UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission ~~file number:~~File Number: 001-41469

FORZA X1, INC.

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its Charter)~~its charter)

Delaware	87-3159685
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3101 S. US-1 Ft. Pierce, Florida	34982
(Address of principal executive offices)	(Zip Code)

(772) 429-2525

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	FRZA	The Nasdaq Stock Market, LLC (The Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No No ☒

As of ~~May 9,~~November 6, 2023, there were ~~10,450,000~~15,762,750 shares of Common Stock, $0.001 par value per share, outstanding.

FORZA X1, INC.

TABLE OF CONTENTS

		Page No.

	PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Balance Sheets as of ~~March 31,~~September 30, 2023 (Unaudited) and December 31, 2022	4

	Condensed Statements of Operations (Unaudited) for the Three ~~months~~and Nine Months ended ~~March 31,~~September 30, 2023 and 2022	5

	Condensed Statements of Stockholders’ Equity (Unaudited) for the Three ~~months~~and Nine Months ended ~~March 31,~~September 30, 2023 and 2022	6

	Condensed Statements of Cash Flows (Unaudited) for the ~~Three months~~Nine Months ended ~~March 31,~~September 30, 2023 and 2022	7

	Notes to the Condensed Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21 23

Item 4.	Controls and Procedures	21 23

	PART II—OTHER INFORMATION	22 24

Item 1.	Legal Proceedings	22 24

Item 1A.	Risk Factors	22 24

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	26

Item 3.	Defaults Upon Senior Securities	26 27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	27

SIGNATURES		28 29

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate under the circumstances. As you read and consider this Quarterly Report on Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond our control), and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements. We believe these factors include, but are not limited to, those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

As a result of these and other factors, we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

NOTE REGARDING COMPANY REFERENCES

Throughout this Quarterly Report on Form 10-Q, “Forza,” “the Company,” “we” and “our” refer to Forza X1, Inc.

FORZA X1, INC.

Condensed Balance Sheets

(Unaudited)

March 31, December 31,
2023 2022

ASSETS
Current Assets:
  Cash and cash equivalents $ 10,683,000 $ 12,767,199
  Inventories 42,829 —
  Due from Twin Vee 129,371 —
  Prepaid expenses and other current assets 366,983 519,735
  Total Current Assets 11,222,183 13,286,934

  Operating lease right of use asset 140,658 162,069
  Security deposit 7,517 7,517
  Property and equipment, net 1,021,674 765,406
  Total Assets $ 12,392,032 $ 14,221,926

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
  Accounts payable $ 49,555 $ 99,028
  Accrued liabilities 77,169 92,767
  Finance leases - current portion 16,830 —
  Operating lease right of use liability 87,789 86,245
  Contract liabilities - customer deposits 5,800 5,300
  Due to Twin Vee —   169,851
  Total Current Liabilities 237,143 453,191

  Finance leases - noncurrent 72,739 —
  Operating lease liability - noncurrent 45,916 68,532
  Total Liabilities 355,798 521,723

Commitments and contingencies (Note 7) — —

Stockholders’ Equity:
Common stock: 25,000,000 authorized; $0.001 par value; 10,450,000 shares issued and outstanding 10,450 10,450
  Additional paid in capital 18,118,548 17,777,385
  Accumulated deficit (6,092,764 ) (4,087,632 )
  Total Stockholders’ Equity 12,036,234 13,700,203

  Total Liabilities and Stockholders’ Equity $ 12,392,032 $ 14,221,926


	September 30,			December 31,
	2023			2022
	Unaudited
ASSETS
Current Assets:
Cash & Cash Equivalents	$	5,438,820		$	12,767,199
Marketable Securities - Available for Sale		9,896,520			—
Due from Twin Vee		4,618			—
Inventory		777,831			—
Prepaid Assets		124,996			519,735
Total Current Assets		16,242,785			13,286,934

Long-Term Assets:
Property and Equipment, Net		1,051,936			765,406
Security Deposit		7,517			7,517
ROU Lease Asset		97,200			162,069
Total Long-Term Assets		1,156,653			934,992
Total Assets	$	17,399,438		$	14,221,926

LIABILITIES & STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable	$	38,513		$	99,028
Due to Twin Vee		—			169,851
Accrued Expenses		73,898			92,767
Contract Liabilities		5,800			5,300
ROU Lease Liability - S/T Portion		90,924			86,245
Financed Lease Liability - S/T Portion		17,233			—
Total Current Liabilities		226,368			453,191

Long-Term Liabilities:
ROU Lease Liability		—			68,532
Financed Lease Liability		63,328			—
Total Long-Term Liabilities		63,328			68,532
Total Liabilities		289,696			521,723

Commitments and contingencies (Note 8)		—			—

Stockholders’ Equity
Common Stock: 25,000,000 authorized; $0.001 par value; 15,784,000 and 10,450,000 shares issued and outstanding, respectively		15,784			10,450
Additional Paid in Capital		25,716,690			17,777,385
Accumulated Deficit		(8,622,732	)		(4,087,632	)
Total Stockholders’ Equity		17,109,742			13,700,203
Total Liabilities & Stockholders’ Equity	$	17,399,438		$	14,221,926

The accompanying notes are an integral part of these unaudited condensed financial statements

FORZA X1, INC.

Condensed Statements of Operations

(Unaudited)

Three months ended March 31,
2023 2022

Net sales $ —   $ —
Cost of products sold 49,941 11,078
Gross loss (49,941 ) (11,078 )

Operating expenses:
Selling, general and administrative 354,662 77,865
Salaries and wages 862,764 182,286
Research and development 702,648 215,670
Professional fees 124,040 19,078
Depreciation 35,696 7,737
Total operating expenses 2,079,810 502,636

Loss from operations (2,129,751 ) (513,714 )

Other income (expense):
Interest expense (291 ) (601 )
Interest income —   23
Dividend income 124,910 —
Total other income (expense) 124,619 (578 )

Income before income tax (2,005,132 ) (514,292 )
Income taxes provision — —
Net loss $ (2,005,132 ) $ (514,292 )

Basic and diluted (loss) per common share $ (0.19 ) $ (0.07 )

Weighted average common shares outstanding basic and diluted 10,450,000 7,000,000


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Net Sales - Related Party	$	18,559		$	—		$	18,559		$	—
Cost of Sales		11,621			66,543			102,358			90,633
Gross Profit (Loss)		6,938			(66,543	)		(83,799	)		(90,633	)

Operating Expenses:
Selling, General, & Administrative		217,455			125,851			906,432			267,657
Salaries & Wages		837,857			515,833			2,565,460			994,982
Professional Fees		92,505			35,221			286,411			70,831
Research & Development		60,667			283,936			1,024,787			718,375
Depreciation & Amortization		50,482			18,744			134,408			37,816
Total Operating Expenses		1,258,966			979,585			4,917,498			2,089,661
Operating Loss		(1,252,028	)		(1,046,128	)		(5,001,297	)		(2,180,294	)

Other Income (Expense):
Interest Income		1,401			4,577			1,401			4,608
Dividend Income		150,284			—			412,551			—
Unrealized Gain		31,426			—			31,426			—
Realized Gain		23,747			—			23,747			—
Interest Expense		(1,144	)		(1,112	)		(2,928	)		(1,970	)
Loss on Disposal of Asset		—			—			—			(31,582	)
Total Other Income (Expenses)		205,714			3,465			466,197			(28,944	)
Net Loss	$	(1,046,314	)	$	(1,042,663	)	$	(4,535,100	)	$	(2,209,238	)

Loss Per Share:
Basic	$	(0.07	)	$	(0.12	)	$	(0.36	)	$	(0.29	)

Weighted Average Shares Outstanding:
Basic		15,784,000			8,837,470			12,579,866			7,619,275

The accompanying notes are an integral part of these unaudited condensed financial statements

FORZA X1, INC.

