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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-20 · 531 added, 518 removed, 663 unchanged (61% of the section changed)

9 unchanged sentences

Notes to the Consolidated Financial Statements

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and the Stockholders of

Vee Powercats Co.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To The Board of Directors and the Stockholders of

Twin Vee PowerCats Co.

and Subsidiaries

Pierce, Florida

on the 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,

Fort Pierce, Florida

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance

sheets of Twin Vee PowerCats Co.

and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated

statements of operations, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December

31, 2025, 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 audits.

We are a public accounting firm registered with the Public

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

with the U.S.

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

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

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

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

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

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

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

In our opinion, the

consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025

and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity

with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding the Company’s

Ability to Continue as a Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements,

the Company’s operating loss, negative cash from operations and accumulated deficit raise substantial doubt about its ability to

continue as a going concern.

Management’s evaluation of the events and conditions, and management’s plans regarding those

matters, are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

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

based on our audits.

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

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

federal securities laws and the applicable

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

We conducted our audits in accordance with the standards

of the PCAOB.

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

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

The Company is not required to have, nor were we

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

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

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

internal control over financial reporting.

Accordingly, we express no such opinion.

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

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

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the 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.

Our audits included performing procedures to assess

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

that respond to those risks.

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

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 provides

a reasonable basis for our opinion.

GRASSI & CO., CPAs, P.C.

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

Jericho, New York

March 20, 2025

VEE POWERCATS CO.

Glastonbury, Connecticut

February 27, 2026

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

Current Assets

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Restricted cash

Accounts receivable

Marketable securities

Inventories, net

Prepaid expenses and other current assets

Deferred offering expenses

Note receivable, current portion

Total current assets

1 unchanged sentence

Operating lease right of use asset, net

Note receivable less current portion, net of discount

Security deposit

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Finance lease liabilities - noncurrent

Operating lease liabilities - noncurrent

Total Liabilities

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$ 0.001 par value;

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

2,237,299 and 1,487,445 issued and outstanding at December 31, 2025 and 2024, respectively

Additional paid-in capital

Accumulated deficit

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

Equity attributable to noncontrolling interests

( 34,000,228 )

( 25,392,955 )

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

All share numbers have been retrospectively adjusted

for the one-for-ten reverse stock split effective April 7, 2025.

The accompanying notes are an integral part of these

consolidated financial statements

VEE POWERCATS CO.

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Years Ended December 31,

Cost of products sold (excluding depreciation & amortization)

Gross profit (loss)

Operating expenses:

income (expense):

gain on marketable securities

Retention Credit income

taxes provision

Selling, general and administrative

Salaries and wages

Professional fees

Impairment of property & equipment

Loss on lease termination

Loss on sale of property & equipment

Gain on sale of R&D assets

Depreciation and amortization

Research and development

Total operating expenses

Loss from operations

( 8,781,299 )

( 14,551,769 )

Other income (expense):

Dividend income

Interest expense

Interest income

Realized gain on marketable securities

Total other income

Loss before income tax

( 8,607,273 )

( 14,009,906 )

Income tax provision

( 8,607,273 )

( 14,009,906 )

Net loss attributable to noncontrolling interests

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

( 2,963,935 )

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

$ ( 8,607,273 )

$ ( 11,045,971 )

Basic and diluted loss per share of common stock

Weighted average number of shares of common stock outstanding

All share numbers have been retrospectively adjusted for the one-for-ten reverse stock split effective April 7, 2025.

The accompanying notes are an integral part of these

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AND SUBSIDIARIES

STATEMENTS OF STOCKHOLDERS' EQUITY

Preferred Stock

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Noncontrolling

Balance, January 1, 2023

January 1, 2024

$ ( 14,346,984 )

Subsidiary share issuance

Stock-based compensation

Subsidiary stock repurchase

issuance for Forza equity

( 5,574,487 )

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( 2,963,935 )

Balance, December 31, 2023

( 14,009,906 )

Share Issuance for Forza Equity

December 31, 2024

$ ( 25,392,955 )

Stock-based compensation

Noncontrolling

Balance, January 1, 2025

$ ( 25,392,955 )

Stock-based compensation

Issuance of common stock

Fractonal shares

( 8,607,273 )

2 unchanged sentences

$ ( 34,000,228 )

All share numbers have been retrospectively adjusted

for the one-for-ten reverse stock split effective April 7, 2025.

