Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - SHF Holdings, Inc. (SHFS) increased by 150% to $8.17 - Lithium Americas Corp. (LAC) rose by 69% to $5.18 - Aqua Metals, Inc. (AQMS) gained 50% reaching $6.11 - CleanCore Solutions, Inc. (ZONE) up by 44% at $2.87 - Cyclerion Therapeutics, Inc. (CYCN) increased by 33% to $4.03 - Twin Vee Powercats Co. (VEEE) rose by 17% to $2.92 - Solidion Technology, Inc. (STI) up by 11% at $5.09 - China Pharma Holdings, Inc. (CPHI) increased by 11% to $2.18 - Stardust Power Inc. (SDST) rose by 10% to $3.04 - Aligos Therapeutics, Inc. (ALGS) increased by 7% to $11.03 [3] Premarket Losers - Aytu BioPharma, Inc. (AYTU) decreased by 15% to $2.11 - Professional Diversity Network, Inc. (IPDN) down by 13% to $4.10 - STRATA Skin Sciences, Inc. (SSKN) fell by 10% to $2.31 - Cohu, Inc. (COHU) decreased by 9% to $20.68 - Super League Enterprise, Inc. (SLE) down by 9% to $7.74 - CTW Cayman (CTW) fell by 9% to $2.29 - Fitell Corporation (FTEL) decreased by 8% to $7.70 - Soluna Holdings, Inc. (SLNH) down by 8% to $2.16 - StableX Technologies, Inc. (SBLX) decreased by 5% to $5.22 - Indaptus Therapeutics, Inc. (INDP) down by 5% to $2.95 [4]

Group 1 - Twin Vee PowerCats' shares increased by 33.33% to $3.32 in pre-market trading, following a 4.18% gain in the regular session [1] - The stock price surge is attributed to the appointment of Scott Searles as Interim Chief Financial Officer, who has 20 years of corporate finance experience [2] - Searles will receive a base salary of $60,000 as part of his 90-day interim agreement while the company searches for a permanent CFO [3] Group 2 - The company trades within a 52-week range of $1.86 to $9.30, reflecting a year-over-year decline of 55.05% [4] - Twin Vee PowerCats has a market capitalization of $5.57 million and an average daily trading volume of 2.95 million shares [4] - The closing price of $2.49 represents a decline of approximately 12.32% from the one-month peak of $2.84 on September 5 [4] Group 3 - Benzinga's Edge Stock Rankings indicate that VEEE is experiencing long-term consolidation with medium and short-term upward movement [5]

Core Viewpoint - Twin Vee PowerCats Co. has successfully enhanced the growth of BoatsForSale.com through an AI-driven transformation since its acquisition in February 2025 [1] Group 1 - The marine technology division, Wizz Banger, Inc., is responsible for the accelerated growth of BoatsForSale.com [1] - The platform has seen an increase in organic search traffic following the implementation of AI technologies [1]

[Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Twin Vee PowerCats reported a strong second quarter for 2025, with a 9.9% increase in revenue and a significant 910 basis point improvement in gross margin Q2 2025 Key Performance Indicators | Metric | Value | Change vs Q2 2024 | | :--- | :--- | :--- | | Revenues | $4.8 million | +9.9% | | Gross Margin | 13.8% | +910 basis points | | Cash & Equivalents | $6.2 million | Increase | | New Dealer Locations | 10 | Added | - Strategic initiatives driving performance include new dealer expansion, cost improvement measures, the integration of the newly acquired Bahama Boat Works, and utilizing AI tools on the boatsforsale.com website[4](index=4&type=chunk) - The company is expanding the Bahama Boat lineup with new **22, 24, and 28-foot models** to complement its existing larger portfolio and plans to enhance all Twin Vee models based on Bahama's high-quality fit and finish[4](index=4&type=chunk) - The company acquired the legendary Bahama Boat Works and introduced an all-new **22' BayCat model**[11](index=11&type=chunk) [Financial Statements Analysis](index=3&type=section&id=Financial%20Statements%20Analysis) The company's financial statements show a notable improvement in profitability for Q2 2025, with gross profit increasing 223% and net loss narrowing by 63% year-over-year [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, net sales grew 9.9% to $4.8 million, while the net loss significantly decreased to $(1.7) million from $(4.5) million in the prior year, driven by a 223% increase in gross profit Three Months Ended June 30, 2025 vs 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $4,755,618 | $4,326,821 | 9.9% | | Gross Profit | $654,053 | $202,340 | 223% | | Loss from Operations | $(1,675,806) | $(4,659,076) | (64%) | | Net Loss | $(1,654,071) | $(4,519,196) | (63%) | | Basic and Diluted EPS | $(0.87) | $(3.09) | (72%) | Six Months Ended June 30, 2025 vs 2024 | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $8,367,909 | $9,603,164 | (13%) | | Gross Profit | $1,191,167 | $479,653 | 148% | | Loss from Operations | $(3,354,900) | $(7,202,281) | (53%) | | Net Loss | $(3,264,311) | $(6,854,390) | (52%) | | Basic and Diluted EPS | $(1.93) | $(4.87) | (60%) | [Consolidated Balance Sheet Data](index=3&type=section&id=Consolidated%20Balance%20Sheet%20Data) As of June 30, 2025, the company's financial position strengthened, with working capital increasing by 52.7% to $10.2 million compared to December 31, 2024 Balance Sheet Highlights (as of June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $5,961,668 | $7,491,123 | (20.4%) | | Current assets | $13,392,948 | $10,419,141 | 28.5% | | Current liabilities | $3,203,858 | $3,747,990 | (14.5%) | | Working capital | $10,189,090 | $6,671,151 | 52.7% | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted Net Loss, a non-GAAP measure, to provide insight into its core operational performance by excluding certain non-cash expenses - Adjusted Net Loss is a supplemental non-GAAP financial measure used by management to evaluate core operations by excluding non-cash expenses such as depreciation, stock-based compensation, and impairment charges[18](index=18&type=chunk) Reconciliation of GAAP Net Loss to Adjusted Net Loss | Period | GAAP Net Loss | Adjusted Net Loss | Change in Adjusted Net Loss | | :--- | :--- | :--- | :--- | | **Q2 2025** | $(1,654,071) | $(941,153) | Improved from Q2 2024 | | **Q2 2024** | $(4,519,196) | $(2,092,494) | N/A | | **H1 2025** | $(3,264,311) | $(1,938,673) | Improved from H1 2024 | | **H1 2024** | $(6,854,390) | $(3,576,124) | N/A | [Corporate Information](index=1&type=section&id=Corporate%20Information) Twin Vee PowerCats Co., located in Fort Pierce, Florida, has been manufacturing and selling boats for 30 years, operating under the Twin Vee and Bahama Boats brands - The company manufactures and markets power sport boats under the Twin Vee and Bahama Boats brands, with a **30-year history** in Fort Pierce, Florida[3](index=3&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - A conference call with CEO Joseph Visconti and CFO Michael P. Dickerson was scheduled for August 7, 2025, at 12:00 p.m. (Eastern) to discuss the financial results[5](index=5&type=chunk)

