VEEE 10-K & 10-Q changes, risk factors and insider trading

For the years ended December 31, 20242025 and 2023,2024, respectively, we incurred a loss from operations of $14,551,769$8,781,299 and $11,987,299$14,551,769; and a net loss of $14,009,906$8,607,273 and $9,782,196.$14,009,906. As of December 31, 2025 and 2024, we had an accumulated deficit of approximately $25,392,955$34,000,228 million.and $25,392,955, respectively. There can be no assurance that expenses will not continue to increase in future periods or that the cash generated from operations in future periods will be sufficient to satisfy our operating needs and to generate income from operations and net income.

Our gas-powered products are often financed by our dealers and retail powerboat consumers, we envisionanticipate that this continuingtrend will continue as we seek to expand our operations and grow our network of distributors. This may not occur if interest rates meaningfully rise because higher rates increase the borrowing costs and, accordingly, the cost of doing business for dealers and the cost of powerboat purchases for consumers. Higher energy costs result in increases in operating expenses at our manufacturing facility and in the expense of shipping products to our dealers. In addition, inflation and increases in energy costs may adversely affect the pricing and availability of petroleum-based raw materials, such as resins and foams that are used in our products. Also, higher fuel prices may have an adverse effect on demand for our gas-powered boats, as they increase the cost of ownership and operation and the prices at which we sell the boats. Therefore, higher interest rates and fuel costs can adversely affect consumers’ decisions relating to recreational powerboating purchases.

Our operations and performance depend on global, regional and U.S. economic and geopolitical conditions. General worldwide economic conditions have experienced significant instability in recent yearsyears, including the recent global economic uncertainty and financial market conditions. The circumstances relating to the COVID-19 pandemic, the Russian invasion of Ukraine, the war in the Middle East, as well as other global conditions, have caused significant shortages in the supply chain.chain and increased prices. We are continuously evaluating alternative and secondary source suppliers in order to ensure that we are able to source sufficient materials.

Further, due to increasing tariffs, heightened interest rates, and inflation, operating costs for many businesses including ours have increased and, in the future, could impact demand or pricingthe cost of manufacturing of our drug candidates or services providers, foreign exchange rates or employee wages.boats. Inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital. In addition, although the Federal Reserve has raised, and may again raise,lowered interest rates in 2024 and 2025, it had raised rates significantly in 2022 and 2023 in response to concerns about inflation, whichand it may again raise interest rates in the future which, coupled with reduced government spending and volatility in financial marketsmarkets, may have the effect of further increasing economic uncertainty and heightening these risks.

These conditions could make it extremely difficult for us to accurately forecast and plan future business activities.

We depend on our network of independent dealers for our gas-powered boats, face increasing competition for dealers, and have little control over their activities.

A significant portion of our sales are derived from our network of independent dealers. We typically manufacture our gas-powered boats based upon indications of interest received from dealers who are not contractually obligated to purchase any boats. While our dealers typically have purchased all of the boats for which they have provided us with indications of interest, it is possible that a dealer could choose not to purchase boats for which it has provided an indication of interest (e.g., if it were to have reached the credit limit on its floor plan), and as a result we once experienced, and in the future could experience, excess inventory and costs. For fiscal 2024, our top three dealers accounted for approximately 40% of our consolidated revenues. All three of these dealers accounted for more than 10% of our total sales for the year ended December 31, 2024. During the year ended December 31, 2023,2025, onetwo individual dealers dealereach had sales ofrepresented over 10% of our total sales and that dealertogether represented 27% of total sales. For the year ended December 31, 2024, three individual dealers each represented over 10% of our sales and together represented 40% of total sales. The loss of a significant dealer could have a material adverse effect on our financial condition and results of operations. The number of dealers supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales. Competition for dealers among other boat manufacturers continues to increase based on the quality, price, value, and availability of the manufacturers’ products, the manufacturers’ attention to customer service, and the marketing support that the manufacturer provides to the dealers. We face intense competition from other boat manufacturers in attracting and retaining dealers, affecting our ability to attract or retain relationships with qualified and successful dealers. Although our management believes that the quality of our products in the performance sport boat industry should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share position. In addition, independent dealers in the boating industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. A substantial deterioration in the number of dealers or the quality of our network of dealers would have a material adverse effect on our business, financial condition, and results of operations.

Many of our dealers have floor plan financing arrangements with third-party finance companies that enable the dealers to purchase our products. In connection with these agreements, we have an obligation to repurchase our products from a finance company under certain circumstances, and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. This obligation is triggered if a dealer defaults on its debt obligations to a finance company, the finance company repossesses the boat, and the boat is returned to us. Our obligation to repurchase a repossessed boat for the unpaid balance of our original invoice price for the boat is subject to reduction or limitation based on the age and condition of the boat at the time of repurchase, and in certain cases by an aggregate cap on repurchase obligations associated with a particular floor plan financing program. As disclosed in the notes accompanying the financial Tostatements included in this report, on April 21, 2025, Northpoint Commercial Finance LLC (“Northpoint”) requested that we take possession of and repurchase certain inventory consisting of six boats in accordance with the Repurchase Agreement between us and Northpoint. Prior to that date, we have not been obligatedrequired to repurchase any other boats under our dealers’ floor plan financing arrangements, and we are not aware of any applicable laws regulating dealer relations which govern our relations with the dealers or would require us to repurchase any boats. However, there is no assurance that a dealer will not default on the terms of a credit line in the future. In addition, applicable laws regulating dealer relations may also require us to repurchase our products from our dealers under certain circumstances, and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. If we were obligated to repurchase a significant number of units under any repurchase agreement or under applicable dealer laws, our business, operating results and financial condition could be adversely affected.

