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Item 8. Financial Statements and Supplementary Data

2023-03-30 compared with 2022-03-31 · 987 added, 641 removed, 88 unchanged (95% of the section changed)

3 unchanged sentences

FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statements of Stockholders’ Equity

Statements of Cash Flows

the Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and the Stockholders of

Vee Powercats Co.

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To The Board of Directors and the Stockholders of

Twin Vee Powercats Co.

and Subsidiaries

Pierce, Florida

on the Financial Statement

have audited the accompanying consolidated financial statements of Twin Vee Powercats Co.

and Subsidiaries (the “Company”),

which comprise the consolidated balance sheets at December 31, 2021 and 2020, and the related consolidated statements of operations,

stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively

referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material

respects, the financial position of the Company at December 31, 2021 and 2020 and the results of its operations and its cash flows for

the years ended December 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Fort Pierce, Florida

Opinion on the Financial Statement

We have audited the accompanying consolidated financial

statements of Twin Vee PowerCats Co.

and Subsidiaries (the “Company”), which comprise the consolidated balance sheets at December

31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then

ended, and the related notes to the consolidated financial statements (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

at December 31, 2022 and 2021 and the results of its operations and its cash flows for the years then ended, in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used

and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

GRASSI & CO., CPAs, P.C.

have served as the Company’s auditor since 2020.

VEE POWERCATS CO.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable

basis for our opinion.

/s/ GRASSI & CO., CPAs, P.C.

We have served as the Company’s auditor since 2020.

Jericho, New York

March 29, 2023

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

TWIN VEE CATAMARANS, INC.)

BALANCE SHEETS

and cash equivalents

offering costs

from affiliated companies

expenses and other current assets

CONSOLIDATED BALANCE SHEETS

Current Assets

securities – non current

and equipment, net

lease right of use asset

AND STOCKHOLDERS’ EQUITY

to affiliated companies

lease right of use liability

Cash and cash equivalents

Accounts receivable

Marketable securities

Deferred offering costs

Due from affiliated companies

Prepaid expenses and other current assets

Total current assets

Marketable securities - non current

Property and equipment, net

Operating lease right of use asset

Security deposit

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Injury Disaster Loan

lease liability – noncurrent

and contingencies (Note 10)

Stockholders’

Accounts payable

Accrued liabilities

Contract liabilities

Due to affiliated companies

Operating lease right of use liability

Total current liabilities

Economic Injury Disaster Loan

Operating lease liability - noncurrent

Total Liabilities

Commitments and contingencies (Note 11)

Stockholders’ equity:

Preferred stock:

10,000,000 authorized;

1 unchanged sentence

no shares issued and outstanding

Common stock:

50,000,000 authorized;

1 unchanged sentence

9,520,000 and 7,000,000 shares issued and outstanding, respectively

paid-in capital

Stockholders’ Equity

Liabilities and Stockholders’ Equity

accompanying notes are an integral part of these consolidated financial statements

VEE POWERCATS CO.

Additional paid-in capital

Accumulated deficit

( 7,154,808 )

( 2,017,556 )

Equity attributed to stockholders of Twin Vee PowerCats Co, Inc.

Equity attributable to noncontrolling interests

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

AND SUSIDIARIES

TWIN VEE CATAMARANS, INC.)

STATEMENTS OF OPERATIONS

of products sold

general and administrative

and development

CONSOLIDATED STATEMENTS OF OPERATIONS

Cost of products sold

Operating expenses:

from operations

Selling, general and administrative

Salaries and wages

Professional fees

Depreciation and amortization

Research and design

Total operating expenses

Loss from operations

( 6,021,708 )

on disposal of assets

from insurance recovery

change in fair value of marketable securities

(loss) income

( 1,630,721 )

and dilutive (loss) income per share of common stock

average number of shares of common stock outstanding

accompanying notes are an integral part of these consolidated financial statements

VEE POWERCATS CO.

AND SUBSIDIARIES

TWIN VEE CATAMARANS, INC.)

STATEMENTS OF STOCKHOLDERS’ EQUITY

the Years ended December 31, 2021 and 2020

Stockholders’

Balance at December 31, 2019

Other income (expense):

Interest expense

Interest income

Loss on disposal of assets

Gain from insurance recovery

Net change in fair value of marketable securities

Government grant income

Total other income

Loss before income tax

( 5,793,414 )

Capital contribution of advances from parent

Net income for the year

Balance at December 31, 2020

( 1,011,009 )

Common stock issued for cash, net

Stock-based compensation

Net loss for the year

Provision for income taxes

( 5,793,414 )

( 1,011,009 )

Net loss attributable to noncontrolling interests

Net loss attributed to stockholders of Twin Vee PowerCats Co, Inc.

$ ( 5,137,252 )

$ ( 1,011,009 )

Basic and dilutive loss per share of common stock

Weighted average number of shares of common stock outstanding

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Noncontrolling

Balance, December 31, 2020

$ ( 1,006,547 )

accompanying notes are an integral part of these consolidated financial statements

VEE POWERCATS CO.

AND SUSIDIARIES

TWIN VEE CATAMARANS, INC.)

STATEMENTS OF CASH FLOWS

Flows From Operating Activities

(loss) income

Common stock issued for cash

Stock-based compensation

( 1,011,009 )

to reconcile net (loss) income to net cash (used in) provided by operating activities:

based compensation

and amortization

(loss) on disposal of asset

on government grant

on forgiveness of Paycheck Protection Program loan

of ROU and lease liabilities

change in fair value of marketable securities

in operating assets and liabilities:

expenses and other current assets

lease liabilities

cash (used in) provided operating activities

( 1,011,009 )

Flows From Investing Activities

from sale of equipment

purchases of investment in trading marketable securities

Balance, December 31, 2021

$ ( 2,017,556 )

of property and equipment

Common stock issued for payment on behalf of Twin Vee PowerCats, Inc.

Common stock issued for cash

Subsidiary share issuance

Stock-based compensation

Merger of Twin Vee PowerCats, Inc.

( 5,137,252 )

cash used in investing activities

( 5,793,414 )

Flows From Financing Activities

proceeds from issuance of common stock

offering cost

contribution from Parent, net

from government grant

from Paycheck Protection Program loan

from EIDL loan

of note payable related party

from related parties

to related parties

of capital lease obligation

cash provided by financing activities

change in cash and cash equivalents

at beginning of year

and cash equivalents at end of year

Cash Flow Information

paid for income taxes

paid for interest

Cash Investing and Financing Activities

in the right-of-use asset and lease liability

accompanying notes are an integral part of these consolidated financial statements

VEE POWERCATS CO.

Balance, December 31, 2022

$ ( 7,154,808 )

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

TWIN VEE CATAMARANS, INC.)

TO THE CONSOLIDATED FINANCIAL STATEMENTS

31, 2021 and 2020

and Summary of Significant Accounting Policies

Vee PowerCats Co.

(“Twin Vee”) was incorporated as Twin Vee Catamarans, Inc., in the state of Florida, on December 1, 2009.

On April 7, 2021, the Company filed a Certificate of Conversion to register and incorporate in the state of Delaware and changed the

company name to Twin Vee PowerCats Co.

The Certificate of Incorporation for Twin Vee PowerCats Co.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows From Operating Activities

Adjustments to reconcile net loss to net cash used in operating activities:

Stock based compensation

Impairment loss

Depreciation and amortization

Loss on disposal of asset

Gain on government grant

Change of right-of-use asset

Net change in fair value of marketable securities

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Accounts payable

Accrued liabilities

Operating lease liabilities

Contract liabilities

Net cash used in operating activities

Cash Flows From Investing Activities

Security deposit

Net sales (purchases) of investment in trading marketable securities

Proceeds from sale of property and equipment

Purchase of property and equipment

Net cash used in investing activities

Cash Flows From Financing Activities

Net proceeds from Twin Vee issuance of common stock

Net proceeds from Forza issuance of common stock

Proceeds from Paycheck Protection Program loan

Advances from related parties

Repayment to related parties

Net cash provided by financing activities

Net change in cash and cash equivalents

Cash at beginning of year

Cash and cash equivalents at end of year

Supplemental Cash Flow Information

Cash paid for income taxes

Cash paid for interest

Non Cash Investing and Financing Activities

Increase in the right-of-use asset

Common stock issued for payment on behalf of Twin Vee Inc.

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022 and 2021

Organization and Summary of Significant

Accounting Policies

Twin Vee PowerCats Co.

(“Twin Vee”) was

incorporated as Twin Vee Catamarans, Inc., in the state of Florida, on December 1, 2009.

On April 7, 2021, the Company filed a Certificate

of Conversion to register and incorporate in the state of Delaware and changed the company name to Twin Vee PowerCats Co.

The Certificate

of Incorporation for Twin Vee PowerCats Co.

was also filed on April 7, 2021.

September 1, 2021, the Company formed Fix My Boat, Inc., (“Fix My Boat”), a wholly-owned subsidiary.

Fix My Boat will utilize

a franchise model for marine mechanics across the country.

October 15, 2021, the Company incorporated Electra Power Sports, Inc., and subsequently changed the name to Forza X1, Inc.