The accompanying notes are an integral part of these

consolidated financial statements

VEE POWERCATS CO.

TWIN VEE POWERCATS CO.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash Flows From Operating Activities

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Impairment of property & equipment

Gain of sale of R&D equipment

Loss on disposal of property & equipment

Change of right-of-use asset

Net change in fair value of marketable securities

Loss on lease termination

Loss on sale of property & equipment

Gain on sale of R&D assets

Amortization of right-of-use asset

Change in inventory reserve

1 unchanged sentence

Accounts receivable

( 1,296,045 )

Prepaid expenses and other current assets

Accounts payable

( 1,100,243 )

Accrued liabilities

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Realized gain on sale of marketable securities, available for sale

Net sales (purchases) of investment in marketable securities

( 1,343,702 )

Proceeds from sale of property and equipment

Net sales of investment in marketable securities

Proceeds from sale of property & equipment

Purchase of property and equipment

5 unchanged sentences

Cash Flows From Financing Activities

Proceeds from Forza Issuance of common stock

Proceeds from issuance of common stock, net of fees of $444,899

Deferred offering costs

Forza stock repurchase

Finance lease payments

Net (used in) cash provided by financing activities

Net cash provided by (used in) financing activities

Net change in cash, cash equivalents and restricted cash

1 unchanged sentence

( 9,048,993 )

Cash at beginning of the year

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

Cash, cash equivalents and restricted cash at beginning of the period

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

Supplemental Cash Flow Information

Cash paid for income taxes

Cash paid for interest

Reconciliation to the Consolidated Balance Sheet

Non-Cash Investing and Financing Activities

Sale of building in exchange for note receivable

Reconciliation to the Consolidated Balance Sheets

Cash and cash equivalents

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

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

Fix My Boat has been inactive for the majority of 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.

Fix My Boat utilized a franchise model for marine mechanics across the country.

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

On July 23, 2024, Fix My Boat, Inc.

into Twin Vee PowerCats Co.

On April 20, 2023, the Company formed AquaSport Co.,

a wholly owned subsidiary incorporated 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.

was merged into Twin

Vee PowerCats Co.

On May 28, 2025, the Company entered into a Mutual Release Agreement with the lessor, removing all obligations under

the lease, and returning to the lessor all property, plant and equipment, brand name and all other leased assets.

Forza X1, Inc.

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Power Sports, Inc.

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

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

(“Forza X1” or “Forza”)

on October 29, 2021.

Prior to Forza’s incorporation on October 15, 2021, the electric

boat business was operated as the Company’s Electra Power Sports™ Division.

Following the Company’s initial public offering

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.

Prior to Forza’s incorporation on October 15, 2021, the electric boat business was operated as the Company’s

Electra Power Sports™ Division.

Following the Company’s initial public offering 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).

On November 26, 2024 (the “Closing Date”), pursuant to the terms of the Agreement and

Plan of Merger, dated as of August 12, 2024 (the “Merger Agreement”), by and between Twin Vee, Twin Vee Merger Sub, Inc.

Forza, Merger Sub was merged with and into Forza (the “Merger”), with Forza surviving the Merger as a wholly-owned subsidiary

At the effective time of the Merger, (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 such 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.

On March 26, 2025, the Company formed Wizz Banger,

Inc., a wholly owned subsidiary in the state of Florida in connection with the Company’s plan to develop an enhanced used boat marketplace.

On June 5, 2025, 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.

or “Twin Vee”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), with Bahama Boat Works,

LLC (“Bahama Boat Works”), pursuant to which the Company acquired various tangible and intangible assets (the “Assets”)

from Bahama Boat Works relating to the Bahama boat brand (the “Bahama Boat Brand”).

Total consideration includes a $ 100,000

upfront payment and contingent consideration of up to $ 2,900,000 based on the future sales of Bahama’s existing 35’, 37’

41’ and 41GT boat models.

