Twin Vee PowerCats, Co. 10-K

Item 8. Financial Statements and Supplementary Data. 54 Twin Vee Powercats Co. and subsidiaries CONSOLIDATED FINANCIAL STATEMENTS Contents Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Stockholders’ Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to the Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To The Board of Directors and the Stockholders of Twin Vee PowerCats Co. and Subsidiaries 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, 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. 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. Glastonbury, Connecticut February 27, 2026 606 F- 2 TWIN VEE POWERCATS CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, December 31, 2025 2024 Assets Current Assets Cash and cash equivalents $ 1,431,578 $ 7,491,123 Restricted cash 215,117 215,117 Inventories, net 2,492,741 2,516,760 Prepaid expenses and other current assets 227,781 196,141 Deferred offering expenses 30,000 — Note receivable, current portion 500,000 — Total current assets 4,897,217 10,419,141 Property and equipment, net 8,342,961 15,037,798 Operating lease right of use asset, net — 390,686 Note receivable less current portion, net of discount 2,967,998 — Security deposit 26,193 40,280 Total Assets $ 16,234,369 $ 25,887,905 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 1,114,835 $ 2,215,078 Accrued liabilities 714,248 794,253 Contract liabilities 395,932 80,000 Finance lease liabilities 19,498 221,929 Operating lease liabilities — 436,730 Total current liabilities 2,244,513 3,747,990 Economic Injury Disaster Loan 499,900 499,900 Finance lease liabilities - noncurrent 22,145 2,423,165 Total Liabilities 2,766,558 6,671,055 Commitments and contingencies (Note 11) Stockholders’ equity: Preferred stock: 10,000,000 authorized; $ 0.001 par value; no shares issued and outstanding — — Common stock: 50,000,000 authorized; $ 0.001 par value; 2,237,299 and 1,487,445 issued and outstanding at December 31, 2025 and 2024, respectively 2,237 1,487 Additional paid-in capital 47,465,802 44,608,318 Accumulated deficit ( 34,000,228 ) ( 25,392,955 ) Total stockholders’ equity 13,467,811 19,216,850 Total Liabilities and Stockholders’ Equity $ 16,234,369 $ 25,887,905 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 F- 3 TWIN VEE POWERCATS CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2025 2024 Net sales $ 14,819,130 $ 14,388,517 Cost of products sold (excluding depreciation & amortization) 13,562,025 15,139,942 Gross profit (loss) 1,257,105 ( 751,425 ) Operating expenses: Selling, general and administrative 2,502,402 3,095,868 Salaries and wages 4,325,348 4,906,819 Professional fees 867,090 1,669,474 Impairment of property & equipment 418,416 1,674,000 Loss on lease termination 57,903 — Loss on sale of property & equipment 133,015 172,684 Gain on sale of R&D assets — ( 50,097 ) Depreciation and amortization 1,734,230 1,745,217 Research and development — 586,379 Total operating expenses 10,038,404 13,800,344 Loss from operations ( 8,781,299 ) ( 14,551,769 ) Other income (expense): Dividend income — 510,099 Other income 56,612 63,391 Interest expense ( 81,229 ) ( 222,594 ) Interest income 198,643 150,553 Realized gain on marketable securities — 40,414 Total other income 174,026 541,863 Loss before income tax ( 8,607,273 ) ( 14,009,906 ) Income tax provision — — Net loss ( 8,607,273 ) ( 14,009,906 ) Less: Net loss attributable to noncontrolling interests — ( 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 $ ( 4.37 ) $ ( 11.01 ) Weighted average number of shares of common stock outstanding 1,968,121 1,003,204 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 F- 4 TWIN VEE POWERCATS CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Additional Common Stock Paid-in Accumulated Noncontrolling Shares Amount Capital Deficit Interests Total Balance, January 1, 2024 952,000 $ 952 $ 37,857,225 $ ( 14,346,984 ) $ 8,538,422 $ 32,049,615 Stock-based compensation — — 1,177,140 — — 1,177,140 Share issuance for Forza equity 535,445 535 5,573,953 — ( 5,574,487 ) — Net loss — — — ( 11,045,971 ) ( 2,963,935 ) ( 14,009,906 ) Balance, December 31, 2024 1,487,445 $ 1,487 $ 44,608,318 $ ( 25,392,955 ) $ — $ 19,216,850 Additional Common Stock Paid-in Accumulated Noncontrolling Shares Amount Capital Deficit Interests Total Balance, January 1, 2025 1,487,445 $ 1,487 $ 44,608,318 $ ( 25,392,955 ) $ — $ 19,216,850 Stock-based compensation — — 303,133 — — 303,133 Issuance of common stock 750,000 750 2,554,351 — — 2,555,101 Fractonal shares ( 146 ) — — — — — Net loss — — — ( 8,607,273 ) — ( 8,607,273 ) Balance, December 31, 2025 2,237,299 $ 2,237 $ 47,465,802 $ ( 34,000,228 ) $ — $ 13,467,811 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 F- 5 TWIN VEE POWERCATS CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended 2025 2024 Cash Flows From Operating Activities Net loss $ ( 8,607,273 ) $ ( 14,009,906 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock based compensation 303,133 1,177,140 Depreciation and amortization 1,734,230 1,745,217 Impairment of