Twin Vee PowerCats, Co.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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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.
Sep 30, 2026 · Filed Nov 5, 2026
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 2026-06-30; filed 2026-08-06.
0001731122-26-001024
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001731122-26-001404
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 94 previous paragraphs and 90 current paragraphs.
45 unchanged; 33 reworded; 12 added; 15 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (12)
Current report
Management Matters
Current report
On October 8, 2026, the Company extended the consulting agreement of Michael P. Dickerson, the Company’s former Chief Financial and Administrative Officer, for a period of three months, until December 31, 2026 at a rate of $25,000 per month with three additional one-month extensions possible. Pursuant to the terms of such consulting agreement, Mr. Dickerson serves as our Interim Chief Financial Officer.
Current report
Defective State of Nevada Reincorporation
Current report
As the Company previously disclosed in a Current Report on Form 8-K that it filed with the SEC on August 5, 2026, the Company purported to effect its reincorporation from the State of Delaware to the State of Nevada through, among other things, a Certificate of Conversion which was filed with the Secretary of State of the State of Delaware (the “DE Secretary of State”) on April 7, 2026. On September 8, 2026, following receipt of stockholder approval for the Ratification Proposal (as defined in the Proxy Statement), the Company filed with the DE Secretary of State a Certificate of Validation of Certificate of Amendment (the “Certificate”) to give effect to the Reverse Stock Split (as defined below). The Certificate was deemed to have become effective as of May 4, 2026 at 12:01 a.m., Eastern Time.
Current report
Officer Compensation
Current report
On August 21, 2026, the Compensation Committee of the Board of Directors (the “Committee”) of Twin Vee PowerCats Co. revised the base salary of Joseph Visconti, the Company’s Chief Executive Officer and President, to $250,000. Additionally, Mr. Visconti shall be eligible to receive a bonus payment of $150,000 upon the successful completion and closing of the Agreement and Plan of Merger with USFM Corporation dated July 12, 2026 as amended October 7, 2026. In the event the Merger Agreement is successful and closes, the Company shall pay this bonus within ten (10) days after closing.
Current report
Results of Operations and Financial Conditions
Current report
Gross loss
Current report
During the three months ended September 30, 2026 and 2025, total operating expenses were $2,731,538 and $2,731,466. Significant declines in salaries and wages as well as a $360,151 impairment in the third quarter of 2025 were offset by an increase in legal and other expenses related to the proposed merger with USFM and the ratification of the defective Nevada reincorporation, May 2026 reverse stock split, and associated defective corporate acts.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
Gross Profit (Loss)
Current report
Liquidity and Capital Resources
Removed paragraphs (15)
Previous report
In light of the Company’s defective reincorporation from Delaware to Nevada (see “Defective State of Nevada Reincorporation” below) the Company is in process of seeking stockholder approval for ratification of the Reverse Stock Split in the State of Delaware, which Reverse Stock Split is expected to remain effective as of 12:01 a.m. Eastern Time on May 4, 2026 following such ratification. The ratification of the defective corporate acts is being pursued pursuant to Section 204 of the Delaware General Corporation Law and will not be effective unless and until the Company’s stockholders approve such ratification. See “Defective Reverse Stock Split” below and “PART II. OTHER INFORMATION - ITEM 1A. RISK FACTORS -We are seeking stockholder approval to ratify certain actions pursuant to Section 204 of the Delaware General Corporation Law and expect to file a Certificate of Validation with the Secretary of State of the State of Delaware in the event stockholders provide such approval.”
Previous report
Executive Compensation
Previous report
On April 21, 2026, the Compensation Committee of the Board of Directors (the “Committee”) of the Company approved an increase in the base salary of Preston Yarborough, the Company’s Vice President, to $250,000 per annum, and on April 22, 2026, the Company entered into an amendment (the “Yarborough Amendment”) to the employment agreement, effective as of July 23, 2021, by and between the Company and Preston Yarborough, reflecting such increase in base salary.
Previous report
On May 17, 2026, the Company delivered a notice of non-renewal pursuant to the terms of the Employment Agreement, effective as of July 23, 2021, with Joseph Visconti. The non-renewal was not due to any disagreement between Mr. Visconti and the Company on any matter. Following July 23, 2026, Mr. Visconti will continue to serve as the Company’s Chief Executive Officer and President on an at-will basis.