As of the acquisition date, only the $ 100,000 payment was recognized and allocated to inventory.

consideration will be recognized as an increase to the cost basis of the acquired boat molds (property,

plant & equipment) when it

becomes both probable and reasonably estimable, in accordance with ASC 450.

No liabilities were assumed, and no goodwill was recorded.

The Asset Purchase Agreement may be terminated by mutual written consent of the parties or by the Company, in its sole discretion, if

the Company decides to discontinue further development, production, or commercialization of the Bahama Boat Brand product line before

the balance of the contingent consideration due to Bahama Boat Works is paid.

Upon any such termination, the parties may either seek to

sell the Bahama Boat Brand and associated assets pursuant to the mechanism set forth in the Asset Purchase Agreement described below or,

the Company, in its sole discretion, may elect to return the Assets to Bahama Boat Works.

Going Concern

For the year ended December 31, 2025, we incurred

a loss from operations of $ 8,781,299 and a net loss of $ 8,607,273 .

As of December 31, 2025, we had accumulated deficits of $ 34,000,228 .

To address these conditions:

We have demonstrated improving recent recovery trends, with revenues and gross margins increasing compared to the prior year, however not to a level that yet supports a positive cash flow.

As of December 31, 2025, we maintain a cash, cash equivalents and restricted cash balance exceeding $ 1.6 million.

During the fourth quarter of 2025, we completed the

sale of our Marion, North Carolina facility, generating $ 500,000 in cash in the fourth quarter of 2025, and expected cash payments of

$500,000 in 2026 and $3,250,000 in 2027, plus interest at 5%.

On February 19, 2026, the Company announced the pricing

of a best-efforts public offering of 6,383,000 shares of common stock.

Each share of common is being sold at a public offering price of

$ 0.47 per share.

Total gross proceeds from the offering, before deducting placement agent fees and other offering expenses, are expected

to be approximately $ 3 million.

The offering closed on February 23, 2026.

Management continues to implement cost controls, operational improvements, and revenue initiatives to further strengthen our financial position.

Despite our ongoing efforts to mitigate these conditions,

there can be no assurance that our expenses will not increase in future periods or that the cash generated from operations in future periods

will be sufficient to satisfy our operating needs.

If we need to raise additional capital to fund our continued operations, there can

be no assurance that funding will be available on acceptable terms on a timely basis, or at all.

The various ways that we could raise

capital carry potential risks.

Any additional sources of financing will likely involve the issuance of our equity securities, which will

have a dilutive effect on our stockholders.

Any debt financing, if available, may involve restrictive covenants that may impact our ability

to conduct our business.

If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to fill new

orders and develop new products.

As such, we cannot conclude that such plans will be effectively implemented within one year after the

date that the financial statements included in this Report are filed with the SEC, and there is uncertainty regarding our ability to maintain

liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern.

If we are unable to generate sufficient revenue from operations and/or raise capital when needed or on attractive terms, we be forced

to delay, reduce or eliminate efforts to expand our dealer network or develop new models and may be forced to cease operations or liquidate

Principles of Consolidation

The consolidated financial

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

excludes losses attributable to noncontrolling interests.

The Company reports noncontrolling interests in consolidated entities as a component

of equity separate from the Company’s equity.

The audited consolidated

financial statements include the accounts of Twin Vee and its wholly owned subsidiaries as of December 31, 2025, Forza X1 and Wizz Banger,

Inc., collectively referred to as the “Company”.

Prior to November 26, 2024, the Company’s net loss excludes losses

attributable to noncontrolling interests.

The Company reported noncontrolling interests in consolidated entities as a component of equity

separate from the Company’s equity.

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

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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

22 unchanged sentences

January 1, 2024

December 31, 2024

December 31, 2025

Payment received for the future sale of a boat to

2 unchanged sentences

to the customer.

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.

At December 31, 2025 and 2024, and January 1, 2024 the Company had customer deposits of $ 395,932 , $ 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

28 unchanged sentences

these estimates.

Concentrations of Credit and Business Risk

Concentration of Credit and Business Risk

Financial instruments that potentially subject the

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

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

Credit risk on trade receivables is mitigated as a result

51 unchanged sentences

Accounts Receivable

The Company carries its accounts receivables net of an allowance for credit

The measurement and recognition of credit losses involves the use of judgment.