property & equipment 418,416 1,674,000 Loss on lease termination 57,903 — Loss on sale of property & equipment 133,015 172,684 Gain on sale of R&D assets — ( 50,097 ) Amortization of right-of-use asset 390,686 464,304 Change in inventory reserve 90,688 ( 285,584 ) Changes in operating assets and liabilities: Accounts receivable — 80,160 Inventories ( 66,669 ) 2,703,682 Prepaid expenses and other current assets ( 31,640 ) 267,081 Accounts payable ( 1,100,243 ) ( 183,947 ) Accrued liabilities ( 80,005 ) ( 281,259 ) Operating lease liabilities ( 436,730 ) ( 482,897 ) Contract liabilities 315,932 35,805 Net cash used in operating activities ( 6,878,557 ) ( 6,973,617 ) Cash Flows From Investing Activities Security deposit 14,087 11,137 Realized gain on sale of marketable securities, available for sale — ( 40,414 ) Net sales of investment in marketable securities — 4,503,356 Proceeds from sale of property & equipment 552,478 6,000 Purchase of property and equipment ( 2,157,199 ) ( 6,341,711 ) Net cash used in investing activities ( 1,590,634 ) ( 1,861,632 ) Cash Flows From Financing Activities Proceeds from issuance of common stock, net of fees of $444,899 2,555,101 — Deferred offering costs ( 30,000 ) — Finance lease payments ( 115,455 ) ( 213,744 ) Net cash provided by (used in) financing activities 2,409,646 ( 213,744 ) Net change in cash, cash equivalents and restricted cash ( 6,059,545 ) ( 9,048,993 ) Cash, cash equivalents and restricted cash at beginning of the period 7,706,240 16,755,233 Cash, cash equivalents and restricted cash at end of the period $ 1,646,695 $ 7,706,240 Supplemental Cash Flow Information Cash paid for interest $ 347,749 $ 435,161 Non-Cash Investing and Financing Activities Sale of building in exchange for note receivable $ 3,750,000 — Reconciliation to the Consolidated Balance Sheets Cash and cash equivalents $ 1,431,578 $ 7,491,123 Restricted cash 215,117 215,117 Total cash, cash equivalents and restricted cash $ 1,646,695 $ 7,706,240 The accompanying notes are an integral part of these consolidated financial statements F- 6 TWIN VEE POWERCATS CO. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 and 2024 1. Organization and Summary of Significant Accounting Policies Organization Twin Vee PowerCats Co. (“Twin Vee” or the “Company”) was incorporated as Twin Vee Catamarans, Inc., in the state of Florida, on December 1, 2009. On April 7, 2021, the Company filed a Certificate of Conversion to register and incorporate in the state of Delaware and changed the company name to Twin Vee PowerCats Co. The Certificate of Incorporation for Twin Vee PowerCats Co. was also filed on April 7, 2021. On September 1, 2021, the Company formed Fix My Boat, Inc., (“Fix My Boat”), a wholly owned subsidiary. Fix My Boat utilized a franchise model for marine mechanics across the country. 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, Inc. was merged 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. 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. was initially incorporated as Electra Power Sports, 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). 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. and Forza, 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, (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” 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. Contingent consideration will be recognized as an increase to the cost basis of the acquired boat molds (property, F- 7 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 assets. Principles of Consolidation 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. F- 8 Basis of Presentation The accompanying consolidated financial statements and the related notes have been prepared in accordance with accounting principles generally accepted in the United State of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Revenue Recognition The Company’s revenue is derived primarily from the sale of boats, motors and trailers to its independent dealers. The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to the dealer. For the majority of sales, this occurs when the product is released to the carrier responsible for transporting it to a dealer. The Company typically receives payment within five business days of shipment. Revenue is measured as the amount of consideration it expects to receive in exchange for a product. The Company offers dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in net sales in the 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. Schedule of accounts receivable Total accounts receivable January 1, 2024 $ 80,160 December 31, 2024 $ — December 31, 2025 $ — Payment received for the future sale of a boat to a customer is recognized as a customer deposit. Customer deposits are recognized as revenue when control over promised goods is transferred to the customer. At December 31, 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 Dealers earn wholesale rebates based on purchase volume commitments and achievement of certain performance metrics. The Company estimates the amount of wholesale