Twin Vee PowerCats, Co.

Current report

** Risks Related to Our Business**

Current report

In light of the Company’s defective reincorporation from the State of Delaware to the State of Nevada, we are seeking stockholder approval to ratify the 1-for-37 reverse stock split purportedly effectuated under Nevada law. The defective reincorporation and the associated ratification (and any failure of the stockholders to approve such ratification) exposes the Company to risk of litigation and regulatory actions, any of which may have a material adverse impact on the Company’s business, financial condition and results of operation, and may impact the Company’s ability to consummate the USFM Merger.

Current report

On August 4, 2026, our Board of Directors authorized the Company to seek stockholder approval to ratify certain actions pursuant to Section 204 (“Section 204”) of the Delaware General Corporation Law, which, in certain circumstances, allows a Delaware corporation to ratify a defective corporate act retroactive to the date the corporate act was originally taken. The ratification is being sought for a 1-for-37 stock split (the “Reverse Stock Split”) reflected in a Certificate of Change Pursuant to NRS 78.209 (the “NV Charter Amendment”), which was improperly filed by the Company with the Secretary of State of the State of Nevada (the “NV Secretary of State”) on April 30, 2026, with a stated effective time of 12:01 am ET on May 4, 2026. The NV Charter Amendment was filed with the NV Secretary of State following the prior improper filings of (a) Articles of Conversion/Exchange/Merger with the NV Secretary of State on April 9, 2026 (the “NV Conversion Filing), (b) Articles of Incorporation with the NV Secretary of State on April 9, 2026 (the “NV Articles”), and (c) a Certificate of Conversion with the Secretary of State of the State of Delaware (the “DE Secretary of State”) on April 7, 2026 (the “DE Conversion Filing”). On August 4, 2026, the Company submitted for filing (x) a Certificate of Correction with the NV Secretary of State to revoke the NV Conversion Filing (the “NV Certificate of Correction”) and (y) a Certificate of Correction with the DE Secretary of State to revoke the DE Conversion Filing (the “DE Certificate of Correction” and, together with the NV Certificate of Correction, the “Certificates of Correction”).

Current report

In the event our stockholders approve the ratification referred to above, the Company will file a Certificate of Validation with the DE Secretary of State (the “DE Certificate of Validation”) promptly following receipt of such stockholder approval, which will include an amendment to the Company’s Delaware certificate of incorporation reflecting the Reverse Stock Split, effective as of 12:01 am ET on May 4, 2026. The ratification of the Reverse Stock Split would remove uncertainty regarding the validity of the Reverse Stock Split and confirm the effectiveness of the Reverse Stock Split in the State of Delaware, effective as of 12:01 am ET on May 4, 2026.

Current report

Under Section 155 of the DGCL, when an act or transaction would result in fractional shares outstanding and the corporation determines not to issue fractions of shares, the corporation may (i) arrange for the disposition of fractional interests by those entitled thereto, (ii) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined or (iii) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) which shall entitle the holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. As originally approved and effected, the Reverse Stock Split involved rounding up fractional shares into whole shares, a practice not permitted under Delaware law. Because of the complexity required to unwind any rounded-up shares, on August 4, 2026, the Board of Directors determined, with the advice of counsel, to provide in the Certificate of Amendment that will be attached to the DE Certificate of Validation and as part of the ratification of the Reverse Stock Split that, with respect to any holder who would have been entitled to receive a fraction of a share as a result of the Reverse Stock Split, the 1-for-37 exchange ratio applicable to the Reverse Stock Split would be automatically adjusted solely with respect to such holder so that at the effective time of the Reverse Stock Split, such holder would receive the next higher whole number of shares. This design will replicate the rounding-up of shares contemplated by the Nevada filings that purportedly effected the Reverse Stock Split while complying with the technical requirements of Delaware law.

