UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934

(Amendment No. )

 

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

FORZA X1, INC.

(Name of the Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

   

JOINT PROXY STATEMENT/PROSPECTUS

 

YOUR VOTE IS VERY IMPORTANT

 

To the Stockholders of Twin Vee PowerCats Co. and Forza X1, Inc.:

 

Twin Vee PowerCats Co., a Delaware corporation (“Twin Vee”), Twin Vee Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Twin Vee (“Merger Sub”), and Forza X1, Inc., a Delaware corporation (“Forza”), have entered into an agreement and plan of merger dated August 12, 2024 (the “Merger Agreement”), which transaction is referred to as the “Merger”, pursuant to which Forza will merge with and into Merger Sub and become a wholly owned subsidiary of Twin Vee. Forza is a minority-owned subsidiary of Twin Vee. Twin Vee and Forza believe that the Merger will enhance stockholder value for both Twin Vee and Forza stockholders by (i) providing a method by which the Twin Vee stockholders can more directly share in the growth of Forza and (ii) generating substantial cost savings and bolstering business efficiencies, including elimination of duplicate administrative functions. Before the Merger can be completed, the stockholders of Twin Vee and Forza must provide various approvals. Twin Vee stockholders will vote to, among other things, approve the issuance of shares of its common stock, par value $0.001 per share (the “Twin Vee Common Stock”) to the Forza stockholders as set forth in the Merger Agreement at an annual meeting of Twin Vee stockholders to be held on November 11, 2024. Forza stockholders will vote to approve and adopt the Merger Agreement and the other transactions and matters described below at an annual meeting of Forza stockholders to be held on November 11, 2024. Twin Vee, in its capacity as a principal stockholder of Forza, has agreed to vote the shares of common stock, par value $0.001 per share, of Forza (the “Forza Common Stock”) held by it for the approval and adoption of the Merger only if a majority of the other stockholders of Forza present in person or by proxy at the Forza Annual Meeting vote to approve and adopt the Merger.

 

At the closing of the Merger, the holders of Forza Common Stock will receive 0.611666275 shares of Twin Vee Common Stock (the “Exchange Ratio”) in exchange for each share of Forza Common Stock that they own on the effective date of the Merger for a maximum of 5,355,000 shares of Twin Vee Common Stock (no fractional shares of Twin Vee Common Stock will be issued) and the 7,000,000 shares of Forza Common Stock held by Twin Vee will be cancelled. After the Merger, Twin Vee will have 14,875,000 shares of Twin Vee Common Stock outstanding. The Exchange Ratio was negotiated so that the pre-closing stockholders of each of Twin Vee and Forza would beneficially own approximately 64% and 36%, respectively of the outstanding shares of Twin Vee Common Stock following the closing of the Merger and not counting for purposes of the computation any outstanding options to purchase shares of Forza Common Stock or any outstanding warrants to purchase shares of Forza Common Stock. Accordingly, at the closing of the Merger: (i) each outstanding share of Forza Common Stock (other than shares held by Twin Vee) will be converted into 0.611666275 of a share of Twin Vee Common Stock, (ii) each outstanding stock option exercisable for shares of Forza Common Stock that is outstanding at the effective time of the Merger (the “Effective Time”), whether vested or unvested, will be assumed by Twin Vee and converted into a stock option to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such stock option to purchase shares of Forza Common Stock prior to the Merger and exchanged such shares for shares of Twin Vee Common Stock in accordance with the Exchange Ratio, (iii) each outstanding warrant to purchase shares of Forza Common Stock will be assumed by Twin Vee and converted into a warrant to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such warrant to purchase shares of Forza Common Stock prior to the Merger and exchanged such shares for shares of Twin Vee Common Stock in accordance with the Exchange Ratio, and (iv) the 7,000,000 shares of Forza Common Stock held by Twin Vee will be cancelled. For a more complete description of the Exchange Ratio, see the section titled “The Merger Agreement—Exchange Ratio” in this Joint Proxy Statement/Prospectus.

 

Twin Vee Common Stock is currently listed on the Nasdaq Capital Market (the “Nasdaq”), under the symbol “VEEE.” Prior to the closing of the Merger, Twin Vee intends to file with Nasdaq a notification form for the listing of additional shares with respect to the shares of Twin Vee Common Stock to be issued to the Forza stockholders in the Merger so that these shares will be listed on the Nasdaq following the Merger. After the closing of the Merger, the combined company is expected to trade on Nasdaq under the symbol “VEEE”. On October 7, 2024, the closing price of Twin Vee Common Stock was $0.5814 per share. The market price of the Twin Vee Common Stock may fluctuate before the completion of the Merger, therefore, you are urged to obtain current market quotations for Twin Vee Common Stock. Twin Vee expects to issue a maximum of 5,355,000 shares of Twin Vee Common Stock in the Merger upon completion of the Merger. No fractional shares of Twin Vee Common Stock will be issued to any stockholder of Forza upon completion of the Merger. The holder of shares of Forza Common Stock who would otherwise be entitled to a fraction of Twin Vee Common Stock (after aggregating all fractional shares of Twin Vee Common Stock that otherwise would be received by such holder), will, in lieu of such fraction of a share, be rounded down to the nearest whole share. We anticipate that the closing of the Merger will occur not later than three business days following the affirmative vote of Twin Vee stockholders and Forza stockholders.

  

 

 

Forza Common Stock is currently listed on Nasdaq under the symbol “FRZA.” However, Forza has received a letter from Nasdaq notifying it that due to its failure regain compliance with the Nasdaq bid price requirement, the Forza Common Stock will be delisted. On October 7, 2024, the closing price of Forza Common Stock was $0.2848 per share. The market price of the Forza Common Stock may fluctuate before the completion of the Merger, therefore, you are urged to obtain current market quotations for Forza Common Stock. If the Merger is completed, there will no longer be a trading market for Forza Common Stock as of such date. In addition, promptly following the closing of the Merger, Forza Common Stock will be deregistered under the Exchange Act and Forza will no longer file periodic reports with the Securities and Exchange Commission (the “SEC”).

 

Twin Vee is asking stockholders of Twin Vee to approve the issuance of the shares of Twin Vee Common Stock to the Forza stockholders as set forth in the Merger Agreement (the “Stock Issuance Proposal”) at the annual meeting of Twin Vee stockholders to take place on November 11, 2024 (the “Twin Vee Annual Meeting”), at 10:00 a.m. Eastern Time, at the offices of Twin Vee, 3101 S. U.S. Highway 1, Fort Pierce, Florida. At the Twin Vee Annual Meeting, Twin Vee stockholders will also be asked to vote on the Twin Vee director nominees, to ratify the appointment of Grassi & Co., CPAs, P.C. as Twin Vee’s independent registered public accounting firm for its fiscal year ending on December 31, 2024, to approve an amendment to Twin Vee’s Certificate of Incorporation, at the discretion of the Board of Directors of Twin Vee (the “Twin Vee Board of Directors”), to effect a reverse stock split (the “Twin Vee Reverse Stock Split”) with respect to the issued and outstanding shares of Twin Vee Common Stock (the “Twin Vee Reverse Stock Split Proposal”), to approve an amendment to the Twin Vee PowerCats Co. Amended and Restated 2021 Stock Incentive Plan (the “Twin Vee 2021 Plan”) to increase the number of shares of Twin Vee Common Stock available for issuance under the Twin Vee 2021 Plan by 1,000,000 shares to 3,171,800 shares (the “Plan Increase Proposal”); and approval to adjourn the meeting if necessary to continue to solicit votes in favor of the Stock Issuance Proposal, Plan Increase Proposal and/or the Twin Vee Reverse Stock Split Proposal.

 

Forza is asking stockholders of Forza to adopt and approve the Merger Agreement and the Merger (the “Merger Proposal”) at an annual meeting of Forza stockholders to take place on November 11, 2024 (the “Forza Annual Meeting”), at 10:30 a.m. Eastern Time, at the offices of Forza, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982. At the Forza Annual Meeting, Forza stockholders will also be asked to vote on the Forza director nominees, to ratify the appointment of Grassi & Co., CPAs, P.C. as Forza’s independent registered public accounting firm for its fiscal year ending on December 31, 2024, to approve an amendment to Forza’s Amended and Restated Certificate of Incorporation, at the discretion of the Board of Directors of Forza (the “Forza Board of Directors”), to effect a reverse stock split (the “Forza Reverse Stock Split”) with respect to the issued and outstanding shares of Forza Common Stock (the “Forza Reverse Stock Split Proposal”), and approval to adjourn the meeting if necessary to continue to solicit votes in favor of the Merger Proposal and/or the Forza Reverse Stock Split Proposal. If the Merger is effected, all of the Forza board members, other than Joseph Visconti, will resign as members of the Forza Board of Directors and the Forza Reverse Stock Split will be abandoned.

 

After careful consideration, the Twin Vee Board of Directors and Forza Board of Directors have unanimously approved the Merger Agreement and the respective proposals referred to above, and each of the Twin Vee Board of Directors and Forza Boards of Directors has determined that it is advisable to enter into the Merger. The Twin Vee Board of Directors recommends that Twin Vee stockholders vote “FOR” the respective proposals described in the accompanying Joint Proxy Statement/Prospectus. The Merger cannot be completed unless Twin Vee stockholders approve the issuance of the shares of Twin Vee Common Stock to the Forza stockholders as set forth in the Merger Agreement (the “Stock Issuance Proposal”) and Forza stockholders adopt and approve the Merger and the Merger Agreement (the “Merger Proposal”).

 

 

 

PLEASE GIVE ALL OF THE DETAILED INFORMATION ON TWIN VEE, FORZA AND THE MERGER CONTAINED IN THE JOINT PROXY STATEMENT/PROSPECTUS YOUR CAREFUL ATTENTION, ESPECIALLY THE DISCUSSION IN THE SECTION ENTITLED “RISK FACTORS” IN THIS JOINT PROXY STATEMENT/PROSPECTUS BEGINNING ON PAGE 37.

 

Neither the Securities and Exchange Commission nor any state securities regulators has approved or disapproved the Twin Vee Common Stock to be issued under this Joint Proxy Statement/Prospectus or passed upon the adequacy or accuracy of this Joint Proxy Statement/Prospectus. Any representation to the contrary is a criminal offense.

 

This Joint Proxy Statement/Prospectus is not an offer to sell Twin Vee Common Stock and Twin Vee is not soliciting an offer to buy Forza Common Stock in any state where the offer or sale is not permitted.

 

On behalf of the Twin Vee Board of Directors and the Forza Board of Directors, we thank you for your support.

 

Joseph C. Visconti Glenn H. Sonoda
Chief Executive Officer General Counsel
Twin Vee PowerCats Co. Forza X1, Inc.

  

Joint Proxy Statement/Prospectus dated October 10, 2024 and to be mailed on or around October 14, 2024.

 

Please also see “Where You Can Find More Information”.

 

ADDITIONAL INFORMATION

 

Stockholders may also consult Twin Vee’s or Forza’s websites for more information concerning the Merger described in this Joint Proxy Statement/Prospectus and each of the parties thereto. Twin Vee’s website is www.twinvee.com and Forza’s website is www.forzax1.com. Information included on these websites is not incorporated by reference into this Joint Proxy Statement/Prospectus.

 

This Joint Proxy Statement/Prospectus is dated October 10, 2024 and is first being mailed to the stockholders of Forza and the stockholders of Twin Vee on or about October 14, 2024.

 

Twin Vee PowerCats Co.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525

 

Forza X1, Inc.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
TWIN VEE POWERCATS CO.

TO BE HELD ON NOVEMBER 11, 2024

 

To the Stockholders of Twin Vee PowerCats Co. (“Twin Vee”):

 

The annual meeting of stockholders of Twin Vee (the “Twin Vee Annual Meeting”), a Delaware corporation, will be held on November 11, 2024, at 10:00 a.m., Eastern Time, at the offices Twin Vee, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982, for the following purposes:

 

1.       To consider and vote upon a proposal to approve the issuance of shares of Twin Vee Common Stock pursuant to the Agreement and Plan of Merger, dated as of August 12, 2024, by and between Twin Vee, Twin Vee Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Twin Vee, and Forza X1, Inc. (the “Merger Agreement”), which transaction is referred to as the “Merger,” as described in the attached Joint Proxy Statement/Prospectus, a copy of which is attached as Annex A to the Joint Proxy Statement/Prospectus (the “Stock Issuance Proposal”);

 

2. To elect the two (2) nominees for Class III director named in the accompanying Joint Proxy Statement/Prospectus to the Board of Directors of Twin Vee (the “Twin Vee Board of Directors”), each to serve a three-year term expiring at the 2027 Annual Meeting of Stockholders and until such director’s successor is duly elected and qualified (provided, however, that if the Merger is completed, the Twin Vee Board of Directors will be reconstituted as provided in the Merger Agreement);

 

3. To ratify the appointment of Grassi & Co., CPAs, P.C. as Twin Vee’s independent registered public accounting firm for its fiscal year ending on December 31, 2024;

 

4. To consider and vote upon a proposal to approve an amendment to Twin Vee’s Certificate of Incorporation, in substantially the form attached to the accompanying Joint Proxy Statement/Prospectus as Annex B, at the discretion of the Twin Vee Board of Directors of to effect a reverse stock split with respect to the issued and outstanding shares of Twin Vee Common Stock, at a ratio of 1-for-2 to 1-for-20, with the ratio within such range to be determined at the discretion of the Twin Vee Board of Directors and included in a public announcement, subject to the authority of the Twin Vee Board of Directors to abandon such amendment (the “Twin Vee Reverse Stock Split Proposal”);

 

5. To consider and vote upon a proposal to approve an amendment to the Twin Vee PowerCats Co. Amended and Restated 2021 Stock Incentive Plan (the “Twin Vee 2021 Plan”), in substantially the form attached to the accompanying Joint Proxy Statement/Prospectus as Annex D, to increase the number of shares of Twin Vee Common Stock available for issuance under the Twin Vee 2021 Plan by 1,000,000 shares to 3,171,800 shares (the “Plan Increase Proposal”);

 

6. To consider and vote upon a proposal to adjourn the Twin Vee Annual Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the Stock Issuance Proposal, the Twin Vee Reverse Stock Split Proposal and/or the Plan Increase Proposal; and

 

7. To transact such other business as may properly come before the Twin Vee Annual Meeting or any adjournment or postponement thereof.

 

The Twin Vee Board of Directors has fixed October 4, 2024 as the record date (the “Twin Vee Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Twin Vee Annual Meeting and any adjournment or postponement thereof. Only stockholders of record at the close of business on the Twin Vee Record Date are entitled to notice of, and to vote at, the Twin Vee Annual Meeting. Only stockholders or their proxy holders and Twin Vee guests may attend the meeting. A list of stockholders entitled to vote will be made available at the Twin Vee Annual Meeting and will be available at the offices of Twin Vee, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982 for ten days before the meeting. At the close of business on the Twin Vee Record Date, there were 9,519,481 shares of Twin Vee Common Stock outstanding and entitled to vote.

 

  Joseph C. Visconti
 October 10, 2024 Joseph C. Visconti, Chief Executive Officer

  

 

 

Your vote is important.

 

You are urged to attend the Twin Vee Annual Meeting in person, but if you are unable to do so, the Twin Vee Board of Directors would appreciate you submitting a proxy to have your shares votes as promptly as possible by using the internet or by returning by mail the enclosed proxy card, dated and signed.

 

Twin Vee PowerCats Co.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525

 

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
FORZA X1, INC.

TO BE HELD ON NOVEMBER 11, 2024

 

To the Stockholders of Forza X1, Inc. (“Forza”):

 

The annual meeting of stockholders of Forza (the “Forza Annual Meeting”), a Delaware corporation, will be held on November 11, 2024, at 10:30 a.m., Eastern Time, at the offices of Forza, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982, for the following purposes:

 

1. To consider and vote upon a proposal to adopt and approve the Agreement and Plan of Merger, dated as of August 12, 2024, by and between Twin Vee PowerCats Co., Twin Vee Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Twin Vee, and Forza (the “Merger Agreement”), which transaction is referred to as the “Merger,” as described in the attached Joint Proxy Statement/Prospectus, a copy of which is attached as Annex A to the Joint Proxy Statement/Prospectus (the “Merger Proposal”)

 

2. To elect the one (1) nominee for Class II director named in the accompanying Joint Proxy Statement/Prospectus to the Board of Directors of Forza (the “Forza Board of Directors”), to serve a three-year term expiring at the 2027 Annual Meeting of Stockholders and until such director’s successor is duly elected and qualified (provided, however, if the Merger is effected, all of the Forza board members, other than Joseph Visconti, will resign as members of the Forza Board of Directors);

 

3. To ratify the appointment of Grassi & Co., CPAs, P.C. as Forza’s independent registered public accounting firm for its fiscal year ending on December 31, 2024;

 

4. To consider and vote upon a proposal to approve an amendment to Forza’s Amended and Restated Certificate of Incorporation, in substantially the form attached to the accompanying proxy statement as Annex B-1, at the discretion of the Forza Board of Directors, to effect a reverse stock split (the “Forza Reverse Stock Split”) with respect to the issued and outstanding shares of Forza Common Stock, including stock held by Forza as treasury shares, at a ratio of 1-for-2 to 1-for-20, with the ratio within such range to be determined at the discretion of the Forza Board of Directors and included in a public announcement, subject to the authority of the Forza Board of Directors to abandon such amendment (the “Forza Reverse Stock Split Proposal”) (If the Merger is effected, the Forza Reverse Stock Split will be abandoned);

 

5. To consider and vote upon an adjournment of the meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the Merger Proposal and/or the Forza Reverse Stock Split Proposal; and

 

6. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

The Forza Board of Directors has fixed October 4, 2024 as the record date (the “Forza Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Forza Annual Meeting and any adjournment or postponement thereof. Only stockholders of record at the close of business on the Forza Record Date are entitled to notice of, and to vote at, the Forza Annual Meeting. Only stockholders or their proxy holders and Forza guests may attend the meeting. A list of stockholders entitled to vote will be made available at the Forza Annual Meeting and will be available at the offices of Forza, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982, for ten days before the meeting. At the close of business on the Forza Record Date, there were 15,754,774 shares of Forza Common Stock outstanding and entitled to vote.

 

  Joseph Visconti
  Joseph Visconti, Interim Chief Executive Officer
 October 10, 2024  

 

 

 

Your vote is important.

 

You are urged to attend the Forza Annual Meeting in person, but if you are unable to do so, the Forza Board of Directors would appreciate you submitting a proxy to have your shares votes as promptly as possible by using the internet or the designated toll-free telephone number or by returning by mail the enclosed proxy card, dated and signed.

 

Forza X1, Inc.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525

 

 

 

ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

 

This Joint Proxy Statement/Prospectus, which forms part of a registration statement on Form S-4 filed with the SEC by Twin Vee (File No. 333-281788), constitutes a prospectus of Twin Vee under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of Twin Vee Common Stock to be issued pursuant to the Merger Agreement, as described in this Joint Proxy Statement/Prospectus. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the Twin Vee Annual Meeting, at which Twin Vee stockholders will be asked to consider and vote on, among other matters, a proposal to approve the issuance of shares of Twin Vee Common Stock pursuant to the Merger Agreement. This document also serves as a notice of meeting and a proxy statement with respect to the Forza Annual Meeting, at which Forza stockholders will be asked to consider and vote on, among other matters, a proposal to adopt the Merger and Merger Agreement.

 

No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this Joint Proxy Statement/Prospectus. This Joint Proxy Statement/Prospectus is dated October 10, 2024. The information contained in this Joint Proxy Statement/Prospectus is accurate only as of that date or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies.

 

This Joint Proxy Statement/Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

 

The information concerning Twin Vee contained in this Joint Proxy Statement/Prospectus has been provided by Twin Vee, and the information concerning Forza contained in this Joint Proxy Statement/Prospectus has been provided by Forza.

 

 

 

TABLE OF CONTENTS

 

    PAGE
Prospect Summary   1
The Parties   1
Twin Vee PowerCats Co.   1
Forza X1, Inc.   2
Industry Trends   2
Twin Vee Merger Sub, Inc.   2
Overview of the Merger Agreement and Agreements Related to the Merger Agreement   3
The Merger Agreement   3
Merger Consideration   3
Treatment of Twin Vee Stock Options   3
Treatment of Forza Stock Options   4
Treatment of Twin Vee Warrants   4
Treatment of Forza Warrants   4
Risks Relating to the Merger   5
Reasons for the Merger   5
Twin Vee Reasons for the Merger   5
Forza Reasons for the Merger   7
Opinion of Financial Advisor to the Twin Vee Board of Directors   8
Opinion of Financial Advisor to the Forza Board of Directors   9
Conditions to the Closing of the Merger   9
Termination of the Merger Agreement   10
Non-Solicitation   11
Management Following the Merger   13
Interests of Certain Persons in the Merger   13
Considerations with Respect to U.S. Federal Income Tax Consequences of the Merger   16
Regulatory Approvals   16
Nasdaq Stock Market Listing   16
Anticipated Accounting Treatment   16
Appraisal Rights and Dissenters’ Rights   17
Comparison of Stockholder Rights   17
The Twin Vee Annual Meeting   17
The Forza Annual Meeting   18
THE MERGER   20
Questions and Answers About the Merger   20
Summary Risk Factors   27
Risks Related to the Merger   28
Cautionary Statement Regarding Forward-Looking Statement   28
Selected Historical Financial Data   29
Selected Historical Financial Data of Twin Vee   29
Selected Historical Financial Data of Forza   30
Unaudited Pro Forma Combined Consolidated Financial Information of Twin Vee and Forza   31
Unaudited Pro Forma Condensed Consolidated Balance Sheets   32
Unaudited Pro Forma Condensed Consolidated Statements of Operations   33
Comparative Historical and Unaudited Pro Forma Per Share Data   35

 

 

 

Market Price and Dividend Information   36
Market Value of Securities   36
Dividend Policy   36
Risk Factors   37
Risks Related to the Merger   37

Risks Related to Twin Vee

  42
Risks Related to Forza   69
The Merger Transaction   80
General   80
Background of the Merger   80
Recommendation of the Twin Vee Board of Directors and its Reasons for the Merger   84
Opinion of the Financial Advisors to the Twin Vee Board of Directors   86
Introduction   86
Summary of Financial Analyses   87
Market Approach   87
Fairness Opinion Conclusion   89
Houlihan Capital Conflict Disclosure and Fees   89
Recommendation of the Forza Board of Directors and its Reasons for the Merger   89
Opinion of the Financial Advisors to the Forza Board of Directors   91
Form of the Merger    96
Merger Consideration   96
Treatment of Twin Vee Stock Options   98
Treatment of Forza Stock Options   98
Treatment of Twin Vee Warrants   98
Treatment of Forza Warrants   99
Effective Time of the Merger   99
Regulatory Approvals   99
Nasdaq Stock Market Listing   99
Anticipated Accounting Treatment   100
Certain U.S. Federal Income Tax Consequences of the Merger   100
General   100
Tax Return Reporting Requirements   102
Taxable Acquisition – U.S. Holders   102
Appraisal Rights and Dissenters’ Rights   102
Effective Time of the Merger   103
Regulatory Approvals   103
Board of Directors and Executive Officers of Twin Vee After the Completion of the Merger   103
Board of Directors   103
Board Diversity Matrix   103
Executive Officers   104
Interests of Twin Vee Directors and Executive Officers in the Merger   104
Interests of Forza Directors and Executive Officers in the Merger   105
Restrictions on Sales of Shares of Twin Vee Common Stock Received in the Merger   105
Nasdaq Listing of Twin Vee Common Stock; Delisting and Deregistration of Forza Common Stock   105
THE MERGER AGREEMENT   106
General   106
Closing and Effective Time of the Merger   106
Merger Consideration   107
Conversion of Forza Common Stock   107
Exchange Ratio   107
Forza Common Stock Held by Twin Vee   107

 

 

 

Fractional Shares of Twin Vee Common Stock   107
Share Issuance Process   107
Conversion of Forza Options and Warrants   108
Directors and Officers of Twin Vee Following the Merger   108

Directors and Officers

  108
Certificate of Incorporation   108
Conditions to Completion of the Merger   108
No Solicitation   110
Approval of Stockholders   112
Conduct of Business Pending the Merger   112
Other Agreements   113
Termination   114
Expenses   116
Representations and Warranties   116
MANAGEMENT OF TWIN VEE AND TWIN VEE BOARD OF DIRECTORS   117
Executive Officers and Directors of Twin Vee   117
Executive Officers   117
Independent Directors   118
Family Relationships   119
INFORMATION REGARDING THE TWIN VEE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE   120
Board Diversity Matrix   120
Twin Vee Board of Directors Composition   120
Director Independence   121
Board of Directors Leadership Structure   122
INFORMATION REGARDING COMMITTEES OF THE TWIN VEE BOARD OF DIRECTORS   123
Board of Directors Committees   123
Audit Committee   123
Compensation Committee   124
Nominating and Corporate Governance Committee   124
Risk Oversight   126
Code of Conduct and Ethics   126
Limitation of Liability and Indemnification   126
Board and Committee Meetings and Attendance   127
Board Attendance at Annual Stockholders’ Meeting   127
Review and Approval of Transactions with Related Persons   127
Communication with Directors   128
Anti-Hedging/Anti-Pledging Policy   128
Equity Compensation Policy   128
TWIN VEE DIRECTOR COMPENSATION   129
2023 Director Compensation   129
Cash Compensation   129
Equity Compensation   129
Director Compensation Table   129
TWIN VEE EXECUTIVE COMPENSATION   131
Summary Compensation Table   131
Outstanding Equity Awards at Fiscal Year-End (December 31, 2023)   132
Employment Arrangements with Twin Vee’s Named Executive Officers   132
Employment Arrangements with Current Executive Officers That Are Not Named Executive Officers   135
Employee Benefit and Stock Plans   137
Simple IRA Plan   137
Twin Vee 2021 Stock Incentive Plan   137
INFORMATION ABOUT THE ANNUAL MEETINGS AND VOTING   138

 

 

 

MATTERS RELATED TO THE ANNUAL MEETINGS   138
Voting   138
Twin Vee   138
Voting   139
Forza   139
Other Business; Adjournments   140
Appraisal Rights   140
INFORMATION ABOUT TWIN VEE   141
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TWIN VEE   154
Overview   154
Results of Operations   155
Comparison of the Three and Six Months Ended June 30, 2024 and 2023   155
Net Sales and Cost Sales   155
Gross Profit   155
Total Operating Expenses   155
Net Loss   156
Comparison of the Six Months Ended June 30, 2024 and 2023   156
Net Sales and Cost Sales   157
Gross Profit   157
Total Operating Expenses   157
Net Loss   158
Comparison of the years Ended December 31, 2023 and 2022   158
Net Sales and Cost Sales   159
Gross Profit   159
Total Operating Expenses   159
Net Loss   160
Liquidity and Capital Resources   160
Cash Flows   162
Cash Flow from Operating Activities   162
Cash Flow from Investing Activities   162
Cash Flow from Financing Activities   163
Critical Accounting Estimates   163
Revenue Recognition   163
Use of Estimates   164
Inventories   164
Impairment of Long-Lived Assets   164
Product Warranty Costs   164
Leases   164
Deferred Income Taxes and Valuation Allowance   164
Off Balance Sheet Arrangements   164
Information Regarding Forza.   165
Information Regarding Forza’s Executive Officers and Directors   165
Executive Officers   165
Independent Directors   166
Family Relationships   167
INFORMATION REGARDING THE FORZA BOARD OF DIRECTORS AND CORPORATE GOVERNANCE   168
Board Diversity Matrix   168
Forza Board of Directors Composition   168
Director Independence   169
Forza Board of Directors Leadership Structure   170
INFORMATION REGARDING COMMITTEES OF THE FORZA BOARD OF DIRECTORS   170
Forza Audit Committee   171
Compensation Committee   171
Forza Nominating and Corporate Governance Committee   172
Risk Oversight   173
Forza Code of Conduct and Ethics   173
Limitation of Liability and Indemnification   173
FORZA EXECUTIVE COMPENSATION   175

