

deficit of $17,949,435 as of December 31, 2024.

Despite a working capital surplus of $105,210 at December 31, 2024, the continued losses

and cash used in operations raise substantial doubt as to the Company’s ability to continue as a going concern.

The Company’s

ability to continue as a going concern is dependent upon the Company’s ability to continue to increase revenues, control expenses,

raise capital, and to continue to sustain adequate working capital to finance its operations.

The failure to achieve the necessary levels

of profitability and cash flows would be detrimental to the Company.

We are continuing to engage in discussions with potential sources

for additional capital, however, our ability to raise capital is somewhat limited based upon our revenue levels, net losses and limited

market for our common stock.

If we fail to raise additional funds when needed, or if we do not have sufficient cash flows from operations,

we may be required to scale back or cease certain of our operations.

Net cash used in or provided by financing activities

Net cash used in operating activities for the year ended December 31, 2025

was primarily the result of a net loss of $105,148 as well as an increase in amortization of right-of-use asset of $428,685, the decrease

in accounts payable and accrued liabilities of $135,322, the increase in accounts receivable of $118,171, and the increase in prepaid

expenses and other current assets of $284,785.

was no cash used in investing activities for the year ended December 31, 2025.

was no cash provided by financing for the year ended December 31, 2025.

Our audited consolidated financial statements included in this Annual Report

were prepared assuming we will continue as a going concern, and, accordingly, do not include adjustments relating to the recoverability

and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

report of our independent registered public accounting firm on our audited consolidated financial statements for the year ended December

31, 2025 includes an explanatory paragraph stating the Company has net loss for the year ended December 31, 2025 and that an accumulated

deficit which raises substantial doubt about its ability to continue as a going concern.

If the Company is unable to raise additional

funds when needed, or does not have sufficient cash flows from sales, it may be required to scale back, delay or cease operations, liquidate

assets and possibly seek bankruptcy protection.

We have a history of losses, and an accumulated deficit of $18,031,358 as of December

Despite a working capital surplus of $579,074 as of December 31, 2025, the accumulated losses and cash used in operations raise

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

The Company’s ability to continue as a going

concern is dependent upon the Company’s ability to continue to increase revenues, control expenses, raise capital, and to continue

to sustain adequate working capital to finance its operations.

The failure to achieve the necessary levels of profitability and cash flows

would be detrimental to the Company.

We are continuing to engage in discussions with potential sources for additional capital, however,

our ability to raise capital is somewhat limited based upon our revenue levels, net losses and limited market for our common stock.

we fail to raise additional funds when needed, or if we do not have sufficient cash flows from operations, we may be required to scale

back or cease certain of our operations.

Accounting Estimates

55 unchanged sentences

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 7. Management’s Discussion and Analysis