As filed with the Securities and Exchange Commission on October 20, 2022

 

Registration No. 333-267372

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

AMENDMENT NO. 2 TO

 

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

TWIN VEE POWERCATS CO.
(Exact name of registrant as specified in its charter)

 

Delaware   2834   33-0505269
(State or other jurisdiction of
incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

 

3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Joseph C. Visconti
Chief Executive Officer
Twin Vee PowerCats Co.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525
(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:
Leslie Marlow, Esq.
Hank Gracin, Esq.
Patrick Egan, Esq.
Blank Rome LLP
1271 Avenue of the Americas
  New York, New York 10020
(212) 885-5000    
Glen Sonoda, Esq.
 
Twin Vee PowerCats Co.
3101 S. U.S. Highway 1
Fort Pierce, Florida 34982
(772) 429-2525

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and the satisfaction or waiver of all other conditions to the closing of the merger of Twin Vee Powercats, Inc. and the Registrant as described in the Agreement and Plan of Merger dated as of September 8, 2022.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

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If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

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

 

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to us ethe extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7 (a)(2)(B) of the Securities Act. ☐

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

 

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this Proxy Statement/Prospectus/Information Statement is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Proxy Statement/Prospectus/ Information Statement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED OCTOBER 20, 2022

 

JOINT PROXY STATEMENT/PROSPECTUS.

 

YOUR VOTE IS VERY IMPORTANT

 

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

 

Twin Vee PowerCats Co., a Delaware corporation, which we refer to as Twin Vee Co., and Twin Vee Powercats, Inc., a Florida corporation, which we refer to as Twin Vee Inc., have entered into a merger agreement dated September 8, 2022, or the merger agreement, which transaction is referred to as the merger, pursuant to which Twin Vee Inc. will merge with and into Twin Vee Co. Twin Vee Co. is a majority-owned subsidiary of Twin Vee Inc. Twin Vee Co. and Twin Vee Inc. believe that the merger will enhance stockholder value for both Twin Vee Co. and Twin Vee Inc. stockholders by (i) providing a method by which the Twin Vee Inc. stockholders can more directly share in the growth of Twin Vee Co. and (ii) enabling Twin Vee Co. to take advantage of the net operating loss carryforwards of Twin Vee Inc. and utilize them to offset the income of Twin Vee Co. Before we complete the merger, the stockholders of Twin Vee Co. and Twin Vee Inc. must approve and adopt the merger agreement. Twin Vee Co. stockholders will vote to approve and adopt the merger agreement and the other transactions and matters described below at an annual meeting of stockholders to be held on November 29, 2022. Twin Vee Inc. stockholders will vote to approve and adopt the merger agreement and the other transactions and matters described below at a special meeting of stockholders to be held on November 29, 2022.

 

Twin Vee Inc. currently owns 4,000,000 shares of common stock of Twin Vee Co. The holders of Twin Vee Inc. common stock will receive in the merger one share of Twin Vee Co. common stock in exchange for 41.7128495 shares of Twin Vee Inc. common stock they own, or the exchange ratio, for a maximum of 4,000,000 shares of Twin Vee Co. common stock (no fractional shares of Twin Vee Co. common stock will be issued) and the 4,000,000 shares of Twin Vee Co. common stock held by Twin Vee Inc. will be canceled. After the merger the outstanding number of shares of common stock of Twin Vee Co. will be substantially the same as it was immediately prior to the merger

 

Twin Vee Co. common stock is currently listed on the Nasdaq Capital Market, or the Nasdaq, under the symbol “VEEE.” On [ ], the most recent practicable trading day prior to the printing of this Joint Proxy Statement/Prospectus, the closing price of Twin Vee Co. common stock was $[ ] per share. The market price of the Twin Vee Co. common stock may fluctuate before the completion of the merger, therefore, you are urged to obtain current market quotations for Twin Vee Co. common stock. Twin Vee Co. expects to issue a maximum of 4,000,000 shares of its common stock in the merger upon completion of the merger. No fractional shares of Twin Vee Co. common stock will be issued to any stockholder of Twin Vee Inc. upon completion of the merger. The holder of shares of Twin Vee Inc. common stock who would otherwise be entitled to a fraction of Twin Vee Co. common stock (after aggregating all fractional shares of Twin Vee Co. common stock that otherwise would be received by such holder), will, in lieu of such fraction of a share, be paid in cash the dollar amount (rounded to the nearest whole cent), without interest, determined by multiplying such fraction by the volume weighted average closing trading price of a share of Twin Vee Co. common stock for the five consecutive trading days ending five trading days immediately prior to the date upon which the merger becomes effective. We anticipate that the closing of the merger will occur not later than three business days following the affirmative Twin Vee Co. and Twin Vee Inc. stockholder votes.

 

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Twin Vee Co. is asking stockholders of Twin Vee Co. to adopt and approve the merger agreement and the merger at the annual meeting of stockholders to take place on November 29, 2022, at 10:00 am Eastern Time, at the offices of Twin Vee Co., 3101 S. U.S. Highway 1, Fort Pierce, Florida. As this will be the annual meeting of Twin Vee Co. stockholders, Twin Vee Co. stockholders will also be asked to vote on Twin Vee Co. director nominees, and vote to ratify the appointment of Grassi & Co., CPAs, P.C. as Twin Vee Co.’s independent registered public accounting firm for the year ended December 31, 2022.

 

Twin Vee Inc. is asking stockholders of Twin Vee Inc. to adopt and approve the merger agreement and the merger at a special meeting of stockholders to take place on November 29, 2022, at 10:00 am Eastern Time, at the offices of Twin Vee Inc., 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982.

 

After careful consideration, the Twin Vee Co. and Twin Vee Inc. Boards of Directors have unanimously approved the merger agreement and the respective proposals referred to above, and each of the Twin Vee Co. and Twin Vee Inc. Boards of Directors has determined that it is advisable to enter into the merger. The Board of Directors of Twin Vee Co. recommends that Twin Vee Co. stockholders vote “FOR” the respective proposals described in the accompanying Joint Proxy Statement/Prospectus. The merger cannot be completed unless Twin Vee Inc. and Twin Vee Co. stockholders adopt and approve the merger agreement.

 

PLEASE GIVE ALL OF THE DETAILED INFORMATION ON TWIN VEE CO., TWIN VEE INC. 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.

 

Neither the Securities and Exchange Commission nor any state securities regulators has approved or disapproved the Twin Vee Co. 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 the Twin Vee Co. common stock and Twin Vee Co. is not soliciting an offer to buy the Twin Vee Inc. common stock in any state where the offer or sale is not permitted.

 

On behalf of our boards of directors, we thank you for your support.

  

Joseph C. Visconti Joseph C. Visconti
Chief Executive Officer Chief Executive Officer
Twin Vee PowerCats Co. Twin Vee Powercats, Inc.

 

Joint Proxy Statement/Prospectus/Information Statement dated October [*], 2022 and to be mailed on or around October [*], 2022.

 

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

 

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ADDITIONAL INFORMATION

 

Stockholders may also consult Twin Vee Co.’s or Twin Vee Inc.’s websites for more information concerning the merger described in this Joint Proxy Statement/Prospectus and each of the parties thereto. Twin Vee Co.’s website is www.twinvee.com and Twin Vee Inc.’s website is www.twinvee.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 , 2022 and is first being mailed to the stockholders of Twin Vee Inc. and the stockholders of Twin Vee Co. on or about October , 2022.

 

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Twin Vee PowerCats Co.
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 29, 2022

 

To the Stockholders of Twin Vee PowerCats Co.:

 

The annual meeting of Twin Vee PowerCats Co., a Delaware corporation, will be held on November 29, 2022, at 10:00 a.m., Eastern Time, at the offices Twin Vee PowerCats Co. 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 September 8, 2022, by and between Twin Vee PowerCats Co. and Twin Vee Powercats, Inc, as described in the attached Joint Proxy Statement/Prospectus;

 

2.     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 Proposal No. 1;

 

3.      To consider and vote upon the election of the two nominees for Class I directors named in this Joint Proxy Statement/Prospectus to the Twin Vee PowerCats Co. board of directors for a term of three years;

 

4.     To consider and vote upon the ratification of the appointment of Grassi & Co. CPAs, P.C. as Twin Vee PowerCats Co.’s independent registered accounting firm for the year ended December 31, 2022;

 

5.       To approve an amendment to the Company’s Certificate of Incorporation, in substantially the form attached to the proxy statement as Annex E, to, at the discretion of the Board of Directors of the Company, effect an increase the number of authorized shares of common stock from 50,000,000 to 75,000,000 (the “Authorized Common Stock Increase”), such amendment to be effected after stockholder approval thereof only in the event the Board of Directors still deems it advisable; and

 

6.       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 Proposal No. 5; and

  

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

 

The board of directors of Twin Vee PowerCats Co. has fixed October 11, 2022 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Twin Vee PowerCats Co. annual meeting and any adjournment or postponement thereof. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the Twin Vee PowerCats Co. annual meeting. Only stockholders or their proxy holders and Twin Vee PowerCats Co. guests may attend the meeting. A list of stockholders entitled to vote will be made available at the annual meeting and will be available at the offices of Twin Vee PowerCats Co., 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982 for ten days before the meeting. At the close of business on the record date, Twin Vee PowerCats Co. had 9,520,000 shares of common stock outstanding and entitled to vote.

 

     Joseph C. Visconti, Chief Executive Officer
 October , 2022      

 

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Your vote is important.

 

You are urged to attend the annual meeting in person, but if you are unable to do so, the 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.

 

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

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF
TWIN VEE POWERCATS, INC.

TO BE HELD ON November 29, 2022

 

To the Stockholders of Twin Vee Powercats, Inc.:

 

The special meeting of Twin Vee Powercats, Inc., a Florida corporation, will be held on November 29, 2022, at 10:00 a.m., Eastern Time, at the offices of Twin Vee PowerCats Co., 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 September 8, 2022 by and between Twin Vee PowerCats Co. and Twin Vee Powercats, Inc, as described in the attached Joint Proxy Statement/Prospectus; and

 

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

 

The board of directors of Twin Vee Powercats, Inc. has fixed October 11, 2022 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Twin Vee Powercats, Inc. special meeting and any adjournment or postponement thereof. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the Twin Vee PowerCats Co. annual meeting. Only stockholders or their proxy holders and Twin Vee Powercats, Inc. guests may attend the meeting. A list of stockholders entitled to vote will be made available at the special meeting and will be available at the offices of Twin Vee Powercats, Inc., 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982 for ten days before the meeting. At the close of business on the record date, Twin Vee Powercats, Inc. had 166,851,398 shares of common stock outstanding and entitled to vote.

 

     Joseph C. Visconti, Chief Executive Officer

 October , 2022

 

   

 

  

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Your vote is important.

 

You are urged to attend the special meeting in person, but if you are unable to do so, the 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.

 

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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 United States Securities and Exchange Commission (the “SEC”) by Twin Vee PowerCats Co. (File No. 333-267372), constitutes a prospectus of Twin Vee PowerCats Co. under Section 5 of the Securities Act of 1933, as amended, or the Securities Act, with respect to the shares of Twin Vee PowerCats Co. common stock, par value $0.001, of Twin Vee PowerCats Co. to be issued pursuant to the merger agreement. 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, or the Exchange Act, with respect to the Twin Vee PowerCats Co. annual meeting, at which Twin Vee PowerCats Co. stockholders will be asked to consider and vote on, among other matters, a proposal to adopt the merger agreement. This document also serves as a notice of meeting and a proxy statement with respect to the Twin Vee Powercats, Inc. special meeting, at which Twin Vee Powercats, Inc. stockholders will be asked to consider and vote on, among other matters, a proposal to adopt the 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 [_____], 2022. 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 PowerCats Co. contained in this Joint Proxy Statement/Prospectus has been provided by Twin Vee PowerCats Co., and the information concerning Twin Vee Inc. contained in this Joint Proxy Statement/Prospectus has been provided by Twin Vee Powercats, Inc.

 

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TABLE OF CONTENTS 

 

The Merger  19
Questions and Answers about the Merger  19
Summary  26
The Companies  26
The Merger Agreement  28
Merger Consideration  28
Risks Related to the Merger  28
Recommendation of the Twin Vee Co. Board of Directors and its Reasons for the Merger  28
Recommendation of the Twin Vee Inc. Board of Directors and its Reasons for the Merger  29
Opinion of Twin Vee Co.’s Financial Advisor  31
Interests of Certain Persons in the Merger  31
Regulatory Approvals  33
Accounting Treatment of the Merger  33
Material U.S. Federal Income Tax Consequences  33
Comparison of Stockholder Rights  34
Appraisal Rights in Connection with the Merger  34
Conditions to Completion of the Merger  34
Termination of the Merger Agreement  35
Management of the Combined Company Following the Merger  36
Matters to Be Considered at the Meetings  36
Where You Can Find More Information  37
Summary Risk Factors  37
Risks Related to the Merger  37
Risks Related to Twin Vee Co.  38
Risks Related to the Electric Powered Boats  39
Intellectual Property Risks  40
Risks Related to the Ownership of Twin Vee Co.’s Common Stock  40
Risks Related to Twin Vee Inc.  41
Cautionary Statement Regarding Forward-Looking Statement  42
Selected Historical Financial Data  43
Selected Historical Financial Data of Twin Vee Co.  43
Selected Historical Financial Data of Twin Vee Inc.  44
Unaudited Pro Forma Combined Consolidated Financial Information of Twin Vee Co. and Twin Vee Inc.  45

 

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Market Price and Dividend Information  49
Market Value of Securities  49
Penny Stock  50
Dividend Policy  50
Risk Factors  51
Risks Related to the Merger  51
Risks Related to the Twin Vee Co.  55
Risks Related to the Industry of Twin Vee Co. and the Combined Entity  68
Risks Related to the Electric-Powered Boats  70
Intellectual Property Risks  76
Risks Related to the Ownership of Twin Vee Co.’s Common Stock  79
Risks Related to Twin Vee Inc.  85
The Merger Transaction  86
General  86
Background of the Merger  86
Recommendation of the Twin Vee Co. Board of Directors and its Reasons for the Merger  88
Opinion of Twin Vee Co.’s Financial Advisor  90
Recommendation of the Twin Vee Inc. Board of Directors and its Reasons for the Merger  93
Accounting Treatment  95
Certain U.S. Federal Income Tax Consequences of the Merger  96
General  96
Backup Withholding  97
Tax Return Reporting Requirements  98
Taxable Acquisition  98
Effective Time of the Merger  99
Regulatory Approvals  100
Appraisal Rights  100
Board of Directors and Executive Officers of Twin Vee Co. After Completion of the Merger  101
Board of Directors  102
Executive Officers  102
Interests of Twin Vee Co. Directors and Executive Officers in the Merger  102
Interests of Twin Vee Inc. Directors and Executive Officers in the Merger  103
Restrictions on Sales of Shares of Twin Vee Co. Common Stock Received in the Merger  103
Nasdaq Listing of Twin Vee Co. Common Stock; Delisting and Deregistration of Twin Vee Inc. Common Stock  103
The Merger Agreement  104
General  104
Closing and Effective Time of Merger  104
Merger Consideration  104
Conversion of Twin Vee Inc. Common Stock  104
Exchange Ratio  105

 

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Twin Vee Co. Common Stock Held by Twin Vee Inc.  105
Fractional Shares of Twin Vee Co. Common Stock  105
Share Issuance Process  105
Directors and Officers of Twin Vee Inc. Following the Merger  106
Certificate of Incorporation 106
Conditions to the Completion of the Merger  106
No Solicitation  107
Approval of Stockholders  108
Covenants; Conduct of Business Pending the Merger  108
Other Agreements  109
Termination  109
Expenses  111
Representations and Warranties  111
Support Agreements  112
Agreements Related to the Merger  113
Support Agreements  113
Twin Vee Inc.  113
Information About the Twin Vee Co. Annual Meeting and Voting  113
Matters Relating to the Meeting  113
Voting  113
Other Business; Adjournments  115
Appraisal Rights  115
Other Information Regarding Twin Vee Co.  116
Business of Twin Vee Co.  116
General  116
Recent Developments  117
Business of Our Segments  118
Gas Powered Boats  118
Twin Vee’s Hull Shape  118
Power Catamaran Hull Benefits  118
Franchise  119
Electric Powered Boat  119
Twin Vee Co.’s Strategy  120
Overall Strategy  120
EV/Forza Specific Strategy  121
Twin Vee Co. Strengths and Competitive Advantages  122
Our Markets  122
Outboard Motor Market  123
Electric Boat Market  123
Dealer Network  124

 

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Floor Plan Financing  125
Competition  125
Raw Materials, Principal Suppliers, and Customers  125
Intellectual Property  126
Insurance and Product Warranties  127
Environmental, Safety and Regulatory Matters  128
Employees/Human Capital  129
Competitive Pay and Benefits  129
Health and Safety  129
Impact of the COVID-19 Pandemic on Our Operations  129
Corporate Information  130
Implications of Being an Emerging Growth Company  131
Management’s Discussion and Analysis of Financial Condition and Results of Operations of Twin Vee Co.  132
Company Overview  132
Recent Developments  133
Financial Conditions  134
Results of Operations  134
Comparison of the Three Months Ended June 30, 2022 and 2021  134
Net Sales and Cost Sales  134
Gross Profit  135
Total Operating Expenses  135
Net Loss  136
Comparison of the Six Months Ended June 30, 2022 and 2021  136
Net Sales and Cost Sales  136
Gross Profit  137
Total Operating Expenses  137
Net Loss  138
Comparison of the years Ended December 31, 2021 and 2020  138
Net Sales and Cost Sales  138
Gross Profit  139
Total Operating Expenses  139
Net Loss  140
Liquidity and Capital Resources  140
Cash Flows  141
Cash Flow from Operating Activities  141
Cash Flow from Investing Activities  142
Cash Flow from Financing Activities  142

 

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Critical Accounting Policies and Significant Judgments and Estimates  143
Revenue Recognition  143
Use of Estimates  143
Inventories  143
Impairment of Long-Lived Assets  144
Product Warranty Costs  144
Leases  144
Paycheck Protection Program  144
Deferred Income Taxes and Valuation Allowance  145
Off Balance Sheet Arrangements  145
Twin Vee Co. Board Composition Following the Merger  146
Information Regarding Twin Vee Inc.  146
Business of Twin Vee Inc.  146
Employees  146
Properties  146
Legal Proceedings  146
Management and Board of Directors  147
Corporate Governance/Nominating Committee  147
Code of Business Conduct and Ethics  147
Executive Compensation  148
Summary Compensation Twin Vee Inc.  148
Management’s Discussions and Analysis of Financial Condition and Results of Operations of Twin Vee Inc.  148
Certain Additional Information  149
Security Ownership of Certain Beneficial Owners and Management of Twin Vee Co., Twin Vee Inc., and the Combined Company    149
Ownership of Twin Vee Co. Common Stock Prior to Merger  149
Ownership of Twin Vee Inc. Common Stock Prior to Merger  151
Ownership of Twin Vee Co. Common Stock Following the Merger  152
Description of Twin Vee Co. Capital Stock  154
General  154
Common Stock  154
Preferred Stock  154
Anti-Takeover Effects of Certain Provisions of Twin Vee Co.’s Certificate of Incorporation, Bylaws and the DGCL  155
Options  156
Warrants  156
Transfer Agent and Registrar  156
Nasdaq Capital Market Listing  156

 

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Description of Twin Vee Inc. Capital Stock  157
General  157
Common Stock  157
Comparison of Rights of Holders of Twin Vee Co. Common Stock and Twin Vee Inc. Common Stock  157
Twin Vee Co. Annual Meeting Proposals  168
Twin Vee Co. Proposal No. 1 —Adoption and Approval of the Merger Agreement  168
Vote Required to Approve the Merger Agreement  168
Board Recommendation  168
Twin Vee Co. Proposal No. 2— Possible Adjournment of the Twin Vee Co. Annual Meeting, If Necessary, To Solicit Additional Proxies If There Are Insufficient Votes in Favor of Proposal 1  169
Vote Required  169
Board Recommendation  169
Twin Vee Co. Proposal No. 3 —Election of Directors  170
Nominees for Election at the 2022 Annual Meeting  170
Class I Directors  171
Vote Required  171
Board Recommendation  171
Continuing Directors  171
Class II  172
Class III  172
Director Independence  173
Board Diversity Matrix  174
Director Qualifications  174
Stockholder Recommendations  175
Stockholder Communications  175
Board of Director’s Leadership Structure  175
Risk Oversight  175
Anti-Hedging and Anti-Pledging Policy  175
Delinquent Section 16(A) Reports  176
Code of Business Conduct and Ethics  176
Limitation of Liability and Indemnification  176
Board of Directors Committees  177
Audit Committee  178
Compensation Committee  178
Corporate Governance and Nominating Committee  178
Board and Committee Meetings  179
Board Attendance at Annual Stockholders’ Meeting  179
2021 Compensation of Directors  179
Cash Compensation  179
Equity Compensation  180
Director Compensation Table  180

 

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Proxy  181
Compensation Discussion and Analysis  181
Chief Compensation Officer Compensation for Fiscal Year 2021  181
2021 Bonus  181
Compensation Risk Management  181
Equity Compensation Information  182
Executive Officer Who Is Not A Director  182
Executive Compensation  183
Summary Compensation Table  183
Outstanding Equity Awards at Fiscal Year-End  184
Employment Arrangements with Twin Vee Co.’s Named Executive Officers  184
Twin Vee Co. Proposal No. 4— Ratification of Appointment of Independent Registered Public Accounting Firm  188
Audit Fees  188
Audit-Related Fees  188
Tax and Other Fees  188
Pre-Approval Policies and Procedures  189
Vote Required  189
Board Recommendation  189
Audit Committee Report  190
Twin Vee Co. Proposal No. 5—Approval of an Amendment to the Twin Vee Co. Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock  191
Possible Effects of the Authorized Common Stock Increase 192
Possible Anti-takeover Effects of the Authorized Common Stock Increase  192
Vote Required  193
Board Recommendation  193
Twin Vee Co. Proposal No. 6—Possible Adjournment of the Twin Vee Co. Annual Meeting, If Necessary, To Solicit Additional Proxies If There Are Insufficient Votes in Favor of Proposal 5 194
Vote Required  194
Board Recommendation  
Certain Relationships and Related Transactions  195
Twin Vee Co.’s Policy Regarding Related Party Transactions  196
Conflict Of Interest  197
Twin Vee Special Meeting Proposal  198
Twin Vee Inc. Proposal No. 1 Adoption and Approval of the Merger Agreement  198
Vote Required to Approve the Merger Agreement  198
Support Agreements  198
Board Recommendations  198
Householding of Proxy Materials  199
Other Matters  199
Appraisal Rights  199
Additional Information for Stockholders  199
Future Stockholder Proposals  199
Annual Report /Form 10-K  201
Legal Matters  201
Experts  201
Where You Can Find More Information  201

 

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Annex A –Agreement and Plan of Merger, dated September 8, 2022  202
Annex B –Opinion of ValuCorp, Inc.;  241
Annex C-1– Twin Vee Co.’s Audited Financial Statements for the Year Ended December 31, 2021 and unaudited financial statements for the six months ended June 30,2022  249
Annex C-2– Twin Vee Inc.’s Audited Financial Statements for the Year Ended December 31, 2021 and unaudited financial statements for the six months ended June 30,2022  285
Annex D –Appraisal Rights under Florida Business Corporation Act  317
Annex E – Form of Certificate of Amendment to the Certificate of Incorporation 328
Part II Information Not Required in Prospectus  329
Item 20. Indemnification of Directors and Officers  329
Item 21. Exhibits and Financial Statement Schedules  330

 

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THE MERGER

 

QUESTIONS AND ANSWERS ABOUT THE MERGER

 

Q:   What is the merger?

