Welcome to the Twin Vee PowerCats Company First Quarter 2023 Investor Call. As a reminder, this call is being recorded and all participants are in a listen-only mode. Your speakers for today's program are Joseph Visconti, President and CEO of Twin Vee PowerCats Company; Jim Leffew, President and CEO of Forza X1, Incorporated; and Carrie Gunnerson, CFO of Twin Vee PowerCats Company. 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 beliefs, may, estimate, continue, anticipate, intend, should, plan, expect, 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 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, including those set forth in our filings with the Securities and Exchange Commission, which are available on our website at www.twinvee.com. You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that these 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 in the Investor Relations section of our website at ir.twinvee.com for at least 90 days. Audiocast quality is subject to your equipment, available bandwidth, and Internet traffic. If you experience unsatisfactory audio quality, please use the telephone dial-in option. A question-and-answer session will follow the 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. [Operator Instructions]. I would now turn the call over to Joseph Visconti.

Hello everyone. I'm Joseph Visconti, President and CEO of Twin Vee PowerCats. I'm joined on the call with Carrie Gunnerson, Twin Vee's CFO; and Jim Leffew is also joining us, the President and CEO of Forza X1, our electric boat company that Twin Vee is the majority shareholder. Good afternoon and thank you for joining our Q1 2023 financial call. Twin Vee designs, manufacturers, and sells a range of catamaran sport boats from our factory located in Fort Pierce, Florida. For nearly 30 years, the Twin Vee brand has been synonymous with offshore catamaran boats and is considered by many to be the best riding boats on the water. In Q1 2023, Twin Vee continued the momentum gained through 2022. We achieved our sales and production goals for the quarter, including the design, manufacturing, and launch of additional new models. We opened new dealers, launched a new mono-hull boat brand named LFG Marine with a 22-foot center console. And the initial launch of this product, we received the large initial order from Freedom Boat Club. We are now in production on the second LFG model or 22-foot dual console. Both of these LFG boats will now be built and branded on as Aquasport boats, but we will discuss that later in the presentation. We received site plan approval for our nearly 30,000 square foot expansion. We continue to move ahead on connecting the back building and the front building. We've transitioned our lamination department 100% to the infusion process for hulls and decks. Infusion is a state-of-the-art lamination process that increases the quality of our build while refining the cost and controls. We have finalized OEM agreements with three leading outboard motor companies. Twin Vee can now offer Suzuki, Mercury, and Yamaha motors as we continue expanding our dealer footprint…

Thank you, Joseph. Good morning, everyone. Our net revenue for the three months ended March 31, 2023, was up 51% to approximately $8,877,000. We are pleased with the consistent growth that we've been able to achieve and maintain over the last year. Our gross profit for the three months ended March 31, 2023, were up 32% to $3,222,000. We continue to monitor the cost of our revenue and our purchase components along with the dealer inventory and adjust our sales prices and our discount structures accordingly. Our operating expenses for the three months ended March 31, 2023, increased approximately $2,109,000 to $5,591,000. Our operating expenses as a percent of sales for the year or for the three months ended March 31, 2023, were 63% compared to 59% in the prior year. However, when you look at just the gas powered segment, our operating expenses as a percent of sales for the three months ended March 31, 2023, were 40% compared to 51% in the same period in 2022. So we're pleased to see the improvement of 11% year-on-year for the first quarter. Our net loss for the three months ended March 31, 2023, were approximately $1,828,000. Forza our electric boat segment portion of that loss was $2,005,000. Forza spent considerable resources in the first quarter putting electric motors on several different boat models as part of our R&D efforts. So we do anticipate that their loss will decrease in the second quarter. Our core business gas powered boats recorded net income of approximately $182,000 for the three months ended March 31, 2023, compared to a loss of approximately $626,000 in the same period of 2022. Further, when we look at our adjusted net income for the period, which excludes non-cash charges, our adjusted net income for our core business, the gas powered boats was approximately $265,000, and our EBITDA income was $364,000. So the net loss that we experienced is definitely a reflection of the company's continued efforts into the electric boat division Forza. As we turn to the balance sheet, we had cash, cash equivalents, restricted cash, and marketable securities of approximately $21,023,000 at March 31, 2023. Our inventory value at that date was approximately $4,797,000, compared to $3,200,000 in the prior year. Our increased product offerings has definitely put upward pressure on our inventory levels. However, we're going to work to unlock some of that value as we move forward, and we think that the our ERP system will lead to that end. And we're also seeing lead times decrease for our component parts. So we do have some tools that we can use to unlock some of that inventory value. At this time, we believe our cash, cash equivalents, restricted cash, and marketable securities and cash produced in operations will provide sufficient cash to finance ongoing operations. And with that, I'll turn the call back over to Joseph.