PART I—FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements of Twin Vee PowerCats Co. and its subsidiaries, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial line items for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a decrease in total assets and cash, but an increase in current assets primarily due to assets held for sale. Total liabilities decreased significantly, while stockholders' equity experienced a slight reduction | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------- | :------------------------ | :------------------ | | Total Assets | $22,357,946 | $25,887,905 | | Cash and cash equivalents | $5,961,668 | $7,491,123 | | Assets held for sale, net | $4,334,523 | — | | Total Liabilities | $3,734,710 | $6,671,055 | | Total Stockholders' Equity | $18,623,236 | $19,216,850 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations indicate a significant improvement in net loss for both the three and six months ended June 30, 2025, compared to the prior year, driven by enhanced gross profit margins and reduced operating expenses, particularly from the cessation of electric boat development and lower impairment charges Three Months Ended June 30 | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | Net sales | $4,755,618 | $4,326,821 | $428,797 | 10% | | Gross profit | $654,053 | $202,340 | $451,713 | 223% | | Net loss | $(1,654,071) | $(4,519,196) | $2,865,125 | (63%) | | Basic and dilutive loss per share | $(0.87) | $(3.09) | $2.22 | (72%) | Six Months Ended June 30 | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | Net sales | $8,367,909 | $9,603,164 | $(1,235,255) | (13%) | | Gross profit | $1,191,167 | $479,653 | $711,514 | 148% | | Net loss | $(3,264,311) | $(6,854,390) | $3,590,079 | (52%) | | Basic and dilutive loss per share | $(1.93) | $(4.87) | $2.94 | (60%) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) The statements reflect a slight decrease in total stockholders' equity from January 1, 2025, to June 30, 2025, primarily due to net losses, partially offset by the issuance of common stock and stock-based compensation | Metric | January 1, 2025 | June 30, 2025 | | :-------------------------- | :-------------- | :------------ | | Total Stockholders' Equity | $19,216,850 | $18,623,235 | | Common Stock Shares | 1,487,445 | 2,237,299 | | Issuance of common stock | — | $2,555,101 | | Net loss (Q2 2025) | — | $(1,654,071) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash used in operating and investing activities increased, but this was largely mitigated by a significant inflow of cash from financing activities, primarily driven by the issuance of common stock | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------------------- | :----------- | :----------- | :----------- | :--------- | | Net cash used in operating activities | $(2,481,889) | $(2,232,013) | $(249,876) | (11%) | | Net cash used in investing activities | $(1,497,435) | $(247,855) | $(1,249,580) | (504%) | | Net cash provided by (used in) financing activities | $2,449,992 | $(137,029) | $2,587,021 | 1,888% | | Net change in cash, cash equivalents and restricted cash | $(1,529,332) | $(2,616,897) | $1,087,565 | 41.5% | | Cash, cash equivalents and restricted cash at end of period | $6,176,785 | $14,138,336 | $(7,961,551) | (56.3%) | [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations of the company's accounting policies, significant transactions, and financial statement line items, including corporate structure changes, revenue recognition, inventory valuation, lease accounting, and equity-related activities [Note 1. Organization and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's corporate history, including the formation and merger of subsidiaries (Fix My Boat, AquaSport Co., Forza X1, Inc.), the recent acquisition of Bahama Boat Brand assets, and the establishment of WIZZ BANGER, INC. It also details critical accounting policies such as the going concern assumption, principles of consolidation, basis of presentation, revenue recognition, and the impact of a 1-for-10 reverse stock split - **Fix My Boat, Inc.** and **AquaSport Co.** merged into **Twin Vee PowerCats Co.** in July 2024. **Forza X1, Inc.** merged into **Twin Vee** as a wholly-owned subsidiary in November 2024[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Acquired tangible and intangible assets related to the **Bahama boat brand** on June 5, 2025, for a **$100,000 upfront payment** and contingent consideration up to **$2,900,000** based on future sales[29](index=29&type=chunk)[30](index=30&type=chunk) - Formed **WIZZ BANGER, INC.** on March 26, 2025, to develop an enhanced used boat marketplace[28](index=28&type=chunk) - The company has incurred significant losses, raising **substantial doubt about its ability to continue as a going concern** for one year after the financial statements are issued[31](index=31&type=chunk) - A **1-for-10 reverse stock split** was effective April 7, 2025, to regain Nasdaq compliance[35](index=35&type=chunk) [Note 2. Inventories](index=15&type=section&id=Note%202.%20Inventories) Inventories are valued at the lower of cost and net realizable value using the average cost method. The company's net inventory increased, and the reserve for excess and obsolete inventories also grew from December 31, 2024, to June 30, 2025 | Inventory Component | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Raw Materials | $2,500,293 | $2,573,553 | | Work in Process | $192,154 | — | | Finished Product | $151,282 | $77,239 | | Total Inventory | $2,843,729 | $2,650,792 | | Reserve for Excess and Obsolete | $(162,729) | $(134,032) | | Net inventory | $2,681,000 | $2,516,760 | [Note 3. Property and Equipment](index=16&type=section&id=Note%203.%20Property%20and%20Equipment) Property and equipment are stated at cost, net of accumulated depreciation. The total net value decreased significantly due to the reclassification of assets held for sale and the disposition of assets related to the AquaSport lease termination | Property and Equipment (Net) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Total Property and Equipment, net | $8,743,265 | $15,037,798 | | Assets held for sale | $4,334,523 | — | | Net book value of disposed property & equipment (AquaSport) | — | $2,541,421 | - On May 28, 2025, the company recorded a **loss on disposition of $54,425** due to the elimination of ROU financial asset and lease liabilities from its balance sheet related to the AquaSport lease termination[67](index=67&type=chunk) [Note 4. Leases](index=16&type=section&id=Note%204.%20Leases) The company recognizes operating lease ROU assets and lease liabilities based on the present value of lease payments. The primary operating lease is for its Fort Pierce facilities, owned by the CEO's LLC. Both ROU assets and liabilities decreased significantly, reflecting the remaining lease term | Operating Lease Metric | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Operating lease ROU asset | $195,540 | $390,686 | | Operating lease liabilities (Current) | $218,560 | $436,730 | | Operating lease cost (Six Months Ended June 30) | $195,146 | $239,175 | - The company leases its office and warehouse facilities from **Visconti Holdings, LLC**, an entity whose sole member is the company's CEO, **Joseph C. Visconti**[70](index=70&type=chunk) [Note 5. Finance Leases](index=17&type=section&id=Note%205.%20Finance%20Leases) The company holds various finance leases for vehicles and equipment. The AquaSport lease was terminated in May 2025, resulting in the elimination of associated assets and liabilities and a recorded loss on termination | Finance Lease Liabilities | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Current portion | $21,038 | $221,929 | | Non-current portion | $30,952 | $2,423,165 | | Total | $51,990 | $2,645,094 | - On May 28, 2025, the **AquaSport lease was terminated**, removing all obligations and returning assets to the lessor, resulting in a **loss on termination of $53,425**[76](index=76&type=chunk) [Note 6. Accrued Liabilities](index=19&type=section&id=Note%206.