 

 

 

Forza Summary Compensation Table   175
Forza Outstanding Equity Awards at Fiscal Year-End (December 31, 2023)   176
Employment Arrangements with Forza’s Named Executive Officers   177
Employment Arrangements with Forza’s Current Executive Officers   179
Employee Benefit and Stock Plans   180
Simple IRA Plan   180
2022 Stock Incentive Plan   180
Administration   180
Eligibility   180
Vesting   180
Shares Stock Available for Issuance   181
DIRECTOR COMPENSATION   181
2023 Director Compensation   181
Cash Compensation   181
Equity Compensation   182
Director Compensation Table   182
INFORMATION ABOUT FORZA    
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FORZA   183
Results of Operations   183
Comparison of the Three Months Ended June 30, 2024 and 2023   183
Operating Expenses   183
Other expense and income   183
Comparison of the Six Months Ended June 30, 2024 and 2023   184
Operating Expenses   184
Other expense and income   184
Comparison of the years Ended December 31, 2023 and 2022   185
Net Sales and Cost Sales   185
Gross Profit   185
Operating Expenses   185
Other expense and income   186
Results of Operations and Known Trends or Future Events   186
Liquidity and Capital Resources   186
Cash Flow from Operating Activities   187
Cash Flow from Investing Activities   187
Cash Flow from Financing Activities   188
Critical Accounting Estimates   188
Controls and Procedures   188
Revenue Recognition   188
Use of Estimates   189
Cash and Cash Equivalents   189
Property and Equipment   189
Impairment of Long-Lived Assets   189
Research and Development   189
Advertising Costs   189
Leases   190
Income Taxes   190
Recent Accounting Pronouncements   190
OFF-BALANCE SHEET ARRANGEMENTS   190
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF   TWIN VEE, FORZA AND THE COMBINED COMPANY   191
Ownership of Twin Vee Common Stock Prior to the Merger   191
Ownership of Forza Common Stock Prior to the Merger   193
DESCRIPTION OF TWIN VEE CAPITAL STOCK   195
DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED   195
General   195
Common Stock   195

 

 

 

Forum Selection   195
Anti-Takeover Provisions   196
Limitations on Liability and Indemnification of Twin Vee’s Officers and Directors   197
Dissenters’ Rights of Appraisal and Payment   197
Stockholders’ Derivative Actions   198
Transfer Agent and Registrar   198
Trading Symbol and Market   198
DESCRIPTION OF FORZA CAPITAL STOCK   199
DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED   199
General   199
Common Stock   199
Forum Selection   199
Anti-Takeover Provisions   200
Limitations on Liability and Indemnification of Forza’s Officers and Directors   201
Dissenters’ Rights of Appraisal and Payment   201
Stockholders’ Derivative Actions   201
Transfer Agent and Registrar   202
Trading Symbol and Market   202
COMPARISON OF RIGHTS OF HOLDERS OF TWIN VEE COMMON STOCK AND FORZA X1, INC. COMMON STOCK   202
TWIN VEE ANNUAL MEETING PROPOSALS   213
TWIN VEE PROPOSAL NO. 1 - APPROVAL OF THE ISSUANCE OF SHARES OF TWIN VEE COMMON STOCK PURSUANT TO THE TERMS OF THE MERGER AGREEMENT   213
TWIN VEE PROPOSAL NO. 2 - TWIN VEE ELECTION OF DIRECTORS PROPOSAL   214
TWIN VEE PROPOSAL NO. 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   215
TWIN VEE PROPOSAL NO. 4 - ADOPTION AND APPROVAL OF THE TWIN VEE REVERSE STOCK SPLIT PROPOSAL   218
TWIN VEE PROPOSAL NO. 5 - AMENDMENT TO THE TWIN VEE POWERCATS CO. 2021 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER BY 1,000,000 SHARES TO 3,171,800 SHARES   229
TWIN VEE PROPOSAL NO. 6 - ADJOURNMENT OF THE TWIN VEE ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES IN FAVOR OF TWIN VEE PROPOSAL NO. 1, TWIN VEE PROPOSAL NO. 4 AND/OR TWIN VEE PROPOSAL NO. 5   239
FORZA ANNUAL MEETING PROPOSALS   240
FORZA PROPOSAL NO. 1 - APPROVAL OF THE MERGER AND THE MERGER AGREEMENT   240
FORZA PROPOSAL NO. 2 - ELECTION OF DIRECTORS   241
FORZA PROPOSAL NO. 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   242
FORZA PROPOSAL NO. 4 - ADOPTION AND APPROVAL OF THE FORZA REVERSE STOCK SPLIT PROPOSAL   245
FORZA PROPOSAL NO. 5 - ADJOURNMENT OF THE FORZA ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES IN FAVOR OF PROPOSAL NO.1 AND/OR PROPOSAL NO. 4   256
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS   257
Twin Vee   257
Indemnification   258
Twin Vee’s Policy Regarding Related Party Transactions   259
Director Independence   259
Forza   259
Indemnification   260
Assignment of Assets Agreement; Assignment of Intellectual Property   260
Assignment of Land Contract   261
Transition Services Agreement   261
Forza’s Policy Regarding Related Party Transactions   261
Director Independence   262
CONFLICTS OF INTEREST   262
HOUSEHOLDING OF PROXY MATERIALS   262
OTHER MATTERS   262
APPRAISAL RIGHTS   262
FUTURE TWIN VEE STOCKHOLDER PROPOSALS   263
FUTURE FORZA STOCKHOLDER PROPOSALS   263
LEGAL MATTERS   264
EXPERTS   264

 

 

 

WHERE YOU CAN FIND MORE INFORMATION   265
INDEX TO FINANCIAL STATEMENTS   F-1
TWIN VEE FINANCIAL STATEMENTS   F-1
FORZA X1 FINANCIAL STATEMENTS   F-1
ANNEX A - Merger Agreement   266
ANNEX B - Twin Vee’s Certificate of Incorporation   337
ANNEX B-1 - Forza’s Amended and Restated Certificate of Incorporation   338
ANNEX C-1 - Houlihan’s Opinion   339
ANNEX C-2 - InteleK’s Opinion   343
ANNEX D - Twin Vee 2021 Plan Amendment   352

 

 

 

PROSPECTUS SUMMARY

 

This summary highlights selected information from this Joint Proxy Statement/Prospectus and may not contain all of the information that is important to you. To better understand the Merger, the proposals being considered at the Twin Vee Annual Meeting and the Forza Annual Meeting, you should read this entire Joint Proxy Statement/Prospectus carefully, including the Merger Agreement and the other annexes to which you are referred to herein. For more information, please see the section titled “Where You Can Find More Information.”

 

The Parties

 

Twin Vee PowerCats Co.

 

3101 S. US-1

Ft. Pierce, Florida 34982

 

Twin Vee is a designer, manufacturer and marketer of recreational and commercial power boats. Twin Vee believes it has been an innovator in the recreational and commercial power catamaran industry. Twin Vee currently has 13 gas-powered models in production ranging in size from its 20-foot mono hull, single engine, center console to its newly designed 40-foot offshore 400 GFX catamaran, quad engines. While Twin Vee’s twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee ride quality by reducing drag, increasing fuel efficiency, and offering users a stable riding boat, its new mono hull line addresses the largest portion of the overall market.

 

Twin Vee has organized its business into three operating segments: (i) its gas-powered boat segment which manufactures and distributes gas-powered boats under the Twin Vee and AquaSport names; (ii) its electric-powered boat segment which was developing fully electric boats, through its publicly minority owned subsidiary, Forza; and (iii) its franchise segment which is developing a franchise business model.

 

Twin Vee’s gas-powered boats allow consumers to use them for a wide range of recreational activities including fishing, diving and water skiing and commercial activities including transportation, eco tours, fishing and diving expeditions. Twin Vee believes that the performance, quality and value of its boats positions it to achieve its goal of increasing Twin Vee’s market share and expanding the power catamaran boating market. Twin Vee currently primarily sells its boats through a current network of 23 independent boat dealers in 37 locations across North America and the Caribbean who resell Twin Vee’s boats to the end user Twin Vee and AquaSport customers. Twin Vee continues recruiting efforts for high quality boat dealers and seek to establish new dealers and distributors domestically and internationally to distribute its boats as it grows its production and introduce new models. Twin Vee’s gas-powered boats are currently outfitted with gas-powered outboard combustion engines.

 

During the second quarter of 2024, Twin Vee experienced a significant reduction in demand for its products, as has been experienced throughout the boating industry. Total units sold in the quarter were 24 compared to 75 in the second quarter of 2023, a 47% reduction over the same period. This difference is due to the average selling price per unit in each quarter. Sales for the second quarter of 2024 included 2 40’ boats with an average selling price of $630,000 each while the second quarter of 2023 had 0 40’ foot boats. Twin Vee’s objectives have been to add new, larger boat models including a new line of GFX2 models, expand its dealers and distribution network, and increase unit production to fulfill its customer and dealer orders.

 

Due to the growing demand for sustainable, environmentally friendly electric and alternative fuel commercial and recreational vehicles, Forza, commenced designing and developing a line of electric-powered boats in 2021. Forza’s electric boats were being designed as fully integrated electric boats including the hull, outboard motor and control system. Notably, the global shift towards electric vehicle adoption has been much slower than initially anticipated. Several leading automotive manufacturers have adjusted their strategies, accordingly, including halting the construction of dedicated electric vehicle factories. The slower-than-expected adoption rates have led to cautious consumer spending and investment in electric vehicle technology, directly impacting Forza’s market. Specifically, the electric boat segment has experienced even more sluggish growth than the automotive sector. In addition, many of the larger players in the boat industry, such as Mercury Marine, have completed their development efforts and have brought their electric outboard motors to market. In an effort to retain cash and reduce expenditures and as a result of current market conditions, on July 11, 2024, the Forza’s Board of Directors determined to discontinue and wind down Forza’s business related to the development and sale of electric boats utilizing its proprietary outboard electric motor.

 

Twin Vee is a Delaware corporation headquartered in Fort Pierce, Florida. Twin Vee Common Stock is traded on the Nasdaq Capital Market under the symbol “VEEE.”

 

For additional information regarding Twin Vee, please refer to its Annual Report on Form 10-K for the year ended December 31, 2023 (the “Twin Vee 2023 Annual Report”), as filed with the SEC, as well as Twin Vee’s other filings with the SEC. For more information, please see the section titled “Where You Can Find More Information.”

 

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Forza X1, Inc.

 

3101 S. US-1

Ft. Pierce, Florida 34982

 

Forza was founded with a mission to inspire the adoption of sustainable recreational boating by producing stylish electric sport boats designed to offer a cleaner, quieter, and more efficient alternative to traditional gasoline-powered boats. Forza has been focused on the creation, implementation and sale of electric boats utilizing its electric vehicle (“EV”) technology to control and power its boats and proprietary outboard electric motor.

 

Forza has not completed the development of its electric boats or electric outboard motor. Three different protypes of the electric boat have been built. Forza has completed the design phase of its outboard motor and it is now in the prototype phase.

 

Approximately 44.4% of the outstanding Forza Common Stock is owned by Twin Vee.

 

Industry Trends

 

The past year has seen a marked deceleration in the global demand for recreational marine vehicles, influenced heavily by economic uncertainties and shifting consumer priorities. This slowdown reflects broader trends affecting the recreational vehicle industries at large, including electric vehicles (EVs). Notably, the global shift towards EV adoption has been much slower than initially anticipated. Several leading automotive manufacturers have adjusted their strategies, accordingly, including halting the construction of dedicated EV factories.

 

The slower-than-expected adoption rates have led to cautious consumer spending and investment in EV technology, directly impacting the electric boat market. Specifically, the electric boat segment has experienced even more sluggish growth than the automotive sector. In addition, while Forza’s electric boats are still in the development stage, many of the larger players in the boat industry, such as Mercury Marine, have completed their development efforts and have brought their electric outboard motors to market. In an effort to retain cash and reduce expenditures and as a result of current market conditions, on July 11, 2024, the Forza’s Board of Directors determined to discontinue and wind down Forza’s business related to the development and sale of electric boats utilizing its proprietary outboard electric motor

 

Twin Vee Merger Sub, Inc.

 

3101 S. US-1

Ft. Pierce, Florida 34982

 

Twin Vee Merger Sub, Inc., a Delaware corporation (“Merger Sub”), is a wholly owned subsidiary of Twin Vee and was formed on August 12, 2024 solely for the purposes of carrying out the Merger.

 

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Overview of the Merger Agreement and Agreements Related to the Merger Agreement

 

The Merger Agreement

 

If the Merger is consummated, Merger Sub will merge with and into Forza with Forza surviving the Merger as a wholly owned subsidiary of the combined company. A copy of the Merger Agreement is attached as Annex A to this Joint Proxy Statement/Prospectus and is incorporated herein by reference. Twin Vee and Forza encourage you to read the entire merger agreement carefully because it is the principal document governing the merger. We currently expect that the Merger will be completed during the fourth quarter of 2024. However, we cannot predict the actual timing of the completion of the Merger.

 

Merger Consideration

 

Subject to the terms and conditions of the Merger Agreement, if the Merger is completed, at the Effective Time (i) each outstanding share of Forza Common Stock (other than shares held by Twin Vee) will be converted into the right to receive 0.611666275 shares of Twin Vee Common Stock (the “Exchange Ratio”), (ii) each outstanding stock option exercisable for shares of Forza Common Stock that is outstanding at the Effective Time, whether vested or unvested, will be assumed by Twin Vee and converted into a stock option to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such stock option for shares of Forza Common Stock prior to the Merger and exchanged such shares for Twin Vee Common Stock in accordance with the Exchange Ratio, (iii) each outstanding warrant to purchase shares of Forza Common Stock will be assumed by Twin Vee and converted into a warrant to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such warrant for shares of Forza Common Stock prior to the Merger and exchanged such shares for Twin Vee Common Stock in accordance with the Exchange Ratio, subject to adjustment for any reverse stock split, and (iv) the 7,000,000 shares of Forza Common Stock held by Twin Vee will be cancelled.

 

Under the Exchange Ratio formula in the Merger Agreement, as of immediately after the Merger as provided for in the Merger Agreement, the pre-closing Forza stockholders (other than Twin Vee) are expected to own approximately 36% of the Post-Closing Shares, and the stockholders of Twin Vee as of immediately prior to the Merger are expected to own approximately 64% of the aggregate number of Post-Closing Shares, as defined below. The 7,000,000 shares of Forza Common Stock held by Twin Vee will be cancelled. The Exchange Ratio formula in the Merger Agreement was negotiated so that the pre-closing stockholders of each of Twin Vee and Forza (excluding Twin Vee as a Forza stockholder) would beneficially own approximately 64% and 36% of the aggregate number of shares of common stock of the combined company outstanding immediately following the Effective Time (the “Post-Closing Shares”), subject to (i) not counting for purposes of the computation any outstanding options to purchase shares of Twin Vee Common Stock or any outstanding options to purchase shares of Forza Common Stock or (ii) any warrants to purchase Twin Vee Common Stock or any warrants to purchase Forza Common Stock. Accordingly, any outstanding options or warrants to purchase shares of Twin Vee Common Stock and Forza Common Stock were not reflected in the computation of the Exchange Ratio. On a fully diluted basis, taking into all outstanding warrants and options the pre-closing Forza stockholders are expected to own approximately 34.3% of the outstanding securities of Twin Vee after the Merger, and the stockholders of Twin Vee are expected to own approximately 65.3% of the aggregate number of the outstanding securities of Twin Vee after the Merger. The Exchange Ratio has been fixed. For a more complete description of the Exchange Ratio, see the section titled “The Merger Agreement—Exchange Ratio” in this Joint Proxy Statement/Prospectus.

 

The Merger Agreement does not include a price-based termination right, and there will be no adjustment to the total number of shares of Twin Vee Common Stock that Forza securityholders will be entitled to receive for changes in the market price of Twin Vee Common Stock or Forza Common Stock. Accordingly, the market value of the shares of Twin Vee Common Stock issued pursuant to the Merger Agreement will depend on the market value of the shares of Twin Vee Common Stock at the time the Merger closes and could vary significantly from the market value on the date of this Joint Proxy Statement/Prospectus. On October 7, 2024, the closing sale price of Twin Vee Common Stock was $0.5814 per share and the closing price of Forza Common Stock was $0.2848 per share.

 

Treatment of Twin Vee Stock Options

 

All options to purchase shares of Twin Vee Common Stock will remain outstanding immediately after the Effective Time in accordance with their terms. The number of shares of Twin Vee Common Stock underlying such options and the exercise prices for such options will be appropriately adjusted to reflect the Twin Vee Reverse Stock Split, assuming the approval of the Twin Vee Reverse Stock Split Proposal by Twin Vee’s stockholders at the Twin Vee Annual Meeting and if thereafter consummated at the discretion of Twin Vee Board of Directors. The terms governing options to purchase shares of Twin Vee Common Stock will remain in full force and effect following the closing of the Merger. 


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Treatment of Forza Stock Options

 

At the Effective Time, each option to purchase shares of Forza Common Stock that are outstanding and unexercised immediately prior to the Effective Time, whether or not vested, issued under the Forza 2022 Plan shall be assumed by Twin Vee and converted into an option to purchase shares of Twin Vee Common Stock. Twin Vee will assume the Forza 2022 Plan and each such option in accordance with the terms of the Forza 2022 Plan and the terms of the stock option agreement by which such option is evidenced. From and after the Effective Time, each option to purchase shares of Forza Common Stock assumed by Twin Vee may be exercised for such number of shares of Twin Vee Common Stock as is determined by multiplying the number of shares of Forza Common Stock that were subject to such option by the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Twin Vee Common Stock. The per share exercise price of the converted option to purchase shares of Twin Vee Common Stock will be determined by dividing the existing per share exercise price of the option to purchase shares of Forza Common Stock by the Exchange Ratio, and rounding to the resulting exercise price up to the nearest whole cent. Any restrictions on the exercise of any option to purchase shares of Forza Common Stock assumed by Twin Vee will continue following the conversion, and the term, exercisability, vesting schedule and other provisions of such option will generally remain unchanged; provided, that any options to purchase shares of Forza Common Stock assumed by Twin Vee may be subject to adjustment to reflect changes in Twin Vee’s capitalization after the Effective Time and that the Twin Vee Board of Directors or a committee thereof will succeed to the authority and responsibility of the Forza Board of Directors or a committee thereof with respect to each assumed option to purchase shares of Forza Common Stock.

 

Treatment of Twin Vee Warrants

 

All warrants to purchase shares of Twin Vee Common Swill remain outstanding and unexercised immediately after the Effective Time in accordance with their terms. The number of shares of Twin Vee Common Stock underlying such warrants and the exercise prices for such warrants will be appropriately adjusted to reflect the Twin Vee Reverse Stock Split, assuming the approval of the Twin Vee Reverse Stock Split Proposal by Twin Vee’s stockholders at the Twin Vee Annual Meeting and if thereafter consummated at the discretion of Twin Vee Board of Directors. The terms governing warrants to purchase shares of Twin Vee Common Stock will remain in full force and effect following the closing of the Merger.

 

Treatment of Forza Warrants

 

At the Effective Time, each warrant to purchase shares of Forza Common Stock that is outstanding and unexercised immediately prior to the Effective Time, shall be assumed by Twin Vee and converted into a warrant to purchase shares of Twin Vee Common Stock. Twin Vee will assume the warrants in accordance with the terms of the warrant agreement by which such warrant is evidenced. From and after the Effective Time, each warrant to purchase shares of Forza Common Stock assumed by Twin Vee may be exercised for such number of shares of Twin Vee Common Stock as is determined by multiplying the number of shares of Forza Common Stock that were subject to such warrant by the Exchange Ratio, and rounding the resulting number down to the nearest whole number of shares of Twin Vee Common Stock. The per share exercise price of the converted warrant will be determined by dividing the existing per share exercise price of the warrant to purchase shares of Forza Common Stock by the Exchange Ratio, and rounding to the resulting exercise price up to the nearest whole cent. Any restrictions on the exercise of any warrant to purchase shares of Forza Common stock assumed by Twin Vee will continue following the conversion, and the term, exercisability, and other provisions of such warrant will generally remain unchanged.

 

The closing of the Merger will occur no later than the second business day after the last of the conditions to the Merger has been satisfied or waived, or at another time as Twin Vee and Forza agree. Twin Vee and Forza anticipate that the closing of the Merger will occur promptly after the Twin Vee Annual Meeting and Forza Annual Meeting. However, because the Merger is subject to a number of conditions, neither Twin Vee nor Forza can predict exactly when the closing will occur or if it will occur at all.

 

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Risks Relating to the Merger

 

In evaluating the adoption of the Merger Agreement or the issuance of shares of Twin Vee Common Stock in the Merger, you should carefully read this Joint Proxy Statement/Prospectus and especially consider the factors discussed in the section titled “Risk Factors,” for a description of risks relating to the Merger, the combined company’s businesses, and Twin Vee Common Stock.

 

Both Twin Vee and Forza are subject to various risks associated with their businesses and their industries. In addition, the Merger, including the possibility that the Merger may not be completed, poses a number of risks to each company and its respective stockholders, including the following risks:

 

  All of Forza’s executive officers and all but one of its directors serve on both the Twin Vee Board of Directors and Forza Board of Directors and therefore have conflicts of interest that may influence them to support or approve the Merger without regard to your interests. In addition, the one director who does not sit on both the Twin Vee Board of Directors and Forza Board of Directors is expected to serve as a director of the combined company and therefore may also have a conflict of interest.
  The Exchange Ratio is not adjustable based on the market price of Twin Vee Common Stock or the Forza Common Stock so the Merger consideration at the closing may have a greater or lesser value than it had at the time the Merger Agreement was signed.
  The combined company’s stock price is expected to be volatile, and the market price of its common stock may drop following the Merger.
  The market price of the combined company’s common stock may decline as a result of the Merger.
  The combined company may not experience the anticipated strategic benefits of the Merger.
  If the conditions to the Merger are not met, the Merger will not occur.
  Twin Vee and Forza will incur substantial expenses related to this transaction whether or not the Merger is completed.
  Twin Vee will assume all of Forza’s outstanding liabilities if the Merger is completed.
  The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Merger.
  Although Houlihan’s opinion was given to Twin Vee’s Board of Directors on August 6, 2024, it does not reflect any changes in market and economic circumstances after August 6, 2024.
  Although InteleK’s opinion was given to Forza’s Board of Directors on August 9, 2024, it does not reflect any changes in market and economic circumstances after August 9, 2024.
  The issuance of the Merger consideration is subject to approval by the stockholders of Twin Vee and the Merger and Merger Agreement are subject to approval by the Forza stockholders, including a majority of the stockholders excluding Twin Vee.
  Twin Vee’s business and stock price may be adversely affected if the acquisition of Forza is not completed.

 

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” in this Joint Proxy Statement/Prospectus. Twin Vee and Forza both encourage you to read and consider all of these risks carefully.

 

Reasons for the Merger

 

Twin Vee and Forza are proposing the Merger because, among other things, it is believed that the Merger will enhance stockholder value for both Twin Vee and Forza stockholders (i) by providing a method by which the Twin Vee stockholders can more directly share in the growth of Forza and (ii) due to the cost savings expected to be realized. For a discussion of Twin Vee’s reasons for the Merger, please see the sections entitled “The Merger Transaction—Recommendation of the Twin Vee Board of Directors and its Reasons for the Merger” and “The Merger Transaction—Recommendation of the Forza Board of Directors and its Reasons for the Merger”.

 

Twin Vee Reasons for the Merger

 

In reaching its unanimous decision to approve the Merger Agreement and the transactions contemplated thereby, the Twin Vee Board of Directors considered a number of factors, including, among others, the following:

 

  ●     the belief that the combination of the businesses of Twin Vee and Forza would create more value for Twin Vee stockholders in the long term due to cost reductions of a combined company than as separate companies
     
  ●     the potential cost savings synergies derived from the Merger, including the reduced fees resulting from Forza no longer being a stand-alone public company which reduction is estimated to be approximately $700,000 and includes reduced legal and accounting fees and proxy solicitation fees as well as the reduced Nasdaq listing fees;

 

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the historical and current information concerning Twin Vee’s and Forza’s business, financial performance, financial condition, including Twin Vee’s and Forza’s cash position, operations, management and competitive position, the prospects of Twin Vee and Forza separately and combined, and the nature of the boating industry generally, including the projected burn rate of Twin Vee and Forza and their short-and long-term strategic objectives; 

     
  the opinion of Twin Vee’s financial advisor, dated August 6, 2024, to the special committee of the Twin Vee Board of Directors (the “Twin Vee Special Committee”) that, as of such date and based on and subject to the assumptions, limitations, qualifications and other matters set forth in the opinion, the exchange ratio of 0.611666275 shares of Twin Vee Common Stock to be issued in exchange for each share of Forza Common Stock pursuant to the Merger Agreement was fair to Twin Vee stockholders from a financial point of view;  
     
  current financial market conditions and historical market prices, volatility and trading information with respect to Forza Common Stock and Twin Vee Common Stock;
     
  that the Merger would provide existing Twin Vee stockholders a significant opportunity to directly participate in the potential growth of the combined company following the Merger;
     
  the terms and conditions of the Merger Agreement and associated transactions, including the relative percentage ownership of Twin Vee securityholders and Forza securityholders immediately following the closing of the Merger, the reasonableness of the fees and expenses related to the Merger and the likelihood that the Merger will be completed;
     
  the fact that the Exchange Ratio, as defined in the Merger Agreement, is fixed and will not fluctuate based upon changes in the stock prices of Twin Vee or Forza prior to the completion of the Merger; and
     
  the belief that the terms and conditions of the Merger Agreement, including the parties’ mutual representations and warranties, covenants, deal protection provisions and closing conditions, are reasonable for a transaction of this nature.

