Twin Vee and Forza X1 announce definitive merger agreement

FORT PIERCE, FL - Twin Vee PowerCats Co. (NASDAQ:VEEE) and Forza X1, Inc. (NASDAQ:FRZA) have officially agreed to a merger, with Forza set to merge into a wholly owned subsidiary of Twin Vee. The all-stock transaction will see Forza shareholders, excluding Twin Vee, receive 0.61166627 Twin Vee shares for each Forza share they hold.

The merger, expected to close by year-end 2024, is subject to regulatory and shareholder approvals. The combined entity will continue under the Twin Vee PowerCats Co. name and retain its NASDAQ listing with the ticker symbol "VEEE."

This strategic move aims to leverage Twin Vee's 30-year history in high-quality offshore boat manufacturing and Forza's focus on electric boats. The merger is set to create a more competitive company with a strong balance sheet, featuring over $1.00 per share in cash, $2.00 per share in net assets, and no funded debt. This financial foundation will support future investments and growth.

Both companies expect to benefit from streamlined operations by reducing overhead costs and unifying management structures. The merger is seen as a logical next step following Twin Vee's drive for operational excellence, which includes factory expansion and vertical integration efforts.

Joseph Visconti, Chairman and CEO of Twin Vee, who also serves as Forza's Interim CEO, stated that they have assembled the right team to achieve their goals, with a focus on efficiency, cost reduction, and scaling their boat-building capabilities.

The transaction has received unanimous approval from the boards of directors of both companies, following recommendations from their respective special committees. This merger is seen as a significant milestone for Twin Vee and Forza X1, with the aim of driving long-term profitable growth and enhancing shareholder value.

The information in this article is based on a press release statement.

In other recent news, amid a slowdown in the marine EV market, Forza X1, Inc. has announced a strategic shift during its first quarter 2024 investor call. The company is undertaking measures to reduce cash burn and reassess its future direction, despite the challenging market conditions. Construction continues on its North Carolina facility due to prior financial commitments and potential shareholder value.

Forza X1 is slowing down testing and production, exploring strategic alternatives, and seeking joint ventures and collaborations to enhance market reach and product offerings. The company is also actively looking for strategic alternatives to maximize shareholder value with minimal financial risk.

Notably, Forza X1 has managed to reduce its burn rate from $600,000 per month to approximately $230,000, with a target to reach less than $150,000 as they exit Q2 of 2024. Despite the marine EV sector's slowdown, the company remains committed to adjusting its business strategy to ensure long-term growth and success.

InvestingPro Insights

As Forza X1, Inc. (NASDAQ:FRZA) prepares to merge into the Twin Vee PowerCats Co. (NASDAQ:VEEE) family, the financial metrics and market sentiment surrounding FRZA provide a snapshot of the company's current standing. According to real-time data from InvestingPro, Forza X1, Inc. holds a modest market capitalization of $4.73 million. Despite a challenging financial performance in the last twelve months leading up to Q1 2024, with a negative gross profit margin of -269.82% and an operating income margin of -15569.32%, the company has experienced a significant return over the last week, with a 17.42% increase in price total return.

InvestingPro Tips suggest that FRZA is trading at a low Price / Book multiple of 0.31, which can be an indicator of undervaluation relative to the company's assets. However, analysts have flagged several concerns, including the company's rapid cash burn and weak gross profit margins. Despite these challenges, analysts anticipate sales growth in the current year, and the company holds more cash than debt on its balance sheet, which may offer some financial flexibility post-merger. Additionally, Forza X1 is considered a niche player in its industry, which could be a strategic advantage as it integrates with Twin Vee's established operations.

For those interested in a deeper dive, there are 18 additional InvestingPro Tips available on Forza X1, Inc., which can be found at https://www.investing.com/pro/FRZA. These tips provide valuable insights into the company's valuation, performance, and industry positioning that could help investors make more informed decisions amidst the upcoming merger.

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