%20Accrued%20Liabilities) Accrued liabilities increased from December 31, 2024, to June 30, 2025, primarily driven by higher accrued wages and benefits and accrued interest, partially offset by a decrease in accrued operating expenses | Accrued Liabilities | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Accrued wages and benefits | $361,157 | $206,041 | | Accrued interest | $182,391 | $96,793 | | Accrued operating expense | $166,583 | $277,873 | | Warranty Reserve | $216,474 | $213,546 | | Total | $926,605 | $794,253 | [Note 7. Short-term Debt](index=19&type=section&id=Note%207.%20Short-term%20Debt) The company maintains lines of credit with Wells Fargo and Yamaha Motor Finance. The outstanding balance with Wells Fargo decreased, while the balance with Yamaha Motor Finance increased, with both lines carrying interest rates above 11% | Line of Credit | June 30, 2025 Outstanding Balance | December 31, 2024 Outstanding Balance | June 30, 2025 Interest Rate | | :--------------- | :-------------------------------- | :------------------------------------ | :---------------------------- | | Wells Fargo | $123,909 | $130,690 | ~11.31% | | Yamaha Motor Finance | $314,497 | $255,649 | 11.50% | [Note 8. Notes Payable – SBA EIDL Loan](index=19&type=section&id=Note%208.%20Notes%20Payable%20%E2%80%93%20SBA%20EIDL%20Loan) The company has an SBA Economic Injury Disaster Loan (EIDL) of $499,900, obtained in response to the COVID-19 pandemic. This 30-year loan carries a 3.75% interest rate and is secured by substantially all of the company's tangible and intangible personal property - **SBA Economic Injury Disaster Loan (EIDL)** amount: **$499,900**[84](index=84&type=chunk) - Interest rate: **3.75%** over a **30-year term**, with interest-only payments beginning October 22, 2022[84](index=84&type=chunk) - The loan is secured by substantially all tangible and intangible personal property of the company[85](index=85&type=chunk) [Note 9. Related Party Transactions](index=20&type=section&id=Note%209.%20Related%20Party%20Transactions) The company leases its Fort Pierce, Florida facilities from an LLC owned by its CEO. Management fees previously received from Forza X1, Inc. ceased following its merger into Twin Vee in November 2024 - Leases Fort Pierce, Florida facilities from **Visconti Holdings, LLC**, an entity owned by the company's CEO, **Joseph C. Visconti**[88](index=88&type=chunk)[70](index=70&type=chunk) - Management services fees from **Forza X1, Inc.** (averaging **$46,670 monthly** in H1 2024) were eliminated in consolidation and ceased after the merger on November 26, 2024[89](index=89&type=chunk) [Note 10. Commitments and Contingencies](index=20&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) The company has repurchase obligations for repossessed dealer inventory, which increased significantly. It is also involved in various civil litigations, including a class action suit related to the Forza merger, though none are currently deemed material in the ordinary course of business | Repurchase Obligation | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Maximum obligation | $13,860,388 (77 units) | $10,265,229 (60 units) | - In Q2 2025, the company negotiated a **$460,220 obligation** for repossessed boats from a former dealer, selling **5 of 6 boats** for a net loss of approximately **$14,875**, with one boat remaining at a **$58,984 obligation**[91](index=91&type=chunk) - A **class action suit** was commenced on March 10, 2025, against the company and its directors/officers related to the **Forza merger**, alleging breach of fiduciary duty; the company denies the allegations and intends to vigorously defend[92](index=92&type=chunk)[188](index=188&type=chunk) [Note 11. Stockholders' Equity](index=20&type=section&id=Note%2011.%20Stockholders'%20Equity) This note details the company's common stock warrants, equity compensation plans, and stock-based compensation expenses. It highlights the outstanding warrants, available shares for grant, and the significant decrease in stock-based compensation expense. Additionally, WIZZ BANGER, INC. granted stock options to its executive team - As of June 30, 2025, the company had outstanding warrants to purchase an aggregate of **56,237 shares of common stock**, with exercise prices ranging from **$30.70 to $102.20** and expiry dates up to August 11, 2027[94](index=94&type=chunk)[100](index=100&type=chunk) - **156,592 shares** remained available for grant under the equity compensation plan as of June 30, 2025[96](index=96&type=chunk) | Stock-Based Compensation Expense | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------- | :------ | :------ | :------ | :------ | | Total Expense | $59,628 | $317,744 | $115,596 | $744,027 | - **WIZZ BANGER, INC.** granted **2,800,000 stock options** to its executive team on June 12, 2025, with a **12-month cliff vesting period** and an exercise price of **$0.12 per share**. The total grant-date fair value was estimated at **$188,761**[105](index=105&type=chunk)[107](index=107&type=chunk) [Note 12. Customer Concentration](index=23&type=section&id=Note%2012.%20Customer%20Concentration) The company exhibits significant customer concentration, with a small number of dealers accounting for a substantial portion of its total sales - During the three months ended June 30, 2025, **three individual dealers** each represented over **10% of the company's total sales**, collectively accounting for **70% of total sales**[108](index=108&type=chunk) - During the three months ended June 30, 2024, **three individual dealers** represented over **10% of total sales**, combining for **49% of total sales**[108](index=108&type=chunk) [Note 13. Segment](index=24&type=section&id=Note%2013.%20Segment) The company operates in two segments: Twin Vee PowerCats (recreational and commercial powerboats) and Wizz Banger, Inc. (a development-stage online marketplace). Wizz Banger currently does not meet the quantitative thresholds for separate disclosure and its financial results are aggregated within Twin Vee PowerCats - The company operates in two reportable segments: **Twin Vee PowerCats** (designs, manufactures, and sells recreational and commercial powerboats) and **Wizz Banger, Inc.** (a development-stage subsidiary for an AI-leveraged online marine marketplace)[110](index=110&type=chunk) - **Wizz Banger, Inc.** does not currently meet the quantitative thresholds for separate disclosure, generating **no revenue** for the six months ended June 30, 2025, and representing **less than 10% of consolidated assets, revenues, and net loss**[111](index=111&type=chunk) [Note 14. Subsequent Events](index=24&type=section&id=Note%2014.%20Subsequent%20Events) On July 28, 2025, Twin Vee and its subsidiary Wizz Banger, Inc. amended a license and conditional sale agreement with Revver Digital, LLC, clarifying rights, assigning the agreement to Wizz Banger, and providing a guaranty by Twin Vee for Wizz Banger's obligations - On July 28, 2025, **Twin Vee** and **Wizz Banger, Inc.