 

The Twin Vee Board of Directors considered the potential risks of the Merger, including, but not limited to, the following:

 

  the risks, challenges and costs inherent in combining the two companies and the expenses to be incurred in connection with the Merger, including the possibility that delays or difficulties in completing the integration could adversely affect the combined company’s operating results and preclude the achievement of some benefits anticipated from the Merger;

 

  the possible volatility, at least in the short term, of the trading price of Twin Vee Common Stock resulting from the Merger announcement;

 

  the risk of diverting management’s attention from other strategic priorities to implement Merger integration efforts;

 

  the risk that the Merger might not be consummated in a timely manner, or that the Merger might not be consummated at all;

 

  the fact that certain of the directors and executive officers of Twin Vee may have conflicts of interest in connection with the Merger, as they may receive certain benefits that are different from, and in addition to, those of the other stockholders of Twin Vee;

 

 

that, while the Merger is expected to be completed, there can be no assurance that all conditions to the parties’ obligations to complete the Merger will be satisfied, and as a result, it is possible that the Merger may not be completed, even if the issuance of the Merger consideration is approved by the stockholders of Twin Vee;

     
  the risk to Twin Vee’s business, operations and financial results in the event that the Merger is not consummated; and

  

 

various other applicable risks associated with the combined company and the Merger, including those described in the section of this Joint Proxy Statement/Prospectus entitled “Risk Factors”.

 

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Forza Reasons for the Merger

 

In reaching its unanimous decision to approve the Merger Agreement and the transactions contemplated thereby, the Forza Board of Directors considered a number of factors, including, among others, the following:

 

  the strategic rationale for the Merger and the potential benefits of the contemplated transaction;

 

  that the Merger was superior to the strategic alternatives available to Forza, including continuing as a stand-alone company or attempting to sell Forza to a third-party acquirer, or liquidating, each of which the Forza Board of Directors viewed as less favorable to Forza stockholders than the Merger;
     
  the potential business, operational and financial synergies that may be realized over time by the combined company following the Merger;
     
  the lack of a viable market for Forza’s designed product for the foreseeable future;
     
  the opinion of Forza’s financial advisor, dated August 7, 2024, to the special committee of the Forza Board of Directors (the “Forza Special Committee”) that, as of such date and based on and subject to the assumptions, limitations, qualifications and other matters set forth in the opinion, the exchange ratio of 0.611666275 shares of Twin Vee Common Stock to be issued in exchange for each share of Forza Common Stock pursuant to the Merger Agreement was fair to Forza stockholders from a financial point of view;
     
  current and historical information concerning Forza’s and Twin Vee’s respective businesses, business plans, operations, management, financial performance and conditions, technology, operations, prospects and competitive position, before and after giving effect to the merger and the merger’s potential effect on stockholder value;

 

  its knowledge of the business, operations, financial condition and earnings of Twin Vee;
     
  the ability to be a stockholder of a company generating revenue, given that Forza, to date, has not yet generated revenue from the sale of its boats;

 

  the likelihood that the Merger will be completed;

 

  current financial market conditions and historical market prices, volatility and trading information with respect to Forza Common Stock and Twin Vee Common Stock;

 

  the terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations;
     
  the consideration to be received by Forza stockholders in the Merger, including the form of such consideration, which enables Forza’s stockholders to continue to have a substantial equity interest in the combined company following the Merger, as well as the fact that the shares of Twin Vee Common Stock to be received by Forza’s stockholders are intended to be received in a tax-free exchange; and
     
  that the Merger should qualify as a reorganization within the meaning of Section 368(a) of the Code and that Forza’s stockholders generally should not recognize gain or loss for U.S. federal income tax purposes upon the exchange of their shares of Forza Common Stock for shares of Twin Vee Common Stock in connection with the Merger.

 

The Forza Board of Directors considered the potential risks of the Merger, including, but not limited to, the following:

 

  the possibility that the Merger might not be completed whether as a result of the failure to satisfy conditions to the closing of the Merger, including the failure to secure the required approvals from Forza and Twin Vee stockholders, or as a result of the termination of the merger agreement by Forza or Twin Vee in certain specified circumstances and the potential effects of the public announcement and pendency of the Merger on management attention;
     
  the effect of a public announcement of the transactions on Forza’s operations, stock price and employees, the potential disruption to Forza and Twin Vee and their businesses as a result of the announcement and pendency of the Merger and the potential adverse effects on the financial results of Forza and Twin Vee as a result of that disruption and the continued operations of the core business of Forza and Twin Vee during the period between the signing of the Merger Agreement and the completion of the Merger;

 

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  the fact that the executive officers and all but one of Forza’s directors may have interests in the Merger that are different from, or in addition to, those of Forza’s other stockholders, including the matters described under the section entitled “Chapter One—The Merger—The Merger Transaction—Interests of Forza Directors and Executive Officers in the Merger”, and the risk that these different interests might influence their decisions with respect to the Merger;

 

  that, while the Merger is expected to be completed, there can be no assurance that all conditions to the parties’ obligations to complete the Merger will be satisfied, and as a result, it is possible that the Merger may not be completed, even if the issuance of the shares of Twin Vee Common Stock to Forza stockholders pursuant to the Merger Agreement is approved by the stockholders of Twin Vee;

 

 

the risk of not realizing all of the anticipated strategic benefits between Forza and Twin Vee and the risk that other anticipated benefits might not be realized;

     
  the risk that the Merger may not be consummated in a timely manner or that the Merger may not be consummated at all, including the impact on Forza’s ability to effect the Forza Reverse Stock split if necessary in time to maintain compliance with the Nasdaq continued listing requirements;
     
  Forza’s inability to solicit competing acquisition proposals;

 

  the substantial costs to be incurred in connection with the Merger, including the costs of integrating the operations of Forza and Twin Vee and the transaction expenses arising from the Merger; and various other applicable risks associated with the combined company and the Merger, including the risks described in the section titled “Risk Factors;” and
     
  the other risks of the type and nature described under “Risk Factors” of this Joint Proxy Statement/Prospectus

 

For more information on the Twin Vee Board of Directors’ reasons for the transaction, see the section titled “The Merger Transaction— Recommendation of the Twin Vee Board of Directors and its Reasons for the Merger.”

 

For more information on the Forza Board of Directors’ reasons for the transaction, see the section titled “The Merger Transaction—Recommendation of the Forza Board of Directors and its Reasons for the Merger.”

 

Opinion of the Financial Advisor to the Twin Vee Board of Directors

 

The Twin Vee Board of Directors engaged Houlihan Capital, LLC (“Houlihan”) to provide financial advisory and investment banking services in connection with the Twin Vee Board of Directors’ consideration and evaluation of certain potential strategic alternatives. On August 6, 2024, Houlihan delivered its oral opinion to the Twin Vee Board of Directors, which opinion was confirmed in writing on the same date, that, as of the date of such opinion, and based upon and subject to the assumptions made, procedures followed, matters considered, limitations of the review undertaken, qualifications contained and other matters set forth in its written opinion, as of July 31, 2024, the Exchange Ratio to be paid by Twin Vee in the Merger pursuant to the Merger Agreement was fair, from a financial point of view, to Twin Vee’s stockholders.

 

The full text of Houlihan’s written opinion, which sets forth the assumptions made, procedures followed, matters considered, limitations of the review undertaken, qualifications contained and other matters set forth therein, is attached as Annex C-1 to this joint proxy statement/prospectus and is incorporated herein by reference. Twin Vee urges you to carefully read the Houlihan opinion, together with the description of such opinion included elsewhere in this Joint Proxy Statement/Prospectus, in its entirety, under the heading ”The Merger Transaction—Opinion of the Financial Advisor to the Twin Vee Board of Directors” starting on page 86 of this Joint Proxy Statement/Prospectus. Houlihan provided its opinion to the Twin Vee Board of Directors (in their capacity as such) for its information and assistance in connection with its consideration of the financial terms of the Merger and it may not be used for any other purpose. Houlihan’s opinion addressed solely the fairness, from a financial point of view, of the Exchange Ratio to be paid by Twin Vee in the Merger pursuant to the Merger Agreement, to Forza’s stockholders. Houlihan’s opinion does not compare the relative merits of the Merger with any other alternative transactions or business strategies which may have been available to Twin Vee and does not address the underlying business decision of the Twin Vee Board of Directors or Twin Vee to proceed with or effect the Merger. Houlihan’s opinion does not constitute a recommendation to the Twin Vee Board of Directors as to how the Twin Vee Board of Directors should vote on the issuance of the Twin Vee Common Stock to Forza stockholders pursuant to the Merger Agreement or to any stockholder of Twin Vee or Forza as to how any such stockholder should vote at any stockholders’ meeting at which the any of the transactions contemplated by the Merger Agreement, or the Merger Agreement itself, is considered, or whether or not any stockholder of Twin Vee or Forza should enter into a voting, shareholders’, or affiliates’ agreement with respect to the Merger, or take any other actions in connection with the Merger or otherwise. For a more complete discussion of Houlihan’s opinion, see the section titled “The Merger Transaction—Opinion of the Financial Advisor to the Twin Vee Board of Directors.”

 

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Opinion of the Financial Advisor to the Forza Board of Directors

 

Forza engaged InteleK Business Valuations & Advisory (“InteleK”), to provide financial advisory and investment banking services in connection with the Forza Special Committee’s and Forza Board of Directors’ consideration and evaluation of certain potential strategic alternatives. On August 9, 2024, InteleK delivered its oral opinion to the Forza Board of Directors, which opinion was confirmed in writing on the same date, that, as of the date of such opinion, and based upon and subject to the assumptions made, procedures followed, matters considered, limitations of the review undertaken, qualifications contained and other matters set forth in its written opinion, as of August 7, 2024, the Exchange Ratio to be paid by Twin Vee in the Merger pursuant to the Merger Agreement was fair, from a financial point of view, to Forza’s stockholders.

 

The full text of InteleK’s written opinion, which sets forth the assumptions made, procedures followed, matters considered, limitations of the review undertaken, qualifications contained and other matters set forth therein, is attached as Annex C-2 to this Joint Proxy Statement/Prospectus and is incorporated herein by reference. Forza urges you to carefully read the InteleK opinion, together with the description of such opinion included elsewhere in this joint proxy statement/prospectus, in its entirety, under the heading ”The Merger Transaction—Opinion of the Financial Advisor to the Forza Board of Directors” starting on page 91 of this Joint Proxy Statement/Prospectus. InteleK provided its opinion to the Forza Board of Directors (in their capacity as such) for its information and assistance in connection with its consideration of the financial terms of the Merger and it may not be used for any other purpose. InteleK’s opinion addressed solely the fairness, from a financial point of view, of the Exchange Ratio to be paid by Twin Vee in the Merger pursuant to the Merger Agreement, to Forza. InteleK’s opinion does not compare the relative merits of the Merger with any other alternative transactions or business strategies which may have been available to Forza and does not address the underlying business decision of the Forza Special Committee, the Forza Board of Directors or Forza to proceed with or effect the Merger. InteleK’s opinion does not constitute a recommendation to the Forza Board of Directors as to how the Forza Board of Directors should vote on the Merger or to any stockholder of Twin Vee or Forza as to how any such stockholder should vote at any stockholders’ meeting at which the Merger is considered. For a more complete discussion of InteleK’s opinion, see the section titled “The Merger Transaction—Opinion of the Financial Advisor to the Forza Board of Directors.”

 

Conditions to the Closing of the Merger

 

Twin Vee and Forza are required to complete the Merger only if certain customary conditions are satisfied or waived, including, but not limited to:

 

approval of the Merger and the Merger Agreement by stockholders holding a majority of the outstanding shares of Forza Common Stock at the Forza Annual Meeting (which approval shall include a majority of the shares present in person or by proxy at the Forza Annual Meeting excluding shares held by Twin Vee);

 

  approval of the issuance by Twin Vee of the shares of common stock pursuant to the Merger Agreement to the Forza stockholders by stockholders holding a majority of the shares present in person or by proxy at the Twin Vee Annual Meeting;

 

 

no court, administrative agency, commission, governmental or regulatory authority, has enacted, enforced or entered any statute, rule, regulation, or other order which is in effect and which has the effect of making the Merger illegal or otherwise prohibiting the consummation of the Merger;

     
  the registration statement on Form S-4, of which this Joint Proxy Statement/Prospectus is a part, must have been declared effective by the SEC in accordance with the Securities Act and must not be subject to any stop order suspending the effectiveness of the registration statement on Form S-4 and no similar proceeding in respect to the Joint Proxy Statement/Prospectus will have been initiated or threatened in writing by the SEC. All other filings will have been approved or declared effective and no stop order will have been issued and no proceeding will have been initiated to revoke any such approval or effectiveness;
     
  the respective representations and warranties of Twin Vee and Forza, shall be true and correct in all material respects as of the date of the Merger Agreement and the closing;

 

  the shares of Twin Vee Common Stock to be issued pursuant to the Merger Agreement shall have been approved for listing on Nasdaq;

 

  no material adverse effect with respect to Twin Vee or Forza or their respective subsidiaries shall have occurred since the date of the Merger Agreement and the closing of the Merger;

 

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  performance or compliance in all material respects by Twin Vee and Forza with their respective covenants and obligations in the Merger Agreement; and

 

  Forza shall have obtained any consents or waivers of approvals required in connection with the Merger.

 

Termination of the Merger Agreement

 

The Merger Agreement may be terminated at any time before the completion of the Merger, whether before or after the required stockholder approval to complete the Merger has been obtained, as set forth below:

 

by mutual written consent of Twin Vee and Forza, duly authorized by their respective boards of directors;

 

by either Twin Vee or Forza if the Merger is not consummated by December 1, 2024 (the “End Date”); provided, however, that this right to terminate is not available to any party whose action or failure to act has been a principal cause of the failure of the merger to occur on or before such date and such action or failure is a breach of the Merger Agreement; provided, further, that, in the event that the SEC has not declared effective under the Securities Act this Joint Proxy Statement/Prospectus by the date which is sixty days prior to the End Date, then Twin Vee shall be entitled to extend the End Date for an additional thirty days;

 

by either Twin Vee or the Forza if a court, administrative agency, commission, governmental or regulatory authority issues a final and non-appealable order, decree or ruling or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger;

 

by Twin Vee if the requisite approval of the stockholders of Forza is not obtained by reason of the failure to obtain the requisite vote at a meeting of the stockholders of Forza, duly convened therefor or at any adjournment or postponement thereof;

 

by either Forza or Twin Vee if the requisite approval of the stockholders of Twin Vee is not obtained by reason of the failure to obtain the requisite vote at a meeting of the stockholders of Twin Vee, duly convened therefor or at any adjournment or postponement thereof; provided, however, that this right to terminate is available to Twin Vee if the failure to obtain the requisite vote shall have been caused by Twin Vee’s action or failure to act and such action or failure to act constitutes a material breach by Twin Vee of the Merger Agreement;

 

by Twin Vee if a “Forza triggering event” has occurred, which is defined as an event where (i) the Forza Board of Directors shall have failed to recommend that Forza’s stockholders vote to approve the Merger Agreement and Merger (the “Forza Board Recommendation”) or shall for any reason have withdrawn or modified in a manner adverse to Twin Vee the Forza Board Recommendation; (ii) Forza shall have failed to include in this Joint Proxy Statement/Prospectus the Forza Board Recommendation; (iii) Forza shall have failed to hold the its stockholders’ meeting within sixty (60) days after the Form S-4 Registration Statement relating to this Joint Proxy Statement/Prospectus is declared effective under the Securities Act (other than to the extent that the Form S-4 Registration Statement is subject to any stop order or proceeding (or threatened proceeding by the SEC) seeking a stop order with respect to the Form S-4 Registration Statement, in which case such sixty (60) day period shall be tolled for so long as such stop order remains in effect or proceeding or threatened proceeding remains pending); provided that Forza may adjourn the meeting in order to obtain a quorum of its stockholders or as reasonably determined by it to comply with applicable law; (iv) the Forza Board of Directors shall have publicly approved, endorsed or recommended any other acquisition proposal; (v) the Forza Board of Directors shall have failed to publicly reaffirm the Forza Board Recommendation within ten (10) days after Twin Vee so requests in writing; (vi) Forza or its representatives shall have breached the non-solicitation provisions of the Merger Agreement;

 

by Forza if a “Company triggering event” has occurred, which is defined as an event where (i) the Twin Vee Board of Directors shall have failed to recommend that Twin Vee’s stockholders vote to approve the issuance of Twin Vee common stock in the Merger (the “Twin Vee Board Recommendation”) or shall for any reason have withdrawn or modified in a manner adverse to Forza the Twin Vee Board Recommendation; (ii) Twin Vee shall have failed to include in this Joint Proxy Statement/Prospectus the Twin Vee Board Recommendation; (iii) Twin Vee shall have failed to hold the its stockholders’ meeting within sixty (60) days after the Form S-4 Registration Statement relating to this Joint Proxy Statement/Prospectus is declared effective under the Securities Act (other than to the extent that the Form S-4 Registration Statement is subject to any stop order or proceeding (or threatened proceeding by the SEC) seeking a stop order with respect to the Form S-4 Registration Statement, in which case such sixty (60) day period shall be tolled for so long as such stop order remains in effect or proceeding or threatened proceeding remains pending); provided that Twin Vee may adjourn the meeting in order to obtain a quorum of its stockholders or as reasonably determined by it to comply with applicable law; (iv) the Twin Vee Board of Directors shall have publicly approved, endorsed or recommended any other acquisition proposal; (v) the Twin Vee Board of Directors shall have failed to publicly reaffirm the Twin Vee Board Recommendation within ten (10) days after Forza so requests in writing; (vi) Twin Vee or its representatives shall have breached the non-solicitation provisions of the Merger Agreement;

 

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  by Forza, upon a breach of any representation, warranty, covenant or agreement on the part of Twin Vee or Merger Sub set forth in the Merger Agreement, or if any representation or warranty of Twin Vee becomes untrue, such that the conditions to the Merger would not be satisfied as of the time of such breach or as of the time such representation or warranty becomes untrue; provided that Forza is not in material breach of any representation, warranty, covenant or agreement so as to cause conditions in the Merger Agreement not to be satisfied; provided, however, that if such inaccuracy in Twin Vee’s representations and warranties or breach by Twin Vee is curable by Twin Vee through the exercise of its commercially reasonable efforts, then Forza may not terminate the merger agreement for thirty (30) calendar days following the delivery of written notice from Forza to Twin Vee of such breach, provided Twin Vee continues to exercise commercially reasonable efforts to cure such breach (it being understood that Forza may not terminate the Merger Agreement if such breach by Twin Vee is cured during such thirty (30) calendar day period); or
     
  by Twin Vee, upon a breach of any representation, warranty, covenant or agreement on the part of Forza set forth in the Merger agreement, or if any representation or warranty of Forza becomes untrue, such that the conditions to the Merger would not be satisfied as of the time of such breach or as of the time such representation or warranty becomes untrue; provided that Twin Vee is not in material breach of any representation, warranty, covenant or agreement so as to cause conditions in the Merger Agreement not to be satisfied; provided, however, that if such inaccuracy in Forza’s representations and warranties or breach by Forza is curable by Forza through the exercise of its commercially reasonable efforts, then Twin Vee may not terminate the merger agreement for thirty (30) calendar days following the delivery of written notice from Twin Vee to Forza of such breach, provided Forza continues to exercise commercially reasonable efforts to cure such breach (it being understood that Twin Vee may not terminate the Merger Agreement if such breach by Forza is cured during such thirty (30) calendar day period).
     
  by Twin Vee, if any time prior to the requisite approval of the stockholders of Twin Vee being obtained Twin Vee has received an acquisition proposal that the Twin Vee Board of Directors deems is a Superior Offer (as defined in the Merger Agreement), Twin Vee has complied with its obligations under the Merger Agreement in order to accept such Superior Offer, Twin Vee both concurrently terminates the Merger and enters into a definitive agreement that provides for the consummation of such Superior Offer; or
     
  by Forza if any time prior to the requisite approval of the stockholders of Forza being obtained Forza has received an acquisition proposal that the Forza Board of Directors deems is a Superior Offer (as defined in the Merger Agreement), Forza has complied with its obligations under the Merger Agreement in order to accept such Superior Offer, Forza both concurrently terminates the Merger and enters into a definitive agreement that provides for the consummation of such Superior Offer.

   

Non-Solicitation

 

Each of Twin Vee and Forza have agreed that, subject to certain exceptions, until the earlier to occur of the termination of the Merger Agreement and the Effective Time, neither they nor any of their respective subsidiaries will authorize or permit any of their or their subsidiaries’ directors, officers, employees, agents, attorneys, accountants, investment bankers, advisors and representatives to, directly or indirectly:

 

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solicit, initiate, knowingly encourage, induce or knowingly facilitate the communication, the making, submission or announcement of any acquisition transaction (as defined below);

 

furnish any nonpublic information regarding such party to any person in connection with or in response to an acquisition proposal or inquiry;

 

engage in discussions or negotiations with any person with respect to any acquisition transaction, except as to the existence of the non-solicitation provisions in the Merger Agreement;

 

  approve, endorse or recommend any acquisition transaction, except as permitted by the Merger Agreement in respect of a bona fide acquisition proposal (which acquisition proposal did not arise out of a material breach of the non-solicitation provisions of the Merger Agreement) that is determined, in good faith to be a superior offer (as defined in the Merger Agreement); or

 

execute or enter into any letter of intent or any contract agreement contemplating or relating to an acquisition transaction (other than a confidentiality agreement as permitted).

 

However, before obtaining the Twin Vee stockholder approval or Forza stockholder approval, respectively, required to consummate the Merger, each of Forza and Twin Vee may furnish nonpublic information regarding such party to, and may enter into discussions or negotiations with, any person in response to a bona fide written acquisition proposal, which the Twin Vee Board of Directors or the Forza Board of Directors, respectively, determines in good faith, after consultation with their respective financial advisors and outside legal counsel, constitutes or is reasonably likely to result in a “superior offer,” as defined in the Merger Agreement and as defined in the section titled “The Merger Agreement—Non-Solicitation” below, and is not withdrawn, if:

 

  neither party nor any of its directors, officers, employees, agents, attorneys, accountants, investment bankers, advisors and representatives has breached the non-solicitation provisions of the Merger Agreement described above;

 

  the Twin Vee Board of Directors or Forza Board of Directors, respectively, concludes in good faith based on the advice of outside legal counsel, that the failure to take such action is reasonably likely to be inconsistent with the fiduciary duties of the Twin Vee or Forza board of directors, respectively, under applicable law;

 

  Twin Vee or Forza, respectively receives from the third-party an executed confidentiality agreement containing provisions (including nondisclosure provisions, use restrictions, non-solicitation provisions and no hire provisions) at least as favorable to such party as those contained in the confidentiality agreement between Twin Vee and Forza; and

 

  at least two business days prior to furnishing such nonpublic information to a third-party, Twin Vee or Forza furnishes the same information to the other party to the extent not previously furnished.

  

If either Twin Vee or Forza receives an acquisition proposal or acquisition inquiry at any time during the period between the date of the Merger Agreement, August 12, 2024, and the earlier to occur of (a) the Effective Time and (b) termination of the Merger Agreement, then such party must promptly, and in no event later than one business day after becoming aware of such acquisition proposal or acquisition inquiry, advise the other party orally and in writing of such acquisition proposal or acquisition inquiry, including the identity of the person making or submitting the acquisition proposal or acquisition inquiry and the material terms thereof. Each of Twin Vee and Forza must keep the other reasonably informed with respect to the status and material terms of any such acquisition proposal or acquisition inquiry and any material modification or proposed material modification thereto.

 

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Management Following the Merger

 

Effective as of the closing of the Merger, the combined company will have a five member Board of Directors, consisting of Joseph Visconti (a current board member of both Twin Vee and Forza), Preston Yarborough (a current board member of Twin Vee), Marcia Kull (a current board member of Forza), Neil Ross (a current board member of both Twin Vee and Forza) and Kevin Schuyler (a current board member of both Twin Vee and Forza). In addition, effective as of the closing of the Merger, the combined company’s executive officers will consist of Twin Vee’s current executive officers, Joseph Visconti, Preston Yarborough, Karl Zimmer and Michael Dickerson, and Joseph Visconti will be appointed as the Chief Executive Officer and President of Forza, which will be a wholly owned subsidiary of Twin Vee after the Merger.

 

Effective as of the closing of the Merger, the combined company’s executive officers are expected to be composed of the following members of the current Forza and Twin Vee management teams:

 

         
Name   Combined Company Position(s)   Current Position(s)
Joseph Visconti     Chief Executive Officer       Chief Executive Officer of Twin Vee  
         
Karl Zimmer   President   President of Twin Vee
         
Michael Dickerson   Chief Financial & Administrative Officer   Chief Financial & Administrative Officer of Twin Vee and Interim Chief Financial & Administrative Officer of Forza
Preston Yarborough   Vice President   Vice President

 

Interests of Certain Persons in the Merger

 

In considering the recommendation of the Forza Board of Directors with respect to approving the Merger, Forza stockholders should be aware that certain members of the Forza Board of Directors and executive officers of Forza have interests in the Merger that may be different from, or in addition to, interests they have as Forza stockholders. For example, following the consummation of the Merger, certain directors and executive officers of Forza will continue to serve on the Board of Directors and management, respectively, of the combined company. In considering the recommendation of the Twin Vee Board of Directors with respect to approving the issuance of the shares of Twin Vee Common Stock to Forza stockholders pursuant to the Merger Agreement, Twin Vee stockholders should be aware that certain members of the Twin Vee Board of Directors and executive officers of Twin Vee have interests in the Merger that may be different from, or in addition to, interests they have as Twin Vee stockholders. For example, following the consummation of the Merger, certain directors and executive officers of Twin Vee will continue to serve on the Twin Vee Board of Directors and as management, respectively, of the combined company and will receive direct ownership of shares of Twin Vee Common Stock issued in the Merger.

 

The following table sets forth the beneficial ownership interest of the principal stockholders in Forza, Twin Vee and the combined company:

 

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   Twin Vee Prior to Merger  Forza Prior to Merger  Combined Company After Merger
   Number of  Percentage  Number of  Percentage  Number of  Percentage
Name  shares  **  shares  ***  shares  ****
Joseph Visconti (1)   2,857,595    30.02%   2,261,939    14.36%   3,232,954    21.73%
Karl Zimmer (2)   85,138    0.89%           85,138    0.57%
Preston Yarborough (3)   209,763    2.20%   45,138    0.29    237,372    1.60%
Michael Dickerson (4)   79,167    0.83    50,000    0.32    109,750    0.74%
James Melvin (5)   16,500    0.17            16,500    0.11%
Bard Rockenbach (6)   15,583    0.16            15,583    0.10%
Neil Ross (7)   16,500    0.17    36,617    0.23    38,897    0.26%
Kevin Schuyler (8)   12,363    0.13    105,500    0.67    76,894    0.52%
Marcia Kull (9)           10,105    0.06    6,181    0.04%
5% Stockholders                              
Marathon Micro Fund, L.P. (10)   950,000    9.98%           950,000    6.39%
AWM Investment
Company, Inc. and Affiliates (11)
   939,176    9.98%           939,176    6.31%
Twin Vee PowerCats Co.(1)             7,000,000    44.43%          

   

* Less than one percent (1%)

 

** Percentage of Twin Vee is based upon 9,519,481 shares of Twin Vee Common Stock outstanding as of October 4, 2024.

 

***Percentage of Forza is based upon 15,754,774 shares of Forza Common Stock outstanding as of October 4, 2024.

 

****Percentage of common stock of the combined company is based on 14,875,000 shares of common stock of the combined company outstanding upon the consummation of the Merger and assumes that the 5,355,000 shares of Twin Vee Common Stock are issued upon consummation of the Merger to the stockholders of Forza and that the 7,000,000 shares of Forza Common Stock held by Twin Vee are cancelled.