X1” “Forza) October 29, 2021.

Forza X1, Inc.

aims to be among the first to develop and manufacture electric boats targeting

the recreational market.

We are focused on the creation and implementation of marine electric vehicle (“EV”) technology to

control and power our electric boats utilizing our proprietary outboard electric motor.

Our electric boats are being designed as fully

integrated electric boats including the hull, outboard motor and control system.

of Consolidation

consolidated financial statements include the accounts of Twin Vee and its wholly owned subsidiaries Fix My Boat and Forza X1, collectively

On September 1, 2021, the Company formed Fix My Boat,

Inc., (“Fix My Boat”), a wholly-owned subsidiary.

Fix My Boat will utilize a franchise model for marine mechanics across the

Fix My Boat has been inactive for the majority of 2022, we anticipate focusing resources on this entity in 2023.

On October 15, 2021, the Company incorporated Electra

Power Sports, Inc., and subsequently changed the name to Forza X1, Inc.

(“Forza X1” “Forza) October 29, 2021.

aims to be among the first to develop and manufacture electric boats targeting the recreational market.

We are focused on the

creation and implementation of marine electric vehicle (“EV”) technology to control and power our electric boats utilizing

our proprietary outboard electric motor.

Our electric boats are being designed as fully integrated electric boats including the hull,

outboard motor and control system.

On December 5, 2022, pursuant to the terms of the Agreement and Plan of Merger,

dated as of September 8, 2022 (the “Merger Agreement”), by and between Twin Vee PowerCats Co.

and Twin Vee Powercats, Inc.,

a Florida corporation (“TVPC”), was merged with and into the Company (the “Merger”).

As TVPC did not meet the definition of a business under ASC 805, the merger

was not accounted for as a business combination.

The merger was accounted for as a recapitalization of Twin Vee PowerCats, Co., effected

through the exchange of TVPC shares for Twin Vee PowerCats, Co.

shares, and the cancellation of Twin Vee PowerCats, Co.

shares held by

Twin Vee Inc.

Upon the effective date of the Merger, December 5, 2022, Twin Vee Co.

accounted for the merger by assuming TVPC’s

net liabilities.

Twin Vee PowerCats, Co.’s financial statements reflect the operations of TVPC.

prospectively and will not be restated

retroactively to reflect the historical financial position or results of operations of TVPC.

Principles of Consolidation

The consolidated financial

statements include the accounts of Twin Vee and its wholly owned subsidiary, Fix My Boat, and majority owned subsidiary, Forza X1, collectively

referred to as the “Company”.

The Company’s net loss

excludes losses attributable to noncontrolling interests.

The Company reports noncontrolling interests in consolidated entities as a component

of equity separate from the Company’s equity.

All inter-company balances and transactions are eliminated in consolidation.

May 13, 2021, the Company effected a forty thousand (40,000)-for-one stock split to the shareholder of record as of May 13,

The stock split was in the form of a common stock dividend of 3,999,900 new shares and all share and per share information

has been retroactively adjusted to reflect the stock split.

Company’s revenue is derived primarily from the sale of boats, motors and trailers to its independent dealers.

The Company recognizes

revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to the dealer.

the majority of sales, this occurs when the product is released to the carrier responsible for transporting it to a dealer.

typically receives payment within five business days of shipment.

Revenue is measured as the amount of consideration it expects to receive

in exchange for a product.

The Company offers dealer incentives that include wholesale rebates, retail rebates and promotions, floor

plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in net sales in the statements

of operations.

The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives

the Company reasonably expects to pay.

The estimated liability and reduction in revenue for dealer incentives is recorded at the time

Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions

dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical

Accrued dealer incentives are included in accrued expenses and other current liabilities in the accompanying consolidated balance

received for the future sale of a boat to a customer is recognized as a customer deposit, which is included in contract liabilities on

the consolidated balance sheet.

Customer deposits are recognized as revenue when control over promised goods is transferred to the customer.

At December 31, 2021 and 2020, the Company had customer deposits of $ 14,100 and $ 6,784 , respectively, and is expected to be recognized

as revenue within a one-year period.

and Discounts

earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics.

The Company estimates the

amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior.

apply to boats already in dealer inventory are referred to as retail rebates.

The Company estimates the amount of retail rebates based

on historical data for specific boat models adjusted for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions

concerning market conditions.

The Company also utilizes various programs whereby it offers cash discounts or agrees to reimburse its

dealers for certain floor plan interest costs incurred by dealers for limited periods of time, generally ranging up to nine months.

Revenue Recognition Matters

generally have no right to return unsold boats.

Occasionally, the Company may accept returns in limited circumstances and at the Company’s

discretion under its warranty policy.

The Company may be obligated, in the event of default by a dealer, to accept returns of unsold

boats under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure.

The repurchase

commitment is on an individual unit basis with a term from the date it is financed by the lending institution through the payment date

by the dealer, generally not exceeding 30 months.

Company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from

the determination of the transaction price for all contracts.

The Company has not adjusted net sales for the effects of a significant

financing component because the period between the transfer of the promised goods and the customer’s payment is expected to be

one year or less.

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial

statements and the reported amounts of expenses during the reporting period.

Some of these judgments can be subjective and complex, and,

consequently, actual results may differ from these estimates.

Concentrations

of Credit and Business Risk

instruments that potentially subject the Company to concentrations of credit risk primarily consist of trade receivables.

on trade receivables is mitigated as a result of the Company’s use of trade letters of credit, dealer floor plan financing arrangements,

and the geographically diversified nature of the Company’s customer base.

The Company minimizes the concentration of credit risk

associated with its cash by maintaining its cash with high quality federally insured financial institutions.

However, cash balances in

excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $ 250,000 are at risk.

As of December 31,

2021 and December 31, 2020, the Company had $ 6,725,302 and $ 641,816 , respectively, in excess of FDIC insured limits.

and Cash Equivalents

and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase.

On December 31, 2021 and December 31, 2020, the Company had cash and cash equivalents of $ 6,975,302 and $ 891,816 , respectively.

Value of Financial Instruments

Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as

for certain assets and liabilities that are initially recorded at their estimated fair values.

Fair Value is defined as the exit price,

or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants

as the measurement date.

The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes

the use of unobservable inputs to value its financial instruments:

Common Stock Split

On May 13, 2021, the Company effected a forty thousand (40,000)-for-one stock

split to the shareholder of record as of May 13, 2021.

The stock split was in the form of a common stock dividend of 3,999,900 new

shares and all share and per share information has been retroactively adjusted to reflect the stock split.

Basis of Presentation

The accompanying consolidated financial statements,

and the related notes, have been prepared in accordance with accounting principles generally accepted in the United State of America (“GAAP”)

and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”).

Revenue Recognition

The Company’s revenue is derived primarily from

the sale of boats, motors and trailers to its independent dealers.

The Company recognizes revenue when obligations under the terms of

a contract are satisfied and control over promised goods is transferred to the dealer.

For the majority of sales, this occurs when the

product is released to the carrier responsible for transporting it to a dealer.

The Company typically receives payment within five business

days of shipment.

Revenue is measured as the amount of consideration it expects to receive in exchange for a product.

The Company offers

dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other

allowances that are recorded as reductions of revenues in net sales in the statements of operations.

The consideration recognized represents

the amount specified in a contract with a customer, net of estimated incentives the Company reasonably expects to pay.

The estimated liability

and reduction in revenue for dealer incentives is recorded at the time of sale.

Subsequent adjustments to incentive estimates are possible

because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive

programs or if dealer achievement or other items vary from historical trends.

Accrued dealer incentives are included in accrued liabilities

in the accompanying consolidated balance sheets.

Payment received for the future sale of a boat to

a customer is recognized as a customer deposit.

Customer deposits are recognized as revenue when control over promised goods is transferred

to the customer.

At December 31, 2022 and 2021, the Company had customer deposits of $ 5,300 and $ 14,100 , respectively, which is recorded

as contract liabilities on the consolidated balance sheets.

These deposits are expected to be recognized as revenue within a one-year

Rebates and Discounts

Dealers earn wholesale rebates based on purchase volume

commitments and achievement of certain performance metrics.

The Company estimates the amount of wholesale rebates based on historical

achievement, forecasted volume, and assumptions regarding dealer behavior.

Rebates that apply to boats already in dealer inventory are

referred to as retail rebates.

The Company estimates the amount of retail rebates based on historical data for specific boat models adjusted

for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions concerning market conditions.

The Company also

utilizes various programs whereby it offers cash discounts or agrees to reimburse its dealers for certain floor plan interest costs incurred

by dealers for limited periods of time, generally ranging up to nine months.

Other Revenue Recognition Matters

Dealers generally have no right to return unsold boats.

Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy.

The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to

floor financing providers, who are able to obtain such boats through foreclosure.

The repurchase commitment is on an individual unit basis

with a term from the date it is financed by the lending institution through the payment date by the dealer, generally not exceeding 30

The Company has excluded sales and other taxes assessed

by a governmental authority in connection with revenue-producing activities from the determination of the transaction price for all contracts.

