Twin Vee PowerCats (VEEE) Risk Analysis

Pursuant to the USFM Merger Agreement, each of the Company's and USFM Corporation's obligation to complete the USFM Merger is subject to the satisfaction or waiver by each of the parties of various conditions, including that the shares of USFM Corporation common stock to be issued to the Company's stockholders in the USFM Merger have been approved for listing on NYSE American or certain other national securities exchanges as of the closing of the USFM Merger. In the event that the shares of USFM Corporation's common stock to be issued in the USFM Merger are not approved for listing on NYSE American or such other national securities exchange, it is possible that the Company and USFM Corporation may mutually agree to waive the applicable condition and nonetheless proceed with completing the USFM Merger. If such condition is waived, neither the Company nor USFM Corporation will recirculate an updated proxy statement/prospectus, nor will it solicit a new vote of the Company's stockholders prior to proceeding with the USFM Merger. If the Company proceeds with the USFM Merger in these circumstances, the USFM Corporation stock issued to the Company's stockholders may not be listed on NYSE American, Nasdaq, or any other national securities exchange. If the USFM Corporation stock is not listed on NYSE American or another national securities exchange following completion of the USFM Merger, trading of the shares of USFM Corporation capital stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it is likely that there would be significantly less liquidity in the trading of the USFM Corporation common stock; decreases in institutional and other investor demand for such shares, coverage by securities analysts, market making activity and information available concerning trading prices and volume; and fewer broker dealers willing to execute trades in the USFM Corporation common stock. Also, it may be difficult for USFM Corporation to raise additional capital if the USFM Corporation common stock is not listed on a major exchange. The occurrence of any of these events could result in a further decline in the market price of the USFM Corporation common stock and could have a material adverse effect on USFM Corporation and the trading price of the shares of USFM Corporation issued to the Company's stockholders upon consummation of the USFM Merger.

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

Additional financing may not be available to USFM Corporation when it is needed or may not be available on favorable terms. To the extent that USFM Corporation raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of USFM Corporation, including the Company's pre-closing securityholders and USFM Corporation's pre-closing securityholders. It is also possible that the terms of any new equity securities may have preferences over USFM Corporation's common stock. Any debt financing USFM Corporation issues may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of USFM Corporation's assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, as a result of USFM Corporation's assumption of the Company's outstanding warrants and other Company Convertible Securities (as defined in the USFM Merger Agreement) in connection with the USFM Merger, USFM Corporation will be obligated to issue additional shares of USFM Corporation common stock upon exercise of any such warrants or Company Convertible Securities. Such warrants and other Company Convertible Securities assumed by USFM Corporation will result in further dilution to all securityholders of USFM Corporation.

Directors and executive officers of the Company and USFM Corporation have interests in the USFM Merger that are different from, or in addition to, the interests of other the Company's stockholders generally. These interests with respect to the Company's directors and executive officers may include, among others, retention bonus payments, severance payments if employment is terminated in a qualifying termination in connection with the USFM Merger and rights to continued indemnification, expense advancement and insurance coverage. The Registration Statement on Form S-4 which USFM Corporation will file in connection with the USFM Merger, and other documents that the Company and USFM Corporation file with the SEC from time to time, will describe these interests of the Company's officers and directors in detail. Please review such filings for more information. Further, certain current members of the Company's Board of Directors will continue as directors of USFM Corporation after the Effective Time and will be eligible to be compensated as non-employee directors of USFM Corporation pursuant to USFM Corporation's non-employee director compensation policy that is expected to be in place following the Effective Time. The Company's Board of Directors was aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the USFM Merger Agreement, approve the USFM Merger, and recommend the approval of the USFM Merger Agreement to the Company's stockholders.

If USFM Corporation is unable to realize the full strategic and financial benefits currently anticipated from the USFM Merger, USFM Corporation's and the Company's stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent USFM Corporation is able to realize only part of the strategic and financial benefits currently anticipated from the USFM Merger.