We depend on third-party suppliers to provide components and raw materials essential to the construction of our boats. During the year ended December 31, 2024 and 2023,2025, we purchased all engines for our boats under supplier agreements with three vendors. While we believe that our relationships with our current suppliers are sufficient to provide the materials necessary to meet present production demand, we cannot assure you that these relationships will continue or that the quantity or quality of materials available from these suppliers will be sufficient to meet our future needs, irrespective of whether we successfully implement our growth strategy. We expect that our need for raw materials and supplies will increase. Our suppliers must be prepared to ramp up operations and, in many cases, hire additional workers and/or expand capacity in order to fulfill the orders placed by us and other customers. Operational and financial difficulties that our suppliers may face in the future could adversely affect their ability to supply us with the parts and components we need, which could significantly disrupt our operations.

We believe that our brand is a significant contributor to the success of our business and that maintaining and enhancing our brand is important to expanding our consumer and dealer base. Failure to continue to protect our brand may adversely affect our business, financial condition, and results of operations. We expect that our ability to develop, maintain and strengthen the Twin Vee and AquaSportBahama Boat Works brands will also depend heavily on the success of our marketing efforts. To further promote our brands, we may be required to change our marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print. Many of our current and potential competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain strong brands, our business, prospects, financial condition and operating results will be materially and adversely impacted.

Negative publicity, including that resulting from severe injuries or death occurring in the sports and activities in which our products are used, could negatively affect our reputation and result in restrictions, recalls, or bans on the use of our products. If the popularity of the sports and activities for which we design, manufacture, and sell products were to decrease as a result of these risks or any negative publicity, sales of our products could decrease, which could have an adverse effect on our net sales, profitability, and operating results. Similarly, as we seek to expand our business to provide crewed and autonomous mission-ready maritime solutions for defense and government customers through Black Line Defense, we face increased reputational and legal risks, as well as potential increased reporting costs associated with such activities. In addition, if we become exposed to additional claims and litigation relating to the use of our products, our reputation may be adversely affected by such claims, whether or not successful, including by generating potential negative publicity about our products, which could adversely impact our business and financial condition.

Operating our business and and maintaining our growth efforts will require significant cash outlays and advance capital expenditures and commitments. If cash on hand and cash generated from operations are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through debt or equity financings, to fund our growth. We cannot assure you that we will be able to raise needed cash on terms acceptable to us or at all. Financings may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the price per share of our common stock inat ourthe initialtime of such public offering. offerings. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of common stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.

We intend to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians. . Competition for individuals with experience designing, manufacturing and servicing boats is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects We depend upon our executive officers and we may not be able to retain them and their knowledge of our business and technical expertise would be difficult to replace.prospects.

Our Chief Executive Officer owns 22.6%4.5% of our outstanding common stock.stock, as of February 27, 2026. As a result, our Chief Executive Officer does and will have significant influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in our control and might affect the market price of our common stock, even when a change in control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders. Accordingly, our Chief Executive Officer could cause us to enter into transactions or agreements that we would not otherwise consider.

Network and information systems and other technologies are important to our business activities and operations. Our newtechnology-enabled web-basedmarine retail and valuation platform Wizz ProBanger Direct will beis dependent upon our networks and information systems. Network and information systems-related events, such as computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious or other activities could result in a disruption of our services and operations or improper disclosure of personal data or confidential information, which could damage our reputation and require us to expend resources to remedy any such breaches. Moreover,We have in the past been targeted by such attacks and likely will continue to be targeted in the future. Moreover the amount and scope of insurance we maintain against losses resulting from any such events or security breaches may not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our businesses that may result, and the occurrence of any such events or security breaches could have a material adverse effect on our business and results of operations. The risk of these systems-related events and security breaches occurring has intensified, in part because we maintain certain information necessary to conduct our businesses in digital form stored on cloud servers. While we develop and maintain systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite these efforts, there can be no assurance that disruptions and security breaches will not occur in the future. To the extent we are able to grow our sales through our ProWizz DirectBanger platform and become dependent on such sales, we could experience loss of revenue in the event that a security breach or a technological malfunction disrupts the ability of customers to access and use the platform. Moreover, we may provide certain confidential, proprietary and personal information to third parties in connection with our businesses, and while we obtain assurances that these third parties will protect this information, there is a risk that this information may be compromised.

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 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 PowercatsPowerCats Co. and Twin Vee Powercats,PowerCats, Inc. (collectively, “Defendants”), related to Forza’s merger with usTwin Vee seeking an 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 defendingdefend against the claims. At this time, time,as the Companymatter is in the pleadings stage, we are unable to estimate or project the ultimate outcome of this matter.

These securities class actions, shareholder derivative actions and other current or future litigation matters may be time-consuming, divert management’s attention and resources, cause the Companyus to incur significant defense and settlement costs or liability. We intend to vigorously defend against all such claims. Because of of the potential risks, expenses and uncertainties of litigation, as well as claims for indemnity from various of the parties concerned, we may from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. While a certain amount of insurance coverage is available for expenses or losses associated with current or future lawsuits, this coverage may not be sufficient. Determining reserves for any litigation is a complex, fact-intensive process that is subject to judgment calls. It is possible that a resolution of one or more such proceedings could require us to make substantial payments to satisfy judgments, fines or penalties or to settle claims or proceedings, any of which could harm our business. Based on information currently available, we are unable to estimate reasonably a possible loss or range of possible losses, if any, with regard to the current securities class action; therefore, no litigation reserve has been recorded in our consolidated balance sheet. Although we plan to defend against the securities class actions, shareholder derivative actions and other lawsuits vigorously, we cannot assure that the results of these actions, either individually or in the aggregate, will not have a material adverse effect on our business, operating results or financial condition.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. We do not have any patent protection for our gas-powered motor products. Our gas powered boats. The only patent protection we have is for our electric products which we are no longer developing. We rely on a combination of trade secret (including those in our know-how), and other intellectual property laws, as well as employee and third-party nondisclosure agreements, intellectual property licenses, and other contractual rights to establish and protect rights in our technology and intellectual property. Our trademark applications may not be granted, any trademark registrations registrations that may be issued to us may not sufficiently protect our intellectual property and any of our issued patents, trademark registrations registrations or other intellectual property rights may be challenged by third parties. Any of these scenarios may result in limitations in the scope of our intellectual property or restrictions on our use of our intellectual property or may adversely affect the conduct of our business. Despite our efforts to protect our intellectual property rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or will take to prevent misappropriation may not be successful. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.