Previous report
Defective Reverse Stock Split
Previous report
On April 30, 2026, the Company filed a Certificate of Change with the Nevada Secretary of State (the “Certificate of Change”) to amend its invalidly filed Nevada 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 (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on May 4, 2026, purportedly pursuant to Nevada Revised Statutes (“NRS”) 78.207. Because the Nevada reincorporation was not validly approved by the requisite vote of Company stockholders, as described more fully elsewhere in this Quarterly Report, the Company never legally became a Nevada corporation. The Company is in process of seeking stockholder approval of the ratification of the Reverse Stock Split and the Reverse Stock Split is expected to remain effective as of 12:01 a.m. Eastern Time on May 4, 2026 under applicable Delaware law. The ratification of the defective corporate act is being pursued pursuant to Section 204 of the Delaware General Corporation Law and will not be effective unless and until the Company’s stockholders approve such ratification. See “PART II. OTHER INFORMATION - ITEM 1A. RISK FACTORS -We are seeking stockholder approval to ratify certain actions pursuant to Section 204 of the Delaware General Corporation Law and expect to file a Certificate of Validation with the Secretary of State of the State of Delaware in the event stockholders provide such approval.”
Previous report
On April 10, 2026, the board of directors of the Company approved the Reverse Stock Split by unanimous written consent. Since the Reverse Stock Split was purportedly effectuated pursuant to NRS 78.207 by a proportionate decrease in both the authorized and issued and outstanding shares of the entire class, no stockholder approval of the Reverse Stock Split was required under the NRS. After the effective time of the Reverse Stock Split, the Company’s common stock began trading under the existing trading symbol “VEEE” on the Nasdaq Capital Market on a reverse split-adjusted basis when the market opened on May 4, 2026. At the effective time of the Reverse Stock Split, every 37 shares of common stock issued and outstanding automatically converted into one issued and outstanding share of common stock and the total number of shares of common stock authorized for issuance under the Articles of Incorporation was reduced by a corresponding proportion from approximately 19.6 million shares to approximately 0.5 million shares.
Previous report
In addition, as a result of the Reverse Stock Split, proportionate adjustments were made to the number of shares of common stock underlying the Company’s outstanding equity awards and warrants. The total number of shares of the Company’s preferred stock authorized for issuance under the Articles of Incorporation remained at 10,000,000.
Previous report
Results of Operations
Previous report
Gross profit
Previous report
During the three months ended June 30, 2026 and 2025, total operating expenses were $2,838,869 and $2,329,859, respectively, an increase of $509,010, or 22%. Second quarter of 2026 includes an impairment charge related to capitalized software of $701,223. Before the impact of this charge, operating expenses would be down $192,213 or 8.2%
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
Gross Profit
Previous report
Liquidity
Previous report
CRITICAL ACCOUNTING ESTIMATES
Reworded paragraphs (33)
Previous wording
Revenue from the sale of our boats accounted for nearly 100% of our net revenue in the second quarter of 2026 and 2025. Our boats are manufactured in Fort Pierce, Florida. We believe our company has been an innovator in the recreational and commercial power boat industry. We currently have 11 Twin Vee models in production ranging in size from 22-foot to 40-foot, and 6 monohull Bahama models in or nearing production ranging in size from 31-foot to 41-foot, and three Bimini monohull models ranging in size from 21-foot to 29-foot.
Current wording
Revenue from the sale of our boats accounted for nearly 100% of our net revenue in the third quarter of 2026 and 2025. Our boats are manufactured in Fort Pierce, Florida. We believe our company has been an innovator in the recreational and commercial power boat industry. We currently have 11 Twin Vee models in production ranging in size from 22-foot to 40-foot, and 6 monohull Bahama models in or nearing production ranging in size from 31-foot to 41-foot, and three Bimini monohull models ranging in size from 21-foot to 29-foot.
Previous wording
During the quarter ended June 30, 2026, four individual dealers each represented over 10% of our total sales and together represented 88% of total sales. During the quarter ended June 30, 2025, three individual dealers each represented over 10% of our total sales and together represented 70% of total sales.
Current wording
During the quarter ended September 30, 2026, three individual dealers each represented over 10% of our total sales and together represented 77% of total sales. During the quarter ended September 30, 2025, four individual dealers each represented over 10% of our total sales and together represented 83% of total sales.
Previous wording
Our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date and we expect our expenses to increase in connection with our ongoing activities. These factors raise substantial doubt about our ability to continue as a going concern for one year after the condensed consolidated financial statements included in this Quarterly Report are issued.
