Forza X1, Inc. (NASDAQ:FRZA) Q4 2022 Earnings Call Transcript
Forza X1, Inc. (NASDAQ:FRZA) Q4 2022 Earnings Call Transcript March 27, 2023
Operator: Greetings and welcome to the Forza X1 Incorporated Year-End 2022 Investor Call. As a reminder this call is being recorded and all participants are in a listen-only mode. Your speaker for today's program is Joseph Visconti, Executive Chairman and Chief of Product Development for Forza X1. 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.
In some cases forward-looking statements can be identified by terminologies such as believes, may, estimates, continue, anticipates, intends, should, plan, expects, predict, potential or the negative of these terms or other similar expressions. The company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that I believe may affect its financial condition, results of operation, business strategy, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties 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.forzax1.com.
You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Finally, this conference call is being webcast. The webcast will be available on our Investor Relations website at ir.forzax1.com for at least 90 days. Audio passcode is subject to your equipment, available bandwidth and internet traffic. If you experience unfadable bandwidth and internet traffic. If you experience unsatisfactory audio quality please use a telephone dial-in option. A question answer session will follow the formal presentation. Please note that only those that have dialed in via telephone may ask a question. Those listening via webcast will be unable to submit questions and must call in instead.
. I will now turn the call over to your host, Joseph Visconti.
Joseph Visconti: Good morning, everybody. I would like to welcome everyone to the call today and thank you for taking the time out of your schedules. My name is Joseph Visconti. I'm the Executive Chairman of Forza X1. Forza's mission is to accelerate the adoption of sustainable recreational commercial electric boats. We continue to be focused on the design, development, testing and the sale of our fully integrated electric boats and our electric propulsion system that includes our outboard motors, high-powered lithium battery packs, our proprietary control system. And we are utilizing the garment screen as our user interface and telematics to update and monitor all of our software through Wi-Fi and cellular. We believe the marine industry is following in the footsteps of the automotive industry as we witness the global transition to electrification.
As we push forward, Forza X1 has entered the testing phase for several of our electric products, specifically our electric outboard motors, which are being water tested on almost a daily basis with several of our electric boats that include our FX-1 which is the red multi hull you've seen, our deck boat and our newest model to be electrified our 22-foot center console monohull. As we get closer to commercialization of our products, it's clear that electric boats must offer consumers a comparable boating experience to internal combustion engines, also known as ice motors in terms of price and performance. We believe that recreational day boats powered by electric outboard motors with run times of six hours, speeds of 20 to 30 knots, and up to 50 miles of use with a single charge will be the transformative performance specs required by consumers to ignite the demand for recreational electric day boats.
As battery technology continues to evolve and the power and battery capacity increases, we feel confident that marine electrification will continue gaining momentum. In fact, we are already receiving inquiries from various companies from around the world seeking to adopt electrification for their own products. We are witnessing the paradigm shift first hand based on the many interactions that we are having with companies from all over the world seeking to align themselves with the marine EV tech company that can provide an out-of-the-box electric propulsion system for a wide range of boats from pontoon and fiberglass manufacturers to extremely high end pocket yachts to tenders all seeking to electrify their products. Many companies are seeking the benefits of electrification.
We feel strongly that the tide is turning and many companies don't want to be left flat footed as the marine electrification moves forward. There is proximately 20 companies building electric boats. We're seeing new players enter the space almost monthly, but small batch production boat builders are not a way forward for consumers. Consumers are smart, specifically boat buying consumers are typically educated, well versed, and knowledgeable group and they will demand a comparable and similar consumer experience while shopping and buying electric boats. Electric boats seeking to gain market share from its ice counterparts will have to deliver quality, design, fit and finish, performance, power run times and of course the value proposition which is price.
These are all goals of Forza X1 and we feel strongly that we will deliver the products described. We all know the talking points that demonstrate why electric boats make more sense when comparing them to internal combustion engine boats or ice boats. No fuel or exhaust, a quieter experience, sustainable, and lower maintenance. For example, I've had my Tesla for almost three years and other than plugging the car in at night and keeping the tire pressure maintained, I have not stopped at a gas station or changed oil in three years. Simply put, electric motors have 90% less moving parts than gas burning engines and are 95% more efficient. Our first Forza model, the FX 1 was designed from the ground up. The FX 1 multi hull boat is a great design.
It offers hydrodynamic efficiencies. In late 2022, our FX 1 dual console reached 30 knots during a water test, this was a significant milestone in achievement for us. Most twin hull catamarans require two motors. A single engine catamaran boat would be a win in terms of keeping the cost down due to the expense of adding that second motor control system and battery pack. Twin hull boats have many great performance characteristics and that second motor behind the cat allows for even better power and increased stability but again, this is important. The second motor drives the cost of the product up when we believe that most consumers are willing to transition from gas boats to electric boats and they're going to be price conscious and seeking value for their purchase.
