Forza X1 Inc. Q1 2023 Earnings Call

Welcome to the Forza X One Inc. First quarter 2023 Investor call. As a reminder, this call is being recorded and all participants are in a listen only mode.

Speaker for today's program is Joseph <unk> Executive Chairman and Chief of product development for forms of X One Inc.

Before I turn the call over to Joseph Please remember that certain statements made during this investor call are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, all statements on this call other than statements of historical fact, including statements regarding the company's future operations and financial position business strategy and plans and objectives.

The management for future operations are forward looking statements in some cases forward looking statements can be identified by terminology such as believes May estimate continue anticipate intend should plan expect predict.

Potential or the negative of these terms or other similar expressions. The company has also based these forward looking statements largely on our current expectations and projections about future events and financial trends that it believes may affect its financial condition results of operations business strategy and financial needs. These forward looking statements are subject to a number of risks and on.

Certainties and assumptions described including those set forth in our filings with the Securities and Exchange Commission, which are available on our Investor Relations website at IR thought Florida.

The X one dot com.

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I'll now turn the call over to Joseph <unk>.

Thank you how are you my name is Joseph <unk> I'm, the executive Chairman at four zone I'd like to welcome everyone to the call today.

Coming into 2023, our company's mission remains the same to accelerate the adoption of sustainable recreation and commercialize electric boats.

Our laser focus remains on designing developing and mass producing.

And Sally family friendly affordable electric boats to the largest segment of the recreational boat buyer markets. These are boaters that enjoy a full day of voting with diverse utility of fishing pulling your kid to wake surfing cruising pull your boat on a sandbar enjoy.

The day with your friends and family day boating.

Today, I'm going to do a brief overview and update on our major milestone accomplishments and then open it up for Q&A.

Proud to have Jim a few is our president and CEO I operated do the investor call today due to Jim's nonstop hectic floors at schedule, Jim has been traveling around the clock pushing our business forward and getting for is it closer to revenues and selling electric boats to end consumers.

I want to thank Carrie Gunnerson, our interim CFO and we have an extraordinary team of engineers led by our Chief engineer, Dan Norton and our Chief Marine architect.

Greg Nick Logan plus many other talented engineers that we have come together with a wide range of skills. That's the side one of the greatest global challenges of our time marine sustainability cleaner oceans lakes and waterways without sacrificing one of our country's great pastime.

Activities being out on the water with our friends and family.

Over the past several months, we have made some pretty big strides. We're currently producing multiple models of our electric boats for continued testing I was out on or after 'twenty two hours monohull 22 yesterday for three hours. They both performed beautifully the F. 22 is currently reaching speeds.

Nearly 40 miles per hour the boat will have over 100 kilowatt battery combined with our 180 horsepower peak outboard motor. This is enough power and battery you and your family to span the entire day on the water.

Having over 50 miles at lower speeds pull your kids not aboard go fast go slow cruise enjoys a day when you're done you will pull the F 22 back onto the traveler like any other 22 foot boats, you'll bring the boat back to your home or to a Doc and you plug the boat.

And and being able to charge that battery pack with our built in fast charger to the recommended 85 or 90% and you'll be able to use the both the following day, we are designing and developing these boats to have them become user friendly affordable and family oriented.

I am happy with the current state of development.

And our current pace of testing there is no straight line and product development.

But it's very possible that boards are could be in a position and began fulfilling orders and delivering both to our customers by the end of this year.

Today, 20 power Cats announced the acquisition of <unk> with sports.

<unk> Board and its 150000 square foot manufacturing facility in White block, Tennessee. This acquisition is a big deal, it's a big opportunity for <unk> and for US, though let me explain.

First the Acrospore brand has been a respected name in the marine industry for almost 60 years, adding acrospore to twin the lineup will open up new markets add growth to our top line and instead of it.

Building the recently launched <unk> Mono all line model My model by model boat by boat, which is possible over time now with Aqua sport, the Agua sport acquisition, including the most equipment a super sized facility.

Wendy will roll its two existing LFG models, the 22 D C and the 22 D C into the act with sport branding name along with five additional models ranging from 21% to 25 feet. This immediately gives twin bee brand recognized company.

It's been around for 60 years, and seven models of Aqua sports and the Monohull line in a factory.

That was filled with new equipment and material and we're probably about a month away from ramping that factory up and being in production now here's worthy Acro sport acquisition gets interesting and where we see that there is some success with forza so as we've.

Seen the success of electrifying R 22 foot outlet G now with the 22 foot Aqua sport.

Our console Boise will have six additional models to electrify the benefit of electrifying the monohull.

Is the single motor cost and performance remember the twin Bee required two motors for peak performance because of the catamaran the multi haul, but a monohull boat requires a single motor this keeps our cost down.

And one of our main objectives as we continue to talk about as we roll out electric boats to consumers that they keep that cost in line with comparable gas powered boats within the same size and range.

