Twin Vee PowerCats, Co.
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
VEEE$8.27+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001731122-24-001808
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001731122-25-000684
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 80 current paragraphs.
35 unchanged; 17 reworded; 27 added; 30 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
All share amounts and exercise or conversion prices in this Quarterly Report on Form 10-Q have been adjusted retrospectively for our 1-for-10 reverse stock split (the “Reverse Stock Split”), which was effective on April 7, 2025.
Current report
Revenue from the sale of our boats accounted for 100% of our net revenue in the first quarter of 2025 and for the fiscal year 2024. Our boats are manufactured in Fort Pierce, Florida. We believe our company has been an innovator in the recreational and commercial power boat industry. We currently have 15 models in production ranging in size from our 22-foot, single engine, monohull (Aquasport) to our 40-foot offshore 400 GFX.
Current report
During the quarter ended March 31, 2025, two individual dealers each represented over 10% of our total sales and together represented 54% of total sales. During the quarter ended March 31, 2024, three individual dealers each represented over 10% of our total sales, and combined they represented 49% of total sales.
Current report
Our unaudited financial statement for the three months ended March 31, 2025 and our audited financial statements for the fiscal year ended December 31, 2024 were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date and we expect our expenses to increase in connection with our ongoing activities. These factors raise substantial doubt about our ability to continue as a going concern for one year after the financial statements included in this Quarterly Report are issued. See “Liquidity and Capital Resources” below.
Current report
The issuance of shares of Twin Vee Common Stock to the former shareholders of Forza was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-4 (File No. 333-281788), as amended, filed by Twin Vee with the Securities and Exchange Commission (the “SEC”) and declared effective on October 10, 2024 (the “Registration Statement”).
Current report
At the effective time of the Merger, in accordance with the terms of the Merger Agreement, the size of Twin Vee’s board of directors (the “Board”) was set at five, Joseph Visconti, Preston Yarborough, Neil Ross and Kevin Schuyler remained as directors of Twin Vee and Marcia Kull was appointed as a director of Twin Vee. Effective as of the effective time of the Merger, Bard Rockenbach and James Melvin resigned as directors of Twin Vee and any committees thereof.
Current report
Nasdaq Compliance
Current report
On May 10, 2024, we received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that for the preceding 30 consecutive business days (March 28, 2024 through May 9, 2024), our Common Stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). We were provided 180 calendar days, or until November 6, 2024, to regain compliance. On November 7, 2024, we received written notification from Nasdaq granting our request for a 180-day extension to regain compliance with the Minimum Bid Price Requirement. Compliance would be achieved if the closing bid price of our Common Stock is at or above $1.00 for a minimum of ten consecutive business days at any time prior to May 5, 2025.
Current report
On April 4, 2025, we filed an amendment (the “Amendment”) to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split at a ratio of 1-for-10, effective as of 11:59 p.m. Eastern Time, on April 7, 2025 (the “Effective Time”), in order to regain compliance with the Minimum Bid Price Requirement. Our Common Stock began trading on a split-adjusted basis on April 8, 2025 under the existing ticker symbol “VEEE.” Any share amounts and exercise or conversion prices in this Quarterly Report on Form 10-Q have been adjusted retrospectively for the Reverse Stock Split.
Current report
On April 28 2025, we received a letter from Nasdaq stating that Nasdaq had determined that we now comply with the Minimum Bid Price Requirement.
Current report
Sale Agreement with Revver Digital, LLC
Current report
On February 4, 2025, we entered into an agreement (the “Sale Agreement”), effective February 4, 2025 (the “Effective Date”), with Revver Digital, LLC, a Delaware limited liability company and wholly owned subsidiary of One Water Marine Inc. (“OWM”), providing us with the right to acquire certain intellectual property of OWM (the “OWN Intellectual Property”) related to (a) the online marketplace, advertisement, marketing, and sale services of yachts, boats, and yacht and boat accessories and (b) arranging of loans, insurance, and warranty services related to yachts and boats under the brands “Yachts for Sale” and “Boats for Sale” through the websites available at the domains (the “Domains”) “yachtsforsale.com” and “boatsforsale.com” (the “Business”). Pending the closing of the sale to us of the OWN Intellectual Property, the Sale Agreement grants us a license to use and sublicense the OWN Intellectual Property to conduct the Business in consideration of: (a) the payment to OWM of a monthly revenue-sharing royalty (the “Revenue-Sharing Royalty”) of six percent (6%) of the Aggregate Subscription Revenue (as defined) of the Business; and (b) a credit to OWM of $500 per OWM dealer who lists boats or yachts on the Domains during such period (the “Dealer Storefront Credit”). On the date of the closing (the “Closing”) of the sale to us of the OWN Intellectual Property, the Sale Agreement provides that in consideration of the transfer of, and as a purchase price (the “Purchase Price”) for, the OWM Intellectual Property, we will assume certain liabilities of OWM related to the Business and pay to OWM $5,000,000 (the “Minimum Purchase Price”), less the aggregate amount of all Revenue-Sharing Royalties paid to OWM through such date and the aggregate amount of all Dealer Storefront Credits accrued for the benefit of OWM through such date (the “Remaining Purchase Price”).