  

A:   Twin Vee Co. and Twin Vee Inc. have entered into an Agreement and Plan of Merger, dated as of September 8, 2022, which is referred to as the merger agreement. The merger agreement contains the terms and conditions of the proposed business combination of Twin Vee Co. and Twin Vee Inc. Under the merger agreement, Twin Vee Inc. will merge with Twin Vee Co., which transaction is referred to as the merger. At the effective time of the merger, the holders of Twin Vee Inc. common stock will receive in the merger one share of Twin Vee Co. common stock in exchange for 41.7128495 shares of Twin Vee Inc. common stock they own, which is referred to as the exchange ratio, for a maximum of 4,000,000 shares of Twin Vee Co. common stock (no fractional shares of Twin Vee Co. common stock will be issued) and the 4,000,000 shares of Twin Vee Co. common stock held by Twin Vee Inc. pre-merger will be canceled. After the merger the outstanding number of shares of common stock of Twin Vee Co. will be substantially the same as it was immediately prior to the merger.

Q:   Why are the two companies proposing to merge?

 

A:   Twin Vee Co. and Twin Vee Inc. are proposing the merger because, among other things, it is believed that the merger will enhance stockholders value for both Twin Vee Co. and Twin Vee Inc. stockholders by (i) providing a method by which the Twin Vee Inc. stockholders can more directly share in the growth of Twin Vee Co. and (ii) enabling Twin Vee Co. to take advantage of the $7,055,709 of net operating loss carryforwards of Twin Vee Inc. and utilize them to offset the income of Twin Vee Co. For a discussion of Twin Vee Co.’s reasons for the merger, please see the sections entitled “The Merger Transaction—Recommendation of the Twin Vee Co. Board of Directors and the Reasons for the Merger” and “The Merger Transaction—Recommendation of the Twin Vee Inc. Board of Directors and the Reasons for the Merger”.

 

Q:   What will happen in the merger?

 

 

A:   In the merger, Twin Vee Inc. will be merged into Twin Vee Co. and will cease to exist. After the merger the outstanding number of shares of common stock of Twin Vee Co. will be substantially the same as it was immediately prior to the merger. Based solely upon the outstanding shares of Twin Vee Co. common stock on October 11, 2022, and Twin Vee Inc.’s outstanding shares of common stock on October 11, 2022, immediately following the completion of the merger, Twin Vee Inc. stockholders will own approximately 42% of the combined company’s outstanding common stock. Based upon the fully diluted outstanding shares of Twin Vee Co. and Twin Vee Inc. on October 11, 2022, immediately following the completion of the merger, Twin Vee Inc. security holders would own approximately 37% of the combined company’s fully diluted outstanding common stock. On October 3, 2022, Twin Vee Co. closed an underwritten public offering of 2,500,000 shares of its common stock. In addition, Twin Vee Co. granted the underwriter a 45-day option to purchase up to an additional 375,000 shares of common stock at the public offering price less discounts and commissions, solely to cover over-allotments. If the underwriter for the Twin Vee Co. underwritten public offering exercise the over-allotment in full Twin Vee Inc. security holders would own approximately 40.4% of the combined company’s outstanding common stock and approximately 35.8% upon the fully diluted outstanding common stock ownership.

 

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 Co. or Twin Vee Inc. as of October 11, 2022, as the applicable record date for the determination of stockholders entitled to notice of, and to vote at, the Twin Vee Co. annual meeting, or the Twin Vee Inc. special meeting of stockholders. This document serves as both a proxy statement of Twin Vee Co. used to solicit proxies for the Twin Vee Co. annual meeting, as a prospectus of Twin Vee Co. used to offer shares of Twin Vee Co. common stock in exchange for shares of Twin Vee Inc. common stock in the merger and as proxy statement used to solicit proxies for the Twin Vee Inc. special meeting. This Joint Proxy Statement/Prospectus contains important information about the merger and the stockholder meetings of Twin Vee Co. and Twin Vee Inc. and you should read it carefully.

 

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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 Co. stockholder or a Twin Vee Inc, 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 both Twin Vee Co. and Twin Vee Inc. approve the merger agreement and the transactions contemplated thereby. Your vote is important. Twin Vee Co. and Twin Vee Inc. encourage Twin Vee Co. stockholders and Twin Vee Inc. stockholders to vote as soon as possible.

 

Certain Twin Vee Inc. stockholders including certain directors and executive officers who in the aggregate beneficially own approximately 98,713,873 of the outstanding shares of Twin Vee Inc. voting stock, are parties to support agreements with Twin Vee Co. pursuant to which such stockholders have agreed to vote for the adoption of the merger agreement. The holders of a sufficient number of shares of Twin Vee Inc. capital stock required to adopt the merger agreement have agreed to adopt the merger agreement. See the section titled “Agreements Related to the Merger—Support Agreements.”

 

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

A:   Twin Vee Co. stockholders are asked to vote on the following items:

 

·the adoption and approval of the merger agreement, described under “The Merger Agreement”;
·the adjournment of the annual meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the adoption of the merger agreement;

 

·the election of the nominees for Class I directors named in this Proxy Statement/Prospectus to the Twin Vee Co. board of directors for a term of three years as described under “ Twin Vee Co. Annual Meeting Proposals—Twin Vee Co. Proposal No. 3”;

 

·the ratification of the appointment of Grassi & Co., CPAs, P.C. as the independent registered public accounting firm of Twin Vee Co. for its fiscal year ending December 31, 2022 as described under “ Twin Vee Co. Annual Meeting Proposals—Twin Vee Co. Proposal No. 4”;
  the approval of an amendment to the Twin Vee Co. Certificate of Incorporation, in substantially the form attached as Annex E to this Joint Proxy Statement/Prospectus, at the discretion of the Board of Directors of the Company, effect an increase the number of authorized shares of Twin Vee Co. common stock from 50,000,000 to 75,000,000 (the “Authorized Common Stock Increase”), such amendment to be effected after stockholder approval thereof only in the event the Twin Vee Co. Board of Directors still deems it advisable as described under “Twin Vee Co. Annual Meeting Proposals—Twin Vee Co. Proposal No. 5”;
     
  the adjournment of the annual meeting, if necessary, if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of the adoption of the Authorized Common Stock Increase proposal; and
     
  such other matters as may properly come before the Twin Vee Co. meeting.

  

Q:   What vote of Twin Vee Co. stockholders is required to approve the proposals?

A:   The vote required of Twin Vee Co. stockholders for (i) the adoption and approval of the merger agreement with Twin Vee Inc. and (ii) the approval of the Authorized Common Stock Increase is the approval of a majority of the outstanding common stock of the corporation entitled to vote.

 

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The vote required of Twin Vee Co. stockholders for each of (i) the ratification of Grassi & Co., CPAs, P.C. as the independent registered public accounting firm, (ii) 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 Proposal 1 (the approval of the merger agreement), and (iii) 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 Proposal 5 (the Authorized Common Stock Increase approval), is the affirmative vote of a majority of the votes present, in person or represented by proxy at the annual meeting and entitled to vote on the matter.

 

Director Elections: Directors shall be elected by a plurality of the shares present in person or by proxy at the meeting and entitled to vote on the election of directors. A plurality means that the two (2) director nominees that receive the highest number of votes cast will be elected. In either event, shares not present at the meeting and shares voting “ABSTAIN” have no effect on the election of directors.

 

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

 

 

A:   A majority of the issued and outstanding shares of Twin Vee Co.’s common stock entitled to vote being present in person or represented by proxy constitutes a quorum for the 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:   On what matters are Twin Vee Inc. stockholders being asked to vote?

 

 

A:   Twin Vee Inc. stockholders are asked to vote on the following items:

 

·the adoption and approval of the merger agreement, described under “The Merger Agreement”; and

 

·such other matters as may properly come before the Twin Vee Inc. meeting.


Q:   What vote of Twin Vee Inc. stockholders is required to approve the proposals?

 

 

A:   The vote required of Twin Vee Inc. stockholders for the adoption and approval of the merger agreement with Twin Vee Inc., is the approval of a majority of the outstanding common stock of the corporation entitled to vote.

 

Certain Twin Vee Inc. stockholders including certain directors and executive officers who in the aggregate beneficially own approximately 59% of the outstanding shares of Twin Vee Inc. voting stock are parties to support agreements with Twin Vee Co., pursuant to which such stockholders have agreed to vote for the adoption of the merger agreement. The holders of a sufficient number of shares of Twin Vee Inc. capital stock required to adopt the merger agreement have agreed to adopt the merger agreement see the section titled “Agreements Related to the Merger—Support Agreements.”

 

Q:   What constitutes a quorum for the Twin Vee Inc. Special Meeting?

 

A:   A majority of the issued and outstanding shares of Twin Vee Inc.’s common stock entitled to vote being present in person or represented by proxy constitutes a quorum for the special 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?

 

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A:   The Twin Vee Co. annual meeting will take place on November 29, 2022 at 10:00 a.m., Eastern Time, at the offices of Twin Vee, Co., 3101 S. U.S. Highway 1, Florida 34982. The Twin Vee Inc. special meeting will take place on November 29, 2022 at 11:00 a.m., Eastern Time, at the offices of Twin Vee, Co., 3101 S. U.S. Highway 1, Fort Pierce, Florida 34982.

 

Q:   Who is entitled to vote at Twin Vee Co.’s Annual Meeting?

A:    Each outstanding share of Twin Vee Co.’s 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 record date, October 11, 2022, are entitled to receive notice of the annual meeting and to vote the shares of 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 annual meeting will be available for examination by any stockholder at Twin Vee Co.’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 annual meeting and at the time and place of the annual meeting.

 

Q:   Who is entitled to vote at Twin Vee Inc.’s Special Meeting?

 

A:   Each outstanding share of Twin Vee Inc.’s 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 record date, October 11, 2022, are entitled to receive notice of the special meeting and to vote the shares of 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 special meeting will be available for examination by any stockholder at Twin Vee Inc’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 special meeting and at the time and place of the annual meeting.

 

Q:   How do the Board of Directors of Twin Vee Co. and Twin Vee Inc. recommend I vote?

 

A:   The Board of Directors of both companies have recommended that stockholders vote “Yes” for the merger. After careful consideration, Twin Vee Co.’s Board of Directors has determined by unanimous vote the merger to be fair to Twin Vee Co. stockholders and in their best interests, and declared the merger advisable. Twin Vee Co.’s Board of Directors approved the merger agreement and recommends that Twin Vee Co. stockholders adopt and approve the merger agreement.

 

After careful consideration, Twin Vee Inc.’s Board of Directors has determined by unanimous vote the merger to be fair to Twin Vee Inc. stockholders and in their best interests, and declared the merger advisable. Twin Vee Inc.’s Board of Directors approved the merger agreement and recommends that Twin Vee Inc. stockholders adopt and approve the merger agreement.

 

In considering the recommendation of the Twin Vee Co. Board of Directors and the Twin Vee Inc. Board of Directors with respect to the merger agreement, Twin Vee Inc. and Twin Vee Co. stockholders should be aware that certain directors and officers of Twin Vee Co. and Twin Vee Inc. 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 Co. Directors and Executive Officers in the Merger” and “Interests of Twin Vee Inc. Directors and Executive Officers in the Merger” for a discussion of these interests.

 

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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; and

  

·according to the best judgment of the proxy holders if a proposal comes up for a vote at the annual meeting that is not on the proxy card.

 

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

 

  if you are a Twin Vee Co. stockholder, FOR the adoption and approval of the merger agreement and the merger, FOR the re-election of the current Twin Vee Co. directors, FOR the ratification of Grassi & Co., CPAs, P.C. as the independent registered public accounting firm, FOR 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 approval of the merger agreement, FOR the approval of the Authorized Common Stock Increase proposal, and FOR 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 approval of the Authorized Common Stock Increase proposal;

 

·if you are a Twin Vee Inc. stockholder, FOR the adoption and approval of the merger agreement and the merger;

 

·according to the best judgment of the proxy holders if a proposal properly comes up for a vote at the annual meeting that is not on the proxy card.

 

·If you are a stockholder of record of Twin Vee Co., you may also vote on the Internet at _______________.

 

·If your shares of 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 Co. or Twin Vee Inc. If you are a Twin Vee Co. stockholder of record, you may attend the annual meeting and vote your shares in person. Even if you plan to attend the annual meeting in person, Twin Vee Co. requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the annual meeting if you are unable to attend. If you are a Twin Vee Inc. stockholder of record, you may attend the special meeting and vote your shares in person. Even if you plan to attend the special meeting in person, Twin Vee Inc. requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the special meeting if you are unable to attend. If your shares of Twin Vee Co. or Twin Vee Inc, 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 annual or special 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.

 

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.

 

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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 matters that are to be considered by the Twin Vee Co. stockholders relating to the merger. 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 Co. Proposal No. 1, Twin Vee Co. Proposal No. 5 and Twin Vee Inc. Proposal No. 1 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 Co. Proposal No. 1, Twin Vee Co. Proposal No. 5, Twin Vee Co. Proposal No. 6 and Twin Vee Inc. Proposal 1 will have the same effect as an AGAINST vote. Twin Vee Co. Proposal Nos.1, 2, and 3 are non-routine matters and Twin Vee Co. Proposal Nos. 4, 5 and 6 are routine matters. Broker non-votes for these other proposals (although none are expected to exist in connection with Proposal Nos. 4, 5 and 6 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:   The holders of Twin Vee Co. common stock do not have any right to an appraisal of the value of their shares in connection with the merger. The holders of Twin Vee Inc. common stock do have a right to an appraisal of the value of their shares in connection with the merger if they do not vote for the merger and if they follow certain procedures described in the section entitled “The Merger—The Merger Transaction—Appraisal Rights”.

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

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

 

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Q:   Should I send in my stock certificates now?

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

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

 

A:    Both Twin Vee Co. and Twin Vee Inc. are working towards completing the merger as quickly as possible. We hope to complete the merger by the fourth quarter of 2022. 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 authorized but unissued shares of Twin Vee Co. common stock will exist after the closing of the merger?

 

A:   Following the closing of the merger, we anticipate that there will be approximately 9,520,000 shares of authorized but unissued Twin Vee Co. common stock. In addition to the number of issued and outstanding shares of Twin Vee Co. common stock after the closing of the merger, Twin Vee Co. has reserved approximately 377,090 shares for future issuance as a result of outstanding Twin Vee Co. stock options and outstanding warrants.

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

A:   Neither Twin Vee Co. nor Twin Vee Inc. 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 Internal Revenue Code of 1986, as amended, or the Code. Assuming that the merger qualifies as a reorganization, Twin Vee Inc. stockholders should not recognize any gain or loss for U.S. federal income tax purposes if they exchange their Twin Vee Inc. shares solely for shares of Twin Vee Co. common stock.

 

Tax matters are very complicated, and the tax consequences of the merger to each Twin Vee Inc. 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—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 Co. stockholders may call Twin Vee Co. Investor Relations at 561-283-4412. Twin Vee Inc. stockholders may call Twin Vee Inc. Investor Relations at 561-283-4412.

 

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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. This summary discusses all of the material aspects of the merger. However, to understand the merger fully and for a more complete description of the legal terms of the merger, you should read this Joint Proxy Statement/Prospectus and the documents we have referred you to carefully. You may obtain the information incorporated by reference into this Joint Proxy Statement/Prospectus without charge by following the instructions in the section entitled “Additional Information for Stockholders—Where You Can Find More Information”.

 

The Companies

 

Twin Vee PowerCats Co.

3101 S. U.S. Highway 1

Fort Pierce, Florida 34982
(772) 429-2525

 

Twin Vee Co. is a designer, manufacturer and marketer of recreational power sport catamaran boats. Twin Vee Co. believes it has been an innovator in the recreational power sport catamaran industry. Twin Vee Co. currently has 6 gas-powered models in production ranging in size from our 24-foot, dual engine, center console to its newly designed 40-foot offshore 400 GFX. Its twin-hull catamaran running surface, known as a symmetrical catamaran hull design, adds to the Twin Vee Co. ride quality by reducing drag, increasing fuel efficiency, and offering users a stable riding boat. Twin Vee Co.’s home base operations in Fort Pierce, Florida is a 7.5-acre facility with several buildings totaling over 75,000 square feet. Twin Vee Co. employed approximately 160 people on June 30, 2022, some of whom have been with its company for over twenty years.

 

Twin Vee Co. has organized its business into three operating segments: (i) its gas-powered boat segment which manufactures and distributes gas-powered boats; (ii) its electric-powered boat segment which is developing fully electric boats, through its wholly owned subsidiary, Forza X1, Inc., a Delaware corporation, or Forza, and (iii) its franchise segment which is developing a standard product offering and will be selling franchises across the United States through its wholly owned subsidiary, Fix My Boat, Inc., a Delaware corporation.

 

Twin Vee Co.’s gas-powered boats allow consumers to use them for a wide range of recreational activities including fishing, diving and water skiing. Twin Vee Co. believes that the performance, quality and value of its boats position it to achieve its goal of increasing its market share and expanding the power catamaran boating market. Twin Vee Co. currently primarily sells its boats through a current network of 21 independent boat dealers in 26 locations across North America and the Caribbean who resell its boats to the end user Twin Vee Co. customers. Twin Vee Co. continues recruiting efforts for high quality boat dealers and seeks to establish new dealers and distributors domestically and internationally to distribute its boats as it grows its production and introduces new models. Its gas-powered boats are currently outfitted with gas-powered outboard combustion engines.

 

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Due to the growing demand for sustainable, environmentally friendly electric and alternative fuel commercial and recreational vehicles, Forza is designing and developing a line of electric-powered catamaran boats ranging in size from 18-feet to 28-feet. Forza’s initial two models, the FX1 Dual Console and FX1 Center Console, are being designed to be 24-foot in length, have an 8’ beam or width and utilize a catamaran hull surface to reduce drag and increase run times. The initial launch of FX1 will include Forza’s proprietary single electric outboard motor. Forza’s electric boats are being designed as fully integrated electric boats including the hull, outboard motor and control system. To date, Forza completed the design of the hull and running surface of the boat and has begun tooling the molds which are required to build the physical fiberglass boat, it has entered into a supply agreement for the supply of the lithium battery packs that it plans to use to power the electric boats, completed the design and prototyping of the boat control system, and completed the design and are more than halfway through prototyping of the electric outboard motor. Forza expects to begin production of its FX1 fully integrated electric boat and motor and commence selling to end user customers by the second quarter of 2023. Forza has also filed three design and four utility patent applications with the U.S. Patent and Trademark Office relating to, among other things, its propulsion system being developed and boat design.

 

Twin Vee Inc.

 

Twin Vee Powercats, Inc.

3101 S. U.S. Highway 1

Fort Pierce, Florida 34982
(772) 429-2525

 

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Twin Vee Inc. is currently the holder of 4,000,000 shares of common stock in Twin Vee Co. Other than being the holder of Twin Vee Co. shares, Twin Vee Inc. has no operations. Twin Vee Inc. was formally known as Value Rich, Inc. from 2006 and 2015, and was in the business of real estate development and publishing. In 2016, in connection with its acquisition of Twin Vee Catamarans, Inc., the predecessor of Twin Vee Co., Value Rich, Inc. changed its name to Twin Vee Inc. On July 23, 2021, Twin Vee Co. closed an underwritten initial public offering of 3,000,000 shares of its common stock at a public offering price of $6.00 per share, for gross proceeds of $18,000,000, before deducting underwriting discounts and offering expenses. As a result, Twin Vee Inc.’s equity ownership in Twin Vee Co. outstanding common stock decreased from 100% to approximately 57%. On October 3, 2022, Twin Vee Co. closed an underwritten public offering of 2,500,000 shares of its common stock at a public offering price of $2.75 per share, for gross proceeds of $6,875,000, before deducting underwriting discounts and offering expenses. As a result, Twin Vee Inc.’s equity ownership in Twin Vee Co. common stock decreased from 57% to approximately 42%. If the underwriter’s exercise in full the over-allotment option to purchase an additional 375,000 shares of common stock, such ownership percentage will decrease to 40.42%

 

The Merger Agreement

 

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 Co. and Twin Vee Inc. 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 third quarter of 2022. However, we cannot predict the actual timing of the completion of the merger.

 

Merger Consideration

 

If the merger is completed, Twin Vee Inc. will merge with and into Twin Vee Co., and Twin Vee Co. will survive the merger. Twin Vee Inc. stockholders will receive, in exchange for every 41.7128495 shares of Twin Vee Inc. common stock held or deemed to be held by such stockholder immediately prior to the closing of the merger, one share of Twin Vee Co. common stock, which we refer to as the exchange ratio, for a maximum of 4,000,000 shares of Twin Vee Co. common stock (no fractional shares of Twin Vee Co. common stock will be issued) and the 4,000,000 shares of Twin Vee Co. common stock held by Twin Vee Inc. will be canceled. As a result, immediately after the merger Twin Vee Inc. stockholders will own approximately 42% of the outstanding shares of the combined company on a fully diluted basis and the remaining Twin Vee Co. stockholders will own approximately 58% of the outstanding shares of the combined company on a fully diluted basis. If the underwriter’s exercise their over-allotment in full, immediately after the merger Twin Vee Inc. stockholders will own approximately 40.42% of the outstanding shares of the combined company on a fully diluted basis and the remaining Twin Vee Co. stockholders will own approximately 59.58% of the outstanding shares of the combined company on a fully diluted basis.

 

For a more complete description of the merger consideration to be issued by Twin Vee Co., please see the section entitled “The Merger—The Merger Agreement” in this Joint Proxy Statement/Prospectus.

 

Risks Relating to the Merger

 

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

 

Recommendation of the Twin Vee Co. Board of Directors and its Reasons for the Merger

 

The Twin Vee Co. Board of Directors approved the merger based on a number of factors, including, among other factors, the following:

 

·the potential cost savings synergies derived from the merger, including the opportunity to utilize $7,055,709 of net operating loss carryforwards of Twin Vee Inc. to offset the income of Twin Vee Co., thus enhancing stockholders value;

 

·the results of the due diligence review of Twin Vee Inc.’s operations by Twin Vee Co.’s management, legal advisors and financial advisors;

 

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·the likelihood of success of the three pending litigations that are currently being defended by Twin Vee Inc. (which are more fully described herein) and the potential exposure in the event that Twin Vee Inc. is unsuccessful in any or all of such litigations, as well as the cost of defending the litigations, which may include the cost of trial;

 

·the terms and conditions of the merger agreement;

 

·the likelihood that the merger will be consummated on a timely basis; and

 

·the opinion of Twin Vee Co.’s financial advisor, dated September 8, 2022, to the Twin Vee Co. special committee of the Board of Directors 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 one share of Twin Vee Co. common stock to be issued in exchange for every 41.7128495 shares of Twin Vee Inc. common stock pursuant to the merger agreement was fair to Twin Vee Co. from a financial point of view.

 

The Twin Vee Co. 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 Co.’s 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 Co. 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 Co.;

 

·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 merger agreement is adopted by the stockholders of Twin Vee Co.; the risk to Twin Vee Co.’s business, operations and financial results in the event that the merger is not consummated;

 

·the risk that the anticipated cost savings resulting from use of the net operating losses will not be realized; 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”.