For us the facility.

I'm sorry, the Acrospore facility is extremely large it's 100 and 150000 square feet. It's almost three times the size of the twin B battery and twin D. Can produce 500 boats out of its factory. So that gives you an idea in proportion how big this facility is that we just did.

Acquired so the new Aqua sport, Tennessee facility in the short term will be a phased approach twin V can sublease a section of the Aqua sport plant to Forza.

For us it can begin building fiber to fiberglass portion of the four is electric boats at the Tennessee facility, while we continue to build and assembled for the motors and our Tech center in old Fort North Carolina. We will then ship the complete as far as the motors from old sports to the Tennessee plant.

Your final rigging.

And we understand that a little bit of logistics, but this gives us for as a an additional $8 million in capital that we would have spent building a new facility Asap and by this I mean that the Tennessee plant is large enough to give four has its own field off.

<unk> section to begin building electric boats, while we also are ramping up the Aqua sport brand in another section of the plant.

Of course, we will continue to build our price North Carolina State of the art factory in North, Iowa Mcdowell County, this is very meaningful to us.

Our planned North Carolina factory will ultimately be the factory and the location that allows for it or is it to build and ship over a thousand electric boats per year.

Based on the least risky a strategy to get for US a revenue positive.

With sports factory not spend the $8 million for the new factory today.

Get boats, you know starting to produce both to end consumers as we think we can by the end of the year I want to be really clear about this there is no misunderstanding Ford is not stopping the construction of our Mcdowell County, North Carolina affords a factory, we are simply doing a slight pivot to <unk>.

The advantage of the infrastructure and investment.

Aqua Sport factory offers enforce it can conserve our current capital until four as our revenue is positive and the market timing is more optimistic.

We are excited about the North Carolina.

State of the art factory being designed and constructed from the ground up dedicated building electric boats at mass scale as we continue to grow our business and launch additional models and additional boats. The task of course, we will keep you up to date and Ah and informed I wanted to.

Over a couple of highlights.

R 22 foot electric including I think we're building we are building that particular boat with carbon fiber and kevlar to lighten the house. So I will let you know how that goes.

We are currently finalizing plans to electrify our 22 foot dual console boat, we built the dual console for Al F. G.

Which isn't our Reagan department in Fort Pierce, Florida, We are also going to electrify that boat under the for as a brand.

Or is it has received inquiries from various global companies and we continue seeking and making relationships around the world with our propulsion system.

We've kind of talked.

Kind of between the lines about a very large company one of the largest boat builders in the world that we've been working with them to possibly have are for us at propulsion system be the propulsion system.

For that company and we signed N D. As you can't get into names.

But that is moving along very nicely.

We are also continuing to work on our more powerful proprietary motor as you know we currently have a 180 horsepower peak power outboard motor.

We are getting close to our 300 horsepower.

This is our second electric motor that would enhance both performance and increased maximum range. Once prototype work is completed the all new 300 horsepower electric motor, we Reg and put on one of our existing boats.

I want to really.

Pushed everybody.

And then spend some time with us at our facilities, whether it's in four peers or in our North Carolina or within a couple of months at the Aqua Sport factory in Tennessee, you know we we.

We post videos, we post pictures, it's hard to really understand what we've done.

Our team works around the clock and we have not burned a lot of cash I think to date, we've gone to $5 million. We have designed our outboard motor from the ground up including everything from the cowling to the frame so lower unit to the cooling system and we are making it happen.

And we set out this mission to be the company that led marine electrification.

We've always said that we wanted to be the company that would be mass producing these boats. There's some great companies building electric boats around the world Onesies Twosies 10 here.

From day, one you know our our goal and our vision is to be that company that produces mass scale electric boats family friendly affordable.

So please take the time and come and visit US. There is a reason that we have investors that own 5%, 6%, 8% or more of our company. The each one of those investors came to the factory walked around met with management shook our hands looked at in the eye and <unk>.

Your line is what we are doing and they see the future with our company. So again, we invite you and look forward to meeting you and I want to open it up for Q&A now.

Thank you well now be conducting a question and answer session.

I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

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Thank you there are no questions at this time I'd like to hand, the floor back over to management for any closing remarks.

Thank you I'd like to go over that.

We currently have a little bit over $10 million in cash our monthly burn.

<unk> is 140000 hours per month for payroll our current rent is $8000 a month and the past three months, we've had some heavy prototype expenses around $700000 over a three month period, but if you aggregate our prototyping out over 12.

Month period, it's more around $120000, so with D&O insurance and the cash burn, we're a little bit under 300000 hours per month.

Month period, it's more around $120000, so with D&O insurance and the cash burn, we're a little bit under 300000 hours per month.

So we're excited about the future we're going to continue to work around the clock and make this company a reality and mass produce affordable boats. So I want to thank everybody. Please get down to the factory and see us and we're looking forward to seeing you soon and thanks again.

Yeah.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Yeah.