LAST CHANCE on Wefunder - Final Q&A Webinar Before Close

Transcript:

David Monson (00:00:00):

Welcome, everybody. Excited to have you here today. While we wait for everybody to filter in, please in the chat, let us know where you are calling in from. I'm always surprised how far reaching our ZenniHome fan base is Draper, Utah. Alright, North Carolina. Lovely. So for anybody joining, let us know in the chat where you are calling in from. Here we go. Boise, Idaho, Farmington, New Mexico, Texas, pano Beach, Florida,

Bob Worsley (00:01:08):

One block from Bob's house.

(00:01:10):

Yeah. Excellent. Yeah, we know Chuck. California, Arizona, Hawaii. All right man, I wish I was there. Phoenix,

(00:01:32):

South Africa.

David Monson (00:01:37):

Amazing.

Bob Worsley (00:01:39):

I can't even imagine what time it is there right now.

David Monson (00:01:46):

Another Florida, Colorado. Amazing. There we go. Canada,

Bob Worsley (00:01:55):

Bc.

David Monson (00:02:04):

We'll just wait a couple more minutes. So again, for those that have joined in the last 30 seconds since I made this announcement, if you're just joining us, let us know in the chat where you are calling in from. Alright, let's see. More, Mesa, Phoenix, North Dakota. Excellent. Alright, great. Well why don't we kick off? So as everybody's well aware, we are coming up on the end of our crowdfunding campaign. What a ride it has been. For those of you that have already invested. Thank you. It has been amazing. For those of you thinking about investing, we want to assure you this is a really wonderful family and group of people to join and so we do hope you make the jump and join us today. We wanted to keep it really casual. We've obviously got our CEO and founder Bob Wesley here. And so the agenda we're going to go through today is we're going to go through 10 biggest updates that have happened since we launched this campaign a little under a year ago.

(00:03:38):

So for those of you that have been around since day one, we are a completely different company than a year ago. Massive things have happened, big changes, amazing progress. So we're going to walk through those and then after that we will open it up to q and a. Many of you have submitted questions already. We have those pulled up and then we're going to take some questions as well in the chat, but this is meant to be kind of a casual party celebration of the end of this campaign and a more intimate chance for everybody to get to know a bit more about ZenniHome and Bob. So Bob, maybe to start, for those that do not know you, I know a lot of folks on here do know you already. Give a little bit of background and just the very beginning stages of ZenniHome.

Bob Worsley (00:04:34):

Okay, thanks David. Is the sound okay? Yeah, sound check. Great. As many of you know, I started out as a boring accountant, raised in Boise, Idaho, worked for Pricewaterhouse, and then I had a wild hair when I was 35 and I started SkyMall, the in-flight shopping catalog. It was in a cartoon this weekend. It was kind of fun to see that people are still having a chuckle about shopping on airplanes. We sold that business, took it public and then sold it to Rupert Murdoch at NewsCorp and I worked for him for a couple years and then we started off on a bunch of other ventures. So we bought a public company that had a lot of land and minerals. We now own about a hundred thousand acres of land, my family office and about a million acres of minerals. We built a power plant that my son runs.

(00:05:32):

It's a green biomass plant that takes a hundred semi loads of wood chips in a day from thinning the forest and is now a very profitable business selling electricity to SRP and a PS in Arizona for their green renewable energy requirements. Then I was asked to serve in the legislature. I served for three terms in the Arizona Senate and then I retired in 2019, had the opportunity to be named Legislator of the Year in 2017 and Entrepreneur of the Year in 1999 for the starting of Sky Mall. After I retired, we moved to Salt Lake to have a second home here. We have 31 grandkids and eight great grandkids. My wife and I have been married 47 years and I felt like I had another startup in me to do this really powerful and important work to create affordable housing in the world. So we're excited about this and I'll let David let you go through the major things that have happened in the company this last year.

David Monson (00:06:43):

Yeah, awesome. So yeah, a year ago, I think this was after Kerry Tarnow had found the website, had done some videos, broke our website, right, with traffic, and that's I think when ZenniHome really kind of first showed up in the public. But right around the beginning of this campaign was when we established our first factory in page and the 75 year lease with Navajo Nation. So Bob, tell us a little bit about that. Finding the location for the factory, getting that settled down and deciding to put down roots in page,

Bob Worsley (00:07:24):

We started thinking that sign is where everybody builds stuff really well and cost effectively. So before Covid, we looked and hired a company in Foshan, China, south of Guang Jo to build our ZenniHome units. And then Covid hit and made that look like a really ridiculously dumb idea to build these in China and ship 'em to the states. So we looked around, actually looked in a maquiladora on the border of Mexico and San Diego there at Tijuana. The cartel scared me and the next move was, Hey, let's really look at doing this, shoring this in the United States. But everybody was really super busy. We were at full employment and so we said, where is there a lot of unemployment? And I remembered in the Senate that they were shutting down Navajo generating station in page Arizona, the largest coal plant west of the Mississippi, and they laid off 1,250 people, Navajo workers that were trained for 40 plus years in code welders, code electricians, carpenters, plumbers, et cetera.