Current report

Furthermore, in accordance with Section 204, on August 4, 2026, our Board of Directors ratified the Reverse Stock Split and approved (a) the submission to the stockholders of the Company a proposal for ratification and approval of Reverse Stock Split; and (b) in the event the Company receives such stockholder ratification and approval, the filing with the DE Secretary of State of the DE Certificate of Validation. On August 5, 2026, the Company filed with the SEC a preliminary proxy statement related to the special meeting of stockholders that will be called for purposes of, among other things, stockholder approval of the ratification of the Reverse Stock Split. Please review the preliminary proxy statement and the other documents that the Company will file with the SEC (including a definitive proxy statement) for more information regarding the defective reincorporation and Reverse Stock Split.

Current report

Although we believe we have fully complied with the procedures and requirements of Section 204 as of the date of this Quarterly Report on Form 10-Q, there can be no assurance that (a) our stockholders will approve the ratification of the Reverse Stock Split, (b) there will be no claims that the Reverse Stock Split, the NV Charter Amendment, the NV Articles, the NV Conversion Filing, the DE Conversion Filing, the Certificates of Correction, the purported reincorporation of the Company in Nevada, and/or all subsequent or related defective or noncompliant corporate acts (including the Reverse Stock Split) are void or voidable due to the failures to comply with applicable law, (c) the Delaware Court of Chancery will not declare in its discretion that the ratification pursuant to Section 204 is not effective or is effective only on certain conditions, or (d) the Company and its officers and directors will not face other claims or liabilities related to any of the foregoing matters or, if asserted, such claims will not be successful. Under Section 204, claims opposing the ratification of a defective corporate act must be brought within 120 days after the filing of the applicable Certificate of Validation. If the ratification pursuant to Section 204 is ultimately not effective, then the Reverse Stock Split would be invalid and the Company and its officers and directors could have liability to holders of the common stock, the Nasdaq Stock Market, other regulators, and other third parties related to the Reverse Stock Split, the invalid Nevada reincorporation, and/or any of the aforementioned matters. The outcome of any such claims or regulatory actions is impossibly to predict, however, any such claims or actions would likely have a material and adverse impact on the Company and its business, financial condition, and results of operation and any such claims or actions would significantly divert attention of the Company’s management.

Current report

In addition, if the ratification referred to above is not approved by the requisite vote of our stockholders, the ratification of the Reverse Stock Split will not become effective in accordance with Section 204, which provides for a non-exclusive method to ratify an act or transaction. The DGCL specifically states that compliance with Section 204 is not the exclusive means of ratifying any transaction or act. The failure to approve the ratification may leave us exposed to potential claims that (i) the Reverse Stock Split did not receive requisite stockholder approval, (ii) the Reverse Stock Split therefore was not validly adopted, (iii) as a result, the Company’s outstanding stock should revert to the pre-split share numbers, (iv) issuances of common stock or warrants, options, or other equity grants subsequent to the Reverse Stock Split may not be valid, and (v) we would not be able to validate our total outstanding shares of common stock in connection with any strategic transaction that our Board of Directors may determine is advisable, including, without limitation, the sale of the Company pursuant to the USFM Merger Agreement, any other business combination, merger or reverse merger, or a license or other disposition of corporate assets of the Company, or in connection with potential future transactions, including, without limitation, capital-raising transactions, exchanges of outstanding warrants, options, or other derivative securities, and other strategic transactions. Any inability to issue Common Stock in the future and any invalidity of past issuances of Common Stock could expose us to significant claims and have a material adverse effect on our operations and liquidity, which could result in material business interruptions and our filing for bankruptcy or an involuntary petition for bankruptcy being filed against us. Among other things, the Company avoided having its shares delisted from Nasdaq, in part, based on assertions the Company made to Nasdaq that it had legally consummated a reverse stock split. Furthermore, in the event the USFM Merger Agreement is not amended, we may face claims from USFM that the Company has breached its representations and other obligations under the USFM Merger Agreement. Any such claims could have a material adverse effect on our financial condition and results of operations.

