What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-03-27 compared with 2023-03-30 · 236 added, 260 removed, 160 unchanged (76% of the section changed)

11 unchanged sentences

We believe our company has been an innovator in the recreational and commercial power catamaran

We currently have 16 gas-powered models in production ranging in size from our 24-foot, dual engine, center console to our newly

designed 40-foot offshore 400 GFX.

Our twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the

Twin Vee ride quality by reducing drag, increasing fuel efficiency, and offering users a stable riding boat.

We have additionally, launched

the LFG Marine line of monohull boats which are expected to appeal to first-time boat buyers, the freshwater market, and consumers that

prefer a monohull boat, increasing our potential customer base significantly across the nation and moving us outside on the niche catamaran

Twin Vee’s home base operations in Fort Pierce Florida is a 7.5-acre facility with several buildings totaling over 75,000

We currently employe approximately 170 employees, 2022, some of whom have been with our company for over twenty years.

We have organized our business into three operating

(i) our gas-powered boat segment which manufactures and distributes gas-powered boats;

(ii) our electric-powered boat segment

which is developing fully electric boats, through our majority held subsidiary, Forza and (iii) our franchise segment which is developing

a standard product offering and will be selling franchises across the United States through our wholly owned subsidiary, Fix My Boat,

Inc., a Delaware corporation.

We currently have 19 gas-powered models in production ranging in size from our 22-foot monohull to our newly designed 40-foot

offshore 400 GFX.

Our twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee ride quality

by reducing drag, increasing fuel efficiency, and offering users a stable riding boat.

We have additionally, launched the AquaSport line

of monohull boats which are expected to appeal to first-time boat buyers,

the freshwater market, and consumers that prefer a monohull

boat, increasing our potential customer base across the nation and moving us outside on the niche catamaran market.

Twin Vee’s home

base operations in Fort Pierce Florida is a 7.5-acre facility with several buildings totaling over 75,000 square feet.

We currently employe

approximately 90 employees.

We have organized our business into three operating segments:

(i) our gas-powered

boat segment which manufactures and distributes gas-powered boats;

(ii) our electric-powered boat segment which is developing fully electric

boats, through our controlling interest subsidiary, Forza and (iii) our franchise segment which is developing a standard product offering

and will be selling franchises across the United States through our wholly owned subsidiary, Fix My Boat, Inc., a Delaware corporation.

Our gas-powered boats allow consumers to use them

4 unchanged sentences

We currently primarily sell our boats through a

current network of 20 independent boat dealers in 27 locations across North America and the Caribbean who resell our boats to the end

user Twin Vee customers.

We continue recruiting efforts for high quality boat dealers and seek to establish new dealers and distributors

domestically and internationally to distribute our boats as we grow our production and introduce new models.

Our gas-powered boats are

currently outfitted with gas-powered outboard combustion engines.

We believe that the boating industry will follow in

the footsteps of the electrification of the automotive industry by creating electric boats that meet or exceed the traditional boating

consumer’s expectations of price, value and run times.

In other words, electric boats must offer a similar experience when compared

to traditional gas-powered boats in terms of size, capability, and price point.

To date, we have completed the design of the 25-foot

FX dual console model, including hull, deck and small parts.

This design has gone from an intellectual concept in CAD to fiberglass and

foam plugs, fiberglass molds and, finally, working boat parts in just over one year.

On October 28, 2022, the running surface of the boat

and all major components were tested successfully for several hours on the Indian River Lagoon in Fort Pierce, Florida.

While the motor

and control systems have been successfully trialed previously, this was the first voyage including all major components, production batteries,

fully functioning “alpha” engine design, control system - including 22” Garmin screen, and Osmosis telematics unit.

The performance of the boat exceeded all expectations and will provide a great baseline for improvements, iterations, and design enhancements.

We ultimately reached over thirty miles per hour.

Subsequent to the initial prototype boat, we have

built four more prototypes:

two more FX-style catamarans, one deck boat and one 22-foot center console monohull.

current network of 43 independent boat dealers in locations across North America and the Caribbean who resell our boats to the end user

Twin Vee customers.

We continue recruiting efforts for high quality boat dealers and seek to establish new dealers and distributors domestically

and internationally to distribute our boats as we grow our production and introduce new models.

Our gas-powered boats are currently outfitted

with gas-powered outboard combustion engines.