The Company has not adjusted net sales for the effects of a significant financing component because the period between the transfer of

the promised goods and the customer’s payment is expected to be one year or less.

Use of Estimates

The preparation of consolidated financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses

during the reporting period.

Some of these judgments can be subjective and complex, and, consequently, actual results may differ from

these estimates.

Concentrations of Credit and Business Risk

Financial instruments that potentially subject the

Company to concentrations of credit risk primarily consist of trade receivables.

Credit risk on trade receivables is mitigated as a result

of the Company’s use of trade letters of credit, dealer floor plan financing arrangements, and the geographically diversified nature

of the Company’s customer base.

The Company minimizes the concentration of credit risk associated with its cash by maintaining its

cash with high quality federally insured financial institutions.

However, cash balances in excess of the Federal Deposit Insurance Corporation

(“FDIC”) insured limit of $ 250,000 are at risk.

As of December 31, 2022 and 2021, the Company had $ 22,666,301 and

$ 6,725,302 , respectively, in excess of FDIC insured limits.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid

investments with original maturities of three months or less at the time of purchase.

On December 31, 2022 and 2021, the Company had cash

and cash equivalents of $ 23,501,007 and $ 6,975,302 , respectively.

Marketable Securities

Our investments in debt securities are carried at

either amortized cost or fair value.

Investments in debt securities that the Company has the positive intent and ability to hold to maturity

are carried at amortized cost and classified as held-to-maturity.

Investments in debt securities that are not classified as held-to-maturity

are carried at fair value and classified as either trading or available-for-sale.

Realized and unrealized gains and losses on trading

debt securities as well as realized gains and losses on available-for-sale debt securities are included in net income.

Fair Value of Financial Instruments

The Company follows accounting guidelines on fair

value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially

recorded at their estimated fair values.

Fair Value is defined as the exit price, or the amount that would be received from selling an

asset or paid to transfer a liability in an orderly transaction between market participants as the measurement date.

The Company uses

the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value

its financial instruments:

Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

Quoted prices for similar instruments that are directly or indirectly observable in the

Significant unobservable inputs which are supported by little or no market activity and

that are financial instruments whose values are determined using pricing models, discounted

cash flow methodologies, or similar techniques, as well as instruments for which the determination

of fair value requires a significant judgment or estimation.

instruments measured as fair value are classified in their entirety based on the lowest level of input that is significant to the fair

value measurement.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety

requires it to make judgments and consider factors specific to the asset or liability.

The use of different assumptions and/or estimation

methodologies may have a material effect on estimated fair values.

Accordingly, the fair value estimates disclosed, or initial amounts

recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.

carrying amounts of cash equivalents approximate their fair value due to their liquid or short-term nature, such as accounts receivable

and payable, and other financial instruments in current assets or current liabilities.

are valued at the lower of cost and net realizable value, with cost determined using the average cost method.

Net realizable value is

defined as sales price less cost of completion, disposable and transportation and a normal profit margin.

Production costs, consisting

of labor and overhead, are applied to ending finished goods inventories at a rate based on estimated production capacity.

Excess production

costs are charged to cost of products sold.

Provisions have been made to reduce excess or obsolete inventories to their net realizable

and Equipment

and equipment are stated at cost.

Depreciation is provided using the straight-line method over the estimated useful lives of the related

assets, except for assets held under capital leases, for which the Company records depreciation and amortization based on the shorter

of the asset’s useful life or the term of the lease.

The estimated useful lives of property and equipment range from three to five

Upon sale or retirement, the cost and related accumulated depreciation is eliminated from their respective accounts, and the resulting

gain or loss is included in results of operations.

Repairs and maintenance charges, which do not increase the useful lives of the assets,

are charged to operations as incurred.

of Long-Lived Assets

assesses the recoverability of its long-lived assets when indicators of impairment are present.

If such indicators are present, recoverability

of these assets is determined by comparing the undiscounted net cash flows estimated to result from those assets over the remaining life

to the assets’ net carrying amounts.

If the estimated undiscounted net cash flows are less than the net carrying amount, the assets

would be adjusted to their fair value, based on appraisal or the present value of the undiscounted net cash flows.

Warranty Costs

required by the Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 460,

Guarantees , the Company is including the following disclosure applicable to its product warranties.

Company accrues for warranty costs based on the expected material and labor costs to provide warranty replacement products.

The methodology

used in determining the liability for warranty cost is based upon historical information and experience.

The Company’s warranty

reserve is calculated as the gross sales multiplied by the historical warranty expense return rate.

following table shows the changes in the aggregate product warranty liability for the years ended December 31, 2021 and December 31,

2020, respectively:

Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation.

Financial instruments measured as fair value are classified

in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s assessment

of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors

specific to the asset or liability.

The use of different assumptions and/or estimation methodologies may have a material effect on estimated

Accordingly, the fair value estimates disclosed, or initial amounts recorded may not be indicative of the amount that the

Company or holders of the instruments could realize in a current market exchange.

The carrying amounts of cash equivalents approximate

their fair value due to their liquid or short-term nature, such as accounts receivable and payable, and other financial instruments in

current assets or current liabilities.

Inventories are valued at the lower of cost and net

realizable value, with cost determined using the average cost method.

Net realizable value is defined as sales price less cost of completion,

disposable and transportation and a normal profit margin.

Production costs, consisting of labor and overhead, are applied to ending finished

goods inventories at a rate based on estimated production capacity.

Excess production costs are charged to cost of products sold.

have been made to reduce excess or obsolete inventories to their net realizable value.

Property and Equipment

Property and equipment is stated at cost, net of accumulated

depreciation and amortization, using the straight-line method over the assets’ useful life.

Leasehold improvements are amortized

over the shorter of the assets’ useful life or the lease term.

The estimated useful lives of property and equipment range from three

to five years.

Upon sale or retirement, the cost and related accumulated depreciation is eliminated from their respective accounts, and

the resulting gain or loss is included in results of operations.

Repairs and maintenance charges, which do not increase the useful lives

of the assets, are charged to operations as incurred.

Impairment of Long-Lived Assets

Management assesses the recoverability of its long-lived

assets when indicators of impairment are present.

If such indicators are present, recoverability of these assets is determined by comparing

the undiscounted net cash flows estimated to result from those assets over the remaining life to the assets’ net carrying amounts.

If the estimated undiscounted net cash flows are less than the net carrying amount, the assets would be adjusted to their fair value,

based on appraisal or the present value of the undiscounted net cash flows.

Product Warranty Costs

As required by the Financial Accounting Standard Board

(“FASB”) Accounting Standard Codification (“ASC”) Topic 460, Guarantees , the Company is including

the following disclosure applicable to its product warranties.

The Company accrues for warranty costs based on the

expected material and labor costs to provide warranty replacement products.

The methodology used in determining the liability for warranty

cost is based upon historical information and experience.

The Company’s warranty reserve is calculated as the gross sales multiplied

by the historical warranty expense return rate.

The following table shows the changes in the aggregate

product warranty liability for the years ended December 31, 2022 and 2021, respectively:

Schedule of product warranty liability

as of beginning of year

Balance as of beginning of year

Payments made

Provision for current years warranty

as of end of year

and marketing costs are expensed as incurred.

During the years ended December 31, 2021 and 2020, advertising costs incurred by the Company

totaled $ 57,042 and $ 28,736 , respectively, and are included in selling, general and administrative expenses in the accompanying consolidated

statements of operations.

and Development

Company expenses research and development costs relating to new product development as incurred.

For the twelve months ended December

31, 2021 and 2020, research and development costs amounted to $ 211,111 and $ 0 , respectively.

and Handling Costs

and handling costs includes those costs incurred to transport product to customers and internal handling costs, which relate to activities

to prepare goods for shipment.

The Company has elected to account for shipping and handling costs associated with outbound freight after

control over a product has transferred to a customer as a fulfillment cost.

The Company includes shipping and handling costs, including

cost billed to customers, in cost of sales in the statements of operations.

All manufactured boats are free on board (FOB), from the

Fort Pierce manufacturing plant.

Dealers are required to either pick up the boats themselves or contract with a transporter.

Company determines if an arrangement is a lease at inception.

Operating lease right-of-use (“ROU”) assets and lease liabilities

are recognized at the commencement date based on the present value of lease payments over the lease term.

As the Company’s leases

do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the commencement date in

determining the present value of lease payments.

The Company calculates the associated lease liability and corresponding ROU asset upon

lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease.

operating lease ROU asset also includes any lease payments made and is reduced by lease incentives.

The Company’s lease terms may

include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Lease expenses

for lease payments is recognized on a straight-line basis over the lease term.

Concentrations

Company is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms.

certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse

effect on the Company.

Business risk insurance is in place to mitigate the business risk associated with sole suppliers for sudden disruptions

such as those caused by natural disasters.

Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the

manufacturing process.

During the twelve months ended December 31, 2021, the Company purchased all engines for its boats under a supply

agreement with a single vendor.

For the years ended December 31, 2021, and 2020, total purchases from this vendor were $ 3,149,300 and

$ 1,898,327 , respectively.