Current report
Gross profits improved by $259,801 or 94% to $537,114 for the three months ended March 31, 2025 from $277,313 for the three months ended March 31, 2024. Gross profit as a percentage of sales for the three months ended March 31, 2025 was 14.9% compared to 5.3% in the first quarter of 2024. This 9.6% improvement in gross profit, while sales declined 32%, reflects our ongoing efforts to reduce our cost structure such as bringing certain manufacturing operations in-house, and better utilization of our ERP system leveraged against higher volumes.
Current report
Operating Expenses
Current report
During the three months ended March 31, 2025 and 2024, total operating expenses were $2,216,208 and $2,820,520, respectively, a decrease of $604,312 or 21%. Operating expenses as a percentage of sales was 61.4% compared to 53.4% in the prior year.
Current report
Research and development expenses were $0 in the first quarter of 2025 compared to $149,691 in the first quarter of 2024. This decrease was due to the wind down of electric boat development.
Current report
Professional fees decreased by 43% or $109,314 to $146,011 for the three months ended March 31, 2025, compared to $255,325 for the three months ended March 31, 2024. This decrease was due primarily to the reduction in legal and accounting costs as a result Forza X1 merging into Twin Vee and no longer being a standalone public company.
Current report
Net loss for the three months ended March 31, 2025 was $1,610,240, as compared to $2,335,195 for the three months ended March 31, 2024, an improvement of $724,955 or 31%. The overall year-over-year improvement in the reported loss for the period was due to the improvement in gross margin resulting from improved cost management and efficiency in the factory and the reduction in costs related to electric boat development. Basic and dilutive loss per share of Common Stock for the three months ended March 31, 2025 was ($1.08), as compared to ($1.77) for the three months ended March 31, 2024, an improvement of 39%.
Current report
During the first quarter of 2025, we classified $4,306,896 of building and land in Marion, North Carolina as an asset held for sale under ASC 360 and included it as a separate line item on the condensed consolidated balance sheet as of March 31, 2025. In 2024, we completed the merger of Forza X1, Inc. and ceased the expenditures related to the development of electric boats. The building is now being marketed for sale. While the timing of the sale is uncertain, we are cautiously optimistic of the sale to be completed within one year and it is expected to generate substantial cash to fund future operations.
Current report
Going Concern
Current report
For the year ended December 31, 2024, we incurred a loss from operations of $14,551,769 and a net loss of $14,009,906. For the three months ended March 31, 2025, we incurred a loss from operations of $1,679,094 and a net loss of $1,610,240. As of March 31, 2025 and December 31, 2024 we had accumulated deficits of $27,003,195 and $25,392,955, respectively. To mitigate these conditions we have plans to improve the liquidity of our business:
Current report
Despite our ongoing efforts to mitigate these conditions, there can be no assurance that our expenses will not continue to increase in future periods or that the cash generated from operations in future periods will be sufficient to satisfy our operating needs. Although we have classified $4,306,896 of building and land in Marion, North Carolina as an asset held for sale, the proceeds of which will help our liquidity, there can be no assurance that we will be able to sell the land and building in the next twelve months and if we do engage in such a sale, that the proceeds will be as expected. If we need to raise additional capital to fund our continued operations, there can be no assurance that funding will be available on acceptable terms on a timely basis, or at all. The various ways that we could raise capital carry potential risks. Any additional sources of financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our stockholders. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to fill new orders and develop new products. As such, we cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements included in this Quarterly Report are filed with the SEC, and there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern. If we are unable to generate sufficient revenue from operations and/or raise capital when needed or on attractive terms, we be forced to delay, reduce or eliminate efforts to expand our dealer network or develop new models and may be forced to cease operations or liquidate assets.
Current report
Sources of Funds
Current report
During the first quarter of 2025, we classified $4,306,896 of building and land in Marion, North Carolina as an asset held for sale under ASC 360 and included it as a separate line item on the condensed consolidated balance sheet as of March 31, 2025. In 2024, we completed the merger of Forza X1, Inc. and ceased the expenditures related to the development of electric boats. The building is now being marketed for sale. While the timing of the sale is uncertain, we are cautiously optimistic that the sale could be completed within one year of the date of this Quarterly Report, and if the sale is completed on favorable terms, we believe it has the potential to generate substantial cash to fund our future operations.
Current report
Selected Balance Sheet Information
Current report
Our working capital increased by $2,508,435 to $9,179,586 as of March 31, 2025, compared to $6,671,151 on December 31, 2024 primarily due to continued operating losses incurred in the period, the cash requirement of the facilities capacity expansion and efficiency project in Ft. Pierce, Florida, and investments in molds for new boat designs, more than offset by the reclassification of assets held for sale to current assets.
Current report
For the three months ended March 31, 2025, net cash used in operating activities was $1,736,277 compared to $1,749,920 during the three months ended March 31, 2024. The use of cash in operating activities for the three months ended March 31, 2025 was due primarily to a $1,610,240 net loss and a $552,023 net reduction in accounts payable and accrued liabilities related primarily to a payment for Marion, NC facility construction costs, accrued capital expenditures for the Ft. Pierce facility and an increase in accounts receivable of $198,829 primarily related to two boats delivered late in the first quarter of 2025 and collected early in the second quarter of 2025. These uses were partially offset by depreciation and amortization of $441,672.