Due to the growing demand for sustainable, environmentally

friendly electric and alternative fuel commercial and recreational vehicles, Forza, is designing and developing a line of electric-powered

Forza’s electric boats are being designed as fully integrated electric boats including the hull, outboard motor and control

To date, Forza X1 has built-out and tested multiple Forza company units, including:

three offshore-style catamarans, two bay boat-style

catamarans, one deck boat and three 22-foot center console (F22) monohulls.

In addition, Forza has also electrified a pontoon boat for

a major national pontoon manufacturer.

Forza is in the process of an additional pontoon electrification project and are building an additional

five monohulls.

Each build cycle includes improvements and involves extensive duration and performance testing.

The engine design and

lower units and the control system cabling have been revamped and improved in each iteration.

The monohull will feature a single battery

and the deck boat will, like the FX, utilize a two-battery system.

The batteries and engines are liquid-cooled and unique improvements

to the heat exchanges have improved performance.

We have now completed our telematics unit design and we have a beta app on the Apple

This will allow for remote monitoring of all of the parameters of the battery and engine for both the end user and the factory.

Additionally, we have improved our user interface through the Garmin control screen to provide well-designed pages showing operating characteristics

and conformance to control parameters.

We continue to anticipate revenues from the sale of

these fully integrated electric boats and motors to commence in late 2023.

Forza will continue to build prototype engines and boats for

the next six to nine months.

In September of 2021 launched our wholly owned subsidiary,

Fix My Boat Inc.

Fix My Boat, will be the first nationally branded, mobile marine service company utilizing a franchise model for marine

mechanics across the country.

We have not experienced material adverse effects on

our business due to increasing inflation, it has raised operating costs for many businesses and, in the future, could impact demand for

our products, foreign exchange rates or employee wages.

Inflation rates, particularly in the United States, have increased recently

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

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

In addition, the Federal Reserve has raised, and may

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

financial markets may have the effect of further increasing economic uncertainty may impact consumer spending for products like our.

lower units and the control systems are continuously improved with each iteration.

Cooling system improvements have also been prioritized

and have yielded a myriad of benefits to runtime, speed, and range.

Forza continues to iterate the engine design, including value engineering

of parts and lightweighting of engine components.

Forza is experimenting with our first 300 HP stacked motor design.

Forza is uncertain

as to when it will obtain revenues from the sale of these fully integrated electric boats.

Forza will continue to build and test prototype

engines and boats for the next six to nine months.

During the year ended December31, 2023, we saw a small

increase in revenue.

Our Company’s objectives have been to add new, larger boat models to our GFX lineup, expand our dealers and

distribution network, and increase unit production to fulfill our customer and dealer orders.

The average selling price of our units did

decrease by 16%, for the year ended December 31, 2023, to approximately $137,692.

This is due to the inclusion of our monohull boats which

have an average selling price of approximately $62,000 per unit.

The addition of the monohull boat accounted for 18% of our total sales

for the year ended December 31, 2023.

Recent Developments

On April 20, 2023 we incorporated AquaSport Co., a

wholly owned subsidiary, in the state of Florida in connection with our plan to lease the AQUASPORT™ boat brand and manufacturing

facility in White Bluff, TN.

On May 5, 2023, we and AquaSport Co.

entered into an agreement with Ebbtide Corporation (“Ebbtide”)

providing AquaSport Co.

with the right to acquire assets, AQUASPORT™ boat brand, trademarks, 150,000-square-foot manufacturing facility

situated on 18.5 acres in White Bluff, TN, related tooling, molds, and equipment to build five AquaSport models ranging in size from 21

to 25-foot boats (the “AquaSport Assets”).

Under the agreement, AquaSport Co.

has the right to

purchase the AquaSport assets from Ebbtide for $3,100,000 during the five-year term of the Agreement (or extension period), less credit

for a $300,000 security deposit paid by us and $16,000 a month for any rent paid under the Agreement by AquaSport Co.

will lease the AquaSport assets from Ebbtide under the agreement at a monthly rent of $22,000 pending AquaSport Co.’s acquisition

of the AquaSport assets.

The lease is for a term of five years, commencing June 1, 2023, with one option to renew the lease for an additional

The White Bluff, TN, AquaSport facility was opened

to produce the AquaSport legacy line of monohull boats.

While there was interest in the legacy models, we’ve seen light demand for

these models from our dealer network and customers.

