What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-20 compared with 2024-03-27 · 501 added, 505 removed, 680 unchanged (60% of the section changed)

9 unchanged sentences

Notes to the Consolidated Financial Statements

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

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, 2023 and 2022, 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, 2023 and 2022 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.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets of Twin Vee Powercats Co.

and Subsidiaries (the Company) as of December 31,

2024 and 2023, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended,

and the related notes (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 as of December 31, 2024 and 2023, and the

results of its operations and its cash flows for each of the years then ended, 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.

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

We are a public accounting firm registered with the Public

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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.

regarding the amounts and disclosures in the consolidated 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.

& CO., CPAs, P.C.

have served as the Company’s auditor since 2020.

TWIN VEE POWERCATS CO.

GRASSI & CO., CPAs, P.C .

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

Jericho, New York

March 20, 2025

VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

BALANCE SHEETS

Current Assets

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Total current assets

Marketable securities - non current

Property and equipment, net

Operating lease right of use asset

Operating lease right of use asset, net

Security deposit

4 unchanged sentences

Contract liabilities

Finance lease liability

Operating lease right of use liability

Finance lease liabilities

Operating lease liabilities

Total current liabilities

Economic Injury Disaster Loan

Finance lease liability - noncurrent

Operating lease liability - noncurrent

Finance lease liabilities - noncurrent

Operating lease liabilities - noncurrent

Total Liabilities

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$ 0.001 par value;

9,520,000 shares issued and outstanding

14,874,480 and 9,520,000 shares issued and outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital

Accumulated deficit

( 14,346,984 )

( 7,154,808 )

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

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consolidated financial statements

TWIN VEE POWERCATS CO.

VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Cost of products sold

of products sold

(loss) profit

general and administrative

of property & equipment

on disposal of assets

on sale of R&D equipment

and amortization

and development

operating expenses

Selling, general and administrative

Salaries and wages

Professional fees

Depreciation and amortization

Research and development

Total operating expenses

Loss from operations

( 11,987,299 )

( 6,021,708 )

Other income (expense):

Dividend income

Interest expense

Interest income

Loss on disposal of assets

Unrealized gain on marketable securities

Realized gain on marketable securities

Employee Retention Credit income

Total other income

Income before income tax

( 9,782,196 )

( 5,793,414 )

Income taxes provision

( 9,782,196 )

( 5,793,414 )

income (expense):

gain on marketable securities

Retention Credit income

taxes provision

Net loss attributable to noncontrolling interests

( 2,590,020 )

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

$ ( 7,192,176 )

$ ( 5,137,252 )

Basic and dilutive loss per share of common stock

Weighted average number of shares of common stock outstanding

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

and dilutive loss per share of common stock

average number of shares of common stock outstanding

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

STATEMENTS OF STOCKHOLDERS' EQUITY

Preferred Stock

Noncontrolling

Balance, December 31, 2021

Balance, January 1, 2023

$ ( 7,154,808 )

Common stock issued for payment on behalf of parent

Common stock issued for cash

Subsidiary share issuance

Stock-based compensation

Merger of Twin Vee PowerCats, Inc.

Subsidiary stock repurchase

( 7,192,176 )

( 2,590,020 )

( 9,782,196 )

Balance, December 31, 2023

$ ( 14,346,984 )

Subsidiary share issuance

Share Issuance for Forza Equity

$ ( 5,574,487 )

Stock-based compensation

Subsidiary stock repurchase

( 11,045,971 )

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consolidated financial statements

TWIN VEE POWERCATS CO.

VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS

Cash Flows From Operating Activities

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Depreciation and amortization

Loss on disposal of asset

Impairment of property & equipment

Gain of sale of R&D equipment

Loss on disposal of property & equipment

Change of right-of-use asset

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( 1,296,045 )

( 2,208,563 )

Prepaid expenses and other current assets

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Realized gain on sale of marketable securities, available for sale

Net (purchases) sales of investment in trading marketable securities

Net sales (purchases) of investment in marketable securities

( 1,343,702 )

5 unchanged sentences

( 1,861,632 )

( 6,629,021 )

Cash Flows From Financing Activities

Proceeds from issuance of common stock

Proceeds from Forza Issuance of common stock

1 unchanged sentence

Forza stock repurchase

Advances from related parties

Repayment to related parties

Finance lease payments

Net cash provided by financing activities

Net (used in) cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

( 9,048,993 )

Cash and cash equivalents at beginning of the year

( 6,745,774 )

Cash at beginning of the year

Cash, cash equivalents and restricted cash at end of the year

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Cash paid for interest

Non Cash Investing and Financing Activities

Increase in the right-of-use asset and lease liability

Common stock issued for payment on behalf of parent

Right of use asset - finance leases

Reconciliation to the Consolidated Balance Sheets

Reconciliation to the Consolidated Balance Sheet

Cash and cash equivalents

1 unchanged sentence

Total cash, cash equivalents and restricted cash

The accompanying notes are an integral part of these

consolidated financial statements

TWIN VEE POWERCATS CO.

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

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

Fix My Boat has been inactive for the majority of 2023 and the year ended December 31, 2024.

On July 23, 2024, Fix My Boat,

was merged into Twin Vee PowerCats Co.

On April 20, 2023, the Company formed AquaSport

Co., a wholly owned subsidiary in the state of Florida in connection with the Company’s plan to lease the assets of former AQUASPORT™

boat brand and manufacturing facility in White Bluff, Tennessee.