 

Recommendation of the Twin Vee Inc. Board of Directors and its Reasons for the Merger

 

The Twin Vee Inc. Board of Directors approved the merger based on a number of factors, including, among other factors, the following:

 

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·the strategic rationale for the merger and the potential benefits of the contemplated transaction;
·the possible alternatives to the merger, including the possibility of continuing to operate as an independent entity;
·current and historical information concerning Twin Vee Inc.’s and Twin Vee Co.’s respective businesses, 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 Co.;
·the likelihood that the merger will be completed;
·current financial market conditions and historical market prices, volatility and trading information with respect to Twin Vee Inc.’s and Twin Vee Co.’s common stock;
·the terms of the merger agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations; and

 

·the consideration to be received by Twin Vee Inc. stockholders in the merger, including the form of such consideration, which enables Twin Vee Inc.’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 Co. common stock to be received by Twin Vee Inc.’s stockholders will be received in a tax-free exchange.

The Twin Vee Inc. 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 and the potential effects of the public announcement and pendency of the merger on management attention;
·the fact that certain of the directors and executive officers of Twin Vee Inc. 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 Inc.;
·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 merger agreement is adopted by the stockholders of Twin Vee Co.;
·the risk of not realizing all of the anticipated strategic benefits between Twin Vee Inc. and Twin Vee Co. 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;
·Twin Vee Inc.’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 Twin Vee Inc. and Twin Vee Co. 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”

 

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Opinion of Twin Vee Co.’s Financial Advisor

  

In connection with the merger, ValuCorp, Twin Vee Co.’s financial advisor, delivered to the Special Committee of the Twin Vee Co. Board of Directors an opinion, dated September 8, 2022, as to the fairness, from a financial point of view and as of the date of such opinion, to Twin Vee Co. of the merger agreement entered into on September 8, 2022. The full text of ValuCorp ‘s opinion is attached to this Joint Proxy Statement/Prospectus as Annex B and is incorporated into this Joint Proxy Statement/Prospectus by reference. Holders of Twin Vee Co. common stock are encouraged to read ValuCorp’s opinion carefully in its entirety for a description of the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by ValuCorp in connection with its opinion. ValuCorp’s opinion was addressed to the Special Committee of the Twin Vee Co. Board of Directors, was only one of many factors considered by the Special Committee and the Twin Vee Co. Board of Directors in their evaluation of the merger and only addresses the fairness, from a financial point of view, to Twin Vee Co. of the issuance of the shares of Twin Vee Co. common stock to be issued in the merger. ValuCorp’s opinion does not address the merits of the underlying decision by Twin Vee Co. to engage in the merger or related transactions or the relative merits of the merger or related transactions as compared to any other transaction or business strategy in which Twin Vee Co. might engage and is not intended to, and does not, constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to the merger or related transactions or any other transaction or business strategy in which Twin Vee Co. might engage.

 

Interests of Certain Persons in the Merger

 

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

 

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

 

    Twin Vee Co.   Twin Vee Inc.   Combined Company
Name   Number of
shares
  Percentage**   Number of
shares
  Percentage***   Number of
shares
  Percentage****
Joseph Visconti (1)     2,449,048       25 .4%     97,113,873       58.2 %     2,449,048       25 .4%
Preston Yarborough (2)     60,448       *       1,600,000       1 %     98,805       1.0 %
James Melvin (3)     5,500        *                   5,500        *  
Bard Rockenbach (4)     5,500       *                   5,500           
Neil Ross (3)     5,500       *                   5,500       *  
Kevin Schuyler (5)     1,832       *                   1,832       *  
Donna Barnett (6)     34,000       *                   34,000       *  
Carrie Gunnerson (7)     29,471       *                   29,471       *  
Twin Vee Inc.(1)     4,000,000       42.0 %                               %
Marathon Micro Fund, L.P.(8)     652,832       6.9 %                     652,832        6.86%   
Michael Carricarte                 25,200,000       15 %     604,130        6.3%   

 

* Less than one percent (1%)

 

** Percentage of Twin Vee Co. is based upon 9,520,000 shares of common stock outstanding as of October 11, 2022.

 

***Percentage of Twin Vee Inc. is based upon 166,851,398 shares of common stock outstanding as of October 11, 2022.

****Percentage of common stock of the combined company is based on 9,520,000 shares of common stock of the combined company outstanding upon the consummation of the merger and assumes that the 4,000,000 shares of common stock of Twin Vee Co. held by Twin Vee Inc are issued upon consummation of the merger to the stockholders of Twin Vee Inc. and that the 4,000,000 shares of common stock of Twin Vee Co., held by Twin Vee Inc. are cancelled.


(1) Joseph Visconti is the Chairman of the Board and Chief Executive Officer of Twin Vee Co. and Twin Vee Inc., and owns 58.2% of the outstanding stock of Twin Vee Inc. Prior to the consummation of the merger Twin Vee Inc. is the owner of 4,000,000 shares of common stock of Twin Vee Co. As a controlling shareholder of Twin Vee Inc., Mr. Visconti is deemed to have control over the shares of common stock of our company owned by Twin Vee Inc. Mr. Visconti currently disclaims beneficial ownership of these securities. In the merger, Mr. Visconti will be issued 2,328,152 shares of Twin Vee Co. stock, which he will directly own after the merger. Mr. Visconti was granted an option to purchase 272,000 shares of our common stock upon the consummation of the Twin Vee Co. initial public offering, of which 120,896 shares of common stock will vest and be exercisable within 60 days of October 11, 2022, and are included in the number of shares of common stock beneficially owned by Mr. Visconti.  
   
(2) Mr. Yarborough was granted an option to purchase 136,000 shares of our common stock upon the consummation of the Twin Vee Co. initial public offering, of which 60,448 shares of common stock will vest and be exercisable within 60 days of October 11, 2022 and are included in the number of shares of common stock beneficially owned by Mr. Yarborough. In the merger, Mr. Yarborough will be issued 38,357 shares of Twin Vee Co. stock which he will directly own after the merger
   
(3) Messrs. Melvin and Ross were each granted an option to purchase 5,500 shares of our common stock upon the consummation of the Twin Vee Co. initial public offering, of which 5,500 shares of common stock will vest and be exercisable within 60 days of October 11, 2022, and are included in the number of shares of common stock beneficially owned by each of Messrs. Melvin and Ross.
   
(4) In connection with his appointment, effective November 7, 2021, Mr. Rockenbach was awarded an option to purchase 5,500 shares of the Company’s 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. Of these 5,500 shares, all 5,500 shares of common stock will vest and be exercisable within 60 days of October 11, 2022, and are included in the number of shares of common stock beneficially owned by Mr. Rockenbach.

 

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(5) In connection with his appointment, effective July 6, 2022, Mr. Schuyler was awarded an option to purchase 5,500 shares of the Company’s 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. Of these 5,500 shares, 1,832 shares of common stock will vest and be exercisable within 60 days of October 11, 2022, and are included in the number of shares of common stock beneficially owned by Mr. Schuyler.
   
(6) Ms. Barnett was granted an option to purchase 34,000 shares of our common stock upon the consummation of the Twin Vee Co. initial public offering, of which 34,000 shares of common stock will vest and be exercisable within 60 days of October 11, 2022, and are included in the number of shares of common stock beneficially owned by Ms. Barnett.
   
(7) Ms. Gunnerson was granted an option to purchase 136,000 shares of our common stock upon in connection with joining our company as Chief Financial Officer, of which 29,471 shares of common stock will vest and be exercisable within 60 days of
October 11, 2022, and are included in the number of shares of common stock beneficially owned by Ms. Gunnerson.
   
(8) Information is based upon a Schedule 13G/A filed with the SEC on December 31, 2021 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.

 

Regulatory Approvals

 

Twin Vee Co. must comply with applicable federal and state securities laws in connection with the issuance of shares of Twin Vee Co. common stock to Twin Vee Inc.’s stockholders and the filing of this Joint Proxy Statement/Prospectus with the SEC. As of the date hereof, the registration statement of which this Joint Proxy Statement/Prospectus is a part has not become effective.

 

Please see the section entitled “Chapter One—The Merger Transaction—Regulatory Approvals” in this Joint Proxy Statement/Prospectus.

 

Accounting Treatment of the Merger

 

As Twin Vee Inc. does not meet the definition of a business under ASC 805, the merger will not be accounted for as a business combination. The merger is expected to be accounted for as a recapitalization of Twin Vee Co., effected through exchange of Twin Vee Inc. shares for Twin Vee Co. shares, and the cancellation of Twin Vee Co. shares held by Twin Vee Inc. Upon the effective date of the Merger, Twin Vee Co. will account for the merger by assuming Twin Vee Inc.’s net liabilities. Twin Vee Co.’s financial statements will reflect the operations of Twin Vee Inc. prospectively and will not be restated retroactively to reflect the historical financial position or results of operations of Twin Vee Inc.

 

Material U.S. Federal Income Tax Consequences

 

The merger should qualify as a reorganization within the meaning of Section 368(a) of the Code. If the merger qualifies as a reorganization, Twin Vee Inc. stockholders generally will not recognize gain or loss upon the receipt of Twin Vee Co. common stock in exchange for Twin Vee Inc. common stock in connection with the merger.

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Tax matters are very complicated, and the tax consequences of the merger to a particular stockholder will depend in part on such stockholder’s circumstances. Accordingly, you are urged to consult your own 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 on the federal income tax effect of the merger, see the section entitled “The Merger Transaction—Certain U.S. Federal Income Tax Consequences of the Merger.”

 

Comparison of Stockholder Rights

 

If Twin Vee Co. and Twin Vee Inc. successfully complete the merger, holders of Twin Vee Inc. common stock will become Twin Vee Co. stockholders, and their rights as stockholders will be governed by Twin Vee Co.’s certificate of incorporation and bylaws. There are differences between the certificates of incorporation and bylaws of Twin Vee Co. and Twin Vee Inc. Since Twin Vee Inc. is a Florida corporation and Twin Vee Co. is a Delaware corporation, the rights of Twin Vee Inc. stockholders will be governed by Delaware law after the completion of the merger. See “ Certain Additional Information—Comparison of Rights of Holders of Twin Vee Co. Common Stock and Twin Vee Inc. Common Stock” in this Proxy Statement/Prospectus for more information.

 

Appraisal Rights in Connection with the Merger

 

Under Florida law, Twin Vee Inc. common stockholders are entitled to appraisal rights in connection with the merger. Holders of Twin Vee Co. common stock are not entitled to appraisal rights in connection with the merger pursuant to Delaware law.

 

Conditions to Completion of the Merger

 

Twin Vee Co. and Twin Vee Inc. are required to complete the merger only if certain customary conditions are satisfied or waived, including, but not limited to:

 

·approval of the merger by stockholders holding a majority of the outstanding shares of Twin Vee Inc. common stock in person or by proxy at Twin Vee Inc.’s special meeting;

 

·approval of the merger by stockholders holding a majority of the outstanding shares of Twin Vee Co. common stock in person or by proxy at Twin Vee Co.’s annual meeting;

 

  · the filing and effectiveness of a registration statement under the Securities Act in connection with the issuance of Twin Vee Co. common stock in the merger;
     
·the respective representations and warranties of Twin Vee Co. and Twin Vee Inc., shall be true and correct in all material respects as of the date of the merger agreement and the closing;

 

·each executive of Twin Vee Co. or any of its subsidiaries and Twin Vee Inc. or any of its subsidiaries shall have delivered a waiver of rights to payments, bonuses, vesting, acceleration or other similar rights that are or may be triggered by the merger;

 

·the shares of Twin Vee Co. common stock to be issued in the merger shall have been approved for listing on Nasdaq;

 

·no material adverse effect with respect to Twin Vee Co. or Twin Vee Inc. 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 Co. and Twin Vee Inc. with their respective covenants and obligations in the merger agreement; and

 

·Twin Vee Inc. 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 Co. and Twin Vee Inc., duly authorized by their respective boards of directors;

 

·by either Twin Vee Co. or Twin Vee Inc. if the merger is not consummated by the date that is 6 months after the signing date of the merger agreement for any reason; 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;

 

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

 

·by Twin Vee Co. if a triggering event (as defined below) occurs;

 

·by Twin Vee Inc., upon a breach of any representation, warranty, covenant or agreement on the part of Twin Vee Co. set forth in the merger agreement, or if any representation or warranty of Twin Vee Co. 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, however, that if such inaccuracy in Twin Vee Co.’s representations and warranties or breach by Twin Vee Co. is curable by Twin Vee Co. through the exercise of its commercially reasonable efforts, then Twin Vee Inc. may not terminate the merger agreement for thirty (30) calendar days following the delivery of written notice from Twin Vee Inc. to Twin Vee Co. of such breach, provided Twin Vee Co. continues to exercise commercially reasonable efforts to cure such breach (it being understood that Twin Vee Inc. may not terminate the agreement if such breach by Twin Vee Co. is cured during such thirty (30) calendar day period);

 

·by Twin Vee Co., upon a breach of any representation, warranty, covenant or agreement on the part of Twin Vee Inc. set forth in the merger agreement, or if any representation or warranty of Twin Vee Inc. 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, however, that if such inaccuracy in Twin Vee Inc.’ representations and warranties or breach by Twin Vee Inc. is curable by Twin Vee Inc. through the exercise of its commercially reasonable efforts, then Twin Vee Co. may not terminate the merger agreement for thirty (30) calendar days following the delivery of written notice from Twin Vee Co. to Twin Vee Inc. of such breach, provided Twin Vee Inc. continues to exercise commercially reasonable efforts to cure such breach (it being understood that Twin Vee Co. may not terminate the agreement if such breach by Twin Vee Inc. is cured during such thirty (30) calendar day period); or

 

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·by Twin Vee Co. if a change that is materially adverse to the business, assets, capitalization, financial condition or results of operations with respect to Twin Vee Inc. or its subsidiaries occurs since the date of the merger agreement; provided, however, that if such change is curable by Twin Vee Inc. through commercially reasonable efforts, then Twin Vee Co. may not terminate the merger agreement for thirty (30) calendar days following the occurrence of such change, provided Twin Vee Inc. continues to exercise commercially reasonable efforts to cure the effect that is materially adverse to the business, assets, capitalization, financial condition or results of operations with respect to Twin Vee Inc. (it being understood that Twin Vee Co. may not terminate the agreement if such breach by Twin Vee Inc. is cured during such thirty (30) calendar day period).

 

A “ triggering event “ has occurred if (i) the Board of Directors of Twin Vee Inc. or any of its committees has withdrawn or has amended or modified in a manner adverse to Twin Vee Co. its recommendation in favor of the adoption and approval of the merger agreement or the approval of the merger; (ii) Twin Vee Inc. failed to seek to obtain the vote of a majority of its stockholders approving the merger agreement and the merger; (iii) the Board of Directors of Twin Vee Inc. failed to reaffirm its recommendation in favor of the adoption and approval of the merger agreement and the approval of the merger within five (5) business days after Twin Vee Co. requests in writing that such recommendation be reaffirmed at any time following the announcement of an third party acquisition proposal; (iv) the Board of Directors of Twin Vee Inc. or any of its committees has approved or recommended any third party acquisition proposal; (v) Twin Vee Inc. has entered into any letter of intent or similar document accepting any such acquisition proposal; or (vi) a tender or exchange offer relating to securities of Twin Vee Inc. has been commenced by a person unaffiliated with Twin Vee Co. or its stockholders and Twin Vee Inc. has not sent to its security holders pursuant to Rule 14e-2 promulgated under the Securities Act, within ten (10) business days after such tender or exchange offer is first published, a statement indicating that Twin Vee Inc. recommends rejection of such tender or exchange offer.

 

Management of the Combined Company Following the Merger

 

Effective as of the closing of the merger, the combined company will have a six member board of directors, consisting of Twin Vee Co.’s current board of directors, Joseph Visconti, Preston Yarborough, James Melvin, Bard Rockenbach, Neil Ross, and Kevin Schuyler. In addition, effective as of the closing of the merger, the combined company’s executive officers, will consist of Twin Vee Co.’s current executive officers, Joseph Visconti, Carrie Gunnerson, Preston Yarborough and Dan Norton.

 

Matters to Be Considered at the Meeting

 

Twin Vee Co. stockholders will be asked to vote on proposals related to the following:

 

·the adoption and approval of the merger agreement;

 

·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 adoption and approval of the merger agreement;

 

·the re-election of Neil Ross and Bard Rockenbach as Twin Vee Co. directors;

 

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  the ratification of Grassi & Co., CPAs, P.C., as the independent registered public accounting firm;
     
  ●   the approval of the Authorized Common Stock Increase proposal; and
     
  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 Authorized Common Stock Increase proposal.

 

The Twin Vee Co. board of directors recommends that Twin Vee Co. stockholders vote “FOR” all of the proposals set forth above. For further discussion of the Twin Vee Co. annual meeting, see “Twin Vee Co. Annual Meeting Proposals,” beginning on page 167.

Twin Vee Inc. stockholders will be asked to vote on proposals related to the following:

 

·the adoption and approval of the merger agreement;

 

·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 adoption and approval of the merger agreement;and

 

  The Twin Vee Co. board of directors recommends that Twin Vee Co. stockholders vote “FOR” all of the proposals set forth above. For further discussion of the Twin Vee Co. annual meeting, see “Twin Vee Co. Annual Meeting Proposals.”

 

Where You Can Find More Information

 

If you would like more information about Twin Vee Co. or Twin Vee Inc., you should refer to the documents filed by each company with the SEC (as to Twin Vee Co.) and the OTC Markets Pink (as to Twin Vee Inc.). The companies have identified these documents and have set out instructions as to how you can obtain copies of these documents under the section “Additional Information for Stockholder—Where You Can Find More Information.”

 

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.”

 

RISKS RELATED TO THE MERGER

 

·All of Twin Vee Inc.’s executive officers and all but one of its directors have conflicts of interest that may influence them to support or approve the merger without regard to your interests.
·The exchange ratio is not adjustable based on the market price of Twin Vee Co. 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.
·If there are Twin Vee Inc. stockholders that exercise their appraisal rights, the surviving corporation in the merger will be responsible for the resulting cash payment obligation.
·Twin Vee Co. and Twin Vee Inc. will incur substantial expenses whether or not the merger is completed.

 

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·Twin Vee Co. will assume all of Twin Vee Inc.’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 ValuCorp’s opinion was given to Twin Vee Co.’s board of directors on September 8, 2022, the date of the execution of the merger agreement, it does not reflect any changes in market and economic circumstances after September 8, 2022.
·The merger and related transactions are subject to approval by the stockholders of both Twin Vee Co. and Twin Vee Inc.
·Twin Vee Co.’s business and stock price may be adversely affected if the acquisition of Twin Vee Inc. is not completed.
·Twin Vee Co.’s ability to use the net operating loss carryforwards of Twin Vee Inc. may be subject to limitation.

 

RISKS RELATED TO TWIN VEE CO.

 

·There is limited public information on Twin Vee Co.’s operating history.
·Twin Vee Co. has incurred losses for the quarter ended June 30, 2022 and the year ended December 31, 2021 and could continue to incur losses in the future.
·Twin Vee Co.’s ability to meet its manufacturing workforce needs is crucial to its results of operations and future sales and profitability.
·Twin Vee Co. has a large fixed cost base that will affect its profitability if its sales decrease.
·Interest rates and energy prices affect product sales.
·The capacity of the manufacturing facility that Twin Vee Co. utilizes will not be sufficient to support its future growth and business plans.
·Twin Vee Co.’s business may be materially affected by the COVID-19 Outbreak.
·Twin Vee Co.’s annual and quarterly financial results are subject to significant fluctuations depending on various factors, many of which are beyond its control.
·Unfavorable weather conditions may have a material adverse effect on Twin Vee Co.’s business, financial condition, and results of operations, especially during the peak boating season.
·A natural disaster, the effects of climate change, or other disruptions at Twin Vee Co.’s manufacturing facility could adversely affect its business, financial condition, and results of operations.
·If we fail to manage Twin Vee Co.’s manufacturing levels while still addressing the seasonal retail pattern for its products, its business and margins may suffer.
·Twin Vee Co. depends on its network of independent dealers for its gas-powered boats, faces increasing competition for dealers, and has little control over their activities.
·Twin Vee Co.’s success depends, in part, upon the financial health of its dealers and their continued access to financing.
·Twin Vee Co. may be required to repurchase inventory of certain dealers.
·Twin Vee Co. relies on third-party suppliers in the manufacturing of its boats.
·Termination or interruption of informal supply arrangements could have a material adverse effect on Twin Vee Co.’s business or results of operations.
·Twin Vee Co. relies on one manufacturer to supply its engines and does not have any long terms commitments from such manufacturer.
·Product liability, warranty, personal injury, property damage and recall claims may materially affect Twin Vee Co.’s financial condition and damage its reputation.
·Significant product repair and/or replacement due to product warranty claims or product recalls could have a material adverse impact on Twin Vee Co.’s results of operations.
·The nature of Twin Vee Co.’s business exposes Twin Vee Co. to workers’ compensation claims and other workplace liabilities.
·If Twin Vee Co, is unable to comply with environmental and other regulatory requirements, Twin Vee Co.’s business may be exposed to material liability and/or fines.
·Twin Vee Co.’s industry is characterized by intense competition, which affects its sales and profits.
·Twin Vee Co. faces increasing competition for dealers and has little control over their activities.

 

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·Twin Vee Co.’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 Co.’s sales and profitability depend, in part, on the successful introduction of new products.
·Twin Vee Co.’s success depends upon the continued strength of its brand, the value of its brand, and sales of its products could be diminished if Twin Vee Co., the consumers who use Twin Vee Co.’s products, or the sports and activities in which Twin Vee Co.’s products are used, are associated with negative publicity.
·Twin Vee Co. may not be able to execute its manufacturing strategy successfully, which could cause the profitability of its products to suffer.
·Twin Vee Co. will rely on complex machinery for its operations, and production involves a significant degree of risk and uncertainty in terms of operational performance, safety, security, and costs.
·Twin Vee Co. may need to raise additional capital that may be required to grow its business, and Twin Vee Co. may not be able to raise capital on terms acceptable to it or at all.
·If Twin Vee Co. fails to manage future growth effectively, it may not be able to market or sell its products successfully.
·The loss of one or a few customers could have a material adverse effect on Twin Vee Co.
·Twin Vee Co. depends upon its executive officers and it may not be able to retain them and their knowledge of Twin Vee Co.’s business and technical expertise would be difficult to replace.
·Certain of Twin Vee Co.’s shareholders have sufficient voting power to make corporate governance decisions that could have a significant influence on Twin Vee Co. and the other stockholders.
·Twin Vee Co. may attempt to grow its business through acquisitions or strategic alliances and new partnerships, which it may not be successful in completing or integrating.
·Twin Vee Co. relies on network and information systems and other technologies for its business activities and certain events, such as computer hackings, viruses or other destructive or disruptive software or activities may disrupt its operations, which could have a material adverse effect on its business, financial condition and results of operations.
·Uninsured losses could result in payment of substantial damages, which would decrease Twin Vee Co.’s cash reserves and could harm its cash flow and financial condition.

 

RISKS RELATED TO THE INDUSTRY OF TWIN VEE CO. AND THE COMBINED ENTITY

 

·Demand in the powerboat industry is highly volatile.
·General economic conditions, particularly in the U.S., affect Twin Vee Co.’s industry, demand for its products and its business, and results of operations.
·Global economic conditions could materially adversely impact demand for Twin Vee Co.’s products and services.
·Changes in general economic conditions, geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond Twin Vee Co.’s control may adversely impact our business and operating results.

