What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-03-30 compared with 2022-03-31 · 1467 added, 1251 removed, 31 unchanged (99% of the section changed)

Risk Factors.

should carefully consider the risks described below before deciding whether to invest in our securities.

If any of the following risks

actually occur, our business, financial condition or results of operations could be adversely affected.

In such case, the trading price

of our common stock could decline and you could lose all or part of your investment.

Our actual results could differ materially from

those anticipated in the forward-looking statements made throughout this Annual Report a result of different factors, including the risks

we face described below.

Related to our Business

is limited public information on our operating history.

limited public operating history makes evaluating our business and prospects difficult.

Although we were formed in 2003, we did not provide

public reports on the results of operations until our 2020 fiscal year.

We only have two years of audited financial statements.

Any investment

decision will not be made with the same data as would be available as if we had a longer history of public reporting.

ability to meet our manufacturing workforce needs is crucial to our results of operations and future sales and profitability.

rely on the existence of an available hourly workforce to manufacture our products.

In addition, Forza X1 relies upon engineers that

are specialist in electric engineering.

We cannot assure you that we or our subsidiaries, will be able to attract and retain qualified

employees to meet current or future manufacturing needs at a reasonable cost, or at all.

For instance, the demand for skilled employees

has increased recently with the low unemployment rates in Florida where we have manufacturing facilities.

Also, although none of our

employees are currently covered by collective bargaining agreements, we cannot assure you that our employees will not elect to be represented

by labor unions in the future.

Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient

number of employees.

Significant increases in manufacturing workforce costs could materially adversely affect our business, financial

condition or results of operations.

have a large, fixed cost base that will affect our profitability if our sales decrease.

fixed cost levels of operating a powerboat manufacturer can put pressure on profit margins when sales and production decline.

Our profitability

depends, in part, on our ability to spread fixed costs over a sufficiently large number of products sold and shipped, and if we make

a decision to reduce our rate of production, gross or net margins could be negatively affected.

Consequently, decreased demand or the

need to reduce production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.

rates and energy prices affect product sales.

gas-powered products are often financed by our dealers and retail powerboat consumers, we envision this continuing as we expand our operations

and grow our network of distributors.

This may not occur if interest rates meaningfully rise because higher rates increase the borrowing

costs and, accordingly, the cost of doing business for dealers and the cost of powerboat purchases for consumers.

Higher energy costs

result in increases in operating expenses at our manufacturing facility and in the expense of shipping products to our dealers.

inflation and increases in energy costs may adversely affect the pricing and availability of petroleum-based raw materials, such as resins

and foams that are used in our products.

Also, higher fuel prices may have an adverse effect on demand for our gas-powered boats, as

they increase the cost of ownership and operation and the pries at which we sell the boats.

Therefore, higher interest rates and fuel

costs can adversely affect consumers’ decisions relating to recreational powerboating purchases.

capacity of the manufacturing facility that we and our parent company utilize will not be sufficient to support our future growth and

business plans.

are currently operating close to full capacity at our current manufacturing facility in Fort Pierce.

We currently plan to manufacture

our electric boats at a new state of the art carbon neutral factory that we plan to build in Fort Pierce Florida.

Until we are able to

expand our manufacturing capacity and build the planned manufacturing facility, we will continue to share our current manufacturing facility

with our subsidiaries, which has a limited capacity and may not be able to satisfy our and their manufacturing needs.

Any facility that

we build will require a significant capital investment and is expected to take at least one to two years to build and become fully operational.

business may be materially affected by the COVID-19 Outbreak.

outbreak of the novel coronavirus (COVID-19) has and may continue to cause disruptions to our business and operational plans.

These disruptions

may include disruptions resulting from (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption

of, or price fluctuations in, supplies from third parties upon which we rely, (iv) restrictions that governments impose to address the

COVID-19 outbreak, and (v) restrictions that we and our contractors and subcontractors impose to ensure the safety of employees and others.

To date, as a result of the COVID-19 pandemic, we have experienced shortages in obtaining the 150 horsepower motors that are supplied

to us by Suzuki Motor of America, Inc., which historically have been used in approximately 15% of our boats.

In addition, we have also

been subject to increased prices for materials resulting generally from supply chain shortages.

We also have increased our inventory

of parts and components, spending additional funds before we have purchase orders.

Continued delays in our supply chain could adversely

impact our production and, in turn, our revenues.

Further, it is presently not possible to predict the extent or durations of these disruptions.

These disruptions may have a material adverse effect on our business, financial condition and results of operations.

Such adverse effect

could be rapid and unexpected.

These disruptions may severely affect our ability to carry out our business plans for 2022 and beyond.

annual and quarterly financial results are subject to significant fluctuations depending on various factors, many of which are beyond

our control .

sales and operating results can vary significantly from quarter to quarter and year to year depending on various factors, many of which

are beyond our control.

These factors include, but are not limited to:

consumer demand for our products;

Discretionary

spending habits;

in pricing in, or the availability of supply in, the powerboat market;

to maintain a premium brand image;

in the operation of our manufacturing facilities;

in the timing and volume of our sales;

timing of our expenditures in anticipation of future sales;

promotions by us and our competitors;

in competitive and economic conditions generally;

preferences and competition for consumers’ leisure time;

of unfavorable weather conditions;

in the cost or availability of our labor;

to these and other factors, our results of operations may decline quickly and significantly in response to changes in order patterns

or rapid decreases in demand for our products.

Investors should carefully

consider the risks described below before deciding whether to invest in our securities.

If any of the following risks actually occur,

our business, financial condition or results of operations could be adversely affected.

In such case, the trading price of our common

stock could decline and you could lose all or part of your investment.

Our actual results could differ materially from those anticipated

in the forward-looking statements made throughout this Annual Report a result of different factors, including the risks we face described

Risks Related to our

There is limited public

information on our operating history.

Our limited public operating

history makes evaluating our business and prospects difficult.

Although we were formed in 2003, we did not provide public reports on the

results of operations until our 2020 fiscal year.

We only have a few years of audited financial statements.

Any investment decision will

not be made with the same data as would be available as if we had a longer history of public reporting.

We have incurred losses for the quarter ended

June 30, 2022 and the year ended December 31, 2021 and could continue to incur losses in the future.

For the year ended December 31, 2022, we incurred a loss from operations of

$6,021,707 and a net loss of $5,793,414.

For the year ended December 31, 2021, we incurred a loss from operations of $1,630,721 and a

net loss of $1,011,009.

As of December 31, 2022, we had an accumulated deficit of approximately $5.8 million.

There can be no assurance

that expenses will not continue to increase in future periods or that the cash generated from operations in future periods will be sufficient

to satisfy our operating needs and to generate income from operations and net income.

Our ability to meet

our manufacturing workforce needs is crucial to our results of operations and future sales and profitability.

We rely on the existence

of an available hourly workforce to manufacture our products.

In addition, Forza relies upon engineers that are specialist in electric

We cannot assure you that we or our subsidiaries, will be able to attract and retain qualified employees to meet current

or future manufacturing needs at a reasonable cost, or at all.

For instance, the demand for skilled employees has increased recently with

the low unemployment rates in Florida where we have manufacturing facilities and in North Carolina where Forza is building a manufacturing

We anticipate increasing the number of employees that Forza will need to hire once the manufacturing facility in North Carolina

is operational.

Also, although none of our employees are currently covered by collective bargaining agreements, we cannot assure you that

our employees will not elect to be represented by labor unions in the future.

Additionally, competition for qualified employees could

require us to pay higher wages to attract a sufficient number of employees.

Significant increases in manufacturing workforce costs could

materially adversely affect our business, financial condition or results of operations.

Forza intends to continue to hire a number of

additional personnel, including design and manufacturing personnel and service technicians for its electric boats and powertrains.

for individuals with experience designing, manufacturing and servicing electric boats is intense, and Forza may not be able to attract,

assimilate, train or retain additional highly qualified personnel in the future.

The failure to attract, integrate, train, motivate and

retain these additional employees could seriously harm Forza’s business and prospects.

We have a large, fixed

cost base that will affect our profitability if our sales decrease.

The fixed cost levels of

operating a powerboat manufacturer can put pressure on profit margins when sales and production decline.

Our profitability depends, in

part, on our ability to spread fixed costs over a sufficiently large number of products sold and shipped, and if we make a decision to

reduce our rate of production, gross or net margins could be negatively affected.

Consequently, decreased demand or the need to reduce

production can lower our ability to absorb fixed costs and materially impact our financial condition or results of operations.

Interest rates and

energy prices affect product sales.

Our gas-powered products

are often financed by our dealers and retail powerboat consumers, we envision this continuing as we expand our operations and grow our

network of distributors.

This may not occur if interest rates meaningfully rise because higher rates increase the borrowing costs and,

accordingly, the cost of doing business for dealers and the cost of powerboat purchases for consumers.

Higher energy costs result in increases

in operating expenses at our manufacturing facility and in the expense of shipping products to our dealers.

In addition, inflation and

increases in energy costs may adversely affect the pricing and availability of petroleum-based raw materials, such as resins and foams

that are used in our products.

Also, higher fuel prices may have an adverse effect on demand for our gas-powered boats, as they increase

the cost of ownership and operation and the pries at which we sell the boats.

Therefore, higher interest rates and fuel costs can adversely

affect consumers’ decisions relating to recreational powerboating purchases.

The capacity of the manufacturing facility that

we and Forza utilize will not be sufficient to support our future growth and business plans.

We are currently operating close to full capacity

at our current manufacturing facility in Fort Pierce.

Forza plans to manufacture its electric boats at a new state of the art carbon neutral

factory that it plans to build in McDowell County, North Carolina.

Until we are able to expand our manufacturing capacity and Forza is

able to build the planned manufacturing facility, we will continue to share our current manufacturing facility with Forza, which has a

limited capacity and may not be able to satisfy our and their manufacturing needs.

Any facility that we build will require a significant

capital investment and is expected to take at least one to two years to build and become fully operational.

As a result of limited capacity

at our facility, Forza’s ability to produce any boats will be limited to available capacity of our facility until Forza’s

future manufacturing facility is operational.

If capacity is not available, Forza will not be able to produce its electric boats as planned.

Forza intends to utilize grant funding

to pay for certain costs associated with the building of its manufacturing facility.

On July 28, 2022, we received notice that the North

Carolina Economic investment committee has approved a Job Development Investment Grant (“JDIG”) providing for reimbursement

to us of up to $1,367,100 over a twelve-year period to establish a new manufacturing plant in McDowell County, North Carolina.

of grant funding is conditioned upon Forza investing over $10.5 million in land, buildings and fixtures, infrastructure and machinery

and equipment by the end of 2025 and Forza creating as many as 170 jobs.

There can be no assurance that Forza will meet the conditions

necessary to receive the grant funding.

Changes in general economic conditions, geopolitical

conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business

and operating results.

Our operations and performance depend on global, regional

economic and geopolitical conditions.

General worldwide economic conditions have experienced significant instability in recent

years including the recent global economic uncertainty and financial market conditions.

Russia’s invasion and military attacks on

Ukraine have triggered significant sanctions from U.S.

and European leaders and financial markets around the world experienced volatility

following the invasion of Ukraine by Russia in February 2022.

Resulting changes in U.S.

trade policy could trigger retaliatory actions

by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if other countries,

including the U.S., become further involved in the conflict, we could face significant adverse effects to our business and financial condition.