Management’s assessment of expected credit

losses includes consideration of current and expected economic conditions, market and industry factors affecting the Company’s customers

(including their financial condition), the aging of account balances, historical credit loss experience, customer concentrations, and

customer creditworthiness.

Management evaluates its experience with historical losses and then applies this historical loss ratio to financial

assets with similar characteristics.

The Company’s historical loss ratio or its determination of risk pools may be adjusted for

changes in customer, economy, market or other circumstances.

The Company may also establish an allowance for credit losses for specific

receivables when it is probable that the receivable will not be collected, and the loss can be reasonably estimated.

Amounts are written

off against the allowance when they are considered to be uncollectible, and reversals of previously reserved amounts are recognized if

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

The Company carries its accounts receivables net of

an allowance for credit losses.

The measurement and recognition of credit losses involve the use of judgment.

Management’s assessment

of expected credit losses includes consideration of current and expected economic conditions, market and industry factors affecting the

Company’s customers (including their financial condition), the aging of account balances, historical credit loss experience, customer

concentrations, and customer creditworthiness.

Management evaluates its experience with historical losses and then applies this historical

loss ratio to financial assets with similar characteristics.

The Company’s historical loss ratio or its determination of risk pools

may be adjusted for changes in customer, economy, market or other circumstances.

The Company may also establish an allowance for credit

losses for specific receivables when it is probable that the receivable will not be collected, and the loss can be reasonably estimated.

Amounts are written off against the allowance when they are considered to be uncollectible, and reversals of previously reserved amounts

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

Inventories are valued at the lower of cost and net

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of the assets, are charged to operations as incurred.

The company utilizes the following depreciable lives:

Schedule of property and equipment

Depreciable Life

Machinery and equipment

Furniture and fixtures

Leasehold improvements

Software and website development

Computer hardware and software

Electric prototypes and tooling

Assets under construction

Impairment of Long-Lived Assets

5 unchanged sentences

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

In 2024, the Company recorded an impairment on long-lived

assets of $ 1,674,000 .

In 2025, the Company recorded an additional impairment of $ 418,416 on long-lived assets.

Notes Receivable

The Company records long-term notes receivable at

their principal amount, net of an original issue discount, which represents the difference between the stated principal and the present

value of future cash flows discounted using the interest rate implicit in the loan.

The discount is amortized to interest income over

the term of the note using the effective interest method.

Accrued interest is recorded as earned.

Management evaluates notes receivable

for collectability and records an allowance for credit losses when necessary based on expected credit losses, historical experience, and

current conditions.

Product Warranty Costs

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and 2024, shipping and handling costs amounted to $ 197,127 and $ 281,915 , respectively.

The Company determines if an arrangement is a lease

at inception.

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

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

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

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

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

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

The operating lease ROU asset also includes any lease

payments made and is reduced by lease incentives.

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

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

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

basis over the lease term.

The Company is a lessee in multiple noncancelable

operating and financing leases.

If the contract provides the Company with the right to substantially all the economic benefits and the

right to direct the use of the identified asset, it is generally considered to be or contain a lease.

Right-of-Use (ROU) assets and lease

liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease

The ROU asset is also adjusted for any lease prepayments made, lease incentives received, and initial direct costs incurred.

The lease liability is initially and subsequently

recognized based on the present value of its future lease payments.

Variable payments are included in the future lease payments when those

variable payments depend on an index or a rate.

Increases (decreases) to variable lease payments due to subsequent changes in an index

or rate are recorded as variable lease expense (income) in the future period in which they are incurred.

The discount rate used is the implicit rate in the

lease contract, if it is readily determinable, or the Company’s incremental borrowing rate.

The Company uses the incremental borrowing

rate based on the information available at the commencement date for all leases.

The Company’s incremental borrowing rate for a

lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar

terms and in a similar economic environment.

The ROU asset for operating leases is subsequently

measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments),

plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives

received, and any impairment recognized.

Operating leases with fluctuating lease payments:

For operating leases with lease payments that

fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term.

The ROU asset for finance

leases is amortized on a straight-line basis over the lease term.