We’ve seen much higher demand for the newly designed AquaSport models currently

manufactured in our Fort Pierce, FL, facility.

Lower demand for these legacy models, coupled with

the current economic headwinds in the boating industry, led us to close the Tennessee facility in November 2023, and to consolidate its

manufacturing operations in our Florida facility.

We remain dedicated to the AquaSport brand and will continue to design and produce new

models, including the 240 CC which is now available for sale, and the 280 CC, which will be available over the next quarter.

In late December 2023, One Water informed us that they were going to discontinue some of their relationships with

manufactures, and Twin Vee was one of those relationships.

We have found that One Water struggled to achieve sales of our Twin Vee production

line due to their unfamiliarity with powered catamarans.

We continue to work with OneWater to help them connect and sell units to end

We have also started working with dealers that are experienced with our products and have proven to be successful in understanding

the benefits of our products and how to achieve sales.

Financial Condition

Our consolidated balance sheet indicates a strong

financial position as of December 31, 2022.

We finished the year with revenue up 4% over the prior year.

Our cash, cash equivalents

and marketable securities were $26.4 million at December 31, 2022.

Our cash, cash equivalents, restricted

cash and marketable securities were $21 million at December 31, 2023.

Our property, plant, and equipment along with prepaid expenses went

1 unchanged sentence

improvements to improve the quality of our products.

While we have largely returned to normal operations,

the COVID-19 pandemic continues to cause challenges.

During fiscal 2022, we experienced supply chain disruptions and an overall increase

in the price of raw materials and other components used in our production.

We also incurred higher labor costs and challenges to fill

open positions due to a highly competitive job market.

Additionally, we experienced periodic operational disruptions as our employees

contracted or were potentially exposed to COVID-19 pandemic, we are unable to predict the impact the pandemic may have on our future results

of operations or financial condition.

Results of Operations

11 unchanged sentences

$ (9,782,196 )

Basic and dilutive loss per share of common stock

Weighted average number of shares of common stock outstanding

$ (5,793,414 )

$ (3,988,782 )

Basic and dilutive income per share of

Weighted average number of shares of

common stock outstanding

Net Sales and Cost Sales

1 unchanged sentence

for the year ended December 31, 2023 from $31,987,724 for the year ended December 31, 2022.

We attribute the large increase in net sales

to a continued strong economy during 2022, along with our investment in the growth of our sales and marketing assets throughout 2022.

That paired with our ability to increase our production capacity by over 100% year over year.

The number of boats sold during fiscal year

ended December 31, 2023 increased 21% over the number of our boats sold during the fiscal year ended December 31, 2022.

Additionally,

we have increased our sale prices to help offset the increases in operating expenses, which includes increased labor cost, in addition

to increased inventory levels due to the additional models we now produce and to protect against supply chain shortages.

Our average revenue

per unit for the year ended December 31, 2022 is up approximately 31% over revenue per unit for the year ended December 31, 2021.

average revenue per unit increase, is not only due to our increase in sales prices, but we also attribute this increase to a shift in

our model mix.

In 2021 our sales were spread evenly across our 26 and 31 Classics and our 24 and 28 GFX models.

In 2022, we discontinued

the remaining Twin Vee Classic lines and made the 260 and 340 GFX models available.

We saw sales across all models increase in 2022.

did see a shift back to sales on our smallest unit, the 240 GFX, which accounted for approximately 40% of our total sales, compared to

The 260 GFX, went from approximately 27% of our total sales, down to 18% in 2022.

The 280 GFX remained consistent with 2021,

while the 340 GFX increased from 3% in 2021 to 12% in 2022.

Gross profits increased by $4,381,020, or 70% to $10,656,806

for the year ended December 31, 2022 from $6,275,786 for the year ended December 31, 2021.

Gross profit as a percentage of sales, for

the year ended December 31, 2022 and 2021 was 33% and 40% respectively.

We attribute the 7% decline in gross profit percentage to increased

cost of raw materials and purchased components, as well as a onetime cycle count adjustment in the fourth quarter of 2022.

As we prepared

to go live on our new ERP system, we have been reviewing on hand inventory, and making corrections.

As we have brought all new models

to the market over the last 2 years, we had been left with noncurrent inventory.

The cycle count adjustment for the year ended December

31,2022 was approximately $1,459,650, compared to $608,728 for the prior year, accounting for 3% of the overall decline.