Condensed Statements of Stockholders’ Equity

(Unaudited)

For the Three ~~months end March 31,~~and Nine Months Ended September 30, 2022

Additional Total
Common Stock Paid-in (Accumulated Stockholders’
Shares Amount Capital Deficit) Equity
Balance, January 1, 2022 7,000,000 $ 7,000 $ 1,993,000 $ (457,551 ) $ 1,542,449
Net Loss — — — (514,292 ) (514,292 )
Balance, March 31, 2022 7,000,000 7,000 1,993,000 (971,843 ) 1,028,157
Capital Contributions from Twin Vee — — 500,000 — 500,000
Net Loss — — — (652,283 ) (652,283 )
Balance June 30, 2022 7,000,000 7,000 2,493,000 (1,624,126 ) 875,874
Common Stock Issued for Cash 3,450,000 3,450 14,826,039 — 14,829,489
Stock-Based Compensation — — 158,705 — 158,705
Net Loss — — — (1,042,663 ) (1,042,663 )
Balance September 30, 2022 10,450,000 $ 10,450 $ 17,477,744 $ (2,666,789 ) $ 14,821,405

For the Three and Nine Months Ended September 30, 2023 ~~and 2022~~

					Additional					Total
	Common Stock				Paid-in		(Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit)			Equity
Balance, January 1, 2023		10,450,000	$	10,450	$	17,777,385	$	(4,087,632	)	$	13,700,203
Stock-Based Compensation		—		—		341,163		—			341,163
Net Loss		—		—		—		(2,005,132	)		(2,005,132	)
Balance, March 31, 2023		10,450,000		10,450		18,118,548		(6,092,764	)		12,036,234
Common Stock Issued for Cash		5,334,000		5,334		6,924,218					6,929,552
Stock-Based Compensation		—		—		341,817		—			341,817
Net Loss		—		—		—		(1,483,654	)		(1,483,654	)
Balance, June 30, 2023		15,784,000		15,784		25,384,583		(7,576,418	)		17,823,949
Stock-Based Compensation		—		—		332,107		—			332,107
Net Loss		—		—		—		(1,046,314	)		(1,046,314	)
Balance September 30, 2023		15,784,000		15,784		25,716,690		(8,622,732	)		17,109,742

   Common Stock Additional
Paid-in (Accumulated Total Stockholders’
Shares Amount Capital Deficit) Equity
Balance, January 1, 2022 700,000 $ 7,000 $ 1,993,500 $ (457,551 ) $ 1,542,949
Net loss —   —   —   (514,292 ) (514,292 )
Balance, March 31, 2022 700,000 $ 7,000 $ 1,993,500 $ (971,843 ) $ 1,028,657

Balance, January 1, 2023 10,450,000 $ 10,450 $ 17,777,385 $ (4,087,632 ) $ 13,700,203
Stock-based compensation —   —   341,163 —   341,163
Net loss —   —   —   (2,005,132 ) (2,005,132 )
Balance, March 31, 2023 10,450,000 10,450 $ 18,118,548 $ (6,092,764 ) $ 12,036,234

The accompanying notes are an integral part of these unaudited condensed financial statements

FORZA X1, INC.

Condensed Statements of Cash Flows

(Unaudited)

Three months ended
March 31, 2023 March 31, 2022

Cash Flows From Operating Activities
Net loss $ (2,005,132 ) $ (514,292 )
Adjustments to reconcile net loss:
Depreciation 35,696 7,737
Stock based compensation 341,163 —
Change of right-of-use asset 21,411 —
Inventories (42,829 ) —
Prepaid expenses and other current assets 152,752 68,602
Accounts payable (49,473 ) 23,645
Contract liabilities - customer deposits 500 (11,229 )
Accrued liabilities (15,598 ) —
Operating lease liabilities (21,072 ) —
Net cash used in operating activities (1,582,582 ) (425,537 )

Cash Flows From Investing Activities
Purchase of property and equipment (199,599 ) (39,870 )
Net cash used in investing activities (199,559 ) (39,870 )

Cash Flows From Financing Activities
Deferred offering costs —   (116,394 )
Finance lease liabilities (2,836 ) —
Repayments of advances from parent (409,505 ) (600,557 )
Advances from parent 110,283 18,151
Net cash used in financing activities (302,058 ) (698,800 )

Net change in cash and cash equivalents (2,084,199 ) (1,164,207 )
Cash and cash equivalents at beginning of period 12,767,199 1,803,285
Cash and cash equivalents at end of period $ 10,683,000 $ 639,078

Supplemental Cash Flow Information
Cash paid for income taxes $ —   $ —
Cash paid for interest $ 291 $ 601

Non Cash Financing Activities
Finance lease $ 92,405 $ —


	Nine Months Ended September 30,
	2023			2022

Cash Flows From:
OPERATING ACTIVITIES
Net Loss	$	(4,535,100	)	$	(2,209,238	)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation & Amortization		134,408			37,816
Change in ROU Lease Asset		64,869			—
Change in Fair Value of Marketable Securities, Available for Sale		(31,426	)		—
Non-Cash Charge for Stock Based Compensation		1,015,087			158,705
Loss on Disposal of Assets		—			31,582
Change in Operating Assets & Liabilities:
Inventory		(777,831	)		—
Prepaid Assets		394,739			(358,208	)
Accounts Payable		(60,515	)		26,151
Accrued Expenses		(18,869	)		(23,438	)
Contract Liabilities		500			4,900
ROU Lease Liability		(63,853	)		—
Net Cash Used In Operating Activities		(3,877,991	)		(2,331,730	)

INVESTING ACTIVITIES
Purchase of Property & Equipment		(328,534	)		(465,086	)
Net Purchase of Marketable Securities, Available for Sale		(9,841,346	)		—
Realized Gains on Marketable Securities, Available for Sale		(23,747	)		—
Net Cash Used In Investing Activities		(10,193,627	)		(465,086	)

FINANCING ACTIVITIES
Proceeds from Sale of Common Stock		6,996,015			15,231,350
Deferred Offering Costs		(66,463	)		(296,361	)
Capital Contributions from Twin Vee		—			500,000
Finance Lease Liabilities		(11,844	)		—
Due to Twin Vee		(755,299	)		(890,198	)
Due from Twin Vee		580,830			389,446
Net Cash Provided by Financing Activities		6,743,239			14,934,237
Net Cash Flow for Period	$	(7,328,379	)	$	12,137,421
Cash & Cash Equivalents - Beginning of Period		12,767,199			1,803,285
Cash & Cash Equivalents - End of Period	$	5,438,820		$	13,940,706

Supplemental Cash Flow Information
Cash Paid During the Period for:
Income Taxes		—			—
Interest		2,928			1,970

Non Cash Investing and Financing Activities
Finance Leases		92,405			—

The accompanying notes are an integral part of these unaudited condensed financial statements.

FORZA X1, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

~~MARCH 31,~~

SEPTEMBER 30, 2023

1.	Organization and Summary of Significant Accounting Policies

Organization

Forza X1, Inc. (“Forza” or the “Company”) was initially incorporated as Electra Power Sports, Inc. on October 15, 2021, but subsequently changed its name to Forza X1, Inc. on October 29, 2021. The Company’s parent company was incorporated in the State of Florida as Twin Vee Catamarans, Inc. on December 1, 2009, and reincorporated in Delaware on April 7, 2021, as Twin Vee PowerCats Co. (“Twin Vee”).

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with the instructions to Quarterly Report on Form 10-Q and Rule 8-03 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of ~~March 31,~~September 30, 2023 and the results of operations and cash flows for the periods presented. The results of operations for the three months and nine months ended ~~March 31,~~September 30, 2023 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed financial statements should be read in conjunction with the financial statements and related notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2023.

Revenue Recognition

The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over promised goods is transferred to the dealer. Revenue is measured as the amount of consideration it expects to receive in exchange for a product.

Payment received for the future sale of a boat to a customer is recognized as a customer deposit. Customer deposits are recognized as revenue when control over promised goods is transferred to the customer. At September 30, 2023 and December 31, 2022, the Company had customer deposits of $5,800 and $5,300, respectively, which is recorded as contract liabilities on the Condensed Balance Sheet. These deposits are not expected to be recognized as revenue within a one-year period.

Use of Estimates

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 useful life of fixed assets.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of the purchase. On ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had cash and cash equivalents of $~~10,683,000~~ 5,438,820and $12,767,199, respectively.

Marketable Securities

The Company’s investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading debt securities as well as realized gains and losses on available-for-sale debt securities are included in net income.

Fair Value of Financial Instruments

The Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair Value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments:

	●	Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

	●	Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

	●	Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires a significant judgment or estimation.

Financial instruments measured as fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange.

Concentrations of Credit and Business Risk

The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limit of $250,000are at risk. ~~As of March 31,~~At September 30, 2023 and December 31, 2022, the Company had $~~10,271,464~~5,108,626 and $12,446,216, respectively, in excess of FDIC insured limits.

Inventories

Inventories, which are raw materials for upcoming production, are valued at the lower of cost and net realizable value, with cost determined using the 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 Goods Sold. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Provisions for excess and obsolete inventories at September 30, 2023 and December 31, 2022, were $90,085 and 0 zero, respectively.