For all underlying classes of assets, the Company

has elected the practical expedient to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of

12 months or less at lease commencement and do not include an option to purchase the underlying asset that the Company is reasonably certain

Leases containing termination clauses in which either party may terminate the lease without cause and the notice period is

less than 12 months are generally deemed short-term leases with lease costs included in short term lease expense.

The Company recognizes

short-term lease cost on a straight-line basis over the lease term.

Supplier Concentrations

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During the year ended

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.

December 31, 2025, the Company purchased all engines (Mercury, Suzuki and Yamaha) for its boats under supplier agreements with three vendors.

Total purchases from these vendors were $ 2,344,366 .

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

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).

During the year ended December 31, 2024, the Company purchased all engines from three

vendors (Mercury, Suzuki and Yamaha) for its boats under supplier agreements.

Total purchases from these vendors were $ 2,573,337 .

Stock-Based Compensation

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jurisdiction and various states.

Recently Adopted Accounting Pronouncements

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

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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

As of December 31, 2023

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Marketable Securities

Corporate Bonds

Certificates of Deposits

Total marketable securities

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 are as follows:

Schedule of assets and liabilities measured fair value

recurring basis

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

The Company’s investments in corporate bonds

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

Measurement of Credit Losses for Accounts Receivable

and Contract Assets Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract

Assets was issued in July 2025 and allows entities to elect a practical expedient that assumes that the current conditions as

of the balance sheet date do not change for the remaining life of the asset.

2025-05 is effective for annual and interim

periods beginning after December 15, 2025, is to be applied on a prospective basis and allows for early adoption.

Adoption is not expected

to have a material impact on the Company's consolidated financial statements.

At December 31, 2025 and 2024 inventories consisted

of the following:

Schedule of inventories

Raw Materials

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Net inventory

Note Receivable

As of December 31, 2025, the Company had a note receivable with an outstanding

principal balance of $ 3,467,998 , consisting of $ 500,000 classified as current and $ 2,967,998 (net of $ 282,002 discount) classified as

long-term on the accompanying consolidated balance sheet.

The note bears interest at a stated rate of 5.0% per annum and accrues interest

on the outstanding principal balance.

Accrued interest receivable related to the note totaled $ 31,250 as of December 31, 2025, and is

included in prepaids and other current assets in the accompanying consolidated balance sheet.

The current portion of the note receivable

represents principal payments contractually due within twelve months of the balance sheet date, with the remaining balance due thereafter.

The Company evaluated the note for expected credit losses under ASC 326 and determined that no allowance was required at December 31,

Schedule of note receivable maturities

Note receivable, due 2026

Note receivable 2027

Property and Equipment

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consisted of the following:

Schedule of property and equipment

Machinery and equipment

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Less accumulated depreciation and amortization

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.

( 4,936,576 )

( 4,066,876 )

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.

and equipment for the years ended December 31, 2025 and 2024 were $ 1,734,230 and $ 1,745,217 , respectively.

On May 28, 2025, the Company

entered into a Mutual Release Agreement with a lessor, removing all obligations under the lease, and returning to the lessor all property,

plant and equipment, brand name and all other leased assets.

The Company recorded the elimination of ROU financial asset and lease liabilities

from its balance sheet, recording a loss on disposition of $ 57,903 .

In addition, the Company disposed of the related property and equipment

with a net book value of $ 2,545,899 .

Operating Leases

Operating right of use (“ROU”) assets

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The Company entered into the lease on January 1, 2020,

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

The current base rent payment is $ 36,465 per month including

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

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.

and as amended January 1, 2021.

The Lease Agreement has a 5-year term, expiring on December 31, 2025, with an option to renew.

Agreement was amended on December 31, 2025 and was converted to a month-to-month tenancy while the parties negotiate a subsequent lease

During the month-to-month tenancy, the Company pays Visconti Holdings, LLC $36,456 per month plus applicable sales and use

tax, which is currently 6.5% in St.

Lucie County, Florida.

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 base rent payment was $ 7,517 per month including property taxes, insurance,

and common area maintenance.

The lease required a $ 7,517 security deposit.