The uncertain financial markets, disruptions in supply

chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future.

outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses

and commerce, as worker shortages have occurred;

supply chains have been disrupted;

facilities and production have been suspended;

demand for certain goods and services, such as medical services and supplies, have spiked, while demand for other goods and services,

such as travel, have fallen.

The future progression of the pandemic and its effects on our business and operations are uncertain.

the outbreak of a pandemic could disrupt our operations due to absenteeism by infected or ill members of management or other employees,

or absenteeism by members of management and other employees who elect not to come to work due to the illness affecting others in our office

or laboratory facilities, or due to quarantines.

Pandemics could also impact members of our Board of Directors resulting in absenteeism

from meetings of the directors or committees of directors, and making it more difficult to convene the quorums of the full Board of Directors

or its committees needed to conduct meetings for the management of our affairs.

Further, due to increasing inflation, operating costs

for many businesses including ours have increased and, in the future, could impact demand or pricing manufacturing of our drug candidates

or services providers, foreign exchange rates or employee wages.

Inflation rates, particularly in the United States, have increased

recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs),

reduced liquidity and limits on our ability to access credit or otherwise raise capital.

In addition, the Federal Reserve has raised,

and may again raise, interest rates in response to concerns about inflation, which coupled with reduced government spending and volatility

in financial markets may have the effect of further increasing economic uncertainty and heightening these risks.

Actual events involving reduced or limited liquidity,

defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services

industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may

in the future lead to market-wide liquidity problems.

For example, on March 10, 2023, Silicon Valley Bank, was closed by the California

Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver.

did not have any cash or cash equivalent balances on deposit with Silicon Valley Bank, uncertainty and liquidity concerns in the broader

financial services industry remain and the failure of Silicon Valley Bank and its potential near- and long-term effects on the biotechnology

industry and its participants such as our vendors, suppliers, and investors, may also adversely affect our operations and stock price.

We are actively monitoring the effects these disruptions

and increasing inflation could have on our operations.

These conditions make it extremely difficult for us

to accurately forecast and plan future business activities.

Our annual and quarterly

financial results are subject to significant fluctuations depending on various factors, many of which are beyond our control .

Our sales and operating results

can vary significantly from quarter to quarter and year to year depending on various factors, many of which are beyond our control.

factors include, but are not limited to:

Seasonal consumer demand for our products;

Discretionary spending habits;

Changes in pricing in, or the availability of supply in, the powerboat market;

Failure to maintain a premium brand image;

Disruption in the operation of our manufacturing facilities;

Variations in the timing and volume of our sales;

The timing of our expenditures in anticipation of future sales;

Sales promotions by us and our competitors;

Changes in competitive and economic conditions generally;

Consumer preferences and competition for consumers’ leisure time;

Impact of unfavorable weather conditions;

Changes in the cost or availability of our labor;

Increased fuel prices.

Due to these and other factors,

our results of operations may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand

for our products.

We anticipate that fluctuations in operating results will continue in the future.

weather conditions may have a material adverse effect on our business, financial condition, and results of operations, especially during

the peak boating season.

weather conditions in any year in any particular geographic region may adversely affect sales in that region, especially during the peak

Unfavorable weather

conditions may have a material adverse effect on our business, financial condition, and results of operations, especially during the peak

boating season.

Sales of our products are generally stronger just before and during spring and summer, which represent the peak boating

months, and favorable weather during these months generally has a positive effect on consumer demand.

Conversely, unseasonably cool weather,

excessive rainfall, reduced rainfall levels, or drought conditions during these periods may close area boating locations or render boating

dangerous or inconvenient, thereby generally reducing consumer demand for our products.

Our annual results would be materially and adversely

affected if our net sales were to fall below expected seasonal levels during these periods.

We may also experience more pronounced seasonal

fluctuation in net sales in the future as we expand our businesses.

There can be no assurance that weather conditions will not have a

material effect on the sales of any of our products.

natural disaster, the effects of climate change, or other disruptions at our manufacturing facility could adversely affect our business,

financial condition, and results of operations .

rely on the continuous operation of our only manufacturing facility in Stuart, Florida for the production of our products.

disaster or other serious disruption to our facility due to fire, flood, earthquake, or any other unforeseen circumstance would adversely

affect our business, financial condition, and results of operations.

Changes in climate could adversely affect our operations by limiting

or increasing the costs associated with equipment or fuel supplies.

In addition, adverse weather conditions, such as increased frequency

and/or severity of storms, or floods could impair our ability to operate by damaging our facilities and equipment or restricting product

delivery to customers.

The occurrence of any disruption at our manufacturing facility, even for a short period of time, may have an adverse

effect on our productivity and profitability, during and after the period of the disruption.

These disruptions may also cause personal

injury and loss of life, severe damage to or destruction of property and equipment, and environmental damage.

Although we maintain property,

casualty, and business interruption insurance of the types and in the amounts that we believe are customary for the industry, we are

not fully insured against all potential natural disasters or other disruptions to our manufacturing facility.

we fail to manage our manufacturing levels while still addressing the seasonal retail pattern for our products, our business and margins

seasonality of retail demand for our products, together with our goal of balancing production throughout the year, requires us to manage

our manufacturing and allocate our gas-powered products to our dealer network to address anticipated retail demand.

Our dealers must

manage seasonal changes in consumer demand and inventory.

If our dealers reduce their inventories in response to weakness in retail demand,

we could be required to reduce our production, resulting in lower rates of absorption of fixed costs in our manufacturing and, therefore,

lower margins.

As a result, we must balance the economies of level production with the seasonal retail sales pattern experienced by our

Failure to adjust manufacturing levels adequately may have a material adverse effect on our financial condition and results

of operations.

depend on our network of independent dealers for our gas-powered boats, face increasing competition for dealers, and have little control

over their activities .

significant portion of our sales of our gas-powered boats are derived from our network of independent dealers.

We typically manufacture

our gas-powered boats based upon indications of interest received from dealers who are not contractually obligated to purchase any boats.

While our dealers typically have purchased all of the boats for which they have provided us with indications of interest, it is possible

that a dealer could choose not to purchase boats for which it has provided an indication of interest (e.g., if it were to have reached

the credit limit on its floor plan), and as a result we once experienced, and in the future could experience, excess inventory and costs.

For fiscal 2021, our top five dealers accounted for 67% of our total boats sold.

The loss of a significant dealer could have a material

adverse effect on our financial condition and results of operations.

The number of dealers supporting our products and the quality of

their marketing and servicing efforts are essential to our ability to generate sales.

Competition for dealers among other boat manufacturers

continues to increase based on the quality, price, value, and availability of the manufacturers’ products, the manufacturers’

attention to customer service, and the marketing support that the manufacturer provides to the dealers.

We face intense competition from

other boat manufacturers in attracting and retaining dealers, affecting our ability to attract or retain relationships with qualified

and successful dealers.

Although our management believes that the quality of our products in the performance sport boat industry should

permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able

to maintain or improve our relationships with our dealers or our market share position.

In addition, independent dealers in the boating

industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in

the future if the surviving entity in any such consolidation purchases similar products from a competitor.

A substantial deterioration

in the number of dealers or quality of our network of dealers would have a material adverse effect on our business, financial condition,

Adverse weather conditions

in any year in any particular geographic region may adversely affect sales in that region, especially during the peak boating season.

Sales of our products are generally stronger just before and during spring and summer, which represent the peak boating months, and favorable

weather during these months generally has a positive effect on consumer demand.

Conversely, unseasonably cool weather, excessive rainfall,

reduced rainfall levels, or drought conditions during these periods may close area boating locations or render boating dangerous or inconvenient,

thereby generally reducing consumer demand for our products.

Our annual results would be materially and adversely affected if our net

sales were to fall below expected seasonal levels during these periods.

We may also experience more pronounced seasonal fluctuation in

net sales in the future as we expand our businesses.

There can be no assurance that weather conditions will not have a material effect

on the sales of any of our products.

A natural disaster,

the effects of climate change, or other disruptions at our manufacturing facility could adversely affect our business, financial condition,

and results of operations .

success depends, in part, upon the financial health of our dealers and their continued access to financing.

we sell nearly all of our gas-powered products through dealers, their financial health is critical to our success.

Our business, financial

condition, and results of operations may be adversely affected if the financial health of the dealers that sell our products suffers.

Their financial health may suffer for a variety of reasons, including a downturn in general economic conditions, rising interest rates,

higher rents, increased labor costs and taxes, compliance with regulations, and personal financial issues.

addition, our dealers require adequate liquidity to finance their operations, including purchases of our products.

Dealers are subject

to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued

access to adequate financing sources on a timely basis on reasonable terms.

These sources of financing are vital to our ability to sell

products through our distribution network.

Access to financing generally facilitates our dealers’ ability to purchase boats from

us, and their financed purchases reduce our working capital requirements.

If financing were not available to our dealers, our sales and

our working capital levels would be adversely affected.

may be required to repurchase inventory of certain dealers .

of our dealers have floor plan financing arrangements with third-party finance companies that enable the dealers to purchase our products.

In connection with these agreements, we may have an obligation to repurchase our products from a finance company under certain circumstances,

and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable

to us to satisfy any repurchase obligation.

This obligation is triggered if a dealer defaults on its debt obligations to a finance company,

the finance company repossesses the boat, and the boat is returned to us.

Our obligation to repurchase a repossessed boat for the unpaid

balance of our original invoice price for the boat is subject to reduction or limitation based on the age and condition of the boat at

the time of repurchase, and in certain cases by an aggregate cap on repurchase obligations associated with a particular floor plan financing

To date, we have not been obligated to repurchase any boats under our dealers’ floor plan financing arrangements, and

we are not aware of any applicable laws regulating dealer relations which govern our relations with the dealers or would require us to

repurchase any boats.

We rely on the continuous

operation of our only manufacturing facility in Stuart, Florida for the production of our products.

Any natural disaster or other serious

disruption to our facility due to fire, flood, earthquake, or any other unforeseen circumstance would adversely affect our business, financial

condition, and results of operations.

Changes in climate could adversely affect our operations by limiting or increasing the costs associated

with equipment or fuel supplies.

In addition, adverse weather conditions, such as increased frequency and/or severity of storms, or floods

could impair our ability to operate by damaging our facilities and equipment or restricting product delivery to customers.

The occurrence

of any disruption at our manufacturing facility, even for a short period of time, may have an adverse effect on our productivity and profitability,

during and after the period of the disruption.

These disruptions may also cause personal injury and loss of life, severe damage to or

destruction of property and equipment, and environmental damage.

Although we maintain property, casualty, and business interruption insurance

of the types and in the amounts that we believe are customary for the industry, we are not fully insured against all potential natural

disasters or other disruptions to our manufacturing facility.

If we fail to manage

our manufacturing levels while still addressing the seasonal retail pattern for our products, our business and margins may suffer .

The seasonality of retail

demand for our products, together with our goal of balancing production throughout the year, requires us to manage our manufacturing and

allocate our gas-powered products to our dealer network to address anticipated retail demand.

Our dealers must manage seasonal changes

in consumer demand and inventory.

If our dealers reduce their inventories in response to weakness in retail demand, we could be required

to reduce our production, resulting in lower rates of absorption of fixed costs in our manufacturing and, therefore, lower margins.

a result, we must balance the economies of level production with the seasonal retail sales pattern experienced by our dealers.

to adjust manufacturing levels adequately may have a material adverse effect on our financial condition and results of operations.

We depend on our network

of independent dealers for our gas-powered boats, face increasing competition for dealers, and have little control over their activities .

A significant portion of

our sales of our gas-powered boats are derived from our network of independent dealers.