** entered into a First Amendment to the license and conditional sale agreement with **Revver Digital, LLC**, assigning the agreement to **Wizz Banger** and clarifying rights, with **Twin Vee guaranteeing Wizz Banger's obligations**[113](index=113&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting operational overview, recent strategic developments, detailed analysis of financial results for the three and six months ended June 30, 2025, liquidity and capital resources, and critical accounting estimates [OVERVIEW](index=25&type=section&id=OVERVIEW) Twin Vee PowerCats Co. designs, manufactures, and markets recreational and commercial powerboats under the Twin Vee (catamarans) and Bahama Boats (V-hull) brands. The company operates from a 100,000 sq ft facility in Fort Pierce, Florida, and sells through a network of 22 independent dealers. The electric boat subsidiary, Forza X1, ceased production and merged into Twin Vee in late 2024 - **Twin Vee PowerCats Co.** is a designer, manufacturer, and marketer of recreational and commercial powerboats, specializing in twin-hull catamarans (**Twin Vee**) and V-hull boats (**Bahama Boats**)[118](index=118&type=chunk)[119](index=119&type=chunk) - The company operates from a **7.5-acre facility** in Fort Pierce, Florida, with approximately **100,000 square feet of buildings**, including a recently completed **30,000 square foot expansion**[118](index=118&type=chunk) - Products are primarily sold through a network of **22 independent boat dealers** across North America, the Caribbean, and Central America[119](index=119&type=chunk) - **Forza X1, Inc.**, the electric boat subsidiary, ceased production of electric boats and merged into **Twin Vee** as a wholly-owned subsidiary on November 26, 2024[119](index=119&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) Recent developments include the amendment of a license agreement for Wizz Banger, the acquisition of Bahama Boat Works assets, a public offering of common stock, a repurchase request for repossessed dealer inventory, and regaining Nasdaq compliance after a reverse stock split - Effective July 14, 2025, **Twin Vee** and **Wizz Banger, Inc.** amended a license and conditional sale agreement with **Revver Digital, LLC**, assigning the agreement to **Wizz Banger** and clarifying rights, with **Twin Vee guaranteeing Wizz Banger's obligations**[123](index=123&type=chunk)[124](index=124&type=chunk) - On June 5, 2025, the company acquired tangible and intangible assets related to the **Bahama boat brand** from **Bahama Boat Works, LLC**, for a **$100,000 upfront payment** and contingent consideration up to **$2,900,000** based on future sales[125](index=125&type=chunk) - A firm commitment underwritten public offering closed on May 12, 2025, selling **750,000 shares of common stock at $4.00 per share**, generating net proceeds of **$2,555,100**[127](index=127&type=chunk) - On April 21, 2025, the company was requested to repurchase repossessed inventory from a former dealer, selling **five of six boats** for a net loss of approximately **$14,000**, with a remaining repurchase obligation of **$58,984**[128](index=128&type=chunk) - The company regained compliance with the **Nasdaq Minimum Bid Price Requirement** on April 28, 2025, following a **1-for-10 reverse stock split** effective April 7, 2025[130](index=130&type=chunk)[131](index=131&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) The company experienced improved gross profit margins and reduced operating losses for both the three and six months ended June 30, 2025, compared to the prior year. This improvement was primarily due to effective cost management, increased factory efficiency, and the cessation of electric boat development, despite a decrease in net sales for the six-month period Comparison of the Three Months Ended June 30, 2025 and 2024 | Metric | June 30, 2025 | June 30, 2024 | $ Change | % Change | | :----------------------------------- | :------------ | :------------ | :------- | :------- | | Net sales | $4,755,618 | $4,326,821 | $428,797 | 10% | | Gross profit | $654,053 | $202,340 | $451,713 | 223% | | Operating expenses | $2,329,859 | $4,861,416 | $(2,531,557) | (52%) | | Net loss | $(1,654,071) | $(4,519,196) | $2,865,125 | (63%) | | Basic and dilutive loss per share | $(0.87) | $(3.09) | $2.22 | (72%) | Comparison of the Six Months Ended June 30, 2025 and 2024 | Metric | June 30, 2025 | June 30, 2024 | $ Change | % Change | | :----------------------------------- | :------------ | :------------ | :------- | :------- | | Net sales | $8,367,909 | $9,603,164 | $(1,235,255) | (13%) | | Gross profit | $1,191,167 | $479,653 | $711,514 | 148% | | Operating expenses | $4,546,067 | $7,681,934 | $(3,135,867) | (41%) | | Net loss | $(3,264,311) | $(6,854,390) | $3,590,079 | (52%) | | Basic and dilutive loss per share | $(1.93) | $(4.87) | $2.94 | (60%) | - **Gross profit as a percentage of sales improved to 13.8% for Q2 2025** (from 4.7% in Q2 2024) and to **14.2% for H1 2025** (from 5.0% in H1 2024), reflecting cost structure reductions and better ERP system utilization[135](index=135&type=chunk)[146](index=146&type=chunk) - Operating expenses decreased significantly due to a **$1,674,000 impairment charge in Q2 2024 not recurring**, the wind-down of electric boat development, and reductions in marketing, advertising, and professional fees[136](index=136&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces substantial doubt about its ability to continue as a going concern due to significant accumulated losses. However, it maintains a cash balance exceeding $6 million, has a building held for sale expected to generate over $4 million, and is actively implementing cost controls and revenue initiatives. The May 2025 public offering significantly boosted working capital - The company incurred a **net loss of $3,264,311** for the six months ended June 30, 2025, and had accumulated deficits of **$28,657,266**, raising **substantial doubt about its ability to continue as a going concern**[157](index=157&type=chunk) - Mitigation efforts include a **cash, cash equivalents, and restricted cash balance exceeding $6 million**, a building and land held for sale (**$4,334,523**) expected to generate **over $4 million**, and ongoing cost controls and revenue initiatives[155](index=155&type=chunk)[160](index=160&type=chunk) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | % Change | | :--------------- | :------------ | :---------------- | :--------- | :------- | | Cash and cash equivalents | $5,961,668 | $7,491,123 | $(1,529,455) | (20.4%) | | Current assets | $13,392,948 | $10,419,141 | $2,973,807 | 28.5% | | Current liabilities | $3,203,858 | $3,747,990 | $(544,132) | (14.5%) | | Working capital | $10,189,090 | $6,671,151 | $3,517,939 | 52.7% | - **Working capital increased by $3,517,939**, primarily due to the **May 2025 Offering of 750,000 shares**, which generated net proceeds of approximately **$2,555,100**[163](index=163&type=chunk)[168](index=168&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section outlines the key accounting policies that require significant management judgment and estimates, including revenue recognition, inventory valuation, impairment of long-lived assets, product warranty costs, leases, and