We plan to use open-source software software in connection with the development and deployment of our products and services. Companies that use open-source software in connection with their products have, from time to time, faced claims challenging the use of open-source software and/or compliance with open-source license terms. As a result, we could be subject to suits by parties claiming ownership of what are believed to be open-source software or claiming noncompliance with open- source licensing terms. Some open-source software licenses may require users who distribute proprietary software containing or linked to open- source software to publicly disclose all or part of the source code to such proprietary software and/or make available any derivative works of the open-source code under the same open- source license, which could include proprietary source code. In such cases, the open- source software license may also restrict us from charging fees to licensees for their use of our software. While we will monitor the use of open-source software and try to ensure that open-source software is not used in a manner that would subject our proprietary source code to these requirements and restrictions, such use could inadvertently occur, in part because open-source license terms are often ambiguous and have generally not been interpreted by U.S. or foreign courts.

Our operations and performance depend significantly on economic conditions, including the introduction of new tariffs. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence, including a significant market reaction to the novel coronavirus (COVID-19), resulting in a significant reduction in many major market indices. Uncertainty about global economic conditions could result in material adverse effects on our business, results of operations or financial condition. Access to public financing and credit can be negatively affected by the effect of these events on U.S. and global credit markets. The health of the global financing and credit markets may affect our ability to obtain equity or debt financing in the future and the terms at which financing, or credit is available to us. These instances of volatility and market turmoil could adversely affect our operations and the trading price of our common shares resulting in:

OurAny failure to meet meet the continued listing requirements of The Nasdaq Capital Market could result in a de-listing of our common stock.

The shares of our common stock are listed for trading on The Nasdaq Capital Market under the symbol “VEEE.” If we fail to satisfy the continued listing requirements of The Nasdaq Capital Market, such as the corporate governance requirements, the stockholder’s equity requirement, or the minimum closing bid price requirement, The Nasdaq Capital Market may take steps to de-list our common stock. Such a de-listing or even notification of failure to comply with such requirements would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a de-listing, we would take actions to restore our compliance with The Nasdaq Capital Market’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price, improve the liquidity of our common stock, prevent our common stock from once again dropping below The Nasdaq Capital Market minimum bid price requirement, or prevent future future non-compliance with The Nasdaq Capital Market’s listing requirements.

On May 10, 2024, we received written notice from theNasdaq’s Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for the preceding 30 consecutive business days (March 28, 2024 through May 9, 2024), our 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). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), weor hadthe aMinimum complianceBid Price periodRequirement. ofWe were provided 180 calendar days, or until November 6, 2024, to regain compliancecompliance, withwhich deadline was subsequently Nasdaqextended Listingto RuleMay 5550(a)(2).5, Since2025. On April 4, 2025, we didfiled notthe achieveAmendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split at a ratio of 1-for-10, effective as of 11:59 p.m. Eastern Time, on April 7, 2025, and our common stock began trading on a split-adjusted basis on April 8, 2025. On April 28, 2025, we received a letter from Nasdaq stating that Nasdaq had determined that we now comply with the Minimum Bid Price Requirement. However, we cannot assure you that we will be able to maintain compliance with the Minimum Bid Price Requirement by November 6, 2024, we were eligible for additional time to comply. Nasdaq granted us until May 6, 2025 in order to cure the deficiency.future.

Even if we effect a reverse stock split, thereThere can be no assurance that our increased stock price following the Reverse Stock Split will remain at a price that will be sufficient in order to meet any continued requirements and policies of Nasdaq or that our common stock will remain listed on Nasdaq.

At our 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”),Stockholders, our stockholders approved an amendment to our Certificate of Incorporation to effect, at the discretion of the Twin Vee Board board of Directors,directors, a reverse stock split at a ratio within a range of 1-for-2 to 1-for-20, with the ratio within such range to be determined at the discretion of our Boardboard of Directorsdirectors and included in a public announcement. If On April 4, 2025, we seekfiled the Amendment to implementour Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split at a reverseratio stockof split1-for-10, ineffective as orderof to11:59 remainp.m. listedEastern Time, on Nasdaq,April the7, announcement2025, or implementation of such a reverse stock split could negatively affect the price of our common stock. Further, there can be no assurance that the increase, if any, in the price ofand our common stock willbegan betrading sufficiently large and sustained foron a sufficientsplit-adjusted amount of time in order to meet any continued requirements and policies of Nasdaq, or that our common stock will remain listedbasis on Nasdaq.April 8, 2025.

Further, whileWhile Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with with the Minimum Bid Price Requirement, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, if we fail to maintain compliance with the Minimum Bid Price Requirement, Nasdaq may determine that it is not in the public interest to maintain the Company’slisting listing,of our common stock, even if we regainshould effect another reverse stock split for the purpose of regaining compliance with the Minimum Bid Price Requirement.

In addition, Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if a listed company that fails to meet the Minimum Bid Price Requirement after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, thenit the company iswill not be eligible for for a Compliance Period.