Thank you, Carrie. At this time, I'd like to open it up for questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Paul Johnston.

Yes. Good morning. Good afternoon. Can you remind us what percentage of Forza, Twin Vee owns at this point?

Thank you, Paul. Its Twin Vee owns approximately 69% of the outstanding shares of Forza, FRZA.

Okay. And I think in the Forza release you said that the cash burn is roughly $300,000 a month, so about $3.5 million annually. Is that roughly correct?

That is correct. So Jim, you're on the line or Carrie, if you want to get into that in detail, but I think, so that's broken out with we've got kind of prototyping that that $300,000 plus is with prototyping. And as we kind of like transition from prototyping into production, that number will change. But I'm going to let Jim get into more detail on that.

Can I just jump in before Jim?

Sure.

Says anything. So we did use over $2 million in cash for Forza in the first quarter. And that's because of the actual boats and the motors that we were producing. So it was a very heavy R&D quarter in the first quarter. So I think the message we want you to go away with is that we do not anticipate those expenses to be at that same level for the rest of the year. Jim?

Okay. No, I -- go ahead. I'm sorry.

I was just going to say I agree with Carrie wholeheartedly there. And that's what I was going to add. So I don't think we are at $3.5 million on a annual basis on a burn rate to get back to your original question or assertion.

Right. Well, I guess what I was trying to understand is that Forza has a little over $10 million in cash. So even if it were $3.5 million a year, which sounds like it won't be, that's three years' worth of cash. I guess I'm just trying to understand what the disconnect here is because I think I apologize, I'm in the cut right now, but from memory there's about 10 million shares of Twin Vee outstanding. And at the current price of roughly $1.50, that's about $15 million market cap, but there's $13 million of cash just with Twin Vee not counting Forza, so the enterprise value is like $2 million, not in counting Forza, am I missing something here?

You're a 100% correct. We are doing non-deal road shows. I think we're doing a great job getting the message out. We're doing press really getting press out updates. I mean, social media marketing. I mean I am like incredibly impressed with our team, what we accomplished over the past year speaking about Forza for a second, getting a boat motor propulsion control up and operational, if you've seen the mono-hull. So yes, if you took the components of Twin Vee, the cash in the bank, $12 million plus, $36 million a year profitable business plus a 69% ownership in Forza, and you added those three components together and Twin Vee is trading it cash value, it does not make sense.

Well, right. Or another way to look at it is that obviously Forza has a lot of promise ahead of it, but even if you completely didn't count that and took it away, you've got Twin Vee doing whatever it is $30 million in sales and the enterprise value is $2 million. It -- I just want to make sure that, well, why is someone not come in and bought a giant chunk of this? I don't get it.

I mean, I'll leave that up to the professionals that are stock pickers and we're in a rough choppy market. A lot of the small stocks, we see gets oversold. So we are speaking to investors that are out there accumulating and buying our stock. We're seeing the volume both stocks Forza and Twin Vee pickup. I mean, it's just an opportunity for someone to get in, if you're paying attention and listening and watching to what we're doing on both companies, I think we're meeting and exceeding every expectation, every goal that we've set -- we've accomplished or blasted through during our IPO at Twin Vee, everything we stated we accomplished. We brought every new model to the market. We opened dealers far exceeding what we stated we would do over a year. We're up to 30 plus dealers. We grew the company over 100% in 2022. Again, in Q1, we grew 51% in a market that's a bit choppy. We have a tight management team. We're pushing forward so the lower stock price is simply just an opportunity for someone to get in.

No, appreciate that. And so just want to make sure there isn't anything we're missing. And just on Twin Vee, what is -- have you or have any analysts made any kind of rough projections as to what kind of earnings per share there might be for 2023 or 2024?

So our bank ThinkEquity has a report out. I do not have it in front of me, so I don't want to state something that I don't have up in front of me at this time. But I'm sure you can go on Bloomberg and look at it, or I could send it to you if you want to give me --

Sure. But they're -- are they projecting that, that you're going to make money or that you're going to lose money for 2023 and 2024?