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And so did a little research, found out that there's a 58% unemployment rate on the Navajo nation and you're just a mile from being off the reservation where you might have some more amenities and utilities and things like that there in Page. So my wife and I drove down to Page, we had done business with Page Steel at our power plant for a number of years. We started talking to the mayor, looked at the area and just fell in love with Page Arizona as a place and the utilities were leaving some magnificent facilities behind when they shut down and shuttered the coal plant. So we looked at those, made a quick negotiation with the Navajo Nation and it ended up with a 75 year lease to be there and to bring life back into that thousand acre site and use the buildings that were left behind.

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They did a hundred million dollars of environmental remediation on the site. We just got the keys a couple weeks ago to the entire thousand acres and we're just thrilled that we're going to be there For 75 years, we've hired over a hundred Navajo workers and started our production there. And they're just really great workers, very skilled craftsmen. That's their specialty. They have done very detailed hand work for many, many years, and so we're thrilled to be there. It ended up being extremely fortuitous to start the business in the Navajo generating station location for all the reasons we'll talk about here in the next few minutes.

David Monson (00:10:23):

Yeah, it's always been an amazing story to me. Originally it was looking for a good place to have a facility and labor to start this factory and it's turned into something much, much more than that. You said it very quickly, I don't want to gloss over it. There's over a hundred Navajo workers now at work at our factory, and for those of you that have seen states or cities court factories to come to their area and you wonder why are they giving so many tax breaks and things like that, it's because for every direct job created at factory, there's usually about 10 x indirect jobs that are also created. So when you look at our employment numbers, that makes a huge, huge impact in the area that we're in. So with that unemployment rate, it's a very, very meaningful thing and a lot of people that had lost those jobs originally did not have any sort of reasonable alternative to the type of work that they were doing in page.

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So it's been a big deal. I know that the famous quote from President Nygren after he came and visited the factory and wanted to partner more deeply with us was we want to build homes on Navajo by Navajo for Navajo. So the factory factories on Navajo Nation, Navajo people are being employed to build the homes and then he wanted homes to be deployed in Navajo Nation where they have their own housing crisis. So I don't think all of that was anticipated before this site, but it's been a wonderful development. I think as time has gone on, Bob, talk a little bit about starting production there to go from nothing and empty floor. I remember visiting that facility when it was just polished concrete and turned the lights on and you just hear the echo and now it's humming and busy with homes and people working in there.

Bob Worsley (00:12:24):

So we ramped up production with employment. We finished building 12 consumer homes, prototypical homes last year, and then we got this B2B order from a vineyard that just one wine of the year in Scottsdale. The vineyard is down in Elgin, Arizona at 5,000 foot elevation, a beautiful place south of Tucson and we just delivered at 10 30 the last unit Friday night, the last unit left the factory and all nine casitas are installed on their podiums in Elgin, Arizona. David, I think you had a few pictures you wanted to show us of that happening.

David Monson (00:13:12):

So for those

(00:13:13):

That were lucky enough to join here, you get an early sneak peek. These are raw video files. We haven't done any editing, any color grading or anything like that. And you can see, I'll just walk through a handful of these clips. So yeah, I had a fun time driving down and back to this site. So this is midway through our installation process. If you see over here on the right side, this is the famous biscuit is what they call it, the biscuit. It's a famous landmark and the units are all angled, so they're looking over the vineyard. You just see now the leaves coming in the homes, they're angled so that all of that floor to ceiling glass in the homes is facing that view over the vineyard. So I can't wait to get back there in a month or two when everything's overflowing. The grapes are ripe and be able to stay the night there and have a wonderful experience.

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So there's nine units total in an L shape around this part of the vineyard. In the back here, you see this is there world-class, restaurant and tasting room is really, really a cool property. Here's kind of a fun angle from the front of that restaurant. They utilize this weathered steel everywhere, and so we did something special for their units. They're using weather, steel and glass. They are putting that same weathered steel on the outside of their units. So if they look a little bit unfinished on the outside, that's because it is, they opted to not use our standard cladding. Here are the halves of the units getting craned in place. It's hard to understand the speed of this until you see this in person, but a single home. So the two halves, I was able to watch them very easily and quickly from trucks, place them in under 30 minutes.

(00:15:20):

Very precisely. The amount of engineering work that has gone into this to make this all line up exactly, this is where our decision to go with steel was such a huge deal. So if anybody has done construction with wood, you're dealing with kind of within a couple inches. Things are wavy, things are bowing. This is millimeter precision at this scale. And so it was a beautiful, beautiful thing to see the team able to crane these in place, use a couple jigs, line them up, and now it's just a matter of doing some of this finished work on the outside and inside. So it's a completely different way to do this. So having these all placed in a matter of days and then a matter of days afterwards again to be able to finish the insides, it's a whole different way to do this. Lemme see if I can find a few other fun shots here They are from the top. So you can see that exact consistent spacing between the two. And that's our mate line. So we have a very specific design on how those come together and seal up and come together. Here's a higher view of that property.

