PART I [Business](index=6&type=section&id=Item%201.%20Business) The company designs, manufactures, and markets power catamaran boats through gas-powered, electric, and franchise segments - The company is organized into three operating segments: gas-powered boats, electric-powered boats (through Forza X1, Inc), and a franchise segment (through Fix My Boat, Inc)[23](index=23&type=chunk) - **Gas-powered boats** accounted for **99% of net revenue** in fiscal year 2021 and 100% in 2020[27](index=27&type=chunk) - The company is developing a line of electric-powered catamarans through its subsidiary Forza X1, with the first two models expected to begin production by the **second quarter of 2023**[25](index=25&type=chunk)[37](index=37&type=chunk) - Sales are primarily conducted through a network of **19 independent boat dealers** in 23 locations across North America and the Caribbean[24](index=24&type=chunk)[42](index=42&type=chunk) [Business of Our Segments](index=6&type=section&id=Business%20of%20Our%20Segments) The company's core business is gas-powered boats, while developing electric models and a marine mechanic franchise - The gas-powered boat segment offers 14 models, including the new 280 GFX, 340 GFX, and the upcoming 400 GFX, which is the largest Twin Vee to date[27](index=27&type=chunk)[28](index=28&type=chunk)[39](index=39&type=chunk) - Forza X1 has completed the design of two electric boat models and the prototype of its electric outboard motor, with commercial production expected to start by **Q2 2023**[37](index=37&type=chunk) - The franchise segment is being developed to establish a franchise model for marine mechanics across the United States[34](index=34&type=chunk) [Our Strategy](index=8&type=section&id=Our%20Strategy) The company's strategy centers on product innovation and dealer expansion, with a distinct direct-to-consumer model for its EV subsidiary - Key strategies include launching new products, increasing market share in the catamaran category, strengthening the dealer network, and expanding internationally[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk) - Forza X1 plans a **direct-to-consumer sales model** using a dedicated web and app platform for an end-to-end customer experience, differing from the traditional dealer model[45](index=45&type=chunk) - Forza's specific goals include successfully launching the FX1 model, investing in a dedicated factory, using a common platform for new models, and focusing on technological advancements[46](index=46&type=chunk) [Our Markets](index=10&type=section&id=Our%20Markets) The company operates in a robust U.S powerboat market and is positioned to enter the growing electric boat segment - In 2021, U.S sales of boats and marine products totaled an estimated **$49 billion**, with new powerboat sales increasing by 7% compared to 2020[51](index=51&type=chunk) - The global recreational boating market is projected to surpass **$63 billion by 2026**[52](index=52&type=chunk) - The market for hybrid and pure electric boats is estimated to be greater than **$20 billion worldwide by 2027**, with recreational boats being the largest and fastest-growing segment[60](index=60&type=chunk) [Our Dealer Network](index=12&type=section&id=Our%20Dealer%20Network) The company relies on a concentrated network of independent dealers without formal written agreements for its gas-powered boat sales - The company's **top five dealers** accounted for approximately **67% of total units sold** for the year ended December 31, 2021[65](index=65&type=chunk) - The company does not have written agreements with its dealers and relies on non-binding indications of interest for production planning[67](index=67&type=chunk) - Twin Vee has repurchase agreements with third-party floor plan financing providers but has not been required to repurchase any boats to date[68](index=68&type=chunk)[69](index=69&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from dealer concentration, supply chain disruptions, new product development, and material weaknesses in internal controls - Business risks include reliance on a network of independent dealers, with the **top five dealers accounting for 67%** of total boats sold in fiscal 2021[115](index=115&type=chunk) - The company relies on a single manufacturer, **Suzuki Motor of America, Inc**, for outboard engines and has experienced shortages of 150-horsepower motors[122](index=122&type=chunk) - The planned fully electric sport boat (FX1) has not yet been fully developed, and its success depends on consumer adoption and a new **direct-to-consumer distribution model**[159](index=159&type=chunk)[162](index=162&type=chunk)[168](index=168&type=chunk) - The company has identified **material weaknesses in its internal controls** over financial reporting, specifically related to segregation of duties[208](index=208&type=chunk)[210](index=210&type=chunk)[212](index=212&type=chunk) - The parent company, Twin Vee