Protection Program

GAAP does not contain authoritative accounting standards for forgivable loans provided by governmental entities to a for-profit

Absent authoritative accounting standards, interpretative guidance issued and commonly applied by financial statement preparers

allows for the selection of accounting policies amongst acceptable alternatives.

Based on the financial statement preparers allows for

the selection of accounting policies amongst acceptable alternatives.

Based on the facts and circumstances, the Company determined it

most appropriate to account for the Paycheck Protection Program (“PPP”) loan proceeds as an in-substance government grant

by analogy to International Accounting Standards 20 “(IAS 20)”, Accounting for Government Grants and Disclosure of Government

Under the provisions of IAS 20, “a forgivable loan from government is treated as a government grant when there

is reasonable assurance that the entity will meet the terms for forgiveness of the loan.” IAS 20 does not define “reasonable

assurance”, however, based on certain interpretations, it is analogous to “probable” as defined in FASB ASC Subtopic

450-20-20 under U.S.

GAAP, which is the definition the Company has applied to its expectations of PPP loan forgiveness.

Under IAS 20,

government grants are recognized in earnings on a systematic basis over the periods in which the Company recognizes costs for which the

grant is intended to compensate (i.e.

Balance as of end of year

Advertising and marketing costs are expensed as incurred.

During the years ended December 31, 2022 and 2021, advertising costs incurred by the Company totaled $ 112,320 and $ 43,467 , respectively,

and are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Research and Development

The Company expenses research and development costs

relating to new product development as incurred.

For the twelve months ended December 31, 2022 and 2021, research and development costs

amounted to $ 941,533 and $ 211,111 , respectively.

Shipping and Handling Costs

Shipping and handling costs includes those costs incurred

to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment.

The Company has

elected to account for shipping and handling costs associated with outbound freight after control over a product has transferred to a

customer as a fulfillment cost.

The Company includes shipping and handling costs, including cost billed to customers, in cost of sales

in the statements of operations.

All manufactured boats are free on board (FOB), from the Fort Pierce manufacturing plant.

required to either pick up the boats themselves or contract with a transporter.

The Company determines if an arrangement is a lease

at inception.

Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based

on the present value of lease payments over the lease term.

As the Company’s leases do not provide an implicit rate, it uses its

incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The Company calculates the associated lease liability and corresponding ROU asset upon lease commencement using a discount rate based

on a credit-adjusted secured borrowing rate commensurate with the term of the lease.

The operating lease ROU asset also includes any lease

payments made and is reduced by lease incentives.

The Company’s lease terms may include options to extend or terminate the lease

when it is reasonably certain that the Company will exercise that option.

Lease expenses for lease payments is recognized on a straight-line

basis over the lease term.

Supplier Concentrations

The Company is dependent on the ability of its suppliers

to provide products on a timely basis and on favorable pricing terms.

The loss of certain principal suppliers or a significant reduction

in product availability from principal suppliers could have a material adverse effect on the Company.

Business risk insurance is in place

to mitigate the business risk associated with sole suppliers for sudden disruptions such as those caused by natural disasters.

The Company is dependent on third-party equipment

manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process.

During the year ended

December 31, 2022, the Company purchased all engines for its boats under a supply agreement with a single vendor.

For the year ended December

31, 2022 and 2021, total purchases to this vendor were $ 5,020,973 and $ 3,149,300 , respectively.

Paycheck Protection Program

GAAP does not contain authoritative accounting

standards for forgivable loans provided by governmental entities to a for-profit entity.

Absent authoritative accounting standards, interpretative

guidance issued and commonly applied by financial statement preparers allows for the selection of accounting policies amongst acceptable

alternatives.

Based on the financial statement preparers allows for the selection of accounting policies amongst acceptable alternatives.

Based on the facts and circumstances, the Company determined it most appropriate to account for the Paycheck Protection Program (“PPP”)

loan proceeds as an in-substance government grant by analogy to International Accounting Standards 20 “(IAS 20)”, Accounting

for Government Grants and Disclosure of Government Assistance .

Under the provisions of IAS 20, “a forgivable loan from government

is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.”

IAS 20 does not define “reasonable assurance”, however, based on certain interpretations, it is analogous to “probable”

as defined in FASB ASC Subtopic 450-20-20 under U.S.

GAAP, which is the definition the Company has applied to its expectations of PPP

loan forgiveness.

Under IAS 20, government grants are recognized in earnings on a systematic basis over the periods in which the Company

recognizes costs for which the grant is intended to compensate (i.e.

qualified expenses).

Further, IAS 20 permits for the recognition in earnings either (1) separately

under a general heading such as other income, or (2) as a reduction of the related expenses.

The Company has elected to recognize government

grant income separately within other income to present a clearer distinction in its consolidated financial statements.

taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future

tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and

their respective tax bases and operating losses.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for

the year in which those temporary differences are expected to be recover or settled.

The effect on deferred tax assets and liabilities

of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the realizability of deferred

tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods

in which those temporary differences become deductible.

Management considers the scheduled reversals of deferred tax liabilities, projected

future taxable income, and tax planning strategies in making this assessment.

Company files income tax returns in the U.S.

federal jurisdiction and various states.

Adopted Accounting Pronouncements

Company has reviewed the Accounting Standards Updates (“ASU”) recently issued by FASB and determined that they are not applicable

to the Company.

and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December

31, 2021 are as follows:

Further, IAS 20 permits for the recognition

in earnings either (1) separately under a general heading such as other income, or (2) as a reduction of the related expenses.

the year ended December 31, 2021, the Company elected to recognize government grant income separately within other income to present a

clearer distinction in its consolidated financial statements.

Employee Retention Credit

On Mach 27, 2020, the Coronavirus Aid, Relief, and

Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including

an employee retention credit (“ERC”), which is a refundable tax credit against certain employment taxes.

The Taxpayer Certainty

and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC.

Pursuant to the employee retention credit, eligible employers could receive

a 50% or 70% credit on qualified wages against their employment taxes each quarter during the eligible period in 2020 and 2021, respectively,

with any excess credits eligible for refunds.

During the year ended December 31, 2022, the Company recognized income related to the employee

retention credit of $ 355,987 upon completion of an analysis providing reasonable assurance that the Company met the conditions set forth

in the CARES Act.

The employee retention credit is recorded in government grant income on the consolidated statement of operations during

the year ended December 31, 2022.

The Company recognizes stock-based compensation costs

for its restricted stock measured at the fair value of each award at the time of grant, as an expense over

the period during which an employee is required to provide service.

Compensation cost is recognized over the service period for the fair

value of awards that vest.

Income taxes are accounted for under the asset and

liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are

expected to be recover or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income

in the period that includes the enactment date.

In assessing the realizability of deferred tax assets, management considers whether it

is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred

tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences

become deductible.

Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax

planning strategies in making this assessment.

The Company files income tax returns in the U.S.

jurisdiction and various states.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13, “ Financial

Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments.

” ASU 2016-13 requires a financial asset

(or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected, which includes

the Company’s accounts receivable.

This ASU is effective for the Company for reporting periods beginning after December 15, 2022.

The Company is currently assessing the potential impact that the adoption of this ASU will have on its consolidated financial statements.

The Company has considered all other recently issued

accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

Marketable securities

Assets and liabilities measured at fair value on a

recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2022 and 2021 are as follows:

Schedule of fair value marketable securities

Value Measurements Using

as of December 31, 2021

Prices in Active Markets for Identical Assets (Level 1)

Other Observable Inputs (Level 2)

market funds (1)

Fair Value Measurements Using

Balance as of December 31, 2022

Quoted Prices in Active Markets for Identical Assets

Significant Other Observable Inputs

Significant Nonobservable Inputs (Level 3)

Marketable securities:

within cash and cash equivalents on the Company’s consolidated balance sheets.

Company’s investments in US government bonds and money market funds are measured based on publicly available quoted market prices

for identical securities as of December 31, 2021.

The Company’s investments in corporate bonds, commercial paper and certificated

of deposits are measured based on quotes from market makers for similar items in active markets.

Company did not have any marketable securities at December 31, 2020

December 31, 2021 and December 31, 2020 inventories consisted of the following:

Corporate Bonds

Certificates of Deposits

Total marketable securities

Fair Value Measurements Using

Balance as of December 31, 2021

Quoted Prices in Active Markets for Identical Assets

Significant Other Observable Inputs

Significant Nonobservable Inputs (Level 3)

Marketable securities:

Corporate Bonds

Certificates of Deposits

Total marketable securities

The Company’s investments in corporate bonds,

commercial paper and certificated of deposits are measured based on quotes from market makers for similar items in active markets.

At December 31, 2022 and 2021 inventories consisted

of the following:

Schedule of inventories

and Equipment

December 31, 2021 and December 31, 2020, property and equipment, net consisted of the following:

Raw Materials

Inventory in transit

Work in Process

Finished Product

Total Inventory

Property and Equipment

At December 31, 2022 and 2021, property and equipment

consisted of the following:

Schedule of property and equipment

and equipment

and website development

hardware and software

prototypes and tooling

accumulated depreciation and amortization

and amortization expense of property and equipment for the twelve months ended December 31, 2021 and 2020 is $ 198,523 and $ 155,728 ,

respectively.