Current wording
Our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026 were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date and we expect our expenses to increase in connection with our ongoing activities. These factors raise substantial doubt about our ability to continue as a going concern for one year after the condensed consolidated financial statements included in this Quarterly Report are issued.
Previous wording
On April 10, 2026, the Company purported to complete its reincorporation from the State of Delaware to the State of Nevada. On August 4, 2026, after discovering that the reincorporation was not approved by a sufficient vote of shares of the Company’s common stock, the Company filed Certificates of Correction (a) in the State of Nevada to revoke the previously filed Nevada Articles of Conversion/Exchange/Merger and Nevada Articles of Incorporation and (b) in the State of Delaware to revoke the previously filed Delaware Certificate of Conversion. Separately, the Company is seeking stockholder approval to ratify the articles of incorporation amendment, which were filed with the State of Nevada on April 30, 2026 with an effective date of May 4, 2026, to effect the reverse stock split referred to elsewhere in this Quarterly Report. In light of the defective corporate acts referred to above, the Company did not effectively reincorporate to Nevada. See “PART II. OTHER INFORMATION - ITEM 1A. RISK FACTORS -We are seeking stockholder approval to ratify certain actions pursuant to Section 204 of the Delaware General Corporation Law and expect to file a Certificate of Validation with the Secretary of State of the State of Delaware in the event stockholders provide such approval.”
Current wording
On April 10, 2026, the Company purported to complete its reincorporation from the State of Delaware to the State of Nevada. On August 4, 2026, after discovering that the reincorporation was not approved by a sufficient vote of shares of the Company’s common stock, the Company filed Certificates of Correction (a) in the State of Nevada to revoke the previously filed Nevada Articles of Conversion/Exchange/Merger and Nevada Articles of Incorporation and (b) in the State of Delaware to revoke the previously filed Delaware Certificate of Conversion. Separately, the Company sought stockholder approval to ratify the articles of incorporation amendment, which were filed with the State of Nevada on April 30, 2026 with an effective date of May 4, 2026, to effect the reverse stock split referred to elsewhere in this Quarterly Report. In light of the defective corporate acts referred to above, the Company did not effectively reincorporate to Nevada.
Previous wording
Our net sales decreased by $1,627,244, or 34%, to $3,128,374 for the three months ended June 30, 2026, from $4,755,618 for the three months ended June 30, 2025. This decrease was due primarily to market conditions of elevated interest rates and higher gas prices impacting consumer behavior and demand. During the second quarter of 2026, we sold 15 boats at an average selling price of approximately $209,000 per unit, compared to 31 units in the second quarter of 2025 with an average selling price of approximately $153,000. The increase in the average sales price is primarily due to a change in the product mix of boats sold, specifically, in the second quarter of 2025, 18 boats of 24 feet or less were sold versus in the second quarter of 2026 8 boats of 24 feet or less were sold.
Current wording
Our net sales decreased by $656,885, or 19%, to $2,772,092 for the three months ended September 30, 2026, from $3,428,977 for the three months ended September 30, 2025. This decrease was due primarily to market conditions of elevated interest rates and higher gas prices impacting consumer behavior and demand. During the third quarter of 2026, we sold 10 boats at an average selling price of approximately $277,000 per unit, compared to 31 units in the third quarter of 2025 with an average selling price of approximately $149,000. The increase in the average sales price is primarily due to a change in the product mix of boats sold, specifically, in the third quarter of 2025, 12 boats of 24 feet or less were sold versus in the third quarter of 2026 3 boats of 24 feet or less were sold.
Previous wording
Gross profit declined by $836,721, or 128%, to a negative $182,668 for the three months ended June 30, 2026, from $654,053 for the three months ended June 30, 2025. Gross (loss) profit as a percentage of sales for the three months ended June 30, 2026 was -5.8% compared to 13.8% in the second quarter of 2025. The decline in gross profit of 19.6 percentage points, is primarily due to an increase in labor related to the completion and re-launch of the new Bahama Boat line of boats at the Palm Beach International Boat Show and the unfavorable leverage effect of lower boat sales on fixed overhead costs.
Current wording
Gross loss declined by $332,109 to a negative $377,338 for the three months ended September 30, 2026, from $45,229 for the three months ended September 30, 2025. Gross loss as a percentage of sales for the three months ended September 30, 2026 was -13.6% compared to -1.3% in the third quarter of 2025. The decline in gross profit of 14.9 percentage points, is primarily due to the unfavorable leverage effect of lower boat sales on fixed overhead costs.