 

RISKS RELATED TO THE ELECTRIC-POWERED BOATS

 

·Forza’s planned fully electric sport boat has not yet been developed, and even if developed, interest in it may not develop.
·Forza’s planned distribution model is different from the predominant current distribution model for boat manufacturers, which subjects Twin Vee Co. to substantial risk and makes evaluating Twin Vee Co.’s business, prospects, financial condition, results of operations, and cash flows difficult.
·Forza’s ability to generate meaningful product revenue from its electric-powered boats will depend on consumer adoption of electric boats.
·Forza depends upon third parties to manufacture and to supply key semiconductor chip components necessary for its electric boats. Forza does not have long-term agreements with all of its semiconductor chip manufacturers and suppliers, and if these manufacturers or suppliers become unwilling or unable to provide an adequate supply of semiconductor chips, with respect to which there is a global shortage, Forza would not be able to find alternative sources in a timely manner and Forza’s Twin Vee Co.’s business would be adversely impacted.

 

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·The electric boats will use lithium-ion battery cells, which, if not appropriately managed and controlled, have been observed to catch fire or vent smoke and flame.
·The electronic vehicle (EV) industry and its technology are rapidly evolving and may be subject to unforeseen changes which could adversely affect the demand for Forza’s boats or increase Forza’s operating costs.
·If Forza’s electric boats fail to perform as expected, its ability to develop, market and sell or lease its products could be harmed.
·Forza’s boats will rely on software and hardware that is highly technical, and if these systems contain errors, bugs, vulnerabilities, or design defects, or if Forza is unsuccessful in addressing or mitigating technical limitations in its systems, Forza’s business could be adversely affected.

 

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.
·Twin Vee Co. and Forza may not be able to prevent others from unauthorized use of their intellectual property, which could harm their business and competitive position.
·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 Co.’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 Co.’s and Forza’s intellectual property rights could result in Twin Vee Co.’s and Forza’s competitors offering similar products, potentially resulting in the loss of some of Twin Vee Co.’s and Forza’s competitive advantage and a decrease in its revenue which would adversely affect its business, prospects, financial condition, results of operations, and cash flows.
·Twin Vee Co. or Forza may in the future become, subject to claims that Twin Vee Co., Forza or their employees have wrongfully used or disclosed alleged trade secrets of Twin Vee Co.’s, Forza’s employees’ former employers.
·Twin Vee Co.’s or 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 services and subject Twin Vee Co. or Forza to possible litigation, claims or proceedings.
·A significant portion of Twin Vee Co.’s or Forza’s intellectual property is not protected through patents or formal copyright registration. As a result, Twin Vee Co. and Forza do not have the full benefit of patent or copyright laws to prevent others from replicating its products and brands.
·Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.
·Twin Vee Co. and Forza may need to defend itself against patent, copyright or trademark infringement claims, which may be time-consuming and would cause Twin Vee Co. and Forza to incur substantial costs.

 

RISKS RELATED TO THE OWNERSHIP OF TWIN VEE CO.’S COMMON STOCK.

 

·Terms of subsequent financings may adversely impact your investment.
·If securities analysts do not publish research or reports about Twin Vee Co., or if they issue unfavorable commentary about Twin Vee Co. or its industry or downgrade its common stock, the price of Twin Vee Co. 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 Co.’s business operations.
·Twin Vee Co. has identified weaknesses in its internal controls, and it cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.
·Twin Vee Co.’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 its business and share price.

 

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  · For as long as Twin Vee Co. is an emerging growth company, it will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about its executive compensation, that apply to other public companies.
  · Twin Vee Co.’s common stock price may be volatile or may decline regardless of its operating performance and you may not be able to resell your shares at or above the price paid for them.
  · Twin Vee Co. does not intend to pay dividends on its common stock for the foreseeable future.
  · FINRA sales practice requirements may limit your ability to buy and sell Twin Vee Co.’s common shares, which could depress the price of its shares.
  · Volatility in Twin Vee Co.’s common shares price may subject it to securities litigation.
  · Twin Vee Co. has broad discretion in the use of the net proceeds from its initial public offering and may not use them effectively.
  · Provisions in Twin Vee Co.’s corporate charter documents and under Delaware law could make an acquisition of Twin Vee Co., which may be beneficial to its stockholders, more difficult and may prevent attempts by its stockholders to replace or remove Twin Vee Co.’s current management.
  · Twin Vee Co.’s Certificate of Incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain types of state actions that may be initiated by Twin Vee Co.’s stockholders, which could limit the stockholders’ ability to obtain a favorable judicial forum for disputes with Twin Vee Co. or its directors, officers, or employees.

 

RISKS RELATED TO TWIN VEE INC.

 

·There is limited public information on Twin Vee Inc.’s operating history.
·Twin Vee Inc. has incurred losses for the quarter ended June 30, 2022 and the year ended December 31, 2021 and could continue to incur losses in the future.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Joint Proxy Statement/Prospectus contains “forward-looking statements.” We 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 our 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 we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate under the circumstances. As you read and consider this 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 our control), and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance anticipated in the forward-looking statements. We believe these factors include, but are not limited to, those described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements.

 

Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we 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 our business not to develop as we expect emerge from time to time, and it is not possible for us to predict all of them. Further, we cannot assess the impact of each currently known or new factor on our 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.

 

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SELECTED HISTORICAL FINANCIAL DATA

 

SELECTED HISTORICAL FINANCIAL DATA OF TWIN VEE CO.

 

The following table sets forth the selected consolidated financial data of Twin Vee Co. and has been derived from Twin Vee Co.’s audited consolidated financial statements which are attached as Annex C-1 to this Joint Proxy Statement/Prospectus. Consolidated balance sheets as of December 31, 2021 and 2020, as well as consolidated statements of operations for the years ended December 31, 2021 and 2020 and the reports thereon in this Joint Proxy Statement/Prospectus which are attached as Annex C-1 to this Joint Proxy Statement/Prospectus. You should read this information in conjunction with Twin Vee Co.’s consolidated financial statements and related notes included in Twin Vee Co.’s Annual Report on Form 10-K for the year ended December 31, 2021. The statement of operations data for the six months ended June 30, 2022 and the balance sheet data as of June 30, 2022 have been derived from unaudited financial statements for the six months ended June 30, 2022 which are attached as Annex C-1 contained in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 which are attached as Annex C-1 to 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,
    2022   2021   2021   2020
Selected Consolidated Statements of Operations Data:                                
Revenue   $ 14,405,613     $ 6,505,214     $ 15,774,170     $ 11,063,619  
Total operating expenses   $ 7,401,698     $ 2,766,221     $ 7,906,507     $ 4,053,469  
Net loss   $ (1,730,099 )   $ 182,800     $ (1,011,009 )   $ 1,171,077  
Net loss per share-basic and diluted   $ (0.25 )   $ 0.05     $ (0.19 )   $ 0.29  
Weighted-average common shares used to compute basic and diluted net loss per share     7,000,000       4,000,000       5,331,400       4,000,000  

 

   As of June 30,  As of December 31,
   2022  2021  2020
Selected Consolidated Balance Sheet Data:               
Cash and cash equivalents  $5,910,533   $6,975,302   $891,816 
Total assets  $21,019,907   $20,599,184   $4,504,566 
Total liabilities  $5,523,583   $3,899,484   $2,955,726 
Total stockholders’ equity  $15,496,324   $16,699,700   $1,548,840 

 

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SELECTED HISTORICAL FINANCIAL DATA OF TWIN VEE INC.

 

The statement of operations data for the years ended December 31, 2021 and 2020 and the balance sheet data as of December 31, 2021 and 2020 have been derived from Twin Vee Inc.’s audited financial statements for the year ended December 31, 2021 which are attached as Annex C-2 to this Joint Proxy Statement/Prospectus. The statement of operations data for the six months ended June 30, 2022 and 2021 and the balance sheet data as of June 30, 2022 have been derived from Twin Vee Inc.’s unaudited financial statements for the six months ended June 30, 2022 which are attached as Annex C-2 to this Joint Proxy Statement/Prospectus.

 

   Six Months Ended June 30,  Years Ended December 31,
   2022  2021  2021  2020
Selected Consolidated Statements of Operations Data:                    
Revenue  $14,405,613   $6,505,214   $15,774,170   $11,063,619 
Total operating expenses  $7,405,430   $2,807,975   $7,936,827   $4,124,043 
Net (loss) income  $(1,733,831)  $141,046   $(1,312,056)  $1,081,680 
Net loss per share-basic and diluted  $(0.01)  $0.00   $—     $—   
Weighted-average common shares used to compute basic and diluted net loss per share   166,743,245    157,626,305           

 

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    As of June 30,   As of December 31,
    2022   2021   2020
Selected Consolidated Balance Sheet Data:                        
Cash and cash equivalents   $ 5,919,082     $ 6,977,792     $ 891,865  
Total assets   $ 20,826,614     $ 20,409,624     $ 4,758,298  
Total liabilities   $ 5,756,456     $ 4,162,447     $ 3,629,234  
Total stockholders’ equity   $ 15,070,158     $ 16,247,177     $ 1,129,064  

  

UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION OF TWIN VEE CO. AND TWIN VEE INC.

 

The following unaudited pro forma combined consolidated financial information assumes that each share of Twin Vee Inc. common stock will be exchanged for .0239734281399308 shares of Twin Vee Co. common stock. Utilizing the exchange ratio of .0239734281399308, it is anticipated that Twin Vee Inc. common stockholders will own approximately 42% 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 Twin Vee Inc. common stock outstanding immediately prior to the completion of the merger will be 166,851,398 and utilizes the exchange ratio of .0239734281399308, which will result in 4,000,000 shares of Twin Vee Co. common stock being issued in the transaction.

 

The following unaudited pro forma combined consolidated financial statements as of June 30, 2022 combine the historical consolidated financial statements of Twin Vee Co. and Twin Vee Inc. The unaudited pro forma combined consolidated financial statements give effect to the proposed merger as if the merger occurred on June 30, 2022 with respect to the consolidated statement of condition, and at the beginning of the periods for the six months ended June 30, 2022 and the twelve months ended December 31, 2021, with respect to the consolidated statements of income.

 

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 Co. 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 that Twin Vee Co. and Twin Vee Inc. have included in this Joint Proxy Statement/Prospectus as of and for the indicated periods.

 

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UNAUDITED PRO FORMA CONDENSED CONSOLDIATED BALANCE SHEETS

 

   Twin Vee PowerCats Inc.  Twin Vee PowerCats Co.  Eliminations and  Twin Vee PowerCats Co. Pro Forma
   June 30,  June 30,  Merger  June 30,
   2022  2022  Adjustments  2022
             
ASSETS                    
Current Assets                    
Cash and cash equivalents  $5,919,082   $5,910,533   $(5,910,533)(1)  $5,919,082 
Accounts receivable           (1)    
Marketable securities   997,925    997,925    (997,925)(1)   997,925 
Inventories   4,369,549    4,369,549    (4,369,549)(1)   4,369,549 
Deferred offering costs   247,129    247,129    (247,129)(1)   247,129 
Due from affiliated companies       286,922    (286,922)(2)    
Prepaid expenses and other current assets   508,203    508,203    (508,203)(1)   508,203 
Total Current Assets   12,041,888    12,320,261    (12,320,261)(1)   12,041,888 
                     
Marketable securities – non current   2,951,005    2,951,005    (2,951,005)(1)   2,951,005 
Property and equipment, net   4,447,838    4,362,758    (4,362,758)(1)   4,447,838 
Operating lease right of use asset   1,360,883    1,360,883    (1,360,883)(1)   1,360,883 
  Security deposit   25,000    25,000    (25,000)(1)   25,000 
Total Assets  $20,826,614   $21,019,907   $(21,019,907)  $20,826,614 
                     
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Current Liabilities:                    
  Accounts payable  $2,262,434   $2,262,434   $(2,262,434)(1)  $2,262,434 
  Accrued liabilities   683,351    683,351    (683,351)(1)   683,351 
  Contract liability   532,127    532,127    (532,127)(1)   532,127 
Due to affiliated companies   115,043    115,043    (115,043)(2)   115,043 
Operating lease right of use liability   382,922    382,922    (382,922)(1)   382,922 
  Total Current Liabilities   3,975,877    3,975,877    (3,975,877)   3,975,877 
                     
Economic Injury Disaster Loan   499,900    499,900    (499,900)(1)   499,900 
  Notes payable   232,873            232,873 
Operating lease liability – noncurrent   1,047,806    1,047,806    (1,047,806)(1)   1,047,806 
  Total Liabilities   5,756,456    5,523,583    (5,523,583)   5,756,456 
                     
Commitments and contingencies (Note 9)                    
                     
Stockholders’ equity:                    
Preferred stock: 10,000,000 authorized; $0.001 par value; no shares issued and outstanding                
Common stock: 180,000,000 authorized; $0.001 par value;   1,668,514    7,000    (1,668,514)   7,000 
Additional paid-in capital   7,171,296    19,236,979    (7,580,545)(1),(2)   18,827,730 
  Accumulated deficit   (8,375,509)   (3,747,655)   8,377,047    (3,747,655)
  Non-controlling interest   14,605,857        (14,605,857)    
  Total stockholders’ equity   15,070,158    15,496,324    (15,496,324)   15,070,158 
                     
Total liabilities and stockholders’ equity  $20,826,614   $21,019,907   $(21,019,907)  $20,826,614 

 

(1) Represents adjustment for (i) elimination of Twin Vee PowerCats Co. in Twin Vee Powercats, Inc., (ii) elimination of Twin Vee Powercats, Inc. accumulated deficit of $8,377,047 and Non-controlling interest of $(14,605,857) and (iii) elimination of Twin Vee PowerCat Inc. common stock.
(2) Represents elimination of Twin Vee Powercats, Inc. loan to Twin Vee PowerCats Co. (3) On August 12, 2022, Forza X1 consummated its initial public offering of 3,450,000 shares of common stock at $5.00 per share, for gross proceeds of $15,000,000, before deducting underwriting discounts and offering expenses. This transaction is not included in the above pro forma table. (4) On October 3, 2022, Twin Vee Co. closed an underwritten public offering of 2,500,000 shares of its common stock at a public offering price of $2.75 per share, for gross proceeds of $6,875,000, before deducting underwriting discounts and offering expenses. This transaction in not included in the above pro forma table.

 

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UNAUDITED PROFORMA CONSDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

SIX MONTHS ENDED JUNE 30, 2022

  

   Twin Vee PowerCats, Inc. Six Months Ended June 30, 2022  Twin Vee PowerCats, Co. Six Months Ended June 30, 2022  Elimination and Merger Adjustments  Twin Vee PowerCats, Co. Six Months Ended June 30, 2022 Pro Forma
             
Net sales  $14,405,613   $14,405,613   $(14,405,613)(1)  $14,405,613 
Cost of products sold   8,524,047    8,524,047    (8,524,047)(1)   8,524,047 
Gross profit   5,881,566    5,881,566    (5,881,566)   5,881,566 
                     
Operating expenses:                    
Selling, general and administrative   1,314,005    1,320,065    (1,320,065)(1)   1,314,005 
Salaries and wages   5,047,091    5,047,091    (5,047,091)(1)   5,047,091 
Professional fees   438,281    438,281    (438,281)(1)   438,281 
Depreciation   209,701    199,909    (199,909)(1)   209,701 
Research and design   396,352    396,352    (396,352)(1)   396,352 
Total operating expenses   7,405,430    7,401,698    (7,401,698)   7,405,430 
                     
(Loss) Income from operations   (1,523,864)   (1,520,132)   1,520,132    (1,523,864)
                     
Other (expense) income:                    
Other income   3,230    3,230    (3,230)(1)   3,230 
Interest expense   (83,556)   (83,556)   83,556(1)   (83,556)
Interest income   32,925    32,925    (32,925)(1)   32,925 
Loss on disposal of assets   (49,990)   (49,990)   49,990(1)   (49,990)
Gain from insurance recovery                
Net change in fair value of marketable securities   (112,576)   (112,576)   112,576(1)   (112,576)
Total other (expenses) income   (209,967)   (209,967)   209,967    (209,967)
                     
Net (loss) income   (1,733,831)   (1,730,099)   1,730,099    (1,733,831)
Less: Net loss (income) attributable to non-controlling interests   712,455    0    0    0 
Net (loss income attributable to the shareholders of Twin Vee PowerCats Inc.  $(1,017,644)  $(1,730,099)  $1,730,099   $(1,733,831)
                     
Basic and dilutive (loss) income per share of common stock  $(0.01)  $(0.25)  $(2)   (0.25)
Weighted average number of shares of common stock outstanding   166,743,245    7,000,000         7,000,000 

 

(1)Represents elimination of Twin Vee PowerCats Co. expenses that were consolidated with Twin Vee Powercats, Inc.
(2)Represents elimination of Twin Vee Powercats, Inc. weighted average shares outstanding, net of shares issued as a result of the Merger, weighted as though these incremental shares had been issued on June 30, 2022.
(3)On August 12, 2022, Forza X1 consummated its initial public offering of 3,450,000 shares of common stock at $5.00 per share, for gross proceeds of $15,000,000, before deducting underwriting discounts and offering expenses. This transaction is not included in the above pro forma table.
(4)On October 3, 2022, Twin Vee Co. closed an underwritten public offering of 2,500,000 shares of its common stock at a public offering price of $2.75 per share, for gross proceeds of $6,875,000, before deducting underwriting discounts and offering expenses. This transaction in not included in the above pro forma table.

  

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UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2021

 

   Twin Vee PowerCats, Inc. Year Ended December 31, 2021  Twin Vee PowerCats, Co. Year Ended December 31, 2021  Elimination and Merger Adjustments  Twin Vee PowerCats, Co. Year Ended December 31, 2021
             
 Net sales  $15,774,170   $15,774,170   $(15,774,170)(1)  $15,774,170 
 Cost of products sold   9,504,534    9,498,384    (9,498,384)(1)   9,504,534 
 Gross profit   6,269,636    6,275,786    (6,275,786)   6,269,636 
                     
Operating expenses:                    
Selling, general and administrative   1,735,081    1,726,345    (1,726,345)(1)   1,735,081 
 Salaries and wages   5,389,599    5,389,599    (5,389,599)(1)   5,389,599 
 Professional fees   381,579    380,929    (380,929)(1)   381,579 
 Depreciation   219,457    198,523    (198,523)(1)   219,457 
 Research and design   211,111    211,111    (211,111)(1)   211,111 
 Total operating expenses   7,936,827    7,906,507    (7,906,507)   7,936,827 
                     
(Loss) Income from operations   (1,667,191)   (1,630,721)   1,630,721    (1,667,191)
                     
Other (expense) income:                    
 Other income   556    538    (538)(1)   556 
 Interest expense   (158,732)   (136,709)   136,709(1)   (158,732)
 Interest income           (1)    
 Loss on disposal of assets   (497,172)   (254,600)   254,600(1)   (497,172)
Gain from insurance recovery   434,724    434,724    (434,724)(1)   434,724 
 Government grant income   608,224    608,224    (608,224)(1)   608,224 
Net change in fair value of marketable securities   (32,465)   (32,465)   32,465(1)   (32,465)
Total other (expenses) income   355,135    619,712    (619,712)   355,135 
                     
Net (loss) income   (1,312,056)   (1,011,009)   1,011,009    (1,312,056)
Less: Net loss (income) attributable to non-controlling interests   529,189    0    0      
Net (loss income attributable to the shareholders of Twin Vee PowerCats Inc.  $(782,867)  $(1,011,009)  $1,011,009   $(1,312,056)
                     
                     
Basic and dilutive (loss) income per share of common stock  $(0.00)  $(0.19)  $(2)   (0.19)
Weighted average number of shares of common stock outstanding   164,730,790    5,331,400         7,000,000 

 

 

(1)  Represents elimination of Twin Vee PowerCats Co. expenses that were consolidated with Twin Vee Powercats, Inc.

(2) Represents elimination of Twin Vee Powercats, Inc. weighted average shares outstanding, net of shares issued as a result of the Merger, weighted as though these incremental shares had been issued on June 30, 2022.

(3) On August 12, 2022, Forza X1 consummated its initial public offering of 3,450,000 shares of common stock at $5.00 per share, for gross proceeds of $15,000,000, before deducting underwriting discounts and offering expenses. This transaction is not included in the above pro forma table.

(4) On October 3, 2022, Twin Vee Co. closed an underwritten public offering of 2,500,000 shares of its common stock at a public offering price of $2.75 per share, for gross proceeds of $6,875,000, before deducting underwriting discounts and offering expenses. This transaction in not included in the above pro forma table.

 

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MARKET PRICE AND DIVIDEND INFORMATION

 

Since July 21, 2021, Twin Vee Co.’s common stock has been traded on the Nasdaq Capital Market under the symbol “VEEE”. As of October 11, 2022, Twin Vee Co. had approximately 1,746 holders of record of Twin Vee Co. common stock.

 

Twin Vee Inc.’s common stock does not currently trade on a national securities exchange, but is traded on the OTC Markets Pink.

 

Market Value of Securities

 

On September 8, 2022, the last trading day before the public announcement of the signing of the merger agreement, the last sale prices per share of Twin Vee Co. common stock on Nasdaq and Twin Vee Inc. common stock on the OTC Pink were $3.91 and $0.10, respectively. On [______________], 2022, the latest practicable date before the date of this Proxy Statement/Prospectus, the closing prices per share of Twin Vee Co. common stock on Nasdaq and Twin Vee Inc. common stock on the OTC Pink were $[____] and $[____], respectively. Twin Vee Inc. stockholders are encouraged to obtain current market quotations for Twin Vee Co. common stock and Twin Vee Inc. common stock and to review carefully the other information contained, or incorporated by reference, in this Proxy Statement/Prospectus. See “Additional Information for Stockholders—Where You Can Find More Information,” of this Proxy Statement/Prospectus. Following the merger, Twin Vee Co.’s common stock will continue to be listed on Nasdaq, and there will be no further market for Twin Vee Inc. common stock.

 

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Penny Stock

 

Twin Vee Inc.’s common stock may be subject to the “penny stock” rules adopted under Section 15(g) of the Exchange Act. The penny stock rules generally apply to companies whose common stock is not listed on a national securities exchange and trades at less than $5.00 per share and have a tangible net worth of at least $5,000,000. These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances.

 

Dividend Policy

 

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

 

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RISK FACTORS

 

In addition to the other information included in and incorporated by reference into this Joint Proxy Statement/Prospectus, Twin Vee Inc.’s stockholders should consider carefully the matters described below in determining whether to approve the merger, and the transactions contemplated thereby, and Twin Vee Co.’s stockholders should consider carefully the matters described below in determining whether to approve the issuance of Twin Vee Co. common stock to Twin Vee Inc. stockholders pursuant to the merger agreement.

 

RISKS RELATED TO THE MERGER

 

All of Twin Vee Inc.’s executive officers and some 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 Inc. officers will be employed by the combined company and certain 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 Inc. officers and some of the directors have a direct or indirect financial interest in both Twin Vee Inc. and Twin Vee Co. These interests, among others, may influence such executive officers and directors of Twin Vee Inc. to support or approve the merger. For a more information concerning the interests of Twin Vee Inc.’s executive officers and directors, see the sections entitled “The Merger—Interests of Twin Vee Inc.’ Directors and Executive Officers in the Merger” in this Proxy Statement/Prospectus.