(00:16:40):

So anyway,

Bob Worsley (00:16:42):

David, as I understand it, all nine of the casitas, which is 18 semi trucks, all of them arrived. All of them are now set.

David Monson (00:16:53):

Yeah. Yep, they are all set. It was really impressive. Another fun thing you saw that truck wobbling there, you're always wondering, they're going down the highway. I know that highway coming down through flags half and everything. It's got quite a lot of bumps and ripples. These units held up amazingly well, exactly what we were hoping for. Again, that steel frame, that was a big deal. All your windows, your doors, everything's kept nicely intact. You end up with just small little blemishes or something on the drywall, which is by design. That's very easy to show up now on site and just quickly patch that up and you're off to the races. So anyway, very, very, very happy with how this went. For those that have been through the prototypes in Mesa, these are 10 steps ahead of where that was. We learned so much from those.

(00:17:53):

We were learning so much from these, and this is the beauty of a true product design process is every single thing that we learn from building, designing and deploying these units, we get to go back and implement in every single unit moving forward. So you start to stack those changes over time and very quickly, again, we're talking about everything that happened in this last year. Very quickly, your light years ahead of where you were before. So I'll stop there. I think that's enough shots of Actually, wait, there was one more that was really cool. Oh yeah, here you go. So you can see even the inside. So having everything fully finished inside, you can see this brace in here that's temporary. It comes out after we place it some guide ropes. You can see how they walk these with the assistance of the crane to very easily place them. We're able to pick from the top because we have such a sturdy structure, we don't have to do slings under the bottom or worry about things bowing or bending or anything like that.

Bob Worsley (00:19:02):

David, I would just mention the way we lift these, the engineering is that each one of those hooks that we screw into our corner posts and these vertical posts in the units can handle 15,000 pounds. But this whole building is designed to be picked straight up. So you'll notice they use spreader bars, one big spreader bar from one hookup above and then three eight foot spreader bars so that you literally are picking up and putting the right amount of pressure on every pick point. This is a masterclass in steel fabrication and steel placement.

David Monson (00:19:47):

Yep. I got a little close to the crane there, but it's kind of fun to see how this, I mean, just the precision of how this aligns was really, really cool to see. So anyway, I'll stop there.

Bob Worsley (00:20:04):

Thanks David.

David Monson (00:20:05):

That was everybody's sneak peek on this last week, so I know everybody's always curious. Bob. Yeah, let's talk about 29 West. So that was our first multifamily deal and tell us a little bit about that project and how we got started on that.

Bob Worsley (00:20:27):

David, while I'm talking, why don't you pull up a picture of our 29 west project. It's really exciting. It's in downtown Mesa, across the street from the Mesa City Hall. It's at a light rail stop. We're also across the street from the Mesa Art Center. It's 500,000 person City Mesa, Arizona to have this right downtown, just 29 West Main Street with a grocery store on the main floor, 90 units on top. So everything you just saw in Elgin, the cool thing is those exact same units get built and stacked and the guys that were there unloading these from the trucks are the same guys that are going to be setting these units on 29 West. So we had Caliber there, Mike Pells, that they have been supervising and planning this job. This is their project actually. They are the owners and developers of this project in downtown Mesa.

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So just imagine college kids going to the film school across the street and adjunct professors living in these units. 75 feet in the air. The same units you saw in Elgin are just stacked together, bolted together. There's an elevator and two sets of stairs that pre-exist. They build, they pour the podium, the columns, they build the elevator shaft, the stair shaft, and then we show up with 180 trucks with two units making one house. And basically there's 90 homes on one half of one acre with 28 parking stalls like Tesla plugin chargers and a grocery store underneath the podium. So we're excited about this project because it'll show the flexibility of using our units for hotels, extended stay student dorms. We're talking to University of Utah, we're talking to BYU, we're talking to a SU, we're talking to the U of A. In fact, U of A signed an agreement last week to do a cooperative venture together down at the University of Arizona to do smart home net zero water, net zero electricity, net zero carbon, how we can really rethink the future of housing and then have students living in these things and students that are entrepreneurial, actually playing with what a home of the future will be and potentially starting businesses that could be complimentary, maybe things that should be in our homes that we can install in the factory and ship with every home.

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So we're excited to work with universities. This project will be very closely aligned with the A SU and the downtown Mesa campus, which is just across the street kitty corner from this building that's 29 West. We've already got five of these units practically finished toward our 90, and we're shifting our gears now in the factory to go from the Elgin Project to the 29 West Project.