Removed paragraphs (30)
Previous report
Historically, we have organized our business into three operating segments: (i) our gas-powered boat segment which manufactures and distributes gas-powered boats under the Twin Vee and AquaSport names; (ii) our electric-powered boat segment which is developing fully electric boats, through our publicly owned subsidiary, Forza X1, Inc., a Delaware corporation (“Forza”) and (iii) our franchise segment which is developing a standard product offering and will be selling franchises across the United States. Inasmuch as we determined to discontinue and wind down Forza’s business related to the development and sale of electric boats utilizing its proprietary outboard electric motor, we do not anticipate having an electric boat segment in the future.
Previous report
During the third quarter of 2024, we have continued to experience a significant reduction in demand for our products, as has been experienced throughout the boating industry. Total units sold in the quarter were 20 compared to 66 in the third quarter of 2023, a 70% reduction, compared to a 64% reduction in revenue over the same period. This difference is due to the average selling price per unit in each quarter. Sales per unit for the third quarter of 2024 was approximately $145,065 compared to $122,371 the prior year quarter as the company has focused more on larger boats in the current year. The Company’s objectives have been to add new, larger boat models including a new line of GFX2 models, expand our dealers and distribution network, and increase unit production to fulfill our customer and dealer orders.
Previous report
Due to the growing demand for sustainable, environmentally friendly electric and alternative fuel commercial and recreational vehicles, Forza, entered the business of designing and developing a line of electric-powered boats. Our electric boats are being designed as fully integrated electric boats including the hull, outboard motor and control system. To date, Forza X1 has built-out and tested multiple Forza company units, including: three offshore-style catamarans, two bay boat-style catamarans, one deck boat and three 22-foot center console (F22) monohulls. The past year has seen a marked deceleration in the global demand for recreational marine vehicles, influenced heavily by economic uncertainties and shifting consumer priorities. This slowdown reflects broader trends affecting the recreational vehicle industries at large, including electric vehicles (EVs). Notably, the global shift towards EV adoption has been much slower than initially anticipated. Several leading automotive manufacturers have adjusted their strategies, accordingly, including halting the construction of dedicated EV factories.
Previous report
The slower-than-expected adoption rates have led to cautious consumer spending and investment in EV technology, directly impacting the Company’s market. Specifically, the electric boat segment has experienced even more sluggish growth than the automotive sector. In addition, many of the larger players in the boat industry, such as Mercury Marine, have completed their development efforts and have brought their electric outboard motors to market. Despite these challenges, we have managed to sustain operations through strategic adjustments, including cost management and a focus on strategic partnerships. We have implemented measures that have reduced cash burn and conserved cash reserves while seeking to leverage our technological advancements through strategic collaborations and partnerships to enhance shareholder value. We have responded to the industry challenges by tightening our financial reins to mitigate the impacts of reduced demand with a view toward long-term sustainability. In an effort to further retain cash and reduce expenditures and as a result of current market conditions, on July 11, 2024, the Board of Directors of Forza determined to discontinue and wind down its business related to the development and sale of electric boats utilizing its proprietary outboard electric motor.
Previous report
On July 12, 2024, Karl Zimmer was appointed as our President.
Previous report
The completion of the Merger by each of us and Forza is subject to customary conditions, including (1) (A) adoption of the Merger Agreement by Forza’s stockholders (which approval shall include a majority of the shares present in person or by proxy at the Forza annual meeting excluding shares held by us) and (B) approval by our shareholders of the issuance of our shares of common stock to the Forza stockholders, (2) authorization for listing on the Nasdaq Capital Market of the shares of our common stock to be issued in the Merger, subject to official notice of issuance, (3) effectiveness of the registration statement on Form S-4 for our common stock to be issued in the Merger, and (4) the absence of any order, injunction, decree or other legal restraint preventing the completion of the Merger or making the completion of the Merger illegal. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including subject to certain exceptions, the accuracy of the representations and warranties of the other party and performance in all material respects by the other party of its obligations under the Merger Agreement. In our capacity as a principal stockholder of Forza, we have agreed to vote the shares of Forza common stock held by us for the approval and adoption of the Merger only if a majority of the other stockholders of Forza present in person or by proxy at the Forza annual meeting vote to approve and adopt the Merger.
Previous report
The Merger Agreement contains certain termination rights for both Forza and the Company. In addition, either the Company or Forza may terminate the Merger Agreement if the Merger is not consummated by December 1, 2024. On November 11, 2024, we held our 2024 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, our stockholders approved the issuance of shares of our common stock to Forza stockholders pursuant to the terms of the Merger Agreement. We believe that all closing conditions will be met and anticipate consummating the Merger in the near future.