Current report

Risks Related to the USFM Merger

Current report

Failure to complete, or delays in completing, the pending USFM Merger could materially and adversely affect the Company’s results of operations, business, financial results, and/or stock price.

Current report

On July 12, 2026, the Company and USFM Corporation entered into the USFM Merger Agreement, pursuant to which, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the USFM Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as a wholly owned subsidiary of USFM Corporation and the surviving corporation of the USFM Merger. Consummation of the USFM Merger is subject to certain closing conditions, a number of which are not within the Company’s control. Any failure to satisfy these required conditions to closing may prevent, delay or otherwise materially adversely affect the completion of the USFM Merger. The Company cannot predict with certainty whether or when any of the required closing conditions will be satisfied or if another uncertainty may arise and cannot assure you that it will be able to successfully consummate the USFM Merger as currently contemplated under the USFM Merger Agreement or at all.

Current report

The Company’s efforts to complete the USFM Merger could cause substantial disruptions in, and create uncertainty surrounding, its business, which may materially adversely affect its results of operation and its business. This uncertainty has been compounded due to the Section 204 defective corporate act ratification and defective Nevada reincorporation matter described more fully elsewhere in this Quarterly Report. Uncertainty as to whether the USFM Merger will be completed in a timely manner or at all may affect the Company’s ability to retain and motivate existing employees. Uncertainty as to whether the USFM Merger will be completed in a timely manner or at all could adversely affect the Company’s business and its relationship with dealers, financing sources, suppliers, vendors, regulators, and other business partners. The adverse effects of the pendency of the USFM Merger could be exacerbated by any delays in completion of the USFM Merger or termination of the USFM Merger Agreement.

Current report

If the conditions to the USFM Merger are not satisfied or waived, the USFM Merger may not occur.

Current report

Even if the USFM Merger is approved by the stockholders of the Company and USFM Corporation, specified conditions must be satisfied or, to the extent permitted by applicable law, waived to complete the USFM Merger. These conditions are set forth in the USFM Merger Agreement and described further in note 15 “Subsequent Events” to the condensed consolidated financial statements set forth elsewhere in this Quarterly Report on Form 10-Q and in other documents the Company and USFM Corporation has filed and will file with the SEC (including a registration statement on Form S-4 to be filed by USFM Corporation). The Company cannot assure you that all of the conditions to the consummation of the USFM Merger will be satisfied or waived. If the conditions are not satisfied or waived, the USFM Merger may not occur or the closing may be delayed. Furthermore, unless such breaches of the USFM Merger Agreement are waived by USFM Corporation, USFM Corporation may have claims against the Company for breach of its representations and other obligations set forth in the USFM Merger Agreement resulting from the defective corporate acts referred to above.

Current report

The Company and USFM Corporation may mutually agree to waive the condition to the USFM Merger requiring approval for listing of USFM Corporation’s common stock on NYSE American or another national securities exchange, and if such condition is waived, USFM Corporation’s stock may not be listed on NYSE American or another national securities exchange following completion of the USFM Merger.

Current report

Pursuant to the USFM Merger Agreement, each of the Company’s and USFM Corporation’s obligation to complete the USFM Merger is subject to the satisfaction or waiver by each of the parties of various conditions, including that the shares of USFM Corporation common stock to be issued to the Company’s stockholders in the USFM Merger have been approved for listing on NYSE American or certain other national securities exchanges as of the closing of the USFM Merger. In the event that the shares of USFM Corporation’s common stock to be issued in the USFM Merger are not approved for listing on NYSE American or such other national securities exchange, it is possible that the Company and USFM Corporation may mutually agree to waive the applicable condition and nonetheless proceed with completing the USFM Merger. If such condition is waived, neither the Company nor USFM Corporation will recirculate an updated proxy statement/prospectus, nor will it solicit a new vote of the Company’s stockholders prior to proceeding with the USFM Merger. If the Company proceeds with the USFM Merger in these circumstances, the USFM Corporation stock issued to the Company’s stockholders may not be listed on NYSE American, Nasdaq, or any other national securities exchange.