On July 30, 2024, AquaSport Co.

was merged into Twin Vee PowerCats Co.

Forza X1, Inc.

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Power Sports, Inc.

on October 15, 2021, and subsequently changed its name to Forza X1, Inc.

on October 15, 2021, and subsequently changed the name to Forza X1, Inc.

(“Forza X1” or “Forza”)

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Following the Company’s initial public offering

that closed on July 23, 2021 (the “IPO”), it determined in October 2021 that for several reasons, that it would market the

Company’s new independent line of electric boats under a new brand name (and new subsidiary) .

On April 20, 2023, the Company formed AquaSport Co.(“AquaSport”),

a wholly owned subsidiary in the state of Florida in connection with the Company’s plan to lease the assets of former AQUASPORT™

boat brand and manufacturing facility in White Bluff Tennessee.

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 (“Twin Vee Inc.” or “TVPC”), TVPC was merged with and into

the Company (the “Merger”).

As Twin Vee Inc.

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.

that closed on July 23, 2021 (the “IPO”), it determined in October 2021 that for several reasons, it would market the Company’s

new independent line of electric boats under a new brand name (and new subsidiary) .

Forza’s completed the initial public

offering of its common stock on August 16, 2022 and a follow-on public offering on June 14, 2023, which together resulted in Forza

becoming a majority-owned subsidiary of the Company.

In an effort to retain cash and reduce expenditures

and as a result of market conditions, on July 11, 2024, Forza’s Board of Directors determined to discontinue and wind down the business

related to the development and sale of electric boats utilizing its proprietary outboard electric motor.

Forza explored strategic alternatives,

including a potential merger with Twin Vee PowerCats Co.

On November 11, 2024, the Company held its 2024 Annual

Meeting of Stockholders (the “Annual Meeting”).

At the Annual Meeting, the Company’s stockholders approved the issuance

of shares of the Company’s common stock to Forza stockholders pursuant to the terms of the Agreement and Plan of Merger, dated as

of August 12, 2024 (the “Merger Agreement”), by and between Forza, the Company and Twin Vee Merger Sub, Inc., a Delaware corporation

and wholly-owned subsidiary of the Company (“Merger Sub”) and an amendment to our Certificate of Incorporation to effect a

reverse stock split at a ratio within the range of 1-for-2 to 1-for-20.

On November 26, 2024 (the “Closing Date”),

pursuant to the terms of the Merger Agreement, Merger Sub was merged with and into Forza (the “Merger”), with Forza surviving

the Merger as a wholly-owned subsidiary of Twin Vee.

At the effective time of the Merger (the “Effective

Time”), (a) each outstanding share of common stock of Forza , par value $ 0.001 per share of Forza (the “Forza Common Stock”)

(other than any shares held by Twin Vee) was converted into the right to receive 0.611666275 shares of Twin Vee common stock, par value

$ 0.001 per share (the “Twin Vee Common Stock”), (b) each outstanding Forza stock option, whether vested or unvested, that

had not previously been exercised prior to the Effective Time was converted into an option to purchase 0.611666275 shares of Twin Vee

Common Stock for each share of Forza Common Stock covered by such option, (c) each outstanding warrant to purchase shares of Forza Common

Stock was assumed by Twin Vee and converted into a warrant to purchase 0.611666275 shares of Twin Vee Common Stock for each share of Forza

Common Stock for which such warrant was exercisable for prior to the Effective Time, and (d) the 7,000,000 shares of Forza Common Stock

held by Twin Vee were cancelled.

The issuance of shares of Twin Vee Common Stock to

the former shareholders of Forza was registered under the Securities Act of 1933, as amended, pursuant to a registration statement

on Form S-4 (File No.

333-281788), as amended, filed by Twin Vee with the Securities and Exchange Commission (the “SEC”) and

declared effective on October 10, 2024 (the “Registration Statement”).

At the Effective Time, in accordance with the terms

of the Merger Agreement, the size of Twin Vee’s board of directors (the “Board”) was set at five, Joseph Visconti, Preston

Yarborough, Neil Ross and Kevin Schuyler remained as directors of Twin Vee and Marcia Kull was appointed as a director of Twin Vee.

Upon her appointment, Ms.

Kull was appointed to serve

on the Board’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Kull will participate

in the non-employee director compensation arrangements described under the heading “Twin Vee Director Compensation” contained

in the Joint Proxy Statement/Prospectus and incorporated by reference herein.

Following the Merger, the composition of each class

of the board is as follows:

The Class I directors are Neil Ross and Marcia Kull, whose terms will expire at the annual meeting of stockholders

to be held in 2025.

The Class II director is Preston Yarborough, whose term will expire at the annual meeting of stockholders to be held

The Class III directors are Kevin Schuyler and Joseph Visconti, whose terms will expire at the annual meeting of stockholders

to be held in 2027.

In connection with the Merger and effective as of

the Effective Time, Bard Rockenbach and James Melvin resigned as directors of Twin Vee and any committees thereof.

The decision to resign

by each of Messrs.

Rockenbach and Melvin was not the result, in whole or in part, of any disagreement with Twin Vee, its management team,

or the board of directors of Twin Vee, on any matter relating to Twin Vee operations, policies or practices.

On May 10, 2024, Twin Vee PowerCats Co.