We typically manufacture our gas-powered boats

based upon indications of interest received from dealers who are not contractually obligated to purchase any boats.

While our dealers

typically have purchased all of the boats for which they have provided us with indications of interest, it is possible that a dealer could

choose not to purchase boats for which it has provided an indication of interest (e.g., if it were to have reached the credit limit on

its floor plan), and as a result we once experienced, and in the future could experience, excess inventory and costs.

For fiscal 2022,

our top five dealers accounted for approximately 48% of our consolidated revenues.

During the year ended December 31, 2022, one individual dealer

had sales of over 10% of our total sales, that dealer represented 12% of total sales.

During the year ended December 31, 2021, five

individual dealers had sales of over 10% of our total sales and combined these five dealers represented 67% of total sales.

of a significant dealer could have a material adverse effect on our financial condition and results of operations.

The number of dealers

supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales.

for dealers among other boat manufacturers continues to increase based on the quality, price, value, and availability of the manufacturers’

products, the manufacturers’ attention to customer service, and the marketing support that the manufacturer provides to the dealers.

We face intense competition from other boat manufacturers in attracting and retaining dealers, affecting our ability to attract or retain

relationships with qualified and successful dealers.

Although our management believes that the quality of our products in the performance

sport boat industry should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance

that we will be able to maintain or improve our relationships with our dealers or our market share position.

In addition, independent

dealers in the boating industry have experienced significant consolidation in recent years, which could result in the loss of one or more

of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor.

A substantial

deterioration in the number of dealers or quality of our network of dealers would have a material adverse effect on our business, financial

condition, and results of operations.

Our success depends,

in part, upon the financial health of our dealers and their continued access to financing.

Because we sell nearly all

of our gas-powered products through dealers, their financial health is critical to our success.

Our business, financial condition, and

results of operations may be adversely affected if the financial health of the dealers that sell our products suffers.

Their financial

health may suffer for a variety of reasons, including a downturn in general economic conditions, rising interest rates, higher rents,

increased labor costs and taxes, compliance with regulations, and personal financial issues.

In addition, our dealers

require adequate liquidity to finance their operations, including purchases of our products.

Dealers are subject to numerous risks and

uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing

sources on a timely basis on reasonable terms.

These sources of financing are vital to our ability to sell products through our distribution

Access to financing generally facilitates our dealers’ ability to purchase boats from us, and their financed purchases

reduce our working capital requirements.

If financing were not available to our dealers, our sales and our working capital levels would

be adversely affected.

We may be required to repurchase inventory

of certain dealers .

Many of our dealers have

floor plan financing arrangements with third-party finance companies that enable the dealers to purchase our products.

In connection with

these agreements, we may have an obligation to repurchase our products from a finance company under certain circumstances, and we may

not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy

any repurchase obligation.

This obligation is triggered if a dealer defaults on its debt obligations to a finance company, the finance

company repossesses the boat, and the boat is returned to us.

Our obligation to repurchase a repossessed boat for the unpaid balance of

our original invoice price for the boat is subject to reduction or limitation based on the age and condition of the boat at the time of

repurchase, and in certain cases by an aggregate cap on repurchase obligations associated with a particular floor plan financing program.

To date, we have not been obligated to repurchase any boats under our dealers’ floor plan financing arrangements, and we are not

aware of any applicable laws regulating dealer relations which govern our relations with the dealers or would require us to repurchase

However, there is no assurance that a dealer will not default on the terms of a credit line in the future.

applicable laws regulating dealer relations may also require us to repurchase our products from our dealers under certain circumstances,

and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable

to us to satisfy any repurchase obligation.

If we were obligated to repurchase a significant number of units under any repurchase agreement

or under applicable dealer laws, our business, operating results and financial condition could be adversely affected.

rely on third-party suppliers in the manufacturing of our boats .

depend on third-party suppliers to provide components and raw materials essential to the construction of our boats.

While we believe

that our relationships with our current suppliers are sufficient to provide the materials necessary to meet present production demand,

we cannot assure you that these relationships will continue or that the quantity or quality of materials available from these suppliers

will be sufficient to meet our future needs, irrespective of whether we successfully implement our growth strategy.

We expect that our

need for raw materials and supplies will increase.

Our suppliers must be prepared to ramp up operations and, in many cases, hire additional

workers and/or expand capacity in order to fulfill the orders placed by us and other customers.

Operational and financial difficulties

that our suppliers may face in the future could adversely affect their ability to supply us with the parts and components we need, which

could significantly disrupt our operations.

or interruption of informal supply arrangements could have a material adverse effect on our business or results of operations .

we have long term relationships with many of our suppliers, we do not have any formal agreements with any suppliers for the purchase

of parts needed and our purchases are made on a purchase order basis.

We have no binding commitment from our suppliers to supply any

specified quantity of materials needed within any specified time period.

In the event that our suppliers receive a large number of orders

from other customers, there is a possibility that they will not be able to support our needs.

If any of our current suppliers were to

be unable to provide needed products to us, there can be no assurance that alternate supply arrangements will be made on satisfactory

If we need to enter into supply arrangements on unsatisfactory terms, or if there are any delays to our supply arrangements, it

could adversely affect our business and operating results.

rely on one manufacturer to supply our engines and do not have any long terms commitments from such manufacturer.

currently rely on one manufacturer, Suzuki Motor of America, Inc.

for the supply of outboard engines.

We do not have any long-term commitments

from Suzuki to supply any specified number of engines and therefore cannot guarantee that there will be adequate supply of our engines.

To date, as a result of the COVID-19 pandemic, we have experienced shortages in obtaining the 150-horsepower motors that are supplied

to us by Suzuki Motor of America, Inc., which historically have been used in approximately 15% of our boats.

Although we believe we have

sufficient supply of our other engines, due to supply chain shortages, we may not be able to obtain engines in the future from other

manufacturers if Suzuki Motor of America, Inc.

In addition, applicable

laws regulating dealer relations may also require us to repurchase our products from our dealers under certain circumstances, and we may

not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy

any repurchase obligation.

If we were obligated to repurchase a significant number of units under any repurchase agreement or under applicable

dealer laws, our business, operating results and financial condition could be adversely affected.

We rely on third-party

suppliers in the manufacturing of our boats .

We depend on third-party

suppliers to provide components and raw materials essential to the construction of our boats.

While we believe that our relationships

with our current suppliers are sufficient to provide the materials necessary to meet present production demand, we cannot assure you that

these relationships will continue or that the quantity or quality of materials available from these suppliers will be sufficient to meet

our future needs, irrespective of whether we successfully implement our growth strategy.

We expect that our need for raw materials and

supplies will increase.

Our suppliers must be prepared to ramp up operations and, in many cases, hire additional workers and/or expand

capacity in order to fulfill the orders placed by us and other customers.

Operational and financial difficulties that our suppliers may

face in the future could adversely affect their ability to supply us with the parts and components we need, which could significantly

disrupt our operations.

Termination or interruption

of informal supply arrangements could have a material adverse effect on our business or results of operations .

Although we have long term

relationships with many of our suppliers, we do not have any formal agreements with any suppliers for the purchase of parts needed and

our purchases are made on a purchase order basis.

We have no binding commitment from our suppliers to supply any specified quantity of

materials needed within any specified time period.

In the event that our suppliers receive a large number of orders from other customers,

there is a possibility that they will not be able to support our needs.

If any of our current suppliers were to be unable to provide needed

products to us, there can be no assurance that alternate supply arrangements will be made on satisfactory terms.

If we need to enter into

supply arrangements on unsatisfactory terms, or if there are any delays to our supply arrangements, it could adversely affect our business

and operating results.

We rely on one manufacturer

to supply our engines for our gas powered boats and do not have any long terms commitments from such manufacturer.

We currently rely on one

manufacturer, Suzuki Motor of America, Inc.

for the supply of outboard engines for our gas powered boats.

We do not have any long-term

commitments from Suzuki to supply any specified number of engines and therefore cannot guarantee that there will be adequate supply of

To date, as a result of the COVID-19 pandemic, we have experienced shortages in obtaining the 150-horsepower motors that

are supplied to us by Suzuki Motor of America, Inc., which historically have been used in approximately 15% of our boats.

believe we have sufficient supply of our other engines, due to supply chain shortages, we may not be able to obtain engines in the future

from other manufacturers if Suzuki Motor of America, Inc.

should be unable to satisfy our needs.

Suzuki Motor of America, Inc., and other manufacturers

may not be able to provide us with engines in a timely manner due to supply chain shortages and even if other manufacturers are able

to fulfill our engine needs they may not be able to do so at the same price as we currently pay for the engines we install in our boats,

which could result in lower profit margins or us increasing the price of our boats in order to maintain profit margins which could adversely

impact demand for our boats.

In addition, certain geopolitical events, such as the current military conflict between Russia and Ukraine,

may increase the likelihood of supply chain interruptions and hinder our ability to find materials we need to build our boats.

liability, warranty, personal injury, property damage and recall claims may materially affect our financial condition and damage our

are engaged in a business that exposes us to claims for product liability and warranty claims in the event our products actually or allegedly

fail to perform as expected or the use of our products results, or is alleged to result, in property damage, personal injury or death.

Although we maintain product and general liability insurance of the types and in the amounts that we believe are customary for the industry,

we are not fully insured against all such potential claims.

Our products involve kinetic energy, produce physical motion and are to be

used on the water, factors which increase the likelihood of injury or death.

Our electric-boats contain lithium-ion batteries, which

have been known to catch fire or vent smoke and flame, and chemicals which are known to be, or could later be proved to be, toxic carcinogenic.

Any judgment or settlement for personal injury or wrongful death claims could be more than our assets and, even if not justified, could

prove expensive to contest.

may experience legal claims in excess of our insurance coverage or claims that are not covered by insurance, either of which could adversely

affect our business, financial condition and results of operations.

Adverse determination of material product liability and warranty

claims made against us could have a material adverse effect on our financial condition and harm our reputation.

In addition, if any of

our products or components in our products are, or are alleged to be, defective, we may be required to participate in a recall of that

product or component if the defect or alleged defect relates to safety.

Any such recall and other claims could be costly to us and require

substantial management attention.

product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on our results

of operations .

provide a hull warranty for structural damage of up to ten years for our gas-powered boats.

In addition, we provide a three-year limited

fiberglass small parts warranty on all on some small fiberglass parts and components such as consoles Gelcoat is covered up to one year.

Additionally, fiberglass lids, plastic lids, electrical panels, bilge pumps, aerator pumps or other electrical devices (excluding stereos,

depth finders, radar, chart plotters except for installation if installed by Twin Vee PowerCats Co.), steering systems, electrical panels,

and pumps are covered under a one-year basic limited systems warranty.

Some materials, components or parts of the boat that are not covered

by our limited product warranties are separately warranted by their manufacturers or suppliers.

These other warranties include warranties

covering engines purchased from suppliers and other components.

standard warranties require us or our dealers to repair or replace defective products during such warranty periods at no cost to the

Although we employ quality control procedures, sometimes a product is distributed that needs repair or replacement.

and replacement costs we could incur in connection with a recall could adversely affect our business.

In addition, product recalls could

harm our reputation and cause us to lose customers, particularly if recalls cause consumers to question the safety or reliability of

our products.

nature of our business exposes us to workers’ compensation claims and other workplace liabilities.

materials we use require our employees to handle potentially hazardous or toxic substances.