deferred income taxes. These estimates can materially affect the reported financial amounts - Revenue is primarily derived from boat sales to independent dealers, recognized when control transfers, net of estimated dealer incentives[171](index=171&type=chunk) - Inventories are valued at the **lower of cost (average cost method)** and net realizable value, with provisions made for excess or obsolete inventories[174](index=174&type=chunk) - The recoverability of long-lived assets is assessed when impairment indicators are present, comparing undiscounted net cash flows to net carrying amounts[175](index=175&type=chunk) - Product warranty costs are accrued based on expected material and labor costs, utilizing historical information and experience[176](index=176&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=34&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) The company reported that it did not have any off-balance sheet arrangements during the periods presented - The company did not have any off-balance sheet arrangements during the periods presented[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Twin Vee PowerCats Co. is exempt from providing detailed quantitative and qualitative disclosures about market risk - The company is a **smaller reporting company** and is not required to provide quantitative and qualitative disclosures about market risk[180](index=180&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting, specifically inadequate staffing and experience in GAAP presentation. A remediation plan is underway, including hiring staff and using outside advisors, but full effectiveness is still being tested - **Disclosure controls and procedures were not effective** as of June 30, 2025, due to **material weaknesses in internal control over financial reporting**[181](index=181&type=chunk) - Material weaknesses are related to not having retained sufficient staff or engaged sufficient outside consultants with appropriate experience in **GAAP presentation**, especially for complex instruments[181](index=181&type=chunk) - A remediation plan is being executed, including retaining a full-time financial analyst and a controller, implementing a robust operating system, and utilizing outside advisors[182](index=182&type=chunk) - As of June 30, 2025, controls and procedures have been implemented, but testing of their effectiveness is ongoing, and additional time is required to demonstrate full remediation[183](index=183&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various civil litigations in the normal course of business, none of which are considered material. However, a putative class action lawsuit was filed on March 10, 2025, against the company and its directors/officers related to the Forza merger, alleging breach of fiduciary duty. The company denies the allegations and intends to vigorously defend, but the ultimate outcome is currently inestimable - A **putative class action complaint** was filed on March 10, 2025, against the company and its directors/officers by former **Forza X1, Inc. shareholders**, alleging **breach of fiduciary duty** related to the **Forza merger**[188](index=188&type=chunk) - The lawsuit seeks an unspecified award of damages, plus interest, costs, and attorneys' fees. The company denies the allegations and intends to vigorously defend against the claims[188](index=188&type=chunk) - At this early stage, the company is unable to estimate or project the ultimate outcome of this matter[188](index=188&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.Risk%20Factors) This section updates previously disclosed risk factors, emphasizing substantial doubt about the company's ability to continue as a going concern due to significant losses, dependence on independent dealers, reliance on third-party suppliers, and identified weaknesses in internal controls. It also highlights the risk of delisting from Nasdaq despite recent compliance and potential liabilities from repurchase obligations - There is **substantial doubt about the company's ability to continue as a going concern** due to significant losses from operations (**$3,354,900 for H1 2025**) and accumulated deficits (**$28,657,266 as of June 30, 2025**)[197](index=197&type=chunk) - The company faces risks related to maintaining **Nasdaq listing compliance**, despite having regained compliance after a **1-for-10 reverse stock split**. Future non-compliance could lead to delisting[190](index=190&type=chunk)[191](index=191&type=chunk)[196](index=196&type=chunk) - The company is highly dependent on its network of independent dealers, with **three individual dealers representing 70% of total sales for Q2 2025**, posing a material adverse effect risk if a significant dealer is lost[199](index=199&type=chunk)[200](index=200&type=chunk) - Identified **material weaknesses in internal controls over financial reporting** due to inadequate staffing and GAAP experience, with ongoing remediation efforts that may not be fully effective[204](index=204&type=chunk)[206](index=206&type=chunk) - The company has **repurchase obligations for repossessed dealer inventory**, with a **maximum obligation of $13,860,388 (77 units)** as of June 30, 2025, which could adversely affect financial condition if a significant number of units are repurchased[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the six months ended June 30, 2025, other than those previously disclosed in its SEC filings - No unregistered sales of equity securities occurred during the six months ended June 30, 2025, beyond what was previously disclosed[214](index=214&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not Applicable[216](index=216&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not Applicable[217](index=217&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section reports no disclosures in lieu of Form 8-K, no changes to procedures for recommending Board nominees, and no Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers during the reporting period - No disclosures in lieu of reporting on a Current Report on Form 8-K[219](index=219&type=chunk) - No changes to procedures for recommending nominees to the Board of Directors[220](index=220&type=chunk) - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three and six months ended June 30, 2025[221](index=221&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including various agreements (underwriting, merger, asset purchase), corporate governance documents (certificate of incorporation, bylaws), warrants, and certifications - The exhibit index includes the **Underwriting Agreement (May 8, 2025)**, **Agreement and Plan of Merger (August 12, 2024, for Forza X1)**, **Certificate of Amendment to Certificate of Incorporation (April 4, 2025)**, **Asset Purchase Agreement (June 5, 2025, for Bahama Boat Works)**, and various certifications[224](index=224&type=chunk) SIGNATURES [Signatures](index=44&type=section&id=Signatures) The Quarterly Report on Form 10-Q was duly signed on August 7, 2025, by Joseph C. Visconti, Chairman and Chief Executive Officer, and Michael P. Dickerson, Chief Financial Officer, on behalf of Twin Vee PowerCats Co - The report was signed by **Joseph C. Visconti, Chairman and Chief Executive Officer**, and **Michael P. Dickerson, Chief Financial Officer**[229](index=229&type=chunk) - The signing date for the report was **August 7, 2025**[229](index=229&type=chunk)