(the “Company”)

received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the

Company that for the preceding 30 consecutive business days (March 28, 2024 through May 9, 2024), the Company’s common stock did

not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per share as required by Nasdaq Listing

Rule 5550(a)(2).

The Company was provided 180 calendar days, or until November 6, 2024, to regain compliance.

On November 7, 2024, the Company received written

notification from The Nasdaq Stock Market LLC (“Nasdaq”) granting the Company’s request for a 180-day extension to regain

compliance with Nasdaq Listing Rule 5550(a)(2).

Compliance may be achieved automatically and without further action if the closing bid

price of the Company’s common stock is at or above $1.00 for a minimum of ten consecutive business days at any time prior to May

5, 2025, Nasdaq will notify the Company when it determines that the Company has regained compliance with the Minimum Bid Price Requirement

and the matter will be closed.

Principles of Consolidation

The consolidated financial

statements include the accounts of Twin Vee and its wholly owned subsidiary, AquaSport, Fix My Boat, and controlling interest subsidiary,

Forza X1, collectively referred to as the “Company”.

statements include the accounts of Twin Vee and its wholly owned subsidiary, Forza X1, collectively referred to as the “Company”.

The Company’s net loss

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

During the first quarter of 2024, the Company changed the classification

of production labor and related benefit costs to be included as a component of cost of sales rather than operating expenses.

has adjusted the statement of operations for the year ended December 31, 2023 to be consistent with the accounting treatment in 2024.

This resulted in an increase in cost of products sold of $ 6,456,139 and a corresponding decrease in operating expenses for the year ended

December 31, 2024.

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.

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 consolidated 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.

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 consolidated 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.

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.

Schedule of accounts receivable

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to the customer.

At December 31, 2023 and 2022, the Company had customer deposits of $ 44,195 and $ 5,300 , respectively, which is recorded

as contract liabilities on the consolidated balance sheets.

These deposits are refundable, we are uncertain when we will be able to

recognize as revenues.

At December 31, 2024 and 2023, the Company had customer deposits of $ 80,000 and $ 44,195 , respectively, which is

recorded as contract liabilities on the consolidated balance sheets.

These deposits are refundable and are recognized as revenue when

the related boat is delivered, generally within 90 days.

Rebates and Discounts

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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.

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

Other Revenue Recognition Matters

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Cash, Cash Equivalents and Restricted Cash

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, 2023 and 2022,

the Company had cash and cash equivalents of $ 16,755,233 and $ 23,501,007 , respectively.

Restricted cash includes amounts that are collected and are held in connection with assets securing certain of the

Company’s financing transactions.

Restricted cash is restricted for payment of interest expense and principal on the outstanding

On December 31,2023 and 2022, included within

restricted cash on the Company’s consolidated balance sheets is an irrevocable letter of credit for $ 257,530 and $0, respectively.

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, 2024 and 2023, the Company had cash,

cash equivalents, and restricted cash of $ 7,706,240 and $ 16,755,233 , respectively.

Restricted cash includes amounts that are collected

and are held in connection with assets securing certain of the Company’s financing transactions.

Restricted cash is restricted for

payment of interest expense and principal on the outstanding borrowings.

On December 31,2024 and 2023, included within restricted cash

on the Company’s consolidated balance sheets is an irrevocable letter of credit for $ 215,117 and $ 257,530 , respectively.

Marketable Securities

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a specifically reserved item is settled for an amount exceeding the previous estimate.

Inventories are valued at the lower of cost and net realizable value, with cost determined

using the weighted average cost method on a first-in first-out basis.

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.

Inventories are valued at the lower of cost and net

realizable value, with cost determined using the weighted average cost method on a first-in first-out basis.

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 value.

At December 31, 2024 and 2023, the provision for excess or obsolete inventories

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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

4 unchanged sentences

by the historical warranty expense return rate.

The company’s warranty liability is included in the accrued liabilities line item

of the accompanying consolidated balance sheets.

The following table shows the changes in the aggregate

1 unchanged sentence

Schedule of product warranty liability

Balance as of the beginning of year

Balance as of January 1

Payments made

Provision for current years warranty

Balance as of end of year

Balance as of December 31

Advertising and marketing costs are expensed as incurred.

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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 products sold in the consolidated 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

For the years ended December 31, 2023, and 2022, shipping and handling costs amounted to $ 718,635

and $ 179,998 ,

respectively.

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 products

sold in the consolidated statements of operations.

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

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

For the years ended December 31, 2024,

and 2023, shipping and handling costs amounted to $ 281,915 and $ 718,635 , respectively.

The Company determines if an arrangement is a lease

22 unchanged sentences

During the year ended

December 31, 2023, the Company purchased all engines for its boats under supplier agreements with three vendors.

During the year ended

December 31, 2022, the Company purchased all engines for its boats under supplier agreements with one vendor.

For the years ended December

31, 2023 and 2022, total purchases from these vendors were $ 9,252,915 and $ 5,020,973 , respectively.

December 31, 2024, the Company purchased all engines (Mercury, Suzuki and Yamaha) and certain composite materials for its boats under

supplier agreements with five vendors.

Total purchases from these vendors were $ 5,324,494 .

During the year ended December 31, 2023, the

Company purchased all engines from three vendors (Mercury, Suzuki and Yamaha) for its boats under supplier agreements.

Total purchases

from these vendors were $ 9,252,915 .

Employee Retention Credit

March 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.

Standards Codification 105, “Generally Accepted Accounting Principles,” describes the decision-making framework when no guidance

exists in US GAAP for a particular transaction.