Current report

If the USFM Corporation stock is not listed on NYSE American or another national securities exchange following completion of the USFM Merger, trading of the shares of USFM Corporation capital stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it is likely that there would be significantly less liquidity in the trading of the USFM Corporation common stock; decreases in institutional and other investor demand for such shares, coverage by securities analysts, market making activity and information available concerning trading prices and volume; and fewer broker dealers willing to execute trades in the USFM Corporation common stock. Also, it may be difficult for USFM Corporation to raise additional capital if the USFM Corporation common stock is not listed on a major exchange. The occurrence of any of these events could result in a further decline in the market price of the USFM Corporation common stock and could have a material adverse effect on USFM Corporation and the trading price of the shares of USFM Corporation issued to the Company’s stockholders upon consummation of the USFM Merger.

Current report

The exchange ratio for the USFM Merger will not change or otherwise be adjusted based on the market price of the Company’s common stock.

Current report

The Company’s stockholders are entitled to receive a fixed 10% of the issued and outstanding USFM Corporation common stock immediately following the Effective Time (calculated on a fully diluted basis). Any changes in the market price of the Company’s common stock before the completion of the USFM Merger will not affect the number of shares USFM Corporation common stock that the Company’s stockholders will be entitled to receive pursuant to the USFM Merger Agreement. The USFM Merger Agreement does not include a price-based termination right. Therefore, the value of the USFM Corporation common stock issued to the Company’s stockholders will fluctuate, possibly materially, based on market conditions.

Current report

The issuance of USFM Corporation common stock to the Company’s stockholders pursuant to the USFM Merger Agreement must be approved by USFM Corporation’s stockholders, and the USFM Merger Agreement and transactions contemplated thereby must be approved by the Company’s stockholders. Failure to obtain these approvals would prevent the closing of the USFM Merger.

Current report

Before the USFM Merger can be completed, USFM Corporation stockholders must approve, among other things, the issuance of USFM Corporation common stock to the Company’s stockholders pursuant to the USFM Merger Agreement, and the Company’s stockholders must adopt the USFM Merger Agreement and approve the USFM Merger and the related transactions. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the USFM Merger. Any delay in completing the USFM Merger may materially adversely affect the timing and benefits that are expected to be achieved from the USFM Merger.

Current report

The USFM Merger may be completed even though a material adverse effect may result from the announcement of the USFM Merger, industry-wide changes or other causes.

Current report

In general, neither USFM Corporation nor the Company is obligated to complete the USFM Merger if there is a material adverse effect affecting the other party between July 12, 2026, the date of the USFM Merger Agreement, and the closing of the USFM Merger. However, certain types of causes are excluded from the concept of a “material adverse effect.” Such exclusions include, but are not limited to, changes in general economic or political conditions, industry-wide changes, changes resulting from the announcement of the USFM Merger, natural disasters, pandemics, other force majeure events and changes in U.S. generally accepted accounting principles. Therefore, if any of these events were to occur and adversely affect USFM Corporation or the Company, the other party would still be obliged to consummate the closing of the USFM Merger notwithstanding such material adverse effect. If any such adverse effects occur and the parties consummate the closing of the USFM Merger, the USFM Corporation stock price may suffer. This in turn may reduce the value of the USFM Merger to the stockholders of USFM Corporation, the Company or both.

Current report

If the USFM Merger is not completed, the Company’s stock price may decline significantly.