 

The exchange ratio is not adjustable based on the market price of Twin Vee Co. 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 Twin Vee Inc. common stock and the exchange ratio is not adjustable. Any changes in the market price of Twin Vee Co. common stock will not affect the number of shares holders of Twin Vee Inc. common stock will be entitled to receive upon consummation of the merger. Therefore, if the market price of Twin Vee Co. common stock declines from the market price on the date of the merger agreement prior to the consummation of the merger, Twin Vee Inc. stockholders could receive merger consideration with considerably less value. Similarly, if the market price of Twin Vee Co. common stock increases from the market price on the date of the merger agreement prior to the consummation of the merger, Twin Vee Inc. stockholders could receive merger consideration with considerably more value than their shares of Twin Vee Inc. common stock and the Twin Vee Co. stockholders immediately prior to the merger will not be compensated for the increased market value of the Twin Vee Co. 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 Co. common stock, for each one percentage point that the market value of Twin Vee Co. common stock rises or declines, there is a corresponding one percentage point rise or decline, respectively, in the value of the total merger consideration issued to the Twin Vee Inc. stockholders.

 

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

 

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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 Co. or Twin Vee Inc. 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 Co. and Twin Vee Inc. 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 Co. believes the merger would enable Twin Vee Co. to take advantage of the $7,056,000 of net operating loss carryforwards of Twin Vee Inc. and utilize them to offset the income of Twin Vee Co. Twin Vee Inc. believes the merger will provide a method by which the Twin Vee Inc. stockholders can more directly share in the growth of Twin Vee Co. 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.

 

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 Co. and Twin Vee Inc., 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 Co. common stock in the merger;

  

·the respective representations and warranties of Twin Vee Co. and Twin Vee Inc., shall be true and correct in all material respects as of the date of the merger agreement and the closing;

 

·each executive of Twin Vee Co. or any of its subsidiaries and Twin Vee Inc. or any of its subsidiaries shall have delivered a waiver of rights to payments, bonuses, vesting, acceleration or other similar rights that are or may be triggered by the merger;

 

·no material adverse effect with respect to Twin Vee Co. or Twin Vee Inc. 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 Co. and Twin Vee Inc. with their respective covenants and obligations in the merger agreement;

 

·Twin Vee Inc. shall have obtained any consents and waivers of approvals required in connection with the merger; and

 

·no material adverse effect with respect to Twin Vee Co. or Twin Vee Inc. or its subsidiaries shall have occurred since the date of the merger agreement.

  

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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 Co. and Twin Vee Inc. 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 Co. and Twin Vee Inc. each may lose some or all of the intended benefits of the merger.

 

If there are Twin Vee Inc. stockholders that exercise their appraisal rights, the surviving corporation in the merger will be responsible for the resulting cash payment obligation.

 

If the merger is completed, holders of Twin Vee Inc. common stock are entitled to appraisal rights under Section 607.1302 of the Florida Business Corporation Act (“FBCA”) provided that they comply with the conditions established by Section 607.1321 of the FBCA. If there are Twin Vee Inc. stockholders who exercise such rights and complete the process required by the FBCA, Twin Vee Co., as the surviving company in the merger, will be obligated to pay such stockholders the pre-merger cash value of their Twin Vee Inc. stock pursuant to Section 607.1324 of the FBCA or as determined by a court within the State of Florida, as provided by Section 607.1330 of the FBCA.

 

Twin Vee Co. and Twin Vee Inc. will incur substantial expenses whether or not the merger is completed.

 

Twin Vee Co. and Twin Vee Inc. will incur substantial expenses related to the merger whether or not the merger is completed. Twin Vee Co. currently expects to incur approximately $200,000 in transactional expenses and Twin Vee Inc. currently expects to incur approximately $0 in transactional expenses. See the section entitled “The Merger—The Merger Agreement—Termination”.

 

Twin Vee Co. will assume all of Twin Vee Inc.’s outstanding liabilities if the merger is completed.

 

By operation of law, Twin Vee Co. will assume all of Twin Vee Inc.’s outstanding liabilities if the merger is completed. As of June 30, 2022, Twin Vee Inc. had $5,756,456 of total liabilities, of which $3,975,877 were total current liabilities; however, a significant portion of the liabilities were liabilities of Twin Vee Co. In addition, Twin Vee Inc. is a defendant in three civil litigations involving warranty claims made by owners of boats purchased from it. By operation of law, Twin Vee Co. will assume Twin Vee Inc.’s obligation to defend against these civil actions if the merger is completed. There can be no assurance given that these civil actions will result in a positive financial ruling or successful outcome for Twin Vee Co. As a result, the assumption of these litigations upon consummation of the merger could be costly for Twin Vee Co.

 

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 Co. and Twin Vee Inc. 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 ValuCorp’s opinion was given to Twin Vee Co.’s board of directors on September 8, 2022, the date of the execution of the merger agreement, it does not reflect any changes in market and economic circumstances after September 8, 2022.

 

To the extent there may have been any changes in the operations and prospects of Twin Vee Co. or Twin Vee Inc. and/or changes in general market and economic conditions subsequent to September 8, 2022, which could make Twin Vee Co. or Twin Vee Inc.’s value now greater or less than its value as of September 8, 2022 (the date of the merger agreement and of the analysis conducted by ValuCorp), any such developments will have no effect whatsoever on ValuCorp’s opinion or the Exchange Ratio, which was been fixed under the merger agreement ValuCorp’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 September 8, 2022, the date of the execution of the merger agreement. While neither the Twin Vee Inc. nor Twin Vee Co. board of directors is aware of any changes in the operations and prospects of Twin Vee Co. or Twin Vee Inc. and/or changes in general market and economic conditions subsequent to September 8, 2022, which could make Twin Vee Co. or Twin Vee Inc.’s value greater or less than its value as of September 8, 2022 (the date of the merger agreement and the analysis conducted by ValuCorp), or lead to the conclusion that the consideration to be received in the merger by Twin Vee Inc.’s shareholders is not fair to Twin Vee Inc. or Twin Vee Co., there can be no assurance given that changes in the operations and prospects of Twin Vee Co. or Twin Vee Inc. and/or changes in general market and economic conditions subsequent to September 8, 2022, could make Twin Vee Co. or Twin Vee Inc.’s value, on the effective date of the merger greater or less than its value as of September 8, 2022. ValuCorp has undertaken no obligation to update its opinion delivered to Twin Vee Co. for changes subsequent to September 8, 2022. For a description of the opinion that the Twin Vee Co. board of directors received from ValuCorp and a summary of the material financial analyses it provided to the Twin Vee Co. board of directors in connection with rendering such opinion, please refer to the section entitled “The Merger—The Merger Transaction— Opinion of Twin Vee Co.’s Financial Advisor”.

 

The merger and related transactions are subject to approval by the stockholders of both Twin Vee Co. and Twin Vee Inc.

 

In order for the merger to be completed, Twin Vee Co.’s stockholders must approve the merger agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of Twin Vee Co. common stock entitled to vote. Twin Vee Inc.’s stockholders must also approve the merger agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of Twin Vee Co. common stock entitled to vote. In addition, under applicable Nasdaq rules, Twin Vee Co.’s stockholders must approve the issuance of the shares of Twin Vee Co. common stock to Twin Vee Inc. stockholders as part of the merger consideration. Approval of the issuance of shares of Twin Vee Co. common stock to Twin Vee Inc. stockholders requires approval by a majority of the outstanding shares of Twin Vee Co. common stock entitled to vote.

 

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

 

Twin Vee Co.’s acquisition of Twin Vee Inc. 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 Twin Vee Inc. and Twin Vee Co.

 

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

 

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the current market price of shares of Twin Vee Co.’s common stock reflects a market assumption that the acquisition will be completed;

 

Twin Vee Co. must pay costs related to the merger; and

 

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

 

Twin Vee Co.’s ability to use the net operating loss carryforwards of Twin Vee Inc. may be subject to limitation.

 

Generally, a change of more than 50% in the ownership of a company’s stock, by value, over a three-year period constitutes an ownership change for U.S. federal income tax purposes. An ownership change may limit a company’s ability to use its net operating loss carryforwards attributable to the period prior to the change. As a result, Twin Vee Co.’s ability to use the net operating loss carryforwards of Twin Vee Inc. to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liability for it. As of December 31, 2021, Twin Vee Inc. had net operating loss carryforwards aggregating approximately $7,056,000. Upon the effectiveness of the merger and the merger agreement, it may be determined that an ownership change occurred pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, or the Code. As a result, Twin Vee Co.’s ability to utilize the net operating loss carryforwards of Twin Vee Inc. may be limited.

 

RISKS RELATED TO TWIN VEE CO.

 

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

 

Twin Vee Co.’s limited public operating history makes evaluating our business and prospects difficult. Although it was formed in 2003, Twin Vee Co. did not provide public reports on the results of operations until its initial public offering in July 2021. Your investment decision will not be made with the same data as would be available as if we had a longer history of public reporting.

 

Twin Vee Co. has incurred losses for the quarter ended June 30, 2022 and the year ended December 31, 2021 and could continue to incur losses in the future.

 

For the six months ended June 30, 2022, Twin Vee Co. incurred a loss from operations of $1,520,132 and a net loss of $1,730,099. For the year ended December 31, 2021, Twin Vee Co. incurred a loss from operations of $1,630,721 and a net loss of $1,011,009. As of June 30, 2022, Twin Vee Co. had an accumulated deficit of approximately $3.8 million. 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 Co.’s operating needs and to generate income from operations and net income.

 

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

 

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Twin Vee Co. relies on the existence of an available hourly workforce to manufacture our products. Twin Vee Co. cannot assure you that it 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 Co. has manufacturing facilities. Also, although none of its employees are currently covered by collective bargaining agreements, Twin Vee Co. cannot assure you that its employees will not elect to be represented by labor unions in the future. Additionally, competition for qualified employees could require it to pay higher wages to attract a sufficient number of employees. Significant increases in manufacturing workforce costs could materially adversely affect Twin Vee Co.’s business, financial condition or results of operations. Twin Vee Co.’s subsidiary, 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 Co. has a large fixed cost base that will affect its profitability if its sales decrease.

 

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

 

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Interest rates and energy prices affect product sales.

 

Twin Vee Co.’s gas-powered products are often financed by its dealers and retail powerboat consumers. Twin Vee Co. envisions this continuing as it expands its operations and grows its 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 Co.’s manufacturing facility and in the expense of shipping products to its 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 its products. Also, higher fuel prices may have an adverse effect on demand for Twin Vee Co.’s gas-powered boats, as they increase the cost of ownership and operation and the pries at which it 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 Co. utilizes will not be sufficient to support its future growth and business plans.

  

Twin Vee Co. is currently operating close to full capacity at its current manufacturing facility in Fort Pierce. Twin Vee Co. currently plans to manufacture its electric boats at a new state of the art carbon neutral factory that it plans to build. Until Twin Vee Co. is able to expand its manufacturing capacity and build the planned manufacturing facility, Twin Vee Co. will continue to share its current manufacturing facility with its subsidiaries, which has a limited capacity and may not be able to satisfy Twin Vee Co. and its subsidiaries’ manufacturing needs. Any facility that Twin Vee Co. builds will require a significant capital investment and is expected to take at least one to two years to build and become fully operational.

 

Twin Vee Co.’s business may be materially affected by the COVID-19 Outbreak.

 

The outbreak of the novel coronavirus (COVID-19) may continue to cause disruptions to Twin Vee Co.’s business and operational plans. These disruptions may include disruptions resulting from (i) shortages of employees, (ii) unavailability of contractors and subcontractors, (iii) interruption of, or price fluctuations in, supplies from third parties upon which it relies, (iv) restrictions that governments impose to address the COVID-19 outbreak, and (v) restrictions that it and its contractors and subcontractors impose to ensure the safety of employees and others. To date, as a result of the COVID-19 pandemic, Twin Vee Co. has experienced shortages in obtaining the 150 horsepower motors that are supplied to it by Suzuki Motor of America, Inc., which historically have been used in approximately 15% of Twin Vee Co.’s boats. In addition, Twin Vee Co. also been subject to increased prices for materials resulting generally from supply chain shortages. Twin Vee Co. also has increased its inventory of parts and components, spending additional funds before it has purchase orders. Continued delays in our supply chain could adversely impact our production and, in turn, our revenues. Further, it is presently not possible to predict the extent or durations of these disruptions. These disruptions may have a material adverse effect on Twin Vee Co.’s business, financial condition and results of operations. Such adverse effect could be rapid and unexpected. These disruptions may severely affect Twin Vee Co.’s ability to carry out its business plans for 2022.

  

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

  

Twin Vee Co.’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 its control. These factors include, but are not limited to:

 

  Seasonal consumer demand for its products;

 

  Discretionary spending habits;

 

  Changes in pricing in, or the availability of supply in, the powerboat market;

 

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  Failure to maintain a premium brand image;

 

  Disruption in the operation of its manufacturing facilities;

 

  Variations in the timing and volume of its sales;

 

  The timing of its expenditures in anticipation of future sales;

 

  Sales promotions by it and its 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 its labor; and

 

  Increased fuel prices.

 

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

 

Unfavorable weather conditions may have a material adverse effect on Twin Vee Co.’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 Co.’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 its products. Twin Vee Co.’s annual results would be materially and adversely affected if its net sales were to fall below expected seasonal levels during these periods. Twin Vee Co. may also experience more pronounced seasonal fluctuation in net sales in the future as it expands its businesses. There can be no assurance that weather conditions will not have a material effect on the sales of any of its products.

 

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

 

Twin Vee Co. relies on the continuous operation of its only manufacturing facility in Fort Pierce, Florida for the production of its products. Any natural disaster or other serious disruption to our facility due to fire, flood, earthquake, or any other unforeseen circumstance would adversely affect its business, financial condition, and results of operations. Changes in climate could adversely affect Twin Vee Co.’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 its ability to operate by damaging its facilities and equipment or restricting product delivery to customers. The occurrence of any disruption at Twin Vee Co.’s manufacturing facility, even for a short period of time, may have an adverse effect on its 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 Co. maintains property, casualty, and business interruption insurance of the types and in the amounts that it believes is customary for the industry, it is not fully insured against all potential natural disasters or other disruptions to its manufacturing facility.

 

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

 

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

 

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

 

A significant portion of Twin Vee Co.’s sales of its gas-powered boats are derived from its network of independent dealers. Twin Vee Co. typically manufactures its boats based upon indications of interest received from dealers who are not contractually obligated to purchase any boats. While dealers typically have purchased all of the boats for which they have provided indications of interest, Twin Vee Co. could experience excess inventory and costs if a dealer should choose not to purchase a boat 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 Co. once experienced, and in the future could experience, excess inventory and costs. At June 30, 2022, Twin Vee Co.’s top three dealers accounted for 46% of its total boats sold. The loss of a significant dealer could have a material adverse effect on Twin Vee Co.’s financial condition and results of operations. The loss of a significant dealer could have a material adverse effect on Twin Vee Co.’s financial condition and results of operations. The number of dealers supporting Twin Vee Co.’s products and the quality of their marketing and servicing efforts are essential to Twin Vee Co.’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 Co. faces intense competition from other boat manufacturers in attracting and retaining dealers, affecting our ability to attract or retain relationships with qualified and successful dealers. Although Twin Vee Co.’s management believes that the quality of its products in the performance sport boat industry should permit it to maintain its relationships with its dealers and its market share position, there can be no assurance that it will be able to maintain or improve its relationships with its dealers or its 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 our 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 our network of dealers would have a material adverse effect on Twin Vee Co.’s business, financial condition, and results of operations.

  

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

 

Because Twin Vee Co. sells nearly all of its gas-powered products through dealers, their financial health is critical to its success. Twin Vee Co.’s business, financial condition, and results of operations may be adversely affected if the financial health of the dealers that sells its 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, the more inventory of our boats that any dealer acquires, the greater the risk that the dealer is affected by the foregoing. During the six months ended June 30, 2022, the dealers have significantly increased their inventory of our boats.

 

In addition, Twin Vee Co.’s dealers require adequate liquidity to finance their operations, including purchases of Twin Vee Co.’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 Co.’s ability to sell products through its distribution network. Access to financing generally facilitates its dealers’ ability to purchase boats from Twin Vee Co., and their financed purchases reduce Twin Vee Co.’s working capital requirements. If financing were not available to Twin Vee Co.’s dealers, its sales and its working capital levels would be adversely affected.

  

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

  

Many of Twin Vee Co.’s dealers have floor plan financing arrangements with third-party finance companies that enable the dealers to purchase its products. In connection with these agreements, Twin Vee Co. may have an obligation to repurchase its products from a finance company under certain circumstances, and it 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 Co. 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 Co. Twin Vee Co.’s obligation to repurchase a repossessed boat for the unpaid balance of its 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 Co. has not been obligated to repurchase any boats under its dealers’ floor plan financing arrangements, and it is not aware of any applicable laws regulating dealer relations which govern its relations with the dealers or would require it 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. The risk that a dealer may default and Twin Vee Co. may be required to repurchase a vehicle increases as dealers acquire more inventory of its boats. Twin Vee Co.’s maximum obligation under such floor plan agreements totaled approximately $6,922,000 or 39 units, and $4,273,000 or 24 units, as of June 30, 2022, and December 31, 2021, respectively. In addition, applicable laws regulating dealer relations may also require Twin Vee Co to repurchase its products from its dealers under certain circumstances, and it 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. If Twin Vee Co. is obligated to repurchase a significant number of units under any repurchase agreement or under applicable dealer laws, Twin Vee Co.’s business, operating results and financial condition could be adversely affected.

 

Twin Vee Co. relies on third-party suppliers in the manufacturing of its boats.

 

Twin Vee Co. depends on third-party suppliers to provide components and raw materials essential to the construction of its boats. While Twin Vee Co. believes that its relationships with its current suppliers are sufficient to provide the materials necessary to meet present production demand, Twin Vee Co. cannot assure you that these relationships will continue or that the quantity or quality of materials available from these suppliers will be sufficient to meet its future needs, irrespective of whether it successfully implements its growth strategy. Twin Vee Co. expects that its need for raw materials and supplies will increase. Twin Vee Co.’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 it and other customers. Operational and financial difficulties that Twin Vee Co.’s suppliers may face in the future could adversely affect their ability to supply Twin Vee Co. with the parts and components it needs, which could significantly disrupt its operations.

 

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

 

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

 

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Twin Vee Co. relies on one manufacturer to supply its engines and does not have any long terms commitments from such manufacturer.

 

Twin Vee Co. currently relies on one manufacturer, Suzuki Motor of America, Inc. for the supply of its outboard engines. Twin Vee Co. does not have any long-term commitments from Suzuki to supply any specified number of engines and therefore cannot guarantee that there will be adequate supply of engines for its gas-powered boats. To date, as a result of the COVID-19 pandemic, Twin Vee Co. has experienced shortages in obtaining the 150-horsepower motors that are supplied to Twin Vee Co. by Suzuki Motor of America, Inc., which historically have been used in approximately 15% of Twin Vee Co.’s boats. Although Twin Vee Co. believes it has sufficient supply of its other engines, due to supply chain shortages, Twin Vee Co. may not be able to obtain engines in the future from other manufacturers if Suzuki Motor of America, Inc. should be unable to satisfy Twin Vee Co.’s needs. Suzuki Motor of America, Inc., and other manufacturers may not be able to provide Twin Vee Co. with engines in a timely manner due to supply chain shortages and even if other manufacturers are able to fulfill Twin Vee Co.’s engine needs they may not be able to do so at the same price as it currently pays for the engines it installs in its boats, which could result in lower profit margins or Twin Vee Co. increasing the price of its boats in order to maintain profit margins which could adversely impact demand for its boats. In addition, certain geopolitical events, such as the current military conflict between Russia and Ukraine, may increase the likelihood of supply chain interruptions and hinder Twin Vee Co.’s ability to find materials it needs to build its boats.

 

Product liability, warranty, personal injury, property damage and recall claims may materially affect Twin Vee Co.’s financial condition and damage its reputation.

 

Twin Vee Co. is engaged in a business that exposes it to claims for product liability and warranty claims in the event its products actually or allegedly fail to perform as expected or the use of its products results, or is alleged to result, in property damage, personal injury or death. Although Twin Vee Co. maintains product and general liability insurance of the types and in the amounts that it believes are customary for the industry, it is not fully insured against all such potential claims. Twin Vee Co.’s products involve kinetic energy, produce physical motion and are to be used on the water, factors which increase the likelihood of injury or death. Twin Vee Co.’s electric-boats contain lithium-ion batteries, which have been known to catch fire or vent smoke and flame, and chemicals which are known to be, or could later be proved to be, toxic carcinogenic. Any judgment or settlement for personal injury or wrongful death claims could be more than Twin Vee Co.’s assets and, even if not justified, could prove expensive to contest.

 

Twin Vee Co. may experience legal claims in excess of its insurance coverage or claims that are not covered by insurance, either of which could adversely affect its business, financial condition and results of operations. Adverse determination of material product liability and warranty claims made against Twin Vee Co. could have a material adverse effect on its financial condition and harm its reputation. In addition, if any of its products or components in its products are, or are alleged to be, defective, Twin Vee Co. may be required to participate in a recall of that product or component if the defect or alleged defect relates to safety. Any such recall and other claims could be costly to Twin Vee Co. and require substantial management attention.

 

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

 

Twin Vee Co. provides a hull warranty for structural damage of up to ten years for its gas-powered boats. In addition, Twin Vee Co. 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 Twin Vee Inc.), 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 Co.’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.

 

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

 

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

 

Certain materials Twin Vee Co. uses requires its employees to handle potentially hazardous or toxic substances. While Twin Vee Co.’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 Co.’s employees and damage to its property or the property of others, including natural resource damage. Twin Vee Co.’s personnel are also at risk for other workplace-related injuries, including slips and falls. Twin Vee Co. may in the future be subject to fines, penalties, and other liabilities in connection with any such injury or damage. Although Twin Vee Co. currently maintains what it believes to be suitable and adequate insurance in excess of its self-insured amounts, it may be unable to maintain such insurance on acceptable terms or such insurance may not provide adequate protection against potential liabilities.

 

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

 

Twin Vee Co.’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 Co. to obtain permits, and limit its ability to discharge hazardous materials into the environment. If Twin Vee Co. fails to comply with these requirements, it 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 Co.’s permits or injunctions preventing some or all of its operations. In addition, the components of Twin Vee Co.’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 its boats in key markets, which would adversely affect Twin Vee Co.’s business. Moreover, compliance with these regulatory requirements could increase the cost of Twin Vee Co.’s products, which in turn, may reduce consumer demand.

 

While Twin Vee Co. believes that it is in material compliance with applicable federal, state, local, and foreign regulatory requirements, and hold all licenses and permits required thereunder, Twin Vee Co. cannot assure you that it 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 Co. to incur substantial capital costs and increase its cost of operations, or may limit its operations, all of which could have a material adverse effect on its business or financial condition.

 

As with most boat construction businesses, Twin Vee Co.’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 Co. 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 Co. may be liable for remediation of contamination at sites where its hazardous wastes have been disposed or at its current facility, regardless of whether our facility is owned or leased or whether the environmental conditions were created by Twin Vee Co., a prior owner or tenant, or a third-party. While Twin Vee Co. does not believe that it is presently subject to any such liabilities, it cannot assure you that environmental conditions relating to its prior, existing, or future sites or operations or those of predecessor companies will not have a material adverse effect on its business or financial condition.

 

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

 

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

 

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

 

Twin Vee Co. faces intense competition from other performance sport boat manufacturers in attracting and retaining dealers and customers, affecting its ability to attract or retain relationships with qualified and successful dealers and consumers looking to purchase boats. Although Twin Vee Co.’s management believes that the quality of our products in the boat industry should permit it to maintain its relationships with its dealers and its market share position, there can be no assurance that Twin Vee Co. will be able to maintain or improve its relationships with its dealers or its 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 Co.’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 our network of dealers would have a material adverse effect on Twin Vee Co.’s business, financial condition, and results of operations.