Accordingly, we may fail to regainmaintain compliance with the Minimum Bid Price requirement during the Compliance Period or maintain compliance with the other Nasdaq listing requirements. Any non-compliance may be costly, divert our management’s time and attention, and could have a material adverse effect on our business, reputation, financing, and results of operation A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of the common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, materially adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.

As a public company, we will beare subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act. We expect that theThe requirements of these rules and regulations willcontinue continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consumingtime consuming and costly, and place significant strain on our personnel, systems and resources.

WeAs of December 31, 2025, we do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and in accordance with GAAP. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

Management has developed and is executing a remediation plan to address the previously disclosed material weaknesses, due to inadequate staffing levels. We have retained a full-time controller and financial analyst and are utilizing the services of experienced SEC reporting consultants as necessary. We have notalso yetselected retainedand sufficientimplemented staffa orrobust engaged sufficientoperating system and we are utilizing the assistance of outside consultantsadvisors withwhere appropriate experience in GAAP presentation, especially of complex instruments, to devise and implementappropriate. effective disclosure controls and procedures, or internal controls. We will be required to expend time and resources hiring and engaging additional staff and outside consultants with the appropriate experience to remedy these weaknesses. We cannot assure you that management will be successful in locating and retaining appropriate candidates; that newly engaged staff or outside consultants will be successful in remedying material weaknesses thus far identified or identifying material weaknesses in the future; or that appropriate candidates will be located and retained prior to these deficiencies resulting in material and adverse effects on our business.

Investors should consider an investment in our common stock risky and invest only if they can withstand a significant loss and wide fluctuations in the market value of their investment. Investors who purchase our common stock may not be able to sell their shares at or above the purchase price. Our stock price has been volatile and may be volatile in the future. The price of our common stock has experienced volatility. OnDuring March2025, our 14, 2024,common thestock has experienced a high closing price of our$7.45 commonand stocka on the Nasdaq was $1.12 per share, on December 31, 2024, thelow closing price of our common stock on the Nasdaq was $0.55$1.59 per shareshare. It is possible that an active trading market will not continue or be sustained, which could make it difficult for investors to sell their shares of our common stock at an attractive price or at all. The stock market in general has been, and the market price of our common stock in particular, will likely be subject to fluctuation, whether due to, or irrespective of, our operating results and financial condition. The market price of our common stock may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to:

FINRA sales practice requirements may limit your ability to buy and sell our common shares,stock, which could depress the price of our shares.

Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for certain types of state actions that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees Our Certificate of Incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine. The exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. To the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

WeTwin areVee PowerCats Co. (“Twin Vee” “we”, “us” or the “Company”) is a designer, manufacturer and marketer of recreational and commercial power catamaran boats. We believe our companycompany, founded in 1996, has been an innovator in the recreational and commercial power catamaran industry. We currently have 19 gas-powered models in production ranging in size from our 22-foot monohull to our newly designed 40-foot offshore 400 GFX. Our twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee ride quality by reducing drag, increasing fuel efficiency,efficiency and offering users a stable riding boat. Additionally, we have launched the AquaSport line of monohull boats which are expected to appeal to first-time boat buyers, the freshwater market, and consumers that prefer a monohull boat, increasing our potential customer base across the nation and beyond the catamaran market. Twin Vee’s home base of operations in Fort PiercePierce, Florida is a 7.5-acre facility with several buildings totaling approximately 100,000 square feet.feet, including a nearly complete 30,000 square foot expansion which began in mid-2024. We currently employe employ approximately 6570 employees.people.

Twin Vee products are marketed under two brands: Twin Vee for our catamarans, or dual hull vessels, and Bahama Boat Works for our “V”-hull boats. Consumers can use our boats for a wide range of recreational activities including fishing, diving and water skiing and commercial activities including transportation, eco tours, fishing and diving expeditions. We believe that the performance, quality and value of our boats position us to achieve our goal of increasing our market share and expanding the power catamaran boatingpower-boat market. We currently primarily sell our boats through a current network of 4317 independent independent boat dealers in locations across North AmericaAmerica, Hawaii, and the CaribbeanAustralia who resell our boats to the end user Twin Vee customers. We continue recruiting efforts forto recruit high quality boat dealers to join our network and seek to establish new dealers and distributors domestically and internationally to to distribute our boats as we grow our production and introduce new models. Our boats are currently outfitted with gas-powered outboard combustion combustionengines. During 2024, Forza X1, Inc., our minority owned electric boat subsidiary determined to cease production of electric engines.boats and on November 26, 2024, Forza X1, Inc. (“Forza”), was merged into Twin Vee Merger Sub, Inc., a wholly-owned subsidiary of Twin Vee (“Merger Sub”) and became a wholly owned subsidiary.

We finished the year with revenue downup 57%3% compared to to the prior year. Our cash, cash equivalents, and restricted cash and marketable securities were $7.7$1.6 million at December 31, 2024.2025. Our property, plant, and equipment went up decreased as wea investedresult of the sale of the North Carolina building, sale and disposition of research and development assets related to the former electric boat development activities, and the termination of a long term building and equipment lease, partially offset by investments in additional boat molds for new model,models, equipment to support our increased production levels, and leasehold improvements to improve the quality of our products and new and expanded production facilities Results of Operationsfacilities.

Our net sales decreasedincreased $19,037,395,$430,613, or 57%3% to $14,388,517$14,819,130 for the year ended December 31, 20242025 from $33,425,912$14,388,517 for the year ended December 31, 2023.2024. The numberCompany ofsold 93 boats sold during fiscal year ended December 31, 20242025, decreasedan 63%increase of 7% compared to the number of our87 boats sold during the fiscal year ended December 31, 2023.2024. However, ourThe average cost price per unit increaseddecreased approximately $27,000.$7,800 or 5%. The increasedecrease in average price per boat was due primarily to the higher percentageintroduction of the 22’ TwinBayCat Veein boatsearly compared to Aquasport boats,2025, which havesold generally15 units at an average selling price of below $100,000, and an overall lower pricesaverage thanprice Twinper Veelarge boat boats.sold during the year.