2.	Property and Equipment

At ~~March 31,~~September 30, 2023 and December 31, 2022, property and equipment consisted of the following:

Schedule of property and equipment
March 31, December 31,
2023 2022
Building - construction in progress 25,071 10,031
Equipment 195,148 59,806
Computer hardware and software 38,847 37,016
Software and website development 90,396 35,572
Furniture and fixtures 2,152 —
Vehicles 48,825 —
Prototype 142,526 142,526
Molds and fixtures 562,916 528,966
1,105,881 813,917
Less accumulated depreciation (84,207 ) (48,511 )
$ 1,021,674 $ 765,406

Schedule of property and equipment
	September 30,			December 31,
	2023			2022
Boat Molds	$	574,415		$	528,966
Machinery & Equipment		171,534			59,806
Computers		50,626			37,016
Furniture & Fixtures		2,152			—
Vehicles		48,826			—
Prototype		142,526			142,526
Land		119,757			—
Assets under Construction		34,623			10,031
Websites		90,395			35,572
Less: Accumulated Depreciation		(182,919	)		(48,511	)
Property & Equipment, Net	$	1,051,936		$	765,406

~~Depreciation expense of property and equipment of $35,696~~ ~~and $7,737~~ ~~for~~

For the three months ended ~~March 31,~~September 30, 2023 and 2022, Depreciation & Amortization Expense was $50,482 and $18,744, respectively. For the nine months ended September 30, 2023 and 2022, Depreciation & Amortization expense was $134,408 and $37,816, respectively.

3. Marketable securities

Assets and liabilities measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2023 and December 31, 2022 are as follows:

Schedule of assets and liabilities measured at fair value on a recurring basis
			Fair Value Based On
	Balance as of September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Non-observable Inputs (Level 3)
Marketable securities: Corporate Bonds		9,896,520		—		9,896,520		—
Total marketable securities	$	9,896,520	$	—	$	9,896,520	$	—

Fair Value Based On

Balance as of
December 31, 2022

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Non-observable Inputs
(Level 3)

Marketable securities: Corporate Bonds

—

Total marketable securities

—

The Company’s investments in corporate bonds are measured based on quotes from market makers for similar items in active markets.

4. Leases

Operating right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right of use assets represent the Company’s right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. We used the U.S. Treasury rate of 0.33% at December 31, 2022.

The Company leases a warehouse facility, and the land upon which the warehouse is located which are located at 150 Commerce Street, Old Fort, North Carolina (the “Property”) from NC Limited Liability Company. The Company entered into the lease on October 7, 2022, the lease has a term of 2 two years. The current base rent payment is $7,517 per month including property taxes, insurance, and common area maintenance. The lease required a $7,517 security deposit. The base rent will increase three percent (3%) on October 15, 2023.

At ~~March 31,~~September 30, 2023 and December 31, 2022, supplemental balance sheet information related to leases were as follows:

Schedule of condensed balance sheet
Schedule of supplemental balance sheet information
	March 31,		December 31,		September 30,		December 31,
	2023		2022		2023		2022
Operating lease ROU asset	$	140,658	$	162,069	$	97,200	$	162,069

	March 31,		December 31,		September 30,		December 31,
	2023		2022		2023		2022
Operating lease liabilities:
Current portion	$	87,789	$	86,245	$	90,924	$	86,245
Non-current portion		45,916		68,532		—		68,532
Total lease liabilities	$	133,705	$	154,777	$	90,924	$	154,777

At ~~March 31,~~September 30, 2023, future minimum lease payments under the non-cancelable operating leases are as follows:

Years Ending December 31,

Schedule of future minimum lease payments
2023	$	68,552	$	23,226
2024		61,937		69,680
Total lease payment	$	130,489	$	92,906
Total imputed interest				1,982
Total			$	90,924

The following summarizes other supplemental information about the Company’s operating lease:

Schedule of operating lease cost
	~~March 31,~~	September 30, 2023
Weighted average discount rate		4	%
Weighted average remaining lease term (years)		~~1.58~~0.96

Three Months Ended March 31, 2023
Operating lease cost $ 22,550
Total lease cost $ 22,550

	Nine Months Ended September 30, 2023
Operating lease cost	$	67,650
Total lease cost	$	67,650

5. Finance Leases

The Company has finance leases for a vehicle and a forklift. The Company entered into the vehicle lease in February of 2023, with a recorded value of $48,826 in net property and equipment. It is a 60-month lease at a 3.0% interest rate. The Company entered into the forklift lease in January of 2023, itwith a recorded value of $43,579 in net property and equipment. It is a 60-month lease at a 7.5% interest rate. ~~The Company entered into~~At the ~~vehicle lease in February of~~nine months ended September 30, 2023, ~~it is a~~ 60~~-month lease at a~~ 3~~% interest rate. The~~the current ~~portion~~and non-current portions of the lease ~~liabilities was~~liability were $~~16,830~~17,233 ~~for the three months ended March 31, 2023,~~ and ~~the non-current portion was~~ $~~72,739~~63,328., respectively.

At September 30, 2023, future minimum payments under the non-cancelable finance leases are as follows:

Years Ending December 31,

Schedule of future minimum payments under the non-cancelable finance leases
2023	$	5,237
2024		20,950
2025		20,950
2026		20,950
2027		20,945
2028		875
Total lease payment	$	89,907
Total Imputed interest		9,346
Total	$	80,561

4.6.

Related Party ~~Transaction~~Transactions

During the nine months ended September 30, 2023, the Company recognized revenue of $18,559 related to the sale of a manufactured hull and deck to Twin Vee.

As of ~~March 31, 2023 and~~ December 31, 2022, the Company had a current ~~liabilities~~liability of $0 ~~and $~~169,851~~, respectively,~~ due to Twin Vee. As of September 30, 2023, the Company had a current asset of $4,618 due from Twin Vee. Prior to the Company’s initial public offering (“IPO”), Twin Vee funded the Company’s working capital needs, primarily for prototyping, consulting services, rent, interest, and payroll. ~~As of March 31,~~

During the nine months ended September 30, 2023 and ~~December 31,~~ 2022, the Company ~~had current assets~~repaid advancements from Twin Vee of $~~129,371~~755,299 and $0890,198, respectively, ~~due~~and had advancements from Twin Vee ~~due to intercompany transactions.~~of $580,830 and $389,446, respectively.

Associated with amounts advanced and due to Twin Vee, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company recorded interest expense of $~~426~~519 and $~~601~~858, respectively, based on a rate of 6% interest on the Company’s average monthly balance.

Pursuant to a management agreement with Twin Vee, dated October 2021, and a subsequent agreement dated September 2022, for various management services, the Company paid $5,000 monthly through August of 2021, and $6,800 monthly thereafter for management fee associated with the use of shared management resources. The September 2022 agreement ~~has a term of one year and will expire~~expired on August 31, ~~2023.~~2023, and was renewed for another year under the same terms. For the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company recorded management fees of $20,400 and $~~15,000~~16,725, respectively, pursuant to athis management ~~agreement with Twin Vee, for various~~agreement. For the nine months ended September 30, 2023 and 2022, the Company recorded management ~~services.~~fees of $61,200 and $46,725, respectively, pursuant to this management agreement.

For the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company recorded rent expense of approximately $10,200 and $2,550, respectively, associated with its month- to- month arrangement to utilize certain space at Twin Vee’s facility. For the nine months ended September 30, 2023 and 2022 the Company recorded rent expense of approximately $30,600 and $7,650, respectively, associated with its month- to- month arrangement to utilize certain space at Twin Vee’s facility. The Company incurred $850 per month for rent expense for approximately 1,000 square feet, from January of 2021 through ~~August~~September 2022, and in ~~September~~October of 2022 the month-to-month rent was adjusted to $3,400 per month, as the number of test boats had increased from 1 to 5, and the Company required ~~additional space, approximately~~ 4,100 square ~~feet.~~feet of additional space. The Company’s use of Twin Vee’s facilities does vary based on the number of prototype units on property and in process. The Company’s corporate headquarters are located at Twin Vee’s ~~location,~~location; however, a number of its employees and consultants work remotely.

~~During~~In August of 2022, the Company signed a six-month lease for a duplex on a property in Black Mountain, NC, to be used by its traveling employees during the construction of its new manufacturing facility, for $2,500 per month. After the initial term of the lease, it was extended on a month-to-month basis. In August of 2023, the Company’s president, James Leffew, purchased the property, and the Company executed a new lease agreement with Mr. Leffew on the same month-to-month terms. For the three months ended ~~March 31,~~September 30, 2023 and 2022, the ~~Company repaid advancements from Twin Vee of $~~lease expense was zero ~~409,505~~0 and $~~600,557~~2,536, ~~respectively,~~respectively. For the nine months ended September 30, 2023 and ~~had advancements from Twin Vee of~~2022, the lease expense was $~~110,283~~12,500 and $~~18,151~~2,536, respectively.

5.7.

Accrued ~~Liabilities~~Expenses

At ~~March 31,~~September 30, 2023 and December 31, 2022, accrued liabilities consisted of the following:

Schedule of accrued liabilities
March 31, December 31,
2023 2022
Accrued wages and benefits $ 47,910 $ 56,581
Accrued operating expense 29,259 36,186
Total $ 77,169 $ 92,767

Schedule of accrued liabilities
	September 30,		December 31,
	2023		2022
Accrued wages and benefits	$	28,748	$	56,581
Accrued operating expense		45,150		36,186
Total	$	73,898	$	92,767

6.8.