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Non-current portion

At December 31, 2024, future minimum lease payments

under the non-cancelable operating leases are as follows:

of future minimum lease payments under the non-cancelable

Year Ending December 31,

Total lease payment

Less imputed interest

The following summarizes other supplemental information about the Company’s

operating lease:

Schedule of operating lease cost

Weighted average discount rate

Weighted average remaining lease term (years)

December 31, 2025

December 31, 2024

Operating lease cost

At December 31, 2025, there were no future minimum

lease payments under the non-cancelable operating leases.

Finance Leases

Vehicle and Equipment Lease

The Company has various finance leases for two vehicles,

two forklifts, and a copy machine.

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

No new leases were entered into

The Company has various finance leases for two forklifts

and a copy machine.

All leases were for 60-month terms at rates ranging from 2.9 % to 7.5 % for both 2025 and 2024.

No new leases were entered

into in 2025 or 2024.

Finance lease are recorded in property and equipment,

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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.

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

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 the Company and $ 16,000 a month for any rent paid under the Agreement by AquaSport

AquaSport Co.

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.

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

AquaSport’s obligations under the Agreement have

been guaranteed by the Company.

entered into an agreement (the “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”).

On May 28, 2025, the Company entered into a Mutual

Release Agreement with the lessor, removing all obligations under the lease, and returning to the lessor all property, plant and equipment,

brand name and all other leased assets.

During the second quarter, the Company recorded the elimination of the assets and liabilities

from its consolidated balance sheet, recording a loss on termination of $57,903.

Finance leases on the AquaSport lease are recorded

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Accrued operating expense

Accrued construction expense

Warranty reserve

Short-term Debt

Motor Floorplan Arrangements

On December 31, 2025 and 2024, 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.

Interest on our Wells Fargo line, after

the free floor plan period, 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, 2025 and 2024, the interest rate on motors in stock was 1.2% and 11.1%,

respectively.

Interest on our Yamaha line, after the free floor

plan period, is calculated on the average daily balance +4%, with a minimum prime at 8.0%.

On December 31, 2025 and 2024, the interest

rate on motors in stock was 5.1 % and 11.8 %, respectively.

On December 31, 2025 and 2024, the outstanding balance

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was $ 238,125 and $ 255,649 , respectively.

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

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

Notes Payable – SBA EIDL Loan

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from a company owned by its CEO.

During the years ended December 31, 2024 and 2023,

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

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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.

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

No management fees have been recorded in the period after the

date of the merger of November 26, 2024.

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

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For the years ended December 31, 2025 and 2024, the lease expense was $ 0 and $ 7,500 , respectively.

was canceled in March 2024.

The lease was

canceled in March 2024.

Commitments and Contingencies

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60 units, as of December 31, 2025, and December 31, 2024, respectively.

The Company incurred no impact from repurchase events during

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

The Company is currently involved in various civil

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

Irrevocable Line of Credit

As of December 31, 2025, the Company maintained $ 215,117 in restricted

cash held in a certificate of deposit for the benefit of Yamaha to secure certain obligations and support the Company’s ongoing

level of business related to motor sales.

The funds are not available for general corporate purposes and will remain restricted in accordance

with the terms of the underlying arrangement.

The restricted cash balance is presented separately within the consolidated balance sheets.

From time to time, we may become involved in legal

proceedings or be subject to claims arising in the ordinary course of our business.

Except as disclosed, we are not presently a party

to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our

business, operating results, financial condition or cash flows.

Regardless of the outcome, litigation can have an adverse impact on us

because of defense and settlement costs, diversion of management resources and other factors.

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 Court of Chancery in 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 Twin Vee 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 deny the allegations and intend to vigorously defend against the claims.

time, as the matter is in the pleadings stage, the Company is unable to estimate or project the ultimate outcome of this matter.

Stockholders’ Equity

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related to this share issuance.

On May 8, 2025, we entered into an underwriting agreement

(the “Underwriting Agreement”) with ThinkEquity LLC, as representative of the several underwriters named therein (the “Representative”),

pursuant to which we agreed to sell to the Representative in a firm commitment underwritten public offering (the “May 2025 Offering”)

an aggregate of 750,000 shares (the “Shares”) of our common stock at the public offering price of $ 4.00 per share, resulting

in gross proceeds of $ 3.0 million, before deducting underwriting discounts, commissions and offering expenses.