David Monson (00:23:59):

Love it. Love it. Yeah, I've been shocked to see how many potential buyers see that building and say, I want that or I want two of those. The stackability and the ability to build these in a factory and send them wherever on a truck you saw them going on a dirt road. Our list of use cases has only gone up over the last year. People wanting to use them for workforce housing, for convenience stores, for all sorts of different creative uses that I don't think we even knew about before we started. So that's been really

Bob Worsley (00:24:38):

Cool. David, there's a comment here that's being batted around on the chat right now about why did we go to a shipping container kind of size and dimension. And it is just one of my favorite topics because everybody in every other factory in America is trying to find out how big can you make a house and go down the road legally. And so you have companies in Boise right now that are building 16 feet wide and 74 feet long, 72 feet long, all in one unit, but then they have to shut down roads and have pilot cars and you can't go across bridges, certain bridges. And so you're doing all this work to fit more house on a truck and when you get to the site, you still have to lift it into place. You still have mate lines with the surrounding modules to turn it into a hotel.

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You still have to do all this work. So we're saying, no, let's honor the eight foot wide dimension of a shipping container and 40 feet long, and we'll make it a little taller, 10 and a half feet tall because we can make it under every overpass in America at 10 and a half feet tall. But now we can go on a train, we can go on a ship, we can go on a truck anywhere without any permits, no special S routes that we have to travel because of bridges and things like that. We can go anywhere that a semi can go even out in the middle of a vineyard in Elgin, Arizona and just pull up, pick it off, set it, and then do the mate line work that's needed for a couple of days and it's a 16 foot wide home, but we didn't have to jump through gymnastics to get it to the site with pilot cars, police cars, special routes, and by the way, two and three times more money per home to deliver that to the job site.

David Monson (00:26:35):

And I think it speaks well to the design journey that we went through. One of my favorite phrases is creativity loves constraints. And one of the constraints here was let's optimize for logistics. If we truly want to build a scalable business, build these things very quickly, you need to be able to deliver them quickly and easily and anywhere, every bit of friction you add in the process slows you down. And so we're not just in the business of constructing homes in a factory, we're in the business of turning keys over to happy customers in hands, wherever they are. And so yeah, saying we're going to constrain ourselves to these shipping dimensions that are so deeply integrated in every mode of transport, every bit of humanity, the standards of shipping and why railroad tracks or the width they are. I mean, this all goes way back to the Romans. And before that, everything has been standardized around this and that's how the world works. And so the fact that our homes can be shipped without breaking their rules or needing special exceptions is a massive win for us in terms of how we're going to be able to deliver these at scale in the future. You saw nine here. Now we want to be doing thousands every year out of our new factory that we have planned.

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So maybe that's a good transition into the next topic, which is the 24 million grant from Navajo Nation for our factory expansion. So Bob, tell everybody what is that for and what's the plan?

Bob Worsley (00:28:16):

Well, right after we moved in, they changed presidents at the Navajo Nation. Jonathan Nez lost his reelection bid to a young 36-year-old upstart energetic man by the name of Buu Nygren. Buu was a Bill Gates scholar, valedictorian high school, got his college paid for by Bill Gates, master's and PhD at USC, worked for 10 years in the construction industry as a project manager with core construction. And he came to our facility after he was elected to give a tour because this was kind of a new exciting thing on the nation. And he came for 15 minutes to sign our 75 year lease. Instead, he spent four and a half hours and postponed all of his other appointments of the day. And he looked at me at the end of the day and he said, Bob, this is the future. I can't believe this factory is on the Navajo nation.

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This is the future what you've been explaining. This is the future of housing. This is the future of construction. I don't want to just lease you this facility and have you hire unemployed workers. He said, I want to be your partner. And so they interjected a new clause in our lease, our 75 year lease that we had to work on a joint venture with them. And so I'm pleased to announce that a month ago we had a big rollout. He came and spoke at about 400 people in our factory and he announced that they were going to give us 24 million of federal money that was given to them during covid called ARPA Money, American Rescue Recovery Act.

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And this is grant money, three and a half billion dollars to the Navajo Nation because they suffered four times more fatalities than anyone else in the country because of Covid. They had terrible housing. 50,000 homes on the Navajo nation is below subpar, dilapidated housing. They need 50,000 homes for 300,000 people on the Navajo Nation. And he said, I want you to partner and I want you to help build homes as well for us. So they gave us 24 million of a grant. There's no dilution, there's no debt repayment required to expand our factory from the smaller buildings that we got with the coal plant conversion to a brand new state-of-the-Art Factory that will be able to produce 25 homes a day. So that's a very exciting thing, something we did not anticipate. Some people say it's good to be lucky. Sometimes people say you're really blessed.

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I don't know what it is, if we were lucky or we're blessed, but I can just tell you, we could not have put this anywhere else in the world. And had someone come in just two years later after we've spent $20 million setting up our factory and say, let me give you 24 million to expand this. And then in addition, we want to give you another $250 million of housing, which will start with the $50 million grant that we're currently putting, crossing the T's and dotting the i's right now on the first $50 million for housing at least 200 homes. So David, you got a little video here? This was designed in Sweden. Yeah,

David Monson (00:31:55):

We'll jump into the grants in a second, but I wanted to show everybody, this is a rendering of our a first phase of our digital twin design. This is constantly changing, but the idea here is that we're able to design our factory, the factory floor, the automations, everything about this new factory digitally simulate it, how long it takes to do every part of the process, even the person walking from stage to stage where we can use robotics, et cetera, so that we're as optimized as we can be before we actually physically build it. And then the fact that we're able to use our current factory to build these units, make all of these improvements like I talked about earlier with the prototypes and then how much better we are for the Elgin units, how much better we'll be for everything in the future, we're able to nail our product down so that when it comes time to automate, we are very, very confident in what we're doing. So anyway, for those of you that haven't seen the news, Dr. Michael Schmidt, he joined as COO recently was at Tesla leading. He was director of operations at the cyber truck Gigafactory in Texas. And here is my daughter coming to visit. Hi. Hi. Okay, just quit for a second. We can go find mom. Okay. She'll help you. Okay. I love you. Just

Bob Worsley (00:33:24):

Mom, something.