Liquidity

As of ~~March 31,~~September 30, 2023, the Company had cash and cash equivalents and working capital of $~~10,683,000~~ 5,438,820and $~~10,985,040~~16,016,417, respectively, compared to $12,767,199and $12,833,743, respectively, on December 31, 2022. ~~The~~On June 12, 2023 the Company ~~has~~completed a public offering that closed on June 14, 2023, which increased its cash by $6,929,552. For the three months ended September 30, 2023 and 2022, the Company incurred a net loss of $~~2,005,132~~1,046,314 and $1,042,663~~514,292~~ ~~for~~, respectively. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company incurred a net loss of $4,535,100 and $2,209,238, respectively. Losses have principally occurred as a result of the research and development efforts coupled with no operating revenue.

The Company has no current source of revenue and may seek additional equity and/or debt financing. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure.

7.9.

Commitments and Contingencies

~~Short-term lease~~Litigation

~~In August of 2022, the Company signed a six-month lease for a duplex, to be used by its employees to minimize travel expense as it started construction on its new manufacturing facility, for $2,200~~ ~~per month, on a property in Black Mountain, North Carolina. During the three months ended March 31, 2023, the lease expense was $2,200~~.

~~Litigation~~

The Company is currently involved in a civil litigation in the normal course of business, the Company does not consider this to be material.

8.10.

Stockholders’ Equity

Common Stock Warrants

~~As of March 31, 2023, the~~The Company had outstanding warrants to purchase 172,500 shares of common stock issuable at a weighted-average exercise price of $6.25 per share that were issued to the representative of the underwriters on August 16, 2022 in connection with the Company’s IPO. The Company also had outstanding warrants to purchase 306,705 shares of common stock issuable at a weighted-average exercise price of $1.88 per share that were issued to the representative of the underwriters on June 14, 2023 in connection with the Company’s secondary offering. The representative’s warrants are exercisable at any time and from time to time, in whole or in part, and expire on August 16, 2027. and June 16, 2028, respectively. There was no warrant activity during the three or nine months ended ~~March 31,~~September 30, 2023.

Equity Compensation Plan

The Company maintains an equity compensation plan (the “Plan”) under which it may award employees, directors and consultants’ incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock-based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the plan. The number of awards under the Plan automatically increased on January 1, 2023. As of ~~March 31,~~September 30, 2023, there were ~~568,750~~573,472 shares remaining available for grant under this Plan. Stock based compensation expense is included in the Condensed Statements of Operations, under salaries and wages.

Accounting for Stock -Based Compensation

Stock Compensation Expense - For the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company recorded $~~341,163~~332,107 and $0158,705, respectively, of stock-based compensation expense which is included in salaries and wages on the accompanying condensed statement of operations. For the nine months ended September 30, 2023 and 2022, the Company recorded $1,015,087 and $158,705, respectively, of stock-based compensation expense which is included in salaries and wages on the accompanying condensed statement of operations.

Forza’s 2022 Stock Incentive Plan (the “Plan”)- Forza has issued stock options. A stock option grant gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. Forza typically issues options that vest pro rata on a monthly basis over various periods. Under the terms of the Plan, the contractual life of the option grants may not exceed ten years.

The Company utilizes the Black-Scholes model to determine fair value of stock option awards on the date of grant. The Company utilized the following assumptions for option grants during the ~~three~~nine months ended ~~March 31,~~September 30, 2023:

Schedule of assumptions
	~~Three~~	Nine months ended
	~~March 31,~~	September 30,
		2023
Expected term		5 years
Expected average volatility		~~111~~112% -115	%
Expected dividend yield		—
Risk-free interest rate		2.98% -3.62	%

The expected volatility of the option is determined using historical volatilities based on historical stock price of comparable boat manufacturing companies. The Company estimated the expected life of the options granted based upon historical weighted average of comparable boat manufacturing companies. The risk-free interest rate is determined using the U.S. Department of the Treasury yield curve rates with a remaining term equal to the expected life of the option. The Company has never paid a dividend, and as such the dividend yield is 0.0%

Schedule of stock option activity
Options Outstanding Weighted Average
Number of Weighted Average Remaining life
Options Exercise Price (years) Fair value of option

Outstanding, December 31, 2021 — $ — — $ —
Granted 1,441,500 3.41 10.00 4,009,913
Exercised — —
Forfeited/canceled — — — —
Outstanding, December 31, 2022 1,441,500 $ 3.41 10.00 $ 4,009,913
Granted — — — —
Exercised — —
Forfeited/canceled (36,944 ) 1.33 9.74 —
Outstanding, March 31, 2023 1,404,556 $ 3.46 9.51 $ 4,009,913

Exercisable options, March 31, 2023 240,583 $ 4.21 9.44

Schedule of stock option activity
	Options Outstanding					Weighted Average
	Number of			Weighted Average		Remaining life
	Options			Exercise Price		(years)		Fair value of option

Outstanding, December 31, 2021		—		$	—		—	$	—
Granted		1,441,500			3.41		10.00		4,009,913
Exercised		—			—
Forfeited/canceled		—			—		—		—
Outstanding, December 31, 2022		1,441,500		$	3.41		9.97	$	4,009,913
Granted		—			—		—		—
Exercised		—			—
Forfeited/canceled		(44,722	)		1.33		9.66		—
Outstanding, September 30, 2023		1,396,778		$	3.48		9.01	$	4,009,913

Exercisable options, September 30, 2023		476,639		$	3.85		8.98

9.11.

Subsequent Events

The Company has evaluated all events or transactions that occurred after ~~March 31,~~September 30, 2023 through ~~May 9,~~November 15, 2023, which is the date that the condensed financial statements were available to be issued. During this period, there were no material subsequent events requiring recognition or disclosure.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes included in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that involve risks and uncertainties. This discussion may contain forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements.” Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q. This discussion should be read in conjunction with the accompanying unaudited condensed financial statements and notes thereto. You should also review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and under Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 28, 2023 for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Overview

Forza X1 Business

We aim to be among the first to develop and manufacture electric boats targeting the US recreational market. Our mission is to inspire the adoption of sustainable recreational boating by producing stylish electric sport boats. We are focused on the creation and implementation of marine electric vehicle (“EV”) technology to control and power our electric boats utilizing our proprietary outboard electric motor. Our electric boats are being designed as fully integrated electric boats including the hull, outboard motor, and control system.

We believe that the boating industry will follow in the footsteps of the electrification of the automotive industry by ~~creating~~adopting electric boats that meet or exceed the traditional boating consumer’s expectations of price, value and run times. In other words, electric boats must offer a similar experience when compared to traditional gas-powered boats in terms of size, capability, and price point.

To date, Forza X1 has built-out and tested multiple Forza company units, including: three ~~FX-style~~offshore-style catamarans, two ~~baycats,~~bay boat-style catamarans, one deck boat and three 22-foot center console (F22) monohulls. In addition, we have also electrified a pontoon boat for a major national pontoon manufacturer. We are in the process of an additional pontoon electrification project and are building an additional five monohulls. Each build cycle includes improvements and involves extensive duration and performance testing. The engine design and lower units and the control systems are continuously improved inwith each iteration. ~~The monohull has~~Cooling system improvements have also been ~~upgraded~~prioritized and have yielded a myriad of benefits to ~~a two-battery system~~runtime, speed, and ~~we have tested the system in a variety of conditions and operating environments. The batteries and engines are liquid-cooled and unique improvements to the heat exchanges have improved performance.~~range. We continue to ~~improve~~iterate the engine design, including value engineering of parts and lightweighting of engine components. We are experimenting with our ~~user interface~~first 300 HP stacked motor design.

In June, Forza announced that it received an initial purchase order from OneWater Marine, Inc. indicating its intention to purchase 100 units of the Company’s upcoming 22-foot electric monohull boat, which was introduced in March of 2023. As Forza gets into commercialization, the order could equate to approximately $12,000,000 in revenue. This milestone agreement will allow Forza to sell through the ~~Garmin control screen~~conventional dealer model sales channel to ~~provide well-designed pages showing operating characteristics~~support those looking for a more traditional way of purchasing a boat, or to accompany trade-ins, financing needs, and ~~important control parameters. Additionally, our telematics unit~~training. The participation of OneWater has been ~~adjusted to provide~~well-received in the marketplace and is a ~~better and easier to use interface. The telematics software is available on the Apple app store under the name Forza Connect.~~

significant achievement for Forza.