rebates based on historical achievement, forecasted volume, and assumptions regarding dealer behavior. Rebates that apply to boats already in dealer inventory are referred to as retail rebates. The Company estimates the amount of retail rebates based on historical data for specific boat models adjusted for forecasted sales volume, product mix, dealer and consumer behavior, and assumptions concerning market conditions. The Company also utilizes various programs whereby it offers cash discounts or agrees to reimburse its dealers for certain floor plan interest costs incurred by dealers for limited periods of time, generally ranging up to six months. Other Revenue Recognition Matters Dealers generally have no right to return unsold boats. Occasionally, the Company may accept returns in limited circumstances and at the Company’s discretion under its warranty policy. The Company may be obligated, in the event of default by a dealer, to accept returns of unsold boats under its repurchase commitment to floor financing providers, who are able to obtain such boats through foreclosure. The repurchase commitment is on an individual unit basis with a term from the date it is financed by the lending institution through the payment date by the dealer, generally not exceeding 30 months. F- 9 The Company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from the determination of the transaction price for all contracts. The Company has not adjusted net sales for the effects of a significant financing component because the period between the transfer of the promised goods and the customer’s payment is expected to be one year or less. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Concentration of Credit and Business Risk Financial instruments that potentially subject the Company to concentration of credit risk primarily consist of trade receivables. Credit risk on trade receivables is mitigated as a result of the Company’s use of trade letters of credit, dealer floor plan financing arrangements, and the geographically diversified nature of the Company’s customer base. The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $ 250,000 are at risk. As of December 31, 2025 and 2024, the Company had $ 798,146 and $ 6,740,623 , respectively, in excess of FDIC insured limits. 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, 2025 and 2024, the Company had cash, cash equivalents, and restricted cash of $ 1,646,695 and $ 7,706,240 , 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, 2025 and 2024, included within restricted cash on the Company’s consolidated balance sheets is an irrevocable letter of credit for $ 215,117 and $ 215,117 , respectively. Marketable Securities 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 other income. Fair Value of Financial Instruments The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair Value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: F- 10 ● Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. ● Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. ● Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation. Financial instruments measured as fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The carrying amounts of cash equivalents approximate their fair value due to their liquid or short-term nature, such as accounts receivable and payable, and other financial instruments in current assets or current liabilities. Accounts Receivable 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 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, 2025 and 2024, the provision for excess or obsolete inventories is $ 224,720 and $ 134,032 , respectively. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and amortization, using the straight-line method over the assets’ useful life. Leasehold improvements are amortized over the shorter of the assets’ useful life or the lease term. The estimated useful lives of property and equipment range from three to five years. Upon sale or retirement, the cost and related accumulated depreciation is eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred. The company utilizes the following depreciable lives: F- 11 Schedule of property and equipment Depreciable Life in years Machinery and equipment 3 - 20 Furniture and fixtures 5 - 7 Land N/A Leasehold improvements 3 - 20 Software and website development 5 Computer hardware and software 5 Boat molds 5 - 15 Vehicles 5 Electric prototypes and tooling 5 Assets under construction N/A Impairment of Long-Lived Assets Management assesses the recoverability of its long-lived assets when indicators of impairment are present. If such indicators are present, recoverability of these assets is determined by comparing the undiscounted net cash flows estimated to result from those assets over the remaining life to the assets’ net carrying amounts. If the estimated undiscounted net cash flows are less than the net carrying amount, the assets would be adjusted to their fair value, based on appraisal or the present value of the undiscounted net cash flows. 