Financial Data and Key Metrics Changes - Revenues for the second quarter reached $4,800,000, representing a 9.9% increase compared to Q2 of the previous year [5] - Gross margin improved to 13.8%, an increase of over 900 basis points from the same period in 2024 [5] - Cash, cash equivalents, and restricted cash increased to $6,200,000, reflecting disciplined cash management [6][22] - Operating expenses decreased to $2,300,000, down 52% from $4,900,000 a year ago [21] - Net loss for the quarter was $1,700,000, a 63% improvement compared to the previous year [21] Business Line Data and Key Metrics Changes - The company shipped a total of 31 units in the second quarter, a sequential increase of 29% compared to the previous quarter [20] - The introduction of the new 22-foot Baycat model is expected to play a significant role in future sales [24] Market Data and Key Metrics Changes - The marine industry continues to face economic pressures, but the company has managed to maintain solid results [5] - The used boat market remains robust, impacting new boat sales [14] Company Strategy and Development Direction - The acquisition of Bahama Boat Works enhances the product portfolio and market presence, adding premium vessels to the lineup [23] - The company is focused on optimizing operations, investing in innovation, and expanding its portfolio through strategic acquisitions [17] - The launch of Whizbanger aims to streamline the boat marketplace, providing transparency and efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current market challenges and emphasized a focus on cost control, margins, and dealer support [7][17] - The company aims to position itself for sustainable growth and long-term shareholder value through disciplined execution [17] Other Important Information - The company has reduced field inventory from nearly 160 units to approximately 50 [8] - A new five-axis router has been delivered, enhancing manufacturing capabilities and operational efficiency [13] Q&A Session Summary - There were no questions during the Q&A session [25]

[First Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) Twin Vee PowerCats reported a strong Q1 2025 with **91.7% sequential revenue growth**, a **961 basis point gross margin improvement**, and disciplined cost management, exceeding guidance - CEO Joseph Visconti attributed the strong performance to solid execution, revenue growth, margin expansion, and disciplined operating costs[3](index=3&type=chunk) - The company expanded its dealer network in the first quarter, which is expected to extend its reach into key regional markets and reflects growing market confidence[3](index=3&type=chunk)[8](index=8&type=chunk) Key Financial and Operational Highlights | Metric | Q1 2025 Result | Note | | :--- | :--- | :--- | | **Sequential Revenue Growth** | 91.7% (vs. Q4 2024) | Outpaced guidance of 50% | | **Gross Margin** | 14.9% | 961 basis point improvement YoY | | **Adjusted Net Loss (Avg/Month)** | $333,000 | 17% improvement over guidance | [Financial Statements Analysis](index=3&type=section&id=Financial%20Statements%20Analysis) Financial statements reveal mixed year-over-year results with a **32% decrease in net sales** but a **94% surge in gross profit** and a **31% improvement in net loss**, alongside a **37.6% increase in working capital** [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Net sales for Q1 2025 decreased **32% to $3.6 million**, yet gross profit increased **94% to $537,114**, and net loss improved **31% to $(1.6) million** year-over-year | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $3,612,291 | $5,276,343 | (32%) | | **Gross profit** | $537,114 | $277,313 | 94% | | **Loss from operations** | $(1,679,094) | $(2,543,207) | (34%) | | **Net loss** | $(1,610,240) | $(2,335,195) | (31%) | | **Basic and dilutive EPS** | $(1.08) | $(1.77) | (39%) | [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, cash and cash equivalents decreased **34.5% to $4.9 million**, but working capital significantly improved **37.6% to $9.2 million** due to increased current assets and decreased current liabilities | Account | March 31, 2025 | December 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $4,910,267 | $7,491,123 | (34.5%) | | **Current assets** | $12,200,833 | $10,419,141 | 17.1% | | **Current liabilities** | $3,021,247 | $3,747,990 | (19.4%) | | **Working capital** | $9,179,586 | $6,671,151 | 37.6% | [Consolidated Statements of Cash Flows](index=3&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw stable cash used in operating activities at **$(1.7) million**, a significant shift to cash used in investing activities at **$(0.8) million**, and a **35% decrease** in cash used in financing activities | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | **Cash used in operating activities** | $(1,736,276) | $(1,749,920) | (1%) | | **Cash (used in) provided by investing activities** | $(789,774) | $1,476,448 | (153%) | | **Cash used in financing activities** | $(54,806) | $(83,735) | (35%) | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company presents Adjusted Net Loss, a non-GAAP measure, to provide a clearer view of core operational performance by excluding non-cash expenses, showing a significant improvement to **$(997,522)** in Q1 2025 - The company uses non-GAAP measures like Adjusted Net Loss to facilitate more meaningful comparisons of financial results to historical periods by excluding non-cash expenses[14](index=14&type=chunk) Reconciliation of GAAP Net Loss to Adjusted Net Loss | Reconciliation of GAAP Net Loss to Adjusted Net Loss | Quarter Ended March 31, 2025 | Quarter Ended March 31, 2024 | | :--- | :--- | :--- | | **Net loss (GAAP)** | **$(1,610,240)** | **$(2,335,195)** | | Depreciation & amortization | $441,672 | $425,281 | | Stock based compensation | $55,968 | $426,283 | | Loss on sale of property & equipment | $63,011 | — | | Boatsforsale.com development costs | $52,067 | — | | **Adjusted net loss (Non-GAAP)** | **$(997,522)** | **$(1,483,631)** | [Business Outlook and Forward-Looking Statements](index=1&type=section&id=Business%20Outlook%20and%20Forward-Looking%20Statements) Management anticipates continued sequential revenue growth in Q2 2025 driven by improving market conditions, focusing on responsible scaling and expecting a more favorable cash profile as major capital investments conclude - The company anticipates continued sequential revenue growth in Q2 2025, driven by improving market conditions and rebounding consumer demand[3](index=3&type=chunk) - Future strategy involves responsible scaling, balancing production increases with expense control and working capital discipline[3](index=3&type=chunk) - A more favorable cash profile is anticipated going forward, as most heavy capital investments are now complete[3](index=3&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) Twin Vee PowerCats Co. held a conference call on May 8, 2025, at 12:00 p.m. Eastern Time, hosted by CEO Joseph Visconti and CFO Michael P. Dickerson, to discuss first-quarter financial results - A conference call was held on May 8, 2025, at 12:00 p.m. (Eastern) with CEO Joseph Visconti and CFO Michael P. Dickerson[4](index=4&type=chunk) - The complete financial statements are available for access on the SEC's website and the company's investor relations page[5](index=5&type=chunk) [About Twin Vee PowerCats Co.](index=1&type=section&id=About%20Twin%20Vee%20PowerCats%20Co.) Twin Vee PowerCats Co., based in Fort Pierce, Florida, is a 30-year manufacturer of power sport boats, renowned for its stable and efficient catamaran hull designs - Twin Vee PowerCats Co. is a manufacturer of power sport boats, specializing in catamaran hull designs known for stability and a smooth ride[6](index=6&type=chunk) - The company has been operating for 30 years and is located in Fort Pierce, Florida[6](index=6&type=chunk)