~~We continue~~In addition to ~~anticipate revenues from~~ the ~~sale of these fully integrated electric boats and motors to commence in late 2023 and early 2024.~~conventional dealer sales avenue, Forza X1 will ~~continue to build prototype engines and boats for the next six to nine months.~~

~~We plan to market and sell our model offerings in~~also pursue, as a ~~variety of ways. One way will be to operate in a fundamentally different manner and structure than traditional marine manufacturers and boat dealers by adopting~~parallel sales channel, a direct-to-consumer ~~sales model.~~option for those more comfortable with the convenience of order from home opportunities that are now readily accepted in the EV space. We are building a dedicated web and app-based platform for sales, deliveries, and service operations ~~to change the traditional boat buying and marine service experience through technological innovation,~~for ease of use, flexibility, and ~~flexibility.~~changing consumer preferences. We intend to employ an integrated, digital-first strategy that is convenient and transparent for our customers and efficient and scalable to support our growth. Additionally, to support those looking for a more traditional way of purchasing a boat, or to accompany trade-ins, financing needs, and training, we will also market our boats through a partnership with One Water, one of the largest dealership networks in the United States. We believe our approach will enable us to provide the best of both worlds to prospective customers and support our mission to electrify recreational boating for mass ~~production.~~consumption.

Recently, we have engaged with several high-profile marine manufacturers and are offering our electrification expertise and hardware packages as a service. We are in the design and prototype phase to provide our solution to a nationally recognized boat manufacturer and are expected to ~~build-out~~build up two demonstration units for their late summer open house & dealer meeting. ~~We are also~~Additional confidential discussions have been held with other renowned and start-up manufacturers representing a variety of hull platform types.

Forza held a very successful “Electrified Event” on July 8^th in the ~~process of creating a robust Forza website and a media day has been scheduled for July 7~~^thBen Hotel in West Palm Beach, Florida. The Forza F22 monohull was unveiled and approximately two-hundred media members, investors, supporters, and interested parties gathered for a presentation and summary of our history and a glimpse into our future plans. Media members were able to participate in rides on the 100% electric boat and discuss our innovative technology with Forza engineers.

In August, Polaris Marine selected Forza to electrify two pontoon boats as demonstration units for Bennington and Godfrey Pontoon, who utilized the Forza’s outboard motor to test and demonstrate its viability in the future development of watercraft specifically optimized for electric propulsion. The Forza electrified vessels were used in over 50 test runs over the course of their annual dealer meetings from August 9 through August 24, 2023, and both units performed flawlessly. Adopting effective high-power, high-performance, and long-range electric propulsion is anticipated to be the next evolution in luxury pontoons, because electric propulsion adds the benefits of instantaneous torque, as well as the ability to navigate in noise restricted environments.

Construction is underway at Forza’s North Carolina ~~factory plans are proceeding apace with clearing~~property and is expected to last for approximately ten months. To date, all of the ~~land 100% complete~~structural steel and ~~rough grading about 90% complete. We are~~rebar has been delivered and the 60,000 square foot pad is being prepped for concrete and footer work. The building will be capable of producing 500 boats annually, or more, and will serve as the technology and fabrication center for Forza.

Forza completed its first 22-foot full electrified dual console model and successfully tested it in September and October of 2023. The boat model will be offered in 2024 with the ~~building design phase~~existing center console. As expected, Forza has made numerous improvements to its engine and ~~have chosen~~propulsion systems and is experimenting with additional battery configurations to optimize performance.

Recent Developments

On June 12, 2023, we issued and sold in a ~~design-build contractor. We have also leased factory space~~firm commitment underwritten public offering(the “Offering”) pursuant to the term of an underwriting agreement that we ~~have upfitted~~entered into with ThinkEquity LLC on June 10, 2023 (the “Underwriting Agreement”), an aggregate of 5,334,000 shares of our Common Stock at a public offering price of $1.50 per share, for ~~use as an engine~~gross proceeds of $8,001,000, before deducting underwriting discounts, commissions and wire harness fabrication and test facility, we started engine production and wire fabrication in March of 2023. We have produced about ten motors to date, including our new Alpha 2 version powered by a Cascadia Motion electric motor. We are currently developing a stacking motor design for up to 300HP.offering expenses.

Results of Operations

Comparison of the Three Months Ended ~~March 31,~~September 30, 2023 and 2022

The following table provides certain selected financial information for the periods presented:

Three months ended March 31,
2023 2022 Change % Change
Net sales $ — $ — — —
Cost of products sold $ 49,941 $ 11,078 38,863 351 %
Gross loss $ (49,941 ) $ (11,078 ) (38,863 ) 351 %
Operating expenses $ 2,079,810 $ 502,636 1,577,174 314 %
Loss from operations $ (2,129,751 ) $ (513,714 ) (1,616,037 ) 315 %
Other income (expense) $ 124,619 $ (578 ) 125,197 (21,660 %)
Net loss $ (2,005,132 ) $ (514,292 ) (1,490,840 ) 290 %
Net loss per common share: Basic and Diluted $ (0.19 ) $ (0.07 ) (0 ) 161 %
Weighted average number of shares of common stock outstanding 10,450,000 7,000,000 3,450,000

	Three Months Ended September 30,
	2023			2022			Change			% Change
Net Sales - Related Party	$	18,559		$	—		$	18,559			—
Cost of Sales		11,621			66,543			(54,922	)		(83	%)
Gross Loss		6,938			(66,543	)		73,481			(110	%)
Operating Expenses		1,258,966			979,585			279,381			29	%
Operating Loss		(1,252,028	)		(1,046,128	)		(205,900	)		20	%
Other Income		205,714			3,465			202,249			5,837	%
Net Loss	$	(1,046,314	)	$	(1,042,663	)	$	(3,651	)		0	%
Net Loss per Common Share:
Basic	$	(0.07	)	$	(0.12	)	$	0.05			(42	%)

Weighted average number of common shares outstanding:
Basic		15,784,000			8,837,470			6,946,530

Operating Expenses

Operating expenses for the three months ended ~~March 31, 2022~~September 30, 2023 increased by ~~$1,577,174~~$279,381 to ~~$2,079,810~~$1,258,966 as compared to ~~$502,636~~$979,585 for the three months ended ~~March 31,~~September 30, 2022. Operating expenses include salaries, selling, ~~and~~ general, and administrative, research and development, professional fees, and depreciation. Research and development costs for the three months ended September 30, 2023 were $60,667, as compared to $283,936 for the three months ended September 30, 2022. Our research and development expenses declined for the quarter, due to large expenditures in the year ago period when we were in the early stages of development of our prototype electric motors and control systems. Going forward, research and development expenses will continue to increase. Salaries and wages for the three months ended September 30, 2023 were $837,857, as compared to $515,833 for the three months ended September 30, 2022, and were primarily related to additional staffing in engineering and design. Our staffing has increased from 12 employees on September 30, 2022, to 18 employees as of September 30, 2023. For the three months ended September 30, 2023, salaries and wages included $332,107 of stock option expense, as compared to $158,705 for the three months ended September 30, 2022. Our expenses for selling, general, and administrative for the three months ended September 30, 2023, were $217,455, as compared to $125,851 for the three months ended September 30, 2022. Professional fees for the three months ended ~~March 31,~~September 30, 2023 were ~~$702,648~~$92,505, as compared to ~~$215,670~~$35,221 for the three months ended ~~March 31,~~September 30, 2022, the increase due largely to the higher legal and compliance costs associated with being a public company. Depreciation and amortization for the three months ended September 30, 2023 was $50,842, as compared to $18,744 for the three months ended September 30, 2022, the increase being attributable to the ongoing addition of equipment and tooling.

Other expense and income

Interest expense was $1,144 and $1,112, respectively for the three months ended September 30, 2023 and 2022.

Because the proceeds from our IPO and secondary offering are partly invested in money market vehicles, those monies earn dividend income, interest income, and capital gains. Dividend and interest income was $151,685 and $4,577, respectively, for the three months ended September 30, 2023 and 2022. Realized and unrealized gains were $55,173 and zero, respectively, for the three months ended September 30, 2023 and 2022.

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table provides certain selected financial information for the periods presented:

	Nine Months Ended September 30,
	2023			2022			Change			% Change
Net Sales - Related Party	$	18,559		$	—		$	18,559			—
Cost of Sales		102,358			90,633			11,725			13	%
Gross Loss		(83,799	)		(90,633	)		6,834			(8	%)
Operating Expenses		4,917,498			2,089,661			2,827,837			135	%
Operating Loss		(5,001,297	)		(2,180,294	)		(2,821,003	)		129	%
Other Income		466,197			(28,944	)		495,141			(1,711	%)
Net Loss	$	(4,535,100	)	$	(2,209,238	)	$	(2,325,862	)		105	%
Net Loss per Common Share:
Basic	$	(0.36	)	$	(0.29	)	$	(0.07	)		24	%

Weighted average number of common shares outstanding:
Basic		12,579,866			7,619,275			4,960,591

Operating Expenses

Operating expenses for the nine months ended September 30, 2023 increased by $2,827,837 to $4,917,498, as compared to $2,089,661 for the nine months ended September 30, 2022. Operating expenses include salaries, selling, general, and administrative, research and development, professional fees and depreciation. Research and development costs for the nine months ended September 30, 2023 were $1,024,787, as compared to $718,375 for the nine months ended September 30, 2022. As we ~~have~~ moved to the prototype and testing of our electric motors and control systems on boats, our ~~expense have increase~~expenses increased as compared to the same period a year ago when we were still in the early stages of development. Salaries and wages for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 were ~~$862,764~~$2,565,460, as compared to ~~$182,286~~$994,982 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, and were primarily related to ~~the design of our fully electric motor,~~