Specifically, ASC 105-10-05-2 instructs companies to look for guidance for a similar

transaction within US GAAP and apply that guidance by analogy.

As such, forms of government assistance, such as the ERC, provided to

business entities would not be within the scope of ASC 958, but it may be applied by analogy under ASC 105-10-05-2.

We accounted for

the Employee Retention Credit as a government grant in accordance with Accounting Standards Update 2013-06, Not-for-Profit Entities (Topic

958) (“ASU 2013-06”) by analogy under ASC 105-10-05-2.

Under this standard, government grants are recognized when the conditions

on which they depend are substantially met.

the years ended December 31, 2023 and 2022, respectively, the Company received $ 1,267,055 and $ 355,987 , from the Employee Retention Credit

On March 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.

Accounting Standards Codification 105, “Generally

Accepted Accounting Principles,” describes the decision-making framework when no guidance exists in US GAAP for a particular transaction.

Specifically, ASC 105-10-05-2 instructs companies to look for guidance for a similar transaction within US GAAP and apply that guidance

As such, forms of government assistance, such as the ERC, provided to business entities would not be within the scope of ASC

958, but it may be applied by analogy under ASC 105-10-05-2.

We accounted for the Employee Retention Credit as a government grant in accordance

with Accounting Standards Update 2013-06, Not-for-Profit Entities (Topic 958) (“ASU 2013-06”) by analogy under ASC 105-10-05-2.

Under this standard, government grants are recognized when the conditions on which they depend are substantially met.

For the years ended December 31, 2024 and 2023, respectively,

the Company received $ 0 and $ 1,267,055 , from the Employee Retention Credit (ERC).

Stock-Based Compensation

22 unchanged sentences

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”)

2016-13, “ Financial Instruments Credit Losses —Measurement of Credit Losses on Financial Instruments.

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

In November 2023, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to

Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 aims to improve reportable segment disclosure requirements,

primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 requires disclosures of significant expenses that

are regularly provided to the chief operating decision maker and included within each reported segment measure of segment profit or loss.

The update also required disclosure regarding the chief operating decision maker and expands interim segment disclosure requirements.

The adoption did not impact how the Company identifies its one reportable segment.

Recently Issued But Not Yet Adopted Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income

Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Expense (“ASU 2027-03”), effective for annual periods beginning after December 15, 2026, and interim periods beginning

after December 15, 2027.

The Company adopted this standard effective January 1, 2023, and the adoption of this ASU did not have a significant

impact on the consolidated financial

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

consolidated financial statements.

The amendments in this update require disclosure, in the notes to the financial statements, of specified information

about certain costs and expenses and a qualitative description of the amounts remaining in relevant expense captions that are not separately

disaggregated quantitatively.

The company is currently evaluating the potential impact the adoption of ASU 2024-03 will have on its future

Marketable Securities

As of December 31, 2024, the Company had no marketable

The Company’s 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.

Schedule of marketable securities

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Total marketable securities

As of December 31, 2022

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Marketable Securities

Corporate Bonds

$ ( 139,484 )

Certificates of Deposits

Total marketable securities

$ ( 166,114 )

Fair Value Measurements

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, 2023 and 2022 are as follows:

recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2023 are as follows:

Schedule of assets and liabilities measured fair value

recurring basis

Fair Value Measurements Using

Balance as of December 31, 2023

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Nonobservable Inputs (Level 3)

Marketable securities:

Corporate Bonds

Total marketable securities

Fair Value Measurements Using

Balance as of December 31, 2022

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Nonobservable Inputs (Level 3)

Value Measurements Using

as of December 31, 2023

Prices in Active Markets for Identical Assets (Level 1)

Other Observable Inputs (Level 2)

Non observable Inputs (Level 3)

marketable securities

Corporate Bonds

Certificates of Deposits

Total marketable securities

The Company’s investments in corporate bonds

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Less accumulated depreciation and amortization

( 2,382,832 )

( 1,058,391 )

During the year, the Company obtained an appraisal

of its partially constructed facility in Monroe, NC and evaluated the carrying costs of its assets, primarily its inventory and fixed

Based on this analysis, the company recorded an impairment charge of $ 1,674,000 against the carrying cost of its partially constructed

building at June 30, 2024.

The Company has evaluated any material liabilities resulting from this action and has determined that there

are no additional material liabilities to be recorded.

Depreciation and amortization expense of property

and equipment for the year ended December 31, 2024 and 2023 is $ 1,745,217 and $ 1,353,383 , respectively.

Leases – Related Party

Operating right of use (“ROU”) assets

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property taxes and the lease required a $ 25,000 security deposit.

The base rent will increase five percent (5%) on the anniversary

of each annual term.

At December 31, 2023 and 2022, supplemental balance

sheet information related to leases were as follows:

Schedule of supplemental balance sheet information

related to leases

Operating lease ROU asset

Operating lease liabilities:

Current portion

Non-current portion

At December 31, 2023, future minimum lease payments

under the non-cancelable operating leases are as follows:

Schedule of future minimum lease payments

Year Ending December 31,

Total lease payment

Less imputed interest

The following summarizes other supplemental information about the Company’s

operating lease:

Schedule of other supplemental information

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.

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 base rent increases five percent (5%) on the anniversary of

each annual term.

The Company leased a warehouse facility which is located

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

The Company entered into

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

The current base rent payment was $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.