After the completion of the USFM Merger, the Company's current shareholders will own a substantially smaller percentage of USFM Corporation than their ownership of the Company prior to the USFM Merger. Immediately after the USFM Merger, the Company's stockholders as of immediately prior to the USFM Merger will own 10% of the outstanding shares of capital stock of USFM Corporation (on a fully-diluted basis), and former holders of USFM Corporation's securities will own 90% of the outstanding shares of capital stock USFM Corporation (on a fully-diluted basis). This reduced ownership interest will make it more difficult for significant Company stockholders to approve matters that are submitted to the stockholders of USFM Corporation for approval.

The outstanding capital stock of USFM Corporation is currently privately held and is not traded on any public market. The lack of a public market makes it difficult to determine the fair market value of USFM Corporation's capital stock. Because the percentage of USFM Corporation's equity to be issued to the Company's stockholders was determined based on negotiations between the parties, it is possible that the value of USFM Corporation common stock to be issued to the Company's stockholders will be more or less than the fair market value of the Company's capital stock.

The sole consideration offered to the Company's stockholders upon consummation of the USFM Merger consists of shares of USFM Corporation common stock and the contingent value rights interests to be issued to Company stockholders in connection with the Pre-Closing CVR Restructuring. The value of such USFM Corporation common stock could decrease, possibly materially, following closing of the USFM Merger. The USFM Corporation common stock may not have a liquid trading market and it may be difficult for Company stockholders to sell shares of USFM Corporation common stock received by them pursuant to the USFM Merger Agreement at the time or at the price desired by such Company stockholders. USFM Corporation will be subject to various risk factors which are in addition to those stated in this Quarterly Report. It is possible that Company stockholders will receive no cash value whatsoever with respect to the shares of USFM Corporation common stock issued to Company stockholders at the closing of the USFM Merger, which would result in a complete loss on such Company stockholders initial investment in the Company. Please carefully review the USFM Corporation registration statement on Form S-4 when it is filed, together with all other documents filed by the Company and USFM Corporation with the SEC, before making any investment decision regarding the Company's or USFM Corporation's common stock.

The USFM Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the USFM Merger, with limited exceptions. Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the USFM Merger Agreement after the closing of the USFM Merger, with limited exceptions. As a result, the parties to the USFM Merger Agreement and its stockholders will have no remedy available to them if the USFM Merger is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by the USFM Corporation or the Company at the time of the USFM Merger. Additionally, USFM Corporation cannot assure you that the due diligence conducted in relation to the Company has identified all material issues or risks associated with the Company, its business or the industry in which it competes. Furthermore, USFM Corporation cannot assure you that factors outside of its or the Company's control will not later arise, or that any previously identified risks will not materialize in a manner inconsistent with the preliminary analysis. As a result of these factors, following the closing of the USFM Merger, USFM Corporation may be exposed to liabilities and incur additional costs and expenses and it may be forced to later write-down or write off assets, restructure its operations, or incur impairment or other charges. If any such actions were to occur, the value of the USFM Corporation common stock issued to the Company's stockholders pursuant to the USFM Merger Agreement may decrease, perhaps substantially. USFM Corporation and its stockholders have no indemnification rights against the Company or its stockholders under the USFM Merger Agreement. Accordingly, stockholders of USFM Corporation (including Company stockholders who receive shares of USFM Corporation common stock at closing of the USFM Merger) could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by USFM Corporation's or the Company's directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the USFM Merger contained an actionable material misstatement or material omission.

The USFM Merger Agreement contemplates that, prior to the closing of the USFM Merger, the Company, Assetco and the Trust will consummate the Pre-Closing CVR Restructuring. As part of the Pre-Closing CVR Restructuring, the Company will cause the distribution of contingent value rights interests ("CVRs") from the Company to the Company's pre-closing stockholders. Each CVR holder is entitled to certain rights to receive a pro rata portion of the proceeds, if any, received as a result of the disposition of the Company Assets and Liabilities (as such term is defined in the USFM Merger Agreement). Such proceeds will be subject to certain permitted deductions. The right of the Company's pre-closing stockholders to derive any value from the CVRs will be contingent solely upon the disposition of such Company Assets and Liabilities. The Trust and Assetco may not be able to achieve successful results from the disposition of such Company Assets and Liabilities as described above. If this is not achieved for any reason, no payments will be made under the CVRs.