While our employees who handle these and

other potentially hazardous or toxic materials receive specialized training and wear protective clothing, there is still a risk that

they, or others, may be exposed to these substances.

Exposure to these substances could result in significant injury to our employees

and damage to our property or the property of others, including natural resource damage.

Our personnel are also at risk for other workplace-related

injuries, including slips and falls.

We may in the future be subject to fines, penalties, and other liabilities in connection with any

such injury or damage.

Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured

amounts, we may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection against

potential liabilities.

we are unable to comply with environmental and other regulatory requirements, our business may be exposed to material liability and/or

operations are subject to extensive and frequently changing federal, state, local, and foreign laws and regulations, including those

concerning product safety, environmental protection, and occupational health and safety.

Some of these laws and regulations require us

to obtain permits and limit our ability to discharge hazardous materials into the environment.

If we fail to comply with these requirements,

we may be subject to civil or criminal enforcement actions that could result in the assessment of fines and penalties, obligations to

conduct remedial or corrective actions, or, in extreme circumstances, revocation of our permits or injunctions preventing some or all

of our operations.

In addition, the components of our boats must meet certain regulatory standards, including stringent air emission

standards for boat engines.

Failure to meet these standards could result in an inability to sell our boats in key markets, which would

adversely affect our business.

Moreover, compliance with these regulatory requirements could increase the cost of our products, which

in turn, may reduce consumer demand.

we believe that we are in material compliance with applicable federal, state, local, and foreign regulatory requirements, and hold all

licenses and permits required thereunder, we cannot assure you that we will, at all times, be able to continue to comply with applicable

regulatory requirements.

Compliance with increasingly stringent regulatory and permit requirements may, in the future, cause us to incur

substantial capital costs and increase our cost of operations, or may limit our operations, all of which could have a material adverse

effect on our business or financial condition.

with most boat construction businesses, our manufacturing processes involve the use, handling, storage, and contracting for recycling

or disposal of hazardous substances and wastes.

The failure to manage or dispose of such hazardous substances and wastes properly could

expose us to material liability or fines, including liability for personal injury or property damage due to exposure to hazardous substances,

damages to natural resources, or for the investigation and remediation of environmental conditions.

Under environmental laws, we may

be liable for remediation of contamination at sites where our hazardous wastes have been disposed or at our current facility, regardless

of whether our facility is owned or leased or whether the environmental conditions were created by us, a prior owner or tenant, or a

While we do not believe that we are presently subject to any such liabilities, we cannot assure you that environmental conditions

relating to our prior, existing, or future sites or operations or those of predecessor companies will not have a material adverse effect

on our business or financial condition.

industry is characterized by intense competition, which affects our sales and profits.

performance sport boat category and the powerboat industry as a whole are highly competitive for consumers and dealers.

We also compete

against consumer demand for used boats.

Competition affects our ability to succeed in both the markets we currently serve and new markets

that we may enter in the future.

Competition is based primarily on brand name, price, product selection, and product performance.

compete with several large manufacturers that may have greater financial, marketing, and other resources than we do and who are represented

by dealers in the markets in which we now operate and into which we plan to expand.

We also compete with a variety of small, independent

manufacturers.

We cannot assure you that we will not face greater competition from existing large or small manufacturers or that we will

be able to compete successfully with new competitors.

Our failure to compete effectively with our current and future competitors would

adversely affect our business, financial condition, and results of operations.

face increasing competition for dealers and have little control over their activities .

face intense competition from other performance sport boat manufacturers in attracting and retaining dealers and customers, affecting

our ability to attract or retain relationships with qualified and successful dealers and consumers looking to purchase boats.

our management believes that the quality of our products in the boat industry should permit us to maintain our relationships with our

dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our

dealers or our market share position.

In addition, independent dealers in the boating industry have experienced significant consolidation

in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation

purchases similar products from a competitor.

A substantial deterioration in the number of dealers or quality of our network of dealers

would have a material adverse effect on our business, financial condition, and results of operations.

sales may be adversely impacted by increased consumer preference for other leisure activities or used boats or the supply of new boats

by competitors in excess of demand .

boats are not necessities and in times of economic hardship, and consumers may cease purchasing non-essential items.

Demand for our boats

may be adversely affected by competition from other activities that occupy consumers’ leisure time and by changes in consumer lifestyle,

usage pattern or taste.

Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase and

enjoy our boats.

the economic downturn that commenced in 2008, there was a shift in consumer demand toward purchasing more used boats, primarily because

prices for used boats are typically lower than retail prices for new boats.

If this were to occur again, it could have the effect of

reducing demand among retail purchasers for our new boats.

Also, while we have balanced production volumes for our boats to meet demand,

our competitors could choose to reduce the price of their products, which could have the effect of reducing demand for our new boats.

Reduced demand for new boats could lead to reduced sales by us, which could adversely affect our business, results of operations, and

Suzuki Motor of America, Inc., and other

manufacturers may not be able to provide us with engines in a timely manner due to supply chain shortages and even if other manufacturers

are able to fulfill our engine needs they may not be able to do so at the same price as we currently pay for the engines we install in

our boats, which could result in lower profit margins or us increasing the price of our boats in order to maintain profit margins which

could adversely impact demand for our boats.

In addition, certain geopolitical events, such as the current military conflict between Russia

and Ukraine, may increase the likelihood of supply chain interruptions and hinder our ability to find materials we need to build our boats.

Significant product repair and/or replacement

due to product warranty claims or product recalls could have a material adverse impact on our results of operations .

We provide a hull warranty for structural damage of

up to ten years for its gas-powered boats.

In addition, we provide a three-year limited fiberglass small parts warranty on all or some

small fiberglass parts and components such as consoles.

Gelcoat is covered up to one year.

Additionally, fiberglass lids, plastic lids,

electrical panels, bilge pumps, aerator pumps or other electrical devices (excluding stereos, depth finders, radar, chart plotters except

for installation if installed by us.), steering systems, electrical panels, and pumps are covered under a one-year basic limited systems

Some materials, components or parts of the boat that are not covered by our limited product warranties are separately warranted

by their manufacturers or suppliers.

These other warranties include warranties covering engines purchased from suppliers and other components.

Our standard warranties require us or our dealers

to repair or replace defective products during such warranty periods at no cost to the consumer.

Although we employ quality control procedures,

sometimes a product is distributed that needs repair or replacement.

The repair and replacement costs we could incur in connection with

a recall could adversely affect its business.

In addition, product recalls could harm our reputation and cause us to lose customers, particularly

if recalls cause consumers to question the safety or reliability of its products.

The nature of our business

exposes us to workers’ compensation claims and other workplace liabilities.

Certain materials we use

require our employees to handle potentially hazardous or toxic substances.

While our employees who handle these and other potentially

hazardous or toxic materials receive specialized training and wear protective clothing, there is still a risk that they, or others, may

be exposed to these substances.

Exposure to these substances could result in significant injury to our employees and damage to our property

or the property of others, including natural resource damage.

Our personnel are also at risk for other workplace-related injuries, including

slips and falls.

We may in the future be subject to fines, penalties, and other liabilities in connection with any such injury or damage.

Although we currently maintain what we believe to be suitable and adequate insurance in excess of our self-insured amounts, we may be

unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection against potential liabilities.

If we are unable to comply with environmental

and other regulatory requirements, our business may be exposed to material liability and/or fines .

Our operations are subject

to extensive and frequently changing federal, state, local, and foreign laws and regulations, including those concerning product safety,

environmental protection, and occupational health and safety.

Some of these laws and regulations require us to obtain permits and limit

our ability to discharge hazardous materials into the environment.

If we fail to comply with these requirements, we may be subject to

civil or criminal enforcement actions that could result in the assessment of fines and penalties, obligations to conduct remedial or corrective

actions, or, in extreme circumstances, revocation of our permits or injunctions preventing some or all of our operations.

the components of our boats must meet certain regulatory standards, including stringent air emission standards for boat engines.

to meet these standards could result in an inability to sell our boats in key markets, which would adversely affect our business.

compliance with these regulatory requirements could increase the cost of our products, which in turn, may reduce consumer demand.

While we believe that we

are in material compliance with applicable federal, state, local, and foreign regulatory requirements, and hold all licenses and permits

required thereunder, we cannot assure you that we will, at all times, be able to continue to comply with applicable regulatory requirements.

Compliance with increasingly stringent regulatory and permit requirements may, in the future, cause us to incur substantial capital costs

and increase our cost of operations, or may limit our operations, all of which could have a material adverse effect on our business or

financial condition.

sales and profitability depend, in part, on the successful introduction of new products.

acceptance of our products depends on our technological innovation and our ability to implement technology in our boats.

Our sales and

profitability may be adversely affected by difficulties or delays in product development, such as an inability to develop viable or innovative

new products.

Our failure to introduce new technologies and product offerings that consumers desire could adversely affect our business,

As with most boat construction

businesses, our manufacturing processes involve the use, handling, storage, and contracting for recycling or disposal of hazardous substances

The failure to manage or dispose of such hazardous substances and wastes properly could expose us to material liability or

fines, including liability for personal injury or property damage due to exposure to hazardous substances, damages to natural resources,

or for the investigation and remediation of environmental conditions.

Under environmental laws, we may be liable for remediation of contamination

at sites where our hazardous wastes have been disposed or at our current facility, regardless of whether our facility is owned or leased

or whether the environmental conditions were created by us, a prior owner or tenant, or a third-party.

While we do not believe that we

are presently subject to any such liabilities, we cannot assure you that environmental conditions relating to our prior, existing, or

future sites or operations or those of predecessor companies will not have a material adverse effect on our business or financial condition.

Our industry is characterized

by intense competition, which affects our sales and profits.

The performance sport boat

category and the powerboat industry as a whole are highly competitive for consumers and dealers.

We also compete against consumer demand

for used boats.

Competition affects our ability to succeed in both the markets we currently serve and new markets that we may enter in

Competition is based primarily on brand name, price, product selection, and product performance.

We compete with several large

manufacturers that may have greater financial, marketing, and other resources than we do and who are represented by dealers in the markets

in which we now operate and into which we plan to expand.

We also compete with a variety of small, independent manufacturers.

assure you that we will not face greater competition from existing large or small manufacturers or that we will be able to compete successfully

with new competitors.

Our failure to compete effectively with our current and future competitors would adversely affect our business,

financial condition, and results of operations.

If we fail to introduce new features or those we introduce fail to gain market acceptance,

our bottom line may suffer.

addition, some of our direct competitors and indirect competitors may have significantly more resources to develop and patent new technologies.

It is possible that our competitors will develop and patent equivalent or superior technologies and other products that compete with

They may assert these patents against us and we may be required to license these patents on unfavorable terms or cease using the

technology covered by these patents, either of which would harm our competitive position and may materially adversely affect our business.

also cannot be certain that our products or features have not infringed or will not infringe the proprietary rights of others.

infringement could cause third parties, including our competitors, to bring claims against us, resulting in significant costs and potential

success depends upon the continued strength of our brand, the value of our brand, and sales of our products could be diminished if we,

the consumers who use our products, or the sports and activities in which our products are used are associated with negative publicity.

believe that our brand is a significant contributor to the success of our business and that maintaining and enhancing our brand is important

to expanding our consumer and dealer base.

Failure to continue to protect our brand may adversely affect our business, financial condition,

We face increasing

competition for dealers and have little control over their activities .

We face intense competition

from other performance sport boat manufacturers in attracting and retaining dealers and customers, affecting our ability to attract or

retain relationships with qualified and successful dealers and consumers looking to purchase boats.