 

(1)

Joseph Visconti is the Chairman of the Board and Chief Executive Officer of Twin Vee and the Interim CEO of Forza. Prior to the consummation of the Merger, Twin Vee is the owner of 7,000,000 shares of Forza Common Stock. As a controlling shareholder of Twin Vee, Mr. Visconti is deemed to have control over the shares of Forza Common Stock owned by Twin Vee. Mr. Visconti owns 98,442 shares of Forza Common Stock and was granted an option to purchase 644,000 shares of Forza Common Stock, of which 451,667 shares of Forza Common Stock will vest and be exercisable within 60 days of October 4, 2024, and are included in and are included in the number of shares of Forza Common Stock beneficially owned by Mr. Visconti. Mr. Visconti currently disclaims beneficial ownership of these securities. 

 

Mr. Visconti was issued 2,328,144 shares of our common stock upon the consummation of the Merger between Twin Vee and Twin Vee Powercats, Inc. in 2022. Additionally, Mr. Visconti purchased 40,785 shares of Twin Vee Common Stock in September 2024. Mr. Visconti was granted an option to purchase 822,000 shares of Twin Vee Common Stock, of which 527,554 shares of Twin Vee Common Stock will vest and be exercisable within 60 days of October 4, 2024, and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Visconti.

   

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(2)  Mr. Zimmer was granted an option to purchase 500,000 shares of Twin Vee Common Stock, of which 0 shares of Twin Vee Common Stock will vest and be exercisable within 60 days of October 4, 2024 and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Zimmer. Mr. Zimmer owns 85,138 shares of Twin Vee Common Stock.
   
(3)  Mr. Yarborough was issued 38,357 shares of our common stock upon the consummation of the Merger between Twin Vee and Twin Vee Powercats, Inc. in 2022. Mr. Yarborough was granted an option to purchase 261,000 shares of Twin Vee Common Stock, of which 171,406 shares of Twin Vee Common Stock will vest and be exercisable within 60 days of October 4, 2024 and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Yarborough. Mr. Yarborough was granted an option to purchase 75,000 shares of Forza Common Stock, of which 45,138 shares of Forza Common Stock will vest and be exercisable within 60 days of October 4, 2024 and are included in the number of shares of Forza Common Stock beneficially owned by Mr. Yarborough.
   
(4)  Mr. Dickerson was granted an option to purchase 300,000 shares of Twin Vee Common Stock, of which 29,167 shares of Twin Vee Common Stock will vest and be exercisable within 60 days of October 4, 2024 and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Dickerson. Mr. Dickerson owns 50,000 shares of Twin Vee Common Stock and 50,000 shares of Forza Common Stock.
   
(5) Mr. Melvin was granted an option to purchase 5,500 shares of Twin Vee Common Stock upon the consummation of the Twin Vee initial public offering, of which 5,500 shares of Twin Vee Common Stock. Additionally, Mr. Melvin was granted an option to purchase an additional 5,500 shares of Twin Vee Common stock in 2022 and another 5,500 shares of Twin Vee Common stock in 2024. The options to purchase a total of 16,500 shares of Twin Vee Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Melvin.
   
(6) In connection with his appointment, effective November 7, 2021, Mr. Rockenbach was awarded an option to purchase 5,500 shares of Twin Vee Common Stock at an exercise price of $3.87 per share, vesting pro rata on a monthly basis over a twelve-month period and exercisable for a period of ten years from the date of grant. Additionally, Mr. Rockenbach was granted an option to purchase an additional 4,583 shares of Twin Vee Common stock in 2022 and another 5,500 shares of Twin Vee Common stock in 2024. All 15,583 shares of Twin Vee Common Stock have vested and be exercisable within 60 days of October 4, 2024, and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Rockenbach.
   
(7) Neil Ross was granted an option to purchase 5,500 shares of Twin Vee Common Stock upon the consummation of the Twin Vee initial public offering, of which 5,500 shares of Twin Vee Common Stock. Additionally, Mr. Ross was granted an option to purchase an additional 5,500 shares of Twin Vee Common stock in 2022 and another 5,500 shares of Twin Vee Common stock in 2024. The options to purchase a total of 16,500 shares of Twin Vee Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Twin Vee Common Stock beneficially owned by each of Mr. Ross. In connection with his appointment on the Forza Board of Directors, effective August 11, 2022, Mr. Ross was awarded an option to purchase 5,500 shares of the Forza Common Stock at an exercise price of $5 per share, vesting pro rata on a monthly basis over a twelve-month period and exercisable for a period of ten years from the date of grant. All 5,500 shares of Forza Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Forza Common Stock beneficially owned by Mr. Ross. Mr. Ross owns 31,117 shares of Forza Common Stock.
   
(8) In connection with his appointment, effective July 6, 2022, Mr. Schuyler was awarded an option to purchase 5,500 shares of the Twin Vee Common Stock at an exercise price of $2.62 per share, vesting pro rata on a monthly basis over a twelve-month period and exercisable for a period of ten years from the date of grant. Additionally, Mr. Schuyler was granted an option to purchase 5,500 shares of Twin Vee Common stock in 2024. All 11,000 shares of Twin Vee Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Twin Vee Common Stock beneficially owned by Mr. Schuyler.  He also owns 1,363 shares of Twin Vee Common Stock. In connection with his appointment, effective August 11, 2022, Mr. Schuyler was awarded an option to purchase 5,500 shares of the Forza Common Stock at an exercise price of $5 per share, vesting pro rata on a monthly basis over a twelve-month period and exercisable for a period of ten years from the date of grant. All 5,500 shares of Forza Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Forza Common Stock beneficially owned by Mr. Schuyler. Mr. Schuyler owns 100,000 shares of Forza Common Stock.
   
(9) In connection with her appointment on the Forza Board of Directors, effective August 11, 2022, Ms. Kull was awarded an option to purchase 5,500 shares of the Forza Common Stock at an exercise price of $5 per share, vesting pro rata on a monthly basis over a twelve-month period and exercisable for a period of ten years from the date of grant. All 5,500 shares of Forza Common Stock have vested, are exercisable within 60 days of October 4, 2024, and are included in the number of shares of Forza Common Stock beneficially owned by Ms. Kull. Ms. Kull owns 4,605 shares of Forza Common Stock.
   
(10) Information is based upon a Schedule 13G/A filed with the SEC on January 30, 2023 by James G. Kennedy, the partner of Marathon Micro Fund, L.P. The address of Marathon Micro Fund, L.P. is 4 North Park Drive, Suite 106, Hunt Valley, Maryland 4982.
   
(11) Information is based upon a Schedule 13G/A filed with the SEC on February 14, 2024 by Adam Stettner, Executive Vice President of AWM Investment Company, Inc. The address of AWM Investment Company, Inc. is c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, NY 10022.

 

15

 

 

Considerations with Respect to U.S. Federal Income Tax Consequences of the Merger

 

Each of Twin Vee and Forza intends that the Merger qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). In general, and subject to the qualifications and limitations set forth in the section titled “The Merger Transaction—Certain Material U.S. Federal Income Tax Consequences of the Merger,” the material tax consequences to U.S. Holders (as defined herein) of Forza Common Stock are expected to be as follows:

 

  A Forza stockholder should not recognize gain or loss upon the exchange of Forza Common Stock for Twin Vee Common Stock pursuant to the Merger, except to the extent of cash received in lieu of a fractional share of Twin Vee Common Stock as described below;

 

  A Forza stockholder’s aggregate tax basis for the shares of Twin Vee Common Stock actually received in the Merger should equal the stockholder’s aggregate tax basis in the shares of Forza Common Stock surrendered upon the closing of the Merger, decreased by the amount of any tax basis allocable to a fractional share for which cash is received; and

 

  the holding period of the shares of Twin Vee Common Stock received by a Forza stockholder in the Merger should include the holding period of the shares of Forza Common Stock surrendered in exchange therefor provided the surrendered Forza Common Stock is held as a capital asset (generally, property held for investment) at the time of the Merger.

 

Tax matters are very complicated, and the tax consequences of the Merger to a particular Forza stockholder will depend on such stockholder’s circumstances. Accordingly, you should consult your tax advisor for a full understanding of the tax consequences of the merger to you, including the applicability and effect of federal, state, local and foreign income and other tax laws. For more information, please see the section titled “The Merger—Certain Material U.S. Federal Income Tax Consequences of the Merger.”

 

Regulatory Approvals

 

In the United States, Twin Vee must comply with applicable federal and state securities laws and the rules and regulations of Nasdaq, in connection with the issuance of shares of Twin Vee Common Stock pursuant to the Merger Agreement and the filing of this Joint Proxy Statement/Prospectus with the SEC.

 

Nasdaq Stock Market Listing

 

Twin Vee has agreed to use commercially reasonable efforts to (a) prepare and submit to the Nasdaq (or such other Nasdaq market on which the shares of Twin Vee Common Stock may then be listed) a notification form for the listing of additional shares with respect to the shares of Twin Vee Common Stock to be issued in connection with the Merger and to cause such shares to be approved for listing or (b) to the extent required by Nasdaq pursuant to its “reverse merger” rules, file an initial listing application for the Twin Vee Common Stock on Nasdaq and to cause such application to be conditionally approved prior to the Effective Time of the Merger. Forza has agreed to cooperate with Twin Vee as reasonably requested by Twin Vee with respect to such application and to promptly furnish to Twin Vee all information concerning Forza and its stockholders that may be required or reasonably requested in connection with the application.

 

In addition, each of Twin Vee’s and Forza’s obligation to complete the Merger is subject to the condition that the shares of Twin Vee Common Stock to be issued in the Merger be approved for listing (subject to official notice of issuance) on Nasdaq as of the closing of the Merger.

 

Anticipated Accounting Treatment

 

The Merger is expected to be treated as an asset acquisition by Twin Vee. To determine the accounting for this transaction under U.S. GAAP, a company must assess whether an integrated set of assets and activities should be accounted for as an acquisition of a business or an asset acquisition. The guidance requires an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set is not a business. In connection with the acquisition of Forza, substantially all the fair value is included in cash and cash equivalents and , as such, the acquisition is expected to be treated as an asset acquisition.

 

16

 

 

Appraisal Rights and Dissenters’ Rights

 

No appraisal rights are available to holders of Twin Vee Common Stock or Forza Common Stock in connection with the Merger in accordance with Section 262 of the Delaware General Corporation Law (the “DGCL”).

 

Comparison of Stockholder Rights

 

Both Twin Vee and Forza are incorporated under the laws of the State of Delaware and, accordingly, the rights of the stockholders of each are currently, and will continue to be, governed by the DGCL. If the Merger is completed, Forza stockholders will become stockholders of Twin Vee, and their rights will be governed by the DGCL, the Bylaws of Twin Vee and, the Certificate of Incorporation of Twin Vee. The rights of Twin Vee stockholders contained in the Certificate of Incorporation and Bylaws of Twin Vee differ from the rights of Forza stockholders under the Amended and Restated Certificate of Incorporation and Bylaws of Forza, as more fully described under the section titled “Comparison of Rights of Holders of Twin Vee Common Stock and Forza X1, Inc. Common Stock.”

 

The Twin Vee Annual Meeting

 

The Twin Vee Annual Meeting will be held on November 11, 2024 at 10:00 a.m. local time, at the offices of Twin Vee, 3101 S. U.S. Highway 1, Fort Pierce, Florida., for the following purposes:

 

 

 

to consider and vote upon a proposal to approve the issuance of shares of Twin Vee Common Stock in connection with Merger, pursuant to the Merger Agreement (the “Stock Issuance Proposal”);

     
  to consider and vote upon the election of the two nominees for Class III directors named in this joint proxy statement/prospectus to the Twin Vee Board of Directors for a term of three years (provided, however, that if the Merger is completed, the Twin Vee Board of Directors will be reconstituted as provided in the Merger Agreement) (the “Twin Vee Election of Directors Proposal”);

 

  to consider and vote upon the ratification of the appointment of Grassi & Co., CPAs, P.C. as Twin Vee’s independent registered public accounting firm for its fiscal year ending on December 31, 2024 (the “Twin Vee Auditor Proposal”)

 

 

to consider and approve an amendment to Twin Vee’s Certificate of Incorporation, in substantially the form attached to the accompanying proxy statement as Annex B, at the discretion of the Twin Vee Board of Directors, to effect a reverse stock split with respect to the issued and outstanding shares of Twin Vee Common Stock, at a ratio of 1-for-2 to 1-for-20 (the “Twin Vee Reverse Stock Split Ratio Range”), with the ratio within such range to be determined at the discretion of the Twin Vee Board of Directors and included in a public announcement, subject to the authority of the Twin Vee Board of Directors to abandon such amendment (the “Twin Vee Reverse Stock Split Proposal”);

     
 

to consider and approve an amendment to the Twin Vee PowerCats Co. Amended and Restated 2021 Stock Incentive Plan (the “Twin Vee 2021 Plan”) to increase the number of shares of Twin Vee Common Stock available for issuance under the Twin Vee 2021 Plan by 1,000,000 shares to 3,171,800 shares (the “Plan Increase Proposal”);

     
  to consider and vote upon an adjournment of the Twin Vee Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the Stock Issuance Proposal, the Twin Vee Reverse Stock Split Proposal and/or the Plan Increase Proposal (the “Twin Vee Adjournment Proposal”); and

 

  to transact such other business as may properly come before the Twin Vee Annual Meeting or any adjournment or postponement thereof.

 

Collectively the proposals above are referred to as the “Twin Vee Proposals”. On each matter to be voted upon, Twin Vee stockholders have one vote for each share of Twin Vee Common Stock owned as of the Twin Vee Record Date. Votes will be counted by the inspector of election. The following table summarizes vote requirements and the effect of abstentions and broker non-votes.

 

17

 

 

Proposal
Number

  Proposal Description   Vote Required for Approval  
Abstentions
  Effect of
Broker
Non-Votes

1

 

 

 

Stock Issuance Proposal

 

 

  FOR votes from the holders of a majority of voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   Counts as a vote “AGAINST” this proposal.  

None

 

 

                 
2   Twin Vee Election of Directors Proposal  

The nominee receiving the most FOR votes from the holders of Forza Common Stock present and entitled to vote

 

 

  Withheld votes will have no effect  

None

 

 

                 
3  

Twin Vee Auditor Proposal

 

  FOR votes from the holders of a majority of voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   Counts as a vote “AGAINST” this proposal.  

Not applicable

 

                 

4

 

 

 

Twin Vee Reverse Stock Split Proposal

 

 

 

FOR votes cast must exceed votes cast against the Twin Vee Reverse Stock Split

 

 

  Counts as a vote “AGAINST” this proposal.  

Not applicable

 

 

                 

5

 

 

 

Plan Increase Proposal

 

 

  FOR votes from the holders of a majority of the voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   Counts as a vote “AGAINST” this proposal.   Not applicable
                 

6

 

 

 

Twin Vee Adjournment Proposal

 

 

  FOR votes from the holders of a majority of the voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   Counts as a vote “AGAINST” this proposal.  

Not applicable

 

 

 

The information in the preceding table with respect to the effect of broker non-votes may be incorrect or change before the Twin Vee Annual Meeting. Therefore, if you are a beneficial owner and want to ensure that shares you beneficially own are voted in favor or against any or all of the Twin Vee Proposals, the only way you can do so is to give your broker or nominee specific instructions as to how the shares are to be voted.

 

No Twin Vee Proposal is contingent upon any other Twin Vee Proposal. Therefore, assuming all other closing conditions have been either satisfied or waived, the Merger will be consummated even if the Twin Vee Reverse Stock Split Proposal is not approved by Twin Vee’s stockholders.

 

The Forza Annual Meeting

 

The Forza Annual Meeting will be held on November 11, 2024 at 10:30 a.m. local time, at the offices of Forza, 3101 S. U.S. Highway 1, Fort Pierce, Florida, for the following purposes:

 

 

to consider and vote upon a proposal to approve the Merger, the Merger Agreement and related transactions (the “Merger Proposal”);

     
  to consider and vote upon the election of the one nominee for Class II directors named in this Joint Proxy Statement/Prospectus to the Forza Board of Directors for a term of three years (provided, however, that if the Merger is completed, all of the Forza board members, other than Joseph Visconti, will resign as members of the Forza Board of Directors (the “Forza Election of Director Proposal”);

 

18

 

 

  to consider and vote upon the ratification of the appointment of Grassi & Co., CPAs, P.C. as our independent registered public accounting firm for our fiscal year ending on December 31, 2024 (the “Forza Auditor Proposal”)

 

  to consider and approve an amendment to the Forza Amended and Restated Certificate of Incorporation, in substantially the form attached to the accompanying proxy statement as Annex B-1, at the discretion of the Forza Board of Directors, to effect a reverse stock split with respect to the issued and outstanding shares of Forza Common Stock, including stock held by the Forza as treasury shares, at a ratio of 1-for-2 to 1-for-20 (the “Forza Reverse Stock Split Ratio Range”), with the ratio within such range to be determined at the discretion of the Forza Board of Directors and included in a public announcement, subject to the authority of the Forza Board of Directors to abandon such amendment (the Forza Reverse Stock Split Proposal) (provided, however, if the Merger is effected, the Forza Reverse Stock Split will be abandoned);

 

  to consider and vote upon an adjournment of the Forza Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the Merger Proposal and/or the Forza Reverse Stock Split Proposal (the “Forza Adjournment Proposal”); and

 

  to transact such other business as may properly come before the Forza Annual Meeting or any adjournment or postponement thereof.

 

Collectively the proposals above are referred to as the “Forza Proposals.” On each matter to be voted upon, stockholders have one vote for each share of Forza Common Stock owned as of the Forza Record Date. Votes will be counted by the inspector of election. The following table summarizes vote requirements and the effect of abstentions and broker non-votes.

 

Proposal
Number

  Proposal Description   Vote Required for Approval   Effect of
Abstentions
  Effect of
Broker
Non-Votes
1   Merger Proposal   FOR votes from the holders of a majority of outstanding voting power of Forza Common Stock, which vote shall include FOR votes from the holders of a majority of shares present in person or represented by proxy shares excluding shares held by Twin Vee   Counts as a vote “AGAINST” this proposal.   Counts as a vote “AGAINST” this proposal.
                 

2

 

  Forza Election of Director Proposal  

The nominee receiving the most FOR votes from the holders of Forza Common Stock present and entitled to vote

 

  Withheld votes will have no effect  

None

 

                 
3  

Forza Auditor Proposal

 

  FOR votes from the holders of a majority of voting power of Forza Common Stock present in person or represented by proxy shares   None   Not applicable
                 
4  

Forza Reverse Stock Split Proposal

 

  FOR votes cast on the Forza Reverse Stock Split must exceed votes cast against the Forza Reverse Stock Split   Counts as a vote “AGAINST” this proposal.  

Not applicable

 

                 
5   Forza Adjournment Proposal   FOR votes from the holders of a majority of the voting power of Forza Common Stock present in person or represented by proxy shares   Counts as a vote “AGAINST” this proposal.   Not applicable

 

The information in the preceding table with respect to the effect of broker non-votes may be incorrect or change before the

Forza Annual Meeting. Therefore, if you are a beneficial owner and want to ensure that shares you beneficially own are voted in favor or against any or all of the Forza Proposals, the only way you can do so is to give your broker or nominee specific instructions as to how the shares are to be voted.

 

No Forza Proposal is contingent upon any other Forza Proposal except that if the Merger is effected, Forza will not implement the Forza Reverse Stock Split and all of the Forza directors, other than Joseph Visconti, will resign as directors of Forza however, certain Forza directors will serve as directors of the combined company. Therefore, assuming all other closing conditions have been either satisfied or waived, the Merger will be consummated even if the other Forza Proposals are not approved by Forza’s stockholders.

 

In addition to the requirement of obtaining such stockholder approval and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived.

 

19

 

 

THE MERGER

 

QUESTIONS AND ANSWERS ABOUT THE MERGER

 

Q: What is the Merger?

 

A: Twin Vee, Merger Sub and Forza have entered into the Merger Agreement. The Merger Agreement contains the terms and conditions of the proposed business combination of Twin Vee and Forza. Pursuant to the terms of the Merger Agreement, Forza will merge with a wholly owned subsidiary of Twin Vee (the Merger). At the Effective Time of the Merger, the holders of Forza Common Stock will receive in the Merger 0.611666275 shares of Twin Vee Common Stock in exchange for each share of Forza Common Stock they own, which is referred to as the Exchange Ratio, for a maximum of 5,355,000 shares of Twin Vee Common Stock (no fractional shares of Twin Vee Common Stock will be issued) and the 7,000,000 shares of Forza Common Stock held by Twin Vee pre-Merger will be cancelled. In addition, at the Effective Time of the Merger, (i) each outstanding stock option exercisable for shares of Forza Common Stock that is outstanding at the Effective Time of the Merger, whether vested or unvested, will be assumed by Twin Vee and converted into a stock option to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such stock option for shares of Forza Common Stock prior to the Merger and exchanged such shares for Twin Vee Common Stock in accordance with the Exchange Ratio and (ii) each outstanding warrant to purchase shares of Forza Common Stock will be assumed by Twin Vee and converted into a warrant to purchase the number of shares of Twin Vee Common Stock that the holder would have received if such holder had exercised such warrant for shares of Forza Common Stock prior to the Merger and exchanged such shares for Twin Vee Common Stock in accordance with the Exchange Ratio. For a more complete description of the Exchange Ratio, see the section titled “The Merger Agreement—Exchange Ratio” in this Joint Proxy Statement/Prospectus.

 

Q: Why are the two companies proposing to merge?

 

A: Twin Vee and Forza are proposing the Merger because, among other things, it is believed that the Merger will enhance stockholders value for both Twin Vee and Forza stockholders (i) by providing a method by which the Twin Vee stockholders can more directly share in the growth of Forza and (ii) due to the cost savings expected to be realized. For a discussion of Twin Vee’s reasons for the Merger, please see the sections entitled “The Merger Transaction—Recommendation of the Twin Vee Board of Directors and its Reasons for the Merger” and “The Merger Transaction—Recommendation of the Forza Board of Directors and its Reasons for the Merger”.

 

Q: What will happen in the Merger?

 

A: In the Merger, Forza will be merged into Twin Vee and will cease to exist. Immediately after the Merger the outstanding number of shares of Twin Vee Common Stock will increase by 5,355,000 which is the number of shares of Twin Vee Common Stock issued in the Merger. Based solely upon the outstanding shares of Twin Vee Common Stock on August 12, 2024, and the outstanding shares of Forza Common Stock on August 12, 2024, immediately following the completion of the Merger, Forza stockholders, excluding Twin Vee, will own approximately 36% of the combined company’s outstanding common stock.

 

Q: Why am I receiving this Joint Proxy Statement/Prospectus?

 

A: You are receiving this Joint Proxy Statement/Prospectus because you have been identified as a stockholder of Twin Vee or Forza as of October 4, 2024, as the applicable record date for the determination of stockholders entitled to notice of, and to vote at, the Twin Vee Annual Meeting, or the Forza Annual Meeting. This document serves as a proxy statement of Twin Vee used to solicit proxies for the Twin Vee Annual Meeting, as a prospectus of Twin Vee used to offer shares of Twin Vee Common Stock in exchange for shares of Forza Common Stock in the Merger and as proxy statement of Forza used to solicit proxies for the Forza Annual Meeting. This Joint Proxy Statement/Prospectus contains important information about the Merger and the stockholder meetings of Twin Vee and Forza and you should read it carefully.

 

20

 

 

Q: What is required to consummate the Merger?

 

A: The companies have agreed to combine the two companies upon the terms and conditions of the Merger Agreement that is described in this Joint Proxy Statement/Prospectus. If you are a Twin Vee stockholder or a Forza stockholder you are receiving these proxy materials to help you decide, among other matters, how to vote your shares with respect to the proposed Merger.

 

The Merger cannot be completed unless, among other things, the stockholders of Twin Vee approve the issuance of the Twin Vee Common Stock to the Forza stockholders pursuant to the terms of the Merger Agreement, and the Forza stockholders, including a majority of the stockholders other than Twin Vee present and entitled to vote at the Forza Annual Meeting, approve the Merger Agreement and the Merger and the transactions contemplated thereby. Your vote is important. Twin Vee and Forza encourage Twin Vee stockholders and Forza stockholders to vote as soon as possible.

 

Q: On what matters are Twin Vee stockholders being asked to vote?

 

A: Twin Vee stockholders are asked to vote on the following Twin Vee Proposals:

 

  The approval of the issuance of shares of Twin Vee Common Stock in connection with Merger, pursuant to the Merger Agreement (the “Stock Issuance Proposal”); 
     
  The election of two Class III nominees named herein to the Twin Vee Board of Directors (the “Twin Vee Election of Directors Proposal”);
     
  The ratification of the appointment of Grassi & Co., CPAs, P.C. as Twin Vee’s independent registered public accounting firm for its fiscal year ending on December 31, 2024 (the “Twin Vee Auditor Proposal”);
     
 

The approval of an amendment to Twin Vee’s Certificate of Incorporation, in substantially the form attached to this Joint Proxy Statement/Prospectus as Annex B, at the discretion of the Board of Directors of Twin Vee, to effect the Twin Vee Reverse Stock Split within the Twin Vee Reverse Stock Split Ratio Range (the “Twin Vee Reverse Stock Split Proposal”);

     
  The approval of an amendment to the Twin Vee PowerCats Co. Amended and Restated 2021 Stock Incentive Plan (the “Twin Vee 2021 Plan”) to increase the number of shares of Twin Vee Common Stock available for issuance under the Twin Vee 2021 Plan by 1,000,000 shares to 3,171,800 shares (the “Plan Increase Proposal”);
     
  The approval of an adjournment of the Twin Vee Annual Meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the Stock Issuance Proposal and/or the Twin Vee Reverse Stock Split Proposal (the “Twin Vee Adjournment Proposal”);
     
  To transact such other business as may properly come before the Twin Vee Annual Meeting or any adjournment or postponement thereof.
     

Q: What vote of Twin Vee stockholders is required to approve the Twin Vee Proposals?

 

A: The vote required of Twin Vee stockholders is set forth below.

 

21

 

 

Proposal
Number

  Proposal Description   Vote Required for Approval   Effect of
Abstentions
  Effect of
Broker
Non-Votes
1   Stock Issuance Proposal   FOR votes from the holders of a majority of voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   None   Broker Non-Votes will have the effect of a vote Against
                 

2

 

  Twin Vee Election of Directors Proposal  

Two nominees receiving the most FOR votes from the holders of shares of Twin Vee Common Stock present and entitled to vote

  Withheld votes will have no effect   None
                 
3  

Twin Vee Auditor Proposal

 

  FOR votes from the holders of a majority of voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   None   None
                 
4   Twin Vee Reverse Stock Split Proposal  

FOR votes from the holders of a majority of the voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares

  None   None
                 
5   Plan Increase Proposal  

FOR votes from the holders of a majority of the voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares

  None   Broker Non-Votes will have the effect of a vote Against
                 
6   Twin Vee Adjournment Proposal   FOR votes from the holders of a majority of the voting power of shares of Twin Vee Common Stock present in person or represented by proxy shares   None   None

 

Q: What constitutes a quorum for the Twin Vee Annual Meeting?

