UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION OF TWIN VEE AND FORZA
Exhibit 99.1
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION OF TWIN VEE AND FORZA
On November 26, 2024, pursuant to the terms of the Agreement and Plan of Merger, dated as of August 12, 2024 (the “Merger Agreement”), by and between Twin Vee PowerCats Co., a Delaware corporation (the “Company” or “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”), Merger Sub was merged with and into Forza (the “Merger”), with Forza surviving the Merger as a wholly-owned subsidiary of Twin Vee.
The Merger became effective on November 26, 2024, when the certificate of merger with respect to the Merger was filed with the Secretary of State of the State of Delaware (the “Effective Time”). At the Effective Time, (a) each outstanding share of common stock of Forza , par value $0.001 per share of Forza (the “Forza Common Stock”) (other than any shares held by Twin Vee) was converted into the right to receive 0.611666275 shares (the “Exchange Ratio”) of Twin Vee common stock, par value $0.001 per share (the “Twin Vee Common Stock”), (b) each outstanding Forza stock option, whether vested or unvested, that had not previously been exercised prior to the Effective Time was converted into an option to purchase 0.611666275 shares of Twin Vee Common Stock for each share of Forza Common Stock covered by such option, (c) each outstanding warrant to purchase shares of Forza Common Stock was assumed by Twin Vee and converted into a warrant to purchase 0.611666275 shares of Twin Vee Common Stock for each share of Forza Common Stock for which such warrant was exercisable for prior to the Effective Time, and (d) the 7,000,000 shares of Forza Common Stock held by Twin Vee were cancelled.
The unaudited pro forma condensed combined financial statements are presented for informational purposes only. The unaudited pro forma condensed combined balance sheet as of September 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 September 30, 2024 and the year ended December 31, 2023 assume that the transaction took place as of January 1, 2023, and combines 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 following:
| ● | Twin Vee’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 included in its annual report on Form 10-K, for the year ended December 31, 2023, filed with the Commission on March 27, 2024. |
| ● | Twin Vee’s unaudited consolidated financial statements for the nine months ended September 30, 2024 and 2023, included in its quarterly report on Form 10-Q, for the quarter ending September 30, 2024, filed with the Commission on November 14, 2024. |
| ● | Forza’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 included in its annual report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 27, 2024. |
| ● | Forza’s unaudited consolidated financial statements for the nine months ended September 30, 2024 and 2023, included in its quarterly report on Form 10-Q, for the quarter ending September 30, 2024, filed with the Commission on November 14, 2024. |
| ● | The sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Twin Vee’s annual report, on Form 10-K, for the year ended December 31, 2023, and quarterly report, on Form 10-Q, for the quarter ended September 30, 2024, filed with the Commission on March 27, 2024 and November 14, 2024, respectively. |
| ● | The sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Forza’s annual report, on Form 10-K, for the year ended December 31, 2023, and quarterly report, on Form 10-Q, for the quarter ended September 30, 2024, filed with the Commission on March 27, 2024 and November 14, 2024, respectively. |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