We anticipate

continued pressure on our gross profit percentage due to price increases on raw materials and purchased components.

However, our average

cost per unit decreased approximately $26,000.

In 2023, we introduced our monohull line of boats.

These are low-cost entry-level boats,

in a very competitive sector.

We believe that adding a full line up of monohull boats will allow us to continue to increase our net sales

year over year.

In 2023, 40% of our sales or approximately $6,000,000, were attributed to our 220 monohull,

Gross profits decreased by $933,779, or 9% to $9,723,027 for the year ended December

31, 2023 from $10,656,806 for the year ended December 31, 2022.

Gross profit as a percentage of sales, for the year ended December 31,

2023 and 2022 was 29% and 33% respectively.

We attribute the 4% decline in gross profit percentage to decreased demand in the marine sector.

Total Operating Expenses

Our total operating expenses for the year ended December

31, 2022 and 2021 were $16,678,514 and $7,906,507 respectively.

Operating expenses as a percentage of sales were 52% compared to 50% in

the prior year.

Selling, general and administrative expenses increased

by approximately 60%, or $1,033,279 to $2,759,624 for the year ended December 31, 2022, compared to $1,726,345 for the year ended December

The large portion of the increase resulted from expenses totaling $422,776, incurred from being publicly traded company, which

Twin Vee only incurred for a portion of 2021, and we did not incur in 2021 for Forza, directors and officers insurance, filing fees, legal

expenses and investor relations costs.

We also incurred significant increases to our liability insurance and workers compensation insurance

totaling $275,416, due to our increased revenue levels and increased wages.

Travel and meals expense increased $115,277, many of Forza’s

employees work remotely and those employees needed to be on site to build our prototypes.

Our Delaware state tax attributed to $95,122

of the increase.

Numerous other items make up the remaining $124,689 of increased selling, general and administrative expense increase.

Our total operating expenses for the year ended December 31, 2023 and 2022

were $21,710,326 and $16,678,514 respectively.

Operating expenses as a percentage of sales were 65% compared to 52% in the prior year.

Selling, general and administrative expenses increased by approximately 35%, or

$974,781 to $3,734,406 for the year ended December 31, 2023, compared to $2,759,625 for the year ended December 31, 2022.

Our advertising

and marketing expenses increased 296%, from $112,319 for the year ended December 31, 2022, to $331,911 for the year ended December 31,

This is due to increased expenses associated with our new AquaSport line and the Forza Electrafication event.

Our rent expense increased

31%, or $134,456 to $567,602 for the year ended December 31, 2023.

The increase was due to Forza Tech Center being rent for a full year

compared to only 3 months in 2022, resulting in an increase of $118,900;

along with a 5% increase for our rent in Fort Pierce.

expense increased $77,889, due to Forza utilizing Recruiting firs to hire two Engineers.

Filing fee and investor relations fees increased

$85,286, due to Forza being public for an entire year in 2023, compared to only a partial year in 2022.

Dues and subscriptions increased

$163,812 for the year ended December 31, 2023, this is due to subscriptions related to our new ERP system, training and safety, marketing

related subscriptions, option tracking and engineering related subscriptions.

Expenses related to travel increased by $202,619, for the

year ended December 31, 2023, this was due to required travel for staff to go to our three different facilities as well as international

travel related to Forza.

We also saw an increase of $60,341 for the year ended December 31, 2023, for our workers compensation expense

due to our increased employment levels.

Numerous other items make up the remaining increase approximately $24,000 of increased selling,

general and administrative expense increase.

Salaries and wage related expenses increased by approximately

6 unchanged sentences

Our cost of benefits,

primarily health insurance and 401K, increased by approximately $235,144, due to our increase in headcount.

Expenses for board fees increased

by $95,792 in 2022, during the year ended December 31, 2021 we only incurred board fees for a portion of the year for Twin Vee, and we

did not incur any board fees for Forza.

The remaining increase of salaries and wages during the year ended December 31, 2021 was associated

with payroll taxes and benefits.

Professional fees increased by 154%, or $585,108

to $966,037 for the year ended December 31, 2022, compared to $380,928 for the year ended December 31, 2021.