 

Twin Vee Co.’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 Co.’s boats are not necessities and in times of economic hardship, consumers may cease purchasing non-essential items. Demand for Twin Vee Co.’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 Co.’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 Co.’s new boats. Also, while Twin Vee Co. has balanced production volumes for its boats to meet demand, its competitors could choose to reduce the price of their products, which could have the effect of reducing demand for Twin Vee Co.’s new boats. Reduced demand for new boats could lead to reduced sales by Twin Vee Co., which could adversely affect its business, results of operations, and financial condition.

 

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

 

Market acceptance of Twin Vee Co.’s products depends on its technological innovation and its ability to implement technology in its boats. Twin Vee Co.’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 Co.’s failure to introduce new technologies and product offerings that consumers desire could adversely affect its business, financial condition, and results of operations. If Twin Vee Co. fails to introduce new features or those it introduces fail to gain market acceptance, Twin Vee Co.’s bottom line may suffer.

 

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Twin Vee Co.’s subsidiary, Forza, is developing two initial models, the FX1 Dual Console and FX1 Center Console, a fully electric version of our popular 24-foot center console PowerCat. The FX1 Dual Console and FX1 Center Console will be Twin Vee Co.’s first fully electric I/O powertrain system that will combine an advanced battery pack, converter, high-efficiency motor, and proprietary union assembly between the transmission, electric motor design, and control software. If Twin Vee Co. experiences delays in the development of the electric I/O powertrain system for the boat, fails to bring the FX1 Dual Console and FX1 Center Console to market as and when planned or if they fail to gain market acceptance, Twin Vee Co.’s bottom line may also suffer.

 

In addition, some of Twin Vee Co.’s direct competitors and indirect competitors may have significantly more resources to develop and patent new technologies. It is possible that Twin Vee Co.’s competitors will develop and patent equivalent or superior technologies and other products that compete with Twin Vee Co.’s. Such competitors may assert these patents against Twin Vee Co. and Twin Vee Co. 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 Co.’s competitive position and may materially adversely affect its business.

 

Twin Vee Co. also cannot be certain that its 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 Co.’s competitors, to bring claims against Twin Vee Co., resulting in significant costs and potential damages.

 

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

  

Twin Vee Co. believes that its brand is a significant contributor to the success of its business and that maintaining and enhancing its brand is important to expanding its consumer and dealer base. Failure to continue to protect its brand may adversely affect Twin Vee Co.’s business, financial condition, and results of operations. Twin Vee Co. expects that its ability to develop, maintain and strengthen the Twin Vee Co. brand will also depend heavily on the success of its marketing efforts. To further promote its brand, Twin Vee Co. may be required to change its 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 Co.’s current and potential competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than Twin Vee Co. does. If Twin Vee Co. does not develop and maintain strong brands, its 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 Co.’s products are used, could negatively affect Twin Vee Co.’s reputation and result in restrictions, recalls, or bans on the use of its products. If the popularity of the sports and activities for which Twin Vee Co. designs, manufactures, and sells products were to decrease as a result of these risks or any negative publicity, sales of our products could decrease, which could have an adverse effect on Twin Vee Co.’s net sales, profitability, and operating results. In addition, if Twin Vee Co. becomes exposed to additional claims and litigation relating to the use of its products, Twin Vee Co.’s reputation may be adversely affected by such claims, whether or not successful, including by generating potential negative publicity about its products, which could adversely impact its business and financial condition.

 

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

 

Twin Vee Co.’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 Co. must be successful in its 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 Co.’s products and its ability to deliver desirable products to its consumers.

 

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

  

Twin Vee Co. expects to rely heavily on complex machinery for its operations and its production will involve a significant degree of uncertainty and risk in terms of operational performance, safety, security, and costs. Twin Vee Inc.’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 Co.’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 Co.’s business, prospects, financial condition, results of operations, and cash flows. Although Twin Vee Co. generally carries insurance to cover such operational risks, it cannot be certain that its 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 Co. to pay substantial amounts, which could adversely affect its business, prospects, financial condition, results of operations, and cash flows.

 

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

 

Operating Twin Vee Co.’s business and maintaining its growth efforts will require significant cash outlays and advance capital expenditures and commitments. Although the proceeds of the Twin Vee Co. initial public offering should be sufficient to fund Twin Vee Co.’s operations, if cash on hand and cash generated from operations and from the Twin Vee Co. initial public offering are not sufficient to meet Twin Vee Co.’s cash requirements, Twin Vee Co. will need to seek additional capital, potentially through debt or equity financings, to fund its growth. Twin Vee Co. cannot assure you that it will be able to raise needed cash on terms acceptable to Twin Vee Co. or at all. Financings may be on terms that are dilutive or potentially dilutive to Twin Vee Co. stockholders, and the prices at which new investors would be willing to purchase Twin Vee Co. securities may be lower than the price per share of its common stock as of the date of this Proxy Statement/Prospectus. The holders of new securities may also have rights, preferences or privileges which are senior to those of existing holders of Twin Vee Co. common stock. If new sources of financing are required, but are insufficient or unavailable, Twin Vee Co. will be required to modify its growth and operating plans based on available funding, if any, which would harm its ability to grow its business.

 

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

 

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

 

training new personnel;

 

forecasting production and revenue;

 

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expanding Twin Vee Co.’s marketing efforts;

 

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 Co. intends to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for Twin Vee Co.’s electric boats and powertrains. Competition for individuals with experience designing, manufacturing and servicing electric boats is intense, and Twin Vee Co. 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 Co.’s business and prospects.

 

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

 

A few customers have in the past, and may in the future, account for a significant portion of Twin Vee Co.’s revenues in any one year or over a period of several consecutive years. For example, during the six months ended June 30, 2022 three dealers represented 46% of Twin Vee Co.’s sales. The loss of business from a significant customer could have a material adverse effect on Twin Vee Co.’s business, financial condition, results of operations and cash flows.

 

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

 

Twin Vee Co.’s future success will depend in significant part upon the continued service of its executive officers. Twin Vee Co. cannot assure you that it will be able to continue to attract or retain such persons. Twin Vee Co. does not have an insurance policy on the life of its chief executive officer, and it does not have “key person” life insurance policies for any of its other officers or advisors. The loss of the technical knowledge and management and industry expertise of any of Twin Vee Co.’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 Co.’s operating results.

 

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

 

Twin Vee Inc. owns approximately 57% of Twin Vee Co.’s outstanding common stock. Twin Vee Co.’s Chief Executive Officer is the Chief Executive Officer of Twin Vee Inc. and a member of Twin Vee Inc.’s board of directors in addition to owning approximately 56% of the outstanding common stock of Twin Vee Inc. As a result, Twin Vee Co.’s Chief Executive Officer does and will have significant influence over Twin Vee Co.’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 our control and might affect the market price of our common stock, even when a change in control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with Twin Vee Co.’s interests or the interests of other stockholders. Accordingly, Twin Vee Co.’s Chief Executive Officer could cause it to enter into transactions or agreements that it would not otherwise consider.

 

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

 

Twin Vee Co. may in the future enter into acquisitions, such as its current search for a waterfront property, and strategic alliances that will enable it to acquire complementary skills and capabilities, offer new products, expand its consumer base, enter new product categories or geographic markets, and obtain other competitive advantages. Twin Vee Co. cannot assure you, however, that it will identify acquisition candidates or strategic partners that are suitable to its business, obtain financing on satisfactory terms, complete acquisitions or strategic alliances, or successfully integrate acquired operations into its 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 Co.’s existing operations. Similarly, Twin Vee Co.’s partnership with leading franchises from other industries to market its 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 Co. relies on network and information systems and other technologies for its business activities and certain events, such as computer hackings, viruses or other destructive or disruptive software or activities may disrupt its operations, which could have a material adverse effect on its business, financial condition and results of operations.

 

Network and information systems and other technologies are important to Twin Vee Co.’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 Co.’s services and operations or improper disclosure of personal data or confidential information, which could damage its reputation and require Twin Vee Co. to expend resources to remedy any such breaches. Moreover, the amount and scope of insurance Twin Vee Co. maintains against losses resulting from any such events or security breaches may not be sufficient to cover its losses or otherwise adequately compensate it for any disruptions to its businesses that may result, and the occurrence of any such events or security breaches could have a material adverse effect on Twin Vee Co.’s business and results of operations. The risk of these systems-related events and security breaches occurring has intensified, in part because Twin Vee Co. maintains certain information necessary to conduct its businesses in digital form stored on cloud servers. While Twin Vee Co. 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 Co. may provide certain confidential, proprietary and personal information to third parties in connection with its businesses, and while it obtains assurances that these third parties will protect this information, there is a risk that this information may be compromised.

 

Likewise, data privacy breaches by employees or others with permitted access to Twin Vee Co.’s systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. While Twin Vee Co. has invested in protection of data and information technology, there can be no assurance that its efforts will prevent breakdowns or breaches in its systems that could adversely affect its 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 Co.’s business, financial condition and results of operations.

 

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

 

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In the ordinary course of business, Twin Vee Co. may be subject to losses resulting from product liability, accidents, acts of God and other claims against Twin Vee Co., for which it may have no insurance coverage. While Twin Vee Co. 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 Co. may not maintain as much insurance coverage as other original equipment manufacturers do, and in some cases, it may not maintain any at all. Additionally, the policies that Twin Vee Co.’s has may include significant deductibles, and it cannot be certain that its insurance coverage will be sufficient to cover all or any future claims against Twin Vee Co. A loss that is uninsured or exceeds policy limits may require Twin Vee Co. to pay substantial amounts, which could adversely affect its financial condition and results of operations. Further, insurance coverage may not continue to be available to Twin Vee Co. or, if available, may be at a significantly higher cost, especially if insurance providers perceive any increase in its risk profile in the future.

 

Risks Related to the Industry of Twin Vee Co. and the Combined Entity

 

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 Co.’s business, prospects, operating results and financial condition. The markets in which Twin Vee Co. 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 Co. 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 Co.’s industry, demand for its products and its 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 Co.’s products. Sales of Twin Vee Co.’s products are highly sensitive to personal discretionary spending levels. Twin Vee Co.’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 Co.’s sales and materially adversely affect its business, financial condition and results of operations. Twin Vee Co. cannot predict the duration or strength of an economic recovery, either in the U.S. or in the specific markets where Twin Vee Co. sells its 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 Co.’s business, financial condition, and results of operations.

 

Consumers often finance purchases of Twin Vee Co.’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 Co.’s products.

  

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

 

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Twin Vee Co.’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 Co.’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 Co. ability to obtain equity or debt financing in the future and the terms at which financing or credit is available to it. These instances of volatility and market turmoil could adversely affect Twin Vee Co.’s operations and the trading price of its common shares resulting in:

 

·customers postponing purchases of Twin Vee Co.’s products and services in response to tighter credit, unemployment, negative financial new and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services; and

 

·third-party suppliers being unable to produce parts and components for Twin Vee Co.’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 Co.’s production or the cost of such production.

 

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

 

Twin Vee Co.’s operations and performance depends on global, regional and U.S. economic and geopolitical conditions. Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from U.S. and European leaders. These events are currently escalating and creating increasingly volatile global economic conditions. Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” Furthermore, if the conflict between Russia and Ukraine continues for a long period of time, or if other countries, including the U.S., become further involved in the conflict, Twin Vee Co. could face significant adverse effects to its business and financial condition.

 

The above factors, including a number of other economic and geopolitical factors both in the U.S. and abroad, could ultimately have material adverse effects on Twin Vee Co.’s business, financial condition, results of operations or cash flows, including the following:

 

  effects of significant changes in economic, monetary and fiscal policies in the U.S. and abroad including currency fluctuations, inflationary pressures and significant income tax changes;

 

  a global or regional economic slowdown in any of Twin Vee Co.’s market segments;

 

  changes in government policies and regulations affecting Twin Vee Co. or its significant customers;

 

  industrial policies in various countries that favor domestic industries over multinationals or that restrict foreign companies altogether;

  

  new or stricter trade policies and tariffs enacted by countries, such as China, in response to changes in U.S. trade policies and tariffs;

 

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  postponement of spending, in response to tighter credit, financial market volatility and other factors;

 

  rapid material escalation of the cost of regulatory compliance and litigation;

 

  difficulties protecting intellectual property;

 

  longer payment cycles;

 

  credit risks and other challenges in collecting accounts receivable; and

 

  the impact of each of the foregoing on outsourcing and procurement arrangements.

 

Risks Related to the Electric-Powered Boats

 

Forza’s planned fully electric sport boat has not yet been developed, and even if developed, interest in it may not develop.

 

Forza has not completed the design and engineering of the FX1 sport boat. There can be no assurance that Forza will be able to complete development of the FX1 when anticipated, if at all, that Forza will be able to mass produce the FX1 or that the anticipated features or services to be included in the FX1 will create substantial interest or a market, and therefore Forza’s anticipated FX1 product, its sales and growth for Forza’s product may not develop as expected, or at all. For example, in May 2021 Twin Vee Co. experienced a small fire in connection with the sea trial of a prototype of its electric boat which resulted in a six-month delay in its design timetable as Twin Vee Co. implemented changes to the design for outboard electric motor system as a result of the fire. Twin Vee Co. cannot guarantee that similar events will not occur in the future, or that Twin Vee Co. will be able to contain such events without damage or delay. Even if such a market for the FX1 sport boat develops, there can be no assurance that Forza would be able to maintain that market.

 

Forza’s operations to date have been primarily limited to finalizing the design and engineering of its electric sport boat as well as organizing and staffing Forza in preparation for launching the FX1 electric boat. As such, Forza has not yet demonstrated, and the success of Forza is wholly dependent upon, its ability to commercialize its products. The successful commercialization of any products will require Forza to perform a variety of functions, including:

 

  completing the design and testing for the FX1 sport boat and Forza’s proprietary outboard electric motor;
     
  manufacturing the FX1 sport boats;
     
  developing a vertically integrated direct-to-consumer distribution system; and
     
  conducting sales and marketing activities.

 

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Forza cannot be certain that its business strategy for its electric-powered boats will be successful or that Forza will successfully address these risks. In the event that Forza does not successfully address these risks, Forza’s business, prospects, financial condition, and results of operations could be materially and adversely affected, and Forza may not have the resources to continue or expand the business operations of its electric-powered boats business.

 

Forza’s planned distribution model is different from the predominant current distribution model for boat manufacturers, which subjects Forza to substantial risk and makes evaluating Forza’s business, prospects, financial condition, results of operations, and cash flows difficult.

 

Forza’s distribution model is still in the planning stages. Forza currently plans to mainly sell its electric-powered boats directly to customers rather than through franchised dealerships (unless required to do so by certain states), primarily through the Forza website and app platform, subject to obtaining applicable dealer licenses and equivalent permits in such jurisdictions. The digital customer experience via our online platform will allow customers to research, shop, choose boat hull color, interior upholstery color, and a possible upgrade of an additional battery to extend run times, order, track and take delivery through our web-based and app platform. Forza has not yet: (i) entered into any arrangements with third parties to provide financing services through Forza’s web and app platform, (ii) hired staff for Forza’s intended support and service department or (iii) partnered with any third parties to address service needs or operate service centers. Once the customer places the order, their Forza account will request several documents, including license, insurance, etc., which can be uploaded online without ever speaking with a salesperson. If the customer has questions, concerns, or needs support through the sales and purchase process, they will be able to contact Forza through the website or app with any questions, concerns.

 

Since Forza’s planned sales and marketing platform is a newer way to shop, buy and take delivery of a new boat through a mostly virtual process, Forza is unable to predict or conclude precisely what the customer will experience. Forza intends to follow up customer transactions with review and quality control questionnaires to collect the data and continue to better its platform and how it interacts with customers.

 

In addition to the Forza website and app platform, Forza also intends to establish Forza customer experience and service centers to be operated as product showrooms and locations where Forza boats may be taken for service and warranty repairs. They will be located in jurisdictions where direct-to-consumer sales or manufacturer-owned dealerships are permissible and allow prospective customers to see Forza’s products in person before purchasing. Forza anticipates staffing these centers with well-trained Forza employees. Forza will initially set up a single office, but if and as it grows, Forza plans to open additional customer experience and service centers to support its expansion, help bolster sales, and introduce its electric boat product to markets across the country that are more familiar purchasing boats at a traditional boat dealership.

 

This model of boat distribution is relatively new, different from the predominant current distribution model for boat manufacturers and, with limited exceptions, unproven, which subjects Forza to substantial risk. Forza has no experience in selling or leasing boats direct-to-consumer and therefore this model may require significant expenditures and provide for slower expansion than the traditional dealer franchise system. For example, Forza will not be able to utilize long established relationships developed by Twin Vee Co. with its dealer network. Moreover, Forza will be competing with companies with well established distribution channels. Forza’s success will depend in large part on its ability to effectively develop its own sales channels and marketing strategies.

 

Implementing Forza’s direct sales model is subject to numerous significant challenges, including obtaining permits and approvals from government authorities, and Forza may not be successful in addressing these challenges. If Forza direct sales model does not develop as expected or develops more slowly than expected, it may be required to modify or abandon its sales model, which could materially and adversely affect Forza’s and Twin Vee Co.’s business, prospects, financial condition, results of operations, and cash flows.

 

Forza’s ability to generate meaningful product revenue from electric-powered boats will depend on consumer adoption of electric boats.

 

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Forza’s ability to generate meaningful product revenue from electric-powered boats will highly depend on sustained consumer demand for alternative fuel vehicles in general and electric boats in particular. If the market for electric boats does not develop as Twin Vee Co. and Forza expects or develops more slowly than it expects, or if there is a decrease in consumer demand for electric vehicles, Forza’s and Twin Vee Co.’s business, prospects, financial condition and results of operations will be harmed. The market for electric and other alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation (including government incentives and subsidies) and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors. Any number of changes in the industry could negatively affect consumer demand for electric vehicles in general and Forza’s electric boats in particular.

 

In addition, demand for electric boats may be affected by factors directly impacting boat prices or the cost of purchasing and operating boats such as sales and financing incentives including tax credits, prices of raw materials and parts and components, cost of fuel, availability of consumer credit, and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect Forza’s business, prospects, financial condition and results of operations. Further, sales of boats in the marine industry tend to be cyclical in many markets, which may expose Forza to increased volatility, especially as it expands and adjust its operations and retail strategies. Specifically, it is uncertain how such macroeconomic factors will impact Forza as a new entrant in an industry that has globally been experiencing a recent decline in sales.

 

Other factors that may influence the adoption of electric boats include:

 

  perceptions about electric vehicle quality, safety, design, performance and cost;
     
  perceptions about the limited range over which electric boats may be driven on a single battery charge;
     
  perceptions about the total cost of ownership of electric boats, including the initial purchase price and operating and maintenance costs, both including and excluding the effect of any government and other subsidies and incentives designed to promote the purchase of electric boats;
     
  perceptions about the sustainability and environmental impact of electric boats, including with respect to both the sourcing and disposal of materials for electric vehicle batteries and the generation of electricity provided in the electric grid;
     
  the availability of other alternative fuel boats;
     
  improvements in the fuel economy of the internal combustion engine;
     
  the quality and availability of service for electric boats;
     
  volatility in the cost of oil and gasoline;
     
  government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;
     
  access to charging stations and cost to charge an electric vehicle and related infrastructure costs and standardization;

 

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  the availability of tax and other governmental incentives to purchase and operate electric boats or future regulation requiring increased use of nonpolluting boats; and
     
  macroeconomic factors.

 

The influence of any of the factors described above or any other factors may cause a general reduction in consumer demand for electric vehicles or Forza’s electric boats in particular, either of which would materially and adversely affect Forza’s business, results of operations, financial condition and prospects.

 

Forza depends upon third parties to manufacture and to supply key semiconductor chip components necessary for its electric boats. Forza does not have long-term agreements with any semiconductor chip manufacturers and suppliers, and if these manufacturers or suppliers become unwilling or unable to provide an adequate supply of semiconductor chips, with respect to which there is a global shortage, Forza would not be able to find alternative sources in a timely manner and Forza’s and Twin Vee Co.’s business would be adversely impacted.

 

Semiconductor chips are a vital input component to the electrical architecture of Forza’s electric boats, controlling wide aspects of the boats’ operations. Many of the key semiconductor chips Forza intends to use in its electric boats come from limited or single sources of supply, and therefore a disruption with any one manufacturer or supplier in Forza’s supply chain would have an adverse effect on its ability to effectively manufacture and timely deliver its boats. Forza does not have any long-term supply contracts with any suppliers and purchase chips on a purchase order basis. Due to Forza’s reliance on these semiconductor chips, it is subject to the risk of shortages and long lead times in their supply. Twin Vee Co. is in the process of identifying alternative manufacturers for semiconductor chips. Forza may in the future experience, semiconductor chip shortages, and the availability and cost of these components would be difficult to predict. For example, Forza’s manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, component or material shortages, cost increases, acquisitions, insolvency, changes in legal or regulatory requirements, or other similar problems.

 

In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021. As a result, Forza’s ability to source semiconductor chips to be used in its electric boats has been adversely affected. This shortage may result in increased chip delivery lead times, delays in the production of Forza’s boats, and increased costs to source available semiconductor chips. To the extent this semiconductor chip shortage continues, and Forza is unable to mitigate the effects of this shortage, Forza’s ability to deliver sufficient quantities of its boats to fulfill its preorders and to support its growth through sales to new customers would be adversely affected. In addition, Forza may be required to incur additional costs and expenses in managing ongoing chip shortages, including additional research and development expenses, engineering design and development costs in the event that new suppliers must be onboarded on an expedited basis. Further, ongoing delays in production and shipment of electric boats due to a continuing shortage of semiconductor chips may harm Forza’s reputation and discourage additional preorders and boat sales, and otherwise materially and adversely affect Forza’s business and operations.

 

The electric boats will use lithium-ion battery cells, which, if not appropriately managed and controlled, have been observed to catch fire or vent smoke and flame.

 

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The battery packs within Forza’s electric boats are being designed to use of lithium-ion cells. If not properly managed or subject to environmental stresses, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, a field or testing failure of battery packs in Forza’s electric boats could occur, which could result in bodily injury or death and could subject Forza to lawsuits, field actions (including product recalls), or redesign efforts, all of which would be time consuming and expensive and could harm Forza’s brand image. Also, negative public perceptions regarding the suitability of lithium-ion cells for boating applications, the social and environmental impacts of mineral mining or procurement associated with the constituents of lithium-ion cells, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could materially and adversely affect Forza’s reputation and business, prospects, financial condition, results of operations, and cash flows.

 

The electronic vehicle (EV) industry and its technology are rapidly evolving and may be subject to unforeseen changes which could adversely affect the demand for Forza’s boats or increase Forza’s operating costs.

 

Forza may be unable to keep up with changes in EV technology or alternatives to electricity as a fuel source and, as a result, its competitiveness may suffer. Developments in alternative technologies, such as advanced diesel, hydrogen, ethanol, fuel cells, or compressed natural gas, or improvements in the fuel economy of the internal combustion engine or the cost of gasoline, may materially and adversely affect Forza’s business and prospects in ways it does not currently anticipate. Existing and other battery cell technologies, fuels or sources of energy may emerge as customers’ preferred alternative to Forza’s boats. Any failure by Forza to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay its development and introduction of new and enhanced alternative fuel and EVs, which could result in the loss of competitiveness of Forza’s electric boats, decreased revenue and a loss of market share to competitors. Forza’s research and development efforts may not be sufficient to adapt to changes in alternative fuel and electric vehicle technology. As technologies change, Forza plans to upgrade or adapt its electric boats with the latest technology. However, Forza’s electric boats may not compete effectively with alternative systems if Forza is not able to source and integrate the latest technology into its boats. Additionally, the introduction and integration of new technologies into the electric boats may increase costs and capital expenditures required for the production and manufacture of boats and, if Forza is unable to cost efficiently implement such technologies or adjust its manufacturing operations, its business, prospects, financial condition, results of operations, and cash flows would be materially and adversely affected.