Current report

The market price of the Company’s common stock is subject to significant fluctuations. The market price of the Company’s common stock will likely be volatile based on whether stockholders and other investors believe that the Company can complete the USFM Merger or otherwise raise additional capital to support the Company’s operations if the USFM Merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The volatility of the market price of the Company’s common stock has been and may be exacerbated by low trading volume and public announcement of the defective Nevada reincorporation and related matters. Additional factors that may cause the market price of the Company’s common stock to fluctuate include:

Current report

• the entry into, or termination of, key agreements;

Current report

• announcements by commercial partners or competitors of new products, significant contracts, commercial relationships or capital commitments;

Current report

• the loss of key employees;

Current report

• future sales of the Company’s common stock;

Current report

• general and industry-specific economic conditions that may affect the Company’s operating expenses; and

Current report

• period-to-period fluctuations in financial results.

Current report

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the Company’s common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies. Such litigation or other disputes may arise in connection with the USFM Merger and/or the defective Nevada reincorporation described more fully elsewhere in this Quarterly Report.

Current report

USFM Corporation may need to raise additional capital by issuing equity securities or debt, which may cause significant dilution to the interests of its stockholders, including the Company’s stockholders following the consummation of the USFM Merger, or restrict USFM Corporation’s operations.

Current report

Additional financing may not be available to USFM Corporation when it is needed or may not be available on favorable terms. To the extent that USFM Corporation raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of USFM Corporation, including the Company’s pre-closing securityholders and USFM Corporation’s pre-closing securityholders. It is also possible that the terms of any new equity securities may have preferences over USFM Corporation’s common stock. Any debt financing USFM Corporation issues may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of USFM Corporation’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments.

Current report

In addition, as a result of USFM Corporation’s assumption of the Company’s outstanding warrants and other Company Convertible Securities (as defined in the USFM Merger Agreement) in connection with the USFM Merger, USFM Corporation will be obligated to issue additional shares of USFM Corporation common stock upon exercise of any such warrants or Company Convertible Securities. Such warrants and other Company Convertible Securities assumed by USFM Corporation will result in further dilution to all securityholders of USFM Corporation.

Current report

Some of the Company’s and USFM Corporation’s directors and executive officers have interests in the USFM Merger that are different from yours.

Current report

Directors and executive officers of the Company and USFM Corporation have interests in the USFM Merger that are different from, or in addition to, the interests of other the Company’s stockholders generally. These interests with respect to the Company’s directors and executive officers may include, among others, retention bonus payments, severance payments if employment is terminated in a qualifying termination in connection with the USFM Merger and rights to continued indemnification, expense advancement and insurance coverage. The Registration Statement on Form S-4 which USFM Corporation will file in connection with the USFM Merger, and other documents that the Company and USFM Corporation file with the SEC from time to time, will describe these interests of the Company’s officers and directors in detail. Please review such filings for more information.

Current report

Further, certain current members of the Company’s Board of Directors will continue as directors of USFM Corporation after the Effective Time and will be eligible to be compensated as non-employee directors of USFM Corporation pursuant to USFM Corporation’s non-employee director compensation policy that is expected to be in place following the Effective Time.

Current report

The Company’s Board of Directors was aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the USFM Merger Agreement, approve the USFM Merger, and recommend the approval of the USFM Merger Agreement to the Company’s stockholders.

Current report

USFM Corporation’s stockholders, including the Company’s stockholders following the USFM Merger, may not realize benefits from the USFM Merger commensurate with the ownership dilution they will experience in connection with the USFM Merger.

Previous report

Any failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a de-listing of our Common Stock.

Previous report

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

Previous report

As previously disclosed, on April 2, 2026, Twin Vee PowerCats Co. (the “Company”) received written notice (the “Notification Letter”) from the staff of the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it no longer satisfies the $1.00 bid price requirement set forth in Nasdaq Listing Rule 5550(a) (2) for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of thirty (30) consecutive business days (collectively, the “Bid Price Rule”). Based on the closing bid price of the Company’s common stock for the thirty (30) consecutive business days from February 18, 2026 to March 31, 2026,