This increase was

primarily due to the additional costs we incurred associated with being a public company and included an increase in audit, legal

and related consulting fees to fulfill our public company SEC reporting obligations, as well as preparation for our merger with Twin

Vee PowerCats, Inc.

primarily health insurance, holiday pay and 401K, increased by approximately $178,996, due to our increase in headcount.

board fees increased by $60,375 in 2023, during the year ended December 31, 2022 we only incurred board fees for a portion of the year

During the years ended December 31, 2023 and 2022, respectively, we incurred $123,048 and $0 in commission expense.

The remaining

increase of salaries and wages during the year ended December 31, 2021 was associated with payroll taxes and benefits.

Professional fees increased by 29%, or $283,351 to $1,249,388 for the year ended December

31, 2023, compared to $966,037 for the year ended 2022.

Professional fees related to Forza increased $194,692 for the year ended December

31, 2023, as we carried the costs of audit and legal fees of a public organization for an entire year compared to only a partial year

The remaining increase was due to consulting services to install and manage our new ERP

Depreciation expense for the year ended December 31,

2 unchanged sentences

our depreciation expense.

Research and design expenses for the year ended December

31, 2022, was $941,533 compared to $211,111, for the year ended December 31, 2021.

These expenses are associated with our development

of our electric propulsion system for Forza.

We anticipate further increases in our research and design expense in 2023.

Other income decreased by 63%, or $391,418 to $228,294 for the year ended December

Research and design expenses for the year ended December 31, 2023, was $1,443,569

compared to $941,533, for the year ended December 31, 2022.

The decrease in other income is primarily the result of $608,224

in government grant income associated with our PPP loan that was recognized in 2021, this was partially offset in 2022, by the ERC credit

of $355,987 we received.

In 2021 we recorded a net gain from insurance recovery of $180,124, which we did not have in 2022.

an increase in net loss in fair value of our marketable securities of $133,988, due to the poor financial market.

For the year ended December

31, 2022 we received $165,877 in dividend income, compared to $0 in 2021, and we received interest income of $85,939 compared to $146

in 2021, and increase of $85,793 as a result of increased interest rates on our cash and marketable securities.

These expenses are associated with our development of our electric propulsion

system for Forza.

Other income increased by 866%, or $1,976,809 to

$2,205,103 for the year ended December 31, 2023, compared to $228,294 for the year ended, 2022.

The increase in other income is

primarily the result of $1,267,055 in Employee Retention Credit income.

We incurred an increase in net gain in fair value of our

marketable securities of $191,722, compared to a net loss in fair value of our marketable securities of $133,988 in 2022, due to

improved financial market.

Additionally, we recorded $909,215 in dividend income during 2023, compared to $0, in 2022.

ended December 31, 2023 we did see an increase in interest expense of $57,002.

Net loss for the year ended December 31, 2023, was $9,479,511, compared to

$5,793,414 for the year ended December 31, 2022.

31, 2022 we did see an increase in interest expense of $27,446.

Our interest expense also includes finance fees, that we pay third-party

finance companies on behalf of our dealers, increase sales to dealers that utilize finance companies naturally drove these fees up during

Net loss for the year ended December 31, 2022, was

$5,793,414, compared to $1,011,009 for the year ended December 31, 2021.

We have spent much of the last two years assembling the tools

and people necessary to increase production levels.

We have spent much of the last two year assembling the tools and people necessary to

increase production levels.

While our revenue levels increased, our expenses also increased.

That coupled with

the additional expenses associated with being a public company and our research and development efforts for our electric boat division,

resulted in a net loss for 2022.

With these investments, we are building the foundation for our future, not only for our gas powered boats,

but also for our electric boat division.

We continue to deal with the fallout of the global pandemic, as well as the impact of additional

costs of growth, but are encouraged by our continued increase in revenue.

Basic and dilutive loss per share of common stock increased

for the year ended December 31, 2022,to ($0.76) compared to ($0.19) for the year ended December 31, 2021.

Toward the end of 2023, market condition

worsened, forcing us to close the Tennessee facility and consolidate operation in Fort Pierce.

That coupled with the additional expenses

associated with being a public company and our research and development efforts for our electric boat division, resulted in a net loss

With these investments, we are building the foundation for our future, not only for our gas powered boats, but also for our

electric boat division.

We have decreased our head count significantly and work to right size the business for the current state of the

economy, while keep our core strengths intact.

Basic and dilutive loss per share of common stock increased for the year ended December

31, 2023 to ($0.76) compared to ($0.67) for the year ended December 31, 2022.