 

A: A majority of the issued and outstanding shares of Twin Vee Common Stock entitled to vote being present in person or represented by proxy constitutes a quorum for the Twin Vee Annual Meeting. If a quorum is not present, the chairperson of the meeting or stockholders entitled to vote at the Twin Vee Annual Meeting present, in person or by proxy, may adjourn the meeting, without notice other than announced at the meeting, to another place, if any, date or time.

 

Q: On what matters are Forza stockholders being asked to vote?

 

A: Forza stockholders are asked to vote on the following Forza Proposals:

 

22

 

 

 

to consider and vote upon a proposal to approve the Merger, the Merger Agreement and related transactions (the Merger Proposal);

     
  the election of the one nominee for Class II directors named in this Joint Proxy Statement/Prospectus to the Forza Board of Directors for a term of three years (provided, however, that if the Merger is completed, all of the Forza board members, other than Joseph Visconti, will resign as members of the Forza Board of Directors) (the “Forza Election of Directors Proposal”);

 

  the ratification of the appointment of Grassi & Co., CPAs, P.C. as Forza’s independent registered public accounting firm for its fiscal year ending on December 31, 2024 (the “Forza Auditor Proposal”)

 

  The approval of an amendment to the Forza Amended and Restated Certificate of Incorporation, in substantially the form attached to this Joint Proxy Statement as Annex B-1, at the discretion of the Board of Directors of Forza, to effect the Forza Reverse Stock Split within the Forza Reverse Stock Split Ratio Range (the “Forza Reverse Stock Split Proposal”);

 

  The approval of an adjournment of the Forza Annual Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the Merger Proposal and/or the Forza Reverse Stock Split Proposal (the “Forza Adjournment Proposal”); and

 

Q: What vote of Forza stockholders is required to approve the Forza Proposals?

 

A: The vote required of Forza stockholders is set forth below

 

Proposal
Number

  Proposal Description   Vote Required for Approval   Effect of
Abstentions
  Effect of
Broker
Non-Votes

1

 

 

Merger Proposal

 

 

  FOR votes from the holders of a majority of outstanding voting power of shares of Forza Common Stock, which vote shall include FOR votes from the holders of a majority of shares of Forza Common Stock present in person or represented by proxy shares excluding shares held by Twin Vee   Withheld votes will have the effect of vote Against   Broker Non-Votes will have the effect of a vote Against
2   Forza Election of Director Proposal  

The nominee receiving the most FOR votes from the holders of shares of Forza Common Stock present and entitled to vote

 

  Withheld votes will have no effect   None
                 
3  

Forza Auditor Proposal

 

  FOR votes from the holders of a majority of voting power of shares of Forza Common Stock present in person or represented by proxy shares   None   None
                 
4   Forza Reverse Stock Split Proposal  FOR votes from the holders of a majority of the voting power of shares of Forza Common Stock present in person or represented by proxy shares

 

 

  None   None
                 
5   Forza Adjournment Proposal  FOR votes from the holders of a majority of the voting power of shares of Forza Common Stock present in person or represented by proxy shares     None   None

 

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Q: What constitutes a quorum for the Forza Annual Meeting?

 

A: A majority of the issued and outstanding shares of Forza Common Stock entitled to vote being present in person or represented by proxy constitutes a quorum for the Forza Annual Meeting. If a quorum is not present, the chairperson of the meeting or stockholders entitled to vote at the meeting present, in person or by proxy, may adjourn the meeting, without notice other than announced at the meeting, to another place, if any, date or time.

 

Q: When and where are the stockholder meetings?

 

A: The Twin Vee Annual Meeting will take place on November 11, 2024 at 10:00 a.m., Eastern Time, at the offices of Twin Vee, 3101 S. U.S. Highway 1, Florida 34982. The Forza Annual Meeting will take place on November 11, 2024 at 10:30 a.m., Eastern Time, at the offices of Forza, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982.

 

Q: Who is entitled to vote at the Twin Vee Annual Meeting?

 

A: Each outstanding share of Twin Vee Common Stock entitles its holder to cast one vote on each matter to be voted upon at the annual meeting. Only stockholders of record at the close of business on the Twin Vee Record Date, October 4, 2024, are entitled to receive notice of the Twin Vee Annual Meeting and to vote the shares of Twin Vee Common Stock that they held on that date at the meeting, or any adjournment or postponement of the meeting. If your shares are held for you as a beneficial holder in “street name,” please refer to the information forwarded to you by your bank, broker or other holder of record to see what you must do to vote your shares.

 

A complete list of stockholders entitled to vote at the Twin Vee Annual Meeting will be available for examination by any stockholder at Twin Vee’s corporate headquarters, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982, during normal business hours for a period of ten days before the Twin Vee Annual Meeting and at the time and place of the meeting.

 

Q: Who is entitled to vote at the Forza Annual Meeting?

 

A: Each outstanding share of Forza Common Stock entitles its holder to cast one vote on each matter to be voted upon at the annual meeting. Only stockholders of record at the close of business on the Forza Record Date, October 4, 2024, are entitled to receive notice of the Forza Annual Meeting and to vote the shares of Forza Common Stock that they held on that date at the meeting, or any adjournment or postponement of the meeting. If your shares are held for you as a beneficial holder in “street name,” please refer to the information forwarded to you by your bank, broker or other holder of record to see what you must do to vote your shares.

 

A complete list of stockholders entitled to vote at the Forza Annual Meeting will be available for examination by any stockholder at Forza’s corporate headquarters, 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982, during normal business hours for a period of ten days before the Forza Annual Meeting and at the time and place of the meeting.

 

Q: How do the Board of Directors of Twin Vee and Forza recommend I vote?

 

A: The Twin Vee Board of Directors and the Forza Board of Directors have recommended that stockholders vote “FOR” each proposal.

 

24

 

 

After careful consideration, the Twin Vee Board of Directors has determined by unanimous vote the Merger to be fair to Twin Vee stockholders and in their best interests, and declared the Merger advisable. The Twin Vee Board of Directors approved the Merger Agreement and recommends that Twin Vee stockholders adopt and approve the issuance of the Twin Vee Common Stock to the Forza stockholders pursuant to the terms of the Merger Agreement.

 

After careful consideration, the Forza Board of Directors has determined by unanimous vote the Merger to be fair to Forza stockholders and in their best interests, and declared the Merger advisable. The Forza Board of Directors approved the Merger and the Merger Agreement and recommends that Forza stockholders adopt and approve the Merger and the Merger Agreement and related transactions.

 

In considering the recommendation of the Twin Vee Board of Directors and the Forza Board of Directors with respect to the proposals, Forza and Twin Vee stockholders should be aware that certain directors and officers of Twin Vee and Forza have certain interests in the merger that are different from, or are in addition to, the interests of stockholders generally. We encourage you to read the sections titled “Interests of Twin Vee Directors and Executive Officers in the Merger” and “Interests of Forza Directors and Executive Officers in the Merger” for a discussion of these interests.

 

Q: How do I vote?

 

A: You may vote by mail by completing, signing and dating your proxy card and returning it in the enclosed, postage-paid and addressed envelope. If you mark your voting instructions on the proxy card, your shares will be voted:

 

  as you instruct

 

If you return a signed card, but do not provide voting instructions, your shares will be voted:

 

  if you are a Twin Vee stockholder, FOR approval of the issuance of shares of Twin Vee Common Stock pursuant to the Merger Agreement and the Merger; FOR the election of the two Class III nominees; FOR the ratification of the appointment of Grassi & Co., CPAs, P.C. as Twin Vee’s independent registered public accounting firm for its fiscal year ending on December 31, 2024; FOR the Twin Vee Reverse Stock Split Proposal; FOR the Plan Increase Proposal, FOR the Twin Vee Adjournment Proposal;

 

  if you are a Forza stockholder, FOR approval of the Merger and the Merger Agreement, FOR the election of the one Class II nominee; FOR the ratification of the appointment of Grassi & Co., CPAs, P.C. as Forza’s independent registered public accounting firm for its fiscal year ending on December 31, 2024; FOR the Forza Reverse Stock Split Proposal; FOR the Forza Adjournment Proposal;
     
   ● if you are a stockholder of record of Twin Vee, you may also vote on the Internet at www.iproxydirect.com/VEEE;
     
   ● if you are a stockholder of record of Forza, you may also vote on the Internet at www.iproxydirect.com/FRZA

  

  if your shares of Twin Vee Common Stock or Forza Common Stock are registered directly in your name with the transfer agent, you are considered to be the stockholder of record with respect to those shares, and the proxy materials and proxy card are being sent directly to you by either Twin Vee or Forza. If you are a Twin Vee stockholder of record, you may attend the Twin Vee Annual Meeting and vote your shares in person. Even if you plan to attend the Twin Vee Annual Meeting in person, Twin Vee requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the Twin Vee Annual Meeting if you are unable to attend. If you are a Forza stockholder of record, you may attend the Forza Annual Meeting and vote your shares in person. Even if you plan to attend the Forza Annual Meeting in person, Forza requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the Forza Annual Meeting if you are unable to attend. If your shares of Twin Vee Common Stock or Forza Common Stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you by your broker or other nominee together with a voting instruction card. As the beneficial owner, you are also invited to attend the applicable meeting. Because a beneficial owner is not the stockholder of record, you may not vote these shares in person at the applicable annual meeting unless you obtain a proxy from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting.

 

25

 

 

Q: What do I do if I want to change my vote?

 

A: You may send in a later-dated, signed proxy or proxy card to your company’s Secretary before your meeting or you can attend your meeting in person and vote. You may also revoke your proxy by sending a notice of revocation to your company’s Secretary at 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982. If you voted by the Internet, you can submit a later vote using such method.

 

Q: If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?

 

A: If you do not provide your broker, bank or nominee with instructions on how to vote your “street name” shares, your broker, bank or nominee will not be permitted to vote them on the “non-routine” matters that are to be considered by the Twin Vee stockholders relating to the issuance of Twin Vee Common Stock pursuant to the Merger Agreement and by the Forza stockholders relating to the approval of the Merger, Merger Agreement and related transactions. You should therefore be sure to provide your broker with instructions on how to vote your shares.

 

If you wish to vote your shares in person, you must bring to the meeting a letter from the broker, bank or nominee confirming your beneficial ownership in the shares to be voted.

 

Q: What is the effect of abstentions and broker non-votes?

 

A: Abstentions with respect to Twin Vee Proposal No. 1, 3, 4 and 5, will have the same effect as an AGAINST vote. Abstentions with respect to all other proposals will have no effect on the outcome of the vote. Abstentions will be counted for the purpose of determining a quorum at the stockholder meetings.

 

Matters subject to stockholder vote are classified as “routine” or “non-routine.” In the case of non-routine matters, brokers may not vote shares held in “street name” for which they have not received voting instructions from the beneficial owner (“Broker Non-Votes”), whereas they may vote those shares in their discretion in the case of any routine matter. Broker Non-Votes will be counted for purposes of calculating whether a quorum is present at the stockholder meetings, but will not be counted for purposes of determining the numbers of votes present in person or represented by proxy and entitled to vote with respect to a particular proposal. Broker Non-Votes for Twin Vee Proposal No. 1, Twin Vee Proposal No. 5, Forza Proposal No. 1, will have the same effect as an AGAINST vote. Twin Vee Proposals No. 1, 2 and 5 and Forza Proposals No. 1 and No. 2 are non-routine matters and Twin Vee Proposals No. 3, 4 and 6 and Forza Proposals No. 3, 4 and 5 are routine matters. Broker non-votes for these other routine matters are not expected to exist in connection with such proposals since they are routine matters for which brokers that vote at the annual meeting may vote in their discretion if beneficial owners do not provide voting instructions to the brokers) will have no effect on the proposals. Therefore, it is important that you complete and return your proxy early so that your vote may be recorded.

 

Votes cast by proxy or in person at the stockholder meetings will be tabulated by the inspectors of election appointed for the stockholder meetings, who also will determine whether a quorum is present.

 

Q: What appraisal rights do stockholders have in connection with the Merger?

 

A: No appraisal rights are available to holders of Twin Vee Common Stock or Forza Common Stock in connection with the Merger in accordance with Section 262 of the DGCL.

 

Q: What happens if I do not return a proxy card or otherwise provide proxy instructions?

 

A: If you are a Twin Vee stockholder, the failure to return your proxy card or otherwise provide proxy instructions could be a factor in establishing a quorum for the annual meeting of Twin Vee stockholders for purposes of approving the issuance of shares pursuant to the merger agreement or other actions sought to be taken, which is required to transact business at the meeting. If you are a Forza stockholder, the failure to return your proxy card or otherwise provide proxy instructions could be a factor in establishing a quorum for the annual meeting of Forza stockholders for purposes of approving the Merger Agreement or other actions sought to be taken, which is required to transact business at the meeting.

 

26

 

 

Q: Should I send in my stock certificates now?

 

A: No. If the Merger is completed, Twin Vee will send Forza stockholders written instructions for exchanging their stock certificates. Twin Vee stockholders will keep their existing certificates.

 

Q: When do you expect the Merger to be completed?

 

A: Both Twin Vee and Forza are working towards completing the Merger as quickly as possible. We hope to complete the Merger by the end of the fourth quarter of 2024. However, the exact timing of completion of the Merger cannot be determined yet because completion of the Merger is subject to a number of conditions.

 

Q: How many outstanding shares of Twin Vee Common Stock will exist immediately after the closing of the Merger?

 

A: Immediately Following the closing of the Merger, we anticipate that there will be approximately 14,875,000 shares of authorized but unissued Twin Vee Common Stock. In addition to the number of issued and outstanding shares of Twin Vee Common Stock after the closing of the Merger, Twin Vee has reserved approximately 2,170,000 shares   for future issuance as a result of outstanding stock options and warrants of Twin Vee and 868,000 shares for future issuance as a result of outstanding stock options and warrants of Forza, which upon the closing of the Merger will be exercisable for shares of Twin Vee Common Stock.

 

Q: What are the federal income tax consequences of the Merger?

 

A: Neither Twin Vee nor Forza has requested or received a ruling from the Internal Revenue Service that the Merger should qualify as a reorganization. The Merger should qualify as a reorganization pursuant to Section 368(a) of the Code. Assuming that the Merger qualifies as a reorganization, Forza stockholders should not recognize any gain or loss for U.S. federal income tax purposes if they exchange their shares of Forza Common Stock solely for shares of Twin Vee Common Stock.

 

Tax matters are very complicated, and the tax consequences of the Merger to each Forza stockholder will depend on the facts of that stockholder’s particular situation. You are urged to consult your own tax advisors regarding the specific tax consequences of the Merger, including tax return reporting requirements, the applicability of federal, state, local and foreign tax laws and the effect of any proposed changes in the tax laws. See “The Merger Transaction—Certain U.S. Federal Income Tax Consequences of the Merger”.

 

Q: Whom do I call if I have questions about the meetings or the Merger?

 

A: Twin Vee stockholders may call Twin Vee Investor Relations at (561) 283-4412. Forza stockholders may call Forza Investor Relations at (561) 283-4412.

 

Summary Risk Factors

 

The following is a summary of the key risks relating to the merger and each company. A more detailed description of each of the risks can be found under the section “Risk Factors.”

 

27

 

 

RISKS RELATED TO THE MERGER

 

  All of Forza’s executive officers and all but one of its directors serve on both the Twin Vee and Forza Board of Directors and therefore have conflicts of interest that may influence them to support or approve the merger without regard to your interests. In addition, the one director that does not sit on both the Twin Vee and Forza Board of Directors is expected to serve as a director of the combined company and therefore may also have a conflict of interest.
  The exchange ratio is not adjustable based on the market price of Twin Vee Common Stock so the Merger consideration at the closing may have a greater or lesser value than it had at the time the Merger Agreement was signed.
  The combined company’s stock price is expected to be volatile, and the market price of its common stock may drop following the Merger.
  The market price of the combined company’s common stock may decline as a result of the Merger.
  The combined company may not experience the anticipated strategic benefits of the Merger.
  If the conditions to the Merger are not met, the Merger will not occur.
  Twin Vee and Forza will incur substantial expenses related to this transaction whether or not the Merger is completed.
  Twin Vee will assume all of Forza’s outstanding liabilities if the Merger is completed.
  The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Merger.
  Although Houlihan’s opinion was given to the Twin Vee Board of Directors on August 6, 2024, it does not reflect any changes in market and economic circumstances after August 6, 2024.
  Although InteleK’s opinion was given to Forza’s Board of Directors on August 9, 2024, it does not reflect any changes in market and economic circumstances after August 9, 2024.
  The issuance of the Merger consideration is subject to approval by the stockholders of Twin Vee and the Merger and Merger Agreement are subject to approval by the Forza stockholders, including a majority of the stockholders excluding Twin Vee.
  Twin Vee’s business and stock price may be adversely affected if the acquisition of Forza is not completed.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Joint Proxy Statement/Prospectus contains “forward-looking statements.” Twin Vee and Forza use words such as “could,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and other similar expressions to identify some forward-looking statements, but not all forward-looking statements include these words. All of their forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the information described under the caption “Risk Factors” and elsewhere in this Joint Proxy Statement/Prospectus.

 

The forward-looking statements contained in this Joint Proxy Statement/Prospectus are based on assumptions that Twin Vee and/or Forza have made in light of their industry experience and their perceptions of historical trends, current conditions, expected future developments, and other factors they believe are appropriate under the circumstances. As you read and consider this Joint Proxy Statement/Prospectus, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond Twin Vee and Forza’s control), and assumptions. Although Twin Vee and Forza believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect their actual operating and financial performance and cause their performance to differ materially from the performance anticipated in the forward-looking statements. Twin Vee and Forza 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, their actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

 

28

 

 

Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, Twin Vee and Forza undertake no obligation to update any forward-looking statement contained in this Joint Proxy Statement/Prospectus to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors that could cause Twin Vee’s and/or Forza’s business not to develop as they expect emerge from time to time, and it is not possible for them to predict all of them. Further, they cannot assess the impact of each currently known or new factor on their results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

SELECTED HISTORICAL FINANCIAL DATA

 

The following tables present summary historical data for Twin Vee and Forza, summary unaudited pro forma condensed combined financial data for Twin Vee and Forza and comparative historical and unaudited pro forma per share data for Twin Vee and Forza.

 

SELECTED HISTORICAL FINANCIAL DATA OF TWIN VEE

 

The following table sets forth the selected consolidated financial data of Twin Vee. The selected consolidated statements of operations and consolidated balance sheets as of and for the year ended December 31, 2023 and 2022 are derived from Twin Vee’s audited consolidated financial statements for the years ended December 31, 2023 and 2022, which are included in this Joint Proxy Statement/Prospectus. The selected consolidated statements of operations and consolidated balance sheets as of June 30, 2024 and the six months ended June 30, 2024 and 2023 are derived from Twin Vee’s unaudited consolidated financial statements for the quarter ended June 30, 2024, which are included in this Joint Proxy Statement/Prospectus. You should read this information in conjunction with Twin Vee’s consolidated financial statements and related notes included in this Joint Proxy Statement/Prospectus . Historical results are not necessarily indicative of the results to be expected in the future.

 

   Six Months Ended June 30,  Years Ended December 31,
   2024  2023  2023  2022
Selected Consolidated Statements of Operations Data:                    
Net Sales  $9,603,164   $17,001,847   $33,425,912   $31,987,724 
Total operating expenses  $7,681,934   $7,959,023   $21,710,326   $21,330,918 
Net loss  $(6,854,390)  $(3,732,208)  $(9,782,196)  $(5,793,414)
Net loss per share-basic and diluted  $(0.49)  $(0.26)  $(0.76)  $(0.67)
Weighted-average common shares used to compute basic and diluted net loss per share   9,520,000    9,520,000    9,520,000    7,624,938 

  

    As of June 30,   As of December 31,
    2024   2023   2022
Selected Consolidated Balance Sheet Data:                        
Cash and cash equivalents   $ 13,927,460     $ 16,497,703     $ 23,501,007  
Total assets   $ 33,753,304     $ 39,846,713     $ 38,231,480  
Total liabilities   $ 7,814,052     $ 7,797,098     $ 5,210,591  
Total stockholders’ equity   $ 25,929,252     $ 32,049,615     $ 33,020,889  

 

29

 

 

SELECTED HISTORICAL FINANCIAL DATA OF FORZA

 

The following table sets forth the selected consolidated financial data of Forza. The selected consolidated statements of operations and consolidated balance sheets as of and for the year ended December 31, 2023 and 2022 are derived from Forza’s audited consolidated financial statements for the years ended December 31, 2023 and 2022, which are included in this Joint Proxy Statement/Prospectus. The selected consolidated statements of operations and consolidated balance sheets as of June 30, 2024 and the six months ended June 30, 2024 and 2023 are derived from Forza’s unaudited consolidated financial statements for the quarter ended June 30, 2024, which are included in this Joint Proxy Statement/Prospectus. You should read this information in conjunction with Forza’s consolidated financial statements and related notes included in this Joint Proxy Statement/Prospectus. Historical results are not necessarily indicative of the results to be expected in the future.

  

   Six Months Ended June 30,  Years Ended December 31,
   2024  2023  2023  2022
Selected Consolidated Statements of Operations Data:                    
Net Sales, related party  $   $   $37,118   $ 
Total Operating Expenses  $4,202,330   $3,658,533   $6,472,914   $3,420,515 
Net loss  $(3,999,391)  $(3,488,786)  $(5,933,113)  $(3,630,081)
Net loss per share-basic and diluted  $(0.25)  $(0.32)  $(0.44)  $(0.44)
Weighted-average common shares used to compute basic and diluted net loss per share   15,754,774    10,950,000    13,365,613    8,332,735 

  

   As of June 30,  As of December 31,
   2024  2023  2022
Selected Consolidated Balance Sheet Data:               
Cash and cash equivalents  $8,188,879   $9,821,531   $12,767,199 
Total assets  $13,156,741   $16,921,844   $14,221,926 
Total liabilities  $658,643   $901,311   $521,723 
Total stockholders’ equity  $12,498,098   $16,020,533   $13,700,203 

  

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UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION OF TWIN VEE AND FORZA

 

The following information does not give effect to the proposed Twin Vee Reverse Stock Split or the Forza Reverse Stock Split described in the Twin Vee Reverse Stock Split Proposal and the Forza Reverse Stock Split Proposal.

 

The following unaudited pro forma combined consolidated financial information assumes that each share of Forza Common Stock will be exchanged for 0.611666275 shares of Twin Vee Common Stock. Utilizing the Exchange Ratio of 64/36, it is anticipated that Forza Common Stockholders will own approximately 36% of the voting stock of the combined company after the Merger.

 

The unaudited pro forma combined consolidated financial information is based upon the assumption that the total number of shares of Forza Common Stock outstanding immediately prior to the completion of the Merger will be 15,754,774 and utilizes the Exchange Ratio of 64/36, which will result in 5,355,000 shares of Twin Vee Common Stock being issued in the transaction.

 

The unaudited pro forma condensed combined balance sheet as of June 30, 2024 assumes that the transaction took place at the beginning of the year and combines the historical balance sheets of Twin Vee and Forza as of such date. The unaudited pro forma condensed combined statements of operations for the three months ended June 30, 2024 and the year ended December 31, 2023 assume that the transaction took place as of January 1, 2023, and combine the historical results of Twin Vee and Forza for each period. The historical financial statements of Twin Vee and Forza have been adjusted to give pro forma effect to events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results.

 

The notes to the unaudited pro forma combined consolidated financial statements describe the pro forma amounts and adjustments presented below. This pro forma data is not necessarily indicative of the operating results that Twin Vee would have achieved had it completed the merger as of the beginning of the period presented and should not be considered as representative of future operations.