~~control system~~additional staffing in engineering and ~~boat.~~design. Our staffing has increased from ~~6 during the first quarter of~~12 employees on September 30, 2022, to ~~15 during the first quarter~~18 employees as of September 30, 2023. For the ~~three~~nine months ended ~~March 31,~~September 30, 2023, salaries and wages included ~~$341,163~~$1,015,087 of stock option expense, as compared to $0$158,705 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. Our ~~expenses for~~ selling, general, and administrative expenses for the nine months ended ~~March 31,~~September 30, 2023, were ~~$354,662 and $77,865~~$906,432 as compared to $267,657 for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. Professional fees were $286,411 for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, ~~were $124,040 and $19,078~~as compared to $70,831 for the ~~three~~nine months ended ~~March 31, 2022. Now that we are publicly traded our professional fees have significantly increased~~September 30, 2022, the increase due largely to ~~meet~~ the ~~requirements or~~higher legal and compliance costs associated with being a public company. Depreciation and amortization for the ~~SEC. During the three~~nine months ended ~~March 31.2022, we did not incur the related expense,~~September 30, 2023 was $134,408, as ~~such our professional fees were only $19,078. Depreciation~~compared to $37,816 for the ~~three~~nine months ended ~~March 31, 2023 was $35,696 compared to $7,737 for~~September 30, 2022, the ~~three months ended March 31, 2022, this is due~~increase being attributable to the ongoing addition of ~~assets, we would anticipate continued increases as we purchase~~ equipment and ~~molds.~~tooling.

Other Income and Expense

~~Other~~

Because the proceeds from our IPO and secondary offering are partly invested in money market vehicles, those monies earn dividend income, interest income, and capital gains. Dividend and interest income was $413,952 and $4,608, respectively, for the nine months ended September 30, 2023 and 2022. Realized and unrealized gains were $55,173 and zero, respectively, for the nine months ended September 30, 2023 and 2022.

There was a loss on disposal of assets of $31,582 for the nine months ended September 30, 2022, relating to a deposit on a land purchase agreement in St. Lucie County, FL. The agreement was abandoned after it was determined that the construction of a facility on that site would be cost prohibitive, whereby the deposit was forfeited. There was no such expense ~~and income~~for the nine months ended September 30, 2023.

Interest expense was ~~$291~~$2,928 and ~~$601,~~$1,970, respectively, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

Dividend and Interest income was $124,910 and $23, respectively for the three months ended March 31, 2023 and 2022. These proceeds from our IPO have been invested resulting in the increase in dividend income.

Liquidity and Capital Resources

The following table provide selected financial data as of ~~March 31,~~September 30, 2023 and December 31, 2022:

March 31, December 31,
2023 2022 Change % Change
  Cash and cash equivalents $ 10,683,000 $ 12,767,199 (2,084,199 ) (16.3 %)
  Current assets $ 11,222,183 $ 13,286,934 (2,064,751 ) (15.5 %)
  Current liabilities $ 237,143 $ 453,191 (216,048 ) (47.7 %)
  Working capital $ 10,985,040 $ 12,833,743 (1,848,703 ) (14.4 %)

	September 30,		December 31,
	2023		2022		Change			% Change
Cash and Cash Equivalents	$	5,438,820	$	12,767,199	$	(7,328,379	)		(57.4	%)
Current Assets	$	16,242,785	$	13,286,934	$	2,955,851			22.2	%
Current Liabilities	$	226,368	$	453,191	$	(226,823	)		(50.1	%)
Working Capital	$	16,016,417	$	12,833,743	$	3,182,674			24.8	%

As of ~~March 31,~~September 30, 2023, we had cash and cash equivalents, and working capital of ~~$10,683,000~~$5,438,820 and ~~$10,985,040,~~$16,016,417, respectively, compared to $12,767,199 and $12,833,743, respectively, on December 31, 2022. We have incurred and expect to continue to incur significant costs in pursuit of our financing and construction of our new manufacturing facility. Our management plans to use the proceeds from the IPO and the secondary offering to finance these expenses. We believe that our current capital resources will be sufficient to fund our operations and growth initiative until we start selling electric boat and electric propulsion systems, and that our current capital resources will be sufficient for ~~at least 18~~another 15 months following the date of this Quarterly Report on Form 10-Q. The Company expects to continue to incur net losses, and ~~we anticipate that our quarterly loss rate will increase, as we move into building and testing additional prototypes, we will~~to have significant cash outflows for at least the next 12 months.

Three Months Ended
March 31,
2023 2022 Change % Change
  Cash used in operating activities $ (1,582,582 ) $ (425,537 ) (1,157,045 ) 272 %
  Cash used in investing activities $ (199,559 ) $ (39,870 ) (159,689 ) 401 %
  Cash used in financing activities $ (302,058 ) $ (698,800 ) 396,742 -57 %
  Net Change in Cash $ (2,084,199 ) $ (1,164,207 ) (919,992 ) 79 %

	Nine Months Ended September 30,
	2023			2022			Change			% Change
Cash Used in Operating Activities	$	(3,877,991	)	$	(2,331,730	)	$	(1,546,261	)		66	%
Cash Used in Investing Activities	$	(10,193,627	)	$	(465,086	)	$	(9,728,541	)		2092	%
Cash Provided by Financing Activities	$	6,743,239		$	14,934,237		$	(8,190,998	)		-55	%
Net Change in Cash	$	(7,328,379	)	$	12,137,421		$	(19,465,800	)		-160	%

Cash Flow from Operating Activities

During the ~~three~~nine months ending ~~March 31,~~September 30, 2023 and 2022, we generated negative cash flows from operating activities of ~~$1,582,582~~$3,877,991 and ~~$425,537,~~$2,331,730, respectively. During the ~~three~~nine months ending ~~March 31,~~September 30, 2023 and 2022, we had a net loss of ~~$2,005,132,~~$4,535,100 and ~~$514,292,~~$2,209,238, respectively. During the ~~three~~nine months ending ~~March 31,~~September 30, 2023, our cash used in operating activities was further impacted by an increase ofin inventories of ~~$42,829 and decrease of $49,473 for accounts payable, $15,598 of accrued liabilities and $21,072 of operating lease liabilities.~~$777,831. During the ~~three~~nine months ending ~~March 31, 2023~~September 30, 2022, our cash ~~provided by~~used in operating activities was further impacted by ~~a decrease of prepaid expenses of $152,752 and~~ an increase in prepaid assets of $500 in contract liabilities – customer deposits and by non-cash expenses of $398,270, of which $341,163 was due to stock based compensation, $35,696 of depreciation and $21,411 for the change of right-of use asset.

$358,208.

Cash Flows from Investing Activities

For the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, we used ~~$199,559,~~$10,193,627 and ~~$39,870~~$465,086, respectively, in investing activities primarily for the purchase of marketable securities, and to a lesser extent, for the purchase of property and ~~equipment, primarily for molds.~~equipment.

Cash Flows from Financing Activities

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, ~~and 2022,~~ net cash ~~used in~~provided by financing activities was ~~$302,058, and $698,800, respectively. During the three months ended March 31, 2023, we had~~$6,743,239. The cash ~~advances from Twin Vee of $110,283, which were offset by repayments of advances of $409,505.~~ ~~Additional cash~~flow from financing activities for the nine months ended September 30, 2023 included net proceeds of ~~$2,836 was due~~$6,929,552 from ~~equipment financing.~~a follow on underwritten public offering in June 2023. During the ~~three~~nine months ended ~~March 31, 2022 we had~~September 30,2022, net cash ~~advances~~provided by financing activities was $14,934,237, driven mostly by the net proceeds from ~~Twin Vee of $18,151, which were offset by repayments of advances of $600,557. Additional cash used in financing for~~ the ~~three months ended March 31,2022, was $116,394 for deferred offering costs.~~Company’s initial public offering.

Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based on four financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, that results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimated under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in the Quarterly Report on Form 10-Q, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving managements judgements and estimates.

Controls and Procedures

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control over financial reporting requirements of the Sarbanes-Oxley Act for the twelve-month period ending December 31, 2023. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, and no long qualify as an emerging growth company, would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

Revenue Recognition

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) required 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 useful life of fixed assets.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with original maturities of three months or less at the time of purchase. On ~~March 31,~~September 30, 2023, the Company had cash and cash equivalents of ~~$10,683,000~~$5,438,820, and on December 31, 2022, the Company had cash and cash equivalents of $12,767,199.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives of property and equipment range from three to seven years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance ~~charges,~~expenses, which do not increase the useful lives of the assets, are charged to operations as incurred.