Gross profits decreasedincreased by $4,018,313,$2,008,530, or 123%267% to $1,257,105 in 2025 compared to a negative $751,425 for the year ended December 31, 20242024. fromGross $3,266,888profit as a percentage of sales for the year ended December 31, 2025 was 8.5% compared to a negative 5.2% for the year ended December 31, 2023.2024. GrossThe profit as a percentage of sales, for the year ended December 31, 2024 and 2023 was negative 5% and positive 10% respectively. We attribute the declineincrease in gross profit percentagereflects our ongoing efforts to inefficienciesreduce inour productioncost resultingstructure, fromsuch aas significantbringing dropcertain inmanufacturing demandoperations inin-house, thebetter marineutilization sector.of our ERP system and direct labor leveraged against higher volumes.

Operating expenses for the year ended December 31, 20242025 and 20232024 were $13,800,344$10,038,404 and $15,254,187,$13,800,344, respectively, a decrease of $1,453,843$3,761,940 or 10%. As a percentage of revenues operating expenses were 96% compared to 46% in the prior year, largely due to the high fixed cost nature of our business on a 57% reduction in revenues partially offset by the benefit of significantly reduced spending at Forza throughout 2024.27%. Operating expenses for the yearyears ended December 31, 2025 and 2024 included an impairment charge of $1,674,000$418,416 and 1,674,000, respectively, related to the impairment of the partially constructed Forza building based on an appraisal prior to the merger of Twin Vee and Forza. Before the impact of this charge, operating expenses for the year ended December 31, 20242025 and 2023 2024 were $12,126,344$9,619,988 and $15,254,187,$12,126,344, respectively, a decrease of $3,127,843$2,506,356 or 21%. As a percentage of revenues, before the impact of the impairment charge, operating expenses were 84% compared to 46% in the prior year, largely due to the high fixed cost nature of our business on a 57% reduction in revenues partially offset by the benefit of significantly reduced spending at Forza throughout 2024.

Salaries and wage-related expenses decreased by approximately 34%,12%, or $2,566,622$581,471 to $4,325,348 for the year ended December 31, 2025, compared to $4,906,819 for the year ended December 31, 2024, compared to $7,473,441 for the year ended December 31, 2023.2024. This decline is primarily related to significant reductions in headcount at Forza, including a $759,765 decline in stock-based compensation partially offset by $310,000$422,844 in special bonuses paid to certain executives upon the successful merger of Twin Vee and Forza. Included incombined salaries and wages for the year ended December 31, 2024 was a non-cashand stock-based compensation expenserelated to the development of $1,202,474,Wizz whichBanger. represented a decrease of $700,275Also resulting from the prior year, due primarily to the forfeiture of options following the departure of certain senior executives at both Twin Vee and Forza during 2024 partially offset by the addition of a new executive officer at Twin Vee and further issuances of options to existing employees. Also resulting from the reduction in headcount year over year were related reductions in the cost of benefits, primarily health insurance, holiday pay and 401K.

Professional fees increaseddecreased by 34%,48%, or $420,086$802,384 to $1,669,474$867,090 for the year ended December 31, 2024,2025, compared to $1,249,388$1,669,474 for the year ended 2023.2024. The increasedecrease in professional fees related primarily to the merger between Twin Vee and Forza.Forza during 2024. Costs incurred were for legal representation, auditor consents, fairness opinions, opinions, appraisals, filings and theother like.similar costs.

Depreciation and amortization expense for the year ended December 31, 2024 increased2025 decreased by 29%,less than 1%, or $391,834$10,987 to $1,734,230 for the year ended December 31, 2025 compared to $1,745,217 for the year ended December 31, 2024 compared to $1,353,383 for the year ended December 31, 2023.2024. This increasedecrease is due to significant investments in equipment, leasehold improvements and boat molds thatmore than offset by the resultedsale inof anForza increasedR&D depreciationequipment expense.and the termination of a significant lease agreement for building and equipment.

Other income decreased by 75%,68%, or $1,663,240$367,839 to $541,863$174,026 for the year ended December 31, 2024,2025, compared to $2,205,103$541,863 for the year ended, 2023.2024. The decrease in other income is primarily the result of $1,267,055 in Employee Retention Credit income received in 2023, which is not recurring in 2024, and lower overall dividends and interest on investments resulting from the liquidation of investments to fund operations and capital investments.

Net loss for the year ended December 31, 2024,2025, was $14,009,906,$8,607,273, compared to $9,782,196$14,009,906 for the year ended December 31, 2023.2024, an improvement of 39%. Both 2025 and 2024 was awere challenging year years with overall boat production down 63%, whichfrom worsenedprevious throughout the year.periods. We managedreduced both variable and fixed operating costs, including reducing then shutting down the Forza research and development operation. The deleveraging of our fixed costs on such a low revenue base in 2024 led to significantcontinued losses. We have decreased reduced our head count significantlyto match current production levels and continue to right-size the business for the current state of the economy, while keep keeping our core strengths intact. Basic and dilutive loss per share of common stock increasedimproved for the year ended December 31, 2024 2025 to ($1.10$4.37) compared to ($0.76$11.01) for the year ended December 31, 2023.2024.

A primary source of funds for the year ended December 31, 20242025 was net cash received from sales of our equity securities and those of Forza during prior fiscal years and revenue generated from operations. Our primary use of cash was related to funding the low-level revenue related cash lossescash-losses from operations and capital improvements. Our priority over the next year is to grow our revenue base while managing working capitalcapital, including improving inventory turns.

