Ladies and gentlemen, welcome to the Twin Vee PowerCats Company Second Quarter 2024 Investor Call. As a reminder, this call is being recorded. [Operator Instructions]. Your speakers for today's program are Chairman and CEO, Joseph Visconti and Chief Financial and Administrative Officer, Michael P. Dickerson. 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 believe, may, estimate, 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 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, 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.twinvee.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 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 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. [Operator Instructions]. I will now turn the call over to Joseph Visconti. Please go ahead, sir.

Thank you. Good afternoon, everyone, and thank you for joining our second quarter 2024 earnings call. I'm Joseph Visconti, Chairman and CEO of Twin Vee PowerCats. I'm here with our CFO, Mike Dickerson. Twin Vee continues to navigate and adapt to a complex economic and environmentally stifle by higher interest rates and shifting consumer confidence, especially within the recreational marine industry. Despite these ongoing challenges, Twin Vee continues to realign our operations and capitalize on strategic and focused opportunities that will allow Twin Vee to emerge from this downturn stronger and better equipped for success in the future. I will detail our short- and long-term plans that include adding two exceptionally seasoned and experienced individuals to our leadership team, adding important factory infrastructure, allowing production volumes to reach new levels of annual production output, adding new models across both brands from smaller bay boats to larger offshore boats, all focused on building and creating a leading national boat manufacturer. We are also in-housing a fully integrated tooling department with our new 46-foot 5-axis router. This big high-tech robot will allow us to design tool, new models faster with less expense, and finally, the most important is to strengthen our balance sheet as a result from the Twin Vee-Forza merger. So far this year, one of our key focuses has been hiring the right management team to ensure our business operates as efficiently as possible. Last quarter, we hired our CFO, Mike Dickerson, who had already enhanced Twin Vee's financial controls, accountability throughout the business. During the second quarter, we took further steps to rightsize our business. Last month, we brought on Karl Zimmer, Twin Vee's new President. Karl's career spans nearly 3 decades, and his experience includes executive leadership roles in several different industries. He has growing businesses, maximized profitability…

Thanks, Joseph, and good afternoon, everyone. I'd like to take a minute to walk through the Twin Vee consolidated financials and some discussion of our segments. On a consolidated basis, net sales were $4.3 million for the second quarter of 2024, a reduction of $3.8 million or 47% from the second quarter of 2023. This reduction is similar to the 41% experienced in the first quarter of 2024, a result of the challenging end markets that we described in our earnings release and Joseph described for you earlier. Even at these depressed levels, we've been able to maintain a positive gross margin of close to 5% through aggressive cost control and further rightsizing of our labor force. Throughout the second quarter, the company has been reducing operating expenses through reductions in headcount, research and development and discretionary spending, partially offset by strategic upgrading of talent. Included in operating expenses for the consolidated entity is $1.674 million related to a Forza asset impairment charge recognized in the second quarter of 2024, that I will speak more about in a minute. Excluding the impact of this charge for the second quarter, overall consolidated operating expenses are down $793,000 or 20% compared to the second quarter of 2023. General and administrative expenses are down $158,000 or 17%. Salaries and wages are down $903,000 or 43% compared to the second quarter of 2023, respectively. These overall reductions were achieved in both the Forza segment as well as the Gas Power or Twin Vee segment. Research and development expenses were up $150,000 in the second quarter of 2024 compared to the same period of 2023 due to an inventory valuation adjustment at Forza of 176,000 to reserve for the value of R&D electric motors, partially offset by a reduction in R&D spend activity at Forza.…

Thank you, Mike. Twin Vee PowerCats and Aquasport boats have combined over 90 years of brand recognition and customer loyalty. So, while the economic landscape presents challenges, we're confident that our commitment to these two incredible, storied and scalable brands allow us to offer various new and innovative products that will allow us to attract returning customers. And our focus on customer satisfaction will position us for continued growth and success. We believe that Twin Vee is well prepared to navigate the current market conditions. And when we start seeing the next market upswing, we will be ready. We're excited about the opportunities that lie ahead, including our planned merger with Forza. We look forward to sharing our continued progress with you. And I want to thank our investors, stakeholders, employees for their continued support. I also want to thank those of you on the call. I will now turn the call back over to the operator who will assist in taking any questions.

I want to thank you, everyone, for taking your time today, and we look forward to updating you with any further updates. Have a great day. Thank you.

Thank you. The conference of Twin Vee PowerCats Company has now concluded. Thank you for your participation. You may now disconnect your lines.