```markdown [PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Unaudited Q1 2025 financial statements show a reduced net loss, decreased assets, and highlight going concern uncertainty [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$23.55 million** as of March 31, 2025, primarily due to reduced cash and reclassified assets held for sale Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,910 | $7,491 | | Assets held for sale | $4,307 | $0 | | **Total Assets** | **$23,550** | **$25,888** | | Total current liabilities | $3,021 | $3,748 | | **Total Liabilities** | **$5,888** | **$6,671** | | Accumulated deficit | $(27,003) | $(25,393) | | **Total Stockholders' Equity** | **$17,663** | **$19,217** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss for Q1 2025 decreased to **$1.61 million** despite lower sales, due to improved gross profit and reduced operating expenses Statement of Operations Summary (Unaudited) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $3,612,291 | $5,276,343 | | Gross profit | $537,114 | $277,313 | | Total operating expenses | $2,216,208 | $2,820,520 | | Loss from operations | $(1,679,094) | $(2,543,207) | | Net loss | $(1,610,240) | $(2,335,195) | | Basic and diluted loss per share | $(1.08) | $(1.77) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$1.74 million** in Q1 2025, with total cash decreasing by **$2.58 million** due to investing activities Cash Flow Summary (Unaudited) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,736,276) | $(1,749,920) | | Net cash (used in) provided by investing activities | $(789,774) | $1,476,448 | | Net cash used in financing activities | $(54,806) | $(83,735) | | **Net change in cash** | **$(2,580,856)** | **$(357,207)** | | **Cash at end of period** | **$5,125,384** | **$16,398,026** | [Notes to the Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Notes detail accounting policies, the Forza X1 merger, a reverse stock split, and a substantial doubt about the company's going concern ability - The company's financial statements were prepared under the assumption of being a going concern, but significant operating losses raise substantial doubt about this ability for the next year[30](index=30&type=chunk)[117](index=117&type=chunk) - On November 26, 2024, Twin Vee completed its merger with Forza X1, Inc., which is now a wholly-owned subsidiary[28](index=28&type=chunk) - A 1-for-10 reverse stock split was effected on April 7, 2025, to regain compliance with Nasdaq's minimum bid price requirement. All share and per-share amounts have been retrospectively adjusted[34](index=34&type=chunk)[106](index=106&type=chunk) - Subsequent to the quarter end, on April 21, 2025, the company was requested to repurchase inventory from a former dealer, with an expected obligation of approximately **$546,000**[91](index=91&type=chunk)[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 32% sales decrease in Q1 2025, offset by improved gross margin and reduced operating loss, addressing going concern risk via cost controls and asset sales [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Net sales decreased by 32% in Q1 2025 due to lower boat volume, but gross profit increased by 94% and operating expenses decreased by 21% Financial Performance Comparison (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $3,612,291 | $5,276,343 | (32%) | | Gross profit | $537,114 | $277,313 | 94% | | Gross Margin | 14.9% | 5.3% | +9.6 pts | | Operating expenses | $2,216,208 | $2,820,520 | (21%) | | Loss from operations | $(1,679,094) | $(2,543,207) | (34%) | - The decrease in net sales was due to selling fewer boats (24 vs. 32) and a change in product mix, with a lower average selling price (**$150k** vs. **$165k**)[126](index=126&type=chunk) - Operating expenses were significantly reduced due to lower marketing, cancellation of rent for the former Forza facility, reduced staffing levels at Forza, and the cessation of R&D for electric boats[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is under pressure due to ongoing losses, with management addressing going concern risk by listing a **$4.3 million** asset for sale and implementing cost controls - The company has classified a building and land in Marion, NC, as an asset held for sale for **$4,306,896**, which is expected to be sold within one year to fund future operations[136](index=136&type=chunk)[140](index=140&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern due to significant historical and ongoing operating losses[138](index=138&type=chunk)[178](index=178&type=chunk) Selected Balance Sheet Data | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,910,267 | $7,491,123 | | Working capital | $9,179,586 | $6,671,151 | | Accumulated deficit | $(27,003,195) | $(25,392,955) | [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the company is not required to provide quantitative and qualitative disclosures about market risk[163](index=163&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of March 31, 2025, due to material weaknesses in internal control over financial reporting, with a remediation plan underway - As of March 31, 2025, management concluded that the company's disclosure controls and procedures were not effective[164](index=164&type=chunk) - The ineffectiveness is due to material weaknesses related to insufficient staffing with appropriate experience in GAAP presentation[164](index=164&type=chunk)[187](index=187&type=chunk) - A remediation plan is in progress, including hiring a Staff Accountant and controller and implementing a robust operating system[165](index=165&type=chunk) [PART II—OTHER INFORMATION](index=32&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a new putative class action lawsuit filed by former Forza X1 shareholders alleging breach of fiduciary duty related to the merger - On March 10, 2025, a putative class action complaint (Youseph, et al. v. Visconti, et al.) was filed by former Forza shareholders alleging breach of fiduciary duty in connection with the Forza merger[191](index=191&type=chunk) - The company intends to vigorously defend against the claims but is currently unable to estimate the ultimate outcome or potential loss[191](index=191&type=chunk)[192](index=192&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks including Nasdaq listing compliance, going concern uncertainty, significant dealer concentration, and persistent material weaknesses in internal controls - There is a risk of failing to meet Nasdaq's continued listing requirements. Although the company regained compliance with the minimum bid price rule via a 