The lease ended on October 15, 2024.

At December 31, 2024 and 2023, supplemental balance

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Year Ending December 31,

Total lease payment

Less imputed interest

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Vehicle and Equipment Lease

The Company has finance leases for a vehicle,

The Company has various finance leases for two vehicles,

two forklifts, and a copy machine.

The Company entered into the vehicle lease in February of 2023, with an asset value of $ 48,826 ,

which is recorded in net property and equipment on the consolidated balance sheet, it is a 60 -month

lease at a 3 %

interest rate.

At December 31, 2023 and 2022, the net book value was $40,688 and $0, respectively.

The Company entered into the

first forklift lease in January of 2023, with an asset value of $ 43,579 ,

which is recorded in net property and equipment on the consolidated balance sheet.

It is a 60 -month

lease at a 7.5 %

interest rate.

At December 31, 2023 and 2022, the net book value was $ 37,042 and $ 0 , respectively The Company entered into the

second forklift lease in July of 2023, with an asset value of $ 35,508 ,

which is recorded in net property and equipment on the consolidated balance sheet.

It is a 60 -month

lease at a 5.0 %

interest rate.

At December 31, 2023 and 2022, the net book value was $ 34,239 and $ 0 , respectively.

The Company entered into the

copier lease in July of 2023, with an asset value of $ 14,245 ,

which is recorded in net property and equipment on the consolidated balance sheet.

It is a 60 -month

lease at a 7.0 %

interest rate.

At December 31, 2023 and 2022, the net book value was $ 13,566 and

All leases were for 60 -month terms at rates ranging from 3 % to 7.5 %.

No new leases were entered into

Finance lease are recorded in property and equipment,

net on the consolidated balance sheet.

Schedule of Finance lease

Accumulated Depreciation

Net Book Value

AquaSport Lease

On April 20, 2023 Twin Vee incorporated AquaSport

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

facility in White Bluff Tennessee.

On May 5, 2023, Twin Vee 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 Tennessee, related tooling, molds, and equipment to build five Aquasport models ranging in size

from 21 to 25-foot boats (the “AquaSport Assets”).

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 Tennessee, 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, the Company has the right

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AquaSport Co.

will lease the AquaSport Assets from Ebbtide under the Agreement at a monthly rent of $ 22,000 with

the option to acquire the AquaSport Assets.

The lease is for a term of five years, commencing June 1, 2023 at a 2.93 % interest

rate, with one option to renew the lease for an additional five years.

leases the AquaSport Assets from Ebbtide under the Agreement at a monthly rent of $ 22,000 with the

option to acquire the AquaSport Assets.

The lease is for a term of five years, commencing June 1, 2023 at a 2.93 % interest rate,

with one option to renew the lease for an additional five years.

In the event AquaSport Co.

commits three payment Events of Default

(as defined in the Agreement) within any consecutive two-year period or commits any other material Event of Default that is not cured

timely and remains uncured, Ebbtide may terminate AquaSport’s rights under the Agreement to acquire the AquaSport Assets.

commits three payment Events of Default (as

defined in the Agreement) within any consecutive two-year period or commits any other material Event of Default that is not cured timely

and remains uncured, Ebbtide may terminate AquaSport’s rights under the Agreement to acquire the AquaSport Assets.

Ebbtide has the right to terminate the Agreement if an Event of Default occurs.

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Schedule of finance lease in property and equipment

Accumulated depreciation

At December 31, 2024 and 2023, supplemental balance

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Accrued interest

Accrued bonus

Accrued rebates

Accrued professional fees

Accrued operating expense

Accrued assets under construction

Accrued inventory

Accrued construction expense

Warranty reserve

Total accrued liabilities

Short-term Debt

On December 31, 2023 and 2022, the Company had a

line of credit with Wells Fargo and Yamaha Motor Finance for $ 1,250,000 and

$ 1,250,000 ,

respectively.

Interest on our Wells Fargo line is calculated in two ways, the average daily balance is prime +5%, with a minimum

prime at 5.5%, there is also a monthly flat charge of 0.2%, which, is 2.4% annualized.

After the 150-day due in full period, the

average daily balance rate goes up to prime +8.5% with no monthly flat charge.

On December 31, 2023 and 2022, our interest rate was

11.6% and 6.5%.

Interest on our Yamaha line is calculated on the average daily balance +4%, with a minimum prime at 8.0%.

December 31, 2023 and 2022, our interest rate was 16.8% and 0%, respectively.

On December 31, 2024 and 2023, the Company had a line

of credit with Wells Fargo and Yamaha Motor Finance for $ 1,250,000 and $ 1,000,000 , respectively.

Interest on our Wells Fargo line is calculated

in two ways, the average daily balance is prime +5%, with a minimum prime at 5.5%, there is also a monthly flat charge of 0.2%, which,

is 2.4% annualized.

After the 150-day due in full period, the average daily balance rate goes up to prime +8.5% with no monthly flat charge.

On December 31, 2024 and 2023, the interest rate on the line of credit was 11.13% and 11.6%.

Interest on our Yamaha line is calculated on the average

daily balance +4%, with a minimum prime at 8.0%.

On December 31, 2024 and 2023, our interest rate was 11.75 % and 16.8 %, respectively.

On December 31, 2024 and 2023, the outstanding balance

with Wells Fargo was $ 231,736 and

respectively.

On December 31, 2023 and 2022, the outstanding balance with Yamaha Motor Finance was $ 210,674 and

respectively.