David Monson (00:33:26):

Okay, Bob, maybe Ivy, how are you? Michael Schmidt, this is Ivy. Ivy. Say hi. Hi. Looks like the kids are having fun with the sprinklers outside. All right, Bob, you take it from here.

Bob Worsley (00:33:38):

Oh yeah. I'll tell you about Dr. Schmidt. He launched the cyber truck facility as the gigafactory in Texas and the Model Y there as well cut cost by 20% for the model Y. And we're just super excited that he is on board, is just making a magnificent difference. We shipped these nine units to Elgin 10 30 sat Friday night. He was at the factory. So proud that we sent out the last of the 18 trucks to get those units down to the vineyard. And by Monday morning we had the punch list back of everything that we could see. We had Trevor, Trevor Barger, our chief revenue officer, and David and other people down at the site, our quality control person, Rosendo Lopez was down there as our number two person at the factory. And basically by Monday morning we had a punch list of things. We got to do this better, folks.

(00:34:48):

This is the stuff we have to improve. And David, when we first started this, I had Tesla consultants called Monroe Engineering out of Windsor, Ontario. They came and looked at our facility and they said, biggest thing we can recommend to you, do not automate the first factory. Do not automate this factory. Build everything by hand. Become intimate with the plan, make sure that you can get access to every point. You don't want robots if you can't even get an arm in somewhere to fix something or to build this, refine your plan. So we've done 1.0 1.1, 1.2, 1.3, 2.0, 2.1 2.2 2.3, 2.4 versions that we've had to go back to the state of Arizona and get new plans approved because we've learned as we've gone along here, what does work and what does not work. And now we're getting to the point with our 3.0 set of plans that we're going to design the automated factory around 3.0 with a lot of learnings. And we will have already built, I'm going to say a thousand units by hand before the new factory starts and launches. And at that point we'll be able to build a thousand a year in our manufacturing and roughly 6,000 units out of the automated factory. So Page Arizona will be shipping 7,000 homes a year when both of these are kicking in.

David Monson (00:36:25):

So cool. I smile every time I hear about that. So let's talk a little bit more about the, so we talk about the 24 million for the factory expansion in factory 2.0. Worth noting for those that have invested or thinking about investing, we are not diluting shareholders for that factory. We have that grant money as well as some financing partners lined up. So we're doing a Propco Opco model where the Propco builds and owns that factory and leases it back to the operating company. And so we thought that was the best way to structure it, to keep everybody whole. So the 50 million grant that was also announced with our partner, IDSA, can we talk a little bit about the housing that is for

Bob Worsley (00:37:21):

Yes. This is what they call a free house to the most needy people. There's 110 communities, they call 'em chapters on the Navajo Nation and they had everyone in that community come forward and say, I need a home. After the Covid experience, we know we have a serious problem here, and those names were accumulated. There's roughly a thousand people, or call it 10 people in each town that have been deemed the most needy. Often they're veterans, elderly people who are living in squalor conditions today. And so that list of a thousand people will be paired down. And this particular grant, the CHID Grant Community Housing & Infrastructure Department, that $50 million will go for the first two or 300 homes. And then there's another CHID two that the council's considering this week for another $70 million. And then behind that, there's veterans money at 35 million, there's an opioid program for 50 million.

(00:38:36):

So all in all, we think there's a pipeline of all the units we can possibly build. And through 2026 that are coming in these pipelines of grants, every one of these are grants. There's no requirement to pay it back. They give us the grant money, we produce the homes, they pick up the homes, they get delivered and installed in these different Navajo communities or chapters. So that's how this works. And there'll be kind of like airplanes lined up to land. We'll have a grant coming and we'll finish those. Another one will come in and we're excited about having that. Again, big picture, David, I have to say this and I'll probably say it twice. Where could we have gone anywhere in the world and had, after spending 20 million of our money, have 24 million given to us, given to us, granted to us to build a new factory and then gave us the first orders that we would need to get our training wheels on and learn how to do this at scale and ramp up the new automated factory at scale with federal US dollars as the backstop.

(00:39:53):

That's where the money's coming from to us through the Navajo Nation. You're not taking any environmental risk. You're not taking any economic downturn risks, interest rates go up and all of a sudden the project you're building for is not economic. This money is going to come for sure through this pipeline. The Navajos feel like they're helping to build this factory. We're building on Navajo for Navajo by Navajo. No one else can say that. So the money will flow to us, we believe, and that's just an opportunity to start a business. That's a dream. No dilution, no debt, just money granted to you to get started.