 

If Forza’s electric boats fail to perform as expected, its ability to develop, market and sell or lease its products could be harmed.

 

Once commercialization commences, Forza’s electric boats may contain defects in design and manufacture that may cause them not to perform as expected or that may require repairs, recalls, and design changes, any of which would require significant financial and other resources to successfully navigate and resolve. The boats will use a substantial amount of software code to operate, and software products are inherently complex and may contain defects and errors when first introduced. If the boats contain defects in design and manufacture that cause them not to perform as expected or that require repair, or certain features of the boats take longer than expected to become available, are legally restricted or become subject to additional regulation, Forza’s ability to develop, market and sell its products and services could be harmed. Although Forza will attempt to remedy any issues it observes in its products as effectively and rapidly as possible, such efforts could significantly distract management’s attention from other important business objectives, may not be timely, may hamper production or may not be to the satisfaction of its customers. Further, Forza’s limited operating history and limited field data reduces its ability to evaluate and predict the long-term quality, reliability, durability and performance characteristics of its battery packs, powertrains and boats. There can be no assurance that Forza will be able to detect and fix any defects in its products prior to their sale or lease to customers.

 

Any defects, delays or legal restrictions on boat features, or other failure of Forza’s boats to perform as expected, could harm its reputation and result in delivery delays, product recalls, product liability claims, breach of warranty claims and significant warranty and other expenses, and could have a material adverse impact on Forza’s business, results of operations, prospects and financial condition. As a new entrant to the industry attempting to build customer relationships and earn trust, these effects could be significantly detrimental to Forza. Additionally, problems and defects experienced by other electric consumer vehicles could by association have a negative impact on perception and customer demand for Forza’s boats.

 

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In addition, even if Forza’s boats function as designed, Twin Vee Co. and Forza expects that the battery efficiency, and hence the range, of its electric boats, like other electric vehicles that use current battery technology, will decline over time. Other factors, such as usage, time and stress patterns, may also impact the battery’s ability to hold a charge, or could require Forza to limit boat battery charging capacity, including via over-the-air or other software updates, for safety reasons or to protect battery capacity, which could further decrease the boats’ range between charges. Such decreases in or limitations of battery capacity and therefore range, whether imposed by deterioration, software limitations or otherwise, could also lead to consumer complaints or warranty claims, including claims that prior knowledge of such decreases or limitations would have affected consumers’ purchasing decisions. Further, there can be no assurance that Forza will be able to improve the performance of its battery packs, or increase its boats range, in the future. Any such battery deterioration or capacity limitations and related decreases in range may negatively influence potential customers’ willingness to purchase Forza boats and negatively impact its brand and reputation, which could adversely affect Forza’s and Twin Vee Co.’s business, prospects, results of operations and financial condition.

 

Forza’s boats will rely on software and hardware that is highly technical, and if these systems contain errors, bugs, vulnerabilities, or design defects, or if Forza is unsuccessful in addressing or mitigating technical limitations in its systems, Forza’s business could be adversely affected.

 

Forza’s boats are expected to rely on software and hardware that is highly technical and complex and may require modification and updates over the life of the boats. In addition, the boats will depend on the ability of such software and hardware to store, retrieve, process and manage large amounts of data. Forza’s software and hardware may contain errors, bugs, vulnerabilities or design defects, and Forza’s systems are subject to certain technical limitations that may compromise its ability to meet its objectives. Some errors, bugs, vulnerabilities, or design defects inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Although Forza will attempt to remedy any issues it observes in its boats effectively and rapidly, such efforts may not be timely, may hamper production or may not be to the satisfaction of its customers.

 

Additionally, if Forza deploys updates to the software (whether to address issues, deliver new features or make desired modifications) and its over-the-air update procedures fail to properly update the software or otherwise have unintended consequences to the software, the software within its customers’ boats will be subject to vulnerabilities or unintended consequences resulting from such failure of the over-the-air update until properly addressed.

 

If Forza is unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in its software and hardware, or fails to deploy updates to its software properly, it would suffer damage to its reputation, loss of customers, loss of revenue or liability for damages, any of which could adversely affect Forza’s business, prospects, financial condition, results of operations, and cash flows.

 

Forza X1 may not receive the anticipated grant funding.

 

On July 28, 2022, Forza received notice that the North Carolina Economic Investment Committee has approved a Job Development Investment Grant (“JDIG”) providing for reimbursement to it of up to $1,367,100 over a twelve-year period to establish a new manufacturing plant in McDowell County, North Carolina. The receipt of grant funding is conditioned upon Forza investing over $10.5 million in land, buildings and fixtures, infrastructure and machinery and equipment by the end of 2025 and us creating as many as 170 jobs. Forza is currently in negotiations for a new site to build the Forza factory in North Carolina. There can be no assurance that the negotiations will be successful. If unsuccessful, Forza will not meet the conditions necessary to receive the grant funding and will be subject to the limited capacity at Twin vee Co.’s factory that it allows Forza, in its discretion, to use. There can be no assurance that Forza X1 will meet the conditions necessary to receive the grant funding.

  

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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 Forza has, Forza 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, Forza cannot be certain that the patent applications that Forza files will issue, or that Forza ‘s issued patents will afford protection against competitors with similar technology. In addition, Forza’s competitors may design around Forza’s issued patents, which may adversely affect its and Forza’s business, prospects, financial condition, results of operations, and cash flows.

 

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

 

Twin Vee Co. and Forza may not be able to prevent others from unauthorized use of their intellectual property, which could harm Twin Vee Co.’s and Forza’s business and competitive position. Twin Vee Co. and Forza rely on a combination of patent, trade secret (including those in Twin Vee Co.’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 Twin Vee Co.’s and Forza’s rights in its technology and intellectual property. Twin Vee Co.’s and Forza’s patent or trademark applications may not be granted, any patents or trademark registrations that may be issued to Twin Vee Co. may not sufficiently protect property and any of the 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 the intellectual property or restrictions on its use of its intellectual property or may adversely affect the conduct of Twin Vee Co.’s and Forza’s business. Despite each of Twin Vee Co.’s and Forza’s efforts to protect its intellectual property rights, third parties may attempt to copy or otherwise obtain and use Twin Vee Co.’s or Forza’s intellectual property or seek court declarations that they do not infringe upon Twin Vee Co.’s or Forza’s intellectual property rights. Monitoring unauthorized use of Twin Vee Co.’s and Forza’s intellectual property is difficult and costly, and the steps Twin Vee Co. has taken or will take to prevent misappropriation may not be successful. From time to time, Twin Vee Co. and Forza may have to resort to litigation to enforce its intellectual property rights, which could result in substantial costs and diversion of its resources.

 

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, Forza’s and Twin Vee Co.’s intellectual property rights may not be as strong or as easily enforced outside of the United States. Failure to adequately protect Forza’s and Twin Vee Co.’s intellectual property rights could result in Forza’s and Twin Vee Co.’s competitors offering similar products, potentially resulting in the loss of some of Forza’s and Twin Vee Co.’s competitive advantage and a decrease in its revenue which would adversely affect its 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 its 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 Forza’s and Twin Vee Co.’s business, prospects, financial condition, results of operations, and cash flows.

 

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Forza cannot assure you that Forza’s 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 Forza 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 its 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 Forza’s existing or future patents may also be challenged by others on the basis that they are invalid or unenforceable.

 

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

 

Many of Twin Vee Co.’s and Forza’s employees were previously employed by other companies with similar or related technology, products or services. Twin Vee Co. and Forza may in the future become, subject to claims that Twin Vee Co., or Forza 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 Co. or Forza fail in defending such claims, it may be forced to pay monetary damages or be enjoined from using certain technology, products, services or knowledge. Even if Twin Vee Co. or Forza is successful in defending against these claims, litigation could result in substantial costs and demand on management resources.

  

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

  

Twin Vee Co. and Forza plan to use open source software in connection with the development and deployment of their 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 Co. and Forza could be subject to suits by parties claiming ownership of what Twin Vee Co. and Forza believe 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 Twin Vee Co. and Forza from charging fees to licensees for their use of our software. While Twin Vee Co. 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 Co.’s and 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 Co.’s and Forza’s platform depends upon the successful operation of open source software, any undetected errors or defects in open source software that we use could prevent the deployment or impair the functionality of Twin Vee Co.’s and Forza’s systems and injure its reputation. In addition, the public availability of such software may make it easier for attackers to target and compromise Twin Vee Co.’s and Forza’s platform through cyber-attacks. Any of the foregoing risks could materially and adversely affect Twin Vee Co.’s and Forza’s business, prospects, financial condition, results of operations, and cash flows.

 

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A significant portion of Twin Vee Co.’s and Forza’s intellectual property is not protected through patents or formal copyright registration. As a result, Twin Vee Co. and Forza do not have the full benefit of patent or copyright laws to prevent others from replicating its products and brands.

 

Twin Vee Co. and Forza have not protected its intellectual property rights through patents or formal copyright registration, and Twin Vee Co. does not currently have any patent applications pending other than its new patent application that it filed for Forza  ‘s propulsion system being developed. There can be no assurance that any patent will be issued or if issued that the patent will protect Forza’s intellectual property. As a result, Twin Vee Co. and Forza may not be able to protect their intellectual property and trade secrets or prevent others from independently developing substantially equivalent proprietary information and techniques or from otherwise gaining access to its intellectual property or trade secrets. In such an instance, Twin Vee Co.’s and Forza’s competitors could produce products that are nearly identical to Twin Vee Co.’s and Forza’s products resulting in Twin Vee Co. or Forza selling less products or generating less revenue from its sales.

 

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

 

Twin Vee Co. and Forza rely on trade secrets, know-how and technology, which are not protected by patents, to protect the intellectual property behind its electric powertrain and for the construction of its boats. Twin Vee Co. and Forza have recently begun to use confidentiality agreements with its collaborators, employees, consultants, outside collaborators and other advisors to protect its proprietary technology and processes. Twin Vee Co. 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 Co. 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 our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect Twin Vee Co.’s and Forza’s competitive business position.

 

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

 

The status of the protection of Twin Vee Co.’s and Forza’s intellectual property is unsettled as it does not have any issued patents, registered trademarks or registered copyrights for most of its intellectual property and other than one patent application, we have not applied for the same. Companies, organizations or individuals, including Twin Vee Co.’s and Forza’s competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with Twin Vee Co.’s and Forza’s ability to make, use, develop, sell or market its powerboats and electric powertrains or use third-party components, which could make it more difficult for Twin Vee Co. and Forza to operate its business. From time to time, Twin Vee Co. and Forza may receive communications from third parties that allege its 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 Co. and Forza is determined to have infringed upon a third party’s intellectual property rights, Twin Vee Co. and 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 our boats or other goods or services to avoid infringing the third-party intellectual property;

 

·establish and maintain alternative branding for our products and services; or

 

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·find third-party 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 Co. or Forza and their failure or inability to obtain a license to the infringed technology or other intellectual property right, Twin Vee Co.’s or Forza’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.

 

Risks Related to the Ownership of Twin Vee Co.’s Common Stock

 

Terms of subsequent financings may adversely impact your investment.

 

Twin Vee Co. may have to engage in common equity, debt, or preferred stock financing in the future. The rights and the value of an investment in Twin Vee Co.’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 common shares. In addition, if Twin Vee Co. needs to raise more equity capital from the sale of common shares, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Common shares which Twin Vee Co. 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 Co., or if they issue unfavorable commentary about Twin Vee Co. or its industry or downgrade its common stock, the price of Twin Vee Co. common stock could decline.

 

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

 

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

 

Twin Vee Co. has identified weaknesses in its internal controls, and it 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 Co. is subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act. Twin Vee Co. expects that the requirements of these rules and regulations will continue to increase its legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on its personnel, systems and resources.

 

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

 

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

  

Twin Vee Co. is expending time and resources to further improve its internal controls over financial reporting, including by expanding our staff. However, Twin Vee Co. cannot assure investors that its internal control over financial reporting, as modified, will enable it to identify or avoid material weaknesses in the future.

  

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

  

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

 

Twin Vee Co.’s independent registered public accounting firm is not required to audit the effectiveness of its internal control over financial reporting until after it is no longer an “emerging growth company” as defined in the JOBS Act. At such time, Twin Vee Co.’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 Co.’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 Co.’s business and operating results and cause a decline in the market price of its common stock.

 

Twin Vee Co.’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 its business and share price.

 

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Section 404(a) of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of Twin Vee Co.’s internal control over financial reporting, starting with the second annual report that Twin Vee Co. will file with the SEC. Twin Vee Co. anticipates being required to meet these standards in the course of preparing our financial statements as of and for the year ending December 31, 2022, and its management will be required to report on the effectiveness of our internal control over financial reporting for such year. Additionally, once Twin Vee Co. is no longer an emerging growth company, as defined by the JOBS Act, Twin Vee Co.’s independent registered public accounting firm will be required pursuant to Section 404(b) of the Sarbanes-Oxley Act to attest to the effectiveness of Twin Vee Co.’s internal control over financial reporting on an annual basis. The rules governing the standards that must be met for Twin Vee Co.’s management to assess its internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.

 

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Twin Vee Co. is in the process of reviewing, documenting, and testing its internal control over financial reporting, but it is not currently in compliance with, and it cannot be certain when it will be able to implement, the requirements of Section 404(a). Twin Vee Co. may encounter problems or delays in implementing any changes necessary to make a favorable assessment of its internal control over financial reporting. In addition, Twin Vee Co. may encounter problems or delays in completing the implementation of any public accounting firm after it ceases to be an emerging growth company. If Twin Vee Co. cannot favorably assess the effectiveness of its internal control over financial reporting, or if its independent registered public accounting firm is unable to provide an unqualified attestation report on its internal controls after Twin Vee Co. ceases to be an emerging growth company, investors could lose confidence in Twin Vee Co.’s financial information and the price of its common stock could decline.

  

Additionally, the existence of any material weakness or significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in Twin Vee Co.’s internal control over financial reporting could also result in errors in its financial statements that could require it to restate its financial statements, cause it to fail to meet its reporting obligations, and cause stockholders to lose confidence in Twin Vee Co.’s reported financial information, all of which could materially and adversely affect Twin Vee Co.’s business and share price.

 

For as long as Twin Vee Co. is an emerging growth company, it will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about its executive compensation, that apply to other public companies.

 

Twin Vee Co. is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, Twin Vee Co. is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and (iii) exemptions from the requirements of holding a non-binding advisory vote on executive compensation and of stockholder approval of any golden parachute payments not previously approved. Twin Vee Co. has elected to adopt these reduced disclosure requirements. Twin Vee Co. cannot predict if investors will find its common stock less attractive as a result of our taking advantage of these exemptions and as a result, there may be a less active trading market for Twin Vee Co.’s common stock and its stock price may be more volatile.

 

Twin Vee Co. could remain an “emerging growth company” for up to five years or until the earliest of (a) the last day of the first fiscal year in which its annual gross revenues exceed $1 billion, (b) the date that Twin Vee Co. becomes a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Twin Vee Co.’s common stock that is held by non-affiliates exceeds $700 million as of the last business day of its most recently completed fiscal quarter, and (c) the date on which Twin Vee Co. has issued more than $1 billion in non-convertible debt securities during the preceding three-year period.

 

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Twin Vee Co. is also a “smaller reporting company” as defined in the Exchange Act, and has elected to take advantage of certain of the scaled disclosures available to smaller reporting companies. To the extent that Twin Vee Co. continues to qualify as a “smaller reporting company” as such term is defined in Rule 12b-2 under the Exchange Act, after Twin Vee Co. ceases to qualify as an emerging growth company, certain of the exemptions available to it as an “emerging growth company” may continue to be available to it as a “smaller reporting company,” including exemption from compliance with the auditor attestation requirements pursuant to SOX and reduced disclosure about its executive compensation arrangements. Twin Vee Co. will continue to be a “smaller reporting company” until it has $250 million or more in public float (based on our common stock) measured as of the last business day of its most recently completed second fiscal quarter or, in the event Twin Vee Co. has no public float (based on its common stock) or a public float (based on its common stock) that is less than $700 million, annual revenues of $100 million or more during the most recently completed fiscal year.

 

Twin Vee Co.’s common stock price may be volatile or may decline regardless of its operating performance and you may not be able to resell your shares at or above the price paid for them.

 

The price of Twin Vee Co.’s common stock has experienced volatility. On September 6, 2022, the closing price of Twin Vee Co.’s common stock on the Nasdaq was $3.75 per share and on June 30, 2022, the closing price of our common stock was $2.69 per share. It is possible that an active trading market for Twin Vee Co.’s common stock will not develop or continue or, if developed, that any market will be sustained, which could make it difficult for you to sell your shares of its common stock at an attractive price or at all.

 

Volatility in the market price of Twin Vee Co.’s common stock may prevent you from being able to sell your shares at or above the price paid for them. Many factors, which are outside Twin Vee Co.’s control, may cause the market price of its common stock to fluctuate significantly, including those described elsewhere in this “Risk Factors” section and this Proxy Statement/Prospectus, as well as the following:

 

·Twin Vee Co.’s operating and financial performance and prospects;

 

·Twin Vee Co’s quarterly or annual earnings or those of other companies in our industry compared to market expectations;

 

·Conditions that impact demand for Twin Vee Co.’s products;

 

·Future announcements concerning Twin Vee Co.’s business or its competitors’ business;

 

·The public’s reaction to Twin Vee Co.’s press releases, other public announcements, and filings with the SEC;

 

·The size of Twin Vee Co.’s public float;

 

·Coverage by or changes in financial estimates by securities analysis or failure to meet their expectations;

 

·Market and industry perception of Twin Vee Co.’s success, or lack thereof, in pursuing its growth strategy;

 

·Strategic actions by Twin Vee Co. or its competitors, such as acquisitions or restructurings;

 

·Changes in laws or regulations that adversely affect Twin Vee Co. or its’s industry;

 

·Changes in accounting standards, policies, guidance, interpretations, or principles;

 

·Changes in senior management or key personnel;

 

·Issuances, exchanges or sales, or expected issuances, exchanges or sales of Twin Vee Co.’s capital stock;

 

·Changes in Twin Vee Co.’s dividend policy;

 

·Adverse resolution of new or pending litigation against Twin Vee Co.;

 

·Changes in general market, economic, and political conditions in the U.S. and global economies or financial markets, and

 

·including those resulting from natural disasters, terrorist attacks, acts of war, and responses to such events.

 

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As a result, volatility in the market price of Twin Vee Co.’s common stock may prevent investors from being able to sell their common stock at or above the price of common stock as of the date of this Proxy Statement/Prospectus or at all. These broad market and industry factors may materially reduce the market price of Twin Vee Co.’s common stock, regardless of its operating performance. In addition, price volatility may be greater if the public float and trading volume of Twin Vee Co.’s common stock is low. As a result, you may suffer a loss on your investment.

  

Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at significantly inflated rates that is disconnected from the underlying value of the company. Many investors who have purchased shares in those companies at an inflated rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest in those stocks have abated. While Twin Vee Co. has no reason to believe its shares would be the target of a short squeeze, there can be no assurance that Twin Vee Co. won’t be in the future, and you may lose a significant portion or all of your investment if you purchase its shares at a rate that is significantly disconnected from Twin Vee Co.’s underlying value.

 

Twin Vee Co. does not intend to pay dividends on its common stock for the foreseeable future.

 

Twin Vee Co. presently has no intention to pay dividends on its common stock at any time in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of Twin Vee Co.’s board of directors and will depend on, among other things, its results of operations, financial condition, cash requirements, contractual restrictions, and other factors that Twin Vee Co.’s board of directors may deem relevant. Furthermore, Twin Vee Co.’s ability to declare and pay dividends may be limited by instruments governing future outstanding indebtedness it may incur.

 

FINRA sales practice requirements may limit your ability to buy and sell Twin Vee Co.’s common shares, which could depress the price of its shares.

  

FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy Twin Vee Co.’s common shares, which may limit your ability to buy and sell Twin Vee Co.’s shares, have an adverse effect on the market for its shares and, thereby, depress their market prices.

 

Volatility in Twin Vee Co.’s common shares price may subject it to securities litigation.

 

The market for Twin Vee Co.’s common shares may have, when compared to seasoned issuers, significant price volatility, and it expects that its share price may continue to be more volatile than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. Twin Vee Co. may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

 

Twin Vee Co. and Forza each have broad discretion in their use of the net proceeds from their initial public offering and may not use them effectively.

 

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Twin Vee Co. and Forza’s management each has broad discretion in the application of the net proceeds from their initial public offering, and investors do not have the opportunity to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from the Twin Vee Co. initial public offering, their ultimate use may vary substantially from their initial intended use. The failure by our management to apply those funds effectively could harm our business.

 

Provisions in Twin Vee Co.’s corporate charter documents and under Delaware law could make an acquisition of Twin Vee Co., which may be beneficial to its stockholders, more difficult and may prevent attempts by its stockholders to replace or remove Twin Vee Co.’s current management.

 

Provisions in Twin Vee Co.’s corporate charter and its bylaws may discourage, delay or prevent a merger, acquisition or other change in control of Twin Vee Co. that stockholders may consider favorable, including transactions in which a shareholder might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of Twin Vee Co.’s common stock, thereby depressing the market price of its common stock. In addition, because the Twin Vee Co. Board of Directors is responsible for appointing the members of its management team, these provisions may frustrate or prevent any attempts by Twin Vee Co. stockholders to replace or remove its current management by making it more difficult for stockholders to replace members of the Twin Vee Co. Board of Directors. Among other things, these provisions:

 

·Twin Vee Co.’s Board of Directors is divided into three classes, one class of which is elected each year by its stockholders with the directors in each class to serve for a three-year term;

 

·the authorized number of directors can be changed only by resolution of Twin Vee Co.’s Board of Directors;

 

·directors may be removed only by the affirmative vote of the holders of at least sixty percent (60%) of Twin Vee Co.’s voting stock, whether for cause or without cause;

 

·Twin Vee Co.’s bylaws may be amended or repealed by Twin Vee Co.’s Board of Directors or by the affirmative vote of sixty-six and two-thirds percent (66 2/3%) of its stockholders;

 

·stockholders may not call special meetings of the stockholders or fill vacancies on the Board of Directors;

 

·Twin Vee Co.’s Board of Directors will be authorized to issue, without stockholder approval, preferred stock, the rights of which will be determined at the discretion of the Board of Directors and that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that Twin Vee Co.’s Board of Directors does not approve;

 

·Twin Vee Co.’s stockholders do not have cumulative voting rights, and therefore its stockholders holding a majority of the shares of common stock outstanding will be able to elect all of Twin Vee Co.’s directors; and

 

·Twin Vee Co.’s stockholders must comply with advance notice provisions to bring business before or nominate directors for election at a stockholder meeting.

  

Moreover, because Twin Vee Co. is incorporated in Delaware, it is governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.

 

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Twin Vee Co.’s Certificate of Incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain types of state actions that may be initiated by Twin Vee Co.’s stockholders, which could limit the stockholders’ ability to obtain a favorable judicial forum for disputes with Twin Vee Co. or its directors, officers, or employees.