Previous report
Gross profits (losses) decreased by $751,168 or 124% to $(145,657) for the three months ended September 30, 2024 from $605,511 for the three months ended September 30, 2023. Gross profit as a percentage of sales, for the three months ended September 30, 2024 and 2023, was -5.0% and 7.5% respectively. On a sequential basis, gross profit declined $348,997 while sales declined $1,425,503, reflecting our efforts to reduce our cost structure and limit cash burn during this economic downturn in the marine industry. We continue to right size the workforce and drive efficiency in all parts of our cost structure.
Previous report
Total Operating Expenses
Previous report
During the three months ended September 30, 2024 and 2023, operating expenses were $2,843,573 and $3,384,934, respectively. Operating expenses as a percentage of sales was 98.0% compared to 41.9% in the prior year. Operating expenses, for the gas-powered boat segment, for the three months ended September 30, 2024 and 2023 were $1,990,512 and $2,124,980, respectively. As a percentage of net sales, for the three months ended September 30, 2024 and 2023, operating expenses for our gas-powered segment were 68.6% and 26.4%, respectively. Our total operating expenses for Forza, our electric powered boat and development segment, for the three months ended September 30, 2024 and 2023 were $852,451 and $1,258,966, respectively.
Previous report
Research and development expenses increased by $25,536 to $89,403 for the three months ended September 30, 2024, from $63,867 for the three months ended September 30, 2023. This increase was due primarily to the charges for an inventory allowance related to R&D inventory at Forza, partially offset by lower R&D activity.
Previous report
Professional fees increased by 51% or $140,961 to $403,387 for the three months ended September 30, 2024, compared to $262,426 for the three months ended September 30, 2023. This increase was due primarily to higher legal and consulting expenses in the current year related to exploration of strategic options at Forza and the Merger between Twin Vee and Forza.
Previous report
Net loss for the three months ended September 30, 2024 was $3,009,907, as compared to $2,444,009 for the three months ended September 30, 2023, an increase in loss of $565,898. Our electric segment, which did not generate any revenue at this time, incurred a loss of $895,702 for the three months ended September 30, 2024, related mostly to staffing costs and professional fees. Our gas-powered segment incurred a loss of $2,113,800 for the three months ended September 30, 2024, due largely to the rapid decline in orders for new boats during 2024. Basic and dilutive loss per share of common stock for the three months ended September 30, 2024 was ($0.26), as compared to ($0.20) for the three months ended September 30, 2023.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous report
Our net sales decreased by $12,476,420, or 50% to $12,504,482 for the nine months ended September 30, 2024 from $24,980,902 for the nine months ended September 30, 2023. This decrease was due to a decrease in the number of boats sold during the first nine months of 2024 and the mix of boats sold. The number of boats sold during the nine months ended September 30, 2024 decreased 61% compared to the nine months ended September 30, 2023.
Previous report
Gross Profit
Previous report
Gross profits decreased by $2,178,813 or 89% to $333,996 for the nine months ended September 30, 2024 from $3,052,809 for the nine months ended September 30, 2023. Gross profit as a percentage of sales, for the nine months ended September 30, 2024 and 2023, was 2.7% and 12.2% respectively. Through continuous efficiency improvements, the company was partially able to offset the impact of fixed cost deleveraging in the production facility as revenues declined 50% over the same period last year. We continue to right size the workforce and drive efficiency in all parts of our cost structure.
Previous report
Total Operating Expenses
Previous report
During the nine months ended September 30, 2024, operating expenses were $10,525,509 and included an impairment charge of $1,674,000 related to the Forza impairment of property & equipment in the second quarter of 2024. Before the impact of this charge, operating expenses for the nine months ended September 30, 2024 and 2023 were $8,851,509 and $11,245,982, respectively, and as a percentage of sales were 70.8% compared to 45.0% in the prior year. Our total operating expenses for our gas-powered boat segment, for the nine months ended September 30, 2024 and 2023 were $5,469,191 and $11,192,837, respectively, and as a percentage of revenues were 43.7% and 44.8%, respectively. Our total operating expenses for Forza, our electric powered boat and development segment, for the nine months ended September 30, 2024 and 2023 were $5,054,781 and $4,917,498, respectively.
Previous report
Selling, general, and administrative expenses decreased by approximately 24.2%, or $706,846 to $2,214,670 for the nine months ended September 30, 2024, compared to $2,921,516 for the nine months ended September 30, 2023. The largest drivers of the decrease were reductions in sales and marketing expenses, hiring costs and office supplies, primarily resulting from the decline in R&D activity at Forza between periods.
Previous report
Salaries and wage related expenses decreased 34.7%, or $1,930,671 to $3,641,185 for the nine months ended September 30, 2024, compared to $5,571,856 for the nine months ended September 30, 2023. The majority of the decrease is due to reductions in staffing levels at Forza, as well as the staffing of Aquasport. Included in salaries and wage related expenses for the nine months ended September 30, 2024 was stock-based compensation expense of $1,022,894, Forza’s portion of that expense being $651,115. In total, stock-based compensation expense decreased by $413,991 or 28.8% as compared to the prior year period.
Previous report
Research and development expenses decreased by $346,619, or 37.3%, to $583,878 for the nine months ended September 30, 2024, from $930,497 for the nine months ended September 30, 2023. This decrease was due primarily to lower R&D activity in the Forza electric motor segment.