Although our management believes that

the quality of our products in the boat industry should permit us to maintain our relationships with our dealers and our market share

position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share

In addition, independent dealers in the boating industry have experienced significant consolidation in recent years, which could

result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products

from a competitor.

A substantial deterioration in the number of dealers or quality of our network of dealers would have a material adverse

effect on our business, financial condition, and results of operations.

Our sales may be adversely

impacted by increased consumer preference for other leisure activities or used boats or the supply of new boats by competitors in excess

Our boats are not necessities

and in times of economic hardship, and consumers may cease purchasing non-essential items.

Demand for our boats may be adversely affected

by competition from other activities that occupy consumers’ leisure time and by changes in consumer lifestyle, usage pattern or

Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase and enjoy our boats.

During the economic downturn

that commenced in 2008, there was a shift in consumer demand toward purchasing more used boats, primarily because prices for used boats

are typically lower than retail prices for new boats.

If this were to occur again, it could have the effect of reducing demand among retail

purchasers for our new boats.

Also, while we have balanced production volumes for our boats to meet demand, our competitors could choose

to reduce the price of their products, which could have the effect of reducing demand for our new boats.

Reduced demand for new boats

could lead to reduced sales by us, which could adversely affect our business, results of operations, and financial condition.

Our sales and profitability

depend, in part, on the successful introduction of new products.

Market acceptance of our

products depends on our technological innovation and our ability to implement technology in our boats.

Our sales and profitability may

be adversely affected by difficulties or delays in product development, such as an inability to develop viable or innovative new products.

Our failure to introduce new technologies and product offerings that consumers desire could adversely affect our business, financial condition,

and results of operations.

We expect that our ability to develop, maintain and strengthen the Twin Vee brand will also depend heavily

on the success of our marketing efforts.

To further promote our brand, we may be required to change our marketing practices, which could

result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print.

Many of our current and potential competitors have greater name recognition, broader customer relationships and substantially greater

marketing resources than we do.

If we do not develop and maintain strong brands, our business, prospects, financial condition and operating

results will be materially and adversely impacted.

publicity, including that resulting from severe injuries or death occurring in the sports and activities in which our products are used,

could negatively affect our reputation and result in restrictions, recalls, or bans on the use of our products.

If the popularity of

the sports and activities for which we design, manufacture, and sell products were to decrease as a result of these risks or any negative

publicity, sales of our products could decrease, which could have an adverse effect on our net sales, profitability, and operating results.

In addition, if we become exposed to additional claims and litigation relating to the use of our products, our reputation may be adversely

affected by such claims, whether or not successful, including by generating potential negative publicity about our products, which could

adversely impact our business and financial condition.

may not be able to execute our manufacturing strategy successfully, which could cause the profitability of our products to suffer.

manufacturing strategy is designed to improve product quality and increase productivity, while reducing costs and increasing flexibility

to respond to ongoing changes in the marketplace.

To implement this strategy, we must be successful in our continuous improvement efforts,

which depend on the involvement of management, production employees, and suppliers.

Any inability to achieve these objectives could adversely

impact the profitability of our products and our ability to deliver desirable products to our consumers.

will rely on complex machinery for our operations, and production involves a significant degree of risk and uncertainty in terms of operational

performance, safety, security, and costs.

expect to rely heavily on complex machinery for our operations and our production will involve a significant degree of uncertainty and

risk in terms of operational performance, safety, security, and costs.

Our parent company’s manufacturing plant consists of large-scale

machinery combining many components.

The manufacturing plant components are likely to suffer unexpected malfunctions from time to time

and will depend on repairs and spare parts to resume operations, which may not be available when needed.

Unexpected malfunctions of the

manufacturing plant components may significantly affect operational efficiency.

Operational performance and costs can be difficult to

predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, environmental

hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining

governmental permits, damages or defects in electronic systems, industrial accidents, pandemics, fire, seismic activity, and natural

Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production

equipment, damage to manufacturing facilities, products, supplies, tools and materials, monetary losses, delays and unanticipated fluctuations

in production, environmental damage, administrative fines, increased insurance costs, and potential legal liabilities, all which could

have a material adverse effect on our business, prospects, financial condition, results of operations, and cash flows.

Although we generally

carry insurance to cover such operational risks, we cannot be certain that our insurance coverage will be sufficient to cover potential

costs and liabilities arising therefrom.

A loss that is uninsured or exceeds policy limits may require us to pay substantial amounts,

which could adversely affect our business, prospects, financial condition, results of operations, and cash flows.

may need to raise additional capital that may be required to grow our business, and we may not be able to raise capital on terms acceptable

to us or at all.

our business and maintaining our growth efforts will require significant cash outlays and advance capital expenditures and commitments.

Although the proceeds of our initial public offering should be sufficient to fund our operations, if cash on hand and cash generated

from operations and from our initial public offering are not sufficient to meet our cash requirements, we will need to seek additional

capital, potentially through debt or equity financings, to fund our growth.

We cannot assure you that we will be able to raise needed

cash on terms acceptable to us or at all.

For example, Forza is currently seeking to raise funds to build a new state of the art carbon

neutral factory located in Fort Pierce, Florida to manufacture its electric boats.

If Forza is unsuccessful in that capital raise, we

may need to raise funds for that facility.

Financings may be on terms that are dilutive or potentially dilutive to our stockholders,

and the prices at which new investors would be willing to purchase our securities may be lower than the price per share of our common

stock in our initial public offering.

The holders of new securities may also have rights, preferences or privileges which are senior

to those of existing holders of common stock.

If new sources of financing are required, but are insufficient or unavailable, we will

be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.

we fail to manage future growth effectively, we may not be able to market or sell our products successfully.

failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial

We plan to expand our operations in the near future.

Our future operating results depend to a large extent on our ability

to manage this expansion and growth successfully.

Risks that we face in undertaking this expansion include:

new personnel;

production and revenue;

our marketing efforts, including the marketing of a new powertrain that we intend to develop;

expenses and investments in anticipation of expanded operations;

or expanding design, manufacturing, sales and service facilities;

and enhancing administrative infrastructure, systems and processes;

intend to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for

our electric boats and powertrains.

Competition for individuals with experience designing, manufacturing and servicing electric boats

is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future.

to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects

loss of one or a few customers could have a material adverse effect on us.

few customers have in the past, and may in the future, account for a significant portion of our revenues in any one year or

over a period of several consecutive years.

For example, during the year ended December 31, 2021 five dealers represented 67% of our

The loss of business from a significant customer could have a material adverse effect on our business, financial condition, results

If we fail to introduce new features or those we introduce fail to gain market acceptance, our bottom line

In addition, some of our

direct competitors and indirect competitors may have significantly more resources to develop and patent new technologies.

It is possible

that our competitors will develop and patent equivalent or superior technologies and other products that compete with ours.

They may assert

these patents against us and we may be required to license these patents on unfavorable terms or cease using the technology covered by

these patents, either of which would harm our competitive position and may materially adversely affect our business.

We also cannot be certain

that our products or features have not infringed or will not infringe the proprietary rights of others.

Any such infringement could cause

third parties, including our competitors, to bring claims against us, resulting in significant costs and potential damages.

Our success depends

upon the continued strength of our brand, the value of our brand, and sales of our products could be diminished if we, the consumers who

use our products, or the sports and activities in which our products are used are associated with negative publicity.

We believe that our brand

is a significant contributor to the success of our business and that maintaining and enhancing our brand is important to expanding our

consumer and dealer base.

Failure to continue to protect our brand may adversely affect our business, financial condition, and results

of operations.

We expect that our ability to develop, maintain and strengthen the Twin Vee brand and the Forza brand will also depend

heavily on the success of our marketing efforts.

To further promote our brand and Forza’s brand, we and Forza may be required to

change our marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional

media such as television, radio and print.

Many of our current and potential competitors have greater name recognition, broader customer

relationships and substantially greater marketing resources than we do.

If we do not develop and maintain strong brands, our business,

prospects, financial condition and operating results will be materially and adversely impacted.

Negative publicity, including

that resulting from severe injuries or death occurring in the sports and activities in which our products are used, could negatively affect

our reputation and result in restrictions, recalls, or bans on the use of our products.

If the popularity of the sports and activities

for which we design, manufacture, and sell products were to decrease as a result of these risks or any negative publicity, sales of our

products could decrease, which could have an adverse effect on our net sales, profitability, and operating results.

In addition, if we

become exposed to additional claims and litigation relating to the use of our products, our reputation may be adversely affected by such

claims, whether or not successful, including by generating potential negative publicity about our products, which could adversely impact

our business and financial condition.

We may not be able

to execute our manufacturing strategy successfully, which could cause the profitability of our products to suffer.

Our manufacturing strategy

is designed to improve product quality and increase productivity, while reducing costs and increasing flexibility to respond to ongoing

changes in the marketplace.

To implement this strategy, we must be successful in our continuous improvement efforts, which depend on the

involvement of management, production employees, and suppliers.

Any inability to achieve these objectives could adversely impact the profitability

of our products and our ability to deliver desirable products to our consumers.

We will rely on complex machinery for our operations,

and production involves a significant degree of risk and uncertainty in terms of operational performance, safety, security, and costs.

We expect to rely heavily on complex machinery for

our operations and our production will involve a significant degree of uncertainty and risk in terms of operational performance, safety,

security, and costs.

Our manufacturing plant consists of large-scale machinery combining many components.

The manufacturing plant components

are likely to suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which

may not be available when needed.

Unexpected malfunctions of the manufacturing plant components may significantly affect operational efficiency.

Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but

not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines,

labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial

accidents, pandemics, fire, seismic activity, and natural disasters.

Should operational risks materialize, it may result in the personal

injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, products, supplies, tools and materials,

monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance

costs, and potential legal liabilities, all which could have a material adverse effect on our business, prospects, financial condition,

results of operations, and cash flows.

Although we generally carry insurance to cover such operational risks, we cannot be certain that

our insurance coverage will be sufficient to cover potential costs and liabilities arising therefrom.

A loss that is uninsured or exceeds

policy limits may require us to pay substantial amounts, which could adversely affect our business, prospects, financial condition, results

of operations, and cash flows.

depend upon our executive officers and we may not be able to retain them and their knowledge of our business and technical expertise

would be difficult to replace .

future success will depend in significant part upon the continued service of our executive officers.

We may need to raise additional capital

that may be required to grow our business, and we may not be able to raise capital on terms acceptable to us or at all.

Operating our business and

maintaining our growth efforts will require significant cash outlays and advance capital expenditures and commitments.

Although the proceeds

of our initial public offering and follow on offering should be sufficient to fund our operations, if cash on hand and cash generated

from operations and from our initial public offering and follow on offering are not sufficient to meet our cash requirements, we will

need to seek additional capital, potentially through debt or equity financings, to fund our growth.

We cannot assure you that we will

be able to continue to attract or retain such persons.

We do not have an insurance policy on the life of our chief executive officer,

and we do not have “key person” life insurance policies for any of our other officers or advisors.

The loss of the technical

knowledge and management and industry expertise of any of our key personnel could result in delays in product development, loss of customers

and sales and diversion of management resources, which could adversely affect our operating results.

of our shareholders have sufficient voting power to make corporate governance decisions that could have a significant influence on us

and the other stockholders.

parent company currently owns approximately 57.14% of our outstanding common stock.

Our Chief Executive Officer is the Chief Executive

Officer of our parent company and a member of its board of directors in addition to owning 56.14% of the outstanding common stock of

our parent company.