AsWe ofdo Decembernot 31, 2024, we hadhave sufficient cash and cash equivalents to meet ongoing expenses for at least twelve months from the date of the filing of this Annual Report. As of December 31, 2024,2025, we had $7,706,240 $1,646,695 of cash, cash equivalents, restricted cash and marketable securities, total current assets of $10,419,141, $4,897,217, and total assets of $25,887,905.$16,234,369. Our total liabilities were $6,671,055.$2,766,558. Our total liabilities were comprised of current liabilities of $3,747,990, $2,244,513, which included accounts payable and accrued liabilities of $3,009,331,$1,829,083, contract liability of $80,000,$395,932, and finance lease liability of $221,929 and current portion of operating lease right of use liability of $436,730, $19,498, and long-term liabilities of $2,923,065.$522,045. As of December 31, 2023,2024, we had $16,755,233$7,706,240 of cash, cash equivalents, restricted cash, $4,462,942and total current assets of marketable securities, total current assets of $26,646,318$10,419,141 and total assets of $39,846,713.$25,887,905. Our total current liabilities were $4,216,345$3,747,990 and total liabilities of $7,797,098 $6,671,055 which included long-term operating lease liabilities for the lease of our facility.

For the year ended December 31, 2024,2025, net cash flows used in operating activities was $6,973,617$6,878,557 compared to $6,934,773$6,973,617 during the year ended December 31, 2023.2024. We have decreased net inventory levels by $2,418,098,$24,019 dueand reduced our outstanding obligations to managingsuppliers inventoryby as well as other working capital items to align with the significant reduction in revenues and production in 2024.$1,100,243. Our net loss was $14,009,906,$8,607,273, decreased by non-cash expenses, primarily due to stock-based compensation of $1,177,140, $303,133, depreciation and amortization of $1,745,217,$1,734,230, impairment of property & equipment of $1,674,000, $418,416, change of right-of-use asset and lease liabilities of $464,304,$390,686, and loss on disposal of property & equipment and lease terminations of $172,684. For the year ended December 31, 2024, our accounts payable decreased $183,947 due to our decrease in inventory and production. For the year ended December 31, 2024, our operating lease liabilities decreased $482,897 and our accrued liabilities decreased by $281,259.$190,918.

During the year ended December 31, 2024,2025, we used $1,861,632$1,590,634 for investment activities, compared to $6,629,021$1,861,632 used during the year ended December 31, 2023.2024. We increased our property and equipment by $6,341,675,$2,157,199 weand sold marketablecertain securitiesproperty and equipment generating cash proceeds of $4,462,942.$552,478. The majority of the property and equipment purchased were molds for our boat production, for Twin Vee, and additions to facilities in both North Carolina and Ft. Pierce Florida.

For the year ended December 31, 2024,2025, net cash usedprovided by financing activities was approximately $213,744$2,409,646 compared to net cash providedused byin financing activities of $6,818,020$213,744 for the year ended December 31, 2023.2024. The cash flow from financing activities for the year ended December 31, 2024 included only finance lease payments while for the year ended December 31, 2023, cash provided by finance activities2025 was primarily from the proceeds of $6,996,015 and deferred offering cost of $66,463 from a follow-on underwritten public offering forof ForzaTwin inVee Junecommon 2023.stock.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States “U.S. GAAP” requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Included in those estimates are assumptions about allowances for inventory obsolescence, useful life of fixed assets, and warranty reserves and bad-debt reserves.

Inventories are statedvalued at the lower of cost orand net realizable valuevalue, with cost determined using the first-in,weighted average cost method on a first-in first-out (FIFO) method.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.

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. For the threesix months ended MarchJune 31,30, 2026, we incurred a loss from operations operations of $2,135,934$5,157,471 and a net loss of $2,094,278.$4,992,290. As of MarchJune 31,30, 2026, we had accumulated deficits of $36,094,506.$38,992,518. To address these conditions:

As of MarchJune 31,30, 2026, we do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and in accordance with GAAP. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

Management has developed and is executing a remediation plan to address the previously disclosed material weaknesses, due to inadequate staffing levels. We have retained a full-time controller and are utilizing the services of experienced SEC reporting consultants as necessary. We arehave alsorecently hired actively recruitingour aformer full-timeCFO Chiefto Financialact Officer.as Interim CFO. We have also selected and implemented a robust operating system and we are utilizing the assistance assistance of outside advisors where appropriate. We cannot assure you that management will be successful in locating and retaining appropriate candidates; that newly engaged staff or outside consultants will be successful in remedying material weaknesses thus far identified or identifying identifying material weaknesses in the future; or that appropriate candidates will be located and retained prior to these deficiencies resulting in material and adverse effects on our business.

Our products are marketed under two brands: Twin Vee for our catamarans, or dual hull vessels, and Bahama Boats and Bimini for our “V”-hull boats. Consumers can use our boats for a wide range of recreational activities including fishing, diving and water skiing and commercial activities including transportation, eco tours, fishing and diving expeditions. We believe that the performance, quality and value of our boats position us to achieve our goal of increasing our market share and expanding the power-boat market. We currently primarily sell our boats through a network of 22 independent boat dealers across North America, the Caribbean and Central America who resell our boats to the end user Twin Vee customers. We continue efforts to recruit high quality boat dealers to join our network and seek to establish new dealers and distributors domestically and internationally to distribute our boats as we grow our production and introduce new models. Our boats are currently outfitted with gas-powered outboard combustion engines. During 2024, Forza X1, Inc. (“Forza”), our then minority owned electric boat subsidiary, determined to cease production of electric boats, and on November 26, 2024, Forza was merged into Twin Vee Merger Sub, Inc., our wholly-owned subsidiary, subsidiary, and became a wholly owned subsidiary.

