Forza X1

Kurta Law is investigating brokers who recommended that their clients purchase shares of Forza X1. This investment came with substantial risks that made it unsuitable for many investors. These risks appear in the prospectus, the SEC filing that companies use to disclose their business strategy and related risks prior to offering the securities for sale. Unsuitable investments violate FINRA Rule 2111 and Regulation Best Interest, and investors who incur losses may be able to recover via FINRA arbitration.

If your broker recommended that you invest in Forza X1, you may have a claim against the firm through FINRA arbitration.  FINRA arbitration offers a quicker and cheaper remedy for investors than suing in civil court. Contact (877) 600-0098 or email info@kurtalawfirm.com to speak to a securities attorney for free today.

What is Forza X1?

According to its website, Forza X1 is a company that focuses on the manufacture and sale of electric sport boats utilizing the company’s proprietary electric motor.

At the time of the prospectus filing, Forza X1’s designs were still merely a concept. The company had yet to create a fully integrated final product and therefore had yet to show that it was capable of scaling production to the degree necessary in order to achieve success.

Investors should also know that Forza X1 is registered as an emerging growth company, meaning that it can make limited disclosures in its prospectus. Less information generally means more risk.

Forza X1 Stock

Forza X1 (FRZA) investments involve a high degree of risk, according to the company’s prospectus. The company debuted at $5.00 per share and recently traded at $0.4998 per share. This massive drop in value was not surprising, given the risks clearly disclosed in the company’s prospectus.

Risks Associated With Forza X1 Investments

Brokerage firms that approve an investment are required to understand the risks associated with an investment. Furthermore, brokers must accurately represent the risks associated with certain investments.

The prospectus states at the beginning of the “Risk Factors” section: “We are a start-up entity and have had very limited operations to date. To date, we have designed and manufactured only prototypes of our electric sport boat, have not yet commercialized our boats and have not sold any boats. We believe that we will continue to incur operating and net losses in the future while we grow, including following our initial generation of revenues from the sale of our boats which may occur later than we expect or not at all. We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity and ramp up operations, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.”

At the time of the prospectus filing, the company had yet to produce even a single boat for sale, and therefore Forza X1’s ability to compete with larger manufacturers within the industry was anything but certain, according to the company itself.

Other Risks Associated with Commercialization:

The risks associated with this type of investment do not end in the laboratory. Besides the scientific proof that Forza X1 still required, the prospectus stated that it would have to overcome the following business hurdles to successfully commercialize.

• Securing substantial additional funding.
• Maintaining a level of governmental support for EV ventures.
• Keeping up with the ever-changing technology within the EV industry.
• Developing new products to stave off competitors.
• Building a recognizable brand within the EV industry.
• Ensuring the safety of the lithium-ion batteries used within the boats, which have been known to catch fire.
• Maintaining compliance with changing environmental regulations.
• Safely developing the sophisticated software contained within EV’s.

Failure of any one of these goals could result in a total business failure and a complete loss for investors.

ThinkEquity Underwriter

ThinkEquity served as the underwriter of Forza X1. Investors should know about this broker’s potential conflicts of interest. An underwriter should keep potentially overly risky investments from trading on the public stock market. But because underwriters make money by bringing new stocks to market, they may have a motivation to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money investing in Forza X1, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have 5-star reviews on Google and a proven track record when it comes to securing fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.