Our Chief Executive Officer owns 4.5% of our outstanding common stock, as of February 27, 2026. As a result, our Chief Executive Officer 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. 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. Accordingly, our Chief Executive Officer could cause us to enter into transactions or agreements that we would not otherwise consider.

The shares of our common stock are listed for trading on The Nasdaq Capital Market under the symbol "VEEE." If we fail to satisfy the continued listing requirements of The Nasdaq Capital Market, such as the corporate governance requirements, the stockholder's equity requirement, or the minimum closing bid price requirement, The Nasdaq Capital Market may take steps to de-list our common stock. Such a de-listing or even notification of failure to comply with such requirements would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a de-listing, we would take actions to restore our compliance with The Nasdaq Capital Market's listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price, improve the liquidity of our common stock, prevent our common stock from once again dropping below The Nasdaq Capital Market minimum bid price requirement, or prevent future non-compliance with The Nasdaq Capital Market's listing requirements. On May 10, 2024, we received written notice from Nasdaq's Listing Qualifications Department notifying us that for the preceding 30 consecutive business days (March 28, 2024 through May 9, 2024), our common stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2), or the Minimum Bid Price Requirement. We were provided 180 calendar days, or until November 6, 2024, to regain compliance, which deadline was subsequently extended to May 5, 2025. On April 4, 2025, we filed the Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split at a ratio of 1-for-10, effective as of 11:59 p.m. Eastern Time, on April 7, 2025, and our common stock began trading on a split-adjusted basis on April 8, 2025. On April 28, 2025, we received a letter from Nasdaq stating that Nasdaq had determined that we now comply with the Minimum Bid Price Requirement. However, we cannot assure you that we will be able to maintain compliance with the Minimum Bid Price Requirement in the future. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Because our common stock is listed on The Nasdaq Capital Market, it is a covered security. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were to be delisted from The Nasdaq Capital Market, our common stock would cease to be recognized as a covered security and we would be subject to regulation in each state in which we offer our securities.

At our 2024 Annual Meeting of Stockholders, our stockholders approved an amendment to our Certificate of Incorporation to effect, at the discretion of the Twin Vee board of directors, a reverse stock split at a ratio within a range of 1-for-2 to 1-for-20, with the ratio within such range to be determined at the discretion of our board of directors and included in a public announcement. On April 4, 2025, we filed the Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split at a ratio of 1-for-10, effective as of 11:59 p.m. Eastern Time, on April 7, 2025, and our common stock began trading on a split-adjusted basis on April 8, 2025. While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Minimum Bid Price Requirement, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, if we fail to maintain compliance with the Minimum Bid Price Requirement, Nasdaq may determine that it is not in the public interest to maintain the listing of our common stock, even if we should effect another reverse stock split for the purpose of regaining compliance with the Minimum Bid Price Requirement. In addition, Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if a listed company that fails to meet the Minimum Bid Price Requirement after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, it will not be eligible for a Compliance Period. Accordingly, we may fail to maintain compliance with the Minimum Bid Price requirement or the other Nasdaq listing requirements. Any non-compliance may be costly, divert our management's time and attention, and could have a material adverse effect on our business, reputation, financing, and results of operation A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of the common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, materially adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.

The trading market for our common stock will depend in part on the research and reports that third-party securities analysts publish about our company and our industry. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of our company, we could lose visibility in the market. In addition, one or more of these analysts could downgrade our common stock or issue other negative commentary about our company or our industry. As a result of one or more of these factors, the trading price of our common stock could decline.