The outstanding balances are included in account payable on the consolidated balance sheet.

with Wells Fargo was $ 130,690 and $ 231,736 , respectively.

On December 31, 2024 and 2023, the outstanding balance with Yamaha Motor Finance

was $ 255,649 and $ 210,674 , respectively.

The outstanding balances are included in account payable on the consolidated balance sheets.

Notes Payable – SBA EIDL Loan

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

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

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.

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 were used solely as working

capital to alleviate economic injury caused by the COVID-19 pandemic.

As part of the

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Related Party Transactions

As discussed in note 6, the Company has leased its

facilities from a company owned by its CEO.

During the years ended December 31, 2023 and 2022,

respectively, we recorded $ 36,000 and $ 24,225 of professional fees, for consulting work for Twin Vee performed by Jim Leffew, the Chief

Executive Officer of Forza.

Additionally, during the years ended December 31, 2023 and 2022, respectively, Aqua Sport recorded expense

of $50,000 and $0, for compensation for his work to start up the Tennessee facility.

As discussed in note 6, the Company leases its facilities

from a company owned by its CEO.

During the years ended December 31, 2024 and 2023,

the Company received a monthly fee of $ 6,800 and $ 5,000 , respectively, to provide management services and facility utilization

This income for the Company, and expense for Forza, has been eliminated in the consolidated financial statements.

respectively, the Company recorded $ 0 and $ 36,000 of professional fees, for consulting work for Twin Vee performed by Jim Leffew, the

former Chief Executive Officer of Forza.

Additionally, during the years ended December 31, 2024 and 2023, respectively, Aqua Sport recorded

expense of $ 0 and $ 50,000 , for compensation for his work to start up the Tennessee facility.

During the year ended December 31, 2024, the Company

received a variable monthly fee averaging $ 41,593 , to provide management services to Forza.

This income for the Company, and expense

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

No management fees have been recorded in the period

after the date of the merger of November 26, 2024.

During the years ended December 31, 2023 the Company

received a monthly fee of $ 6,800 , to provide management services and facility utilization to Forza.

This income for the Company,

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

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

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In August of 2023,

the president of Forza, James Leffew, purchased the property, and Forza executed a new lease agreement with Mr.

Leffew on the same month-to-month

the then president of Forza, James Leffew, purchased the property, and Forza executed a new lease agreement with Mr.

Leffew on the same

month-to-month terms.

For the years ended December 31, 2024 and 2023, the lease expense was $ 7,500 and $ 20,000 , respectively.

was canceled in March 2024.

Commitments and Contingencies

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the years ended December 31, 2024 and December 31, 2023.

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, 2023, the lease expense was

The Company is currently involved in various civil

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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 .

Pursuant to the Underwriting Agreement, the Company 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 .

On November 26, 2024, pursuant to the terms of the

Merger Agreement with Forza and Merger Sub, Forza merged with and into Merger Sub, with Forza surviving the merger (the “Merger”).

The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a)

of the Internal Revenue Code of 1986, as amended.

Subject to the terms and conditions of the Merger Agreement, at the effective time of

the Merger (the “Effective Time”), each outstanding share of Forza common stock (other than any shares held by us), were converted

into the right to receive 0.61166627 shares (the “Exchange Ratio”) of our common stock, any fractional shares to be rounded

down to the nearest whole share of common stock, for an aggregate of 5,354,480 shares of our common stock.

No cash proceeds were received

related to this share issuance.

Common Stock Warrants

As of December 31, 2024, 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.

warrants to purchase an aggregate of 562,373 shares of common stock:

● warrants to purchase 150,000 shares of common stock at an 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 IPO.

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.

● warrants to purchase 143,750 shares of common stock at an exercise price of $ 3.4375 were issued to the

representative of the underwriters on October 3, 2022, in connection with an underwritten public offering.

These representative’s

warrants are exercisable at any time and from time to time, in whole or in part, and expire on September 28, 2027.

● warrants to purchase 105,501 shares of common stock at an exercise price of $ 10.22 .

These warrants were

assumed by the Company on November 26, 2024 in connection with the Merger and were converted into a warrant to purchase the number of

shares of Company common stock that the holder would have received if such holder had exercised such warrant to purchase shares of Forza

common stock prior to the Merger .

These representative’s warrants were originally issued in connection with Forza X1, Inc.’s

initial public offering that closed on August 16, 2022, and are exercisable at any time and from time to time, in whole or in part, and

expire on August 11, 2027.

● warrants to purchase 163,122 shares of common stock at an exercise price of $ 3.07 .

These warrants were

assumed by the Company on November 26, 2024 in connection with the Merger and were converted into a warrant to purchase the number of

shares of Company common stock that the holder would have received if such holder had exercised such warrant to purchase shares of Forza

common stock prior to the Merger These representative’s warrants were originally issued in connection with Forza X1, Inc.’s

public offering that closed on June 14, 2023, and are exercisable at any time and from time to time, in whole or in part, and expire on

June 12, 2028.

There was no warrant activity during the year ended

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automatically increased on January 1, 2022.

As of December 31, 2023, there were shares remaining available for grant under this Plan.

As of December 31, 2024, there were 948,089 shares remaining available for grant under this

Accounting for Stock-Based Compensation

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For the year ended December 31, 2024 and 2023, the

Company recorded $ 1,902,749 and $ 1,448,751 , respectively, of stock-based compensation expense, which is included in salaries

and wages on the accompanying consolidated statement of operations.