PowerCats, Inc, owns approximately **57.14% of the outstanding common stock**, giving it and its CEO significant influence over corporate decisions[152](index=152&type=chunk) [Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the Securities and Exchange Commission - None[236](index=236&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) The company leases its current facility from its CEO and plans to acquire land for a new manufacturing plant - The company leases its primary facility from an LLC solely owned by its CEO, Joseph C Visconti, under a five-year lease agreement with monthly rent of **$31,500**[237](index=237&type=chunk) - The current facility's capacity is not expected to be sufficient for future growth; subsidiary Forza X1 has an option to acquire **14.5 acres** to build a new manufacturing plant[238](index=238&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not presently a party to any material legal proceedings[239](index=239&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[240](index=240&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq, and proceeds from its 2021 IPO have been partially reallocated - The company's common stock has traded on the Nasdaq under the symbol **"VEEE"** since July 21, 2021[241](index=241&type=chunk) - The company has not paid cash dividends in 2021 or 2020 and does not intend to in the foreseeable future[244](index=244&type=chunk) - The IPO on July 23, 2021, generated approximately **$15.8 million in net proceeds**[248](index=248&type=chunk) - The company has revised its use of IPO proceeds, reallocating funds from developing electric motors for retrofitting to general working capital[250](index=250&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Sales grew 43% in 2021, but higher costs led to a decline in gross margin and a net loss | | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $15,774,170 | $11,063,619 | $4,710,551 | 43% | | **Gross profit** | $6,275,786 | $4,774,303 | $1,501,483 | 31% | | **(Loss) income from operations** | $(1,630,721) | $720,834 | $(2,351,555) | (326%) | | **Net (loss) income** | $(1,011,009) | $1,171,077 | $(2,182,086) | (186%) | | **Basic and dilutive (loss) income per share** | $(0.19) | $0.29 | $(0.48) | (166%) | - **Net sales increased 43% YoY** due to a strengthening economy, a 27% increase in the number of boats sold, and a 12% increase in average revenue per unit[267](index=267&type=chunk) - **Gross profit margin decreased from 43% to 40%** in 2021, attributed to increased costs of raw materials and purchased components[268](index=268&type=chunk) - **Operating expenses increased 95% to $7.9 million**, driven by higher salaries, public company costs, and R&D for the electric boat division[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk)[275](index=275&type=chunk) - **Working capital increased by approximately $10.5 million** in 2021, primarily due to the net proceeds from the IPO[264](index=264&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's total assets and stockholders' equity significantly increased in 2021, driven by IPO proceeds | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $13,073,346 | $1,834,942 | | **Total Assets** | $20,599,184 | $4,504,566 | | **Total Current Liabilities** | $2,155,420 | $1,440,067 | | **Total Liabilities** | $3,899,484 | $2,955,726 | | **Total Stockholders' Equity** | $16,699,700 | $1,548,840 | | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | **Net sales** | $15,774,170 | $11,063,619 | | **Gross profit** | $6,275,786 | $4,774,303 | | **Net (loss) income** | $(1,011,009) | $1,171,077 | | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(1,947,539) | $364,648 | | **Net cash used in investing activities** | $(8,037,264) | $(200,452) | | **Net cash provided by financing activities** | $16,068,289 | $512,046 | [Controls and Procedures](index=71&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of year-end 2021 due to material weaknesses in internal control - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were **not effective**[419](index=419&type=chunk) - The ineffectiveness is due to **material weaknesses** related to a lack of segregation of duties across financially relevant functions[421](index=421&type=chunk) - A remediation plan is underway, which includes recruiting a full-time controller and utilizing outside advisors to improve internal controls[422](index=422&type=chunk)[423](index=423&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=73&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) The company's five-member board has a majority of independent directors and has established key governance committees - The board of directors consists of five members: Joseph C Visconti (CEO), Preston Yarborough (VP), Bard Rockenbach, James Melvin, Neil Ross, and Steven A Shallcross[432](index=432&type=chunk) - The board is divided into three classes with staggered three-year terms, which may delay or prevent changes in control[445](index=445&type=chunk)[446](index=446&type=chunk) - The board has determined that Messrs Rockenbach, Ross, Melvin, and Shallcross are **independent directors** under Nasdaq rules[451](index=451&type=chunk) - The company has established Audit, Compensation, and Corporate Governance and Nominating committees, each composed of independent directors[454](index=454&type=chunk)[455](index=455&type=chunk) [Executive Compensation and Director Compensation](index=79&type=section&id=Item%2011.