 

Twin Vee Co.’s Certificate of Incorporation and bylaws provide that, unless Twin Vee Co. consents to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for (i) any derivative action or proceeding brought on behalf of Twin Vee Co, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of Twin Vee Co.’s directors, officers, or other employees to Twin Vee Co. or its stockholders, (iii) any action arising pursuant to any provision of the DGCL or Twin Vee Co.’s certificate of incorporation or bylaws (as either may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine. Twin Vee Co. believes that the exclusive forum provision may not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Twin Vee Co. believes that to the extent that any such claims may be based upon federal law claims, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Twin Vee Co. believes that Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

 

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Twin Vee Co. or its directors, employees, control persons, underwriters, or agents, which may discourage lawsuits against Twin Vee Co. and its directors, employees, control persons, underwriters, or agents. Additionally, a court could determine that the exclusive forum provision is unenforceable, and Twin Vee Co.’s stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find these provisions of Twin Vee Co.’s bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Twin Vee Co. may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect Twin Vee Co.’s business, financial condition, or results of operations.

 

RISKS RELATED TO TWIN VEE INC.

 

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

 

Twin Vee Inc.’s limited public operating history makes evaluating our business and prospects difficult. Although it was formed in 2003and does file reports as required by OTC Markets Alternative Reporting Standard for Pink companies it does not file with the SEC quarterly reports, annual reports or current reports and therefore there is less information available about Twin Vee Inc. than a company that files such reports with the SEC. Your investment decision will not be made with the same data as would be available as if Twin Vee Inc. was a reporting company making filings with the SEC.

 

Twin Vee Inc. has incurred losses for the six months ended June 30, 2022 and the year ended December 31, 2021 and could continue to incur losses in the future.

 

For the six months ended June 30, 2022, Twin Vee Inc. incurred a net loss of $1,733,831. For the year ended December 31, 2021, Twin Vee Inc. incurred a loss of $1,312,056. As of June 30, 2022, Twin Vee Inc. had an accumulated deficit of approximately $8.4 million. There can be no assurance that expenses will not continue to increase in future periods. It is not anticipated that Twin Vee Inc. will generate any revenue.

 

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THE MERGER TRANSACTION

  

This section and the section entitled “The Merger Agreement” in this Joint Proxy Statement/Prospectus describe the material aspects of the merger, including the merger agreement. While Twin Vee Co. and Twin Vee Inc. believe that this description covers the material terms of the merger and the merger agreement, it may not contain all of the information that is important to you. You should read carefully this entire Joint Proxy Statement/Prospectus for a more complete understanding of the merger and the merger agreement, attached as Annex A to this Joint Proxy Statement/Prospectus, which is herein incorporated by reference.

 

General

 

At the effective time, Twin Vee Inc. will merge with and into Twin Vee Co., which will be the surviving entity. Each holder of a share of Twin Vee Inc. common stock will receive 0.023973428139908 of a share of Twin Vee Co. common stock. See “The Merger Agreement—Merger Consideration.” Based solely upon the outstanding shares of Twin Vee Co. common stock on October 11, 2022 and Twin Vee Inc.’s outstanding shares of common stock on October 11, 2022, immediately following the completion of the merger, Twin Vee Inc. stockholders will own approximately 42% of the combined company’s outstanding common stock, which is equivalent to the approximately 42% of Twin Vee Co. that Twin Vee Inc. currently owns. Based upon the fully-diluted outstanding shares of Twin Vee Co. and Twin Vee Inc. on October 11, 2022, immediately following the completion of the merger, Twin Vee Inc. security holders would own approximately 37% of the combined company’s outstanding common stock.

 

Background of the Merger

 

Twin Vee Inc. was initially incorporated under the laws of the State of Florida on July 11, 2003 and reincorporated in Delaware on March 3, 2006 under the name ValueRich, Inc. Twin Vee PowerCats Co. (which is referred to in this Joint Proxy Statement/Prospectus as Twin Vee Co.) was incorporated in the State of Florida as Twin Vee Catamarans, Inc. on December 1, 2009 and reincorporated in the State of Delaware on April 7, 2021. On February 17, 2015, ValueRich consummated the acquisition of Twin Vee Catamarans, Inc., the predecessor of Twin Vee Co. On April 26, 2016, ValueRich changed its name and began operating under the name Twin Vee Powercats, Inc. (which is referred to in this Joint Proxy Statement/Prospectus as Twin Vee Inc.). As a result of the foregoing, Twin Vee Inc. is the parent company of Twin Vee Co.

 

On July 23, 2021, Twin Vee Co. closed an underwritten initial public offering of 3,000,000 shares of its common stock at a public offering price of $6.00 per share, for gross proceeds of $18,000,000, before deducting underwriting discounts and offering expenses (the “Twin Vee IPO”). As a result of the Twin Vee IPO, Twin Vee Inc.’s equity ownership in Twin Vee Co. decreased to from 100% to approximately 57%.

 

On November 8, 2021 and January 12, 2022, Joseph Visconti, the Chief Executive Officer of Twin Vee Inc. and Twin Vee Co., Carrie Gunnerson, the Chief Financial Officer of Twin Vee Inc. and Twin Vee Co., Glenn Sonoda, Secretary of and counsel to Twin Vee Inc. and Twin Vee Co., and Leslie Marlow and Hank Gracin of Gracin & Marlow, LLP, Twin Vee Co.’s counsel, participated in a telephone conference where various methods were discussed in which 4,000,000 shares of common stock of Twin Vee Co. held by Twin Vee Inc. (the “Twin Vee Co. Shares”) could be distributed to the Twin Vee Inc. stockholders and the tax treatment related thereto.

 

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During the January 12, 2022 teleconference, a discussion also ensued regarding the existing $7,055,709 of net operating loss carryforwards of Twin Vee Inc. and the circumstances under which Twin Vee Co. could have an opportunity to use such net operating loss carryforwards to offset its income. Ms. Gunnerson advised that her research indicated that a distribution or spinoff of the Twin Vee Co. shares by Twin Vee Inc. to its stockholders would result in a taxable transaction for the Twin Vee Inc. stockholders. As a result, the participants on the teleconference discussed an alternative structure pursuant to which Twin Vee Inc. would merge with and into Twin Vee Co., the Twin Vee Co. shares would be cancelled and retired, and Twin Vee Co. would issue an equivalent number of its shares of common stock (i.e., approximately 4,000,000 shares) to the Twin Vee Inc. stockholders. Ms. Gunnerson advised that shares of Twin Vee Co. common stock should be able to be distributed to Twin Vee Inc. stockholders on a tax-free basis in the event of a merger of Twin Vee Inc. with and into Twin Vee Co. and that following any such merger Twin Vee Co. could have an opportunity to use the existing $7,055,709 of net operating loss carryforwards of Twin Vee Inc. to offset its income. A decision therefore was made at the conclusion of the teleconference to explore the feasibility of a merger transaction between Twin Vee Inc. and Twin Vee Co.

 

On February 1, 2022, Twin Vee Co. engaged the law firm of Blank Rome LLP (“BR”) as counsel in connection with a merger of Twin Vee Co. with Twin Vee Inc. Leslie Marlow and Hank Gracin, who as of February 1, 2022 joined BR, began drafting the merger agreement between Twin Vee Co. and Twin Vee Inc. (the “merger agreement”). The terms of the merger agreement were negotiated by Leslie Marlow and Hank Gracin of BR, as counsel for Twin Vee Co., and Glenn Sonoda, as counsel for Twin Vee Inc., with input from their respective clients.

 

On June 6, 2022, the Board of Directors of Twin Vee Co. formed a special committee of the Twin Vee Co. Board in connection with discussing the terms of the merger agreement. James Melvin, Bard Rockenbach, Neil Ross and Steven Shallcross were appointed by the Twin Vee Co. Board of Directors as independent members of the Twin Vee Co. Committee. On June 30, 2022, Mr. Shallcross resigned from the Twin Vee Board of Directors and all committees of the Board of Directors.

 

On July 12, 2022, a meeting of the Twin Vee Co. Board of Directors was held to discuss, among other things, the merger transaction.

 

Mr. Schuyler were appointed by the Twin Vee Co. Board of Directors as an independent member of the Twin Vee Co. Committee.

 

On June 15, 2022, ValuCorp (“ValuCorp”), was retained by Twin Vee Co. to undertake certain investigations and reviews in connection with the delivery of a fairness opinion with respect to a possible business combination transaction of Twin Vee Co. with Twin Vee Inc.

 

On September 6, 2022, a meeting of the Twin Vee Co. Board of Directors was held to discuss, among other things, the terms of the merger transaction.

 

On September 8, 2022, a meeting of the Special Committee was held to discuss and consider the terms of the proposed merger agreement. Also present at the Twin Vee Co. Special Committee meeting, was Leslie Marlow and Patrick Egan of BR and Michael Gilburd on behalf of ValuCorp. Ms. Marlow from BR gave a brief description of the terms and conditions of the merger agreement and discussed the Board’s fiduciary obligations with respect to the proposed merger. During the meeting, ValuCorp reviewed in detail with the Twin Vee Co. Committee its financial analyses with respect to the fairness, from a financial point of view, to Twin Vee Co. of the issuance of the shares of Twin Vee Co. common stock in the merger pursuant to the merger agreement. ValuCorp rendered its oral opinion, based upon and subject to various assumptions, limitations and qualifications undertaken by ValuCorp in its review of the merger agreement, that the exchange ratio, as defined in the merger agreement was fair, from a financial point of view, to the Twin Vee Co. stockholders. ValuCorp’s oral opinion was subsequently confirmed in a written opinion dated September 8, 2022. The Special Committee determined that the merger and merger agreement is fair to, and in the best interests of, Twin Vee Co. and its stockholders and resolved to recommend to the Twin Vee Co. Board of Directors that the merger and merger agreement be approved.

 

Later in the day on September 8, 2022, a meeting of the Twin Vee Co. Board of Directors was held to discuss the merger transaction. Ms. Marlow from BR gave an overview of what occurred at the Twin Vee Co. Special Committee meeting and the Twin Vee Co. Board of Directors discussed the merger agreement and considered the merger. The Twin Vee Co. Board of Directors determined that the merger and merger agreement is fair to and in the best interests of Twin Vee Co. and its stockholders and approved the merger and merger agreement.

 

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On September 8, 2022, a meeting of the Twin Vee Inc. Board of Directors was held, discussed and considered the terms of the proposed merger agreement. Mr. Sonoda presented the terms and conditions of the merger agreement and discussed the Twin Vee Inc. Board of Directors’ fiduciary obligations with respect to the proposed merger. The Twin Vee Inc. Board of Directors determined that the merger and merger agreement is fair to and in the best interests of Twin Vee Inc.

 

Following the meetings of the Twin Vee Co. Board of Directors and Twin Vee Inc. Board of Directors on September 8, 2022, Twin Vee Inc. and Twin Vee Co. exchanged execution copies of the merger agreement and delivered the definitive merger agreement as of September 8, 2022.

  

Recommendation of the Twin Vee Co. Board of Directors and its Reasons for the Merger

 

The Twin Vee Co. Board of Directors has (i) determined that the merger with Twin Vee Inc. is advisable and fair to, and in the best interest of, Twin Vee Co. and its stockholders, (ii) has approved the merger and the merger agreement, and (iii) recommends that Twin Vee Co. stockholders vote “FOR” the adoption and approval of the merger agreement. In considering the recommendation of the Twin Vee Co. Board of Directors with respect to the merger agreement, Twin Vee Co. stockholders should be aware that certain directors and officers of Twin Vee Co. have certain interests in the merger that are in addition to the interests of Twin Vee Co. stockholders generally. The Twin Vee Co. Board of Directors consulted with and received information from Twin Vee Co. management and Twin Vee Co.’s legal and financial advisors in evaluating the merger, and considered a number of factors in reaching its decision to take the foregoing actions, including, but not limited to the following:

 

·the belief that the combination of the businesses of Twin Vee Co. and Twin Vee Inc. would create more value for Twin Vee Co. stockholders in the long term than Twin Vee Co. would create as a subsidiary of Twin Vee Inc.;

 

·the belief that the merger of Twin Vee Co. and Twin Vee Inc. is an effective method of distribution of the Twin Vee Co. shares of common stock held by Twin Vee Inc. to the Twin Vee Inc. stockholders;
·the potential cost savings synergies derived from the merger of Twin Vee Co. and Twin Vee Inc., including the opportunity to utilize $7,055,709 of Twin Vee Inc.’s net operating loss carryforwards to offset Twin Vee Co.’s income, thus enhancing Twin Vee Co.’s stockholders value;

 

·the results of the due diligence review of Twin Vee Inc.’s operations by Twin Vee Co.’s management, legal advisors and financial advisors;

 

·the likelihood of success of the three pending litigations that are currently being defended by Twin Vee Inc. (which are more fully described herein) and the potential exposure in the event that Twin Vee Inc. is unsuccessful in any or all of such litigations, as well as the cost of defending the litigations, which may include the cost of trial;

 

·the terms and conditions of the merger agreement;

 

·the likelihood that the merger will be consummated on a timely basis;

 

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·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 Co. or Twin Vee Inc. prior to the completion of the merger;

 

·the opinion of Twin Vee Co.’s financial advisor, dated September 8, 2022, to the Twin Vee Co. 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 one share of Twin Vee Co. common stock to be issued in exchange for every 0.0239734281399308 shares of Twin Vee Inc. common stock pursuant to the merger agreement was fair to Twin Vee Co. from a financial point of view. (See section entitled “The Merger—The Merger Transaction—Opinion of Twin Vee Co.’s Financial Advisor”);

 

·the use of Twin Vee Co. common stock as the sole consideration in the merger, which will allow Twin Vee Co. to proceed with the merger without having to deplete its existing cash resources;

 

·the fact that the directors and executive officers of Twin Vee Inc., holding approximately 59% of Twin Vee Inc.’s outstanding shares, agreed to vote their shares of Twin Vee Inc. common stock in favor 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 Co. Board also identified and considered a variety of risks and other countervailing factors in its deliberations concerning whether to approve the merger and enter into the merger agreement, including, but not limited to, the following:

 

·the risks described under the section entitled “The Merger—Risk Factors”;

 

·the risks, challenges and costs inherent in combining the two companies and the substantial 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 Co.’s 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 Co. 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 Co.;

 

·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 merger agreement is adopted by the stockholders of Twin Vee Co.;

 

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

  

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·the risk that the anticipated cost savings will not be realized and operational and financial benefits anticipated in connection with the merger might not be realized by the combined company; and

 

·the expected substantial limitations on the combined company’s utilization of net operating loss carryforwards in light of Section 382 of the Internal Revenue Code of 1986, as amended or the Code.

 

In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Twin Vee Co. Board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and to recommend that Twin Vee Co. stockholders vote in favor of the issuance of shares of Twin Vee Co. common stock in the merger. In addition, individual members of the Twin Vee Co. Board may have given differing weights to different factors. The Twin Vee Co. Board conducted an overall analysis of the factors described above.

 

Opinion of Twin Vee Co.’s Financial Advisor

 

As stated above, Twin Vee Co. retained ValuCorp to render the Opinion to the Twin Vee Corp Special Committee of the Board of Directors as to the fairness of the Exchange Ratio, from a financial point of view, to the stockholders of Twin Vee Co. On September 8, 2022, at the request of the Twin Vee Co. Special Committee of the Board of Directors, ValuCorp rendered its oral opinion, subsequently confirmed by delivery of the written Opinion dated September 8, 2022, to the Twin Vee Corp Special Committee of the Board of Directors that the merger was fair, from a financial point of view, to the stockholders of Twin Vee Co.as of the date of such Opinion and based upon the various assumptions, qualifications and limitations set forth therein.

 

The following is a summary of the material financial analyses delivered by ValuCorp, Inc. to the Special Committee of the Board of Directors of Twin Vee Powercats Co. in connection with rendering the Fairness Opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by ValuCorp, Inc. nor does the order of analyses described represent relative importance or weight given to those analyses by ValuCorp. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of ValuCorp’s financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 31, 2022, the last trading day before the public announcement of the transactions and is not necessarily indicative of current market conditions.

 

The Transaction. Twin Vee Inc. currently owns 4,000,000 shares of common stock of Twin Vee Co. The holders of Twin Vee Inc. common stock will receive in the merger one share of Twin Vee Co. common stock in exchange for every 41.7128495 shares of Twin Vee Inc. common stock they own, or the exchange ratio, for a maximum of 4,000,000 shares of Twin Vee Co. common stock (no fractional shares of Twin Vee Co. common stock will be issued) and the 4,000,000 shares of Twin Vee Co. common stock held by Twin Vee Inc. will be canceled. After the merger, the outstanding number of shares of common stock of Twin Vee Co. will be substantially the same as it was immediately prior to the merger.

 

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Historical Exchange Ratio Analysis. ValuCorp reviewed the historical trading prices for Twin Vee Co. common stock and Twin Vee Inc. common stock for the 6-month period prior to September 8, 2022. ValuCorp calculated historical average exchange ratios over various periods by first dividing the closing price per share of Twin Vee Co. common stock on each trading day during the period by the closing price per share of Twin Vee Inc. common stock on the same trading day, and subsequently taking the average of these daily historical exchange ratios over such periods (such period, the “Average Exchange Ratio”). ValuCorp then calculated the premiums implied by the exchange ratio to the historical average exchange ratio over various periods. The following table presents the results of this analysis:

 

VALUE OF VEEE SHARES (9/6/22) = $3.75 VALUE OF TVPC SHARES (9/6/22) – 0.095 X 41.712 = $3.96

 

ValuCorp has taken into consideration the maximum debt to be assumed by Twin Vee Co of up to

 

$235,000 owed by Twin Vee Inc., and the total debt outstanding owed by Twin Vee Co. of

 

$5,523,583 at June 30, 2022.

 

Historical Stock Trading Analysis. ValuCorp reviewed the historical trading prices and volumes of Twin Vee Co. common stock for the 6-month period ended August 31, 2022. See, Fairness Opinion of ValuCorp, Exhibit A – The Historical Trading Prices and Volumes of Twin Vee Powercats, Co. (“Twin Vee Co.”) and Exhibit B – The Historical Trading Prices and Volumes of Twin Vee Powercats, Inc. or “Twin Vee Inc.”).

 

This analysis indicated that the implied price per share to be paid to Twin Vee Co. stockholders based on the exchange ratio of approximately 41.712 Twin Vee Inc. shares for one share of Twin Vee Co. pursuant to the Merger Agreement is fair from a financial point of view.

 

Illustrative Discounted Cash Flow Analysis. Using the forecasts in the Discounted Cash Flow Analysis, ValuCorp created discounted cash flow analysis of Twin Vee Co., as set forth in Fairness Opinion of ValuCorp Exhibit C – Twin Vee Co. Discounted Cash Flow Analysis.

 

Precedent Premium Analysis. Using publicly available information, ValuCorp reviewed and analyzed acquisition premia for transactions announced during the time period from October 11, 2012, through August 31, 2022, involving a public company based anywhere in the world in the marine industry as the target, where the transaction value and other transaction data was disclosed, as described in Fairness Opinion of ValuCorp, Exhibit D – Comparable Companies’ Transactions and Potential Acquirers and Exhibit F – Boat Building in the US Industry Report 33661B, IBISWorld.

 

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While none of the companies that participated in the selected transactions are directly comparable to Twin Vee Co., the companies that participated in the selected transactions are companies with operations, results, market sizes, and product profiles that, for the purposes of analysis, may be considered similar to that of Twin Vee Co.

 

Public Comparables Analysis. ValuCorp reviewed and compared certain financial information for Twin Vee Co. to corresponding financial information, ratios, and public market multiples for the following publicly traded corporations in the industry (collectively referred to as the “selected companies”) appear in the Fairness Opinion of ValuCorp Exhibit E – Comparable Companies and Potential Acquirers

 

Although none of the selected companies is directly comparable to Twin Vee Co., the companies included were chosen by ValuCorp utilizing its professional judgment because they are companies with operations, results, market sizes, and product profiles that, for the purposes of analysis, may be considered similar to that of Twin Vee Co. See, Fairness Opinion of ValuCorp, Exhibit F – Boat Building in the US Industry Report 33661B, IBISWorld, Pages 43 – 44 for Industry Data, Annual Change, Key Ratios, and Industry Financial Statement.

 

Present Value of Future Share Price AnalysisTwin Vee Co. Standalone. ValuCorp performed an analysis of the implied present value of future enterprise value and value per share of Twin Vee Co. common stock, which is designed to provide an indication of the present value of a theoretical future value of Twin Vee Co.’s equity as a function of Twin Vee Co.’s financial multiples. See, Fairness Opinion of ValuCorp Exhibit C – Twin Vee Co. Discounted Cash Flow Analysis.

 

The preparation of a Fairness Opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying ValuCorp’s Fairness Opinion. In arriving at its fairness determination, ValuCorp considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, ValuCorp made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to Twin Vee Co., Twin Vee Inc., or the contemplated transactions.

 

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ValuCorp prepared these analyses for the purposes of ValuCorp’s providing its Fairness Opinion to the Twin Vee Co. board of directors as to the fairness from a financial point of view of the transaction consideration to be paid to the holders of Twin Vee Co. common stock (other than Twin Vee Inc. and its affiliates) taken in the aggregate, pursuant to the final Merger Agreement.

 

These analyses do not purport to be appraisals, nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Twin Vee Co., Twin Vee Inc., ValuCorp or any other person assumes responsibility if future results are materially different from those forecasts.

 

The transaction consideration was determined through arm’s-length negotiations between Twin Vee Co. and Twin Vee Inc. and was approved by the Twin Vee Co. board of directors. ValuCorp provided advice to Twin Vee Co. during these negotiations. ValuCorp did not, however, recommend any specific amount of transaction consideration to Twin Vee Co. or the Twin Vee Co. board of directors or that any specific amount of transaction consideration constituted the only appropriate transaction consideration for the contemplated transactions.

 

As described above, ValuCorp’ Fairness Opinion to the Twin Vee Co. board of directors was one of many factors taken into consideration by the Twin Vee Co. board of directors in making its determination to approve the final Merger Agreement. The summary herein does not purport to be a complete description of the analyses performed by ValuCorp in connection with the Fairness Opinion and is qualified in its entirety by reference to the written Fairness Opinion of ValuCorp.

 

Recommendation of the Twin Vee Inc. Board of Directors and its Reasons for the Merger

 

The Twin Vee Inc. Board of Directors (i) has determined that the merger agreement and the merger are advisable and fair to, and in the best interests of, Twin Vee Inc. and its stockholders, (ii) has approved the merger agreement, and (iii) recommended that the Twin Vee Inc. stockholders vote “FOR” the merger and merger agreement. In reaching its decision to approve the merger agreement, the Twin Vee Inc. Board of Directors consulted with senior members of Twin Vee Inc.’s management, members of the Twin Vee Inc. Board of Directors and with Twin Vee Inc.’s legal, consulting and accounting advisors regarding the strategic and operational aspects of combining Twin Vee Inc. and Twin Vee Co. and reviewed the results of the due diligence efforts undertaken by Twin Vee Inc. management and Twin Vee Inc.’s legal, consulting and accounting advisors.

 

The principal factors supporting the Twin Vee Inc. Board of Director’s decision to approve the merger agreement and recommend that Twin Vee Inc. stockholders vote to adopt the merger agreement included the following:

 

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·the belief that the merger of Twin Vee Co. and Twin Vee Inc. is an effective method of distribution of the Twin Vee Co. shares of common stock held by Twin Vee Inc. to the Twin Vee Inc. stockholders;

  

·tha