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 The Company accrues for warranty costs based on the expected material and labor costs to provide warranty replacement products. The methodology used in determining the liability for warranty cost is based upon historical information and experience. The Company’s warranty reserve is calculated as the gross sales multiplied by the historical warranty expense return rate. The 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 product warranty liability for the years ended December 31, 2025 and 2024, respectively: Schedule of product warranty liability 2025 2024 Balance as of January 1 $ 213,546 $ 192,894 Less: Payments made ( 340,742 ) ( 217,609 ) Add: Provision for current years warranty 362,356 238,261 Balance as of December 31 $ 235,160 $ 213,546 Advertising Advertising and marketing costs are expensed as incurred. During the years ended December 31, 2025 and 2024, advertising costs incurred by the Company totaled $ 76,488 and $ 206,333 , respectively, and are included in selling, general and administrative expenses in the accompanying consolidated statements of operations. F- 12 Research and Development The Company expenses research and development costs relating to new product development as incurred. For the years ended December 31, 2025 and 2024, research and development costs amounted to $ 0 and $ 586,378 , respectively. Shipping and Handling Costs Shipping and handling costs includes those costs incurred to transport product to customers and internal handling costs, which relate to activities to prepare goods for shipment. The Company has elected to account for shipping and handling costs associated with outbound freight after control over a product has transferred to a customer as a fulfillment cost. The Company includes shipping and handling costs, including cost billed to customers, in cost of 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 transporter. For the years ended December 31, 2025, and 2024, shipping and handling costs amounted to $ 197,127 and $ 281,915 , respectively. Leases 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 term. 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 to exercise. 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. F- 13 Supplier Concentrations The Company is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms. The loss of certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse effect on the Company. Business risk insurance is in place to mitigate the business risk associated with sole suppliers for sudden disruptions such as those caused by natural disasters. The Company is dependent on third-party equipment manufacturers, distributors, and dealers for certain parts and materials utilized in the manufacturing process. During the year ended December 31, 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, 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 The Company recognizes stock-based compensation costs for its restricted stock and restricted stock units, measured at the fair value of each award at the time of grant, as an expense over the period during which an employee is required to provide service. Compensation cost is recognized over the service period for the fair value of awards that vest. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recover or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company files income tax returns in the U.S. federal jurisdiction and various states. 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 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 disclosures. ASU 2025-05: 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. ASU No. 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. 2. Inventories At December 31, 2025 and 2024 inventories consisted of the following: F- 14 December 31, December 31, 2025 2024 Raw Materials $ 2,517,006 $ 2,573,553 Work in Process 112,100 — Finished Product 88,354 77,239 Total Inventory $ 2,717,460 $ 2,650,792 Reserve for Excess and Obsolete ( 224,720 ) ( 134,032 ) Net inventory $ 2,492,740 $ 2,516,760 3. 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, 2025. Schedule of note receivable maturities Schedule of note receivable maturities Note receivable, due 2026 $ 500,000 Note receivable 2027 3,250,000 3,750,000 Discount ( 282,002 ) $ 3,467,998 4. Property and Equipment At December 31, 2025 and 2024, property and equipment consisted of the following: December 31, December 31, 2025 2024 Machinery and equipment $ 3,354,246 $ 2,610,977 Furniture and fixtures 36,816 36,816 Land — 1,119,758 Leasehold improvements 3,219,520 1,228,860 Software and website development 1,089,155 300,935 Computer hardware and software 120,328 120,245 Boat molds 5,347,338 7,270,411 Vehicles 94,534 143,360 Electric prototypes and tooling — 142,526 Assets under construction 17,600 6,130,786 13,279,537 19,104,674 Less accumulated depreciation and amortization ( 4,936,576 ) ( 4,066,876 ) $ 8,342,961 $ 15,037,798 F- 15 Depreciation and amortization expense of property 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 . 