As a result, our Chief Executive Officer does and will have significant influence over our management and affairs

and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

In addition, this concentration of ownership may delay or prevent a change in our control and might affect the market price of our common

stock, even when a change in control may be in the best interest of all stockholders.

Furthermore, the interests of this concentration

of ownership may not always coincide with our interests or the interests of other stockholders.

Accordingly, our Chief Executive Officer

could cause us to enter into transactions or agreements that we would not otherwise consider.

may attempt to grow our business through acquisitions or strategic alliances and new partnerships, which we may not be successful in

completing or integrating .

may in the future enter into acquisitions, such as our current search for a waterfront property and the 14.5 acre parcel for which Forza

has an option to acquire pursuant to the land purchase agreement we executed in October 2021, which option we subsequently assigned to

Forza X1, and strategic alliances that will enable us to acquire complementary skills and capabilities, offer new products, expand our

consumer base, enter new product categories or geographic markets, and obtain other competitive advantages.

We cannot assure you, however,

that we will identify acquisition candidates or strategic partners that are suitable to our business, obtain financing on satisfactory

be able to raise needed cash on terms acceptable to us or at all.

Financings may be on terms that are dilutive or potentially dilutive

to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the price per

share of our common stock in our initial public offering.

The holders of new securities may also have rights, preferences or privileges

which are senior to those of existing holders of common stock.

If new sources of financing are required, but are insufficient or unavailable,

we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow

our business.

If we fail to manage

future growth effectively, we may not be able to market or sell our products successfully.

Any failure to manage our

growth effectively could materially and adversely affect our business, prospects, operating results and financial condition.

expand our operations in the near future.

Our future operating results depend to a large extent on our ability to manage this expansion

and growth successfully.

Risks that we face in undertaking this expansion include:

training new personnel;

forecasting production and revenue;

expanding our marketing efforts, including the marketing of a new powertrain that we intend to develop;

controlling expenses and investments in anticipation of expanded operations;

establishing or expanding design, manufacturing, sales and service facilities;

implementing and enhancing administrative infrastructure, systems and processes;

addressing new markets.

We intend to continue to

hire a number of additional personnel, including design and manufacturing personnel and service technicians for our electric boats and

Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and we may

not be able to attract, assimilate, train or retain additional highly qualified personnel in the future.

The failure to attract, integrate,

train, motivate and retain these additional employees could seriously harm our business and prospects

The loss of one or

a few dealers could have a material adverse effect on us.

A few dealers have in the

past, and may in the future, account for a significant portion of our revenues in any one year or over a period of several consecutive

For example, during the year ended December 31, 2022, one individual dealer had sales of over 10% of our total sales,

and that one dealer represented 12% of total sales.

During the year ended December 31, 2021, five dealers represented 67% of our

The loss of business from a significant dealer could have a material adverse effect on our business, financial condition, results

of operations and cash flows.

We depend upon our

executive officers and we may not be able to retain them and their knowledge of our business and technical expertise would be difficult

Our future success will depend

in significant part upon the continued service of our executive officers.

We cannot assure you that we will be able to continue to attract

or retain such persons.

We do not have an insurance policy on the life of our chief executive officer, and we do not have “key person”

life insurance policies for any of our other officers or advisors.

The loss of the technical knowledge and management and industry expertise

of any of our key personnel could result in delays in product development, loss of customers and sales and diversion of management resources,

which could adversely affect our operating results.

Certain of our shareholders

have sufficient voting power to make corporate governance decisions that could have a significant influence on us and the other stockholders.

Our Chief Executive Officer

owns 25.84% of our outstanding common stock.

As a result, our Chief Executive Officer does and will have significant influence over our

management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant

corporate transactions.

In addition, this concentration of ownership may delay or prevent a change in our control and might affect the

market price of our common stock, even when a change in control may be in the best interest of all stockholders.

Furthermore, the interests

of this concentration of ownership may not always coincide with our interests or the interests of other stockholders.

Accordingly, our

Chief Executive Officer could cause us to enter into transactions or agreements that we would not otherwise consider.

We may attempt to grow

our business through acquisitions or strategic alliances and new partnerships, which we may not be successful in completing or integrating .

We may in the future enter

into acquisitions and strategic alliances that will enable us to acquire complementary skills and capabilities, offer new products, expand

our consumer base, enter new product categories or geographic markets, and obtain other competitive advantages.

We cannot assure you,

however, that we will identify acquisition candidates or strategic partners that are suitable to our business, obtain financing on satisfactory

terms, complete acquisitions or strategic alliances, or successfully integrate acquired operations into our existing operations.

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levels of consumer enthusiasm and acceptance, or achieve anticipated levels of sales or profitability, or otherwise perform as expected.

rely on network and information systems and other technologies for our business activities and certain events, such as computer hackings,

viruses or other destructive or disruptive software or activities may disrupt our operations, which could have a material adverse effect

on our business, financial condition and results of operations.

and information systems and other technologies are important to our business activities and operations.

Network and information systems-related

events, such as computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns

or malicious or other activities could result in a disruption of our services and operations or improper disclosure of personal data

or confidential information, which could damage our reputation and require us to expend resources to remedy any such breaches.

the amount and scope of insurance we maintain against losses resulting from any such events or security breaches may not be sufficient

to cover our losses or otherwise adequately compensate us for any disruptions to our businesses that may result, and the occurrence of

any such events or security breaches could have a material adverse effect on our business and results of operations.

these systems-related events and security breaches occurring has intensified, in part because we maintain certain information necessary

to conduct our businesses in digital form stored on cloud servers.

While we develop and maintain systems seeking to prevent systems-related

events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring

and updating as technologies change and efforts to overcome security measures become more sophisticated.

Despite these efforts, there

can be no assurance that disruptions and security breaches will not occur in the future.

Moreover, we may provide certain confidential,

proprietary and personal information to third parties in connection with our businesses, and while we obtain assurances that these third

parties will protect this information, there is a risk that this information may be compromised.

data privacy breaches by employees or others with permitted access to our systems may pose a risk that sensitive data may be exposed

to unauthorized persons or to the public.

While we have invested in protection of data and information technology, there can be no assurance

that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our business.

The occurrence of any of

such network or information systems-related events or security breaches could have a material adverse effect on our business, financial

condition and results of operations.

losses could result in payment of substantial damages, which would decrease our cash reserves and could harm our cash flow and financial

the ordinary course of business, we may be subject to losses resulting from product liability, accidents, acts of God and other claims

against us, for which we may have no insurance coverage.

While we currently carry commercial general liability, commercial boat liability,

excess liability, product liability, cybersecurity, crime, special crime, drone, cargo stock throughput, builder’s risk, owner

controlled insurance program, property, owners protective, workers’ compensation, employment practices, employed lawyers, production,

fiduciary liability and directors’ and officers’ insurance policies, we may not maintain as much insurance coverage as other

original equipment manufacturers do, and in some cases, we may not maintain any at all.

Additionally, the policies that we have may include

significant deductibles, and we cannot be certain that our insurance coverage will be sufficient to cover all or any future claims against

A loss that is uninsured or exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial

condition and results of operations.

Further, insurance coverage may not continue to be available to us or, if available, may be at a

significantly higher cost, especially if insurance providers perceive any increase in our risk profile in the future.

Related to our Electric-Powered Boats

planned fully electric sport boat has not yet been developed, and even if developed, interest in it may not develop.

through Forza, have not completed the design and engineering of the FX1 sport boat.

There can be no assurance that we will be able to

complete development of the FX1 when anticipated, if at all, that we will be able to mass produce the FX1 or that the anticipated features

or services to be included in the FX1 will create substantial interest or a market, and therefore our anticipated FX1 product, its sales

and growth for our product may not develop as expected, or at all.

For example, in May 2021 we experienced a small fire in connection

with the sea trial of a prototype of our electric boat which resulted in a six-month delay in our design timetable as we implemented

changes to the design for outboard electric motor system as a result of the fire.

We cannot guarantee that similar events will not occur

in the future, or that we will be able to contain such events without damage or delay.

Even if such a market for the FX1 sport boat develops,

there can be no assurance that we would be able to maintain that market.

operations to date have been primarily limited to finalizing the design and engineering of our electric sport boat as well as organizing

and staffing Forza in preparation for launching the FX1 electric boat.

As such, we have not yet demonstrated, and the success of Forza

is wholly dependent upon, its ability to commercialize its products.

The successful commercialization of any products will require us

to perform a variety of functions, including:

the design and testing for the FX1 sport boat and our proprietary outboard electric motor;

manufacturing

the FX1 sport boats;

a vertically integrated direct-to-consumer distribution system;

sales and marketing activities.

cannot be certain that our business strategy for our electric-powered boats will be successful or that we will successfully address these

In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations

could be materially and adversely affected, and we may not have the resources to continue or expand the business operations of our electric-powered

boats business.

planned distribution model is different from the predominant current distribution model for boat manufacturers, which subjects us to

substantial risk and makes evaluating our business, prospects, financial condition, results of operations, and cash flows difficult.

distribution model is still in the planning stages.

We, through Forza, currently plan to mainly sell our electric-powered boats directly

to customers rather than through franchised dealerships (unless required to do so by certain states), primarily through the Forza X1

website and app platform, subject to obtaining applicable dealer licenses and equivalent permits in such jurisdictions.

The digital customer

experience via our online platform will allow customers to research, shop, choose boat hull color, interior upholstery color, and a possible

upgrade of an additional battery to extend run times, order, track and take delivery through our web-based and app platform.

(i) entered into any arrangements with third parties to provide financing services through Forza X1’s web and app platform,

(ii) hired staff for our intended support and service department or (iii) partnered with any third parties to address service needs or

operate service centers.

Once the customer places the order, their Forza X1 account will request several documents, including license,

insurance, etc., which can be uploaded online without ever speaking with a salesperson.

If the customer has questions, concerns, or needs

support through the sales and purchase process, they will be able to contact Forza X1 through the website or app with any questions,

our planned sales and marketing platform is a newer way to shop, buy and take delivery of a new boat through a mostly virtual process,

we are unable to predict or conclude precisely what the customer will experience.

We intend to follow up customer transactions with review

and quality control questionnaires to collect the data and continue to better our platform and how we interact with customers.

addition to the Forza website and app platform, we also intend to establish Forza X1 customer experience and service centers to be operated

as product showrooms and locations where Forza X1 boats may be taken for service and warranty repairs.

They will be located in jurisdictions

where direct-to-consumer sales or manufacturer-owned dealerships are permissible and allow prospective customers to see our products

in person before purchasing.

We anticipate staffing these centers with well-trained Forza X1 employees.

We will initially set up a single

office, but if and as we grow, we plan to open additional customer experience and service centers to support our expansion, help bolster

sales, and introduce our electric boat product to markets across the country that are more familiar purchasing boats at a traditional

boat dealership.

model of boat distribution is relatively new, different from the predominant current distribution model for boat manufacturers and, with

limited exceptions, unproven, which subjects us to substantial risk.

We and Forza have no experience in selling or leasing boats direct-to-consumer

and therefore this model may require significant expenditures and provide for slower expansion than the traditional dealer franchise

For example, Forza will not be able to utilize long established relationships developed by Twin Vee with its dealer network.

Moreover, we will be competing with companies with well established distribution channels.

Our success will depend in large part on our

ability to effectively develop our own sales channels and marketing strategies.

our direct sales model is subject to numerous significant challenges, including obtaining permits and approvals from government authorities,

and we may not be successful in addressing these challenges.