Company recorded $ 417,375 and $ 557,479 , respectively, of stock-based compensation expense, which is included in salaries and

wages on the accompanying consolidated statement of operations.

Stock Options

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The Company utilized the following assumptions for

option grants during the year ended December 31, 2023 and 2022:

option grants during the years ended December 31, 2024 and 2023:

Schedule of assumptions

Year Ended December 31

Year Ended December 31,

Expected term

1 unchanged sentence

Expected average volatility

39.1 – 49.6 %

Expected dividend yield

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Weighted Average Grant – Date

Average Remaining life

Weighted Average Remaining life

Aggregate Intrinsic

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Outstanding, December 31, 2023

Common Stock Warrants

As of December 31, 2023, Forza had outstanding warrants

to purchase 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, 2023.

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, 2023, there were shares remaining available for grant under this Plan.

Stock based compensation expense

is included in the consolidated statements of operations, under salaries and wages.

Accounting for Stock -Based Compensation

For the year ended December 31, 2023 and 2022, Forza

recorded $ 1,345,270 and $ 458,346 , 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, 2023:

Forfeited/canceled

Outstanding, December 31, 2024

On November 26, 2024, we consummated the Merger

contemplated by the Merger Agreement.

Each outstanding share of Forza Common Stock (other than any shares held by the Company), were converted

into the right to receive 0.61166627 shares (the “Exchange Ratio”) of Twin Vee Common Stock, any fractional shares to be rounded

down to the nearest whole share of common stock, for an aggregate of 5,354,480 shares of Twin Vee Common Stock.

No cash proceeds were

received related to this share issuance.

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, 2023:

Schedule of assumptions

ended December 31, 2023

Year Ended December 31

Expected term

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2.98 – 4.72 %

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

The Company estimated the expected

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

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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 %

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

Schedule of options activity

1 unchanged sentence

Weighted Average

Average Remaining life

Fair value of

Weighted Average

Remaining life

Exercise Price

Outstanding, December 31, 2021

Forfeited/canceled

Fair value of option

Outstanding, December 31, 2022

2 unchanged sentences

Exercisable options, December 31, 2023

At December 31, 2023, Forza options are unvested and

expected to vest over the next three years.

Accounting for Stock -Based Compensation

Stock Compensation Expense

- For the year-to-date period until the date of merger on November 26, 2024, the Company recorded $ 759,765 of stock-based compensation

expense which is included in salaries and wages on the accompanying condensed statement of operations.

Forza’s 2022 Stock

Incentive Plan (the “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 Plan, the contractual life of the option grants

may not exceed ten years.

Customer and Supplier Concentration

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

During the year ended December 31, 2023, one individual dealer

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

During the year ended December 31, 2022, one individual customer had sales of over 10 % of our total sales and one customer represented 12 %

of total sales.

year ended December 31, 2023, we purchased a substantial portion of materials from one third-party vendors.

As of December 31, 2023,

the amount due to the vendors was $ 396,828 .

During the year ended December 31, 2022, we purchased a substantial portion of materials from two third-party vendors.

December 31, 2022, the amount due to the vendors was $ 845,042 .

The Company believe there are other suppliers that could be substituted should the supplier become unavailable or

non-competitive.

During the year

ended December 31, 2024, three individual customers had sales of over 10 % of our total sales and represented 40 % of total sales.

During the year ended December 31, 2023, one individual dealer had sales of over

10 % of our total sales and represented 10 % of total sales.

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, 2024, the Company purchased a substantial portion of engines and other materials from five vendors.

Total purchases from

these vendors were $ 5,324,494 .

During the year ended December 31, 2023, the Company purchased all engines from three vendors for its boats

under supplier agreements.

Total purchases from these vendors were $ 9,252,915 .

The Company believes

there are other suppliers that could be substituted should the supplier become unavailable or non-competitive.

Due to operating losses and the recognition of valuation

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Valuation allowance

( 7,725,000 )

( 4,976,000 )

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

against its deferred tax assets due to the uncertainty surrounding the realization of such assets.

During years ended December 31, 2023

and 2022, respectively the Twin Vee valuation allowance increased by approximately $ 2,749,000 and $ 1,176,000 and the Forza X1 valuation

allowance increased by approximately S 343,000 and $ 532,000 .

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

$ 8.6 million available to offset future federal and state taxable income.

During the years ended December 31,

2024 and 2023, the valuation allowance increased by approximately $ 8,100,000 and $ 3,092,000 , respectively.

The Company has net operating

and economic loss carry-forwards of approximately $ 8.6 million available to offset future federal and state taxable income.

A reconciliation between expected income taxes, computed

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Schedule of income tax rate

Tax at federal statutory rate

Tax at state rate net of federal benefit

Change in valuation allowance

Provision for taxes

at federal statutory rate

at state rate net of federal benefit

in valuation allowance

The Company’s tax positions for 2020 to 2022

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Numerator for basic and diluted net loss per share:

$ ( 7,192,176 )

$ ( 5,137,252 )

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

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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.

