10-K: Brownies Marine Group Reports FY2025 Results

Brownies Marine Group, Inc. filed its annual report for the fiscal year ended December 31, 2025, detailing a decrease in net revenues and continued efforts to manage expenses.

Summary

• Brownies Marine Group, Inc. reported its annual results for the fiscal year ended December 31, 2025.
• Net revenues decreased by 7.99% to $7,516,687 in 2025 from $8,169,669 in 2024.
• The company incurred a net loss of $105,149 for the year ended December 31, 2025, compared to a net loss of $240,599 for the year ended December 31, 2024.
• Gross profit margin decreased from 40.4% in 2024 to 37.4% in 2025.
• Operating expenses decreased by 14.3% in 2025 compared to 2024, primarily due to a significant reduction in payroll expenses.
• The company has a history of losses and an accumulated deficit of $18,031,358 as of December 31, 2025.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.
• The company is focused on transitioning to battery-powered technologies and expanding its distribution channels.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to the revenue decline, continued net loss, auditor's going concern warning, and material weaknesses in internal controls, despite some operational improvements.

Positives

• Operating expenses decreased by 14.3% in 2025 compared to 2024, driven by a 39.2% decrease in payroll expenses.
• Working capital improved significantly, increasing by 240.3% from $170,175 in 2024 to $579,074 in 2025.
• The company is strategically transitioning towards battery-powered, software-enabled, and electrically driven technologies.
• The company is expanding its distribution into non-marine related channels to increase market reach.
• The company has no pending legal proceedings.
• The company has not experienced any cybersecurity incidents that materially affected its business.

Negatives

• Net revenues decreased by 7.99% to $7,516,687 in 2025 from $8,169,669 in 2024.
• The company incurred a net loss of $105,149 for the year ended December 31, 2025, compared to a net loss of $240,599 in 2024.
• Gross profit margin declined from 40.4% in 2024 to 37.4% in 2025.
• The company has an accumulated deficit of $18,031,358 as of December 31, 2025.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.
• The company's common stock is traded on the OTCID Basic Market and is not eligible for proprietary broker-dealer quotations, indicating lower liquidity and higher risk.
• The company relies on revenues from related parties, which accounted for 8.7% of net revenues in 2025.
• The company has identified material weaknesses in its internal control over financial reporting, including insufficient accounting personnel and lack of qualified staff.

Risks

• The company has a history of losses and an accumulated deficit, raising substantial doubt about its ability to continue as a going concern.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.
• The company's common stock is quoted on the OTCID Basic Market and has limited trading volume and liquidity, increasing the risk of price volatility and difficulty in selling shares.
• The company relies on revenues from related parties, and the loss of these revenues would have a material adverse impact.
• The company depends on licenses with its CEO, Robert Carmichael, for intellectual property; failure to maintain these licenses would be detrimental.
• The company may not be able to enforce its intellectual property rights globally.
• The company relies on third-party vendors and manufacturers, and disruptions in the supply chain, particularly from China, could materially impact operations.
• The company's success is dependent on consumer discretionary spending, which is sensitive to economic conditions.
• The company's operations can be adversely affected by bad weather.
• The manufacture and distribution of recreational diving equipment carries an inherent risk of product liability claims.
• The issuance of shares upon exercise of outstanding options, warrants, and convertible debt could cause substantial dilution to existing shareholders.

Future Outlook

The company is focused on transitioning its product line to battery-powered configurations and expanding its distribution network into non-marine related channels. Management aims to improve the company's public profile and market visibility to support potential qualification for higher tiers of the OTC Markets.

Management Comments

• Management believes that transparent reporting, disciplined corporate governance, and consistent investor communications are essential to long-term shareholder value creation.
• Management believes that the guided tour model is an important building block in introducing its battery powered diving products to the consumer market.
• Management intends to pursue initiatives designed to improve the Companys visibility in the public markets and support potential qualification for higher tiers of the OTC Markets.

Industry Context

StockSavvy.ai notes that the diving and snorkeling market is projected to reach $2.2 billion by 2025 and grow to over $2.6 billion by 2030, with a CAGR of 4.0%. The yacht market is also experiencing growth, valued at $311.32 billion in 2025 and projected to reach $470.69 billion by 2034 (CAGR of 4.70%). The North American high-pressure compressor market is expected to grow from $7.11 billion in 2026 to $11.0 billion by 2034 (CAGR of 5.6%). These market trends provide a positive backdrop for Brownies Marine Group's product offerings.

Comparison to Industry Standards

• The company's gross profit margin of 37.4% in 2025 is lower than the industry average for marine technology companies, which typically see margins in the 40-50% range.
• The company's net loss for the year and accumulated deficit are significant concerns when compared to industry peers that are generally profitable and have positive retained earnings.
• The company's reliance on related party transactions for a notable portion of its revenue (8.7%) is higher than typically observed in well-established, publicly traded companies in the sector.
• The company's auditor's statement regarding substantial doubt about its ability to continue as a going concern is a critical indicator that its financial health is below industry standards for stable businesses.

Corporate Governance

Legal Proceedings

• There are no pending legal proceedings to which the company is a party or in which any director, officer or affiliate, or security holder is a party adverse to the company or has a material interest adverse to the company.

Related Party Transactions

• Sales to entities owned by the brother of Robert Carmichael (Brownies Southport Divers, Inc., Brownies Palm Beach Divers, and Brownies Yacht Toys) totaled $636,928 in 2025 and $566,291 in 2024.
• Sales to entities wholly-owned by Robert Carmichael (Brownies Global Logistics, LLC and 940 Associates, Inc.) were $0 in 2025 and $9,887 in 2024.
• The company has an exclusive license agreement with 940 Associates, Inc. for trademarks, paying royalties of $44,234 in 2025 and $51,256 in 2024.
• The company issued a convertible demand note of $50,000 to Robert Carmichael for BLU3 working capital needs in September 2023.
• The company issued promissory notes totaling $150,000 and $280,000 to director Charles Hyatt in November 2023 and February 2024, respectively, for working capital.
• The company issued shares of common stock to Robert Carmichael and Charles Hyatt as compensation for accrued board of directors fees in Q3 2025.

Stakeholder Impact

• Shareholders may experience dilution due to the potential issuance of shares from outstanding options, warrants, and convertible debt.
• Investors may face difficulties selling shares due to the limited liquidity and quotation on the OTCID Basic Market.
• The company's going concern issue could impact the value of shareholder investments.
• Employees may be affected by the company's financial performance and potential need to scale back operations.
• Suppliers may face payment delays given the company's financial condition.

Next Steps

• Continue to expand distribution into non-marine related channels.
• Pursue initiatives to enhance public company profile and market visibility.
• Seek additional capital to fund operations.
• Remediate material weaknesses in internal controls over financial reporting.

Key Dates

Recommendation

The company's continued net losses, declining revenues, significant accumulated deficit, and the auditor's going concern warning indicate a high level of financial risk. The lack of liquidity for its stock and material weaknesses in internal controls further exacerbate these concerns, making it a speculative investment with a high probability of further decline.

Keywords

Brownies Marine Group, SEC Filing, 10-K, Annual Report, Marine Technology, Diving Equipment, High Pressure Compressors, Financial Results, Going Concern, Internal Controls, Stock Dilution, Related Party Transactions