If our direct sales model does not develop as expected or develops more

slowly than expected, we may be required to modify or abandon our sales model, which could materially and adversely affect our business,

prospects, financial condition, results of operations, and cash flows.

ability to generate meaningful product revenue from our electric-powered boats will depend on consumer adoption of electric boats.

ability to generate meaningful product revenue from electric-powered boats will highly depend on sustained consumer demand for alternative

fuel vehicles in general and electric boats in particular.

If the market for electric boats does not develop as we expect or develops

more slowly than we expect, or if there is a decrease in consumer demand for electric vehicles, our business, prospects, financial condition

and results of operations will be harmed.

The market for electric and other alternative fuel vehicles is relatively new, rapidly evolving,

characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation (including

government incentives and subsidies) and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

Any number of changes in the industry could negatively affect consumer demand for electric vehicles in general and our electric boats

in particular.

addition, demand for electric boats may be affected by factors directly impacting boat prices or the cost of purchasing and operating

boats such as sales and financing incentives including tax credits, prices of raw materials and parts and components, cost of fuel, availability

of consumer credit, and governmental regulations, including tariffs, import regulation and other taxes.

Volatility in demand may lead

to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition

and results of operations.

Further, sales of boats in the marine industry tend to be cyclical in many markets, which may expose us to

increased volatility, especially as we expand and adjust our operations and retail strategies.

Specifically, it is uncertain how such

macroeconomic factors will impact us as a new entrant in an industry that has globally been experiencing a recent decline in sales.

factors that may influence the adoption of electric boats include:

about electric vehicle quality, safety, design, performance and cost;

about the limited range over which electric boats may be driven on a single battery charge;

about the total cost of ownership of electric boats, including the initial purchase price and operating and maintenance costs,

both including and excluding the effect of any government and other subsidies and incentives designed to promote the purchase

of electric boats;

about the sustainability and environmental impact of electric boats, including with respect to both the sourcing and disposal

of materials for electric vehicle batteries and the generation of electricity provided in the electric grid;

availability of other alternative fuel boats;

in the fuel economy of the internal combustion engine;

quality and availability of service for electric boats;

in the cost of oil and gasoline;

regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

to charging stations and cost to charge an electric vehicle and related infrastructure costs and standardization;

availability of tax and other governmental incentives to purchase and operate electric boats or future regulation requiring increased

use of nonpolluting boats;

macroeconomic

influence of any of the factors described above or any other factors may cause a general reduction in consumer demand for electric vehicles

or our electric boats in particular, either of which would materially and adversely affect our business, results of operations, financial

condition and prospects

depends upon third parties to manufacture and to supply key semiconductor chip components necessary for our electric boats.

not have long-term agreements with all of our semiconductor chip manufacturers and suppliers, and if these manufacturers or suppliers

become unwilling or unable to provide an adequate supply of semiconductor chips, with respect to which there is a global shortage, we

would not be able to find alternative sources in a timely manner and our business would be adversely impacted.

Semiconductor

chips are a vital input component to the electrical architecture of our electric boats, controlling wide aspects of the boats’

Many of the key semiconductor chips we intend to use in our electric boats come from limited or single sources of supply,

and therefore a disruption with any one manufacturer or supplier in our supply chain would have an adverse effect on our ability to effectively

manufacture and timely deliver our boats.

We do not have any long- term supply contracts with any suppliers and purchase chips on a purchase

Due to our reliance on these semiconductor chips, we are subject to the risk of shortages and long lead times in their supply.

We are in the process of identifying alternative manufacturers for semiconductor chips.

We have in the past experienced, and may in the

future experience, semiconductor chip shortages, and the availability and cost of these components would be difficult to predict.

example, our manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns,

labor strikes or shortages, natural disasters, component or material shortages, cost increases, acquisitions, insolvency, changes in

legal or regulatory requirements, or other similar problems.

particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer

electronics that use these chips, has resulted in a severe global shortage of chips in 2021.

As a result, our ability to source semiconductor

chips to be used in our electric boats has been adversely affected.

This shortage may result in increased chip delivery lead times, delays

in the production of our boats, and increased costs to source available semiconductor chips.

To the extent this semiconductor chip shortage

continues, and we are unable to mitigate the effects of this shortage, our ability to deliver sufficient quantities of our boats to fulfill

our preorders and to support our growth through sales to new customers would be adversely affected.

In addition, we may be required to

incur additional costs and expenses in managing ongoing chip shortages, including additional research and development expenses, engineering

design and development costs in the event that new suppliers must be onboarded on an expedited basis.

Further, ongoing delays in production

and shipment of electric boats due to a continuing shortage of semiconductor chips may harm our reputation and discourage additional

preorders and boat sales, and otherwise materially and adversely affect our business and operations.

electric boats will use lithium-ion battery cells, which, if not appropriately managed and controlled, have been observed to catch fire

or vent smoke and flame.

battery packs within Forza’s electric boats are being designed to use of lithium-ion cells.

If not properly managed or subject

to environmental stresses, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that

can ignite nearby materials as well as other lithium-ion cells.

While the battery pack is designed to contain any single cell’s

release of energy without spreading to neighboring cells, a field or testing failure of battery packs in our electric boats could occur,

which could result in bodily injury or death and could subject us to lawsuits, field actions (including product recalls), or redesign

efforts, all of which would be time consuming and expensive and could harm our brand image.

Also, negative public perceptions regarding

the suitability of lithium-ion cells for boating applications, the social and environmental impacts of mineral mining or procurement

associated with the constituents of lithium-ion cells, or any future incident involving lithium-ion cells, such as a vehicle or other

fire, could materially and adversely affect our reputation and business, prospects, financial condition, results of operations, and cash

electronic vehicle (EV) industry and its technology are rapidly evolving and may be subject to unforeseen changes which could adversely

affect the demand for our boats or increase our operating costs.

may be unable to keep up with changes in EV technology or alternatives to electricity as a fuel source and, as a result, its competitiveness

Developments in alternative technologies, such as advanced diesel, hydrogen, ethanol, fuel cells, or compressed natural gas,

or improvements in the fuel economy of the internal combustion engine or the cost of gasoline, may materially and adversely affect our

business and prospects in ways we do not currently anticipate.

Existing and other battery cell technologies, fuels or sources of energy

may emerge as customers’ preferred alternative to our boats.

Any failure by us to develop new or enhanced technologies or processes,

or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced alternative

fuel and EVs, which could result in the loss of competitiveness of our electric boats, decreased revenue and a loss of market share to

Forza’s research and development efforts may not be sufficient to adapt to changes in alternative fuel and electric

vehicle technology.

As technologies change, Forza plans to upgrade or adapt its electric boats with the latest technology.

electric boats may not compete effectively with alternative systems if we are not able to source and integrate the latest technology

into our boats.

Additionally, the introduction and integration of new technologies into the electric boats may increase costs and capital

expenditures required for the production and manufacture of boats and, if Forza is unable to cost efficiently implement such technologies

or adjust its manufacturing operations, its business, prospects, financial condition, results of operations, and cash flows would be

materially and adversely affected.

Forza X1’s electric boats fail to perform as expected, its ability to develop, market and sell or lease its products could be harmed.

commercialization commences, Forza X1’s electric boats may contain defects in design and manufacture that may cause them not to

perform as expected or that may require repairs, recalls, and design changes, any of which would require significant financial and other

resources to successfully navigate and resolve.

The boats will use a substantial amount of software code to operate, and software products

are inherently complex and may contain defects and errors when first introduced.

If the boats contain defects in design and manufacture

that cause them not to perform as expected or that require repair, or certain features of the boats take longer than expected to become

available, are legally restricted or become subject to additional regulation, Forza X1’s ability to develop, market and sell its

products and services could be harmed.

Although Forza X1will attempt to remedy any issues it observes in its products as effectively

and rapidly as possible, such efforts could significantly distract management’s attention from other important business objectives,

may not be timely, may hamper production or may not be to the satisfaction of its customers.

Further, Forza X1’s limited operating

history and limited field data reduces its ability to evaluate and predict the long-term quality, reliability, durability and performance

characteristics of its battery packs, powertrains and boats.

There can be no assurance that Forza X1 will be able to detect and fix any

defects in its products prior to their sale or lease to customers.

defects, delays or legal restrictions on boat features, or other failure of Forza X1’s boats to perform as expected, could harm

its reputation and result in delivery delays, product recalls, product liability claims, breach of warranty claims and significant warranty

and other expenses, and could have a material adverse impact on our business, results of operations, prospects and financial condition.

As a new entrant to the industry attempting to build customer relationships and earn trust, these effects could be significantly detrimental

Additionally, problems and defects experienced by other electric consumer vehicles could by association have a negative impact

on perception and customer demand for Forza X1’s boats.

addition, even if Forza X1’s boats function as designed, we expect that the battery efficiency, and hence the range, of its electric

boats, like other electric vehicles that use current battery technology, will decline over time.

Other factors, such as usage, time and

stress patterns, may also impact the battery’s ability to hold a charge, or could require us to limit boat battery charging capacity,

including via over-the-air or other software updates, for safety reasons or to protect battery capacity, which could further decrease

the boats’ range between charges.

Such decreases in or limitations of battery capacity and therefore range, whether imposed by

deterioration, software limitations or otherwise, could also lead to consumer complaints or warranty claims, including claims that prior

knowledge of such decreases or limitations would have affected consumers’ purchasing decisions.

Further, there can be no assurance

that Forza X1 will be able to improve the performance of its battery packs, or increase its boats range, in the future.

Any such battery

deterioration or capacity limitations and related decreases in range may negatively influence potential customers’ willingness

to purchase Forza X1 boats and negatively impact its brand and reputation, which could adversely affect our business, prospects, results

of operations and financial condition.

X1’s boats will rely on software and hardware that is highly technical, and if these systems contain errors, bugs, vulnerabilities,

or design defects, or if we are unsuccessful in addressing or mitigating technical limitations in our systems, our business could be

adversely affected.

X1’s boats are expected to rely on software and hardware that is highly technical and complex and may require modification and

updates over the life of the boats.

In addition, the boats will depend on the ability of such software and hardware to store, retrieve,

process and manage large amounts of data.

Forza X1’s software and hardware may contain errors, bugs, vulnerabilities or design

defects, and our systems are subject to certain technical limitations that may compromise its ability to meet its objectives.

bugs, vulnerabilities, or design defects inherently may be difficult to detect and may only be discovered after the code has been released

for external or internal use.

Although Forza X1 will attempt to remedy any issues it observes in its boats effectively and rapidly, such

efforts may not be timely, may hamper production or may not be to the satisfaction of its customers.

We rely on network

and information systems and other technologies for our business activities and certain events, such as computer hackings, viruses or other

destructive or disruptive software or activities may disrupt our operations, which could have a material adverse effect on our business,

financial condition and results of operations.

Network and information systems

and other technologies are important to our business activities and operations.

Network and information systems-related events, such as

computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious

or other activities could result in a disruption of our services and operations or improper disclosure of personal data or confidential

information, which could damage our reputation and require us to expend resources to remedy any such breaches.

Moreover, the amount and

scope of insurance we maintain against losses resulting from any such events or security breaches may not be sufficient to cover our losses

or otherwise adequately compensate us for any disruptions to our businesses that may result, and the occurrence of any such events or

security breaches could have a material adverse effect on our business and results of operations.

The risk of these systems-related

events and security breaches occurring has intensified, in part because we maintain certain information necessary to conduct our businesses

in digital form stored on cloud servers.