Previous report
Professional fees increased by 13.7% or $133,631 to $1,111,079 for the nine months September 30, 2024, compared to $977,448 for the nine months ended September 30, 2023 primarily due to merger related legal and related expenses incurred during the third quarter of 2024.
Previous report
Depreciation and amortization expense increased by 54%, or $456,032 to $1,300,697 for the nine months ended September 30, 2024, as compared to $844,665 for the nine months ended September 30, 2023. This increase is due to the addition of fixed assets, primarily building additions and molds, to increase our production levels and support and throughput.
Previous report
Other income decreased by $1,689,741 to $327,215 for the nine months ended September 30, 2024, as compared to $2,016,956 for the nine months ended September 30, 2023. This decrease was due primarily to the first half of 2023 recognition of income from the Employee Retention Credit of $1,267,055 and a reduction in income generating investment amounts.
Previous report
Net Loss
Previous report
Net loss for the nine months ended September 30, 2024 was $9,864,298, as compared to $6,176,217 for the nine months ended September 30, 2023, an increase in the net loss of $3,688,081. Our electric segment, which did not generate any revenue, incurred a loss of $4,846,882 for the nine months ended September 30, 2024, related mostly to staffing costs and research and development. Our gas-powered segment incurred a loss of $4,962,576 for the nine months ended September 30, 2024, due largely to the rapid decline in orders for new boats during the first nine months of 2024. Basic and dilutive loss per share of common stock for the nine months ended September 30, 2024 was ($0.75), as compared to ($0.46) for the nine months ended September 30, 2023.
Previous report
Our working capital decreased by $10,894,286 to $11,535,687 as of September 30, 2024, compared to $22,429,972 on December 31, 2023 primarily due to continued development efforts at Forza which was a non-revenue generating entity, the ongoing construction of the new manufacturing facilities in North Carolina and Ft. Pierce, Florida, and investments in molds for new boat designs.
Previous report
For the nine months ended September 30, 2024, net cash flows used in operating activities was $4,638,887 compared to $6,930,130 during the nine months ended September 30, 2023. The use of cash for the nine months ended September 30, 2024 was due primarily to a $9,864,298 net loss partially offset by a $1,591,390 reduction in net inventory levels and depreciation and amortization of $1,300,697, stock-based compensation of $1,022,894, and an impairment of property & equipment of $1,674,000 since December 31, 2023. For the nine months ended September 30, 2023, net cash flows used in operating activities was $6,930,130. We increased inventory levels by $4,126,506, due to opening the AquaSport production facility and adding two additional engine suppliers. Accounts receivable increased by $494,339, and accounts payable increased by $1,568,127. Our accrued expenses decreased by $275,255 and prepaid expenses decreased by $332,142. Our net loss from operation was $6,176,217, and was decreased by non-cash expenses of $2,591,485, the largest of these being stock-based compensation of $1,436,885, change of right-of-use asset and leases liabilities of $355,519, and depreciation of $844,665.
Previous report
We adopted FASB Accounting Standards Update (“ASU”) No. 2016-02,Leases(“Topic 842”), using the modified retrospective adoption method with an effective date of January 1, 2019. This standard requires all lessees to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments.
Reworded paragraphs (17)
Previous wording
We are a designer, manufacturer and marketer of recreational and commercial power boats. We believe our company has been an innovator in the recreational and commercial power catamaran industry. We currently have 13 gas-powered models in production ranging in size from our 22-foot mono hull, single engine, center console to our newly designed 40-foot offshore 400 GFX catamaran, quad engines. While our twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee ride quality by reducing drag, increasing fuel efficiency, and offering users a stable riding boat, our new mono hull line addresses the largest portion of the overall market.
Current wording
Twin Vee PowerCats Co. (“Twin Vee” “we”, “us” or the “Company”) is a designer, manufacturer and marketer of recreational and commercial power boats. We believe our company, founded in 1996, has been an innovator in the recreational and commercial power catamaran industry. Our twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee ride quality by reducing drag, increasing fuel efficiency and offering users a stable riding boat. Twin Vee’s home base operations in Fort Pierce, Florida is a 7.5-acre facility with several buildings totaling approximately 100,000 square feet, including a nearly complete 30,000 square foot expansion which began in mid-2024. We currently employ approximately 85 people.
Previous wording
Our gas-powered boats allow consumers to use them for a wide range of recreational activities including fishing, diving and water skiing and commercial activities including transportation, eco tours, fishing and diving expeditions. We believe that the performance, quality and value of our boats position us to achieve our goal of increasing our market share and expanding the power catamaran boating market. We currently primarily sell our boats through a current network of 23 independent boat dealers in 37 locations across North America and the Caribbean who resell our boats to the end user Twin Vee and AquaSport customers. We continue recruiting efforts for high quality boat dealers and seek to establish new dealers and distributors domestically and internationally to distribute our boats as we grow our production and introduce new models. Our gas-powered boats are currently outfitted with gas-powered outboard combustion engines.