Revenue from the sale of our boats accounted for nearly 100% of our net revenue in the firstsecond quarter of 2026 and 2025. Our boats are manufactured in Fort Pierce, Florida. We believe our company has been an innovator in the recreational and commercial power boat industry. We currently have 1211 Twin Vee models in orproduction nearing productionranging ranging in size from 24-foot22-foot to 40-foot, and 96 monohull (Bahama) models in or nearing production ranging in size from 22-foot31-foot to 41-foot.41-foot, and three Bimini monohull models ranging in size from 21-foot to 29-foot.

During the quarter ended MarchJune 31,30, 2026, four individual dealers each represented over 10% of our total sales and together represented 80%88% of total sales. During the quarter ended MarchJune 31,30, 2025, twothree individual dealers each represented over 10% of our total sales and together represented 54%70% of total sales.

Our unaudited condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date and we expect our expenses to increase in connection with our ongoing activities. These factors raise substantial doubt about our ability to continue as a going concern for one year after the condensed consolidated financial statements included in this Quarterly Report are issued.

OnAs previously disclosed, on April 2, 2026, wethe Company received written notice (the “Notification Letter”) from the staff of the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying usthe Company that that the Companyit no longer satisfies the $1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of thirty (30) consecutive business days (collectively, the “Bid Price Rule”). Based on the closing bid price of ourthe Company’s common stock for the thirty (30) consecutive business days from February 18, 2026 to March 31, 2026, wethe Company no longer satisfysatisfied the Bid Price Rule. While companies are typically afforded a 180-calendar day compliance period to comply with the Bid Price Rule, the Notification Letter stated that, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), wethe were Company was not eligible for any compliance period specified in Nasdaq Listing Rule 5810(c)(3)(A) due to the fact that wethe Company effected a reverse stock split over the prior one-year period. WeThe Company effected a 1-for-10 reverse stock split on April 7, 2025. The Notification Letter stated that our the Company’s securities will be subject to delisting from Nasdaq unless wethe Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which was sotimely requested and subsequently scheduled for May 7, 2026. Accordingly, any further suspension or delisting action by Nasdaq relating to the Bid Price Rule will be stayed pending the Panel’s decision.

We intend to actively monitor the closing bid price of our common stock and evaluate all available options to regain compliance with the applicable rules. To that end, on April 30, 2026, we the Company filed a Certificate of Change with the Nevada Secretary of State (the “Certificate of Change”) to amend ourits Nevada Articles of Incorporation Incorporation to effect a 1-for-37 reverse stock split of ourthe Company’s authorized shares of common stock, accompanied by a corresponding decrease in ourthe Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on May 4, 20262026, (the “Effective Time”),purportedly pursuant to Nevada Revised Statutes (“NRS”) 78.207. On 78.207.June 17, 2026, the Panel found that Twin Vee is in compliance with the Listing Rules of The Nasdaq Stock Market.

Defective State of Nevada Reincorporation

On April 21, 2026, the compensationCompensation committeeCommittee of ourthe boardBoard of directorsDirectors (the “Committee”) of the Company approved an increase in the base salary of Preston Yarborough, the ourCompany’s Vice President, to $250,000 per annum, and on April 22, 2026, wethe Company entered into an amendment (the “Yarborough Amendment”) to the employment agreement, effective as of July 23, 2021, by and between usthe Company and Preston Yarborough, reflecting such increase in base salary.

Defective Reverse Stock Stock Split

On April 10, 2026, ourthe board of directors of the Company approved the Reverse Stock Split by unanimous written consent. Since the Reverse Stock Split was purportedly effectuated pursuant to NRS 78.207 by a proportionate decrease in both the authorized and issued and outstanding shares of the entire class, no stockholder approval of the Reverse Stock Split was required under the NRS. After the Effectiveeffective Time,time of the Reverse Stock Split, the Company’s common stock began trading under the existing trading symbol “VEEE” on the Nasdaq Capital Market on a reverse split-adjusted basis when the market opened on May 4, 2026. At the Effectiveeffective Time,time of the Reverse Stock Split, every 37 shares of common stock issued and outstanding automatically converted into one issued and outstanding share of common stock and the total number of shares of common stock authorized for issuance under the Articles of Incorporation was reduced by a corresponding proportion from approximately 19.6 million shares to approximately 0.5 million shares.

In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of common stock underlying the Company’s outstanding equity awards and warrants. The total number of shares of ourthe Company’s preferred stock authorized for issuance under the Articles of Incorporation remained at 10,000,000.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025.

Our net sales increaseddecreased by $352,415,$1,627,244, or 10%,34%, to $3,964,706 for the three months ended March 31, 2026, from $3,612,291$3,128,374 for the three months ended MarchJune 31,30, 2026, from $4,755,618 for the three months ended June 30, 2025. This increasedecrease was due primarily to themarket successconditions of ourelevated newinterest dealerrates initiatives,and whichhigher addedgas 14prices newimpacting dealer/locationsconsumer duringbehavior 2025.and demand. During the firstsecond quarter of 2026, we sold 21 15 boats at an average selling price of approximately $189,000$209,000 per unit, compared to 2431 units in the firstsecond quarter of 2025 with an average selling price of approximately $151,000.$153,000. The increase in the average sales price is primarily due to a change in the product mix of boats sold, specifically, the sale of a 35’ Bahama, versus no boat sales over 28’ in the firstsecond quarter of 2025.2025, 18 boats of 24 feet or less were sold versus in the second quarter of 2026 8 boats of 24 feet or less were sold.