– Related Party

right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date.

Operating lease

liabilities represent the present value of lease payments not yet paid.

Operating right of use assets represent our right to use an underlying

asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs,

lease incentives, and impairment of operating lease assets.

To determine the present value of lease payments not yet paid, we estimate

incremental secured borrowing rates corresponding to the maturities of the leases.

We used the U.S.

Treasury rate of 0.36 % and 1.67 %

at December 31, 2021 and December 31, 2020, respectively.

office lease contains rent escalations over the lease term.

We recognize expense for this office lease on a straight-line basis

Machinery and equipment

Furniture and fixtures

Leasehold improvements

Software and website development

Computer hardware and software

Electric prototypes and tooling

Less accumulated depreciation and amortization

( 1,058,391 )

Depreciation and amortization expense of property

and equipment for the year ended December 31, 2022 and 2021 is $ 553,750 and $ 198,523 , respectively.

Leases – Related Party

Operating right of use (“ROU”) assets

and operating lease liabilities are recognized at the lease commencement date.

Operating lease liabilities represent the present value

of lease payments not yet paid.

Operating right of use assets represent our right to use an underlying asset and is based upon the

operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment

of operating lease assets.

To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing

rates corresponding to the maturities of the leases.

The Company’s office lease contains rent escalations

over the lease term.

Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use

asset related to the lease.

The Company recognizes expense for this office lease on a straight-line basis over the lease term.

Additionally,

tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related

to the lease.

These are amortized through the right-of-use asset as reductions of expense over the lease term.

Company leases its office and warehouse facilities, and the land which are located at 3101 S US-1, Fort Pierce, Florida (the

“Property”) from Visconti Holdings, LLC.

Visconti Holdings, LLC is a single member LLC that holds the ownership of the

property, and its sole member is Joseph C Visconti, the CEO and majority shareholder of the Company.

The Company entered into the

lease on January 1, 2020, and as amended January 1, 2021, the lease has a term of five 5 years.

The current base rent payment

is $ 30,000 per

The Company leases its office and warehouse

facilities, and the land which are located at 3101 S US-1, Fort Pierce, Florida (the “Property”) from Visconti Holdings,

Visconti Holdings, LLC is a single member LLC that holds the ownership of the property, and its sole member is Joseph C.

Visconti, the CEO of the Company and the CEO and majority shareholder of the Company’s parent company.

The Company entered

into the lease on January 1, 2020, and as amended January 1, 2021, the lease has a term of five 5 years.

The current base rent

payment is $ 30,000 per

month including property taxes and the lease required a $ 25,000 security

The base rent will increase five percent (5%) on the anniversary of each annual term.

December 31, 2021 and December 31, 2020, supplemental balance sheet information related to leases were as follows:

At December 31, 2022 and 2021, supplemental balance

sheet information related to leases were as follows:

Schedule of leases supplemental balance sheet information

lease ROU asset

lease liabilities:

Total lease liabilities

December 31, 2021, future minimum lease payments under the non-cancelable operating leases are as follows:

Operating lease ROU asset

Operating lease liabilities:

Current portion

Non-current portion

At December 31, 2022, future minimum lease payments

under the non-cancelable operating leases are as follows:

Schedule of maturities of lease liabilities

Years Ending December

lease payment

imputed interest

following summarizes other supplemental information about the Company’s operating lease:

Year Ending December 31,

Total lease payment

Less imputed interest

The following summarizes other supplemental information about the Company’s

operating lease:

Schedule of operating lease cost

average discount rate

average remaining lease term (years)

Twelve Months

December 31, 2021 and December 31, 2020, accrued liabilities consisted of the following:

Weighted average discount rate

Weighted average remaining lease term (years)

Operating right of use (“ROU”) assets

and operating lease liabilities are recognized at the lease commencement date.

Operating lease liabilities represent the present value

of lease payments not yet paid.

Operating right of use assets represent the Company’s right to use an underlying asset and is based upon

the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment

of operating lease assets.

To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing

rates corresponding to the maturities of the leases.

We used the U.S.

Treasury rate of 0.33 % at December 31, 2022.

The Company leases a warehouse facility, and the land

which are located at 150 Commerce Street, Old Fort, North Carolina (the “Property”) from NC Limited Liability Company.

Company entered into the lease on October 7, 2022, the lease has a term of two years.

The current base rent payment is $ 7,517 per

month including property taxes, insurance, and common area maintenance.

The lease required a $ 7,517 security deposit.

The base rent

will increase three percent (3%) on October 15, 2023.

At December 31, 2022 and 2021, supplemental balance

sheet information related to leases were as follows:

Schedule of leases supplemental balance sheet information

Operating lease ROU asset

Operating lease liabilities:

Current portion

Non-current portion

At December 31, 2022, future minimum lease payments

under the non-cancelable operating leases are as follows:

Year Ending December 31,

Total lease payment

Less imputed interest

The following summarizes other supplemental information about the Company’s

operating lease:

Schedule of operating lease cost

Weighted average discount rate

Weighted average remaining lease term (years)

Accrued Liabilities

At December 31, 2022 and 2021, accrued liabilities

consisted of the following:

Schedule of accrued liabilities

wages and benefits

operating expense

Accrued wages and benefits

Accrued interest

Accrued bonus

Accrued rebates

Accrued professional fees

Accrued operating expense

Accrued inventory

Warranty reserve

Total accrued liabilities

Grant Income – Paycheck Protection Program

response to the coronavirus disease (“Covid-19”) COVID-19 pandemic, the second PPP was established under Consolidated Appropriations

Act (“CAA”) and administered by the Small Business Administration (“SBA”).

Companies who met the eligibility

requirements set forth by the PPP could qualify for PPP loans.

If the loan proceeds are fully utilized to pay qualified expenses, the

full principal amount of the PPP loan, along with any accrued interest, may qualify for loan forgiveness, subject to potential reduction

based on the level of full-time employees maintained by the organization.

March 19, 2021, the Company received a loan of $ 608,224 under the PPP provided by SunTrust/Trust

The loan bears interest at 1.0 % and has an initial deferment period wherein no payments are due until the application

for forgiveness is submitted, not to exceed ten months from the covered period.

After the deferment period, if the loan is not forgiven

under the terms of the PPP, the loan and interest will be paid back over the remaining period through maturity in March 2026.

the loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and

interest on other debt obligations.

When it applied for the loan, the Company believed it would qualify to have the loan forgiven under

the terms of the PPP and therefore consider the loan to be substantively a conditional government grant to be accounted for using an

analogy to IAS 20.

the Company believes that it completed the required activities by utilizing the PPP proceeds for payroll and other qualified expenditures

prior to December 31, 2021, it has recognized PPP government grant income for the full amount of the PPP loan, $608,224, and no liability

for the PPP loan is reflected in the consolidated balance sheet as of December 31, 2021.

Forgiveness of Debt – Paycheck Protection Program

response to the COVID-19 pandemic, the PPP was established under the Coronavirus Aid, Relief, and Economic Security (“CARES”)

Act and administrated by the SBA.

Companies who met the eligibility requirements set forth by the PPP could qualify for PPP loans.

the loan proceeds are fully utilized to pay qualified expenses, the full principal amount of the PPP loan, along with any accrued interest,

may qualify for loan forgiveness, subject to potential reduction based on the level of full-time employees maintained by the organization.

April 2020, the Company received a loan of $ 609,500 from a bank under the PPP loan program.

The loan bears interest at 1 %, with principal

and interest payments deferred until the application of the forgiveness is submitted, not to exceed ten months from the covered period.

After that, the loan and interest would be paid back over a period of 5 years, if the loan is not forgiven under the terms of the PPP.

Funds from the loan were only to be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent,

utilities, and interest on other dept obligations incurred.

December 31, 2020, the Company was approved for full forgiveness of the loan principal and interest in the amount of $ 609,500 .

recognized $ 609,500 of forgiveness of PPP loan on the consolidated statement of operations during the year ended December 31, 2020.

Payable – SBA EIDL Loan

April 22, 2020, the Company received an SBA Economic Injury Disaster Loan (“EIDL”) in the amount of $ 499,900 .

in response to the COVID - 19 Pandemic.

The loan is a 30 -year loan with an interest rate

of 3.75 %, monthly payments of $ 2,437 to begin October 22, 2022, under the EIDL program, which is administered through the SBA.

Government Grant Income – Paycheck

Protection Program

In response to the coronavirus disease (“Covid-19”)

COVID-19 pandemic, the second PPP was established under Consolidated Appropriations Act (“CAA”) and administered by the Small

Business Administration (“SBA”).

Companies who met the eligibility requirements set forth by the PPP could qualify for PPP

If the loan proceeds are fully utilized to pay qualified expenses, the full principal amount of the PPP loan, along with any accrued

interest, may qualify for loan forgiveness, subject to potential reduction based on the level of full-time employees maintained by the

organization.

On March 19, 2021, the Company received a loan of

$ 608,224 under the PPP provided by SunTrust/Trust Bank.

The loan bears interest

at 1.0 % and has an initial deferment period wherein no payments are due until the application for forgiveness is submitted, not to

exceed ten months from the covered period.