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, 2023 and 2022:

Schedule of reportable segments

For the Year Ended December 31, 2023

Electric Boat

Gas-Powered Boats

Cost of products sold

Operating expense

Loss from operations

( 5,390,613 )

( 6,593,433 )

( 11,987,299 )

Other income (expense)

$ ( 3,830,871 )

$ ( 5,933,113 )

$ ( 9,782,196 )

For the Year Ended December 31, 2022

Electric Boat

Gas-Powered Boats

Cost of products sold

Operating expense

Loss from operations

( 2,383,344 )

( 3,600,906 )

( 6,021,708 )

Other income (expense)

$ ( 2,144,167 )

$ ( 3,577,729 )

$ ( 5,793,414 )

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

Schedule of property and equipment, net classified by business

Gas-Powered Boats

Electric-Boats

Segment Information

Effective with the beginning of the fourth quarter

of 2024, the company began operating in a single segment following the reorganization of its operations from three operating and reportable

segments to one operating and reportable segment.

The primary business activities include design, manufacture, marketing and sales of

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

The Company’s Chief Operating Decision Maker is its President and Chief Executive Officer.

The CDOM regularly reviews

consolidated net sales, consolidated operating expenses and consolidated operating income.

Subsequent Events

The Company has evaluated all event or transactions

The Company has evaluated all events or transactions

that occurred after December 31, 2024 through March 20, 2025, which is the date that the consolidated financial statements were available

5 unchanged sentences

of common stock outstanding on December 31 of the preceding calendar year.

For 2024, the maximum number of common stock shares that can

be issued will be 4,284,000 .

On March 4, 2024, Mrs.

Carrie Gunnerson,

the Company’s then Chief Financial Officer, provided the Company notice of her resignation as an executive officer of the Company

and of Forza, effective May 31, 2024.

Gunnerson informed the Company that she was resigning to pursue another opportunity and that

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

James Leffew, Forza X1’s then Chief Executive Officer, provided the Company notice of his resignation as an executive

officer of the Company, effective June 2, 2024.

Leffew informed Forza X1 that he was resigning from the Company as an executive officer

to pursue another opportunity and that his resignation was not the result of any disagreement relating to the Company’s operations,

policies or practices.

As of January 1, 2025, the maximum number of common stock shares

available for issuance was 3,841,152 .

In January 2025, the company obtained a waiver of

liens and the delivery of certain equipment from the general contractor of the Marion North Carolina facility which will allow the company

to move forward with a plan of disposal.

The land and building are currently listed for sale while the company searches for a broker for

the property.

We expect this property to be sold withing the next 12 months.

On February 4, 2025, Twin Vee PowerCats Co.

(the “Company”)

entered into an agreement (the “Sale Agreement”), effective February 4, 2025 (the “Effective Date”), with Revver

Digital, LLC, a Delaware limited liability company and wholly owned subsidiary of One Water Marine Inc.

(“OWM”), providing

the Company with the right to acquire certain intellectual property of OWM (the “OWN Intellectual Property”) related to (a)

the online marketplace, advertisement, marketing, and sale services of yachts, boats, and yacht and boat accessories and (b) arranging

of loans, insurance, and warranty services related to yachts and boats under the brands “Yachts for Sale” and “Boats

for Sale” through the websites available at the domains (the “Domains”) “yachtsforsale.com” and “boatsforsale.com”

(the “Business”).

Pending the closing of the sale of the OWN Intellectual Property to the Company, the Sale Agreement grants

the Company a license to use and sublicense the OWN Intellectual Property to conduct the Business in consideration of:

(a) the payment

to OWM of a monthly revenue-sharing royalty (the “Revenue-Sharing Royalty”) of six percent (6%) of the Aggregate Subscription

Revenue (as defined) of the Business;

and (b) a credit to OWM of $ 500 per OWM dealer who lists boats or yachts on the Domains during such

period (the “Dealer Storefront Credit”).

On the date of the closing (the “Closing”) of the sale of the OWN Intellectual

Property to the Company, the Sale Agreement provides that in consideration of the transfer of, and as a purchase price (the “Purchase

Price”) for, the OWM Intellectual Property, the Company will assume certain liabilities of OWM related to the Business and pay to

OWM $ 5,000,000 (the “Minimum Purchase Price”), less the aggregate amount of all Revenue-Sharing Royalties paid to OWM through

such date and the aggregate amount of all Dealer Storefront Credits accrued for the benefit of OWM through such date (the “Remaining

Purchase Price”).

On March 10, 2025, shareholders Nabeel Youseph and

Marisa Hardyal-Youseph (“Plaintiffs”), who are former holders of common stock of Forza X1, Inc.

(“Forza”), commenced

an action in the Chancery Court of the State of Delaware, captioned Youseph, et al.

Visconti, et al., Case No.

2025-0262, by filing

a putative class action complaint (the “Complaint”) against Defendants Joseph Visconti, Kevin Schuyler, Neil Ross, Twin Vee

PowerCats Co.

and Twin Vee PowerCats, Inc.

(collectively, “Defendants”), related to Forza’s merger with us seeking an

unspecified award of damages, plus interest, costs, and attorneys’ fees.

Plaintiffs’ Complaint asserts claims (1) against

Defendants for breach of fiduciary duty in their capacities as controlling shareholders of Forza, (2) against Messrs.

Visconti, Schuyler,

and Ross for breach of fiduciary duty in their capacities as directors of Forza, and (3) against Mr.

Visconti for breach of fiduciary

duty in his capacity as an officer of Forza.

Defendants intend to vigorously defending against the claims.

At this time, the Company is

unable to estimate the ultimate outcome of this matter.

Changes in and Disagreements with Accountants on Accounting

1 unchanged sentence

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