Gross profit declined by $340,777,$836,721, or 63%,128%, to $196,337a negative for the three months ended March 31, 2026, from $537,114$182,668 for the three months ended MarchJune 31,30, 2025.2026, Grossfrom profit$654,053 as a percentage of sales for the three months ended MarchJune 31,30, 2025. Gross (loss) profit as a percentage of sales for the three months ended June 30, 2026 was 5.0%-5.8% compared to 14.9%13.8% in the firstsecond quarter of 2025. The decline in gross profit of 9.9 19.6 percentage points, is primarily due to an increase in labor related to the completion and re-launch of the new Bahama Boat line of boats at the Palm Beach International Boat Show and athe $173,409unfavorable non-cashleverage inventoryeffect reserveof increaselower relatedboat tosales excesson inventory.fixed overhead costs.

Salaries and wage related expenses decreased 8%,22%, or or $81,457,$232,125, to $885,505$822,978 for the three months ended MarchJune 31,30, 2026, compared to $966,962$1,055,103 for the three months ended MarchJune 31,30, 2025. The decrease decrease in salaries and wages is across the board, including salaries, director expenses, and benefits due to ongoing resource management.management, in addition, the retirement of our prior CFO resulted in a reduction in salaries, bonus accruals as well as stock based compensation expenses.

Professional fees decreasedincreased by 18%,35%, or $26,957,$66,482, to $119,054$256,989 for the three months ended MarchJune 31,30, 2026, compared to $146,011$190,507 for the three months ended MarchJune 31,30, 2025.2025, Thisprimarily decrease was due primarilyto expenses related to the reductionproposed inmerger legalwith fees following a change in our SEC attorney firm in late 2025.USFM.

Depreciation and amortization expense increased by 6%,8%, or $25,489$33,534 to $467,161$459,085 for the three months ended MarchJune 31,30, 2026, as compared to $441,672$425,551 for the three months ended MarchJune 31,30, 2025. This increase is due to the capitalization of Ft. Pierce building expansion and the 5-axis C&C machine installed in late 2025.

Other income decreasedincreased by $27,198$101,789 to $41,656$123,524 for the the three months ended MarchJune 31,30, 2026, as compared to $68,854$21,735 for the three months ended MarchJune 31,30, 2025. This decreaseincrease was due primarily to to aan reductionincrease in dividend and interest income from lowerhigher cash and cash equivalent balances, partiallyfollowing offsetthe bythree accruedequity sale transactions in the first quarter of 2026 and interest income related to the Company’s note receivable on the former building in North Carolina.

Net loss for the three months ended MarchJune 31,30, 2026 was $2,094,278,$2,898,012, as compared to $1,610,240$1,654,071 for the three months ended MarchJune 31,30, 2025, a changereduction of $484,038$1,243,941 or 30%.75%. The overall year-over-year increase in the reported loss for the period was primarily due to the reduction in gross margin and an increase in SG&A as described above.above, which included the write off of capitalized software of $701,223. Basic and dilutive loss per share of Common Stock for the three months ended MarchJune 31,30, 2026, adjusted for the May 4, 2026 1 for 37 reverse stock split, was ($12.93$5.07), as compared to ($40.05$32.22) for the three months ended MarchJune 31,30, 2025, an improvement of 68%.84%.

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. For the threesix months ended MarchJune 31,30, 2026, we incurred a loss from operations operations of $2,135,934$5,157,471 and a net loss of $2,094,278.$4,992,290. As of MarchJune 31,30, 2026, we had accumulated deficits of $36,094,506.$38,992,518. To address these conditions:

A primary source of funds for the three and six months ended MarchJune 31,30, 2026 was net cash received from our three follow-on equity offerings closed during the first quarter of 2026, and revenue generated from operations. Our primary use of cash was related to funding our operations including capital improvements, and development of the Bahama Boat lineup.

During the threesix months ended MarchJune 31,30, 2026, the Company Company completed multiple equity offerings resulting in aggregate gross proceeds of $7,192,640 and aggregate net proceeds of $5,800,025, after after deducting placement agent fees and expenses and the Company’s offering expenses.

The following table provides selected financial data about us as of MarchJune 31,30, 2026 and December 31, 2025.

As of MarchJune 31,30, 2026, we had $5,671,756$3,929,427 of cash, cash equivalents, and restricted cash, total current assets of $9,597,334$8,576,146 and total assets of $23,217,086.$20,651,788. Our total liabilities were $5,968,603. $6,246,232. Our total liabilities were comprised of current liabilities of $3,232,034,$3,633,980, which included accounts payable and accrued liabilities of $2,637,237, $2,563,931, lease liabilities of $457,303$470,943 and contract liability of $210,800.$525,800. Long term liabilities were $2,736,569.$2,612,252. As of December 31, 2025, we had $1,646,695 of cash, cash equivalents, and restricted cash, total current assets of $4,897,217 and total assets of $16,234,369. Our total current liabilities were $2,244,513 and total liabilities were $2,766,558.

The accumulated deficit was $36,094,506$38,992,518 as of MarchJune 31,30, 2026 compared to accumulated deficit of $34,000,228 as of December 31, 2025.

Our working capital increased by $3,712,596$2,289,462 to $6,365,300$4,942,166 as of MarchJune 31,30, 2026, compared to $2,652,704 on December 31, 2025 primarily due to the three first quarter 2026 equity offerings totaling 17,347,900468,863 shares, netting approximately $5,800,025 after fees and expenses, partially offset by continued operating losses incurred in the the period.

For the threesix months ended MarchJune 31,30, 2026 net cash used used in operating activities was $1,661,001,$3,271,122, compared to $1,736,279$2,481,889 during the threesix months ended MarchJune 31,30, 2025. The use of cash in operating activities for the threesix months ended MarchJune 31,30, 2026 was due primarily to a $2,135,934$5,157,471 operating loss adjusted for non-cash depreciation and amortization of $467,161 and$926,246, stock-based compensation of $74,925.$130,010, and asset impairment losses of $699,711.