After the deferment period, if the loan is not forgiven under the terms of the PPP, the loan

and interest will be paid back over the remaining period through maturity in March 2026.

Funds from the loan may only be used for payroll

costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations.

When it applied for the loan, the Company believed it would qualify to have the loan forgiven under the terms of the PPP and therefore

consider the loan to be substantively a conditional government grant to be accounted for using an analogy to IAS 20.

As the Company believes that it completed the required

activities by utilizing the PPP proceeds for payroll and other qualified expenditures prior to December 31, 2021, it has recognized PPP

government grant income for the full amount of the PPP loan, $608,224, and no liability for the PPP loan is reflected in the consolidated

balance sheet as of December 31, 2021.

Notes Payable – SBA EIDL Loan

On April 22, 2020, the Company received an SBA Economic

Injury Disaster Loan (“EIDL”) in the amount of $ 499,900 .

The loan is in response to the COVID - 19

The loan is a 30 -year loan with an interest rate of 3.75 %, monthly payments of $ 2,437 to begin October 22, 2022,

under the EIDL program, which is administered through the SBA.

Under the guidelines of the EIDL, the maximum term is 30 years;

however, terms are determined on a case-by-case basis based on each borrower’s

ability to repay and carry an interest rate of 3.75%.

The EIDL loan has an initial deferment period wherein no payments are due for thirty

months from the date of disbursement.

The EIDL loan may be prepaid by the Company at any time

prior to maturity with no prepayment penalties.

The proceeds from this loan must be used solely as working capital to alleviate

economic injury caused by the COVID-19 pandemic.

part of the EIDL loan, the Company granted the SBA a continuing security interest in and to any and all collateral to secure payment

and performance of all debts, liabilities and obligations of the Company to the SBA under the EIDL loan.

The collateral includes substantially

all tangible and intangible personal property of the Company.

summary of the minimum maturities of term debt follows for the years ending December 31, 2021.

terms are determined on a case-by-case basis based on each borrower’s ability to repay and carry an interest rate of 3.75%.

EIDL loan has an initial deferment period wherein no payments are due for thirty months from the date of disbursement.

EIDL loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The proceeds from this loan must be

used solely as working capital to alleviate economic injury caused by the COVID-19 pandemic.

As part of the

EIDL loan, the Company granted the SBA a continuing security interest in and to any and all collateral to secure payment and performance

of all debts, liabilities and obligations of the Company to the SBA under the EIDL loan.

The collateral includes substantially all tangible

and intangible personal property of the Company.

A summary of the minimum maturities of term debt follows

for the years set forth below.

Schedule of minimum maturities

2027 and thereafter

Party Transactions

December 31, 2018, the Company entered into a loan and promissory note with Joseph C.

Visconti, the CEO and majority shareholder of the

The principal amount of the loan was $ 525,500 , together with a simple interest rate of 6 % on the balance of principal remaining

During the twelve months ended December 31, 2021, the Company repaid $27,850.

At December 31, 2021 and December 31, 2020, the

outstanding amount of the note payable was $ 0 and $ 27,850 , respectively.

discussed in note 5, the Company has leased its facilities from a company owned by its CEO.

the twelve months ended December 31, 2021, and 2020, the Company had purchases of $ 90,417 and $ 0 , respectively, from a related party.

Related Party Transactions

On December 31, 2018, the Company entered into a loan

and promissory note with Joseph C.

Visconti, the CEO and majority shareholder of the Company.

The principal amount of the loan was $ 525,500 ,

together with a simple interest rate of 6 % on the balance of principal remaining unpaid.

During the year ended December 31, 2021, the

Company repaid $27,850.

At December 31, 2021, the outstanding amount of the note payable was $ 0 .

As discussed in note 5, the Company has leased its

facilities from a company owned by its CEO.

During the year ended December 31, 2021, we received

a cash payment in the amount of $ 24,300 from Boat Fuji, Inc., a company owned 33 % by Joseph Visconti, our chief executive officer, for

future technical website support expenses to be incurred by us on behalf of Boat Fuji, Inc.

During the year ended December 31, 2021, we

paid $ 15,808 to certain affiliate companies or on their behalf, including (i) $ 2,000 that was repaid to Boat Fuji, Inc.

due to a decrease

in the estimated expenses to be paid by us on its behalf, (ii) $ 12,000 of franchise fee development expenses paid by us on behalf

of My Boat MD, Inc., a wholly owned subsidiary of Twin Vee PowerCats, Inc and (iii) $ 1,808 of expenses paid to Twin Vee PowerCats, Inc.

for reimbursement of telephone, internet and other similar expenses incurred by it on our behalf.

During the year ended December 31, 2022, we recorded

$ 15,000 of professional fees, for consulting work for Twin Vee performed by Jim Leffew, the Chief Executive Officer of Forza.

In connection

with the closing of Forza’s initial public offering, we entered into a transition services agreement (the “Transition Services

Agreement”) with Forza, pursuant to which we agreed to provide Forza, at our cost, with certain services, such as procurement, shipping,

receiving, storage and use of our facility until Forza’ s new planned facility is completed.

Forza’s ability to utilize our

manufacturing capacity pending completion of its own facility will be subject to its availability as determined by us.

The Transition

Services Agreement operates on a month-to-month basis.

In 2021, the Company had purchases of $ 90,417 , from

a related party.

The Company paid $ 90,417 to our parent company, Twin Vee PowerCats, Inc., to purchase a 36-foot used catamaran boat.

twelve months ended December 31, 2021, and 2020, the Company recorded management fees of $ 42,000 and $ 0 , respectively, paid to its

shareholder parent company.

the years ending December 31, 2021 and 2020, the Company paid bills on behalf of our parent company.

At December 31, 2021 and 2020, due

from affiliated companies was $ 286,622 , and $ 6,100 , respectively.

During the years ending December 31, 2021 and 2020, our parent company

funded certain expenditure which resulted in advances from affiliated companies.

At December 31, 2021 and 2020, advance from affiliated

companies was $ 115,043 and $ 120,693 , respectively.

Approximately $ 93,000 of the balance is related to an equipment purchase, the remaining

balance was related to startup costs for our franchise business.

and Contingencies

certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that

provide credit to the Company’s dealers.

The maximum obligation of the Company under such floor plan agreements totaled approximately

$ 4,273,258 and $ 1,790,000 as of December 31, 2021, and December 31, 2020, respectively.

The Company incurred no impact

from repurchase events during the twelve months ended December 31, 2021 and December 31, 2020.

COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closings of multiple industries.

While disruption is currently expected to be temporary, there is considerable uncertainty regarding the duration of the closings.

extent to which COVID-19 impacts future results, which are highly uncertain and cannot be predicted, including new information which

may emerge concerning the severity of the coronavirus and the action to contain it or treat its impact, among others.

At this time, the

Company cannot estimate with meaningful precision the potential impact of COVID-19 to its financial and operational results.

Company is currently involved in various civil litigation in the normal course of business none of which is considered material.

Stockholder’s

April 7, 2021, the Company filed a Certificate of Incorporation with the Secretary of State of the State of Delaware (see Note 1) which

authorizes the Company to issue 50,000,000 shares of common stock and 10,000,000 shares of preferred stock, each

with a par value of $ 0.001 .

May 13, 2021, the Company effected a forty-thousand (40,000)-for-one stock split to the shareholder of record as of May 13, 2021.

stock split was in the form of a common stock dividend of 3,999,900 new shares and all share and per share information has been retroactively

adjusted to reflect the stock split.

July 23, 2021, the Company, consummated its initial public offering (the “IPO”) of 3,000,000 shares of its common

stock (“Shares”) at a public offering price of $ 6.00 per Share, generating gross proceeds of $ 18,000,000 , which netted

to the Company $15,849,037 after offering expenses.

The Company had granted the underwriters a 45-day option to purchase up to 450,500 additional

Shares to cover over-allotment., which option expired unexercised.

Stock Warrants

of December 31, 2021, the Company has outstanding warrants to purchase 3,000,000 shares of common stock issuable at a weighted-average

exercise price of $ 7.50 per share that were issued to the representative of the underwriters in connection with the IPO.

warrant activity during the year ended December 31, 2021 other than the warrant issuance.

Compensation Plans

Company maintains an equity compensation plan under which it may award employees, directors and consultants’ incentive and non-qualified

During the year ended December 31, 2022 and 2021,

the Company received cash of $ 14,549 and $ 44,628 from its affiliate companies, and paid $ 57,659 and $ 3,111,100 to its

affiliate companies, respectively.

During the year ended December 31, 2022 and 2021,

the Company recorded management fees of $ 54,000 and $ 42,000 , respectively, paid to its majority shareholder company, Twin Vee PowerCats,

During the year ended December 31, 2022, the Company

issued 20,000 shares valued at $ 52,400 for payment on behalf of our former Parent company.

At December 31, 2022 and 2021, advances from affiliated

companies included in due to affiliated companies was $ 0 and $ 115,043 , respectively.

Approximately $ 93,000 of the balance is related

to an equipment purchase, the remaining balance was related to startup costs for our franchise business.