David Monson (00:40:36):

Yeah. Yeah, it's amazing. And then if you look at it from the, we have a lot of people that talk to us about what about affordable housing? You get back to maybe the mission of Zenni home and being able to provide high quality, attainable housing to I think those that are most in need for those that are unfamiliar on Navajo Nation. In a report that was published in, I think it was 2011 from Navajo Housing Authority, they showed a need of over 35,000 homes on Navajo Nation. That's 2011. And then additionally, there was another 34, 30 5,000 homes that needed significant repairs. So we have heard, you cannot actually quote me on this, but we have heard now that the need of homes is actually probably over 50,000 in today's terms. And so yeah, these are some of the most in need people needing homes.

(00:41:46):

And then the fact that we're bringing people back to work to build those same homes, it's a really great story of being able to do good and do well, I think is how a lot of people like to say it. David, I'd like to take four minutes and just let the President tell the story. This is President Nygren four minute clip of his hour conversation with us at the factory just a little over a month ago. And just make sure, Bob, do you have the share your sound box checked? I don't know. So if you stop share, and then when you click share and that little window pops up, there's a little check box on the bottom. Just make sure that's checked off when you select yourself. Let's see, where is that David share sound? Thank you very much. Yep. Okay, here we go. Can you tell me if you can hear it?

President Buu Nygren (00:42:48):

Today is a day about really working with people that have a heart and commitment to work on Navajo. And so when we have people that are innovative and want to bring the cost down and bring building homes like this to our people in our community, we got to get behind that. And so I'm very happy that Mr. Arban Mitchell announced that within the coming weeks, there'll be a contract before me for 50 million to produce 200 homes all across Navajo that are going to look like this, that are going to stand still for a long time. But the number one mission for me is I want to get on board on when it comes to high quality affordability and quantity, because there's a 50,000 shortage of homes here on the Navajo Nation. You know what people are going to be saying now, buy a Navajo made home, made on Navajo because it's going to be the most efficient home that you can build.

(00:43:44):

It's not going to take a lot of energy. It's going to last forever and it's going to be affordable. Imagine being the mecca of the most affordable, high quality homes produced in America, and it's going to be happening here on the Navajo Nation in Le Chee Arizona. That's what I'm looking forward to doing. You have our business here. You've revamped up what NGS used to do, and I look forward to the expansions that are going to happen next door so that we can meet that demand of 25 homes a day, over 7,000 homes a year, and be the most productive, efficient, modular facility in North America. And I think that's something that we can all stand behind. I just want to say thank you so much to Zenni Homes. I look forward to the 200 homes, and I also look forward to working out for the expansion and moving forward because I would love to see a thousand homes being produced out of this facility like nothing on a year to year basis. So with that being said, I'm going to say thank you so much and thank you to everyone involved here, and thank you to the workers because made on Navajo, made by Navajo, it's going to mean something very soon.

David Monson (00:44:54):

This is a

Bob Worsley (00:44:54):

Great honor to be standing here on the Navajo Nation.

David Monson (00:45:02):

Awesome. And what you're not seeing was that was on the factory floor, hundreds of people facing them right there. So you heard a bit from the applause. So yeah, I think we've talked a lot in terms of dollar amounts, but in terms of people and homes, we are working on a plan to hopefully do over a thousand homes before the end of 2026 for Navajo Nation. So obviously lots of things will change along the way, but as of now, that's what we're penciling in and what we're aiming for and what we feel confident in. Let's see. So Bob, I think the next question is, or the next topic was just our overall pipeline. Well into 2026. So tell us, I think we've already talked about 29 West. We talked about Elgin and now Navajo. I think we have our one other multifamily project in Phoenix, if you want to maybe talk about that as well.

(00:46:12):

Oh, we cannot hear you. Can you hear me n ow, David? There we go. Unfortunately, I still have that video running in my ear here. Can you hear it or is it okay? Everybody can hear me? Yep. Great. Awesome. So yeah, we have a Litech project in Mesa, I'm sorry, in Phoenix. It's approved by the city of Phoenix. So now we have a project approved by Mesa. We have a project approved by the city of Phoenix. It's a litech, low affordable housing, 80 units in North Phoenix, and that's exciting. We'll have that fully finished and funded by July, and then we'll be building that in between some of these Navajo units after that. So again, with this pipeline, we feel like we're going to be super busy through 2026. And I think just an emphasis here on something that's been a big change along the way is the amount of success we've seen with these large volume buyers and developers.

(00:47:22):

We have people calling us up wanting tens or hundreds or if we've even had a couple look for thousands at a time. And so you couldn't ask for a better situation for an early startup to have such a high volume of demand. We are definitely production constrained, which is a great problem to have. And now with our new leadership from Michael Schmidt, he has built multiple factories in five different countries around the world. We have one of the most credible people in the world to help us build this factory and pull this off. And so we have all the right, I think, ingredients to build a scalable housing business and make a big dent in the housing crisis.

