What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-06-16 compared with 2024-05-09 · 41 added, 55 removed, 153 unchanged (39% of the section changed)

23 unchanged sentences

The Company has set an allowance for expenses related to this recall of $160,500.

However, in 2023 the Company

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

As of December 31, 2024 the

company deemed that all units effected by the recall have been serviced or are no longer in service and has reduced the recall allowance

of Operations

Ended December 31, 2024 and 2023

our net revenues decreased 11.6% in 2023 from 2022, which included a decrease of 17.8% in sales to related parties.

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

27 unchanged sentences

reported on a consolidated basis for our operating segments.

Aggregate operating expenses decreased 31.0% for the year ended December

Aggregate operating expenses increased 9.0% for the year ended December

31, 2024 as compared to the year ended December 31, 2023.

General & Administrative Expenses (SG&A Expenses)

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

SG&A during those years

are as follows:

General & Administrative Expenses (SG&A)

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

SG&A during those years were

Non-Cash Stock based compensation – options

Professional Fees

decreases for the year ended December 31, 2023 can be attributed to a decrease in the BTL and BLU3 payroll which contributed the majority

of the 8.1% decrease.

BLU3 decreased its engineering staff in 2023 by one engineer.

Additionally, the CEO resigned in Q2 of 2023 and

the annual salary was not incurred.

Stock compensation expenses decreased 91.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

decrease can be attributed to fewer options being issued during the year as well as certain vesting criteria not being met in 2023 that

were met in 2022.

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

decreased 20.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Accounting fees decreased, 30.3%

in 2023, due to the change in audit firms for the year ended December 31, 2022.

Additionally, legal fees decreased by 48.9% due to fewer

stock awards for legal fees in 2023.

expense decreased 26.8% for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

The decrease is attributed

to less spending on direct and internet advertising by BTL, BLU3 and SSI in 2023.

expenses decreased 9.9% for the year ended December 31, 2023 as compared the year ended December 31, 2022.

The primary driver of the

decrease to other expenses is the reserve for expenses related to the 2022 recall of the Nomad dive system.

This reserve was decreased

to reflect the actual expense of the recall in 2023.

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.

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.

& Development Expenses (R&D Expenses)

1 unchanged sentence

The decrease can be primarily

attributed to the completion of the R&D for BLU3’s NOMAD in early 2022.

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

for the year ended December 31, 2023.

This increase can be attributed to the increase in convertible debt related to the SSI acquisition,

as well as the financing of tools and dyes for both the SSI and BLU3 operations.

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

and Capital Resources

6 unchanged sentences

Working Capital

decrease in our current assets on December 31, 2023 from December 31, 2022 primarily reflects decreases in cash and inventory of approximately

The decrease in inventory was due to inventory in BLU3 that was used for

the sale of the Nomad dive system through the end of 2023.

increase in our total current liabilities for the year ended December 31, 2023 as compared to the year ended December 31, 2022 reflects

an increase in customer deposits of approximately $88,206, an increase of approximately $79,011 in other liabilities, primarily attributed

to the reserve for Nomad recall expenses of $160,500, and a decrease of 9,892 in operating lease liabilities with the

signing of the SSI lease renewal, and an increase of $225,000 in related party demand note, due to the issuances of new notes.

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

Years Ended December 31,

2 unchanged sentences

Net cash provided by financing activities

cash used in operating activities for 2023 was primarily the result of a net loss of $1,248,115, as well as the change in long term lease

liability of $258,034 for the year ended December 31, 2023 as compared to December 31, 2022.

The cash used related to net loss was offset

by $462,297 in depreciation and amortization expenses and $81,424 non-cash stock based compensation expenses during the year ended December

cash used in investing activities for the year ended December 31, 2023 of $29,955 reflects primarily the cash used to purchase fixed assets.

This compares to cash used to acquire assets of Gold Coast Scuba of $30,000, as well as the cash used to purchase fixed assets, net of

debt totaling approximately $21,124, and fixed asset purchases of $11,040 for the year ended December 31, 2022.

cash provided by financing activities for the year ended December 31, 2023 reflects $200,000 in proceeds related to the sale of the Company’s

common stock and units comprised of stock and $225,000 in proceeds from the issuance of demand notes.

The increase in net cash was offset

by repayments of notes payable and other debt of $73,533.

This is compared to cash provided from the sale of common stock and units

of $305,000, proceeds from the exercise of warrants of $265,000, and the repayment of debt and notes payable totaling $54,988 for the

year ended December 31, 2022.

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,

75 unchanged sentences

Statements and Supplementary Data.

consolidated financial statements appear beginning at page F-1.

consolidated financial statements appear beginning on page F-1 of the Annual Report.

in and Disagreements with Accountants on Accounting and Financial Disclosure.

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