1-for-10 reverse stock split on April 7, 2025, there is no assurance it can maintain compliance[171](index=171&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) - A substantial doubt exists about the company's ability to continue as a going concern due to a history of significant operating losses[178](index=178&type=chunk)[179](index=179&type=chunk) - The company has significant dealer concentration risk. In Q1 2025, two dealers accounted for **54%** of total sales[180](index=180&type=chunk)[181](index=181&type=chunk) - Material weaknesses in internal controls have been identified due to inadequate staffing, and there is no assurance they will be effectively remediated[183](index=183&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales or issuer purchases of equity securities during Q1 2025 - The company did not sell any unregistered equity securities during the three months ended March 31, 2025[193](index=193&type=chunk) - There were no issuer purchases of its equity securities in Q1 2025[194](index=194&type=chunk) [Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - Not Applicable[195](index=195&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[196](index=196&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[199](index=199&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed as part of the Quarterly Report on Form 10-Q - The Exhibit Index lists all exhibits filed with the Form 10-Q[200](index=200&type=chunk) ```

Financial Data and Key Metrics Changes - The company reported revenue of $3.6 million for the first quarter, representing a 91.7% sequential increase compared to the fourth quarter of 2024, exceeding the previously guided growth of 50% [15] - Gross margins improved to 14.9%, up 961 basis points from the same period last year, primarily due to better manufacturing efficiency [16] - Operating expenses decreased by 21% year over year, reflecting reductions in selling, general and administrative expenses [17] - The adjusted net loss averaged $333,000 per month in the first quarter, a 17% improvement over the previously guided adjusted net loss expectations of $400,000 [17] - Cash and cash equivalents stood at $5.1 million as of March 31, down from year-end levels primarily due to funding negative EBITDA [17] Business Line Data and Key Metrics Changes - The company shipped 24 units in the first quarter, a sequential increase of 118% compared to the fourth quarter of 2024 [16] - The average sale price delivered fell to $151,000 in the first quarter from $171,000 in the fourth quarter due to an increased mix of smaller boats [16] - Field inventory decreased significantly from approximately 180 boats to under 60 boats, indicating improved inventory management and demand [8][10] Market Data and Key Metrics Changes - The recreational sector faced challenges in 2024, but the company has seen signs of recovery in consumer demand as the dealer network expands [15][21] - The company added six new dealer locations, enhancing its market presence [7] Company Strategy and Development Direction - The company is focused on operational efficiency, margin expansion, and developing high-impact digital platforms to complement its core business [21] - A new 22-foot twin D Bay Cat model was introduced, targeting the growing inshore market [11] - The company completed a facility expansion of 30,000 square feet to enhance operational efficiency [11] - A new interactive website is set to launch, transforming customer interaction and enhancing the buying experience [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and supply chain issues but expressed confidence in navigating these through proactive strategies [20] - The company anticipates continued sequential revenue growth in the second quarter of 2025 as the market recovers [21] - Management emphasized a commitment to operational discipline and American craftsmanship while delivering value to customers and shareholders [24] Other Important Information - The company reclassified $4.3 million of land and buildings as held for sale, which is expected to strengthen cash position within the next twelve months [19] - Inventory turnover improved from approximately 4.5 to 5 turns year over year, reflecting better alignment between production and dealer demand [19] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the Q&A session may not have been included in the records provided.

Financial Data and Key Metrics Changes - The company reported revenue of $3.6 million for Q1 2025, representing a 91.7% sequential increase compared to Q4 2024, exceeding the previously guided growth of 50% [14] - Gross margins improved to 14.9%, an increase of 961 basis points year-over-year, primarily due to better manufacturing efficiency [15] - Operating expenses decreased by 21% year-over-year, reflecting reductions in selling, general and administrative expenses, including salaries and professional fees [15] - The adjusted net loss averaged $333,000 per month in Q1 2025, a 17% improvement over the previously guided adjusted net loss expectations of $400,000 [16] Business Line Data and Key Metrics Changes - The company shipped 24 units in Q1 2025, a sequential increase of 118% compared to Q4 2024 [14] - The average sale price per unit decreased to $151,000 in Q1 2025 from $171,000 in Q4 2024 due to a higher mix of smaller boats [15] - Field inventory decreased significantly from approximately 180 boats to under 60 boats, indicating improved sales and inventory management [7][9] Market Data and Key Metrics Changes - The company noted that the recreational sector faced challenges in 2024, but this provided an opportunity to reset and refocus for future growth [5] - The dealer network expanded with the addition of six new dealer locations, enhancing market presence [6] Company Strategy and Development Direction - The company is focused on operational efficiency, margin expansion, and developing high-impact digital platforms to complement its core business [19] - A new 22-foot twin D Bay Cat model was introduced, targeting the growing inshore market, which is expected to generate strong interest [10] - The company completed a facility expansion of 30,000 square feet to enhance operational efficiency [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued sequential revenue growth in Q2 2025 as the market recovers and the dealer base expands [19] - The company is actively monitoring the impact of tariffs on its supply chain but believes its proactive strategy will help navigate potential challenges [18] Other Important Information - The company reclassified $4.3 million of land and buildings as held for sale, which is expected to strengthen its cash position within the next twelve months [17] - A new interactive website is set to launch, enhancing customer engagement and allowing for real-time customization of products [12] Q&A Session Summary Question: What is the outlook for revenue growth in the upcoming quarters? - Management anticipates continued sequential revenue growth in Q2 2025 as the market slowly recovers and the dealer base expands [19] Question: How is the company addressing the impact of tariffs? - The company is actively monitoring the evolving tariff landscape and believes its strong relationships with US suppliers will help mitigate risks [18]