Current wording
Twin Vee products are marketed under two brands: Twin Vee for our catamarans, or dual hull vessels, and Aquasport for our “V”-hull boats. Consumers can use our boats for a wide range of recreational activities including fishing, diving and water skiing and commercial activities including transportation, eco tours, fishing and diving expeditions. We believe that the performance, quality and value of our boats position us to achieve our goal of increasing our market share and expanding the power-boat market. We currently primarily sell our boats through a network of 22 independent boat dealers across North America, the Caribbean and Central America who resell our boats to the end user Twin Vee customers. We continue efforts to recruit high quality boat dealers to join our network and seek to establish new dealers and distributors domestically and internationally to distribute our boats as we grow our production and introduce new models. Our boats are currently outfitted with gas-powered outboard combustion engines. During 2024, Forza X1, Inc., our then minority owned electric boat subsidiary determined to cease production of electric boats and on November 26, 2024, Forza X1, Inc.(“Forza”), was merged into Twin Vee Merger Sub, Inc., a wholly-owned subsidiary of Twin Vee (“Merger Sub”) and became a wholly owned subsidiary.
Previous wording
On August 12, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Forza and Twin Vee Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Forza will merge with and into Merger Sub, with Forza surviving the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of Forza common stock (other than any shares held by us), will be converted into the right to receive 0.61166627 shares (the “Exchange Ratio”) of our common stock, any fractional shares to be rounded down to the nearest whole share of common stock, for an aggregate of 5,355,000 shares of our common stock. Each outstanding stock option exercisable for shares of Forza common stock that is outstanding at the Effective Time, whether vested or unvested, will be assumed by us and converted into a stock option to purchase the number of shares of our common stock that the holder would have received if such holder had exercised such stock option for shares of Forza common stock prior to the Merger and exchanged such shares for our common stock in accordance with the Exchange Ratio. Each outstanding warrant to purchase shares of Forza common stock will be assumed by us and converted into a warrant to purchase the number of shares of our common stock that the holder would have received if such holder had exercised such warrant for shares of Forza common stock prior to the Merger and exchanged such shares for shares of our common stock in accordance with the Exchange Ratio, subject to adjustment for any reverse stock split. In addition, at the Effective Time the 7,000,000 shares of Forza common stock held by us will be cancelled.
Current wording
On November 26, 2024 (the “Closing Date”), pursuant to the terms of the Merger Agreement, by and between us, Twin Vee Merger Sub, Inc. and Forza, Merger Sub was merged with and into Forza (the “Merger”), with Forza surviving the Merger as our wholly-owned subsidiary. At the effective time of the Merger, (a) each outstanding share of common stock of Forza , par value $0.001 per share of Forza (the “Forza Common Stock”) (other than any shares held by Twin Vee) was converted into the right to receive 0.611666275 shares of Twin Vee common stock, par value $0.001 per share (the “Twin Vee Common Stock” or “ Common Stock”) for an aggregate of 5,355,000 pre-split shares of our common stock (approximately 535,500 shares after adjustment for the Reverse Stock Split), (b) each outstanding Forza stock option, whether vested or unvested, that had not previously been exercised prior to such time was converted into an option to purchase 0.611666275 shares of Twin Vee Common Stock for each share of Forza Common Stock covered by such option, and (c) each outstanding warrant to purchase shares of Forza Common Stock was assumed by Twin Vee and converted into a warrant to purchase 0.611666275 shares of Twin Vee Common Stock for each share of Forza Common Stock for which such warrant was exercisable for prior to the Effective Time.
Previous wording
Our net sales decreased by $5,175,227, or 64% to $2,901,318 for the three months ended September 30, 2024 from $8,076,545 for the three months ended September 30, 2023. This decrease was due to a decrease in the number of boats sold during the three months ended September 30, 2024 and the mix of boats sold. The number of boats sold during the three months ended September 30, 2024 decreased 70% compared to the three months ended September 30, 2023.
Current wording
Our net sales decreased by $1,664,052, or 32% to $3,612,291 for the three months ended March 31, 2025 from $5,276,343 for the three months ended March 31, 2024. This decrease was due to a decrease in the number and changes in the mix of boats sold during the three months ended March 31, 2025. During the first quarter of 2025, we sold 24 boats at an average selling price of approximately $150,000 per unit, compared to 32 units in the first quarter of 2024 with an average selling price of approximately $165,000. This reduction in unit price is due primarily to mix, where 2 40-foot boats were delivered in the first quarter of 2024 versus 0 in the first quarter of 2025.
Previous wording
Selling, general, and administrative expenses decreased by approximately 22%, or $220,124 to $764,757 for the three months ended September 30, 2024, compared to $984,881 for the three months ended September 30, 2023. The decrease was primarily due to reductions in marketing, advertising, dealer meeting and travel expenses.
Current wording
Selling, general, and administrative expenses decreased by approximately 14%, or $95,402 to $598,552 for the three months ended March 31, 2025, compared to $693,954 for the three months ended March 31, 2024. The decrease was primarily due to reductions in marketing and advertising, the cancelation of rents that were previously paid for the former Forza facility in North Carolina and a reduction in certain insurance costs.