Impairment of Long-lived Assets

Management assesses the recoverability of its long-lived assets when indicators of impairment are present. If such indicators are present, recoverability of these assets is determined by comparing the undiscounted net cash flows estimated to result from those assets over the remaining life to the assets’ net carrying amounts. If the estimated undiscounted net cash flows are less than the net carrying amount, the assets would be adjusted to their fair value, based on appraisal or the present value of the undiscounted net cash flows.

Research and Development

Research and development costs are expensed ~~when~~as incurred. Such costs for the three months ended ~~March 31,~~September 30, 2023 were ~~$702,648~~$60,667, as compared to ~~$215,670~~$283,936 for the ~~period~~three months ended September 30, 2022. For the nine months ended September 30, 2023, they were $1,024,787 as compared to $718,375 for the nine months ending ~~March 31,~~September 30, 2022.

Advertising Costs

Advertising and marketing costs are expensed as incurred. ~~For~~Such costs for the three months ended ~~March 31,~~September 30, 2023 ~~and 2022, advertising and marketing costs incurred by~~were $28,146, as compared to $5,582 for the ~~Company totaled $12,556 and $2,485, respectively.~~three months ended September 30, 2022. For the nine months ended September 30, 2023, they were $90,492 as compared to $8,314 for the nine months ended September 30, 2022. Advertising and marketing costs are included in selling, ~~and~~ general, and administrative expenses in the accompanying statements of operations.

Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company calculates the associated lease liability and corresponding ROU asset upon lease commencement using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. The operating lease ROU asset also includes any lease payments made and is reduced by lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for lease payments is recognized on a straight-line basis over the lease term.

Income Taxes

The Company is a C Corporation under the Internal Revenue Code and a similar section of the state code.

All income tax amounts reflect the use of the liability method under accounting for income taxes. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes arising primarily from differences between financial and tax reporting purposes.

Deferred income taxes, net of appropriate valuation allowances, are determined using the tax rates expected to be in effect when the taxes are actually paid. Valuation allowances are recorded against deferred tax assets when it is more likely than not that such assets will not be realized. When an uncertain tax position meets the more likely than not recognition threshold, the position is measured to determine the amount of benefit or expense to recognize in the financial statements.

In accordance with U.S GAAP, the Company follows the guidance in FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes. At ~~March 31, 2022,~~September 30, 2023, the Company does not believe it has any uncertain tax positions that would require either recognition or disclosure in the accompanying financial statements.

The Company’s income tax returns are subject to review and examination by federal, state and local governmental authorities.

Recent Accounting Pronouncements

All newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under Securities and Exchange Commission rules.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (Principal Executive Officer) and our interim Chief Financial Officer (Principal Financial Officer), evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31,~~September 30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. We have adopted and maintain disclosure controls and procedures (as defined Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. Our disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~March 31,~~September 30, 2023 our Chief Executive Officer and our interim Chief Financial Officer concluded that, as of such a date, our disclosure controls and procedures were not effective at the reasonable assurance level, due to the material weaknesses in our internal control over financial reporting, as further described below.

Previously Reported Material Weakness

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, we previously identified material weaknesses in our internal control over financial reporting relating to a lack of segregation of duties We have not yet retained sufficient staff or engaged sufficient outside consultants with appropriate experience in GAAP presentation, especially of complex instruments, to devise and implement effective disclosure controls and procedures, or internal controls. Significant progress has been made,

we have hired additional staff and are in the process of training, the required procedures and controls have been implemented. We will be testing these controls over the coming months to verify that the material weakness has been remediated. We continue to work with outside consultants with the appropriate experience to aid in the remedy these weaknesses. As such, the auditor provided us with a letter stating that our internal controls with respect to the financial close and financial reporting do not include a sufficient process to reconcile the accounts to supporting records and an independent review process to ensure U.S. GAAP financial statements are free from error. Wduties. ~~e have determined that these control deficiencies constituted material weaknesses in our internal control over financial reporting.~~ A material weakness is a deficiency or combination of deficiencies in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our condensed financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional misstatements to our condensed financial statements that would be material and would not be prevented or detected on a timely basis.

Remediation Plan

Management has developed and is executing a remediation plan to address the previously disclosed material weaknesses. We are actively engaged in the remediation of each of the outstanding material weaknesses, ~~including~~to include the retention of a full-time controller and ~~utilizing~~ the ~~assistance~~utilization of outside advisors where appropriate. With their added expertise, we will continue to make improvements in our accounting processes over the coming months. In the third quarter, we also completed the migration of our data into the SAP ByDesign ERP platform, which will aid in the segregation of access and responsibilities, as well as improve our reporting processes.

~~To remediate the existing material weaknesses, additional~~Additional time is required tobefore we can demonstrate the effectiveness of the remediation efforts. The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time ~~and~~over which management ~~has concluded,~~can conclude, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

~~During the three months ended March 31, 2023, we did experience turnover in our finance department and are working on rehiring and retraining staff.~~ We continue to develop and ~~refined~~refine our controls and other ~~producers~~procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC are recorded, processed, summarized and reported within the time periods specified in SEC rules and in accordance with GAAP.

PART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM 1A.

RISK FACTORS.

Investing in our securities involves a high degree of risk. You should consider carefully the following risks and the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2022, together with all the other information in this Quarterly Report on Form 10-Q, including our condensed financial statements and notes thereto. If any of the following risks actually materializes, our operating results, financial condition and liquidity could be materially adversely affected. The following information updates, and should be read in conjunction with, the information disclosed in Part I, Item 1A, “Risk Factors,” contained in our Annual Report on Form 10-K for the year ended December 31, 2022. Except as disclosed below, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

RISKS RELATED TO OUR BUSINESS

There is substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm has expressed doubt about our ability to continue as a going concern.

The report of our independent registered public accounting firm contains a note stating that the accompanying financial statements have been prepared assuming we will continue as a going concern. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, we incurred a net loss of ~~$2,012,649~~$4,535,100 and ~~$514,292,~~$2,209,238, respectively and used cash in operations of ~~$1,582,582~~$3,877,991 and ~~$425,537,~~$2,331,730, respectively. During the year ended December 31, 2022, we incurred a net loss of $3,630,081 and used cash in operations of $3,377,621. For the periods October 15, 2021 through December 31, 2021 (Successor) and January 1, 2021 through October 14, 2021 (Predecessor), we incurred a net loss of $270,630 and $186,921, respectively. For the period October 15, 2021 through December 31, 2021 (Successor), we used cash in operations of $317,131. For the period January 1, 2021 through October 14, 2021 (Predecessor), we had cash provided by operations of $13,024. Losses have principally occurred as athe result of ~~the~~our research and development efforts coupled with noa lack of operating revenue. ~~Losses have principally occurred as a result of the research and development efforts coupled with no operating revenue.~~ Until we begin generating revenue, there is doubt about our ability to ~~continue as~~become a going concern ~~through December 31, 2023.~~

Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business and operating results.

Our operations and performance depend on global, regional and U.S. economic and geopolitical conditions. General worldwide economic conditions have experienced significant instability in recent years including the recent global economic uncertainty and financial market conditions. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from U.S. and European leaders and financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022. Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if other countries, including the U.S., become further involved in the conflict, we could face significant adverse effects to our business and financial condition. The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact our business in the future. The COVID-19 outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such boats and other recreational components and supplies, have spiked, while demand for other goods and services, such as travel, have fallen. The future progression of the pandemic and its effects on our business and operations are uncertain. Further, although we have not experienced material adverse effects on our business due to increasing inflation, it has raised operating costs for many businesses and, in the future, could impact demand for our products, foreign exchange rates or employee wages. Inflation rates, particularly in the United States and United Kingdom, have increased recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital. In addition, the Federal Reserve has raised, and may again raise,

interest rates in response to concerns about inflation, which coupled with reduced government spending and volatility in financial markets may have the effect of further increasing economic uncertainty and heightening these risks. Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver. Although we did not have any cash or cash equivalent balances on deposit with Silicon Valley Bank, uncertainty and liquidity concerns in the broader financial services industry remain and the failure of Silicon Valley Bank and its potential near- and long-term effects on our vendors, suppliers, and investors, may also adversely affect our operations and stock price. We currently maintain our cash assets at certain financial institutions in the U.S. in amounts that are in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000. In the event of a failure of any financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations.

~~We are actively monitoring the effects these disruptions and increasing inflation could have on our operations.~~

These conditions make it extremely difficult for us to accurately forecast and plan future business activities. In addition, the outbreak of a pandemic could disrupt our operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who elect not to come to work due to the illness affecting others in our office or laboratory facilities, or due to quarantines. Pandemics could also impact members of our Board of Directors resulting in absenteeism from meetings of the directors or committees of directors and making it more difficult to convene the quorums of the full Board of Directors or its committees needed to conduct meetings for the management of our affairs.

Our outstanding common stock is substantially controlled by our management.

