BWMG stock got a small pop on September 30, 2019, after the company announced its first shipment of its new dive system.

Brownie’s Marine Group, Inc. (OTCPINKSHEETS: BWMG) a developer, manufacturer and distributor of modern diving solutions is proud to announce the launch of NEMO – The World’s Smallest Dive System. The Company is ready to begin shipping pre-order units of the breakthrough dive product by their subsidiary BLU3, INC., a company created to develop and market battery-powered shallow water dive systems designed to allow more people to engage in the underwater world than ever before.

NEMO is an ultra-portable, air travel friendly, compact, affordable, and easy-to-use dive system with a 1¼ – pound submersible battery pack that powers the automatic air delivery system for an average dive of one hour. The product was engineered to transform the 100-year old sport of snorkeling by leveraging the present opportunities of the 4th industrial revolution. A diverse team of engineers, multiple design iterations proofed by 3D printers, and extensive testing lead to rapid innovation steps that would not have been economically or time-frame feasible in the past. The final iteration of the main components have now been injection molded predominately in the USA to achieve enterprise scale in today’s marketplace. Multiple patent applications are in process globally to protect this disruptive technology.

Robert Carmichael, Brownie’s CEO stated, “BLU3 NEMO will forever change the way people first experience the underwater world; and the shear number of people willing to give it a try. Patented technology sets NEMO in an all new class of its own in terms of its compact size, ease of use and affordable price point. NEMO has the added benefit of being cost effective to produce and therefore it is scalable for global distribution in the outdoor activity industry. In my 39 years of diving, innovating and leading this company, this is by far the most exciting invention to date. NEMO and the BLU3 inventions to follow will positively impact the entire diving and aquatic community. People that have had the opportunity to consider SCUBA for over 6-decades or felt that snorkeling was too burdensome will now dive in due to the incredible ease of use, performance and value NEMO delivers. I have thought about characterizing this as an “industry disruptor” but that is not a complete description, NEMO is an “industry expander and creator.”

BWMG stock is a hard read on the daily chart:

BWMG stock in the daily time frame.

There’s a positive divergence between the MACD and price. The product is interesting but it’s unclear as to how much money the company will make with this product and what its margins are. Creating a new product and then convincing the small scuba diving niche public they can’t live without your solution, and then training the public on how to use your product all takes a lot of effort and a lot of money. The company is going to have to raise money via stock dilution. They have 1 billion authorized shares with 243 million shares outstanding. The market cap on the stock is about $4 million. The company did $2.5 million in sales last year. I think the company is going to have to dilute shares to raise enough money to mass produce their diving system. Until we get the profit margin on this new scuba diving system, I’m not interested in this stock. Nevertheless, that’s a very interesting product that could become the next hot product in sporting-goods stores and dive shops across the country. Again though, without a major distributor and very little data on how they expect to scale up production, I would be very suspicious of the pinksheet listed company.

Unfortunately, while the company gets an A+ in product innovation, it does not meet the requirements for inclusion in the long-term buy and hold GST Portfolio at this time.

Disclosure: We do not hold any position in BWMG stock.

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