Previous wording
Salaries and wage related expenses decreased 34%, or $586,366 to $1,145,568 for the three months ended September 30, 2024, compared to $1,731,934 for the three months ended September 30, 2023. The majority of the decrease is due to reductions in staffing levels at Forza. Included in salaries and wage related expenses for the three months ended September 30, 2024 was stock-based compensation expense of $278,867, Forza’s portion of that expense being $174,159. In total, stock-based compensation expense decreased by $185,693 or 40% as compared to the prior year period.
Current wording
Salaries and wage related expenses decreased 25%, or $329,307 to $966,962 for the three months ended March 31, 2025, compared to $1,296,269 for the three months ended March 31, 2024. The majority of the decrease is due to reductions in staffing levels at Forza and a reduction in stock-based compensation.. Stock based compensation was $55,968 and $426,283 in the first quarter of 2025 and 2024, respectively.
Previous wording
Depreciation and amortization expense increased by 29%, or $98,632 to $440,458 for the three months ended September 30, 2024, as compared to $341,826 for the three months ended September 30, 2023. This increase is due to the addition of fixed assets, primarily molds, to increase our production levels and throughout.
Current wording
Depreciation and amortization expense increased by 4%, or $16,391 to $441,672 for the three months ended March 31, 2025, as compared to $425,281 for the three months ended March 31, 2024. This increase is due to the addition of fixed assets, primarily molds, to increase our production levels and throughout.
Previous wording
Other income decreased by $356,091 to a loss of $20,677 for the three months ended September 30, 2024, as compared to $355,414 for the three months ended September 30, 2023. This decrease was due primarily to a reduction in dividend and interest income from lower cash balances and a loss on disposal of assets in the third quarter of 2024.
Current wording
Other income decreased by $139,158 to $68,854 for the three months ended March 31, 2025, as compared to $208,012 for the three months ended March 31, 2024. This decrease was due primarily to a reduction in dividend and interest income from lower cash and cash equivalent balances.
Previous wording
A primary source of funds for the year ended December 31, 2023 and through September 30, 2024 was net cash received from our secondary offering, as well as Forza’s initial public and secondary offering and revenue generated from operations. Our primary use of cash was related to funding the expansion of our operations through capital improvements, as well as molds for the expansion of Aquasport and Twin Vee models. With reduced demand, we have been reducing inventory levels. Our priority over the next several months is to continue to reduce production costs and labor to match market demand, complete the Twin Vee facility expansion and efficiency project, complete the addition of a wire harness assembly cell, continue to expand the Twin Vee GFX 2 lineup, and develop and introduce a new Twin Vee BayCat line of boats, which will require additional investment in molds and machinery.
Current wording
A primary source of funds for the year ended December 31, 2024 and through March 31, 2025 was net cash received from our 2023 secondary offering, as well as Forza’s initial public and secondary offering and revenue generated from operations. Our primary use of cash was related to funding the expansion of our operations through capital improvements, as well as molds for the expansion of Aquasport and Twin Vee models. With reduced demand, we have been reducing inventory levels. Our priority over the next several months is to continue to ramp up production at a measured pace to match increasing market demand, complete the Twin Vee facility expansion and efficiency project, and finalize the development and marketing of the all-new 22-foot BayCat model.
Previous wording
As of September 30, 2024, we had $11,357,892 of cash, cash equivalents, and restricted cash, total current assets of $15,356,981 and total assets of $30,140,476. Our total liabilities were $6,932,265. Our total liabilities were comprised of current liabilities of $3,843,294 which included accounts payable and accrued liabilities of $3,153,884, leases liability of $651,235, contract liability of $38,175 and long-term liabilities of $3,088,971. As of December 31, 2023, we had $16,497,703 of cash, cash equivalents, and restricted cash, $4,462,942 of marketable securities, total current assets of $26,646,318 and total assets of $39,846,713. Our total current liabilities were $4,216,345 and total liabilities of $7,797,098 which included long-term finance and operating leases liabilities of $3,080,853.
Current wording
As of March 31, 2025, we had $5,125,384 of cash, cash equivalents, and restricted cash, total current assets of $12,200,833 and total assets of $23,550,268. Our total liabilities were $5,887,690. Our total liabilities were comprised of current liabilities of $3,021,247 which included accounts payable and accrued liabilities of $2,457,309, leases liability of $551,438, contract liability of $12,500. Long term liabilities were $2,866,443. As of December 31, 2024, we had $7,706,240 of cash, cash equivalents, and restricted cash, total current assets of $10,419,141 and total assets of $25,887,905. Our total current liabilities were $3,747,990 and total liabilities were $6,671,055 which included long-term finance leases liabilities of $2,423,165.
Previous wording
The accumulated deficit was $21,491,078 as of September 30, 2024 compared to accumulated deficit of $14,346,984 as of December 31, 2023.
Current wording
The accumulated deficit was $27,003,195 as of March 31, 2025 compared to accumulated deficit of $25,392,955 as of December 31, 2024.