Previous wording
Selling, general, and administrative expenses decreased by approximately 1%, or $5,167, to $600,106 for the three months ended June 30, 2026, compared to $605,273 for the three months ended June 30, 2025.
Current wording
Selling, general, and administrative expenses decreased by approximately 5%, or $33,630, to $617,098 for the three months ended September 30, 2026, compared to $650,728 for the three months ended September 30, 2025.
Previous wording
Salaries and wage related expenses decreased 22%, or $232,125, to $822,978 for the three months ended June 30, 2026, compared to $1,055,103 for the three months ended June 30, 2025. The decrease in salaries and wages is across the board, including salaries, director expenses, and benefits due to ongoing resource management, in addition, the retirement of our prior CFO resulted in a reduction in salaries, bonus accruals as well as stock based compensation expenses.
Current wording
Salaries and wage related expenses decreased 59%, or $601,307, to $415,587 for the three months ended September 30, 2026, compared to $1,016,894 for the three months ended September 30, 2025. The decrease in salaries and wages is across the board, including salaries, director expenses, and benefits due to ongoing resource management, in addition, the conversion of our prior CFO to consultant status resulted in a reduction in salaries, bonus accruals as well as stock-based compensation expenses.
Previous wording
Professional fees increased by 35%, or $66,482, to $256,989 for the three months ended June 30, 2026, compared to $190,507 for the three months ended June 30, 2025, primarily due to expenses related to the proposed merger with USFM.
Current wording
Professional fees increased by 511%, or $1,056,489, to $1,263,287 for the three months ended September 30, 2026, compared to $206,798 for the three months ended September 30, 2025, primarily due to legal and other expenses related to the proposed merger with USFM and the ratification of the defective Nevada reincorporation, May 2026 reverse stock split, and associated defective corporate acts.
Previous wording
Depreciation and amortization expense increased by 8%, or $33,534 to $459,085 for the three months ended June 30, 2026, as compared to $425,551 for the three months ended June 30, 2025. This increase is due to the capitalization of Ft. Pierce building expansion and the 5-axis C&C machine installed in late 2025.
Current wording
Depreciation and amortization expense increased by 4%, or $15,741 to $435,566 for the three months ended September 30, 2026, as compared to $419,825 for the three months ended September 30, 2025. This increase is due to the capitalization of Ft. Pierce building expansion and the 5-axis C&C machine installed in late 2025.
Previous wording
Other income increased by $74,591 to $165,180 for the six months ended June 30, 2026, as compared to $90,589 for the six months ended June 30, 2025. This increase was due primarily to an increase in dividend and interest income from higher cash and cash equivalent balances, following the three equity sale transactions in the first quarter of 2026 and interest income related to the Company’s note receivable on the former building in North Carolina.
Current wording
Other income increased by $74,642 to $95,824 for the three months ended September 30, 2026, as compared to $21,182 for the three months ended September 30, 2025. This increase was due primarily to an increase in dividend and interest income from higher cash and cash equivalent balances, following the three equity sale transactions in the first quarter of 2026 and interest income related to the Company’s note receivable related to the building in North Carolina which the Company sold on October 31, 2025.
Previous wording
Net loss for the three months ended June 30, 2026 was $2,898,012, as compared to $1,654,071 for the three months ended June 30, 2025, a reduction of $1,243,941 or 75%. The overall year-over-year increase in the reported loss for the period was primarily due to the reduction in gross margin and an increase in SG&A as described above, which included the write off of capitalized software of $701,223. Basic and dilutive loss per share of Common Stock for the three months ended June 30, 2026, adjusted for the May 4, 2026 1 for 37 reverse stock split, was ($5.07), as compared to ($32.22) for the three months ended June 30, 2025, an improvement of 84%.
Current wording
Net loss for the three months ended September 30, 2026 was $3,013,052, as compared to $2,755,513 for the three months ended September 30, 2025, an increase of $257,539 or 9%. The overall year-over-year increase in the reported loss for the period was primarily due to the reduction in gross margin and an increase in legal fees as described above, Basic and dilutive loss per share of common stock for the three months ended September 30, 2026, adjusted for the May 4, 2026 1 for 37 reverse stock split, was ($5.19), as compared to ($45.57) for the three months ended September 30, 2025, an improvement of 89%.