While we develop and maintain systems seeking to prevent systems-related events and security

breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies

change and efforts to overcome security measures become more sophisticated.

Despite these efforts, there can be no assurance that disruptions

and security breaches will not occur in the future.

Moreover, we may provide certain confidential, proprietary and personal information

to third parties in connection with our businesses, and while we obtain assurances that these third parties will protect this information,

there is a risk that this information may be compromised.

Likewise, data privacy breaches

by employees or others with permitted access to our systems may pose a risk that sensitive data may be exposed to unauthorized persons

or to the public.

While we have invested in protection of data and information technology, there can be no assurance that our efforts

will prevent breakdowns or breaches in our systems that could adversely affect our business.

The occurrence of any of such network or

information systems-related events or security breaches could have a material adverse effect on our business, financial condition and

results of operations.

Uninsured losses could result in payment of

substantial damages, which would decrease our cash reserves and could harm our cash flow and financial condition.

In the ordinary course of business, we may be subject

to losses resulting from product liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage.

While we currently carry commercial general liability, commercial boat liability, excess liability, product liability, cybersecurity,

crime, special crime, drone, cargo stock throughput, builder’s risk, owner controlled insurance program, property, owners protective,

workers’ compensation, employment practices, employed lawyers, production, fiduciary liability and directors’ and officers’

insurance policies, we may not maintain as much insurance coverage as other original equipment manufacturers do, and in some cases, we

may not maintain any at all.

Additionally, the policies that we have may include significant deductibles, and we cannot be certain that

our insurance coverage will be sufficient to cover all or any future claims against us.

A loss that is uninsured or exceeds policy limits

may require us to pay substantial amounts, which could adversely affect our financial condition and results of operations.

Further, insurance

coverage may not continue to be available to us or, if available, may be at a significantly higher cost, especially if insurance providers

perceive any increase in our risk profile in the future.

Risks Related to our Electric-Powered

Forza’s planned fully electric sport boat

has not yet been developed, and even if developed, interest in it may not develop.

Forza, has not completed the design and engineering

of the FX1 sport boat.

There can be no assurance that Forza will be able to complete development of the FX1 when anticipated, if at all,

that we will be able to mass produce the FX1 or that the anticipated features or services to be included in the FX1 will create substantial

interest or a market, and therefore Forza’s anticipated FX1 product, its sales and growth for our product may not develop as expected,

For example, in May 2021 we experienced a small fire in connection with the sea trial of a prototype of our electric boat which

resulted in a six-month delay in our design timetable as we implemented changes to the design for outboard electric motor system as a

result of the fire.

We cannot guarantee that similar events will not occur in the future, or that we will be able to contain such events

without damage or delay.

Even if such a market for the FX1 sport boat develops, there can be no assurance that Forza would be able to

maintain that market.

Forza’s operations to date have been primarily

limited to finalizing the design and engineering of its electric sport boat as well as organizing and staffing Forza in preparation for

launching the FX1 electric boat.

As such, Forza has not yet demonstrated, and the success of Forza is wholly dependent upon, its ability

to commercialize its products.

The successful commercialization of any products will require us to perform a variety of functions, including:

completing the design and testing for the FX1 sport boat and Forza’s proprietary outboard electric motor;

manufacturing the FX1 sport boats;

developing a vertically integrated direct-to-consumer distribution system;

conducting sales and marketing activities.

Forza cannot be certain that its business strategy

for its electric-powered boats will be successful or that we will successfully address these risks.

In the event that we do not successfully

address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected,

and Forza may not have the resources to continue or expand the business operations of its electric-powered boats business.

Forza may be unable to adequately control the

capital expenditures and costs associated with our business and operations.

Forza will require significant capital to develop

and grow our business, including developing its first boat to be manufactured, the FX1, as well as building its brand.

Forza expects to

make additional capital expenditures and incur substantial costs as it completes the design and engineering of the FX1 and prepare to

commercially launch sales of its boats and grow its business, including research and development expenses, raw material procurement costs,

sales and distribution expenses as we build our brand and market its boats and general and administrative expenses as Forza scales its

operations, identifies and commits resources to investigate new areas of demand and incurs costs as a public company.

Forza’s ability

to become profitable in the future will not only depend on its ability to complete the design and development of its boats but also to

control its capital expenditures and costs.

As Forza expands its product portfolio, it will need to manage costs effectively to sell those

products at our expected margins.

If Forza is unable to cost efficiently design, manufacture, market, sell and distribute and service

its boats and provide its services, our business, prospects, financial condition, results of operations, and cash flows would be materially

and adversely affected.

Forza’s planned distribution model is

different from the predominant current distribution model for boat manufacturers, which subjects us to substantial risk and makes evaluating

our business, prospects, financial condition, results of operations, and cash flows difficult.

Forza’s distribution model is still in the planning

We, through Forza, currently plans to mainly sell its electric-powered boats directly to customers rather than through franchised

dealerships (unless required to do so by certain states), primarily through the Forza X1 website and app platform, subject to obtaining

applicable dealer licenses and equivalent permits in such jurisdictions.

The digital customer experience via our online platform will

allow customers to research, shop, choose boat hull color, interior upholstery color, and a possible upgrade of an additional battery

to extend run times, order, track and take delivery through our web-based and app platform.

Forza has not yet:

(i) entered into any arrangements

with third parties to provide financing services through Forza X1’s web and app platform, (ii) hired staff for our intended support

and service department or (iii) partnered with any third parties to address service needs or operate service centers.

Once the customer

places the order, their Forza X1 account will request several documents, including license, insurance, etc., which can be uploaded online

without ever speaking with a salesperson.

If the customer has questions, concerns, or needs support through the sales and purchase process,

they will be able to contact Forza X1 through the website or app with any questions, concerns.

Since Forza’s planned sales and marketing platform

is a newer way to shop, buy and take delivery of a new boat through a mostly virtual process, we are unable to predict or conclude precisely

what the customer will experience.

Forza intends to follow up customer transactions with review and quality control questionnaires to

collect the data and continue to better our platform and how we interact with customers.

In addition to the Forza website and app platform,

Forza also intends to establish Forza X1 customer experience and service centers to be operated as product showrooms and locations where

Forza X1 boats may be taken for service and warranty repairs.

They will be located in jurisdictions where direct-to-consumer sales or

manufacturer-owned dealerships are permissible and allow prospective customers to see our products in person before purchasing.

anticipates staffing these centers with well-trained Forza X1 employees.

Forza will initially set up a single office, but if and as its

grows, Forza plans to open additional customer experience and service centers to support our expansion, help bolster sales, and introduce

its electric boat product to markets across the country that are more familiar purchasing boats at a traditional boat dealership.

This model of boat distribution is relatively new, different from the predominant

current distribution model for boat manufacturers and, with limited exceptions, unproven, which subjects us to substantial risk.

Forza has no experience in selling or leasing boats direct-to-consumer and therefore this model may require significant expenditures and

provide for slower expansion than the traditional dealer franchise system.

For example, Forza will not be able to utilize long established

relationships developed by Twin Vee with its dealer network.

Moreover, we Forza will be competing with companies with well established

distribution channels.

Forza’s success will depend in large part on its ability to effectively develop its own sales channels and

marketing strategies.

Implementing a direct sales model is subject to numerous

significant challenges, including obtaining permits and approvals from government authorities, and we may not be successful in addressing

these challenges.

If Forza’s direct sales model does not develop as expected or develops more slowly than expected, it may be required

to modify or abandon our sales model, which could materially and adversely affect its business, prospects, financial condition, results

of operations, and cash flows.

Forza’s ability to generate meaningful

product revenue from its electric-powered boats will depend on consumer adoption of electric boats.

Forza’s ability to generate meaningful product

revenue from electric-powered boats will highly depend on sustained consumer demand for alternative fuel vehicles in general and electric

boats in particular.

If the market for electric boats does not develop as expected or develops more slowly than expected, or if there

is a decrease in consumer demand for electric vehicles, Forza’s business, prospects, financial condition and results of operations

will be harmed.

The market for electric and other alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly

changing technologies, price competition, additional competitors, evolving government regulation (including government incentives and

subsidies) and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

Any number of changes

in the industry could negatively affect consumer demand for electric vehicles in general and Forza’s electric boats in particular.

In addition, demand for electric boats may be affected

by factors directly impacting boat prices or the cost of purchasing and operating boats such as sales and financing incentives including

tax credits, prices of raw materials and parts and components, cost of fuel, availability of consumer credit, and governmental regulations,

including tariffs, import regulation and other taxes.

Volatility in demand may lead to lower vehicle unit sales, which may result in downward

price pressure and adversely affect Forza’s business, prospects, financial condition and results of operations.

Further, sales of

boats in the marine industry tend to be cyclical in many markets, which may expose us to increased volatility, especially as Forza expands

and adjust its operations and retail strategies.

Specifically, it is uncertain how such macroeconomic factors will impact us as a new

entrant in an industry that has globally been experiencing a recent decline in sales.

Other factors that may influence the adoption of electric

boats include:

perceptions about electric vehicle quality, safety, design, performance and cost;

perceptions about the limited range over which electric boats may be driven on a single battery charge;

perceptions about the total cost of ownership of electric boats, including the initial purchase price and operating and maintenance costs, both including and excluding the effect of any government and other subsidies and incentives designed to promote the purchase of electric boats;

perceptions about the sustainability and environmental impact of electric boats, including with respect to both the sourcing and disposal of materials for electric vehicle batteries and the generation of electricity provided in the electric grid;

the availability of other alternative fuel boats;

improvements in the fuel economy of the internal combustion engine;

the quality and availability of service for electric boats;

volatility in the cost of oil and gasoline;

government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

access to charging stations and cost to charge an electric vehicle and related infrastructure costs and standardization;

the availability of tax and other governmental incentives to purchase and operate electric boats or future regulation requiring increased use of nonpolluting boats;

macroeconomic factors.

The influence of any of the factors described above

or any other factors may cause a general reduction in consumer demand for electric vehicles or Forza’s electric boats in particular,

either of which would materially and adversely affect our business, results of operations, financial condition and prospects.

Forza depends upon third parties to manufacture

and to supply key semiconductor chip components necessary for its electric boats.

Forza does not have long-term agreements with any semiconductor

chip manufacturers and suppliers, and if these manufacturers or suppliers become unwilling or unable to provide an adequate supply of

semiconductor chips, with respect to which there is a global shortage, Forza would not be able to find alternative sources in a timely

manner and Forza’s and our business would be adversely impacted.

Semiconductor chips are a vital input component to the electrical architecture of electric

boats, controlling wide aspects of the Forza boats’ operations.

Many of the key semiconductor chips Forza intends to use in its

electric boats come from limited or single sources of supply, and therefore a disruption with any one manufacturer or supplier in the

supply chain would have an adverse effect on our ability to effectively manufacture and timely deliver its boats.

Forza does not have

any long- term supply contracts with any suppliers and purchase chips on a purchase order basis.

Due to its reliance on these semiconductor

chips, Forza is subject to the risk of shortages and long lead times in their supply.

Forza in the process of identifying alternative

manufacturers for semiconductor chips.

Forza has in the past experienced, and may in the future experience, semiconductor chip shortages,

and the availability and cost of these components would be difficult to predict.

For example, Forza’s manufacturers may experience

temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural

disasters, component or material shortages, cost increases, acquisitions, insolvency, changes in legal or regulatory requirements, or

What changed 10-K

Item 1A. Risk Factors