Liquidity and Capital Resources

A primary source of funds for the year ended December

31, 2022 was net cash received from our secondary offering, as well as Forza’s initial public offering and revenue generated from

Our primary use of cash was related to funding the expansion of our operations through capital improvements, adding staff

and increasing inventory levels to meet the increase in demand for our products.

With uncertainty on component availability, prolonged

lead time and rising prices, we have been adding to our inventory far earlier than previous years.

A primary source of funds for the year ended December 31, 2023 was net cash

received from our secondary offering, as well as Forza’s initial public and secondary offering and revenue generated from operations.

Our primary use of cash was related to funding the expansion of our operations through capital improvements, adding staff, and increasing

inventory levels.

Our priority over the next several months is to minimize new purchase orders and to deploy as much of this inventory

as possible into new production.

The following table provide selected financial data

about us as of December 31, 2023 and December 31, 2022.

Cash and cash equivalents

Cash, cash equivalents and restricted cash

Marketable securities

5 unchanged sentences

As of December 31, 2023, we had $21,218,175

of cash, cash equivalents and marketable securities, total current assets of $29,887,529, and total assets of $38,231,480.

Our total liabilities

were $5,210,591.

Our total liabilities were comprised of current liabilities of $3,791,063 which included accounts payable of $2,065,680

and accrued liabilities of $1,240,769, contract liability of $5,300 due to affiliated companies of $0 and current portion of operating

lease right of use liability of $479,314, and long-term liabilities of $1,419,528.

As of December 31, 2021, we had $6,975,302 of cash

and cash equivalents, marketable securities of $6,064,097, total current assets of $13,073,346 and total assets of $20,599,184.

current liabilities were $2,155,420 and total liabilities of $3,899,484 which included long-term operating lease liabilities for the lease

of our facility.

We believe that our cash and cash equivalents

will provide sufficient resources to finance operations for the next 12 months.

In addition to cash, cash equivalents and marketable

securities, we anticipate that we will be able to rely, in part, on cash flows from operations in order to meet our liquidity and

capital expenditure needs in the next year.

We do anticipate Forza’s expenses to increase during the next two years as it

constructs its planned manufacturing facility in McDowell, North Carolina, the cost of which we expect will be paid for through the

proceeds of Forza’s initial public offering, and certain grant funding, provided the conditions to receipt of the grant

funding are met, of which there can be no assurance.

Cash used in operating activities

$ (4,146,030 )

of cash, cash equivalents, restricted cash and marketable securities, total current assets of $26,646,318, and total assets of $39,846,713.

Our total liabilities were $7,797,098.

Our total liabilities were comprised of current liabilities of $4,216,345 which included accounts

payable and accrued liabilities of $3,474,538, contract liability of $44,195, finance lease liability of $214,715 and current portion

of operating lease right of use liability of $482,897, and long-term liabilities of $3,580,753.

As of December 31, 2022, we had $23,501,007

of cash, cash equivalents and restricted cash, marketable securities of $2,927,518, total current assets of $29,887,529 and total assets

of $38,231,480.

Our total current liabilities were $3,791,063 and total liabilities of $5,210,591 which included long-term operating lease

liabilities for the lease of our facility.

We believe that our cash and cash equivalents will provide sufficient resources

to finance operations for the next 12 months.

In addition to cash, cash equivalents, restricted cash and marketable securities, we anticipate

that we will be able to rely, in part, on cash flows from operations in order to meet our liquidity and capital expenditure needs in the

We do anticipate Forza’s expenses to increase during the next year as it constructs its planned manufacturing facility

in McDowell, North Carolina, the cost of which we expect will be paid for through the proceeds of Forza’s initial public offering,

its secondary offering and certain grant funding, provided the conditions to receipt of the grant funding are met, of which there can

be no assurance.

Cash used in operating

$ (6,934,773 )

2 unchanged sentences

$ (6,629,021 )

Cash provided by financing activities

Cash provided by financing

(14,049,320 )

Cash at end of year

3 unchanged sentences

We have increased inventory levels by $1,296,045, due to

supply chain delays that continue to impact lead time and parts availability, and due to our increased product offerings.

from operation was $5,793,414, was decreased by non-cash expenses of approximately $2,593,713, primarily due to stock-based compensation

of $1,448,751, depreciation of $553,750, change of right-of-use asset and lease liabilities of $397,136, net change in fair value of marketable

securities of $133,988 and a loss on the disposal of assets of $60,088.