Previous wording
Our net sales decreased by $1,274,829, or 15% to $7,093,080 for the six months ended June 30, 2026 from $8,367,909 for the six months ended June 30, 2025. This decrease was due primarily to market conditions of elevated interest rates and higher gas prices impacting consumer behavior and demand. We sold 36 and 45 boats during the first six months of 2026 and 2025, respectively. The average unit price per boat was approximately $197,000 in the first six months of 2026 compared to $186,000 in the first six months of 2025. This increase is due primarily to the sale of a 35’ and a 37’ Bahama in 2026 versus none in 2025.
Current wording
Our net sales decreased by $1,931,714, or 16% to $9,865,172 for the nine months ended September 30, 2026 from $11,796,886 for the nine months ended September 30, 2025. This decrease was due primarily to market conditions of elevated interest rates and higher gas prices impacting consumer behavior and demand. We sold 47 and 78 boats during the first nine months of 2026 and 2025, respectively. The average unit price per boat was approximately $210,000 in the first nine months of 2026 compared to $151,000 in the first nine months of 2025. This increase is due primarily to the sale of a 35’, 37’ and 41’ Bahama’s in 2026 versus none in 2025.
Previous wording
Gross profits decreased by $1,177,498 or 99%, to $13,669 for the six months ended June 30, 2026, from $1,191,167 for the six months ended June 30, 2025. Gross profit as a percentage of sales, for the six months ended June 30, 2026 and 2025, was 0.2% and 14.2% respectively. The decline in gross profit of 14 percentage points, is primarily due to an increase in labor related to the completion and re-launch of the new Bahama Boat line of boats at the Palm Beach International Boat Show and the unfavorable leverage effect of lower boat sales on fixed overhead costs.
Current wording
Gross profits decreased by $1,509,607 or 132%, to a gross loss of $363,669 for the nine months ended September 30, 2026, from $1,145,938 gross profit for the nine months ended September 30, 2025. Gross profit as a percentage of sales, for the nine months ended September 30, 2026 and 2025, was -3.7% and 9.7% respectively. The decline in gross profit of 13.4 percentage points, is primarily due to an increase in labor related to the completion and re-launch of the new Bahama Boat line of boats at the Palm Beach International Boat Show and the unfavorable leverage effect of lower boat sales on fixed overhead costs.
Previous wording
During the second quarter of 2026, the Company recorded a non-cash impairment charge of approximately $701,223 related to capitalized software development costs. The software platform was developed and commercialized during 2025 with the expectation of generating future revenues through licensing, subscription arrangements, customer access fees, and other commercialization opportunities. Following commercialization, management actively pursued customer adoption, strategic partnerships, and other monetization initiatives. After evaluating market demand, expected future investment requirements, strategic priorities, and the absence of supportable future revenue opportunities, management determined during the second quarter of 2026 to discontinue commercialization efforts and abandon the software as a revenue-generating initiative. As a result, the Company concluded that the carrying value of the software was no longer recoverable and recorded a full impairment charge of approximately $701,223, representing the remaining net book value of the asset.
Current wording
During the second quarter of 2026, the Company recorded a non-cash impairment charge of approximately $699,710 related to capitalized software development costs. The software platform was developed and commercialized during 2025 with the expectation of generating future revenues through licensing, subscription arrangements, customer access fees, and other commercialization opportunities. Following commercialization, management actively pursued customer adoption, strategic partnerships, and other monetization initiatives. After evaluating market demand, expected future investment requirements, strategic priorities, and the absence of supportable future revenue opportunities, management determined during the second quarter of 2026 to discontinue commercialization efforts and abandon the software as a revenue-generating initiative. As a result, the Company concluded that the carrying value of the software was no longer recoverable and recorded a full impairment charge of approximately $699,710, representing the remaining net book value of the asset.
Previous wording
During the six months ended June 30, 2026, operating expenses were $5,171,140 compared to $4,546,067 in the same period in 2025, an increase of $625,073 or 14%. The six month period ended June 30, 2026 includes an impairment charge related to capitalized software of $701,223. Before the impact of this charge, operating expenses would be down $76,150 or 2.0%
Current wording
During the nine months ended September 30, 2026, operating expenses were $7,902,678 compared to $7,277,533 in the same period in 2025, an increase of $625,145 or 9%. The nine-month period ended September 30, 2026 and 2025 includes an impairment charge related to capitalized software of $699,711 and the North Carolina building of $360,151, respectively. Before giving effect to these impairment charges, operating expenses would have been down $285,585 compared to the comparable prior year period.