The Shares were sold pursuant

to an effective shelf registration statement on Form S-3 (File No.

333-266858) filed with the SEC under the Securities Act and declared

effective by the Commission on August 24, 2022, a base prospectus, dated August 24, 2022, included in the Registration Statement at the

time it originally became effective, and a prospectus supplement, dated May 8, 2025, filed with the Commission pursuant to Rule 424(b)

under the Securities Act.

Pursuant to the Underwriting Agreement, we also issued to designees of the Representative unregistered warrants

to purchase up to 37,500 shares of our common stock, which equals 5% of the shares of common stock purchased in the May 2025 Offering.

The May 2025 Offering closed on May 12, 2025.

The net proceeds to us from the May 2025 Offering, after deducting the underwriting discount,

the Representative’s fees and expenses and our estimated offering expenses, were $ 2,555,101 .

Common Stock Warrants

As of December 31, 2024, the Company had outstanding

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.

Common Stock Warrants

As of December 31, 2025 and December 31, 2024, the

Company had outstanding warrants to purchase an aggregate of 56,237 shares of common stock:

warrants to purchase 15,000 shares of common stock at an exercise price of $ 75.00 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 14,375 shares of common stock at an exercise price of $ 34.38 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 10,550 shares of common stock at an exercise price of $ 102.20 .

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.

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 16,312 shares of common stock at an exercise price of $ 30.70 .

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

December 31, 2024.

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 years ended

December 31, 2025 and 2024.

Equity Compensation Plan

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The number of awards under the Plan

automatically increased on January 1, 2022.

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

automatically increases on January 1 of each year.

As of December 31, 2025, there were 139,55 1 shares remaining available for grant under

Accounting for Stock-Based Compensation

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Company recorded $ 303,133 and $ 1,177,140 , respectively, of stock-based compensation expense, which is included in salaries and

wages on the accompanying consolidated statement of operations.

wages on the accompanying consolidated statements of operations.

Stock Options

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5.2 – 5.8 years

1.4 - 6.5 years

Expected average volatility

48.4 % – 49.0 %

39.1 – 49.6 %

Expected dividend yield

Risk-free interest rate

3.77 – 4.55 %

0.72 – 1.5 - 4.72 %

The expected volatility of the option is determined

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Weighted Average

Average Remaining life

Weighted Average Remaining life

Exercise Price

Outstanding, December 31, 2022

Outstanding, January 1, 2024

Forfeited/canceled

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Exercisable options, December 31, 2025

At December 31, 2024, 961,405 share of Twin Vee options

At December 31, 2025, 63,236 shares of Twin Vee options

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

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Fair Value Price

Outstanding, December 31, 2022

Outstanding, January 1, 2024

Forfeited/canceled

2 unchanged sentences

Outstanding, December 31, 2025

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

Year Ended December 31

Wizz Banger, Inc.

Stock Options

On June 12, 2025, the Company’s wholly owned subsidiary, Wizz Banger,

Inc., granted stock options to certain members of its executive team under a newly adopted equity incentive plan.

The grant consisted

of 2,800,000 options to acquire common shares of the subsidiary at an exercise price of $0.12 per share, which equaled the estimated fair

market value of the subsidiary’s common stock on the grant date, as determined by a third-party valuation.

The options are subject to 12-month cliff vesting, whereby no portion of

the award vests unless the executive remains employed by the subsidiary for the full 12-month period following the grant date.

Upon completion

of the service period, 100% of the options will vest.

The Company is recognizing compensation expense on a straight-line bases

over the vesting period.

As of December 31, 2025, $ 102,246 of compensation expense has been recognized.

The total grant-date fair value

of the award was estimated to be approximately $ 188,761 , calculated using the Black-Scholes option pricing model with the following assumptions:

Expected Term:

Expected average volatility

Expected dividend yield

Expected Volatility:

55 % (based on comparable SaaS companies)

Risk-Free Interest Rate:

2.98 – 4.72 %

The expected volatility of the option is determined

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

The Company estimated the expected

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

The risk-free interest

rate is determined using the U.S.