We are an "emerging growth company," as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible 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, (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a non-binding advisory vote on executive compensation and of stockholder approval of any golden parachute payments not previously approved. We have elected to adopt these reduced disclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions and as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We could remain an "emerging growth company" for up to five years or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (b) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed fiscal quarter, and (c) the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period. We are also a "smaller reporting company" as defined in the Exchange Act and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies. To the extent that we continue to qualify as a "smaller reporting company" as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an "emerging growth company" may continue to be available to us as a "smaller reporting company," including exemption from compliance with the auditor attestation requirements pursuant to SOX and reduced disclosure about our executive compensation arrangements. We will continue to be a "smaller reporting company" until we have $250 million or more in public float (based on our common stock) measured as of the last business day of our most recently completed second fiscal quarter or, in the event we have no public float (based on our common stock) or a public float (based on our common stock) that is less than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

Investors should consider an investment in our common stock risky and invest only if they can withstand a significant loss and wide fluctuations in the market value of their investment. Investors who purchase our common stock may not be able to sell their shares at or above the purchase price. Our stock price has been volatile and may be volatile in the future. The price of our common stock has experienced volatility. During 2025, our common stock has experienced a high closing price of $7.45 and a low closing price of $1.59 per share. It is possible that an active trading market will not continue or be sustained, which could make it difficult for investors to sell their shares of our common stock at an attractive price or at all. The stock market in general has been, and the market price of our common stock in particular, will likely be subject to fluctuation, whether due to, or irrespective of, our operating results and financial condition. The market price of our common stock may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: - actual or anticipated variations in our and our competitors' results of operations and financial condition;   - market acceptance of our diagnostic tests and therapeutic products;   - the mix of products that we sell and related services that we provide;   - changes in earnings estimates or recommendations by securities analysts, if our common stock is covered by analysts;   - development of technological innovations or new competitive diagnostic tests or therapeutic products by others;   - announcements of technological innovations or new diagnostic tests or therapeutic products by us;   - our failure to achieve a publicly announced milestone;   - delays between our expenditures to develop and market new or enhanced diagnostic tests or therapeutic products and the generation of sales from those diagnostic tests and therapeutic products;   - developments concerning intellectual property rights, including our involvement in litigation;   - our sale or proposed sale, or the sale by our significant shareholders, of our common stock or other securities in the future   - changes in key personnel;   - success or failure of our research and development projects or those of our competitors;   - the trading volume of our common stock; and   - general economic and market conditions and other factors, including factors unrelated to our operating performance. Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a "short squeeze." These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at significantly inflated rates that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest in those stocks have abated. While we have no reason to believe our shares would be the target of a short squeeze, there can be no assurance that we won't be in the future, and investors may lose a significant portion or all of their investment if you purchase our shares at a rate that is significantly disconnected from our underlying value. These factors and any corresponding price fluctuations may materially and adversely affect the market price of our common stock and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could impose a substantial cost upon us and divert the resources and attention of our management from our business.

To date, there have been many days on which limited trading of our common stock took place. We cannot predict the extent to which investors' interests will lead to an active trading market for our common stock or whether the market price of our common stock will be volatile. If an active trading market does not develop, investors may have difficulty selling our common stock. We are likely to be too small to attract the interest of many brokerage firms and analysts. We cannot give investors any assurance that an active public trading market for our common stock will develop or be sustained. The market price of our common stock could be subject to wide fluctuations in response to quarterly variations in our revenues and operating expenses, announcements of new products or services by us, significant sales of our common stock, including "short" sales, the operating and stock price performance of other companies that investors may deem comparable to us, and news reports relating to trends in our markets or general economic conditions.

Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Among other things included in these provisions: - our board of directors is divided into three classes, one class of which is elected each year by our stockholders with the directors in each class to serve for a three-year term;         - the authorized number of directors can be changed only by resolution of our board of directors;         - directors may be removed only by the affirmative vote of the holders of at least sixty percent (60%) of our voting stock, whether for cause or without cause;         - our bylaws may be amended or repealed by our board of directors or by the affirmative vote of sixty-six and two-thirds percent (66 2/3%) of our stockholders;         - stockholders may not call special meetings of the stockholders or fill vacancies on the board of directors;         - our board of directors will be authorized to issue, without stockholder approval, preferred stock, the rights of which will be determined at the discretion of the board of directors and that, if issued, could operate as a "poison pill" to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that our board of directors does not approve;         - our stockholders do not have cumulative voting rights, and therefore our stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors; and         - our stockholders must comply with advance notice provisions to bring business before or nominate directors for election at a stockholder meeting. Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.