Previous wording
Selling, general, and administrative expenses increased by approximately 21%, or $256,832, to $1,460,657 for the six months ended June 30, 2026, compared to $1,203,825 for the six months ended June 30, 2025. The increase was driven by both property taxes and Delaware franchise taxes as well as approximately $168,000 of penalties assessed by the Internal Revenue Service related to section 6721 and 6722 for the tax year 2022. The Company is actively seeking to resolve this disagreement with the IRS. Included in salaries and wage related expenses for the six months ended June 30, 2026 and 2025 was stock-based compensation expense of $130,010 and $115,597, respectively.
Current wording
Selling, general, and administrative expenses increased by approximately 12%, or $223,202, to $2,077,755 for the nine months ended September 30, 2026, compared to $1,854,553 for the nine months ended September 30, 2025. The increase was driven by both property taxes and Delaware franchise taxes as well as approximately $168,000 of penalties assessed by the Internal Revenue Service related to section 6721 and 6722 for the tax year 2022. The Company is actively seeking to resolve this disagreement with the IRS.
Previous wording
Salaries and wage related expenses decreased 15%, or $313,582, to $1,708.483 for the six months ended June 30, 2026, compared to $2,022,065 for the six months ended June 30, 2025. The decrease in salaries and wages is across the board, including salaries, director expenses, and benefits due to ongoing resource management, in addition, the retirement of our prior CFO resulted in a reduction in salaries and bonus accruals.
Current wording
Salaries and wage related expenses decreased 30%, or $914,889, to $2,124,070 for the nine months ended September 30, 2026, compared to $3,038,959 for the nine months ended September 30, 2025. The decrease in salaries and wages is across the board, including salaries, director expenses, and benefits due to ongoing resource management, in addition, the retirement of our prior CFO resulted in a reduction in salaries and bonus accruals. Included in salaries and wage related expenses for the nine months ended September 30, 2026 and 2025 was stock-based compensation expense of $166,034 and $179,493, respectively.
Previous wording
Professional fees increased by 12% or $39,525, to $376,043 for the six months ended June 30, 2026, compared to $336,518 for the six months ended June 30, 2025. This increase is primarily due to expenses related to the proposed merger with USFM.
Current wording
Professional fees increased by 201% or $1,096,014, to 1,639,330 for the nine months ended September 30, 2026, compared to $543,316 for the nine months ended September 30, 2025. This increase is primarily due to legal and other expenses related to the proposed merger with USFM and the ratification of the defective Nevada reincorporation, May 2026 reverse stock split, and associated defective corporate acts.
Previous wording
Depreciation and amortization expense increased by 7%, or $59,023, to $926,246 for the six months ended June 30, 2026, as compared to $867,223 for the six months ended June 30, 2025. This increase is due to the capitalization of Ft. Pierce building expansion and the 5-axis C&C machine installed in late 2025.
Current wording
Depreciation and amortization expense increased by 6%, or $74,764, to $1,361,812 for the nine months ended September 30, 2026, as compared to $1,287,048 for the nine months ended September 30, 2025. This increase is due to the capitalization of Ft. Pierce building expansion and the 5-axis C&C machine installed in late 2025.
Previous wording
Other income increased by $101,789 to $123,524 for the three months ended June 30, 2026, as compared to $21,735 for the three months ended June 30, 2025. This increase was due primarily to an increase in dividend and interest income from higher cash and cash equivalent balances, following the three equity sale transactions in the first quarter of 2026 and interest income related to the Company’s note receivable on the former building in North Carolina.
Current wording
Other income increased by $149,234 to $261,005 for the nine months ended September 30, 2026, as compared to $111,771 for the nine months ended September 30, 2025. This increase was due primarily to an increase in dividend and interest income from higher cash and cash equivalent balances, following the three equity sale transactions in the first quarter of 2026 and interest income related to the Company’s note receivable on the former building in North Carolina.
Previous wording
Net loss for the six months ended June 30, 2026 was $4,992,290, as compared to $3,264,311 for the six months ended June 30, 2025, a reduction of $1,727,979 or 53%. The overall year-over-year increase in the reported loss for the period was primarily due to the reduction in gross margin and an increase in SG&A as described above, which included the write off of capitalized software of $701,223. Basic and dilutive loss per share of Common Stock for the six months ended June 30, 2026, adjusted for the May 4, 2026 1 for 37 reverse stock split, was ($12.85), as compared to ($71.27) for the six months ended June 30, 2025, an improvement of 82%.