| Twin Vee Powercats Co. Inc. September 30, 2024 | Forza X1, Inc. September 30, 2024 | Eliminations & Merger Adjustments | Twin Vee Powercats Co. Inc. Pro Forma September 30, 2024 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 11,144,929 | $ | 7,200,427 | $ | (7,200,427 | ) | A | $ | 11,144,929 | ||||||||||
| Restricted cash | 212,963 | — | — | 212,963 | ||||||||||||||||
| Accounts receivable | 129,544 | 125,000 | (125,000 | ) | 129,544 | |||||||||||||||
| Inventories, net | 3,343,468 | 60,645 | (60,645 | ) | A | 3,343,468 | ||||||||||||||
| Due to/from affiliated companies, net | — | 87,884 | (87,884 | ) | A | — | ||||||||||||||
| Prepaid expenses and other current assets | 548,077 | 80,095 | (80,095 | ) | A | 548,077 | ||||||||||||||
| Total current assets | 15,378,981 | 7,554,051 | (7,554,051 | ) | 15,378,981 | |||||||||||||||
| Property and equipment, net | 14,217,041 | 4,388,229 | (4,388,229 | ) | A | 14,217,041 | ||||||||||||||
| Operating lease right of use asset | 495,744 | 7,629 | (7,629 | ) | A | 495,744 | ||||||||||||||
| Security deposit | 48,710 | 7,517 | (7,517 | ) | A | 48,710 | ||||||||||||||
| Total Assets | $ | 30,140,476 | $ | 11,957,426 | $ | (11,957,426 | ) | $ | 30,140,476 | |||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||
| Accounts payable | $ | 1,957,902 | $ | 73,067 | $ | (73,067 | ) | A | $ | 1,957,902 | ||||||||||
| Accrued liabilities | 1,195,982 | 9,712 | (9,712 | ) | A | 1,195,982 | ||||||||||||||
| Contract liabilities – customer deposits | 38,175 | 6,175 | (6,175 | ) | A | 38,175 | ||||||||||||||
| Finance lease liability – current portion | 220,103 | 24,847 | (24,847 | ) | A | 220,103 | ||||||||||||||
| Operating lease right of use liability – current portion | 431,132 | — | — | A | 431,132 | |||||||||||||||
| Total current liabilities | 3,843,294 | 113,801 | (113,801 | ) | 3,843,294 | |||||||||||||||
| Economic Injury Disaster Loan | 499,900 | — | — | 499,900 | ||||||||||||||||
| Finance lease liability - noncurrent | 2,479,742 | 67,070 | (67,070 | ) | A | 2,479,742 | ||||||||||||||
| Operating lease liability - noncurrent | 109,329 | — | — | 109,329 | ||||||||||||||||
| Total Liabilities | 6,932,265 | 180,871 | (180,871 | ) | 6,932,265 | |||||||||||||||
| 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 | 38,871,551 | 26,697,988 | (20,885,125 | ) | B/C | 44,684,414 | ||||||||||||||
| Accumulated deficit | (21,491,078 | ) | (14,915,838 | ) | 14,915,838 | B | (21,491,078 | ) | ||||||||||||
| Equity attributed to stockholders of Twin Vee PowerCats Co, Inc. | 17,389,993 | 11,776,555 | (5,958,337 | ) | 23,208,211 | |||||||||||||||
| Equity attributable to noncontrolling interests | 5,818,218 | — | (5,818,218 | ) | B | — | ||||||||||||||
| Total stockholders’ equity | 23,208,211 | 11,776,555 | (11,776,555 | ) | 23,208,211 | |||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 30,140,476 | $ | 11,957,426 | $ | (11,957,426 | ) | $ | 30,140,476 | |||||||||||
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.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Twin Vee Powercats Co. Inc. Nine Months Ended September 30, 2024 | Forza X1, Inc. Nine Months Ended September 30, 2024 | Eliminations and Merger Adjustments | Twin Vee Powercats Co. Inc. Nine Months Ended September 30, 2024 Pro Forma | |||||||||||||
| Net sales | $ | 12,504,482 | $ | — | $ | — | $ | 12,504,482 | ||||||||
| Cost of products sold | 12,170,486 | 68,335 | (68,335 | ) | A | 12,170,486 | ||||||||||
| Gross profit (loss) | 333,996 | (68,335 | ) | 68,335 | 333,996 | |||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 2,214,670 | 737,269 | (1,308,175 | ) | A/B | 1,643,764 | ||||||||||
| Salaries and wages | 3,641,185 | 1,479,501 | (1,479,501 | ) | A | 3,641,185 | ||||||||||
| Professional fees | 1,111,079 | 391,971 | (593,191 | ) | A/B | 909,859 | ||||||||||
| Impairment of property & equipment | 1,674,000 | 1,674,000 | (1,674,000 | ) | A | 1,674,000 | ||||||||||