 

The unaudited pro forma combined consolidated financial information presented below is based on, and should be read together with, the historical financial information and their respective management’s discussion and analysis of financial condition and results of operations. Twin Vee’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 and unaudited consolidated financial statements for the six months ended June 30, 2024 and 2023 have been derived from the Twin Vee financial statements included in this Joint Proxy Statement/Prospectus. Forza’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 and unaudited consolidated financial statements for the six months ended June 30, 2024 and 2023 have been derived from the Forza financial statements included in this Joint Proxy Statement/Prospectus.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

 

   Twin Vee Powercats Co. Inc.  Forza X1, Inc.  Eliminations & Merger     Powercats Co. Inc. Pro Forma
   June 30, 2024  June 30, 2024  Adjustments     June 30, 2024
Assets                      
Current Assets                      
Cash and cash equivalents  $13,927,460   $8,188,879    (8,188,879) A  $13,927,460 
Restricted cash   210,876              210,876 
Accounts receivable   115,793              115,793 
Marketable securities   995,208              995,208 
Inventories, net   4,147,507    273,076    (273,076) A   4,147,507 
Due from affiliates, net       18,384    (18,384)      
Prepaid expenses and other current assets   185,263    73,513    (73,513) A   185,263 
Total current assets   19,582,107    8,553,852    (8,553,852)     19,582,107 
                       
                       
Property and equipment, net   13,506,672    4,565,008    (4,565,008) A   13,506,672 
                       
Operating lease right of use asset   615,815    30,364    (30,364) A   615,815 
Security deposit   48,709    7,517    (7,517) A   48,710 
Total Assets  $33,753,304   $13,156,741   $(13,156,741)    $33,753,304 
                       
Liabilities and Stockholders' Equity                      
Current Liabilities:                      
Accounts payable  $2,779,814   $503,646    (503,646) A  $2,779,814 
Accrued liabilities   1,107,611    27,814    (27,814) A   1,107,611 
Due to affiliated companies                  
Contract liabilities   6,175    6,175    (6,175) A   6,175 
Finance lease liability   218,348    24,535    (24,535) A   218,348 
Operating lease right of use liability   448,611    23,073    (23,073) A   448,611 
Total current liabilities   4,560,559    585,243    (585,243)     4,560,559 
                       
Economic Injury Disaster Loan   499,900              499,900 
Finance lease liability - noncurrent   2,535,033    73,400    (73,400) A   2,535,033 
Operating lease liability - noncurrent   218,560              218,560 
Total Liabilities   7,814,052    658,643    (658,643)     7,814,052 
                       
Stockholders' equity:                      
Preferred stock: 10,000,000 authorized; $0.001 par value; no shares                  
issued and outstanding                      
Common stock: 50,000,000 authorized; $0.001 par value   9,520    15,784    (10,429) B/C   14,875 
Treasury Stock       (21,379)   21,379  B    
Additional paid-in capital   38,592,684    26,523,829    (20,213,224) B/C   44,903,289 
Accumulated deficit   (18,978,912)   (14,020,136)   14,020,136  B   (18,978,912)
Equity attributed to stockholders of Twin Vee PowerCats Co, Inc.   19,623,292    12,498,098    (6,182,138)     25,939,252 
Equity attributable to noncontrolling interests   6,315,960        (6,315,960)      
Total stockholders’ equity   25,939,252    12,498,098    (12,498,098)     25,939,252 
                       
Total Liabilities and Stockholders' Equity  $33,753,304   $13,156,741   $(13,156,741)    $33,753,304 

 

A - Represents elimination of Forza balances included in Twin Vee consolidated balance sheet
B - Represents elimination of Forza equity and accumulated deficit and non-controlling interest no longer eliminated post-merger
C - Represents issuance of Twin Vee common stock to non-Twin Vee shareholders of Forza stock and the offset to the elimination of the Forza non-controlling interest previously eliminated from the Twin Vee balance sheet.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

    Twin Vee Powercats Co.   Forza X1, Inc. Six Months Ended   Eliminations and     Twin Vee Powercats Co. Inc. Six Months Ended June
    Inc. Six June 30, 2024   June 30, 2024   Merger Adjustments     30, 2024
Pro Forma
Net sales   $ 9,603,164     $           $ 9,603,164  
Cost of products sold     9,123,511       56,413       (56,413 ) A     9,123,511  
Gross profit (loss)     479,653       (56,413 )     56,413         479,653  
                                   
Operating expenses:                                  
Selling, general and administrative     1,449,912       524,516       (920,143 ) A/B     1,054,285  
Salaries and wages     2,495,616       1,122,851       (1,122,851 )  A     2,495,616  
Professional fees     707,692       251,106       (387,739 ) A/B     571,059  
Impairment of property & equipment     1,674,000       1,674,000       (1,674,000 )  A     1,674,000  
Depreciation and amortization     860,239       119,752       (119,752 )  A     860,239  
Research and development     494,475       510,105       (510,105 )  A     494,475  
Total operating expenses     7,681,934       4,202,330       (4,734,590 )       7,149,674  
                                   
Loss from operations     (7,202,281 )     (4,258,743 )     4,791,003         (6,670,021 )
                                   
Other income (expense):                                  
Dividend income     396,671       245,010       (245,010 ) A     396,671  
Other income     32,962                     32,962  
Interest expense     (121,887 )     (3,938 )     3,938    A     (121,887 )
Interest income     7,879                     7,879  
Unrealized gain on marketable securities     32,266       18,280       (18,280 )  A     32,266  
Total other income     347,891       259,352       (259,352 )       347,891  
                                   
Income before income tax     (6,854,390 )     (3,999,391 )     4,531,651         (6,322,130 )
Income taxes provision                          
Net loss     (6,854,390 )     (3,999,391 )     4,531,651         (6,322,130 )
Less: Net loss attributable to noncontrolling interests     (2,222,462 )             2,222,462   A      
Net loss attributed to stockholders of Twin Vee PowerCats Co, Inc     (4,631,928 )     (3,999,391 )     2,309,189         (6,322,130 )

 

A - Represents elimination of intercompany revenues and cost of sales, and non-controlling interests, and Forza amounts included in Twin Vee consolidated results

B - Represents adjustment for public company costs no longer borne by Forza related to the merger

 

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

    Twin Vee Powercats Co. Inc. Year Ended December 31, 2023   Forza X1, Inc. Year Ended December 31, 2023   Eliminations and Merger Adjustments     Twin Vee Powercats Co. Inc. Year Ended December 31, 2023 Pro Forma
Net sales   $ 33,425,912     $ 37,118       (37,118 ) A   $ 33,425,912  
Cost of products sold     23,702,885       157,637       (157,637 ) A     23,702,885  
Gross profit     9,723,027       (120,519 )     120,519         9,723,027  
                                   
Operating expenses:                                  
Selling, general and administrative     3,734,406       1,112,920       (1,614,657 ) A/B     3,232,669  
Salaries and wages     13,929,580       3,279,195       (3,279,195 ) A     13,929,580  
Professional fees     1,249,388       353,996       (634,905 ) A/B     968,479  
Depreciation and amortization     1,353,383       185,900       (185,900 ) A     1,353,383  
Research and development     1,443,569       1,540,903       (1,540,903 ) A     1,443,569  
Total operating expenses     21,710,326       6,472,914       (7,255,560 )       20,927,680  
                                   
Loss from operations     (11,987,299 )     (6,593,433 )     7,376,079         (11,204,653 )
                                   
Other income (expense):                                  
Dividend income     909,215       507,794       (507,794 ) A     909,215  
Other income     9,898                     9,898  
Interest expense     (221,157 )     (3,694 )     3,694   A     (221,157 )
Interest income     48,370       1,401       (1,401 ) A     48,370  
Loss on disposal of assets                          
Unrealized gain on marketable securities     87,781       50,878       (50,878 ) A     87,781  
Realized gain on marketable securities     103,941       103,941       (103,941 ) A     103,941  
Employee Retention Credit income     1,267,055                     1,267,055  
Total other income     2,205,103       660,320       (660,320 )       2,205,103  
                                   
Income before income tax     (9,782,196 )     (5,933,113 )     6,715,759         (8,999,550 )
Income taxes provision                            
Net loss     (9,782,196 )     (5,933,113 )     6,715,759         (8,999,550 )
Less: Net loss attributable to noncontrolling interests     (2,590,020 )           2,590,020   A      
Net loss attributed to stockholders of Twin Vee                                  
PowerCats Co, Inc.     (7,192,176 )     (5,933,113 )     4,125,739         (8,999,550 )

 

A - Represents elimination of intercompany revenues and cost of sales, non-controlling interests and Forza amounts included in Twin Vee consolidated results

B - Represents adjustment for public company costs no longer borne by Forza related to the merger

 

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Comparative Historical and Unaudited Pro Forma Per Share Data

 

The information below reflects the historical net loss and book value per share of Twin Vee Common Stock and the historical net loss and book value per share of Forza Common Stock in comparison with the unaudited pro forma net loss and book value per share after giving effect to the proposed Merger of Twin Vee with Forza on a pro forma basis. The unaudited pro forma net loss and book value per share does not give effect to the proposed reverse stock split of Twin Vee Common Stock described in the Twin Vee Reverse Stock Split Proposal.

 

You should read the tables below in conjunction with the audited consolidated financial statements of Twin Vee for the years ended December 31, 2023 and 2022 and unaudited consolidated financial statements of Twin Vee for the six months ended June 30, 2024 and 2023, which are included elsewhere in this Joint Proxy Statement/Prospectus; the audited financial statements of Forza for the years ended December 31, 2023 and 2022 and unaudited condensed financial statements of Forza for the six months ended June 30, 2024 and 2023, which are included elsewhere in this Joint Proxy Statement/Prospectus; and the unaudited pro forma condensed combined financial information and notes related to such financial information which are included elsewhere in this Joint Proxy Statement/Prospectus.

 

    Twin Vee Historical   Forza Historical   Twin Vee Unaudited Pro Forma Combined Data   Forza Pro Forma Equivalent Data (i)
                 
Net Loss per share:                                
For the year ended December 31, 2023                                
Basic and diluted   $ (0.76 )   $ (0.44 )   $ (0.61 )   $ (0.22 )
For the six months ended June 30, 2024                                
Basic and diluted   $ (0.49 )   $ (0.18 )   $ (0.43 )   $ (0.15 )
Book value per share                                
As of December 31, 2023   $ 3.37     $ 1.13     $ 2.15     $ 0.78  
As of June 30, 2024   $ 2.72     $ 0.79     $ 1.74     $ 0.63  

 

(i) The Forza unaudited pro forma equivalent data was calculated by multiplying the pro forma condensed combined results by the estimated Exchange Ratio of 64/36

 

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MARKET PRICE AND DIVIDEND INFORMATION

 

Twin Vee Common Stock is traded on the Nasdaq Capital Market under the symbol “VEEE”. As of October 4, 2024, Twin Vee had 313 holders of record of Twin Vee Common Stock.

 

Forza Common Stock is traded on the Nasdaq Capital Market under the symbol “FRZA”. As of October 4, 2024, Forza had 3 holders of record of Forza Common Stock.

 

Market Value of Securities

 

On August 9, 2024, the last trading day before the public announcement of the signing of the Merger Agreement, the last sale prices per share of Twin Vee Common Stock on Nasdaq and Forza Common Stock on Nasdaq were $0.49 and $0.30, respectively. On October 7, 2024, , the closing prices per share of Twin Vee Common Stock on Nasdaq and Forza Common Stock on Nasdaq were $0.5814 and $0.2848, respectively. Forza and Twin Vee stockholders are encouraged to obtain current market quotations for Twin Vee Common Stock and Forza Common Stock and to review carefully the other information contained, or incorporated by reference, in this Joint Proxy Statement/Prospectus. See “Additional Information for Stockholders—Where You Can Find More Information,” of this Joint Proxy Statement/Prospectus. Following the Merger, Twin Vee Common Stock will continue to be listed on Nasdaq, and there will be no further market for Forza Common Stock.

 

Dividend Policy

 

Twin Vee has never declared or paid any cash dividends on Twin Vee Common Stock. Twin Vee currently intends to retain future earnings, if any, to finance the expansion of its business. As a result, Twin Vee does not anticipate paying any cash dividends in the foreseeable future.

 

 Forza has never declared or paid any cash dividends on Forza Common Stock.

 

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RISK FACTORS

 

In addition to the other information included in and incorporated by reference into this Joint Proxy Statement/Prospectus including as discussed under the section entitled “Risk Factors” below , Forza’s stockholders should consider carefully the matters described below in determining whether to approve the Merger, and the transactions contemplated thereby, and Twin Vee’s stockholders should consider carefully the matters described below in determining whether to approve the issuance of Twin Vee Common Stock to Forza stockholders pursuant to the Merger Agreement.

 

RISKS RELATED TO THE MERGER

 

All of Forza’s executive officers and most of its directors have conflicts of interest that may influence them to support or approve the merger without regard to your interests.

 

All of the Twin Vee and Forza officers will be employed by the combined company and several of each of their directors will continue to serve on the Board of Directors of the combined company following the consummation of the Merger. In addition, all of the Twin Vee and Forza officers and most of their directors have a direct or indirect financial interest in both Forza and Twin Vee. These interests, among others, may influence such executive officers and directors of Twin Vee and Forza to support or approve the Merger. For a more information concerning the interests of Forza’s executive officers and directors, see the sections entitled “The Merger—Interests of Forza’s Directors and Executive Officers in the Merger” in this Joint Proxy Statement/Prospectus.

 

The Exchange Ratio is not adjustable based on the market price of Twin Vee Common Stock so the Merger consideration at the closing may have a greater or lesser value than it had at the time the Merger Agreement was signed.

 

The parties to the Merger Agreement have set the Exchange Ratio for the Forza Common Stock and the Exchange Ratio is not adjustable. Any changes in the market price of Twin Vee Common Stock or Forza Common Stock will not affect the number of shares holders of Forza Common Stock will be entitled to receive upon consummation of the Merger. Therefore, if the market price of Twin Vee Common Stock declines from the market price on the date of the Merger Agreement prior to the consummation of the Merger, Forza stockholders could receive Merger consideration with considerably less value. Similarly, if the market price of Twin Vee Common Stock increases from the market price on the date of the Merger Agreement prior to the consummation of the Merger, Forza stockholders could receive Merger consideration with considerably more value than their shares of Forza Common Stock and the Twin Vee stockholders immediately prior to the Merger will not be compensated for the increased market value of the Twin Vee Common Stock. If the market price of Forza Common Stock declines from the market price on the date of the Merger Agreement prior to the consummation of the Merger, Forza stockholders could receive Merger consideration with considerably more value. Similarly, if the market price of Forza Common Stock increases from the market price on the date of the Merger Agreement prior to the consummation of the Merger, Forza stockholders could receive Merger consideration with considerably less value than their shares of Forza Common Stock and the Forza stockholders immediately prior to the Merger will not be compensated for the increased market value of the Forza Common Stock. The Merger Agreement does not include a price-based termination right. Because the Exchange Ratio does not adjust as a result of changes in the value of Twin Vee Common Stock.

 

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

 

In general, either Twin Vee or Forza can refuse to complete the Merger if there is a material adverse change affecting the other party between August 12, 2024, the date of the Merger Agreement, and the closing. However, certain types of changes do not permit either party to refuse to complete the Merger, even if such change could be said to have a material adverse effect on Twin Vee or Forza, including:

 

  general business or economic conditions affecting the industries in which Twin Vee or Forza operate;

 

  acts of war, armed hostilities or terrorism;

 

  changes in financial, banking or securities markets;

 

  the taking of any action required to be taken by the Merger Agreement;

 

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  with respect either party, the announcement or pendency of the Merger Agreement or any related transactions; or

 

  with respect to either party, any change in their or the other party’s stock price or trading volume stock.

 

If adverse changes occur and Twin Vee and Forza still complete the Merger, the combined company stock price may suffer. This in turn may reduce the value of the Merger to the stockholders of Twin Vee and Forza.

 

The combined company’s stock price is expected to be volatile, and the market price of its common stock may drop following the Merger.

 

The market price of the combined company’s common stock could be subject to significant fluctuations following the Merger especially when the shareholder base is increased. Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of the combined company’s common stock.

 

In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm the combined company’s profitability and reputation.

 

The market price of the combined company’s common stock may decline as a result of the Merger.

 

The market price of the combined company’s common stock may decline as a result of the Merger if the combined company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by Twin Vee or Forza or investors, financial or industry analysts.

 

The combined company may not experience the anticipated strategic benefits of the Merger.

 

The respective managements of Twin Vee and Forza believe that the Merger would provide certain strategic benefits that may not be realized by each of the companies operating as standalones. Specifically, Twin Vee believes the Merger would enable the combined companies to take advantage of approximately $700,000 in annual cost savings  . There can be no assurance that these anticipated benefits of the Merger will materialize or that if they materialize will result in increased stockholder value or revenue stream to the combined company.

 

 Twin Vee and Forza stockholders may not realize a benefit from the Merger commensurate with the ownership dilution they will experience in connection with the Merger.

 

If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the Merger, Twin Vee and Forza securityholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the Merger.

 

If the conditions to the Merger are not met, the Merger will not occur.

 

Even if the Merger is approved by the stockholders of Twin Vee and Forza, specified conditions must be satisfied or waived in order to complete the Merger, including, among others:

 

  the filing and effectiveness of a registration statement under the Securities Act in connection with the issuance of Twin Vee Common Stock in the Merger;

 

  the respective representations and warranties of Twin Vee and Forza, shall be true and correct in all material respects as of the date of the Merger Agreement and the closing;

 

  no material adverse effect with respect to Twin Vee or Forza or its subsidiaries shall have occurred since the date of the Merger Agreement and the closing of the Merger;

 

  performance or compliance in all material respects by Twin Vee and Forza with their respective covenants and obligations in the Merger Agreement;

 

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  Forza and Twin Vee shall have obtained any consents and waivers of approvals required in connection with the Merger, including for Twin Vee approval of its stockholders of the issuance of the Twin Vee Common Stock pursuant to the terms of the Merger Agreement and for Forza approval of its stockholders of the Merger and the Merger Agreement; and

 

  no material adverse effect with respect to Twin Vee or Forza or its subsidiaries shall have occurred since the date of the Merger Agreement.

 

These and other conditions are described in detail in the Merger Agreement, a copy of which is attached as Annex A to this Joint Proxy Statement/Prospectus. Twin Vee and Forza cannot assure you that all of the conditions to the Merger will be satisfied. If the conditions to the Merger are not satisfied or waived, the Merger will not occur or will be delayed, and Twin Vee and Forza each may lose some or all of the intended benefits of the Merger.

 

Twin Vee and Forza will incur substantial expenses whether or not the Merger is completed.

 

Twin Vee and Forza will incur substantial expenses related to the Merger whether or not the Merger is completed. Twin Vee currently expects to incur approximately $400,000 in transactional expenses and Forza currently expects to incur approximately $100,000 in transactional expenses. See the section entitled “The Merger—The Merger Agreement—Termination”.

 

Twin Vee will assume all of Forza’s outstanding liabilities if the Merger is completed.

 

By operation of law, Twin Vee will assume all of Forza’s outstanding liabilities if the Merger is completed. As of June 30, 2024, Forza had $658,643 of total liabilities, of which $585,243 were total current liabilities.

 

During the pendency of the Merger, Twin Vee and Forza may not be able to enter into a business combination with another party at a favorable price because of restrictions in the Merger Agreement, which could adversely affect their respective businesses.

 

Covenants in the Merger Agreement impede the ability of Twin Vee and Forza to make acquisitions, subject to certain exceptions relating to fiduciary duties, or complete other transactions that are not in the ordinary course of business pending the closing of the merger. As a result, if the Merger is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination outside the ordinary course of business, with any third-party, subject to certain exceptions. Any such transactions could be favorable to such party’s stockholders.

 

Certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

 

The terms of the Merger Agreement prohibit each of Twin Vee and Forza from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in certain circumstances where the Twin Vee Board of Directors or Forza Board of Directors, as applicable, determines in good faith, after consultation with its financial advisor and outside legal counsel, that an unsolicited alternative takeover proposal constitutes or is reasonably likely to result in a superior takeover proposal and that failure to take such action would be reasonably likely to result in a breach of the fiduciary duties of the Forza Board of Directors.

 

The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Merger.

 

The pro forma financial statements contained in this Joint Proxy Statement/Prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the Merger for several reasons. For example, the pro forma financial statements have been derived from the historical financial statements of Twin Vee and Forza and certain adjustments and assumptions have been made regarding the combined company after giving effect to the Merger. The information upon which these adjustments and assumptions have been made is preliminary, and such adjustments and assumptions are difficult to make with complete accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Merger. For example, the impact of any incremental costs incurred in integrating the two companies is not reflected in the pro forma financial statements. As a result, the actual financial condition and results of operations of the combined company following the Merger may not be consistent with, or evident from, these pro forma financial statements.

 

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In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the Merger. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company. See the section entitled “The Merger—Selected Historical Financial Data—Unaudited Pro Forma Condensed Combined Consolidated Financial Information”.

 

Although InteleK’s opinion was given to the Forza Board of Directors on August 9, it does not reflect any changes in market and economic circumstances after August 9, 2024.

 

To the extent there may have been any changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 9, 2024, which could make Twin Vee or Forza’s value now greater or less than its value as of August 9, 2024 (the date of the analysis conducted by InteleK), any such developments will have no effect whatsoever on InteleK’s opinion or the Exchange Ratio, which was been fixed under the Merger Agreement. InteleK’s opinion was based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to them on August 9, 2024. While neither the Forza Board of Directors nor Twin Vee Board of Directors is aware of any changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 9, 2024, which could make Twin Vee or Forza’s value greater or less than its value as of August 9, 2024 (the date of the Merger Agreement and the analysis conducted by InteleK), or lead to the conclusion that the consideration to be received in the Merger by Forza’s shareholders is not fair to Forza or Twin Vee, there can be no assurance given that changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 9, 2024, could make Twin Vee or Forza’s value, on the effective date of the Merger greater or less than its value as of August 9, 2024. InteleK has undertaken no obligation to update its opinion delivered to Forza for changes subsequent to August 9, 2024. For a description of the opinion that the Forza Board of Directors received from InteleK and a summary of the material financial analyses it provided to the Forza Board of Directors in connection with rendering such opinion, please refer to the section entitled “The Merger Transaction—Opinion of the Financial Advisor to the Forza Board of Directors”.

 

 Although Houlihan’s opinion was given to the Twin Vee Board of Directors on August 6, 2024, it does not reflect any changes in market and economic circumstances after August 6, 2024.

 

To the extent there may have been any changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 6, 2024, which could make Twin Vee or Forza’s value now greater or less than its value as of August 6, 2024 (the date of the Merger Agreement and of the analysis conducted by Houlihan), any such developments will have no effect whatsoever on Houlihan’s opinion or the Exchange Ratio, which was been fixed under the Merger Agreement Houlihan’s opinion was based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to them on August 6, 2024. While neither the Forza Board of Directors nor Twin Vee Board of Directors is aware of any changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 6, 2024, which could make Twin Vee or Forza’s value greater or less than its value as of August 6, 2024 (the date of the analysis conducted by Houlihan), or lead to the conclusion that the consideration to be received in the Merger by Forza’s shareholders is not fair to Forza or Twin Vee, there can be no assurance given that changes in the operations and prospects of Twin Vee or Forza and/or changes in general market and economic conditions subsequent to August 6, 2024, could make Twin Vee or Forza’s value, on the effective date of the Merger greater or less than its value as of August 6, 2024. Houlihan has undertaken no obligation to update its opinion delivered to Twin Vee for changes subsequent to August 6, 2024. For a description of the opinion that the Twin Vee Board of Directors received from Houlihan and a summary of the material financial analyses it provided to the Twin Vee Board of Directors in connection with rendering such opinion, please refer to the section entitled “The Merger Transaction— Opinion of the Financial Advisor to the Twin Vee Board of Directors”.

 

The Merger and related transactions are subject to approval by the stockholders of both Twin Vee and Forza.

 

In order for the Merger to be completed, under applicable Nasdaq rules Twin Vee’s stockholders must approve the issuance of the shares of Twin Vee Common Stock pursuant to the terms of the Merger Agreement, which requires the affirmative vote of the holders of at least a majority of the Twin Vee Common Stock present in person or by proxy at the Twin Vee Annual Meeting and entitled to vote. Forza’s stockholders must also approve the Merger and the Merger Agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of Forza Common Stock entitled to vote and a majority of the Forza Common Stock present in person or by proxy at the Forza Annual Meeting excluding Twin Vee.

 

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Twin Vee’s business and stock price may be adversely affected if the acquisition of Forza is not completed.

 

Twin Vee’s acquisition of Forza is subject to several customary conditions, including the effectiveness of this Joint Proxy Statement/Prospectus and the approvals of the transaction by the stockholders of Forza and Twin Vee.

 

If Twin Vee’s acquisition of Forza is not completed, Twin Vee could be subject to a number of risks that may adversely affect Twin Vee’s business and stock price, including:

 

the current market price of shares of Twin Vee Common Stock reflects a market assumption that the acquisition will be completed;

 

Twin Vee must pay costs related to the Merger; and

 

Twin Vee would not realize the benefits it expects from acquiring Forza.

 

If Twin Vee’s acquisition of Forza is not completed, Forza could be subject to a number of risks that may adversely affect Twin Vee’s business and stock price, including:

 

the current market price of shares of Forza Common Stock reflects a market assumption that the acquisition will be completed;

 

Forza must pay costs related to the Merger;

 

Forza Common Stock is no longer listed on the Nasdaq; and

 

Forza would not realize the benefits it expects from being acquired by Twin Vee.

  

Should the Merger not qualify as a tax-free reorganization, Forza stockholders may recognize capital gain or loss with respect to the shares of Twin vee common stock received in the Merger.

 

The Merger is expected to be treated as a reorganization within the meaning of Section 368 of the Code, however, neither Twin Vee nor Forza has received an Internal Revenue Services ruling to that effect. The failure of the Merger to qualify as a reorganization within the meaning of Section 368 of the Code would result in a Forza stockholder recognizing capital gain or loss with respect to the shares of Forza Common Stock surrendered for Twin Vee Common Stock received in the Merger.

 

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RISKS RELATED TO TWIN VEE

  

Risks Related to Twin Vee’s Business

 

There is limited public information on Twin Vee’s operating history.

 

Twin Vee’s limited public operating history makes evaluating Twin Vee’s business and prospects difficult. Although Twin Vee was formed in 2003, Twin Vee did not provide public reports on the results of operations until Twin Vee’s 2020 fiscal year. Twin Vee only has a few years of audited financial statements. Any investment decision will not be made with the same data as would be available as if Twin Vee had a longer history of public reporting.

 

Twin Vee have incurred losses for the six months ended June 30, 2024 and the year ended December 31, 2023, and could continue to incur losses in the future.

 

For the year ended December 31, 2023, Twin Vee incurred a loss from operations of $11,987,299 and a net loss of $9,782,196. For the six months ended June 30, 2024, Twin Vee incurred a loss from operations of $6,854,390 and a net loss of $5,137,294. As of June 30, 2024, Twin Vee had an accumulated deficit of approximately $18,975,713. There can be no assurance that expenses will not continue to increase in future periods or that the cash generated from operations in future periods will be sufficient to satisfy Twin Vee’s operating needs and to generate income from operations and net income.

 

Twin Vee’s ability to meet Twin Vee’s manufacturing workforce needs is crucial to Twin Vee’s results of operations and future sales and profitability.

 

Twin Vee relies on the existence of an available hourly workforce to manufacture Twin Vee’s products. In addition, Forza relies upon engineers that are specialist in electric engineering. Twin Vee cannot assure you that Twin Vee or Twin Vee’s subsidiaries, will be able to attract and retain qualified employees to meet current or future manufacturing needs at a reasonable cost, or at all. For instance, the demand for skilled employees has increased recently with the low unemployment rates in Florida where Twin Vee have manufacturing facilities and in North Carolina where Forza is building a manufacturing facility. Also, although none of Twin Vee’s employees are currently covered by collective bargaining agreements, Twin Vee cannot assure you that Twin Vee’s employees will not elect to be represented by labor unions in the future. Additionally, competition for qualified employees could require us to pay higher wages to attract a sufficient number of employees. Significant increases in manufacturing workforce costs could materially adversely affect Twin Vee’s business, financial condition or results of operations. Forza intends to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for its electric boats and powertrains. Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and Forza may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm Forza’s business and prospects.

 

Twin Vee has a large, fixed cost base that will affect Twin Vee’s profitability if Twin Vee’s sales decrease.

 

The fixed cost levels of operating a powerboat manufacturer can put pressure on profit margins when sales and production decline. Twin Vee’s profitability depends, in part, on Twin Vee’s ability to spread fixed costs over a sufficiently large number of products sold and shipped, and if Twin Vee makes a decision to reduce Twin Vee’s rate of production, gross or net margins could be negatively affected. Consequently, decreased demand or the need to reduce production can lower Twin Vee’s ability to absorb fixed costs and materially impact Twin Vee’s financial condition or results of operations.

 

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Interest rates and energy prices affect product sales.

 

Twin Vee’s gas-powered products are often financed by Twin Vee’s dealers and retail powerboat consumers, Twin Vee envisions this continuing as Twin Vee expands Twin Vee’s operations and grows Twin Vee’s network of distributors. This may not occur if interest rates meaningfully rise because higher rates increase the borrowing costs and, accordingly, the cost of doing business for dealers and the cost of powerboat purchases for consumers. Higher energy costs result in increases in operating expenses at Twin Vee’s manufacturing facility and in the expense of shipping products to Twin Vee’s dealers. In addition, inflation and increases in energy costs may adversely affect the pricing and availability of petroleum-based raw materials, such as resins and foams that are used in Twin Vee’s products. Also, higher fuel prices may have an adverse effect on demand for Twin Vee’s gas-powered boats, as they increase the cost of ownership and operation and the pries at which Twin Vee sells the boats. Therefore, higher interest rates and fuel costs can adversely affect consumers’ decisions relating to recreational powerboating purchases.

 

The capacity of the manufacturing facility that Twin Vee and Forza utilize will not be sufficient to support Twin Vee’s future growth and business plans.

 

Twin Vee is currently operating close to full capacity at Twin Vee’s current manufacturing facility in Fort Pierce. Forza had planned to manufacture electric boats at a new state of the art carbon neutral factory that to be built in McDowell County, North Carolina. However, those plans have been curtailed in light of Forza’s recent decision to discontinue its operations. Until Twin Vee is able to expand Twin Vee’s manufacturing capacity, Twin Vee will continue to use Twin Vee’s current manufacturing facility, which has a limited capacity and may not be able to satisfy Twin Vee’s manufacturing needs. Any facility that Twin Vee builds will require a significant capital investment and is expected to take at least one to two years to build and become fully operational. .