Current wording
Net loss for the nine months ended September 30, 2026 was $8,005,342, as compared to $6,019,824 for the nine months ended September 30, 2025, an increase of $1,985,518 or 33%. The overall year-over-year increase in the net loss for the period was primarily due to the reduction in gross margin, an increase in legal fees described above, and the write off of capitalized software of $699,710. Basic and dilutive loss per share of common stock for the nine months ended September 30, 2026, adjusted for the May 4, 2026 1 for 37 reverse stock split, was ($18.26), as compared to ($118.63) for the nine months ended September 30, 2025, an improvement of 85%.
Previous wording
For the year ended December 31, 2025, we incurred a loss from operations of $8,781,299 and a net loss of $8,607,273. For the six months ended June 30, 2026, we incurred a loss from operations of $5,157,471 and a net loss of $4,992,290. As of June 30, 2026, we had accumulated deficits of $38,992,518. To address these conditions:
Current wording
For the year ended December 31, 2025, we incurred a loss from operations of $8,781,299 and a net loss of $8,607,273. For the nine months ended September 30, 2026, we incurred a loss from operations of $8,266,347 and a net loss of $8,005,342. As of September 30, 2026, we had accumulated deficits of $42,005,570. To address these conditions:
Previous wording
A primary source of funds for the three and six months ended June 30, 2026 was net cash received from our three follow-on equity offerings closed during the first quarter of 2026, and revenue generated from operations. Our primary use of cash was related to funding our operations including capital improvements, and development of the Bahama Boat lineup.
Current wording
A primary source of funds for the three and nine months ended September 30, 2026 was net cash received from our three follow-on equity offerings closed during the first quarter of 2026, and revenue generated from operations. Our primary use of cash was related to funding our operations including capital improvements, and development of the Bahama Boat lineup.
Previous wording
During the six months ended June 30, 2026, the Company completed multiple equity offerings resulting in aggregate gross proceeds of $7,192,640 and aggregate net proceeds of $5,800,025, after deducting placement agent fees and expenses and the Company’s offering expenses.
Current wording
During the nine months ended September 30, 2026, the Company completed three equity offerings resulting in aggregate gross proceeds of $7,192,640 and aggregate net proceeds of $5,800,025, after deducting placement agent fees and expenses and the Company’s offering expenses.
Previous wording
As of June 30, 2026, we had $3,929,427 of cash, cash equivalents, and restricted cash, total current assets of $8,576,146 and total assets of $20,651,788. Our total liabilities were $6,246,232. Our total liabilities were comprised of current liabilities of $3,633,980, which included accounts payable and accrued liabilities of $2,637,237, lease liabilities of $470,943 and contract liability of $525,800. Long term liabilities were $2,612,252. As of December 31, 2025, we had $1,646,695 of cash, cash equivalents, and restricted cash, total current assets of $4,897,217 and total assets of $16,234,369. Our total current liabilities were $2,244,513 and total liabilities were $2,766,558.
Current wording
As of September 30, 2026, we had $1,828,616 of cash, cash equivalents, and restricted cash, total current assets of $6,593,654 and total assets of $18,305,427. Our total liabilities were $6,876,899. Our total liabilities were comprised of current liabilities of $4,390,843, which included accounts payable and accrued liabilities of $2,708,380, lease liabilities of $485,677 and contract liability of $1,196,786. Long term liabilities were $2,486,056. As of December 31, 2025, we had $1,646,695 of cash, cash equivalents, and restricted cash, total current assets of $4,897,217 and total assets of $16,234,369. Our total current liabilities were $2,244,513 and total liabilities were $2,766,558.
Previous wording
The accumulated deficit was $38,992,518 as of June 30, 2026 compared to accumulated deficit of $34,000,228 as of December 31, 2025.
Current wording
The accumulated deficit was $42,005,570 as of September 30, 2026 compared to accumulated deficit of $34,000,228 as of December 31, 2025.
Previous wording
Our working capital increased by $2,289,462 to $4,942,166 as of June 30, 2026, compared to $2,652,704 on December 31, 2025 primarily due to the three first quarter 2026 equity offerings totaling 468,863 shares, netting approximately $5,800,025 after fees and expenses, partially offset by continued operating losses incurred in the period.
