Full Year 2023 Forza X1 Inc Earnings Call

Speaker Change: © transcript Emily Beynon © transcript Emily Beynon

Speaker Change: Welcome to the Forza X1 Inc. Year-End 2023 Investor Call. As a reminder, this call is being recorded and all participants are in a listen-only mode.

Speaker Change: Your speaker for today's program is Joseph Visconti, Executive Chairman and Interim CEO of Forza X1, Inc.

Speaker Change: 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 facts, including statements regarding the company's future operations and financial position, business strategy, and plans and objectives of management for future operations, are forward-looking statements.

Speaker Change: In some cases, forward-looking statements can be identified by terminology such as believe, may, estimates.

Speaker Change: continue, anticipates, intends, should, plan, expects, predict, potential, or the negative of these terms or other similar expressions.

Speaker Change: and the company has based these forward-looking statements largely on its 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 uncertainties and assumptions described

Speaker Change: including those set forth in its filings with the Securities and Exchange Commission, which are available on the company's investor relations website at ir.forzax1.com. You should not rely upon forward-looking statements as prediction of future events.

Speaker Change: We cannot assure you that the events and circumstances reflect in the forward-looking statements will be achieved or occur. Finally, this conference call is being webcast. The webcast will be available at IR.orgiaX1.com for at least 90 days. Audio cast quality is subject to your equipment, available bandwidth, and internet traffic. If you experience unsatisfactory...

Speaker Change: Audio quality, please use the telephone dial-in option. A question and answer session will follow the presentation. Please note that only those who have dialed in via telephone may ask a question. Those listening via the webcast will be unable to submit questions. If you would like to ask a question, you may signal by pressing star 1 on your telephone keypad. I will now turn the conference over to Joseph Visconti.

Joseph Visconti: Good morning, everybody.

Joseph Visconti: I want to welcome everyone to the call today. Thank you for taking the time out of your schedules. My name is Joseph Visconti. I'm the Executive Chairman and Interim CEO of Forza X1.

Joseph Visconti: Before I begin my presentation, I want to speak on the recent news of the resignations of former CEO President Jim Leffew and our CFO Kerry Gunnarson. Both of these resignations were untimely but also unrelated.

Joseph Visconti: I understand the optics were not great, but for those of you that know me, you also know that I strongly believe in change brings opportunity.

Joseph Visconti: Jim Leffew and our team of Forza engineers worked diligently to push our mission forward. And I want to thank Jim for all of his efforts, and we wish him the best of luck with his future endeavors.

Joseph Visconti: Kerry Gunnarsson has graciously agreed to stay on through the audit period and 10K process to ensure a smooth transition for our finance team in the hiring and onboarding of a new CFO .

Joseph Visconti: Carrie and I have worked together for nearly three years in both Forza and Twin V. I want to thank her for her contribution throughout her tenure, and I wish her well.

Joseph Visconti: As a CEO of a microcap public company launching a disruptive product in an increasingly crowded marketplace,

Joseph Visconti: especially when economic headwinds or EV headwinds continue to be challenging.

Joseph Visconti: A change of leadership provides us with an opportunity to reevaluate our strategies,

Joseph Visconti: While we're experiencing these headwinds with a fresh perspective to capitalize on emerging opportunities with the goal of driving sustainable growth as we launch our products.

Joseph Visconti: Although electric boat annual sales units have been relatively small in comparison to traditional boats with outboard combustible motors, we believe our products

Joseph Visconti: potential remains strong.

Joseph Visconti: As with automobiles, EV offers sustainability, convenience,

Joseph Visconti: and reduce service costs. We see electric boats playing a significant role in the future of marine transportation and we firmly believe in Forza's mission of manufacturing and selling affordable family-friendly day boats.

Joseph Visconti: However, because of the current state of the recreational marine and EV space, both on the marine and EV side, our primary focus right now is to steer this company through these challenging times and emerge stronger on the other side.

Speaker Change: So where do we go from here?

Speaker Change: Our outward motor has undergone...

Speaker Change: While our team is exploring and open to all available options and opportunities within our industry, we are currently reducing unnecessary expenditures. We are shelving longer-term projects in favor of those with more near-term impact to reduce our expenditures and lengthen our runway.

Speaker Change: As of today, our outboard motor has undergone an extensive redesign. Our new design incorporates a simplified frame structure that uses stacked custom casings and

Speaker Change: Castings which are sealed for increased durability and corrosion protection. The overall shape of the motor and cowlings have been updated. And this redesign facilitates higher-value manufacturing processes, such as thermal form and injection molding.