Therefore, we've decided to pivot for the sake of consumer acceptance and move forward with our 22-foot monohull, as far as its first product being offered for consumer sale, our 22-foot monohull gives us the best chance for success. Keep in mind that the single engine 22-foot boat is the largest recreational market segment on the planet in terms of unit sales. More boats were sold in that 22-foot range monohull than any other boat being produced today. Our 22-foot monohull was electrified several weeks ago and successfully sea trialed. During its performance testing, the loss and drag with the monohull versus the dual hull was inconsequential when compared to the monohull, ease of use and the single motor performance. The lower CG or center of gravity with a battery pack sitting lower in the boat, in the V hull allowed for the 22 V hull to turn on a dime, get on plane quickly, and there is no nontraditional performance or handling characteristics as we took the 22 V hull through its paces.
Our 22 V hull will continue its testing in the coming weeks so that our team can continue gathering, additional data on performance as well as to examine potential for improved battery life and increased run times. With that being said, we have gone into small batch production on our 22 and now feel that the 22 V hull and 22 dual console will be the first to market. It's going to be ready, it'll be priced right, great value and we believe that this boat will be that will excite the market and the many thousands of boat buyers waiting for the right electric boat. Our engineers have also been hard at work on our all new electric deck boat. The deck boat successfully completed test in February and March. During those tests we were able to run the deck boat over 22 miles with an average speed of around 21 knots with only 50% to 60% battery use, we're happy to report all systems performed as expected.
These initial tests were a major success. We're excited to continue our work so that we can bring the deck boat to market. As of today, several of our electric boats are in the water on a regular daily basis. We've hired several fulltime boat captains whose job is to operate our test boats for at least 4 to 8 hours per day, putting the boats through their paces and trying to break them. We have most recently been working on adding the second model to our proprietary motor lineup. Model 2 is designed to increase power from our current outboard motor of 150 horsepower to our new version which is 300 horsepower, which will enhance boat performance and increase maximum range. As far as our control systems, we have reimagined and modernized the helm through centralizing the standard controls.
We have partnered with industry leader Garmin and Osmosis Telematics that help power this high tech command and control system. The Garmin Marine Screen that we are utilizing as our user interface offers GPS mapping, depth readings, heading indicators and speed. Additionally, the Garmin unit will also be capable for the specific control and display for items such as beta battery charge, battery temperature, anchorage draw on the motor to reduce range anxiety and improve the customer experience. Forza continues developing the direct to consumer all digital web and app platform that we will offer a build in price module. The platform will offer financing, schedule delivery, training and service in an all in one easy to use and frictionless consumer experience.
We believe that website will be up in less than eight months. In addition, Forza is thrilled about our strategic partnership with OneWater Marine, in which Forza and OneWater will partner to increase, I'm sorry, partner to create additional distribution channels for our electric boats. OneWater Marine is one of the largest and fastest growing premium marine retailers in the United States and currently operates over 100 retail locations in 20 states. As we bring our boats to market, this will give our customers who desire a more traditional boat buying experience, the ability to engage one-on-one with OneWater representatives, experience test rides, and pursue trade in opportunities. We believe the multi-channel approach either through the all-digital platform direct to consumer or OneWater's 100 plus dealerships throughout the country will enable us to reach further, sell more, and engage more customers.
As you may already be aware Forza has selected North Carolina as the site of its future state of art factory. We believe our state-of-the-art factory will be the first of its kind in the United States, a manufacturing and product development center specifically designed for fully integrated electric boats. The factory is designed for construction in two phases of approximately 60,000 square feet each. When finished, the factory will be capable of producing up to 1000 units a year. All aspects of the manufacturing will be vertically integrated under one roof, which means we're basically building every part of the boat. The clearing and grading for the land is 95% completed. We are targeting Q4 2023 completion date to have the factory fully constructed.
In the meantime, we have leased a temporary space near the new factory in a town called Old Fort, North Carolina which is being utilized for small batch production on our outboard motors and testing the motors with our newly installed test tank. Our test tank is quite large and allows our engineers to conduct controlled tests within the Old Fort facility. It also allows us to obtain quicker access to performance data without the need of traveling to and from a body of water. For the next several months until our factory is ready, all prototype work and assembly will be undertaking at Twin Vee's headquarters in Fort Pierce, Florida while the engines are being fabricated North Carolina and then shipped to Fort Pierce and installed on our prototype boats.
So with that being said, I'd like to open it up for questions.
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