Twin Vee PowerCats subsidiary Forza X1 halts electric boat operations By Investing.com

In response to the current market environment and to conserve cash, Forza X1, Inc., a subsidiary of Twin Vee PowerCats Co., has decided to cease the development and sale of its electric boats, which feature proprietary outboard electric motors. The announcement was made on Thursday following a decision by the Board of Directors on July 11, 2024.

Forza X1 is also evaluating strategic options, including a possible merger with its parent company, Twin Vee PowerCats. The subsidiary has made significant workforce reductions to better align with its financial situation and production needs, now maintaining a staff of just five employees.

The company anticipates incurring pre-tax charges under $100,000 related to the workforce reduction, with the majority expected in the third quarter of fiscal year 2024. These charges, largely comprising severance and benefits, will be primarily settled in cash.

The wind-down of Forza X1’s electric boat operations is projected to cut the company’s monthly cash used in operating activities by over 50%, from about $403,000 per month in the first quarter of 2024 to under $200,000 per month.

The statements regarding anticipated cost reductions and estimated restructuring expenses are forward-looking and involve risks and uncertainties. Actual results may differ significantly due to various factors, including the achievement of expected cost reductions. These forward-looking statements are based on estimates and assumptions as of the date of this report, and Twin Vee PowerCats does not commit to updating them in light of new information.

This news is based on a recent SEC filing by Twin Vee PowerCats Co.

In other recent news, Twin Vee PowerCats Co. faced significant economic challenges in the first quarter of 2024, with a decrease in revenue from $8.8 million to $5.2 million and a consolidated net loss of $2.335 million. Despite these hurdles, the company reported a 40% increase in revenue per direct labor. As part of strategic adjustments, Twin Vee has downsized and shifted focus to financial controls and accountability.

On the executive front, an employment agreement was amended to increase Vice President Preston Yarborough’s base salary to $200,000. The company’s Compensation Committee also awarded stock options to three top executives, with CEO Joseph Visconti receiving the largest share. These financial incentives form part of the company’s amended 2021 Stock Incentive Plan.

Despite the economic headwinds, Twin Vee remains debt-free, with a strong balance sheet and over $7 million in cash. The company is investing in new models with higher margins and is preparing for a market upswing. These are some of the recent developments at Twin Vee PowerCats Co.

InvestingPro Insights

In light of the recent developments at Forza X1, Inc., and the strategic decisions made by Twin Vee PowerCats Co., investors may find the following insights particularly relevant. According to InvestingPro data, Forza X1’s parent company, Twin Vee PowerCats, holds a market cap of just $5.52 million and is trading at a low Price / Book multiple of 0.25 as of the last twelve months ending Q1 2024. Despite the challenges, analysts anticipate sales growth in the current year, which could signal a potential turnaround for the company.

InvestingPro Tips suggest that while the company is quickly burning through cash, with a revenue decline of -14.73% over the last twelve months, it holds more cash than debt on its balance sheet, which may provide some financial flexibility in these turbulent times. Moreover, the company has a Price / Book multiple that suggests it may be undervalued.

Investors interested in deeper analytics and additional tips can explore more at https://www.investing.com/pro/TVEE, and remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 18 additional InvestingPro Tips available for Twin Vee PowerCats, providing comprehensive insights for informed decision-making.

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