Speaker Change: Additionally, the motor cooling units have been re-engineered to optimize cooling flow rates to the inverter.

Speaker Change: which have yielded better run times, speed, range, and aims to extend time on the water for a single charge.

Speaker Change: Our engineering team continuously improves the engine design, lower units, and control systems for each iteration to help reduce overall weight and cost of the increased functionality. We are currently producing what we believe to be the final beta iteration of the equivalent of 140 horsepower outboard motor.

Speaker Change: On the parallel path, our Forza factory is under construction.

Speaker Change: I saw images yesterday of the building going vertical and the exterior walls are being assembled. We are constructing a state-of-the-art 60,000 square foot facility on our 11 acre property in Marion, North Carolina. We are shooting for an October 2024 completion date, so it's right around the corner.

Speaker Change: Before we look at what's ahead for us, let me provide an update on Forza's cash position and current state. As of December 31st, 2023...

Speaker Change: Forza had cash and cash equivalents of approximately $9,822,000.

Speaker Change: Forza had working capital of approximately $12,814,000 as of December 31st, 2023.

Speaker Change: Last year our burn rate was approximately 600,000 hours per month and with recent cuts and reduction our burn is approximately 200,000 hours a month not including the construction cost of our new facility.

Speaker Change: We are also mindful of the increasing competition from players like Yamaha, who recently acquired a propulsion manufacturer named Torquedo in January . Mercury, we know, has launched a whole suite of EV, Outboard Motors, and Suzuki, we believe, will be announcing soon.

Speaker Change: These major players are entering the EV market, and one of the reasons we believe in the electrification of the recreational marine industry is that these large engine manufacturers have committed significant resources to developing their own electric motors.

Speaker Change: for the Marine EV space. However, we recognize that competing with the likes of Mercury, Yamaha, and Suzuki will require us to form strategic partnerships,

Speaker Change: While I'm unable to give specifics, I can say that we are currently in talks with several key technical and financial players in the marine industry.

Speaker Change: These partnerships can potentially impact our trajectory with the goal of positioning our products, the Forza products, along with other major marine manufacturers. From day one, our vision was to produce affordable electric boats, and we continue to believe that the EV marine space will follow the automotive space. There is no straight line with success. We all know that.

Speaker Change: When introducing and manufacturing disruptive new products to a nascent market, there will always be challenges, but the number one rule is to not run out of money and cautiously and optimistically protect your capital.

Speaker Change: Finally, I do want to mention that we are addressing the delisting notice we received from NASDAQ a few months ago. Unfortunately, Forza continues to trade under a dollar a share. Our team will request a six-month extension to comply with the continued listing rule to allow us more time to increase the stock price.

Speaker Change: Jim Leffew, However, if we are unable to get the stock over or if the stock does not trade over a dollar for a minimum 10 consecutive business days, we will have to consider alternative

Speaker Change: methods with NASDAQ such as a reverse stock split.

Speaker Change: In conclusion, while we are adjusting our business to minimize cash burn while pushing our final beta product forward, we are an agile group of innovators. We are not afraid to pivot and adapt based on current and projected near-term marketplace. And with that, I would like to open it up to questions.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please while we poll for your questions.

Speaker Change: Our first questions come from the line of Frank Griffin with Forza X1. Please proceed with your questions.

Frank Griffin: Good morning, Joe. This is Frank in North Carolina. How are you doing? Good. How are you doing?

Frank Griffin: I'm fine. Congratulations on a 4% increase in your financials. That's great.

Speaker Change: I think you're looking at the Twin V. This is the Forza investor call. That was for the Twin V investor.

Speaker Change: And as a purpose in any case was...

Speaker Change: Okay, okay, concerning Forza, I just wanted to be...

Speaker Change: Concerning the SEC and the delisting, as a new company, is it a pretty good chance we'll get an extension in the grace period for six months?

Speaker Change: Well, there's no guarantee, but Forza has the capital, the cash, and typically companies that do apply for an extension are granted. Again, there's no guarantee, but I'm being advised that there's a very good chance that NASDAQ grants these six-month extensions. Okay.

Speaker Change: Thank you very much, and you'll continue to hard work with you and your staff. God bless you and your family. Thank you.

Speaker Change: Thank you, sir.

Speaker Change: Forza X1

Speaker Change: Forza X1

Speaker Change: I'm showing no further questions in the queue. I'd like to pass the floor back over to Joseph Visconti for any closing remarks.

Joseph Visconti: I just want to thank everyone for their time today and if you have any additional questions, please email them to glenn at twinv.com and we'll be happy to help you. Thank you again everyone. Have a good day.

Joseph Visconti: Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.