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

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

Schedule of options activity

Options Outstanding

Weighted Average

Remaining life

Exercise Price

Fair value of option

Outstanding, December 31, 2022

Forfeited/canceled

Outstanding, December 31, 2023

Exercisable options, December 31, 2023

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

Dividend Yield:

Fair Value per Option:

Customer Concentration

Significant dealers and suppliers are those that account

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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.

ended December 31, 2025, two individual customers had sales of over 10 % of our total sales and represented 27 % of total sales.

the year ended December 31, 2024, three individual dealers had sales of over 10 % of our total

sales and represented 40 % of total sales.

Due to operating losses and the recognition of valuation

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Valuation allowance

( 29,300,000 )

( 16,700,000 )

Net deferred tax asset

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2025 and 2024, the valuation allowance increased by approximately $ 12,600,000 and $ 8,100,000 , 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

at federal statutory rate

at state rate net of federal benefit

in valuation allowance

Tax at federal statutory rate

Tax at state rate net of federal benefit

Change in valuation allowance

Provision for taxes

The Company’s tax positions for 2020 to 2022

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Numerator for basic and diluted net loss per share:

Net loss attributable to stockholders of Twin Vee PowerCats Co.

$ ( 8,607,273 )

$ ( 11,045,971 )

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

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potentially dilutive securities were antidilutive.

All share numbers have been retrospectively adjusted for the one-for-ten reverse stock split effective April 7, 2025.

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 Company reports segment information based on the “management”

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

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.

The Company operates in two reportable segments:

(1) Twin Vee PowerCats, which designs, manufactures, and sells recreational

and commercial powerboats;

and (2) Wizz Banger, Inc., a development-stage subsidiary with plans to develop an innovative online marketplace

leveraging artificial intelligence (AI) to transform how customers search for and purchase recreational marine assets.

While the Company manages Wizz Banger, Inc.

as a distinct operating segment,

it does not currently meet the quantitative thresholds for separate disclosure as a reportable segment under ASC 280-10-50-12.

Specifically,

for the year ended December 31, 2025, Wizz Banger, Inc.

did not satisfy any of the three quantitative tests requiring separate presentation,

as it represented less than 10% of the Company’s consolidated revenues, less than 10% of consolidated assets, and less than 10%

of the greater, in absolute amount, of the combined profit of profitable segments or the combined loss of loss-making segments, based

on the measure of segment performance regularly reviewed by the Company’s Chief Operating Decision Maker (“CODM”), which

excludes software development costs and non-cash stock-based compensation.

Although Wizz Banger, Inc.

qualifies as an operating segment

due to the availability of discrete financial information and management’s ongoing evaluation of its operating results, it has not

achieved sufficient scale to be considered reportable.

Accordingly, the financial results of Wizz Banger, Inc.

are aggregated and presented

within the consolidated results of Twin Vee PowerCats for segment reporting purposes.

Subsequent Events

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

that occurred after December 31, 2025 through February 27, 2025, which is the date that the consolidated financial statements were available

to be issued.

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

2021 Stock Incentive Plan

On January 1, 2025, our 2021 Stock Incentive Plan

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available for issuance was 384,115 .

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.

February 2026 Offering

On February 19, 2026, we entered into a placement

agency agreement (the “Placement Agency Agreement”) with ThinkEquity LLC, as sole placement agent (the “Placement Agent”),

pursuant to which we agreed to issue and sell directly to various investors in a best efforts public offering (the “February 2026

Offering”) an aggregate of 6,383,000 shares (the “Shares”) of our common stock at a public offering price of $ 0.47 per

The Shares were sold pursuant to a registration statement on Form S-1 (File No.

333-292661) relating to the securities filed with

the Securities and Exchange Commission (“SEC”) and became effective on February 13, 2026, and a prospectus, dated February

The February 2026 Offering closed on February 23, 2026.

The net proceeds to us from the February 2026 Offering, after deducting

the underwriting discount, the Representative’s fees and expenses and our estimated offering expenses, were approximately $ 2,540,109 .

Changes in and Disagreements with Accountants on Accounting

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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 8. Financial Statements and Supplementary Data