During the year ended December 31, 2022, Twin Vee

received a monthly fee of $ 5,850 to provide management services and facility utilization to Forza.

This income for Twin Vee, and

expense for Forza, has been eliminated in the consolidated financial statements.

Commitments and Contingencies

Repurchase Obligations

Under certain conditions, the Company is obligated

to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to the Company’s dealers.

The maximum obligation of the Company under such floor plan agreements totaled approximately $ 10,693,000 or 67 units, and $ 4,273,000 or

24 units, as of December 31, 2022, and December 31, 2021, respectively.

The Company incurred no impact from repurchase events during

the year ended December 31, 2022 and year ended December 31, 2021.

Short-term lease

In August of 2022, Forza signed a six-month lease

for a duplex, to be used by its employees to minimize travel expense as it started construction on its new manufacturing facility, for

$ 2,200 per month, on a property in Black Mountain, North Carolina.

During the year ended December 31, 2022, the lease expense was

The Company is currently involved in various civil

litigation in the normal course of business none of which is considered material.

Stockholders’ Equity

Common Stock Issuance

On October 3, 2022, the Company issued and sold to

ThinkEquity LLC, as the underwriter in a firm commitment underwritten public offering (the “ Offering ”) pursuant to

the term of an underwriting agreement that the Company entered into with ThinkEquity LLC on September 28, 2022 (the “Underwriting

Agreement”),an aggregate of 2,500,000 shares of the Company’s common stock, par value $ 0.001 per share, at

a public offering price of $ 2.75 per share, for gross proceeds of $ 6,875,000 , before deducting underwriting discounts, commissions

and offering expenses.

Pursuant to the Underwriting Agreement, the Company has also issued

to the underwriter warrants to purchase up to 143,750 shares of Common Stock.

The warrants will be exercisable at a per share

exercise price of $ 3.4375 .

Common Stock Warrants

As of December 31, 2022, the Company had outstanding

293,750 warrants.

150,000 warrants at a weighted-average exercise price of $ 7.50 per share that were issued to the representative

of the underwriters on July 23, 2021, in connection with the Company’s initial public offering that closed on July 23, 2021 (the

The representative’s warrants are exercisable at any time and from time to time, in whole or in part, and expire

on July 20, 2026.

143,750 warrants at exercise price of $ 34,375 were issued in connection with

the Offering.

Warrants are exercisable at any time and from time to time, in whole or in part, during the four- and one-half year period

commencing 180 days from the commencement of sales of the shares of common stock in this offering.

There was no warrant activity during the year ended

December 31, 2022.

Equity Compensation Plan

The Company maintains an

equity compensation plan (the “Plan”) under which it may award employees, directors and consultants’ incentive and non-qualified

stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee

of the Board of Directors which has been appointed by the Board of Directors to administer the plans.

As of December 31, 2021, there

were 286,388 shares remaining available for grant under these plans.

for Stock-Based Compensation

Compensation Expense - For the year ended December 31, 2021, the Company recorded $ 309,832 of stock-based compensation expense

in the accompanying consolidated statement of operations.

For the year ended December 31, 2020, the Company did not issue any stock-based

compensation expense.

Under the Company’s 2021 Stock Incentive Plan the Company has issued stock options.

A stock option grant gives

the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of

The Company typically issues options that vest pro rata on a monthly basis over various periods.

Under the terms of the Plan, the

contractual life of the option grants may not exceed ten 10 years.

Company utilizes the Black-Scholes model to determine fair value of stock option awards on the date pf grant.

The Company utilized the

following assumptions for option grants during the year ended December 31, 2021:

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

average volatility

dividend yieldy

interest rate

expected volatility of the option is determined using historical volatilities based on historical stock price of comparable boat manufacturing

The Company estimated the expected life of the options granted based upon historical weighted average of comparable boat manufacturing

The risk-free interest rate is determined using the U.S.

Department of the Treasury yield curve rates with a remaining term

equal to the expected life of the option.

of the Board of Directors which has been appointed by the Board of Directors to administer the Plan.

The number of awards under the Plan

automatically increased on January 1, 2022.

As of December 31, 2022, there were 377,090 shares remaining available for grant

under this Plan.

Accounting for Stock-Based Compensation

Stock Compensation Expense

For the year ended December 31, 2022 and 2021, the

Company recorded $ 990,406 and $ 309,832 , respectively, of stock-based compensation expense, which is included in salaries and

wages on the accompanying consolidated statement of operations.

Stock Options

Under the Company’s

2021 Stock Incentive Plan the Company has issued stock options.

A stock option grant gives the holder the right, but not the obligation

to purchase a certain number of shares at a predetermined price for a specific period of time.

The Company typically issues options that

vest pro rata on a monthly basis over various periods.

Under the terms of the Plan, the contractual life of the option grants may not

exceed ten years.

The Company utilizes the

Black-Scholes model to determine fair value of stock option awards on the date of grant.

The Company utilized the following assumptions for

option grants during the year ended December 31, 2022 and 2021:

Schedule of assumptions

Expected term

4.94 - 5 years

Expected average volatility

Expected dividend yield

Risk-free interest rate

1.50 – 4.45 %

0.72 - 1.00 %

The expected volatility of the option is determined

using historical volatilities based on historical stock price of comparable boat manufacturing companies.

The Company estimated the expected

life of the options granted based upon historical weighted average of comparable boat manufacturing companies.

The risk-free interest

rate is determined using the U.S.

Department of the Treasury yield curve rates with a remaining term equal to the expected life of the

The Company has never paid a dividend, and as such the dividend yield is 0.0 %

Schedule of expected volatility of option

value of option

December 31, 2020

Options Outstanding

Weighted Average

Remaining life

Exercise Price

Outstanding, December 31, 2020

Forfeited/canceled

December 31, 2021

options, December 31, 2021

December 31, 2021, the Company had 713,612 options outstanding, 610,747 shares are unvested and expected to vest over the next five years.

the year ended December 31, 2021, Boat House Marine Center, Palm City Yachts, Paradis, Seven Sports Marine and Wefings had

sales of over 10% of our total sales, combined the five customers represented 67 % of total sales.

Outstanding, December 31, 2021

Forfeited/canceled

Outstanding, December 31, 2022

Exercisable options, December 31, 2022

At December 31, 2022, 635,542 Twin Vee options

are unvested and expected to vest over the next four years.

Common Stock Warrants

As of December 31, 2022, Forza had outstanding warrants

to purchase 172,500 shares of common stock issuable at a weighted-average exercise price of $ 6.25 per share that were issued

to the representative of the underwriters on August 16, 2022 in connection with the Company’s IPO.

The representative’s warrants

are exercisable at any time and from time to time, in whole or in part, and expire on August 16, 2027.

There was no warrant activity during

the year ended December 31, 2022.

Equity Compensation Plan

The Company maintains an

equity compensation plan (the “Plan”) under which it may award employees, directors and consultants’ incentive and non-qualified

stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee

of the Board of Directors which has been appointed by the Board of Directors to administer the plan.

The number of awards under the Plan

will automatically increase on January 1, 2023.

As of December 31, 2022, there were 683,500 shares remaining available for grant

under this Plan.

Stock based compensation expense is included in the Statements of Operations, under salaries and wages.

Accounting for Stock -Based Compensation

For the year ended December 31, 2022 and 2021, Forza

recorded $ 458,345 and $ 0 , respectively, of stock-based compensation expense, which is included in salaries and wages on the

accompanying consolidated statement of operations.

Stock Options

Under Forza’s 2022

Stock Incentive Plan (the “Forza Plan”), Forza has issued stock options.

A stock option grant gives the holder the right,

but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time.

Forza typically

issues options that vest pro rata on a monthly basis over various periods.

Under the terms of the Forza Plan, the contractual life of

the option grants may not exceed ten years.

Forza utilizes the Black-Scholes

model to determine fair value of stock option awards on the date of grant.

Forza utilized the following assumptions for option grants

during the year ended December 31, 2022:

31, 2020, Wefings had sales of over 11 % of our total sales.

from Insurance recovery

May 2021, the Company experienced a thermal event on the electric boat prototype rendering it unusable for further testing.

Additionally, the

Company experienced a building fire in one of the outer storage buildings resulting in the need for demolition.

This had no impact on

production as this was an extra storage building not necessary for business operations.

The Company recorded a loss on disposal of asset

from fire of $ 249,499 and gain from insurance recovery of $ 434,724 , during the year ended December 31, 2021.

Due to operating losses and the recognition of

valuation allowances, the Company has no provision for a current and deferred federal or state income taxes in 2021.

Company reversed valuation allowances against previously reserved deferred tax assets, accordingly, there was no provision for

current and deferred federal or state income taxes.

Schedule of assumptions

Expected term

Expected average volatility

Expected dividend yield

Risk-free interest rate

2.98 - 3.62 %

The expected volatility of the option is determined

using historical volatilities based on historical stock price of comparable boat manufacturing companies.

Forza estimated the expected

life of the options granted based upon historical weighted average of comparable boat manufacturing companies.

The risk-free interest

rate is determined using the U.S.