5. Operating Leases Operating right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right of use assets represent our right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. The Company’s office lease contains rent escalations over the lease term. The Company recognizes expense for this office lease on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. The Company leases its office and warehouse facilities, and the land which are located at 3101 S US-1, Fort Pierce, Florida (the “Property”) from Visconti Holdings, LLC. Visconti Holdings, LLC is a single member LLC that holds the ownership of the property, and its sole member is Joseph C. Visconti, the CEO of the Company and the CEO and majority shareholder of the Company’s parent company. The Company entered into the lease on January 1, 2020, and as amended January 1, 2021. The Lease Agreement has a 5-year term, expiring on December 31, 2025, with an option to renew. The Lease Agreement was amended on December 31, 2025 and was converted to a month-to-month tenancy while the parties negotiate a subsequent lease agreement. 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. The lease ended on October 15, 2024. At December 31, 2025 and 2024, supplemental balance sheet information related to leases were as follows: Schedule of leases supplemental balance sheet information December 31, December 31, 2025 2024 Operating lease ROU asset $ — $ 390,686 December 31, December 31, 2025 2024 Operating lease liabilities: Current portion $ — $ 436,730 Non-current portion — — Total $ — $ 436,730 F- 16 Schedule of operating lease cost Year Ended December 31, 2025 Year Ended December 31, 2024 Operating lease cost $ 390,686 $ 464,304 At December 31, 2025, there were no future minimum lease payments under the non-cancelable operating leases. 6. Finance Leases Vehicle and Equipment Lease 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, net on the consolidated balance sheet. Schedule of Finance lease December 31, December 31, 2025 2024 Cost $ 76,972 $ 220,332 Accumulated Depreciation ( 33,269 ) ( 85,558 ) Net Book Value $ 43,703 $ 134,774 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 (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 in property and equipment, net on the consolidated balance sheet. Schedule of finance lease in property and equipment December 31, December 31, 2025 2024 Land $ — $ 1,000,000 Building — 100,000 Molds — 2,000,000 — 3,100,000 Accumulated depreciation — ( 438,138 ) Total $ — $ 2,661,862 F- 17 At December 31, 2025 and 2024, supplemental balance sheet information related to finance leases were as follows: Schedule of supplemental balance sheet of finance lease December 31, December 31, 2025 2024 Finance lease liabilities: Current portion $ 19,498 $ 221,929 Non-current portion 22,145 2,423,165 Total $ 41,643 $ 2,645,094 At December 31, 2025, future minimum lease payments under the non-cancelable finance leases are as follows: Schedule of future minimum lease payments of finance lease Year Ending December 31, 2026 $ 21,518 2027 18,412 2028 4,657 Total lease payment 44,587 Less imputed interest ( 2,944 ) Total $ 41,643 The following summarizes other supplemental information about the Company’s finance lease: Schedule of summarize other supplemental information of finance lease December 31, December 31, 2025 2024 Weighted average discount rate 6.4 % 3.0 % Weighted average remaining lease term (years) 2.2 % 3.3 % 7. Accrued Liabilities At December 31, 2025 and 2024, accrued liabilities consisted of the following: Schedule of accrued liabilities December 31, December 31, 2025 2024 Accrued wages and benefits $ 233,166 $ 206,041 Accrued interest 146,933 96,793 Accrued operating expense 98,989 277,873 Warranty reserve 223,049 213,546 Total $ 702,138 $ 794,253 8. 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, 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 with Wells Fargo was $ 57,285 and $ 130,690 , respectively. On December 31, 2025 and 2024, the outstanding balance with Yamaha Motor Finance was $ 238,125 and $ 255,649 , respectively. The outstanding balances are included in accounts payable on the consolidated balance sheets. F- 18 9. Notes Payable – SBA EIDL Loan On April 22, 2020, the Company received an SBA Economic Injury Disaster Loan (“EIDL”) in the amount of $ 499,900 . The loan is in response to the COVID - 19 pandemic. The loan is a 30 -year loan with an interest rate of 3.75 %, monthly payments of $ 2,437 to begin October 22, 2022, under the EIDL program, which is administered through the SBA. 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 EIDL loan, the Company granted the SBA a continuing security interest in and to any and all collateral to secure payment and performance of all debts, liabilities and obligations of the Company to the SBA under the EIDL loan. The collateral includes substantially all tangible and intangible personal property of the Company. A summary of the minimum maturities of term debt follows for the years set forth below. Schedule of minimum maturities Year Ending December 31, 2026 $ — 2027 6,611 2028 10,932 2029 10,387 2030 12,744 2031 and thereafter 459,226 Total $ 499,900 10. Related Party Transactions As discussed in note 5, the Company leases its facilities from a company owned by its CEO. 