%20Executive%20Compensation%20and%20Director%20Compensation) Executive compensation is comprised of salary, bonus, and option awards, with long-term employment agreements in place | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Joseph C. Visconti** (President and CEO) | 2021 | 235,276 | 200,965 | 671,276 | 1,135,788 | | | 2020 | 171,000 | 85,000 | - | 265,500 | | **Preston Yarborough** (Vice President) | 2021 | 145,577 | 58,359 | 335,638 | 548,835 | | | 2020 | 135,000 | 13,500 | - | 161,200 | | **Carrie Gunnerson** (CFO) | 2021 | 39,088 | 16,406 | 227,617 | 283,111 | - The company has five-year employment agreements with its CEO, Vice President, and CFO, which include provisions for salary, performance bonuses, and severance[477](index=477&type=chunk)[486](index=486&type=chunk)[494](index=494&type=chunk) - Non-employee directors receive annual cash retainers ranging from **$3,000 to $12,000** depending on committee roles, plus an initial grant of options to purchase 5,500 shares[527](index=527&type=chunk)[528](index=528&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Ownership is highly concentrated, with the parent company and CEO holding a controlling interest | Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | | :--- | :--- | :--- | | **Twin Vee PowerCats, Inc.** | 4,000,000 | 58.82% | | **Joseph Visconti** | 2,321,160 | 33.16% | | **Marathon Micro Fund, L.P.** | 652,832 | 9.32% | | **All current executive officers and directors as a group (7 persons)** | 2,394,016 | 33.52% | - CEO Joseph Visconti is deemed to have control over the **4,000,000 shares** owned by the parent company, Twin Vee PowerCats, Inc, due to his controlling stake in the parent[540](index=540&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=90&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) The company engages in multiple related party transactions, primarily with entities controlled by its CEO - The company leases its facility from Visconti Holdings, LLC, an entity controlled by CEO Joseph Visconti, with monthly rent payments of **$26,500**[545](index=545&type=chunk) - A loan from CEO Joseph Visconti with an original principal of **$525,500** was fully repaid during 2021[546](index=546&type=chunk)[383](index=383&type=chunk) - The company paid its parent, Twin Vee PowerCats, Inc, **$90,417** to purchase a used boat and also pays a monthly management fee of **$3,500** to the parent company[547](index=547&type=chunk)[549](index=549&type=chunk) [Principal Accountant Fees and Services](index=91&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company's audit fees increased in 2021, with all services pre-approved by the Audit Committee | | Year ended Dec 31, 2021 | Year ended Dec 31, 2020 | | :--- | :--- | :--- | | **Audit fees and expenses** | $115,000 | $75,000 | | **Audit related fees** | $9,500 | $0 | | **Other fees** | $8,500 | $0 | | **Total** | **$133,000** | **$75,000** | PART IV [Exhibits and Financial Statement Schedules](index=93&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including key corporate and employment agreements - The financial statements required for this report are located in Part II, Item 8[559](index=559&type=chunk) - Key exhibits filed include the Underwriting Agreement, Certificate of Incorporation, Bylaws, employment agreements for executives, and the 2021 Stock Incentive Plan[561](index=561&type=chunk)[562](index=562&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OR FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Commission file number: 001-40623 TWIN VEE POWERCATS CO. (Exact Name of Registrant as Specified in Its Charter) Delawar ...

Part I [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2021, show significant revenue growth, improved net income, and positive cash flow from operations [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2021, total assets increased to $6.31 million, driven by inventories and property, while liabilities grew due to a PPP loan and accounts payable Condensed Balance Sheet Data (in USD) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $2,899,841 | $1,834,942 | | Inventories | $1,539,514 | $936,676 | | Cash | $406,642 | $891,816 | | **Total Assets** | **$6,312,615** | **$4,504,566** | | **Total Current Liabilities** | $2,044,221 | $1,440,067 | | Accounts Payable | $1,190,147 | $799,280 | | Paycheck Protection Program Loan | $608,224 | $0 | | **Total