  

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

 

Twin Vee’s 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. The circumstances relating to the COVID-19 pandemic, the Russian invasion of Ukraine, the war in the Middle East, as well as other global conditions, have caused significant shortages in the supply chain. Twin Vee is continuously evaluating alternative and secondary source suppliers in order to ensure that Twin Vee is able to source sufficient materials.

 

The uncertain financial markets, disruptions in supply chains, mobility restraints, and changing priorities as well as volatile asset values could impact Twin Vee’s 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 as medical services 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 Twin Vee’s business and operations are uncertain. In addition, the outbreak of a pandemic could disrupt Twin Vee’s 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 Twin Vee’s office or laboratory facilities, or due to quarantines. Pandemics could also impact members of Twin Vee’s 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 Twin Vee’s affairs.

 

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Further, due to increasing inflation, operating costs for many businesses including ours have increased and, in the future, could impact demand or pricing manufacturing of Twin Vee’s boats or employee wages. Inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation may result in increases in Twin Vee’s operating costs (including Twin Vee’s labor costs), reduced liquidity and limits on Twin Vee’s 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.

 

Twin Vee is actively monitoring the effects these disruptions and increasing inflation could have on Twin Vee’s operations.

 

These conditions make it extremely difficult for Twin Vee to accurately forecast and plan future business activities.

 

Twin Vee’s annual and quarterly financial results are subject to significant fluctuations depending on various factors, many of which are beyond Twin Vee’s control.

 

Twin Vee’s sales and operating results can vary significantly from quarter to quarter and year to year depending on various factors, many of which are beyond Twin Vee’s control. These factors include, but are not limited to:

 

  Seasonal consumer demand for Twin Vee’s products;
  Discretionary spending habits;
  Changes in pricing in, or the availability of supply in, the powerboat market;
  Failure to maintain a premium brand image;
  Disruption in the operation of Twin Vee’s manufacturing facilities;
  Variations in the timing and volume of Twin Vee’s sales;
  The timing of Twin Vee’s expenditures in anticipation of future sales;
  Sales promotions by us and Twin Vee’s competitors;
  Changes in competitive and economic conditions generally;
  Consumer preferences and competition for consumers’ leisure time;
  Impact of unfavorable weather conditions;
  Changes in the cost or availability of Twin Vee’s labor; and
  Increased fuel prices.

 

Due to these and other factors, Twin Vee’s results of operations may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand for Twin Vee’s products. Twin Vee anticipates that fluctuations in operating results will continue in the future.

 

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Unfavorable weather conditions may have a material adverse effect on Twin Vee’s business, financial condition, and results of operations, especially during the peak boating season.

 

Adverse weather conditions in any year in any particular geographic region may adversely affect sales in that region, especially during the peak boating season. Sales of Twin Vee’s products are generally stronger just before and during spring and summer, which represent the peak boating months, and favorable weather during these months generally has a positive effect on consumer demand. Conversely, unseasonably cool weather, excessive rainfall, reduced rainfall levels, or drought conditions during these periods may close area boating locations or render boating dangerous or inconvenient, thereby generally reducing consumer demand for Twin Vee’s products. Twin Vee’s annual results would be materially and adversely affected if Twin Vee’s net sales were to fall below expected seasonal levels during these periods. Twin Vee may also experience more pronounced seasonal fluctuation in net sales in the future as Twin Vee expands Twin Vee’s businesses. There can be no assurance that weather conditions will not have a material effect on the sales of any of Twin Vee’s products.

 

 

A natural disaster, the effects of climate change, or other disruptions at Twin Vee’s manufacturing facility could adversely affect Twin Vee’s business, financial condition, and results of operations.

 

Twin Vee relies on the continuous operation of Twin Vee’s only manufacturing facility in Stuart, Florida for the production of Twin Vee’s products. Any natural disaster or other serious disruption to Twin Vee’s facility due to fire, flood, earthquake, or any other unforeseen circumstance would adversely affect Twin Vee’s business, financial condition, and results of operations. Changes in climate could adversely affect Twin Vee’s operations by limiting or increasing the costs associated with equipment or fuel supplies. In addition, adverse weather conditions, such as increased frequency and/or severity of storms, or floods could impair Twin Vee’s ability to operate by damaging Twin Vee’s facilities and equipment or restricting product delivery to customers. The occurrence of any disruption at Twin Vee’s manufacturing facility, even for a short period of time, may have an adverse effect on Twin Vee’s productivity and profitability, during and after the period of the disruption. These disruptions may also cause personal injury and loss of life, severe damage to or destruction of property and equipment, and environmental damage. Although Twin Vee maintain property, casualty, and business interruption insurance of the types and in the amounts that Twin Vee believes are customary for the industry, Twin Vee is not fully insured against all potential natural disasters or other disruptions to Twin Vee’s manufacturing facility.

 

If Twin Vee fails to manage its manufacturing levels while still addressing the seasonal retail pattern for Twin Vee’s products, Twin Vee’s business and margins may suffer.

 

The seasonality of retail demand for Twin Vee’s products, together with Twin Vee’s goal of balancing production throughout the year, requires Twin Vee to manage Twin Vee’s manufacturing and allocate Twin Vee’s gas-powered products to Twin Vee’s dealer network to address anticipated retail demand. Twin Vee’s dealers must manage seasonal changes in consumer demand and inventory. If Twin Vee’s dealers reduce their inventories in response to weakness in retail demand, Twin Vee could be required to reduce Twin Vee’s production, resulting in lower rates of absorption of fixed costs in Twin Vee’s manufacturing and, therefore, lower margins. As a result, Twin Vee must balance the economies of level production with the seasonal retail sales pattern experienced by Twin Vee’s dealers. Failure to adjust manufacturing levels adequately may have a material adverse effect on Twin Vee’s financial condition and results of operations.

 

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Twin Vee depends on Twin Vee’s network of independent dealers for Twin Vee’s gas-powered boats, face increasing competition for dealers, and has little control over their activities.

 

A significant portion of Twin Vee’s sales of Twin Vee’s gas-powered boats are derived from Twin Vee’s network of independent dealers. Twin Vee typically manufactures Twin Vee’s gas-powered boats based upon indications of interest received from dealers who are not contractually obligated to purchase any boats. While Twin Vee’s dealers typically have purchased all of the boats for which they have provided Twin Vee with indications of interest, it is possible that a dealer could choose not to purchase boats for which it has provided an indication of interest (e.g., if it were to have reached the credit limit on its floor plan), and as a result Twin Vee once experienced, and in the future could experience, excess inventory and costs. For the six months ended June 30, 2024, three individual dealers represented over 10% of Twin Vee’s total sales, or 38% in total. For the six months ended June 30, 2023, one individual dealer represented over 10% of Twin Vee’s sales, and that dealer represented 20% of total sales. The loss of a significant dealer could have a material adverse effect on Twin Vee’s financial condition and results of operations. The number of dealers supporting Twin Vee’s products and the quality of their marketing and servicing efforts are essential to Twin Vee’s ability to generate sales. Competition for dealers among other boat manufacturers continues to increase based on the quality, price, value, and availability of the manufacturers’ products, the manufacturers’ attention to customer service, and the marketing support that the manufacturer provides to the dealers. Twin Vee faces intense competition from other boat manufacturers in attracting and retaining dealers, affecting Twin Vee’s ability to attract or retain relationships with qualified and successful dealers. Although Twin Vee’s management believes that the quality of Twin Vee’s products in the performance sport boat industry should permit it to maintain Twin Vee’s relationships with Twin Vee’s dealers and Twin Vee’s market share position, there can be no assurance that Twin Vee will be able to maintain or improve Twin Vee’s relationships with Twin Vee’s dealers or Twin Vee’s market share position. In addition, independent dealers in the boating industry have experienced significant consolidation in recent years, which could result in the loss of one or more of Twin Vee’s dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. A substantial deterioration in the number of dealers or the quality of Twin Vee’s network of dealers would have a material adverse effect on Twin Vee’s business, financial condition, and results of operations.

 

 

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

 

A few dealers have in the past, and may in the future, account for a significant portion of Twin Vee’s revenues in any one year or over a period of several consecutive years. For the six months ended June 30, 2024, three individual dealers represented over 10% of the Company’s total sales, that dealer representing 38% of total sales. The loss of business from a significant dealer could have a material adverse effect on Twin Vee’s business, financial condition, results of operations and cash flows.

 

Twin Vee’s success depends, in part, upon the financial health of Twin Vee’s dealers and their continued access to financing.

 

Because Twin Vee sells nearly all of Twin Vee’s gas-powered products through dealers, their financial health is critical to Twin Vee’s success. Twin Vee’s business, financial condition, and results of operations may be adversely affected if the financial health of the dealers that sell Twin Vee’s products suffers. Their financial health may suffer for a variety of reasons, including a downturn in general economic conditions, rising interest rates, higher rents, increased labor costs and taxes, compliance with regulations, and personal financial issues.

 

In addition, Twin Vee’s dealers require adequate liquidity to finance their operations, including purchases of Twin Vee’s products. Dealers are subject to numerous risks and uncertainties that could unfavorably affect their liquidity positions, including, among other things, continued access to adequate financing sources on a timely basis on reasonable terms. These sources of financing are vital to Twin Vee’s ability to sell products through Twin Vee’s distribution network. Access to financing generally facilitates Twin Vee’s dealers’ ability to purchase boats from us, and their financed purchases reduce Twin Vee’s working capital requirements. If financing were not available to Twin Vee’s dealers, Twin Vee’s sales and Twin Vee’s working capital levels would be adversely affected.

 

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Twin Vee may be required to repurchase inventory of certain dealers.

 

Many of Twin Vee’s dealers have floor plan financing arrangements with third-party finance companies that enable the dealers to purchase Twin Vee’s products. In connection with these agreements, Twin Vee may have an obligation to repurchase Twin Vee’s products from a finance company under certain circumstances, and Twin Vee may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to us to satisfy any repurchase obligation. This obligation is triggered if a dealer defaults on its debt obligations to a finance company, the finance company repossesses the boat, and the boat is returned to Twin Vee. Twin Vee’s obligation to repurchase a repossessed boat for the unpaid balance of Twin Vee’s original invoice price for the boat is subject to reduction or limitation based on the age and condition of the boat at the time of repurchase, and in certain cases by an aggregate cap on repurchase obligations associated with a particular floor plan financing program. To date, Twin Vee has not been obligated to repurchase any boats under Twin Vee’s dealers’ floor plan financing arrangements, and Twin Vee is not aware of any applicable laws regulating dealer relations which govern Twin Vee’s relations with the dealers or would require us to repurchase any boats. However, there is no assurance that a dealer will not default on the terms of a credit line in the future. In addition, applicable laws regulating dealer relations may also require Twin Vee to repurchase Twin Vee’s products from Twin Vee’s dealers under certain circumstances, and Twin Vee may not have any control over the timing or amount of any repurchase obligation nor have access to capital on terms acceptable to Twin Vee to satisfy any repurchase obligation. If Twin Vee were obligated to repurchase a significant number of units under any repurchase agreement or under applicable dealer laws, Twin Vee’s business, operating results and financial condition could be adversely affected.

 

Twin Vee rely on third-party suppliers in the manufacturing of Twin Vee’s boats.

 

Twin Vee depends on third-party suppliers to provide components and raw materials essential to the construction of Twin Vee’s boats. During the year ended December 31, 2023, Twin Vee purchased all engines for its boats under supplier agreements with three vendors. During the year ended December 31, 2022, Twin Vee purchased all engines for its boats under supplier agreements with one vendor. During the six months ended June 30, 2024, Twin Vee purchased all engines and certain composite materials for its boats under supplier agreements with five vendors. During the six months ended June 30, 2023, Twin Vee purchased all engines for its boats under supplier agreements with two vendors While Twin Vee believe that Twin Vee’s relationships with Twin Vee’s current suppliers are sufficient to provide the materials necessary to meet present production demand, Twin Vee cannot assure investors that these relationships will continue or that the quantity or quality of materials available from these suppliers will be sufficient to meet Twin Vee’s future needs, irrespective of whether Twin Vee successfully implements Twin Vee’s growth strategy. Twin Vee expects that Twin Vee’s need for raw materials and supplies will increase. Twin Vee’s suppliers must be prepared to ramp up operations and, in many cases, hire additional workers and/or expand capacity in order to fulfill the orders placed by Twin Vee and other customers. Operational and financial difficulties that Twin Vee’s suppliers may face in the future could adversely affect their ability to supply Twin Vee with the parts and components Twin Vee needs, which could significantly disrupt Twin Vee’s operations.

 

 

Termination or interruption of informal supply arrangements could have a material adverse effect on Twin Vee’s business or results of operations.

 

Although Twin Vee has long-term relationships with many of Twin Vee’s suppliers, Twin Vee does not have any formal agreements with any suppliers for the purchase of parts needed and Twin Vee’s purchases are made on a purchase order basis. Twin Vee has no binding commitment from Twin Vee’s suppliers to supply any specified quantity of materials needed within any specified time period. In the event that Twin Vee’s suppliers receive a large number of orders from other customers, there is a possibility that they will not be able to support Twin Vee’s needs. If any of Twin Vee’s current suppliers were to be unable to provide needed products to Twin Vee, there can be no assurance that alternate supply arrangements will be made on satisfactory terms. If Twin Vee needs to enter into supply arrangements on unsatisfactory terms, or if there are any delays to Twin Vee’s supply arrangements, it could adversely affect Twin Vee’s business and operating results.

 

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Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on Twin Vee’s results of operations.

 

Twin Vee provides a hull warranty for structural damage of up to ten years for its gas-powered boats. In addition, Twin Vee provides a three-year limited fiberglass small parts warranty on all or some small fiberglass parts and components such as consoles. Gelcoat is covered up to one year. Additionally, fiberglass lids, plastic lids, electrical panels, bilge pumps, aerator pumps or other electrical devices (excluding stereos, depth finders, radar, chart plotters except for installation if installed by us.), steering systems, electrical panels, and pumps are covered under a one-year basic limited systems warranty. Some materials, components or parts of the boat that are not covered by Twin Vee’s limited product warranties are separately warranted by their manufacturers or suppliers. These other warranties include warranties covering engines purchased from suppliers and other components.

 

Twin Vee’s standard warranties require Twin Vee or Twin Vee’s dealers to repair or replace defective products during such warranty periods at no cost to the consumer. Although Twin Vee employs quality control procedures, sometimes a product is distributed that needs repair or replacement. The repair and replacement costs Twin Vee could incur in connection with a recall could adversely affect its business. In addition, product recalls could harm Twin Vee’s reputation and cause Twin Vee to lose customers, particularly if recalls cause consumers to question the safety or reliability of its products.

 

The nature of Twin Vee’s business exposes us to workers’ compensation claims and other workplace liabilities.

 

Certain materials Twin Vee uses require Twin Vee’s employees to handle potentially hazardous or toxic substances. While Twin Vee’s employees who handle these and other potentially hazardous or toxic materials receive specialized training and wear protective clothing, there is still a risk that they, or others, may be exposed to these substances. Exposure to these substances could result in significant injury to Twin Vee’s employees and damage to Twin Vee’s property or the property of others, including natural resource damage. Twin Vee’s personnel are also at risk for other workplace-related injuries, including slips and falls. Twin Vee may in the future be subject to fines, penalties, and other liabilities in connection with any such injury or damage. Although Twin Vee currently maintains what Twin Vee believes to be suitable and adequate insurance in excess of Twin Vee’s self-insured amounts, Twin Vee may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection against potential liabilities.

 

If Twin Vee is unable to comply with environmental and other regulatory requirements, Twin Vee’s business may be exposed to material liability and/or fines.

 

Twin Vee’s operations are subject to extensive and frequently changing federal, state, local, and foreign laws and regulations, including those concerning product safety, environmental protection, and occupational health and safety. Some of these laws and regulations require Twin Vee to obtain permits and limit Twin Vee’s ability to discharge hazardous materials into the environment. If Twin Vee fails to comply with these requirements, Twin Vee may be subject to civil or criminal enforcement actions that could result in the assessment of fines and penalties, obligations to conduct remedial or corrective actions, or, in extreme circumstances, revocation of Twin Vee’s permits or injunctions preventing some or all of Twin Vee’s operations. In addition, the components of Twin Vee’s boats must meet certain regulatory standards, including stringent air emission standards for boat engines. Failure to meet these standards could result in an inability to sell Twin Vee’s boats in key markets, which would adversely affect Twin Vee’s business. Moreover, compliance with these regulatory requirements could increase the cost of Twin Vee’s products, which in turn, may reduce consumer demand.

 

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While Twin Vee believes that Twin Vee is in material compliance with applicable federal, state, local, and foreign regulatory requirements, and holds all licenses and permits required thereunder, Twin Vee cannot assure you that Twin Vee will, at all times, be able to continue to comply with applicable regulatory requirements. Compliance with increasingly stringent regulatory and permit requirements may, in the future, cause Twin Vee to incur substantial capital costs and increase Twin Vee’s cost of operations, or may limit Twin Vee’s operations, all of which could have a material adverse effect on Twin Vee’s business or financial condition.

 

As with most boat construction businesses, Twin Vee’s manufacturing processes involve the use, handling, storage, and contracting for recycling or disposal of hazardous substances and wastes. The failure to manage or dispose of such hazardous substances and wastes properly could expose Twin Vee to material liability or fines, including liability for personal injury or property damage due to exposure to hazardous substances, damages to natural resources, or for the investigation and remediation of environmental conditions. Under environmental laws, Twin Vee may be liable for remediation of contamination at sites where Twin Vee’s hazardous wastes have been disposed or at Twin Vee’s current facility, regardless of whether Twin Vee’s facility is owned or leased or whether the environmental conditions were created by us, a prior owner or tenant, or third-party. While Twin Vee does not believe that Twin Vee is presently subject to any such liabilities, Twin Vee cannot assure investors that environmental conditions relating to Twin Vee’s prior, existing, or future sites or operations or those of predecessor companies will not have a material adverse effect on Twin Vee’s business or financial condition.

 

Twin Vee’s industry is characterized by intense competition, which affects Twin Vee’s sales and profits.

 

The performance sport boat category and the powerboat industry as a whole are highly competitive for consumers and dealers. Twin Vee also competes against consumer demand for used boats. Competition affects Twin Vee’s ability to succeed in both the markets Twin Vee currently serves and new markets that Twin Vee may enter in the future. Competition is based primarily on brand name, price, product selection, and product performance. Twin Vee competes with several large manufacturers that may have greater financial, marketing, and other resources than Twin Vee does and who are represented by dealers in the markets in which Twin Vee now operates and into which Twin Vee plans to expand. Twin Vee also competes with a variety of small, independent manufacturers. Twin Vee cannot assure investors that Twin Vee will not face greater competition from existing large or small manufacturers or that Twin Vee will be able to compete successfully with new competitors. Twin Vee’s failure to compete effectively with Twin Vee’s current and future competitors would adversely affect Twin Vee’s business, financial condition, and results of operations. Twin Vee also competes with other manufacturers for employees.

 

Twin Vee faces increasing competition for dealers and have little control over their activities.

 

Twin Vee faces intense competition from other performance sport boat manufacturers in attracting and retaining dealers and customers, affecting Twin Vee’s ability to attract or retain relationships with qualified and successful dealers and consumers looking to purchase boats. Although Twin Vee’s management believes that the quality of Twin Vee’s products in the boat industry should permit Twin Vee to maintain Twin Vee’s relationships with Twin Vee’s dealers and Twin Vee’s market share position, there can be no assurance that Twin Vee will be able to maintain or improve Twin Vee’s relationships with Twin Vee’s dealers or Twin Vee’s market share position. In addition, independent dealers in the boating industry have experienced significant consolidation in recent years, which could result in the loss of one or more of Twin Vee’s dealers in the future if the surviving entity in any such consolidation purchases similar products from a competitor. A substantial deterioration in the number of dealers or quality of Twin Vee’s network of dealers would have a material adverse effect on Twin Vee’s business, financial condition, and results of operations.

 

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Twin Vee’s sales may be adversely impacted by increased consumer preference for other leisure activities or used boats or the supply of new boats by competitors in excess of demand.

 

Twin Vee’s boats are not necessities and in times of economic hardship, consumers may cease purchasing non-essential items. Demand for Twin Vee’s boats may be adversely affected by competition from other activities that occupy consumers’ leisure time and by changes in consumer lifestyle, usage pattern or taste. Similarly, an overall decrease in consumer leisure time may reduce consumers’ willingness to purchase and enjoy Twin Vee’s boats.

 

 

During the economic downturn that commenced in 2008, there was a shift in consumer demand toward purchasing more used boats, primarily because prices for used boats are typically lower than retail prices for new boats. If this were to occur again, it could have the effect of reducing demand among retail purchasers for Twin Vee’s new boats. Also, while Twin Vee has balanced production volumes for Twin Vee’s boats to meet demand, Twin Vee’s competitors could choose to reduce the price of their products, which could have the effect of reducing demand for Twin Vee’s new boats. Reduced demand for new boats could lead to reduced sales by Twin Vee, which could adversely affect Twin Vee’s business, results of operations, and financial condition.

 

Twin Vee’s sales and profitability depend, in part, on the successful introduction of new products.

 

Market acceptance of Twin Vee’s products depends on Twin Vee’s technological innovation and Twin Vee’s ability to implement technology in Twin Vee’s boats. Twin Vee’s sales and profitability may be adversely affected by difficulties or delays in product development, such as an inability to develop viable or innovative new products. Twin Vee’s failure to introduce new technologies and product offerings that consumers desire could adversely affect Twin Vee’s business, financial condition, and results of operations. If Twin Vee fails to introduce new features or those Twin Vee introduces fail to gain market acceptance, Twin Vee’s bottom line may suffer.

 

In addition, some of Twin Vee’s direct competitors and indirect competitors may have significantly more resources to develop and patent new technologies. It is possible that Twin Vee’s competitors will develop and patent equivalent or superior technologies and other products that compete with ours. They may assert these patents against us and Twin Vee may be required to license these patents on unfavorable terms or cease using the technology covered by these patents, either of which would harm Twin Vee’s competitive position and may materially adversely affect Twin Vee’s business.

 

Twin Vee also cannot be certain that Twin Vee’s products or features have not infringed or will not infringe the proprietary rights of others. Any such infringement could cause third parties, including Twin Vee’s competitors, to bring claims against us, resulting in significant costs and potential damages.

 

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Twin Vee’s success depends upon the continued strength of Twin Vee’s brand, the value of Twin Vee’s brand, and sales of Twin Vee’s products could be diminished if Twin Vee, the consumers who use Twin Vee’s products, or the sports and activities in which Twin Vee’s products are used are associated with negative publicity.

 

Twin Vee believes that Twin Vee’s brand is a significant contributor to the success of Twin Vee’s business and that maintaining and enhancing Twin Vee’s brand is important to expanding Twin Vee’s consumer and dealer base. Failure to continue to protect Twin Vee’s brand may adversely affect Twin Vee’s business, financial condition, and results of operations. Twin Vee expects that Twin Vee’s ability to develop, maintain and strengthen the Twin Vee, AquaSport and Forza brands will also depend heavily on the success of Twin Vee’s marketing efforts. To further promote Twin Vee’s brands and Forza’s brand, Twin Vee and Forza may be required to change Twin Vee’s marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print. Many of Twin Vee’s current and potential competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than Twin Vee do. If Twin Vee does not develop and maintain strong brands, Twin Vee’s business, prospects, financial condition and operating results will be materially and adversely impacted.

 

Negative publicity, including that resulting from severe injuries or death occurring in the sports and activities in which Twin Vee’s products are used, could negatively affect Twin Vee’s reputation and result in restrictions, recalls, or bans on the use of Twin Vee’s products. If the popularity of the sports and activities for which Twin Vee design, manufacture, and sell products were to decrease as a result of these risks or any negative publicity, sales of Twin Vee’s products could decrease, which could have an adverse effect on Twin Vee’s net sales, profitability, and operating results. In addition, if Twin Vee becomes exposed to additional claims and litigation relating to the use of Twin Vee’s products, Twin Vee’s reputation may be adversely affected by such claims, whether or not successful, including by generating potential negative publicity about Twin Vee’s products, which could adversely impact Twin Vee’s business and financial condition.

 

 

Twin Vee may not be able to execute Twin Vee’s manufacturing strategy successfully, which could cause the profitability of Twin Vee’s products to suffer.

 

Twin Vee’s manufacturing strategy is designed to improve product quality and increase productivity, while reducing costs and increasing flexibility to respond to ongoing changes in the marketplace. To implement this strategy, Twin Vee must be successful in Twin Vee’s continuous improvement efforts, which depend on the involvement of management, production employees, and suppliers. Any inability to achieve these objectives could adversely impact the profitability of Twin Vee’s products and Twin Vee’s ability to deliver desirable products to Twin Vee’s consumers.

 

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Twin Vee will rely on complex machinery for Twin Vee’s operations, and production involves a significant degree of risk and uncertainty in terms of operational performance, safety, security, and costs.

 

Twin Vee expects to rely heavily on complex machinery for Twin Vee’s operations and Twin Vee’s production will involve a significant degree of uncertainty and risk in terms of operational performance, safety, security, and costs. Twin Vee’s manufacturing plant consists of large-scale machinery combining many components. The manufacturing plant components are likely to suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of the manufacturing plant components may significantly affect operational efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of Twin Vee’s control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, pandemics, fire, seismic activity, and natural disasters. Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, products, supplies, tools and materials, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs, and potential legal liabilities, all which could have a material adverse effect on Twin Vee’s business, prospects, financial condition, results of operations, and cash flows. Although Twin Vee generally carries insurance to cover such operational risks, Twin Vee cannot be certain that Twin Vee’s insurance coverage will be sufficient to cover potential costs and liabilities arising therefrom. A loss that is uninsured or exceeds policy limits may require Twin Vee to pay substantial amounts, which could adversely affect Twin Vee’s business, prospects, financial condition, results of operations, and cash flows.

 

Twin Vee may need to raise additional capital that may be required to grow Twin Vee’s business, and Twin Vee may not be able to raise capital on terms acceptable to us or at all.

 

Operating Twin Vee’s business and maintaining Twin Vee’s growth efforts will require significant cash outlays and advance capital expenditures and commitments. Although the proceeds of Twin Vee’s initial public offering and follow on offering should be sufficient to fund Twin Vee’s operations, if cash on hand and cash generated from operations and from Twin Vee’s initial public offering and follow on offering are not sufficient to meet Twin Vee’s cash requirements, Twin Vee will need to seek additional capital, potentially through debt or equity financings, to fund Twin Vee’s growth. Twin Vee cannot assure investors that Twin Vee will be able to raise needed cash on terms acceptable to Twin Vee or at all. Financings may be on terms that are dilutive or potentially dilutive to Twin Vee’s stockholders, and the prices at which new investors would be willing to purchase Twin Vee’s securities may be lower than the price per share of Twin Vee’s Common Stock in Twin Vee’s public offerings. 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, Twin Vee will be required to modify Twin Vee’s growth and operating plans based on available funding, if any, which would harm Twin Vee’s ability to grow Twin Vee’s business.