(00:48:12):

Okay, so we've already talked about Michael Schmidt, so that was the last one that I had on here. As far as major, major updates, we've done a million other things as well that have been fantastic, but the last one I wanted to put up here was we ran our first crowdfunding campaign. We're now over 3.5 million, raised over 2100 investors, which has been phenomenal. The interest, the support, one thing that has been incredible is actually the value add from all of you that have joined as investors. We have people participating in a number of different areas of our company as value add investors. And so much of what we have done today, we couldn't have done with the contributions from everybody like you. We recently launched a ZenniHome Ambassador program for anybody that has invested. This is an exclusive group where after you invest, you get an email from us to join this group, and we have ways that you can interact with us and actually participate in the success of the company moving forward.

(00:49:27):

And so we anticipate that there's going to be a lot of fun opportunities, whether it's helping us find new deals, whether it's working on sourcing, hiring connections to places that we don't have connections already spreading the word about various things that we're doing. It should be a really fun group to participate in. So I know we've already had quite a number of already signed up for that and we're kicking that off. Bob, I think we're ready to jump into our q and a. Any other last thoughts on major updates looking back at the year before we jump into the q and a?

Bob Worsley (00:50:03):

No, I just think we're just incredibly lucky to be where we are and we are looking forward to all of you taking this ride with us. It looks like there's lots of questions, so why don't we just jump into their questions, David,

David Monson (00:50:21):

And maybe really quickly before we hit the questions, and I'll reiterate this again at the end with our Wefunder closing, I'm going to drop the link to our campaign in the chat for everybody. So for those of you following our story, we had said today was going to be our last day, and with all of these big updates that we've had, anytime you have a big update, whether bad or good, the $25 million grant and hiring a new COO, you always have to file new updates with the crowdfunding regulations. And then those requirements require that you give all of your pending investors at least five days to confirm their investments. So we promised we were not extending, we have to extend by regulations a few days. So the third May 3rd is the closing drop, dead date, midnight eastern time for those that really want to push the deadline.

(00:51:27):

But yeah, anybody can go onto that link, the wefunder.com/zennihome and can make an investment there as small as $250. We also, if you are an accredited investor, you can, I'll drop another link. You can work with us through our investment specialist team. Let me get you the link to that. We have a few different options. Standard accredited investing, we have an opportunity zone fund set up as well. For those of you with capital gains taxes that you'd like to shelter, we do have a convertible note option there. So depending on how much you're looking to invest, we have a few different options for you. So you can go through either one of those links that are again in the chat. So with that being said, let's jump into the q and a and let me open up the chat we have in here. Oh, someone was asking about investing. Are there convertible notes in this priced round? Bob, you want to talk a little bit about that?

Bob Worsley (00:52:53):

Yeah, David, I don't know if you could find the little diagram that shows the different ways to invest if you can find the icons, but this is the first time all of our lawyers or any of 'em have talked to us before that they've seen something so creative. But if you are an accredited investor and there's certain rules you have to meet, you have to invest at least $25,000. There's also an opportunity zone that David talked about that helps you shelter your gains short or long-term gains that was created by President Trump and President Biden's continued that we do an 8% interest rate for 18 months, and then your note converts into stock at today's price. So some people have chosen the convertible debt option and make 8% interest. In the meantime, we also have an EB five program for people, have friends that are trying to get a green card in the United States.

(00:53:50):

We're inundated right now with people from India, Brazil, China, that want to make an $800,000 investment, and that's called an employee employment bonus program. Because we're on the Navajo Nation, we have a one year fast track to get a green card if you have friends or family that need a green card to live in the United States indefinitely. And then again, the crowdfunding that's on Wefunder that you're here to talk about today with as little as $250. So nobody's ever done this and gave everyone on every program the same deal. It's $7 and 11 cents a share, and we've democratized this so that people that aren't normally able to invest can actually put some money into this. My wife and I put this into all 31 of our grandkids as names. We made investments for each one of them. We've had a lot of grandparents doing that. They make an investment of 25 or 50,000, and then they want to make sure their grandkids all have a few shares to play with as this goes on. So that's how it works. We'd love to have you play, and hopefully there'll be room for all of you to invest by Friday night, May 3rd.

David Monson (00:55:16):

Awesome. All right. Let me jump into, let's see. Okay, someone asked about the shipping container dimensions. We already talked about that. And just to be clear, we do not use shipping containers. We just build to those dimensions because it's optimized for logistics. Let's see. Are the units rated for climates like snow load for the mountains and hurricanes for the coast?

Bob Worsley (00:55:46):

Yeah. We are now rated for zone one through six, which is 90% of America and Canada. What that does mean is if you were at Aspen or Alta Utah, you probably would need to have a shed roof to get the snow off the unit. And so snow load becomes an issue where you're getting feet of snow in one storm. We also are, we built these so that they would withstand hurricanes, snow earthquakes, up to an earthquake, an 8.0 earthquake in downtown Los Angeles or a hurricane in Miami, a classified hurricane. The one thing we would need to talk to you about is if you need hurricane shutters or hurricane glass, that would be extra, but the box itself is designed and is bolted to the ground so that it can withstand a class five hurricane, class eight earthquake and snow below the highest snow loads in the highest mountains where most of us live in America.