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 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 for a duplex on a property in Black Mountain, NC, to be used by its traveling employees during the construction of its new manufacturing facility, for $ 2,500 per month. After the initial term of the lease, it was extended on a month-to-month basis. In August of 2023, 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, 2025 and 2024, the lease expense was $ 0 and $ 7,500 , respectively. The lease was canceled in March 2024. 11. Commitments and Contingencies Repurchase Obligations Under certain conditions, the Company is obligated to repurchase new inventory repossessed from dealerships by financial institutions that provide credit to the Company’s dealers. The maximum obligation of the Company under such floor plan agreements totaled $ 12,018,684 or 65 units, and $ 10,265,229 or 60 units, as of December 31, 2025, and December 31, 2024, respectively. F- 19 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. Litigation 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. v. 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. At this time, as the matter is in the pleadings stage, the Company is unable to estimate or project the ultimate outcome of this matter. 12. Stockholders’ Equity Twin Vee Common Stock Issuance On October 3, 2022, the Company issued and sold to ThinkEquity LLC, as the underwriter in a firm commitment underwritten public offering (the “ Offering ”) pursuant to the term of an underwriting agreement that the Company entered into with ThinkEquity LLC on September 28, 2022 (the “Underwriting Agreement”),an aggregate of 2,500,000 shares of the Company’s common stock, par value $ 0.001 per share, at a public offering price of $ 2.75 per share, for gross proceeds of $ 6,875,000 , before deducting underwriting discounts, commissions and offering expenses. Pursuant to the Underwriting Agreement, the Company 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. F- 20 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 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. ● 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 years ended December 31, 2025 and 2024. 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 automatically increases on January 1 of each year. As of December 31, 2025, there were 139,55 1 shares remaining available for grant under this Plan. F- 21 Accounting for Stock-Based Compensation Stock Compensation Expense For the year ended December 31, 2025 and 2024, the 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 statements of operations. Stock Options Under the Company’s 2021 Stock Incentive Plan the Company has issued stock options. A stock option grant gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. The Company typically issues options that vest pro rata on a monthly basis over various periods. Under the terms of the Plan, the contractual life of the option grants may not exceed ten years. The Company utilizes the Black-Scholes model to determine fair value of stock option awards on the date of grant. The Company utilized the following assumptions for option grants during the years ended December 31, 2025 and 2024: Schedule of assumptions Year Ended December 31 Year Ended December 31, 2025 2024 Expected term 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 4.1 % 3.8 – 4.6 % 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 option. The Company has never paid a dividend, and as such the dividend yield is 0.0 % Schedule of option activity Options Outstanding Number of Weighted Average Weighted Average Remaining life Fair value Options Exercise Price (years) of options Outstanding, January 1, 2024 127,093 $ 39.85 8.04 $ 2,213,178 Granted 135,236 21.90 6.50 266,495 Exercised — — — — Forfeited/canceled ( 48,425 ) ( 36.34 ) — ( 770,980 ) Outstanding, December 31, 2024 213,904 $ 29.30 8.03 $ 1,708,693 Granted 72,000 2.71 5.73 98,371 Exercised — — — — Forfeited/canceled ( 54,392 ) ( 7.61 ) — ( 203,632 ) Outstanding, December 31, 2025 231,512 $ 26.13 7.44 $ 1,603,432 Exercisable options, December 31, 2025 168,286 $ 34.53 6.80 F- 22 At December 31, 2025, 63,236 shares of Twin Vee options are unvested and expected to vest over the next four years. Restricted Stock Units Under the Company’s 2021 Stock Incentive Plan the Company has issued restricted stock units (“RSUs”). RSUs are granted with a fair value equal to the closing market price of our common stock on the business day of the grant date. An award may vest completely at a point in time (cliff-vest) or in increments over time (graded-vest). Generally, RSUs vest over three years. Schedule of restricted stock options Restricted Stock Units Outstanding Number of Weighted Average Grant – Date Weighted Average Remaining life Aggregate Intrinsic Units Fair Value Price (years) Value Outstanding, January 1, 2024 6,725 $ 