Department of the Treasury yield curve rates with a remaining term equal to the expected life of the

Forza has never paid a dividend, and as such the dividend yield is 0.0 %

Schedule of expected volatility of option

Options Outstanding

Weighted Average

Remaining life

Exercise Price

Outstanding, December 31, 2020

Forfeited/canceled

Outstanding, December 31, 2021

Forfeited/canceled

Outstanding, December 31, 2022

Exercisable options, December 31, 2022

At December 31, 2022, 1,323,514 Forza options

are unvested and expected to vest over the next three years.

Customer and Supplier Concentration

Significant dealers and suppliers are those that account

for greater than 10% of the Company’s revenues and purchases.

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

had sales of over 10 % of our total sales, and one customer represented 12% of total sales.

During the year ended December 31, 2021, five individual customers had sales of over 10 % of our total sales and combined these five customers

represented 67% of total sales.

During the year

ended December 31, 2022, we purchased substantial portion of materials from two third-party vendors (27%).

As of December 31, 2022, the

amount due to the vendors was $ 845,042 .

During the year ended December 31, 2021, we purchased substantial portion of materials from two

third-party vendors (454%).

As of December 31, 2021, the amount due to the vendors was $ 804,098 .

The Company believe there are other suppliers

that could be substituted should the supplier become unavailable or non- competitive.

Gain from Insurance recovery

During May 2021, the Company experienced a thermal

event on the electric boat prototype rendering it unusable for further testing.

Additionally, the Company experienced a building

fire in one of the outer storage buildings resulting in the need for demolition.

This had no impact on production as this was an extra

storage building not necessary for business operations.

The Company recorded a loss on disposal of asset from fire of $ 249,499 and

gain from insurance recovery of $ 434,724 , during the year ended December 31, 2021.

Due to operating losses and the recognition of valuation

allowances, the Company has no provision for a current and deferred federal or state income taxes in 2021.

In 2020, the Company reversed

valuation allowances against previously reserved deferred tax assets, accordingly, there was no provision for current and deferred federal

or state income taxes.

Deferred income taxes reflect the net tax effects

3 unchanged sentences

as follows as of:

of deferred tax assets and deferred tax liabilities

Non-operating

loss carryforward

Schedule of deferred tax assets and deferred tax liabilities

Non-operating loss carryforward

Valuation allowance

( 4,976,000 )

( 3,800,000 )

deferred tax asset

Net deferred tax asset

Schedule of deferred tax assets and deferred tax liabilities

Non-operating loss carryforward

Valuation allowance

Net deferred tax asset

The Company has established a valuation allowance

1 unchanged sentence

During year ended December 31, 2021,

the valuation allowance increased by approximately $ 375,000 .

The Company has net operating and economic loss carry-forwards of approximately

$ 3.8 million available to offset future federal and state taxable income.

the Twin Vee valuation allowance increased by approximately $ 1,176,000 and the Forza X1 valuation allowance increased by approximately

The Company has net operating and economic loss carry-forwards of approximately $ 5.0 million available to offset future

federal and state taxable income.

A reconciliation between expected income taxes, computed

2 unchanged sentences

Schedule of income tax rate

at federal statutory rate

at state rate net of federal benefit

in valuation allowance

Company’s tax positions for 2018 to 2020 have been analyzed and concluded that no liability for unrecognized tax benefits should

be recorded related to uncertain tax positions taken on returns filed for open tax years.

Tax returns for the years 2018 to 2020, are

subject to review by the tax authorities.

Tax at federal statutory rate

Tax at state rate net of federal benefit

Change in valuation allowance

Provision for taxes

The Company’s tax positions for 2019 to 2021

have been analyzed and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions

taken on returns filed for open tax years.

Tax returns for the years 2019 to 2021, are subject to review by the tax authorities.

Net (Loss) Income Per Share

net loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding.

Diluted net loss

per share of common stock has been computed on the basis of the weighted average number of shares outstanding plus equivalent shares

of common stock assuming exercise of stock options.

Potential shares of common stock that have an anti-dilutive effect (i.e., those that

share or decrease loss per share) are excluded from the calculation of diluted net loss per share of common stock.

and diluted loss per common share have been computed based on the following as of years ending December 31, 2021 and 2020:

of earning per share

for basic and diluted net (loss) income per share:

(loss) income

basic net (loss) income per share - weighted average common shares outstanding

of dilutive stock options

diluted net (loss) income per share - weighted average common shares outstanding

(loss) income per share -Basic:

(loss) income per share

(loss) income per share - Diluted:

(loss) income per share

the years ended December 31, 2021 and 2020, all potentially dilutive securities were antidilutive.

Company reports segment information based on the “management” approach.

The management approach designates the internal reporting

used by management for making decisions and assessing performance as the source of the Company’s reportable segments.

reported our financial performance based on the following segments:

Basic net loss per share has been computed on the

basis of the weighted average number of shares of common stock outstanding.

Diluted net loss per share of common stock has been computed

on the basis of the weighted average number of shares outstanding plus equivalent shares of common stock assuming exercise of stock options.

Potential shares of common stock that have an anti-dilutive effect (i.e., those that share or decrease loss per share) are excluded from

the calculation of diluted net loss per share of common stock.

Basic and diluted loss per common share have been

computed based on the following as of years ending December 31, 2022 and 2021:

Schedule of earning per share

Numerator for basic and diluted net loss per share:

$ ( 5,793,414 )

$ ( 1,011,009 )

For basic net loss per share - weighted average common shares outstanding

Effect of dilutive stock options

For diluted net losse per share - weighted average common shares outstanding

Net loss per share -Basic:

Net loss per share

Net loss per share - Diluted:

Net loss per share

For the years ended December 31, 2022 and 2021, all

potentially dilutive securities were antidilutive.

The Company reports segment information based on the

“management” approach.

The management approach designates the internal reporting used by management for making decisions and

assessing performance as the source of the Company’s reportable segments.

The Company reported its financial performance based

on the following segments:

Gas-powered Boats, Franchise and Electric Boats.

Company evaluates the performance of its reportable segments based on net sales and operating income.

Net sales for business segments

are generally based on the sale of boats and the sale of franchises.

Operating income (loss) for each segment includes net sales to third

parties, related cost of sales and operating expenses directly attributable to the segment.

Operating income for each segment excludes

other income and expense.

The Company does not include intercompany transfers between segments for management reporting purposes.

following table shows information by reportable segments for the years ended December 31,2021 and 2020:

Schedule of segment information

The Company evaluates the performance of its reportable

segments based on net sales and operating income.

Net sales for business segments are generally based on the sale of boats and the sale

of franchises.

Income (loss) from operations for each segment includes net sales to third parties, related cost of sales and operating

expenses directly attributable to the segment.

Operating income for each segment excludes other income and expense.

The Company does not

include intercompany transfers between segments for management reporting purposes.

The following table shows information by reportable

segments for the three and year ended December 31, 2022 and 2021:

of reportable segments

For the Year Ended December 31, 2022

Gas-Powered Boats

Electric Boat and Development

Cost of products sold

3 unchanged sentences

( 3,600,906 )

Cost of products sold

Operating expense

Income (loss) from operations

( 6,021,708 )

Other income (expense)

$ ( 2,144,167 )

$ ( 3,577,729 )

$ ( 5,793,414 )

For the Year Ended December 31, 2021

Gas-Powered Boats

Electric Boat and Development

3 unchanged sentences

( 1,187,510 )

and equipment, net classified by business were as follows:

( 1,630,721 )

Other income (expense)

$ ( 488,024 )

$ ( 457,552 )

$ ( 1,011,009 )

Property and equipment, net classified by business were as follows:

Schedule of segment reporting information by segment

Gas-Powered Boats

Electric-Boats

evaluated all additional events subsequent to the balance sheet date through to March 30, 2022, the date the consolidated financial statements

were available to be issued and determined the following items are relevant to disclosure:

Company granted under its 2021 Stock Incentive Plan, stock options to purchase 240,000 and 12,000 share of the Company’s common

stock, to two consultants.

The grants occurred on January 7, 2022 and February 15, 2022, with and exercise price of $ 3.99 and $ 3.77 ,

respectively.

The January 7, 2022 options vest according to set production accomplishments, while the February 15, 2022 options vest

in five monthly installments commencing on the first day of the month following the issuance date, and are subject to consultants continued

service to Twin Vee through each of the vesting dates.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Subsequent Events

The Company has evaluated all event or transactions

that occurred after December 31, 2022 through March 28, 2023, which is the date that the consolidated financial statements were

available to be issued.

During this period, there were no material subsequent events requiring recognition or disclosure, other than the

ones described below.

On February 3, 2023, Ms.

Nicole Camacho, the

Chief Financial of Forza X1, Inc., provided the Company notice of her resignation as an executive officer of the Company, effective February

Camacho informed the Company that she was resigning from the Company as an executive officer to pursue another opportunity

and that her resignation was not the result of any disagreement relating to the Company’s operations, policies or practices.

On February 6, 2023, the

Board of Directors (the “Board”) of Forza, appointed Carrie Gunnerson to the position of Interim Chief Financial Officer and

Interim Principal Financial and Accounting Officer.

Changes in and Disagreements with Accountants on Accounting

and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data