Forza X1, Inc. (FRZA)·Q4 2023 Earnings Summary

Executive Summary

• Q4 2023 capped a pre‑revenue year; FY 2023 net sales were $0.037M and Q4 net sales were approximately $0.019M (derived from FY minus nine months), with FY net loss of $5.93M and Q4 net loss of ~$1.40M; cash at year‑end was $9.82M .
• Management reduced monthly cash burn to ~$200K entering 2024 (from ~$600K in 2023) and targeted October 2024 to complete the new 60,000 sq ft Marion, NC facility, positioning for potential scale once demand improves .
• Strategic highlights included a formal A.I. autonomy partnership (NeuBoat/Avikus), continued propulsion/system testing, and a 100‑unit dealer order with OneWater (~$12M potential revenue), though broader EV/marine demand softened and large OEMs (Mercury, Yamaha, Suzuki) intensified competition .
• Governance/market risks emerged: CEO and CFO resigned in March 2024, and Nasdaq minimum bid price non‑compliance could necessitate action (e.g., reverse split) if the stock doesn’t regain compliance .
• No Wall Street consensus (S&P Global) was available for FRZA for Q4 2023; estimate comparisons are therefore unavailable.*

What Went Well and What Went Wrong

What Went Well

• Announced Autonomous A.I Technology partnership (NeuBoat/Avikus) to enable 360° situational awareness, advanced route planning, smart autopilot, and autonomous self‑docking—enhancing safety and appeal to next‑gen boaters .
• Outboard motor redesign improved durability/corrosion protection, manufacturability (thermoform/injection), and cooling circuits—yielding better runtime, speed, and range; propulsion system passed safety‑critical testing and progressed toward endurance tests .
• Secured initial 100‑boat order with OneWater (~$12M expected revenue) and showcased products at major industry venues; set plan to demonstrate in California early 2024 .

What Went Wrong

• Demand headwinds: EV adoption slowed, marine industry saw lower recreational demand; management decided to slow testing/production and tighten spending .
• Competitive pressure increased with Mercury launching electric outboards and Yamaha acquiring Torqeedo; Suzuki likely to enter—raising the bar for performance and capital access .
• Heightened risk profile: FY net loss widened YoY to $5.93M (from $3.63M), working capital declined by year‑end, and Nasdaq non‑compliance persisted, with potential reverse split under consideration .

Financial Results

Note: FRZA reported FY and interim results; Q4 2023 quarterly figures are derived by subtracting 9‑month data (through Q3) from FY totals. EPS for Q4 was not disclosed separately.

Quarterly Operating Metrics (USD)

EPS Snapshot

Balance Sheet KPIs

FY YoY (USD)

Note: Q4 2023 figures are derived from FY 2023 minus nine months ended 9/30/2023 using reported press release tables .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our outboard motor has undergone an extensive redesign… simplified frame… sealed for increased durability… cooling circuits re‑engineered… yielded better runtime, speed, and range.”
• “We are shooting for an October 2024 completion date [for the Marion, NC factory].”
• “Last year, our burn rate was approximately $600,000 per month… with recent cuts… approximately $200,000 a month” .
• “We are currently in talks with several key technical and financial players… partnerships can potentially impact our trajectory” .
• “We observed a noticeable market slowdown for… electric boats… larger players… have brought their electric outboard motors to market.”

Q&A Highlights

• Production ramp: Plan was 1→2 boats/month in early 2024, with aim to reach 3–4/week exit rate subject to demand and facility readiness .
• Battery technology: Actively evaluating multiple battery suppliers/chemistries under NDA; improving cost, safety and energy density; confident in progress .
• OEM partnerships: Continued engagement with Polaris (Bennington/Godfrey) with testing of 300HP variant and lighter LFP battery configuration; exploring similar kit/service opportunities with other manufacturers .

Estimates Context

• S&P Global consensus for Q4 2023 EPS/Revenue/EBITDA was unavailable for FRZA due to missing mapping; accordingly, estimate comparisons and beat/miss analysis cannot be provided.*

Key Takeaways for Investors

• Development‑stage profile persists: minimal net sales and negative operating leverage; cash of $9.82M at year‑end supports near‑term testing and facility completion but necessitates disciplined burn control .
• Execution pivot: management slowed production/testing and curtailed capex beyond the new plant, prioritizing partnerships to share risk—reducing burn to ~$200K/month and targeting < $150K/month by mid‑2024 .
• Strategic optionality: A.I. autonomy partnership plus OEM dialogues (Polaris/others) could monetize propulsion/platform know‑how even if direct boat sales timing slips .
• Competitive reality: Mercury’s launched products and Yamaha/Torqeedo tie‑up raise the performance/scale bar; FRZA’s differentiation hinges on integration, autonomy features, and capital‑light partnership models .
• Facility milestone: October 2024 target for NC plant completion remains a near‑term catalyst; readiness could support demos, limited production, and partnership deliverables .
• Governance/listing risk: CEO/CFO transitions and Nasdaq bid‑price non‑compliance require monitoring; capital markets access may depend on market perception of strategy and burn trajectory .
• Near‑term trading lens: Headlines around partnership announcements, factory progress, and burn‑rate reductions likely drive sentiment; absence of consensus estimates limits traditional beat/miss catalysts.*

*S&P Global estimates unavailable for FRZA Q4 2023; no estimate comparisons are included.