22.50 1.50 $ 11,702 Granted 8,730 8.38 3.00 15,190 Exercised — — — Forfeited/canceled ( 7,888 ) ( 13.13 ) — ( 13,725 ) Outstanding, December 31, 2024 7,567 $ 15.98 1.51 $ 13,167 Granted 8,900 4.40 2.56 15,486 Exercised — — — Forfeited/canceled ( 3,415 ) ( 6.86 ) — ( 5,943 ) Outstanding, December 31, 2025 13,052 $ 10.47 1.35 $ 22,710 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: 6 years ● Expected Volatility: 55 % (based on comparable SaaS companies) ● Risk-Free Interest Rate: 4.2 % ● Dividend Yield: 0% ● Fair Value per Option: $ 0.0674 F- 23 13. Customer Concentration Significant dealers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. During the year ended December 31, 2025, two individual customers had sales of over 10 % of our total sales and represented 27 % of total sales. During the year ended December 31, 2024, three individual dealers had sales of over 10 % of our total sales and represented 40 % of total sales. 14. Income Tax Due to operating losses and the recognition of valuation allowances, the Company has no provision for current and deferred federal or state income taxes in 2024. In 2021, the Company reversed valuation allowances against previously reserved deferred tax assets, accordingly, there was no provision for current and deferred federal or state income taxes. Deferred income taxes reflect the net tax effects of temporary and permanent differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows as of: Schedule of deferred tax assets and deferred tax liabilities December 31, December 31, 2025 2024 Non-operating loss carryforward $ 29,300,000 $ 16,700,000 Valuation allowance ( 29,300,000 ) ( 16,700,000 ) 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 the years ended December 31, 2025 and 2024, the valuation allowance increased by approximately $ 12,600,000 and $ 8,100,000 , respectively. A reconciliation between expected income taxes, computed at the federal income tax rate of 21 % applied to the pretax accounting loss, and our blended state income tax rate of 2%, and the income tax net expense included in the consolidated statements of operations for the years ended December 31, 2025 and 2024 is as follows: Schedule of income tax rate December 31, December 31, 2025 2024 Tax at federal statutory rate 21.0 % 21.0 % Tax at state rate net of federal benefit 2.0 % 2.0 % Change in valuation allowance ( 23.0 )% ( 23.0 )% Provision for taxes 0.0 % 0.0 % The Company’s tax positions for 2020 to 2022 have been analyzed and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years. Tax returns for the years 2023 to 2024, are subject to review by the tax authorities. 15. Net Loss Per Share Basic net loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net loss per share of common stock has been computed on the basis of the weighted average number of shares outstanding plus equivalent shares of common stock assuming exercise of stock options. Potential shares of common stock that have an anti-dilutive effect (i.e., those that share or decrease loss per share) are excluded from the calculation of diluted net loss per share of common stock. F- 24 Basic and diluted loss per common share have been computed based on the following as of years ending December 31, 2025 and 2024: Schedule of earning per share December 31, December 31, 2025 2024 Numerator for basic and diluted net loss per share: Net loss attributable to stockholders of Twin Vee PowerCats Co. Inc. $ ( 8,607,273 ) $ ( 11,045,971 ) Denominator: For basic net loss per share - weighted average common shares outstanding 1,968,121 1,003,204 Effect of dilutive stock options — — For diluted net loss per share - weighted average common shares outstanding 1,968,121 1,003,204 Net loss per share -Basic: Net loss per share $ ( 4.37 ) $ ( 11.01 ) Net loss per share - Diluted: Net loss per share $ ( 4.37 ) $ ( 11.01 ) For the years ended December 31, 2025 and 2024, all potentially dilutive securities were antidilutive. All share numbers have been retrospectively adjusted for the one-for-ten reverse stock split effective April 7, 2025. 16. Segment Information The Company reports segment information based on the “management” approach. 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 segments. 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. 17. Subsequent Events The Company has evaluated all events or transactions 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 below. F- 25 2021 Stock Incentive Plan On January 1, 2025, our 2021 Stock Incentive Plan automatically increased, and will continue to increase on January 1 of each calendar year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in a number of shares of common stock equal to 4.5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year. As of January 1, 2026, the maximum number of common stock shares available for issuance was 384,115 . 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 share. 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 19, 2026. 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 . Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.