Twin Vee PowerCats, Co. currently owns ~~67%~~44.35% of our outstanding common stock. Joseph Visconti, who currently serves as our Executive Chairman and Chief of Product Development is also the Chairman of the Board and Chief Executive Officer of our parent company, Twin Vee PowerCats Co.~~, and is also the Chairman of the Board and Chief Executive Officer of Twin Vee PowerCats Co.~~ Mr. Visconti beneficially owns ~~25.84~~26.60 % of the outstanding stock of Twin Vee PowerCats ~~Co.~~Co, in addition to stock and vested options in Forza X1 representing 1.66% of the outstanding stock. As a result, Mr. Visconti is deemed to beneficially own ~~17%~~13.45% of Forza X1. As a result of these holdings, Mr. Visconti does and will have significant influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. Therefore, Twin Vee PowerCats Co. will have substantial influence over any election of our directors and our operations. It should also be noted that for the most part, authorization to modify our amended and restated certificate of incorporation, as amended, requires only majority stockholder consent and approval to modify our amended and restated bylaws requires authorization of only a majority of the board of directors. This concentration of ownership could also have the effect of delaying or preventing a change in our control. Accordingly, our Executive Chairman and Chief of Product Development could cause us to enter into transactions or agreements that we would not otherwise consider. In addition, this concentration of ownership may delay or prevent a change in our control and might affect the market price of our common stock, even when a change in control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders.

We may need to raise additional capital that may be required to grow our business, and we may not be able to raise capital on terms acceptable to us or at all.

Operating our business and maintaining our growth efforts will require significant cash outlays and advance capital expenditures and commitments. Our current plans also involve constructing a 100,000 square foot state-of-the-art manufacturing facility dedicated to developing and manufacturing our FX series electric boats, the cost of which is uncertain. Although the proceeds of our initial public offering and our secondary offering should be sufficient to fund our operations, if cash on hand and cash generated from operations and from our initial public offering and subsequent follow on offering are not sufficient to meet our cash requirements, we will need to seek additional capital, potentially through debt or equity financings, to fund our growth. We cannot assure you that we will be able to raise needed cash on terms acceptable to us or at all. Financing may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be lower than the price per share of our common stock paid by existing holders. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of common stock. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.

We do not yet have adequate internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the ~~future~~.future.

As a public company, we are subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act. We expect that the requirements of these rules and regulations will 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.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting.

We do not yet have effective disclosure controls and procedures, or internal controls over all aspects of our financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and in accordance with GAAP. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

We will be required to expend time and resources to further improve our internal controls over financial reporting, including by expanding our staff. However, we cannot assure you that our internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

We have not yet retained sufficient staff or engaged sufficient outside consultants with appropriate experience in GAAP presentation, especially of complex instruments, to devise and implement effective disclosure controls and procedures, or internal controls. We will be required to expend time and resources hiring and engaging additional staff and outside consultants with the appropriate experience to remedy these weaknesses. We cannot assure you that management will be successful in locating and retaining appropriate candidates; that newly engaged staff or outside consultants will be successful in remedying material weaknesses thus far identified or identifying material weaknesses in the future; or that appropriate candidates will be located and retained prior to these deficiencies resulting in material and adverse effects on our business.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business, including increased complexity resulting from our international expansion. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of management reports and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures, and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our common stock.

Our independent registered public accounting firm is not required to audit the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results and cause a decline in the market price of our common stock.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF ~~PROCEEDS.~~PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

(a)

Unregistered Sales of Equity Securities.

None.

~~(c)~~(b)

Use of Proceeds.

On August 16, 2022, we closed ~~ours~~our initial public offering of 3,000,000 shares of our common stock at a public offering price of $5.00 per share and an additional 450,000 shares of common stock upon exercise of the over-allotment option, generating gross proceeds of $17,250,000 (the “IPO”) pursuant to our Registration Statement on Form S-1 (as amended) (File No. 333-261884), which was declared effective by the SEC on August 11, 2022. After deducting underwriting discounts and commissions of approximately $1.3 million, and other offering expenses payable by us of approximately $1.3 million, we received approximately $14.7 million in net proceeds from our initial public offering. ThinkEquity ~~a division of Fordham Financial Management, Inc.~~LLC acted as the representative of the several underwriters for the offering.

There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus, dated August 11, 2022, which was filed with the SEC on August 15, 2022, pursuant to Rule 424(b) under the Securities Act. The primary use of the net proceeds from our initial public offering continues to be, as follows: (i) approximately $8.0 million for the acquisition of property and the development of a manufacturing plant to build, design and manufacture our new line of electric boats; (ii) approximately $2.0 million for ramp up of production and inventory; (iii) approximately $2.6 million for working capital. Since its initial public offering, the Company has invested approximately $6.0 million into production, R&D, inventory, working capital, facility planning, and the clearing and grading of land.

No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries. Pending the uses described, we have invested the net proceeds in our operating cash account.

(c)

Issuer Purchase of Equity Securities.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

Not Applicable.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index. The Exhibit Index is incorporated herein by reference.

EXHIBIT INDEX

Exhibit No.		Description of Exhibit

3.1		Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-41469), filed with the Securities and Exchange Commission on August 16, 2022)
3.2		Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-41469), filed with the Securities and Exchange Commission on August 16, 2022)
31.1*		Certification by principal executive officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by principal financial officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification by principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification by principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)

Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FORZA X1, INC.

Date: ~~May 9,~~November 6, 2023	By:	/s/ ~~Jim~~James Leffew
		~~Jim~~	James Leffew
		Chief Executive Officer
		(Principal Executive Officer)

Date: ~~May 9,~~November 6, 2023	By:	/s/ Carrie Gunnerson
		Carrie Gunnerson
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

2829


	Three months ended March 31,
	2023			2022

Net sales	$	—		$	—
Cost of products sold		49,941			11,078
Gross loss		(49,941	)		(11,078	)

Operating expenses:
Selling, general and administrative		354,662			77,865
Salaries and wages		862,764			182,286
Research and development		702,648			215,670
Professional fees		124,040			19,078
Depreciation		35,696			7,737
Total operating expenses		2,079,810			502,636

Loss from operations		(2,129,751	)		(513,714	)

Other income (expense):
Interest expense		(291	)		(601	)
Interest income		—			23
Dividend income		124,910			—
Total other income (expense)		124,619			(578	)

Income before income tax		(2,005,132	)		(514,292	)
Income taxes provision		—			—
Net loss	$	(2,005,132	)	$	(514,292	)

Basic and diluted (loss) per common share	$	(0.19	)	$	(0.07	)

Weighted average common shares outstanding basic and diluted		10,450,000			7,000,000


	Common Stock				Additional Paid-in		(Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit)			Equity
Balance, January 1, 2022		700,000	$	7,000	$	1,993,500	$	(457,551	)	$	1,542,949
Net loss		—		—		—		(514,292	)		(514,292	)
Balance, March 31, 2022		700,000	$	7,000	$	1,993,500	$	(971,843	)	$	1,028,657

Balance, January 1, 2023		10,450,000	$	10,450	$	17,777,385	$	(4,087,632	)	$	13,700,203
Stock-based compensation		—		—		341,163		—			341,163
Net loss		—		—		—		(2,005,132	)		(2,005,132	)
Balance, March 31, 2023		10,450,000		10,450	$	18,118,548	$	(6,092,764	)	$	12,036,234


	Three months ended
	March 31, 2023			March 31, 2022

Cash Flows From Operating Activities
Net loss	$	(2,005,132	)	$	(514,292	)
Adjustments to reconcile net loss:
Depreciation		35,696			7,737
Stock based compensation		341,163			—
Change of right-of-use asset		21,411			—
Inventories		(42,829	)		—
Prepaid expenses and other current assets		152,752			68,602
Accounts payable		(49,473	)		23,645
Contract liabilities - customer deposits		500			(11,229	)
Accrued liabilities		(15,598	)		—
Operating lease liabilities		(21,072	)		—
Net cash used in operating activities		(1,582,582	)		(425,537	)

Cash Flows From Investing Activities
Purchase of property and equipment		(199,599	)		(39,870	)
Net cash used in investing activities		(199,559	)		(39,870	)

Cash Flows From Financing Activities
Deferred offering costs		—			(116,394	)
Finance lease liabilities		(2,836	)		—
Repayments of advances from parent		(409,505	)		(600,557	)
Advances from parent		110,283			18,151
Net cash used in financing activities		(302,058	)		(698,800	)

Net change in cash and cash equivalents		(2,084,199	)		(1,164,207	)
Cash and cash equivalents at beginning of period		12,767,199			1,803,285
Cash and cash equivalents at end of period	$	10,683,000		$	639,078

Supplemental Cash Flow Information
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	291		$	601

Non Cash Financing Activities
Finance lease	$	92,405		$	—

	Three Months Ended March 31, 2023
Operating lease cost	$	22,550
Total lease cost	$	22,550