Previous wording
We believe that our cash and cash equivalents will provide sufficient resources to finance operations for the next 24 months from the date of the filing of this Quarterly Report on Form 10-Q. In addition to cash and cash equivalents, we anticipate that we will be able to rely, in part, on cash flows from operations in order to meet our liquidity and capital expenditure needs in the next year. We expect Forza’s expenses to decrease as it curtails its operation and the potential sale of its partially constructed manufacturing facility in McDowell, North Carolina, the cost of which we expect will be paid for through the proceeds of Forza’s public offerings, provided the conditions to receipt of the grant funding are met, of which there can be no assurance.
Current wording
In addition to cash and cash equivalents, we anticipate that we will be able to rely, in part, on cash flows from operations and the sale of the manufacturing facility in Marion, North Carolina, to meet our liquidity and capital expenditure needs in the next year.
Previous wording
During the nine months ended September 30, 2024, cash used in investing activities was $567,889, due primarily to net sales of marketable securities partially offset by investments in property, plant and equipment. This compares to a use of cash in investing activities of $11,061,664 in the nine months ended September 30, 2023 resulting from the investment of cash received from the Forza stock issuance into marketable securities and the purchase of property and equipment.
Current wording
During the three months ended March 31, 2025, cash used in investing activities was $789,774, due to investments in property, plant and equipment. This compares to cash provided by investing activities of $1,476,448 in the three months ended March 31, 2024 resulting from the sale of marketable securities and the purchase of property and equipment.
Previous wording
For the nine months ended September 30, 2024, net cash used in financing activities was approximately $190,565 from finance lease obligations compared to net cash provided by financing activities of $6,892,338 in the nine months ended September 30, 2023, primarily from the issuance of Forza common stock.
Current wording
For the three months ended March 31, 2025 and 2024, net cash used in financing activities was approximately $54,806 and $83,735, respectively from finance lease obligations.
Previous wording
Our revenue is derived primarily from the sale of boats, motors and trailers to its independent dealers. We recognize revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to the dealer. For the majority of sales, this occurs when the product is released to the carrier responsible for transporting it to a dealer. We typically receive payment within five business days of shipment. Revenue is measured as the amount of consideration it expects to receive in exchange for a product. We offer dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in net sales in the statements of operations. The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives we reasonably expect to pay. The estimated liability and reduction in revenue for dealer incentives is recorded at the time of sale. Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Accrued dealer incentives are included in accrued liabilities in the accompanying consolidated balance sheets.
Current wording
Our revenue is derived primarily from the sale of boats, motors and trailers to its independent dealers. We recognize revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to the dealer. For the majority of sales, this occurs when the product is released to the carrier responsible for transporting it to a dealer. We typically receive payment within five business days of shipment. Revenue is measured as the amount of consideration it expects to receive in exchange for a product. We offer dealer incentives that include wholesale rebates, retail rebates and promotions, floor plan reimbursement or cash discounts, and other allowances that are recorded as reductions of revenues in net sales in the statements of operations. The consideration recognized represents the amount specified in a contract with a customer, net of estimated incentives we reasonably expect to pay. The estimated liability and reduction in revenue for dealer incentives is recorded at the time of sale. Subsequent adjustments to incentive estimates are possible because actual results may differ from these estimates if conditions dictate the need to enhance or reduce sales promotion and incentive programs or if dealer achievement or other items vary from historical trends. Accrued dealer incentives are included in accrued liabilities in the accompanying condensed consolidated balance sheets.
Previous wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States “U.S. GAAP” requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Included in those estimates are assumptions about allowances for inventory obsolescence, useful life of fixed assets, warranty reserves and bad-debt reserves.
Current wording
The preparation of financial statements in conformity with accounting principles generally accepted in the United States “U.S. GAAP” requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from those estimates. Included in those estimates are assumptions about allowances for inventory obsolescence, useful life of fixed assets and warranty reserves.
Previous wording
Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Net realizable value is defined as sales price less cost of completion, disposable and transportation and a normal profit margin. Production costs, consisting of labor and overhead, are applied to ending finished goods inventories at a rate based on estimated production capacity. Excess production costs are charged to cost of products sold. Provisions are made when necessary to reduce excess or obsolete inventories to their net realizable value.
Current wording
Inventories are stated at the lower of cost and net realizable value using the average cost method on a first-in first -out basis. Net realizable value is defined as sales price less cost of completion, disposable and transportation and a normal profit margin. Production costs, consisting of labor and overhead, are applied to ending finished goods inventories at a rate based on estimated production capacity. Excess production costs are charged to cost of products sold. Provisions are made when necessary to reduce excess or obsolete inventories to their net realizable value.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
A primary source of funds for the year ended December 31, 2024 and through March 31, 2025 was net cash received from our 2023 secondary offering, as well as Forza’s initial public and secondary offering and revenue generated from operations. Our primary use of cash was related to funding the expansion of our operations through capital improvements, as well as molds for the expansion of Aquasport and Twin Vee models. With reduced demand, we have been reducing inventory levels. Our priority over the next several months is to continue to ramp up production at a measured pace to match increasing market demand, complete the Twin Vee facility expansion and efficiency project, and finalize the development and marketing of the all-new 22-foot BayCat model.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table provides certain selected financial information for the periods presented:
Previous report — wording carried elsewhere
Net Sales and Cost of Sales