Previous report

the Company no longer satisfies the Bid Price Rule. While companies are typically afforded a 180-calendar day compliance period to comply with the Bid Price Rule, the Notification Letter stated that, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), the Company was not eligible for any compliance period specified in Nasdaq Listing Rule 5810(c)(3)(A) due to the fact that the Company effected a reverse stock split over the prior one-year period. The Company effected a 1-for-10 reverse stock split on April 7, 2025. The Notification Letter stated that the Company’s securities will be subject to delisting from Nasdaq unless the Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which was timely requested and subsequently scheduled for May 7, 2026. Accordingly, any further suspension or delisting action by Nasdaq relating to the Bid Price Rule will be stayed pending the Panel’s decision. During the appeal process with the Panel, the Common Stock will continue to be listed and trade on Nasdaq. There can be no assurance that the Panel will grant the Company’s request for continued listing or that the Company will be able to regain compliance and thereafter maintain its listing on Nasdaq.

Previous report

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Stock is listed on The Nasdaq Capital Market, it is a covered security. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were to be delisted from The Nasdaq Capital Market, our Common Stock would cease to be recognized as a covered security and we would be subject to regulation in each state in which we offer our securities.

Previous report

The Company intends to actively monitor the closing bid price of its common stock and evaluate all available options to regain compliance with the applicable rules. To that end, on April 30, 2026, the Company filed a Certificate of Change with the Nevada Secretary of State to amend its Articles of Incorporation to effect a 1-for-37 reverse stock split of the Company’s authorized shares of common stock, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of common stock, effective as of 12:01 a.m. Eastern Time on May 4, 2026, pursuant to NRS 78.207.

Previous report

There can be no assurance that our increased stock price following the Reverse Stock Split will remain at a price that will be sufficient in order to meet any continued requirements and policies of Nasdaq or that our common stock will remain listed on Nasdaq.

Previous report

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

Previous report

In addition, Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if a listed company that fails to meet the Bid Price Rule after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then we are not eligible for an 180-day compliance period.

Previous report

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

Previous report

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

Previous report

A significant portion of our sales are derived from our network of independent dealers. We typically manufacture our gas-powered boats based upon indications of interest received from dealers who are not contractually obligated to purchase any boats. While our dealers typically have purchased all of the boats for which they have provided us with indications of interest, it is possible that a dealer could choose not to purchase boats for which it has provided an indication of interest (e.g., if it were to have reached the credit limit on its floor plan), and as a result we once experienced, and in the future could experience, excess inventory and costs. For the three months ended March 31, 2026, four individual dealers each represented over 10% of our total sales and together represented 80% of total sales. For the three months ended March 31, 2025, two individual dealers each represented over 10% of our total sales and together represented 54% of total sales. The loss of a significant dealer could have a material adverse effect on our financial condition and results of operations. The number of dealers supporting our products and the quality of their marketing and servicing efforts are essential to our ability to generate sales. Competition for dealers among other boat manufacturers continues to increase based on the quality, price, value, and availability of the manufacturers’ products, the manufacturers’ attention to customer service, and the marketing support that the manufacturer provides to the dealers. We face intense competition from other boat manufacturers in attracting and retaining dealers, affecting our ability to attract or retain relationships with qualified and successful dealers. Although our management believes that the quality of our products in the performance sport boat industry should permit us to maintain our relationships with our dealers and our market share position, there can be no assurance that we will be able to maintain or improve our relationships with our dealers or our market share position. In addition, independent dealers in the boating industry have experienced significant consolidation in recent years, which could result in the loss of one or more of our dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. A substantial deterioration in the number of dealers or the quality of our network of dealers would have a material adverse effect on our business, financial condition, and results of operations.

Previous report

The loss of one or a few dealers could have a material adverse effect on us.

Previous report

A few dealers have in the past, and may in the future, account for a significant portion of our revenues in any one year or over a period of several consecutive years. For the three months ended March 31, 2026, four individual dealers represented over 10% of our total sales and combined represented 80% of total sales. The loss of business from a significant dealer could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Previous report

We rely on third-party suppliers in the manufacturing of our boats.