| Depreciation and amortization | 1,300,697 | 184,441 | (184,441 | ) | A | 1,300,697 | ||||||||||
| Research and development | 583,878 | 587,599 | (587,599 | ) | A | 583,878 | ||||||||||
| Total operating expenses | 10,525,509 | 5,054,781 | (5,826,907 | ) | 9,753,383 | |||||||||||
| Loss from operations | (10,191,513 | ) | (5,123,116 | ) | 5,895,242 | (9,419,387 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Dividend income | 447,571 | 276,862 | (276,862 | ) | A | 447,571 | ||||||||||
| Other income | 33,442 | — | — | 33,442 | ||||||||||||
| Interest expense | (178,922 | ) | (7,362 | ) | 7,362 | A | (178,922 | ) | ||||||||
| Interest income | 107,297 | 62,830 | (62,830 | ) | A | 107,297 | ||||||||||
| Unrealized gain(loss) on marketable securities | 5,204 | (16,930 | ) | 16,930 | A | 5,204 | ||||||||||
| Realized gain on marketable securities | 35,210 | 35,210 | (35,210 | ) | A | 35,210 | ||||||||||
| Loss on disposal of property & equipment | (172,684 | ) | (172,684 | ) | 172,684 | A | (172,684 | ) | ||||||||
| Gain on sale of R&D assets | 50,097 | 50,097 | (50,097 | ) | A | 50,097 | ||||||||||
| Total other income | 327,215 | 228,023 | (228,023 | ) | 327,215 | |||||||||||
| Loss before income tax | (9,864,298 | ) | (4,895,093 | ) | 5,667,219 | (9,092,172 | ) | |||||||||
| Income taxes provision | — | — | — | — | ||||||||||||
| Net loss | (9,864,298 | ) | (4,895,093 | ) | 5,667,219 | (9,092,172 | ) | |||||||||
| Less: Net loss attributable to noncontrolling interests | (2,720,204 | ) | 2,720,204 | A | — | |||||||||||
| Net loss attributed to stockholders of Twin Vee PowerCats Co, Inc. | $ | (7,144,094 | ) | $ | (4,895,093 | ) | $ | 2,947,015 | $ | (9,092,172 | ) | |||||
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
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 (loss) | 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 | |||||||||||
| Loss 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. | $ | (7,192,176.00 | ) | $ | (5,933,113.00 | ) | $ | 4,125,739.32 | $ | (8,999,549.68 | ) | |||||
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
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 Merger of Twin Vee with Forza on a pro forma basis.
You should read the tables below in conjunction with the following:
| ● | Twin Vee’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 included in its annual report on Form 10-K, for the year ended December 31, 2023, filed with the Commission on March 27, 2024. |
| ● | Twin Vee’s unaudited consolidated financial statements for the nine months ended September 30, 2024 and 2023, included in its quarterly report on Form 10-Q, for the quarter ending September 30, 2024, filed with the Commission on November 14, 2024. |
| ● | Forza’s historical audited consolidated financial statements for the years ended December 31, 2023 and 2022 included in its annual report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 27, 2024. |
| ● | Forza’s unaudited consolidated financial statements for the nine months ended September 30, 2024 and 2023, included in its quarterly report on Form 10-Q, for the quarter ending September 30, 2024, filed with the Commission on November 14, 2024. |
| 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 | ) | $ | (0.23 | ) | ||||
| For the nine months ended September 30, 2024 | ||||||||||||||||
| Basic and diluted | $ | (0.75 | ) | $ | (0.31 | ) | $ | (0.61 | ) | $ | (0.24 | ) | ||||
| Book value per share | ||||||||||||||||
| As of December 31, 2023 | $ | 3.37 | $ | 1.02 | $ | 2.15 | $ | 0.84 | ||||||||
| As of September 30, 2024 | $ | 2.44 | $ | 0.75 | $ | 1.56 | $ | 0.61 | ||||||||
(i) The Forza unaudited pro forma equivalent data was calculated by multiplying the pro forma condensed combined results by the Exchange Ratio.