 

If Twin Vee fails to manage future growth effectively, Twin Vee may not be able to market or sell Twin Vee’s products successfully.

 

Any failure to manage Twin Vee’s growth effectively could materially and adversely affect Twin Vee’s business, prospects, operating results and financial condition. Twin Vee plans to expand Twin Vee’s operations in the near future. Twin Vee’s future operating results depend to a large extent on Twin Vee’s ability to manage this expansion and growth successfully. Risks that Twin Vee faces in undertaking this expansion include:

 

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  training new personnel;
     
  forecasting production and revenue;
     
  expanding Twin Vee’s marketing efforts, including the marketing of a new powertrain that Twin Vee intends to develop;
     
  controlling expenses and investments in anticipation of expanded operations;
     
  establishing or expanding design, manufacturing, sales and service facilities;
     
  implementing and enhancing administrative infrastructure, systems and processes; and
     
  addressing new markets.

 

Twin Vee intends to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for Twin Vee’s electric boats and powertrains. Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and Twin Vee may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm Twin Vee’s business and prospects

 

Twin Vee depends upon Twin Vee’s executive officers and Twin Vee may not be able to retain them and their knowledge of Twin Vee’s business and technical expertise would be difficult to replace.

 

Twin Vee’s future success will depend in significant part upon the continued service of Twin Vee’s Chief Executive Officer and other executive officers. Twin Vee cannot assure investors that Twin Vee will be able to continue to attract or retain such persons. Twin Vee does not have an insurance policy on the life of Twin Vee’s chief executive officer, and Twin Vee does not have “key person” life insurance policies for any of Twin Vee’s other officers or advisors. The loss of the technical knowledge and management and industry expertise of any of Twin Vee’s key personnel could result in delays in product development, loss of customers and sales and diversion of management resources, which could adversely affect Twin Vee’s operating results.

  

Certain of Twin Vee’s shareholders have sufficient voting power to make corporate governance decisions that could have a significant influence on us and the other stockholders.

 

Twin Vee’s Chief Executive Officer beneficially owns 29.38% of Twin Vee’s Common Stock. As a result, Twin Vee’s Chief Executive Officer does and will have significant influence over Twin Vee’s 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 Twin Vee’s control and might affect the market price of Twin Vee’s 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 Twin Vee’s interests or the interests of other stockholders. Accordingly, Twin Vee’s Chief Executive Officer could cause Twin Vee to enter into transactions or agreements that Twin Vee would not otherwise consider.

 

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Twin Vee may attempt to grow Twin Vee’s business through acquisitions or strategic alliances and new partnerships, which Twin Vee may not be successful in completing or integrating.

 

Twin Vee may in the future enter into acquisitions and strategic alliances that will enable it to acquire complementary skills and capabilities, offer new products, expand Twin Vee’s consumer base, enter new product categories or geographic markets, and obtain other competitive advantages. Twin Vee cannot assure investors, however, that Twin Vee will identify acquisition candidates or strategic partners that are suitable to Twin Vee’s business, obtain financing on satisfactory terms, complete acquisitions or strategic alliances, or successfully integrate acquired operations into Twin Vee’s existing operations. Once integrated, acquired operations may not achieve anticipated levels of sales or profitability, or otherwise perform as expected. Acquisitions also involve special risks, including risks associated with unanticipated challenges, liabilities and contingencies, and diversion of management attention and resources from Twin Vee’s existing operations. Similarly, Twin Vee’s partnership with leading franchises from other industries to market Twin Vee’s products or with third-party technology providers to introduce new technology to the market may not achieve anticipated levels of consumer enthusiasm and acceptance, or achieve anticipated levels of sales or profitability, or otherwise perform as expected.

 

 

Twin Vee relies on network and information systems and other technologies for Twin Vee’s business activities and certain events, such as computer hackings, viruses or other destructive or disruptive software or activities may disrupt Twin Vee’s operations, which could have a material adverse effect on Twin Vee’s business, financial condition and results of operations.

 

Network and information systems and other technologies are important to Twin Vee’s business activities and operations. Network and information systems-related events, such as computer hackings, cyber threats, security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious or other activities could result in a disruption of Twin Vee’s services and operations or improper disclosure of personal data or confidential information, which could damage Twin Vee’s reputation and require us to expend resources to remedy any such breaches. Moreover, the amount and scope of insurance Twin Vee maintains against losses resulting from any such events or security breaches may not be sufficient to cover Twin Vee’s losses or otherwise adequately compensate us for any disruptions to Twin Vee’s businesses that may result, and the occurrence of any such events or security breaches could have a material adverse effect on Twin Vee’s business and results of operations. The risk of these systems-related events and security breaches occurring has intensified, in part because Twin Vee maintains certain information necessary to conduct Twin Vee’s businesses in digital form stored on cloud servers. While Twin Vee develops and maintains systems seeking to prevent systems-related events and security breaches from occurring, the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Despite these efforts, there can be no assurance that disruptions and security breaches will not occur in the future. Moreover, Twin Vee may provide certain confidential, proprietary and personal information to third parties in connection with Twin Vee’s businesses, and while Twin Vee obtains assurances that these third parties will protect this information, there is a risk that this information may be compromised.

 

Maintaining the secrecy of confidential, proprietary, or trade secret information is important to Twin Vee’s competitive business position. While Twin Vee has taken steps to protect such information and invested in information technology, there can be no assurance that Twin Vee’s efforts will prevent service interruptions or security breaches in Twin Vee’s systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could adversely affect Twin Vee’s business operations or result in the loss, dissemination, or misuse of critical or sensitive information. A cyber-attack or other significant disruption involving Twin Vee’s information technology systems, or those of Twin Vee’s vendors, suppliers and other partners, could also result in disruptions in critical systems, corruption or loss of data and theft of data, funds or intellectual property. A breach of Twin Vee’s security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other reason, could enable others to produce competing products, use Twin Vee’s proprietary technology or information, or adversely affect Twin Vee’s business or financial condition. Twin Vee may be unable to prevent outages or security breaches in Twin Vee’s systems. Twin Vee remains potentially vulnerable to additional known or yet unknown threats as, in some instances, Twin Vee, Twin Vee’s suppliers and Twin Vee’s other partners may be unaware of an incident or its magnitude and effects. Twin Vee also faces the risk that Twin Vee exposes Twin Vee’s vendors or partners to cybersecurity attacks. Any or all of the foregoing could adversely affect Twin Vee’s results of operations and Twin Vee’s business reputation.

 

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Likewise, data privacy breaches by employees or others with permitted access to Twin Vee’s systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. While Twin Vee has invested in protection of data and information technology, there can be no assurance that Twin Vee’s efforts will prevent breakdowns or breaches in Twin Vee’s systems that could adversely affect Twin Vee’s business. The occurrence of any of such network or information systems-related events or security breaches could have a material adverse effect on Twin Vee’s business, financial condition and results of operations.

 

Twin Vee’s business and operations would suffer in the event of computer system failures.

 

Despite the implementation of security measures, Twin Vee’s internal computer systems, and those of third parties on which Twin Vee rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the internet, attachments to emails, persons inside Twin Vee’s organization, or persons with access to systems inside Twin Vee’s organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusions, including by computer hackers, foreign governments, and cyber-terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in Twin Vee’s operations, it could result in a material disruption of Twin Vee’s current or future product development programs. For example, the loss of any customer data could impact Twin Vee’s ability to retain customers or attract new customers. To the extent that any disruption or security breach was to result in a loss of or damage to Twin Vee’s data or applications, or inappropriate disclosure of confidential or proprietary information, Twin Vee could incur material legal claims and liability, damage to Twin Vee’s reputation, and the further development of Twin Vee’s product candidates could be delayed.

 

 

Twin Vee is increasingly dependent on information technology, and Twin Vee’s systems and infrastructure face certain risks, including cybersecurity and data leakage risks.

 

Significant disruptions to Twin Vee’s information technology systems or breaches of information security could adversely affect Twin Vee’s business. In the ordinary course of business, Twin Vee collects, stores and transmits confidential information, and it is critical that Twin Vee do so in a secure manner to maintain the confidentiality and integrity of such confidential information. The size and complexity of Twin Vee’s information technology systems, and those of Twin Vee’s third-party vendors with whom Twin Vee contract, make such systems potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by Twin Vee’s employees, partners or vendors, from attacks by malicious third parties, or from intentional or accidental physical damage to Twin Vee’s systems infrastructure maintained by us or by third parties. Maintaining the secrecy of this confidential, proprietary, or trade secret information is important to Twin Vee’s competitive business position. While Twin Vee have taken steps to protect such information and invested in information technology, there can be no assurance that Twin Vee’s efforts will prevent service interruptions or security breaches in Twin Vee’s systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could adversely affect Twin Vee’s business operations or result in the loss, dissemination, or misuse of critical or sensitive information. A breach of Twin Vee’s security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information, or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other reason, could enable others to produce competing products, use Twin Vee’s proprietary technology or information, or adversely affect Twin Vee’s business or financial condition. Further, any such interruption, security breach, loss or disclosure of confidential information, could result in financial, legal, business, and reputational harm to Twin Vee and could have a material adverse effect on Twin Vee’s business, financial position, results of operations or cash flow.

  

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Uninsured losses could result in payment of substantial damages, which would decrease Twin Vee’s cash reserves and could harm Twin Vee’s cash flow and financial condition.

 

In the ordinary course of business, Twin Vee may be subject to losses resulting from product liability, accidents, acts of God and other claims against us, for which Twin Vee may have no insurance coverage. While Twin Vee currently carries commercial general liability, commercial boat liability, excess liability, product liability, cybersecurity, crime, special crime, drone, cargo stock throughput, builder’s risk, owner controlled insurance program, property, owners protective, workers’ compensation, employment practices, employed lawyers, production, fiduciary liability and directors’ and officers’ insurance policies, Twin Vee may not maintain as much insurance coverage as other original equipment manufacturers do, and in some cases, Twin Vee may not maintain any at all. Additionally, the policies that Twin Vee have may include significant deductibles, and Twin Vee cannot be certain that Twin Vee’s insurance coverage will be sufficient to cover all or any future claims against us. A loss that is uninsured or exceeds policy limits may require Twin Vee to pay substantial amounts, which could adversely affect Twin Vee’s financial condition and results of operations. Further, insurance coverage may not continue to be available to Twin Vee or, if available, may be at a significantly higher cost, especially if insurance providers perceive any increase in Twin Vee’s risk profile in the future.

 

Intellectual Property Risks

 

Forza’s patent applications may not issue as patents, which may have a material adverse effect on its ability to prevent others from commercially exploiting products similar to its products.

  

Forza cannot be certain that it is the first inventor of the subject matter to which it has filed a particular patent application, or that it is the first party to file such a patent application. If another party has filed a patent application for the same subject matter as it has, it may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, Twin Vee cannot be certain that the patent applications that Forza files will issue, or that Twin Vee’s issued patents will afford protection against competitors with similar technology. In addition, its competitors may design around Forza’s issued patents, which may adversely affect its and Twin Vee’s business, prospects, financial condition, results of operations, and cash flows.

 

 

Twin Vee and Forza may not be able to prevent others from unauthorized use of Twin Vee’s intellectual property, which could harm Twin Vee’s business and competitive position.

 

Twin Vee and Forza may not be able to prevent others from unauthorized use of Twin Vee’s intellectual property, which could harm Twin Vee’s and Forza’s business and competitive position. Twin Vee and Forza rely on a combination of patent, trade secret (including those in Twin Vee’s know-how), and other intellectual property laws, as well as employee and third-party nondisclosure agreements, intellectual property licenses, and other contractual rights to establish and protect rights in Twin Vee’s technology and intellectual property. Twin Vee’s and Forza’s patent or trademark applications may not be granted, any patents or trademark registrations that may be issued to us may not sufficiently protect Twin Vee’s and Forza’s intellectual property and any of Twin Vee’s or Forza’s issued patents, trademark registrations or other intellectual property rights may be challenged by third parties. Any of these scenarios may result in limitations in the scope of Twin Vee’s or Forza’s intellectual property or restrictions on Twin Vee’s or Forza’s use of Twin Vee’s intellectual property or may adversely affect the conduct of Twin Vee’s or Forza’s business. Despite Twin Vee’s or Forza’s efforts to protect Twin Vee’s or Forza’s intellectual property rights, third parties may attempt to copy or otherwise obtain and use Twin Vee’s or Forza’s intellectual property or seek court declarations that they do not infringe upon Twin Vee’s or Forza’s intellectual property rights. Monitoring unauthorized use of Twin Vee’s or Forza’s intellectual property is difficult and costly, and the steps Twin Vee and Forza have taken or will take to prevent misappropriation may not be successful. From time to time, Twin Vee and Forza may have to resort to litigation to enforce Twin Vee’s intellectual property rights, which could result in substantial costs and diversion of Twin Vee’s resources.

 

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Patent, trademark, and trade secret laws vary significantly throughout the world. A number of foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Therefore, Twin Vee’s and Forza’s intellectual property rights may not be as strong or as easily enforced outside of the United States. Failure to adequately protect Twin Vee’s and Forza’s intellectual property rights could result in competitors offering similar products, potentially resulting in the loss of some of competitive advantage and a decrease in Twin Vee’s and Forza’s revenue which would adversely affect Twin Vee’s business, prospects, financial condition, results of operations, and cash flows.

 

If Forza’s patents expire or are not maintained, Forza’s patent applications are not granted or patent rights are contested, circumvented, invalidated or limited in scope, Forza may not be able to prevent others from selling, developing or exploiting competing technologies or products, which could have a material adverse effect on its and Twin Vee’s business, prospects, financial condition, results of operations, and cash flows.

 

Forza cannot assure that its pending applications will issue as patents. Even if its patent applications issue into patents, these patents may be contested, circumvented or invalidated in the future. In addition, the rights granted under any issued patents may not provide us with adequate protection or competitive advantages. The claims under any patents that issue from Forza’s patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to Forza’s technology. The intellectual property rights of others could also bar Forza from licensing and exploiting any patents that issue from Forza’s pending applications. Numerous patents and pending patent applications owned by others exist in the fields in which Forza has developed and are developing its technology. Many of these existing patents and patent applications might have priority over its patent applications and could subject its patents to invalidation or its patent applications to rejection. Finally, in addition to patents and patent applications that were filed before its patents and patent applications, any of its existing or future patents may also be challenged by others on the basis that they are invalid or unenforceable.

  

Twin Vee and Forza may in the future become, subject to claims that Twin Vee or Twin Vee’s employees have wrongfully used or disclosed alleged trade secrets of Twin Vee’s or Forza’s employees’ former employers.

 

Many of Twin Vee’s and Forza’s employees were previously employed by other companies with similar or related technology, products or services. Twin Vee and Forza are, and may in the future become, subject to claims that Twin Vee, they or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers. Litigation may be necessary to defend against these claims. If Twin Vee or Forza fail to defend such claims, Twin Vee or they may be forced to pay monetary damages or be enjoined from using certain technology, products, services or knowledge. Even if Twin Vee or they are successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

 

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Twin Vee’s and Forza’s use of open-source software in their applications could subject their proprietary software to general release, adversely affect their ability to sell their and Forza’s services and subject us to possible litigation, claims or proceedings.

 

Twin Vee plans and Forza had planned to use open-source software in connection with the development and deployment of Twin Vee’s and Forza’s products and services. Companies that use open-source software in connection with their products have, from time to time, faced claims challenging the use of open-source software and/or compliance with open-source license terms. As a result, Twin Vee or Forza could be subject to suits by parties claiming ownership of what are believed to be open-source software or claiming noncompliance with open- source licensing terms. Some open-source software licenses may require users who distribute proprietary software containing or linked to open- source software to publicly disclose all or part of the source code to such proprietary software and/or make available any derivative works of the open-source code under the same open- source license, which could include proprietary source code. In such cases, the open- source software license may also restrict us or Forza from charging fees to licensees for their use of Twin Vee’s or Forza’s software. While Twin Vee and Forza will monitor the use of open-source software and try to ensure that open-source software is not used in a manner that would subject Twin Vee’s or Forza’s proprietary source code to these requirements and restrictions, such use could inadvertently occur, in part because open-source license terms are often ambiguous and have generally not been interpreted by U.S. or foreign courts.

 

Further, in addition to risks related to license requirements, use of certain open-source software carries greater technical and legal risks than does the use of third-party commercial software. For example, open-source software is generally provided as-is without any support or warranties or other contractual protections regarding infringement or the quality of the code, including the existence of security vulnerabilities. To the extent that Twin Vee’s or Forza’s platformer the platform of Twin Vee’s subsidiaries depends upon the successful operation of open-source software, any undetected errors or defects in open-source software that Twin Vee or Forza use could prevent the deployment or impair the functionality of Twin Vee’s systems and injure Twin Vee’s reputation. In addition, the public availability of such software may make it easier for attackers to target and compromise Twin Vee’s or Forza’s platform through cyber-attacks. Any of the foregoing risks could materially and adversely affect Twin Vee’s and Forza’s business, prospects, financial condition, results of operations, and cash flows.

 

A significant portion of Twin Vee’s and Forza’s intellectual property is not protected through patents or formal copyright registration. As a result, neither Twin Vee nor Forza have the full benefit of patent or copyright laws to prevent others from replicating Twin Vee’s or Forza’s products, product candidates and brands.

 

Twin Vee has not protected Twin Vee’s intellectual property rights with respect to Twin Vee’s gas-powered boats through patents or formal copyright registration, and Twin Vee does not currently have any patent applications pending. There can be no assurance that any patent will issue or if issued that the patent will protect Twin Vee’s intellectual property. As a result, Twin Vee may not be able to protect Twin Vee’s intellectual property and trade secrets or prevent others from independently developing substantially equivalent proprietary information and techniques or from otherwise gaining access to Twin Vee’s intellectual property or trade secrets. In such an instance, Twin Vee’s competitors could produce products that are nearly identical to ours or Forza’s resulting in us selling less products or generating less revenue from Twin Vee’s or Forza’s sales.

 

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Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

 

Twin Vee and Forza rely on trade secrets, know-how and technology, which are not protected by patents, to protect the intellectual property behind Twin Vee’s boats and the intellectual property behind Forza’s electric powertrain and for the construction of its boats. Twin Vee and Forza have recently begun to use confidentiality agreements with Twin Vee’s and its collaborators, employees, consultants, outside collaborators and other advisors to protect its proprietary technology and processes. Twin Vee and Forza intend to use such agreements in the future, but these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases Twin Vee and Forza could not assert any trade secret rights against such party. Costly and time-consuming litigation could be necessary to enforce and determine the scope of Twin Vee’s proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect Twin Vee’s or Forza’s competitive business position.

 

 

Twin Vee and Forza may need to defend themselves against patent, copyright or trademark infringement claims, which may be time-consuming and would cause us and Forza to incur substantial costs.

 

The status of the protection of Twin Vee’s and Forza’s intellectual property is unsettled as Twin Vee and Forza do not have any issued patents, registered trademarks or registered copyrights for most of Twin Vee’s and Forza’s intellectual property and other than three design, five utility and two full non-provisional patent applications, neither Twin Vee nor Forza have applied for the same. Companies, organizations or individuals, including Twin Vee’s competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with Twin Vee’s or Forza’s ability to make, use, develop, sell or market Twin Vee’s powerboats and electric powertrains or use third-party components, which could make it more difficult for us or Forza to operate. From time to time, Twin Vee or Forza may receive communications from third parties that allege Twin Vee’s or Forza’s products or components thereof are covered by their patents or trademarks or other intellectual property rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights. If Twin Vee or Forza are determined to have infringed upon a third party’s intellectual property rights, Twin Vee or Forza may be required to do one or more of the following:

 

  cease making, using, selling or offering to sell processes, goods or services that incorporate or use the third-party intellectual property;
     
  pay substantial damages;
     
  seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;
     
  redesign Twin Vee’s boats or other goods or services to avoid infringing the third-party intellectual property;
     
  establish and maintain alternative branding for Twin Vee’s products and services; or
     
  find-third providers of any part or service that is the subject of the intellectual property claim.

 

In the event of a successful claim of infringement against Twin Vee or Forza and Twin Vee’s or Forza’s failure or inability to obtain a license to the infringed technology or other intellectual property right, Twin Vee’s business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

 

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Risks Related to the Boating Industry

 

Demand in the powerboat industry is highly volatile.

 

Volatility of demand in the powerboat industry, especially for recreational powerboats and electric powerboats, may materially and adversely affect Twin Vee’s business, prospects, operating results and financial condition. The markets in which Twin Vee will be competing have been subject to considerable volatility in demand in recent periods. Demand for recreational powerboat and electric powerboat sales depends to a large extent on general, economic and social conditions in a given market. Historically, sales of recreational powerboats decrease during economic downturns. Twin Vee has fewer financial resources than more established powerboat manufacturers to withstand adverse changes in the market and disruptions in demand.

 

General economic conditions, particularly in the U.S., affect Twin Vee’s industry, demand for Twin Vee’s products and Twin Vee’s business, and results of operations.

 

Demand for premium boat brands has been significantly influenced by weak economic conditions, low consumer confidence, high unemployment, and increased market volatility worldwide, especially in the U.S. In times of economic uncertainty and contraction, consumers tend to have less discretionary income and tend to defer or avoid expenditures for discretionary items, such as Twin Vee’s products. Sales of Twin Vee’s products are highly sensitive to personal discretionary spending levels. Twin Vee’s business is cyclical in nature and its success is impacted by economic conditions, the overall level of consumer confidence and discretionary income levels. Any substantial deterioration in general economic conditions that diminishes consumer confidence or discretionary income may reduce Twin Vee’s sales and materially adversely affect Twin Vee’s business, financial condition and results of operations. Twin Vee cannot predict the duration or strength of an economic recovery, either in the U.S. or in the specific markets where Twin Vee sell Twin Vee’s products. Corporate restructurings, layoffs, declines in the value of investments and residential real estate, higher gas prices, higher interest rates, and increases in federal and state taxation may each materially adversely affect Twin Vee’s business, financial condition, and results of operations.

 

Consumers often finance purchases of Twin Vee’s products. Although consumer credit markets have improved, consumer credit market conditions continue to influence demand, especially for boats, and may continue to do so. There continue to be fewer lenders, tighter underwriting and loan approval criteria, and greater down payment requirements than in the past. If credit conditions worsen, and adversely affect the ability of consumers to finance potential purchases at acceptable terms and interest rates, it could result in a decrease in the sales of Twin Vee’s products.

 

Global economic conditions could materially adversely impact demand for Twin Vee’s products and services.

 

Twin Vee’s operations and performance depend significantly on economic conditions. Global financial conditions continue to be subject to volatility arising from international geopolitical developments and global economic phenomenon, as well as general financial market turbulence, including a significant recent market reaction to the novel coronavirus (COVID-19), resulting in a significant reduction in many major market indices. Uncertainty about global economic conditions could result in material adverse effects on Twin Vee’s business, results of operations or financial condition. Access to public financing and credit can be negatively affected by the effect of these events on U.S. and global credit markets. The health of the global financing and credit markets may affect Twin Vee’s ability to obtain equity or debt financing in the future and the terms at which financing, or credit is available to us. These instances of volatility and market turmoil could adversely affect Twin Vee’s operations and the trading price of Twin Vee’s common shares resulting in:

 

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  customers postponing purchases of Twin Vee’s products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for Twin Vee’s products and services; and
     
  third-party suppliers being unable to produce parts and components for Twin Vee’s products in the same quantity or on the same timeline or being unable to deliver such parts and components as quickly as before or subject to price fluctuations, which could have a material adverse effect on Twin Vee’s production or the cost of such production.

 

Risks Relating to Ownership of Twin Vee’s Common Stock

 

Terms of subsequent financings may adversely impact your investment.

 

Twin Vee may have to engage in common equity, debt, or preferred stock financing in the future. Investors rights and the value of their investment in Twin Vee’s securities could be reduced. Interest on debt securities could increase costs and negatively impacts operating results. Preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock could be more advantageous to those investors than to the holders of Twin Vee Common Stock. In addition, if Twin Vee needs to raise more equity capital from the sale of Twin Vee Common Stock , institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of prior investors investment. Twin Vee Common Stock which Twin Vee sells could be sold into any market which develops, which could adversely affect the market price.

  

If securities analysts do not publish research or reports about Twin Vee’s company, or if they issue unfavorable commentary about Twin Vee or Twin Vee’s industry or downgrade Twin Vee’s Common Stock, the price of Twin Vee’s Common Stock could decline.

 

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

 

The obligations associated with being a public company will require significant resources and management attention, which may divert from Twin Vee’s business operations.

 

As a result of Twin Vee’s initial public offering, Twin Vee is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that Twin Vee file annual, quarterly, and current reports with respect to Twin Vee’s business and financial condition. The Sarbanes-Oxley Act requires, among other things, that Twin Vee establish and maintain effective internal controls and procedures for financial reporting. As a result, Twin Vee has and will continue to incur significant legal, accounting, and other expenses that Twin Vee did not previously incur.

 

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Twin Vee has identified weaknesses in Twin Vee’s internal controls, and Twin Vee cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.

 

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

 

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

 

As of June 30, 2024, Twin Vee did not yet have effective disclosure controls and procedures, or internal controls over all aspects of Twin Vee’s financial reporting. Twin Vee is continuing to develop and refine Twin Vee’s disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that Twin Vee will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and in accordance with GAAP. Twin Vee’s management is responsible for establishing and maintaining adequate internal control over Twin Vee’s financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Twin Vee will be required to expend time and resources to further improve Twin Vee’s internal controls over financial reporting, including by expanding Twin Vee’s staff. However, Twin Vee cannot assure you that Twin Vee’s internal control over financial reporting, as modified, will enable us to identify or avoid material weaknesses in the future.

 

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

 

Twin Vee is in the process of hiring additional staff and providing them with the required training, Twin Vee continues to engage outside consultants with appropriate experience in GAAP presentation, especially of complex instruments, to devise and implement effective disclosure controls and procedures, or internal controls. Twin Vee will be required to spend time and resources hiring and engaging additional staff and outside consultants with the appropriate experience to remedy these weaknesses. Twin Vee cannot assure investors 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 Twin Vee’s business.

  

Twin Vee’s current controls and any new controls that Twin Vee develops may become inadequate because of changes in conditions in Twin Vee’s business, including increased complexity resulting from Twin Vee’s international expansion. Further, weaknesses in Twin Vee’s disclosure controls or Twin Vee’s 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 Twin Vee’s operating results or cause Twin Vee to fail to meet Twin Vee’s reporting obligations and may result in a restatement of Twin Vee’s 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 Twin Vee’s internal control over financial reporting that Twin Vee will eventually be required to include in Twin Vee’s 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 Twin Vee’s reported financial and other information, which would likely have a negative effect on the market price of Twin Vee’s common stock.

 

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Twin Vee’s independent registered public accounting firm is not required to audit the effectiveness of Twin Vee’s internal control over financial reporting until after Twin Vee are no longer an “emerging growth company” as defined in the JOBS Act. At such time, Twin Vee’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which Twin Vee’s 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 Twin Vee’s business and operating results and cause a decline in the market price of Twin Vee’s common stock.

 

Twin Vee’s failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act as a public company could have a material adverse effect on Twin Vee’s business and share price.