Previous report

We depend on third-party suppliers to provide components and raw materials essential to the construction of our boats. During the three months ended March 31, 2026, we purchased all engines for our boats under supplier agreements with three vendors. While we believe that our relationships with our current suppliers are sufficient to provide the materials necessary to meet present production demand, we cannot assure you that these relationships will continue or that the quantity or quality of materials available from these suppliers will be sufficient to meet our future needs, irrespective of whether we successfully implement our growth strategy. We expect that our need for raw materials and supplies will increase. Our suppliers must be prepared to ramp up operations and, in many cases, hire additional workers and/or expand capacity in order to fulfill the orders placed by us and other customers. Operational and financial difficulties that our suppliers may face in the future could adversely affect their ability to supply us with the parts and components we need, which could significantly disrupt our operations.

Previous report

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

Previous report

We are currently, and may in the future be, subject to substantial litigation, regulatory actions, government investigations, proceedings and similar actions including matters related to commercial disputes, intellectual property, employment, securities laws, disclosures, whistleblower, environmental, tax, accounting, class action, and product liability, as well as trade, regulatory and other claims related to our business and our industry. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability or require us to change our business practices. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, operating results or financial condition.

Previous report

On March 10, 2025, shareholders Nabeel Youseph and Marisa Hardyal-Youseph (“Plaintiffs”), who are former holders of common stock of Forza X1, Inc. (“Forza”), commenced an action in the Court of Chancery in the State of Delaware, captioned Youseph, et al. v. Visconti, et al., Case No. 2025-0262, by filing a putative class action complaint (the “Complaint”) against Defendants Joseph Visconti, Kevin Schuyler, Neil Ross, Twin Vee PowerCats Co. and Twin Vee PowerCats, Inc. (collectively, “Defendants”), related to Forza’s merger with Twin Vee seeking an unspecified award of damages, plus interest, costs, and attorneys’ fees. Plaintiffs’ Complaint asserts claims (1) against Defendants for breach of fiduciary duty in their capacities as controlling shareholders of Forza, (2) against Messrs. Visconti, Schuyler, and Ross for breach of fiduciary duty in their capacities as directors of Forza, and (3) against Mr. Visconti for breach of fiduciary duty in his capacity as an officer of Forza. Defendants deny the allegations and intend to vigorously defend against the claims. At this time, as the matter is in the pleadings stage, the Company is unable to estimate or project the ultimate outcome of this matter.

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

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We may be required to repurchase inventory of certain dealers.

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Many of our dealers have floor plan financing arrangements with third-party finance companies that enable the dealers to purchase our products. In connection with these agreements, we have an obligation to repurchase our products from a finance company under certain circumstances, and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. This obligation is triggered if a dealer defaults on its debt obligations to a finance company, the finance company repossesses the boat, and the boat is returned to us. Our obligation to repurchase a repossessed boat for the unpaid balance of our original invoice price for the boat is subject to reduction or limitation based on the age and condition of the boat at the time of repurchase, and in certain cases by an aggregate cap on repurchase obligations associated with a particular floor plan financing program. As disclosed in the notes accompanying the financial statements included in this Quarterly Report, on April 21, 2025, Northpoint Commercial Finance LLC (“Northpoint”) requested that we take possession of and repurchase certain inventory consisting of six boats in accordance with the Repurchase Agreement between us and Northpoint. Prior to that date, we have not been obligated to repurchase any other boats under our dealers’ floor plan financing arrangements,

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and we are not aware of any applicable laws regulating dealer relations which govern our relations with the dealers or would require us to repurchase any boats. However, there is no assurance that a dealer will not default on the terms of a credit line in the future. In addition, applicable laws regulating dealer relations may also require us to repurchase our products from our dealers under certain circumstances, and we may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. If we were obligated to repurchase a significant number of units under any repurchase agreement or under applicable dealer laws, our business, operating results and financial condition could be adversely affected.