Current wording
Our working capital decreased by $449,893 to $2,202,811 as of September 30, 2026, compared to $2,652,704 on December 31, 2025 primarily due to the three first quarter 2026 equity offerings totaling 468,863 shares, netting approximately $5,800,025 after fees and expenses, partially offset by continued operating losses incurred in the period.
Previous wording
For the six months ended June 30, 2026 net cash used in operating activities was $3,271,122, compared to $2,481,889 during the six months ended June 30, 2025. The use of cash in operating activities for the six months ended June 30, 2026 was due primarily to a $5,157,471 operating loss adjusted for non-cash depreciation and amortization of $926,246, stock-based compensation of $130,010, and asset impairment losses of $699,711.
Current wording
For the nine months ended September 30, 2026 net cash used in operating activities was $5,203,057, compared to $5,129,964 during the nine months ended September 30, 2025. The use of cash in operating activities for the nine months ended September 30, 2026 was due primarily to a $8,266,347 operating loss adjusted for non-cash depreciation and amortization of $1,361,812, stock-based compensation of $166,034, and asset impairment losses of $699,711.
Previous wording
During the six months ended June 30, 2026, cash used in investing activities was $235,477, due to investments in property, plant and equipment, primarily related to contingent consideration capitalized as Bahama Boat Works boat hulls. This compares to use of cash in investing activities of $1,536,522 in the six months ended June 30, 2025 resulting from purchase of property and equipment.
Current wording
During the nine months ended September 30, 2026, cash used in investing activities was $399,763, due to investments in property, plant and equipment, primarily related to contingent consideration capitalized as Bahama Boat Works boat hulls. This compares to use of cash in investing activities of $1,950,362 in the nine months ended September 30, 2025 resulting from purchase of property and equipment.
Previous wording
For the six months ended June 30, 2026, net cash provided by financing activities was approximately $5,789,331 due primarily to the three first quarter 2026 equity offerings totaling 468,863 shares, netting approximately $5,800,025 after fees and expenses. For the six months ended June 30, 2025, net cash used in financing activities was approximately $2,449,992.
Current wording
For the nine months ended September 30, 2026, net cash provided by financing activities was approximately $5,784,741 due primarily to the three first quarter 2026 equity offerings totaling 468,863 shares, netting approximately $5,800,025 after fees and expenses. For the nine months ended September 30, 2025, net cash used in financing activities was approximately $2,293,774.
Previous wording
As described in note 15 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, the Company entered into the USFM Merger Agreement on July 12, 2026, which sets forth the terms associated with the USFM Merger. Among other things, pursuant to the USFM Merger Agreement, the Company must consummate the Pre-Closing CVR Restructuring, pursuant to which the Company must to transfer all of the Company Assets and Liabilities (which includes all of the Company’s cash in excess of $1,500,000) to Assetco.
Current wording
As described in note 15 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, the Company entered into the A&R Merger Agreement on October 7, 2026, which sets forth the terms associated with the USFM Merger. Among other things, pursuant to the USFM Merger Agreement, the Company must consummate the Pre-Closing CVR Restructuring, pursuant to which the Company must to transfer all of the Company Assets and Liabilities (which includes all of the Company’s cash in excess of $700,000) to Assetco. This amount of retained cash was reduced from $1,500,000 in the initial USFM merger agreement entered into on July 12, 2026.
Previous wording
Inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted 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 have been made to reduce excess or obsolete inventories to their net realizable value.
Current wording
Inventories are valued at the lower of cost and net realizable value, with cost determined using the weighted average cost 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 have been made to reduce excess or obsolete inventories to their net realizable value.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
During the second quarter of 2026, the Company recorded a non-cash impairment charge of approximately $701,223 related to capitalized software development costs. The software platform was developed and commercialized during 2025 with the expectation of generating future revenues through licensing, subscription arrangements, customer access fees, and other commercialization opportunities. Following commercialization, management actively pursued customer adoption, strategic partnerships, and other monetization initiatives. After evaluating market demand, expected future investment requirements, strategic priorities, and the absence of supportable future revenue opportunities, management determined during the second quarter of 2026 to discontinue commercialization efforts and abandon the software as a revenue-generating initiative. As a result, the Company concluded that the carrying value of the software was no longer recoverable and recorded a full impairment charge of approximately $701,223, representing the remaining net book value of the asset.