Liabilities** | **$4,580,975** | **$2,955,726** | | **Total Stockholders' Equity** | **$1,731,640** | **$1,548,840** | [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) Net sales grew significantly for both three and six-month periods ended June 30, 2021, leading to a positive net income for the three-month period and substantial growth for the six-month period Operating Results (in USD) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $3,297,571 | $1,720,604 | $6,505,214 | $4,387,461 | | **Gross Profit** | $1,316,144 | $695,448 | $2,804,050 | $1,864,682 | | **(Loss) Income from Operations** | ($116,933) | ($824) | $37,829 | $138,212 | | **Net Income (Loss)** | $50,851 | ($23,524) | $182,800 | $55,132 | | **Basic and Dilutive EPS** | $0.01 | ($0.01) | $0.05 | $0.01 | [Condensed Statements of Cash Flows](index=9&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2021, operating cash flow turned positive, while investing activities increased, and financing activities were primarily from a PPP loan Cash Flow Summary (in USD) | Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,045 | ($314,367) | | Net cash used in investing activities | ($604,990) | ($119,692) | | Net cash provided by financing activities | $114,771 | $586,044 | | **Net change in cash** | **($485,174)** | **$151,985** | | **Cash at end of period** | **$406,642** | **$367,559** | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Financial%20Statements) Key notes highlight single vendor reliance, related-party leases, significant customer concentration, and the completion of an $18 million IPO in July 2021 - The company is dependent on a single vendor for all engines, with purchases totaling **$1.31 million** in the first six months of 2021[45](index=45&type=chunk) - The company leases its office and warehouse facilities from an LLC whose sole member is the company's CEO, Joseph C. Visconti[51](index=51&type=chunk) - In July 2021, the company completed its Initial Public Offering (IPO), selling 3,000,000 shares at **$6.00 per share** for gross proceeds of **$18,000,000**[69](index=69&type=chunk) - Customer concentration is significant, with five customers representing **64% of total sales** during the first six months of 2021[67](index=67&type=chunk) [Management's Discussion and Analysis (MD&A)](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes sales growth to economic recovery despite component shortages, with stable gross margins, increased operating expenses, and improved liquidity post-IPO [Business Overview](index=17&type=section&id=Overview) Twin Vee designs and manufactures power catamaran boats, increasing production and developing new emission-free electric propulsion models - The company is developing emission-free 240 and 280 electric propulsion models, intended for launch in the first half of 2022[77](index=77&type=chunk) - Production has increased from one boat per week during the COVID-19 slowdown in early 2020 to **two and a half boats per week** as of Q2 2021[77](index=77&type=chunk) - The company sells its boats through a network of **10 independent dealers** in 14 locations across North America and the Caribbean[76](index=76&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) For the first six months of 2021, net sales and gross profit increased significantly, with net income rising 232% despite higher operating expenses Comparison of Six Months Ended June 30, 2021 and 2020 (in USD) | Metric | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $6,505,214 | $4,387,461 | $2,117,753 | 48% | | **Gross Profit** | $2,804,050 | $1,864,682 | $939,368 | 50% | | **Operating Expenses** | $2,766,221 | $1,726,470 | $1,039,751 | 60% | | **Net Income** | $182,800 | $55,132 | $127,668 | 232% | - The increase in operating expenses is attributed to a higher headcount in 2021 compared to 2020 (when headcount was reduced due to COVID-19) and a doubling of professional services fees in preparation for the IPO[83](index=83&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased as of June 30, 2021, but working capital significantly improved, with the July 2021 IPO providing substantial additional capital Liquidity Data (in USD) | Metric | June 30, 2021 | December 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Cash | $406,642 | $891,816 | (54.4%) | | Current Assets | $2,899,841 | $1,834,942 | 58.0% | | Current Liabilities | $2,044,221 | $1,440,067 | 42.0% | | **Working Capital** | **$855,620** | **$394,875** | **116.7%** | - Cash flow from operations turned positive to approximately **$5,000** for the first six months of 2021, compared to a use of **($314,000)** in the prior year period, driven by net income offset by increased inventory[92](index=92&type=chunk) [Critical Accounting Policies](index=22&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGMENTS%20AND%20ESTIMATES) Critical accounting policies include revenue recognition, inventory valuation, and the treatment of the PPP loan as an in-substance