For the year ended December 31, 2022, our accounts payable and

accrued liabilities increased $1,648,774, due to our increase in inventory.

For the year ended December 31, 2022, our operating lease

liabilities decreased $390,050.

Prepaid expenses decreased by $21,339 and contract liabilities decreased by $8,800.

Accounts receivable

increased by $9,030.

having three different manufactures for engines and to bringing inventory in for the Tennessee facility, and due to our increased product

Our net loss was $9,782,196, was decreased by non-cash expenses of approximately $4,062,597 primarily due to stock-based compensation

of $1,902,749, depreciation of $1,353,383, change of right-of-use asset and lease liabilities of $474,630, change in inventory reserve

of $419,616 and net change in fair value of marketable securities of $87,781.

For the year ended December 31, 2023, our accounts payable

increased $333,346, due to our increase in inventory, prepaid expenses and other current assets decreases by $419,195, due to not being

required to prepay for incoming engines, as we were in 2022.

For the year ended December 31, 2023, our operating lease liabilities decreased

$479,315 and our accrued liabilities decreased by $165,257.

Contract liabilities increased by $38,895.

Accounts receivable increased by $65,993.

Cash Flow from Investing Activities

2 unchanged sentences

We increased our property and equipment

by $3,365,679, this was funded through the sales of investments of $3,002,591.

The majority of the property and equipment purchased were

molds for our boat production, for both Forza and Twin Vee, investing an additional $2,229,674.

We also spent approximately $531,858 on

machinery and equipment, these improvements include a new CNC machine, infusion equipment, cranes, hoists, production carts and other

We spend an additional $193,350 to complete the upgrade the wiring in the building so it would support our new production levels,

we installed new lighting and ventilation to improve the overall quality of our product and we built of breakroom for our employees.

additionally spent approximately $284,509 on computer hardware and software.

We sold a thermoform machine for $175,000, in order to free

up space for our manufacturing processes.

by $5,162,478, we invested in marketable securities of $1,343,702 and we realized a gain on the sale of marketable securities, available

for sale of $103,941.

The majority of the property and equipment purchased were molds for our boat production, for AquaSport and Twin

Vee, investing and additional $3,593,709.

We further spent $1,119,758 on the land in Tennessee and in North Carolina.

We also spent approximately

$714,991 on machinery and equipment.

Cash Flows from Financing Activities

For the year ended December 31, 2023, net cash provided by financing activities

was $20,867,340, compared to $16,068,289 during the year ended December 31, 2021.

Net cash provided by financing activities primarily

came from net proceeds from Forza’s initial public offering of $14,934,989 which included the noncontrolling interest of $5,241,317

and net proceeds from our secondary offering of $6,001,836.

We had repayments of debt and advancements from Twin Vee Inc., which was a

$69,485 net payment associated with.

was approximately $6,818,021 compared to net cash provided by financing activities of $20,867,340 for the year ended December 31, 2022.

cash flow from financing activities for the year ended December 31, 2023 included proceeds of $6,996,015 and deferred offering cost of

$66,463 from a follow on underwritten public offering for Forza in June 2023.

Additional cash

used for financing activities of $90,153 was related to equipment financing, and $21,379 was used for a Forza buy back of

The cash provided by financing activities for the year ended December 31,2022, included $20,936,825 in net proceeds from the Forza offering.

CRITICAL ACCOUNTING ESTIMATES

9 unchanged sentences

On an ongoing basis,

we evaluate our estimates based on historical experience and make various assumptions, which management believes to be reasonable under

we evaluate our estimates based on historical experience and make various assumptions,

which management believes to be reasonable under

the circumstances, which form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent

11 unchanged sentences

to retained earnings upon adoption as the effect was immaterial.

Payment 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 balance sheet.

Customer deposits are

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

Payment 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 sheets.

Customer deposits are recognized as revenue

when control over promised goods is transferred to the customer.

Use of Estimates

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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.

Management assesses the recoverability of its long-lived assets when indicators of

impairment are present.

If such indicators are present, the 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

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Lease classification is evaluated at the inception of the lease agreement.

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 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).

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 financial statements between its operating income and the amount of net income resulting from the PPP loan and forgiveness.

Deferred Income Taxes and Valuation Allowance

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

What changed 10-K

Item 7. Management’s Discussion and Analysis