We are making money. Are you? Twin Vee we're profitable.

Right. On an annual basis that including the consolidation of the Forza, I guess.

I don't understand the question, Paul.

The -- the question is, do they project that you'll be profitable including the losses through for your ownership of Forza?

So if you -- what if you give me your e-mail, I will -- I don't have that report in front of me. And I will grab it after the call and then -- because we got other people that might want to answer questions and I will shoot it over to you. What's your e-mail?

I'll write you offline. That's fine.

All right. I'm joseph@twinvee. If you want to just ping me, I'll grab the report and even follow-up a call with you afterwards if that's okay.

I appreciate it. Yes. Appreciate it.

You got it.

Thank you. Our next question comes from the line of Mike Powell. Please proceed with your questions.

Hey, thanks for taking the call. The prior caller asked some of the questions I was going to ask about Forza, but on the Aquasport transaction you just announced, can you any financial economics you can disclose regarding what that means for Twin Vee in terms of revenue, EBITDA, incremental EBITDA, et cetera?

We don't have any projections on that. We just completed the transaction about a week ago. We're just getting our arms around the assets. It's 150,000 square foot facility. There's probably upwards of a couple hundred molds inside of the facility. I can have Jim elaborate on kind of a re-launch strategy if you'd like to hear that, but we can't talk about any financial projections at this time.

Or maybe what the business was doing prior to the sounds like a shutdown in November or something like that. I don't know the history of it, but what was it doing in revenues or whatever you can disclose.

I -- I don't know revenues. I believe and Jim, correct me if I'm wrong, I think two years ago, they produced like 150 units out of the facility.

Yes, it's hard to say exactly, because they were wrapped up with the Limestone Boat Company and also the Boca Bait brands. So when we start back up, we will exclusively focus on the Aquasport brands and we have some internal targets for revenue to rebuild that brand over the next five years. And I can suggest those to you. It's a shutdown plant right now. So we have to go in there and hire from the ground-up and start over. So those projections are simply that, just projections. But I can give those to you if you'd like to hear.

Yes, that'd be great.

We're targeting between $10 million and $12 million in revenue after the first year of startup. And we expect to get started sometime in July of this year, so about two months from now. A lot of that depends on the workforce. We can put together in the Nashville area. It's a good plant. It's been a high production rate plant in the past, I believe back in the Hay Day of its boat building years, it produced 17 boats a day. We obviously will have to upgrade some of the tooling for Aquasport. As many of you may know, Aquasport is a legacy brand that's been around for 60 years, but it's had a bad decade or two and is in need of a facelift. But the product is well received out there and we feel confident that we'll be able to rebuild the brand over the next several years. We're expecting to incrementally add about $10 million to $12 million every year from now until the fifth year. That's what our target is.

And is it -- will the customer know that Twin Vee owns Aquasport? Is there like a any kind of synergy between the two companies or it'll be viewed as like two completely separate independent brands?

I think it'll be looked at as two separate brands. I think some of the operators of the Aquasport brand over the last 10 years or so, had not done it justice. I think we're a known salt water brand entity in Twin Vee. And I think the market will be a favorably with our acquisition of Aquasport and Aquasport brand. And we'll be able to rebuild that -- its rightful place in the marketplace given time.

And you said $10 million to $12 million revs per year increasing every year for five years. Is that, did I hear you right? And then you know --

You did hear me right.

Okay. Sounds pretty substantial.

It sounds aggressive. It sounds aggressive. But we feel like the brand can handle that and that'll be our target and we've got a lot of boat building experience and we have a lot of good people behind us. It's a matter of executing on our plans.

And what revenue level does it become profitable roughly?

Yes. I think we should look at a year-and-a-half into it $18 million or so. I think that is sort of the escape velocity point right there, and I think we'll be self-sufficient after that rate and we should be able to really add to profitability of Twin Vee after that.

Okay.

Again, these are generalizations and we still have a lot of work to do to vet this out.

Yes. I got your five-minute intro on the forward-looking statement, so you're covered. So just kidding. But appreciate you guys taking my questions.

Thank you.

Thank you. There are no further questions at this time. I would like to hand the call back over to Joseph Visconti for any closing remarks.

I want to thank everybody for joining the call today and we're excited about the future specifically with re-launching this Aquasport brand. Thank you for your support, everyone. If you have any other questions, you can ping me at joseph@twinvee and we will follow-up and get in touch with you. Thank you.

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