government grant - Revenue is recognized when the product is released to the carrier for transport to a dealer, with dealer incentives recorded as a reduction of revenue[36](index=36&type=chunk)[99](index=99&type=chunk) - The company accounts for its Paycheck Protection Program (PPP) loan as an in-substance government grant, recognizing it in other income as the related costs are incurred[108](index=108&type=chunk) - Inventories are stated at the lower of cost (using FIFO) or net realizable value, requiring estimates for inventory obsolescence[102](index=102&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of June 30, 2021, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of June 30, 2021[113](index=113&type=chunk) - Material weaknesses were identified relating to (i) lack of segregation of duties and (ii) insufficient level of review of internally prepared financial statements[115](index=115&type=chunk) - These control deficiencies resulted in an inventory error of approximately **$227,000** and other errors in balances for inventory, property and equipment, and accounts payable[115](index=115&type=chunk) - A remediation plan is being executed, including the retention of a full-time controller, but the weaknesses are not yet considered remediated[116](index=116&type=chunk)[117](index=117&type=chunk) Part II [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including dependence on dealers and a single engine supplier, supply chain disruptions, internal control weaknesses, and concentrated ownership influence [Business and Operational Risks](index=25&type=section&id=Business%20and%20Operational%20Risks) Operational risks include reliance on independent dealers and a single engine supplier, potential supply chain disruptions, and a large fixed cost base - The company depends on its network of independent dealers, with the top five dealers accounting for **33% of boats sold** in fiscal 2020[132](index=132&type=chunk) - The company relies on a single manufacturer, Suzuki Motor of America, Inc., for its engines and has experienced shortages of 150-horsepower motors due to the COVID-19 pandemic[139](index=139&type=chunk) - The company may be required to repurchase inventory from dealers who default on their floor plan financing arrangements[136](index=136&type=chunk) [Product and Market Risks](index=31&type=section&id=Product%20and%20Market%20Risks) The company faces risks from intense competition, volatile demand, and the need for successful new product introductions, particularly electric models - The powerboat industry is highly competitive and cyclical, with demand highly sensitive to general economic conditions and consumer discretionary spending[149](index=149&type=chunk)[175](index=175&type=chunk) - Future success depends on the successful introduction of new products, including the development of the Twin 240E, a fully electric boat with a proprietary powertrain system[153](index=153&type=chunk)[154](index=154&type=chunk) [Public Company and Ownership Risks](index=34&type=section&id=Public%20Company%20and%20Ownership%20Risks) Risks include material weaknesses in internal controls, significant influence by the CEO and parent company, and reduced reporting requirements as an emerging growth company - The company has identified material weaknesses in its internal control over financial reporting, including lack of segregation of duties and insufficient review, which could result in a material misstatement of financial statements[182](index=182&type=chunk)[185](index=185&type=chunk) - The parent company owns approximately **57.14%** of the outstanding common stock, and the CEO has significant influence over management and corporate matters[165](index=165&type=chunk) - As an "emerging growth company," the company is exempt from certain reporting requirements, including the auditor attestation of internal controls required by Section 404(b) of the Sarbanes-Oxley Act[194](index=194&type=chunk) [Use of Proceeds from Initial Public Offering](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company closed its IPO in July 2021, raising $16.4 million net, with proceeds allocated for electric boat development, larger boat production, and a new testing center - The company closed its IPO on July 22, 2021, raising approximately **$16.4 million** in net proceeds[211](index=211&type=chunk) Planned Use of IPO Net Proceeds (in USD) | Use of Proceeds | Allocated Amount | | :--- | :--- | | Production & marketing of larger boats | ~$1,500,000 | | Design & development of electric boats | ~$2,500,000 | | Design & development of electric propulsion system | ~$6,000,000 | | Acquisition & development of waterfront testing center | ~$3,500,000 | | Working capital | Balance | [Other Disclosures](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, and other disclosures are not applicable - The company is not presently a party to any material legal proceedings[120](index=120&type=chunk)