David Monson (00:56:55):

Nice. Next one. Someone's asking about the Los Milics project asking what the costs, is there a difference in costs for a B2C buyer versus a B2B buyer? And then what do the costs look like overall, right? The housing engineering, grading, crane time shipping, all of that.

Bob Worsley (00:57:20):

Great. So the one bedroom unit, the Denizen is $90,000. The two bedroom unit is $125,000, and then it's around $30,000 to transport within reason and have the crane there to set it. You saw the crane down in Los Milics on the pictures that David was sharing, that crane could set three or four homes a day. If it's showing up for one, it's typically in the range of 3000, $4,000 to mow in. Do the set go out. They can move in the morning and be done by noon. They can come in at noon and be done by five, and then it takes about a week or two to kind of do the mate line work to waterproof the place, the mate line where the two boxes come together. So all of that combined, we think you should be budgeting something like $30,000 for that. So you've got the 90, the 125, about 30 to transport it, and then you'll have to figure out what your land is going to cost.

(00:58:25):

Our goal is to get you a home under $200,000. That's what we're shooting for. And when you, today, it takes about 400, $500,000 to buy a starter home. We think it sounds pretty darn good under 200,000 to have a home here that if you wanted to, you could add two later. You could add units on top of it, stack on top of it. My wife and I are building triplexes right now with three of these two bedroom units that could be used as one home for 1,920 square feet, six bedrooms, three baths, beautiful home. David's got a picture of that. He'll show you here in just a minute. So don't think of this as a 640 square foot home, two bedroom home. This can be. This particular home is 1,920 square feet, six bedrooms, three bathrooms, and it could also be used as a triplex. So each unit could be locked and used as a triplex. So don't limit yourself. Think of us as a module, a Lego block that can be stacked or rambled into any size and any size home you want.

David Monson (00:59:37):

Very cool. Next question, how are you balancing tackling B2C, B2B and B2G?

Bob Worsley (00:59:48):

We have discovered that, and I think all companies in our space have discovered that doing one home for one customer in one backyard, in Salt Lake City, in southern California, Las Vegas, Phoenix, whatever, is really a tough model to work. And so we are targeting larger projects where people need 10, 20, 50, a hundred thousand units. We're working with FEMA on Maui for the Lahaina town that was burned, 4,000 homes destroyed over a hundred people died. We were working with FEMA to help build that city back. That'll be hundreds, maybe thousands of units. Now, we are talking to some general contractors though that are willing to take a geographic area and maybe take 40 or 50 customers like you that might say, I want one in my backyard, and we'll turn you over to a general contractor that's going to work that area and be able to do yours and 40 or 50 other people in that geographic area cost effectively.

(01:00:57):

Work with the city to expedite permitting, work with the crane, the trucking, so that it's done in an organized fashion and actually make it work to do a B2C product. But today we're really focusing on B2B and B2G. The Navajo nation will probably buy over a thousand units. They want to buy a thousand a year after the ARPA money is gone. And so they're already planning on how would we have a hundred to $200 million available to us to do a thousand new homes a year? Because as David mentioned, we need 50,000 on the Navajo Nation. If we're building 7,000, a thousand for the Navajo Nation is something that we could fit in to the line time and still ship 6,000 units to Southern California, Nevada, salt Lake City, anywhere in Utah, Wasatch Front Colorado, New Mexico, and Arizona, maybe even into Texas front page with a one truck day radius.

David Monson (01:01:59):

Awesome. Really quickly, there was a question in here that is already answered. Veronica asked, can you explain a little more how the crowdfunding works for inexperienced investors and Aaron on our team, thank you. Dropped the link to Wefunder has a good getting started for investors link in there. So anybody that has the same question, I would encourage you to click on that link. It'll walk you through the process. But I think the important point is that the terms that we are offering accredited or crowdfunding investors are the same. And it just happens to be that crowdfunding and Wefunder, this is a specific mechanism for people doing the smaller check sizes to be able to get access to a deal like this. Normally without crowdfunding, only people with over X millions in net worth would be able to make an investment like this. Alright, okay, next question. Someone asked, when will you start shipping nationwide? And then they had a follow up question. What is the biggest advantage over a Boxabl? So maybe let's talk about nationwide first.

Bob Worsley (01:03:13):

Yeah. We are doing the Southwest out of page. So if you drew a radius, a driving radius of, call it 10 hours a truck day, a truck can actually drive 11 hours a day without stopping and resting. And so we're looking at that radius from Page call it 800 900 miles, and that covers all of really most of California from San Francisco south, all of Arizona, all of Utah, all of Nevada, all of Colorado, New Mexico and into Idaho. And so that'll cover what we call the Southwest. We'll have another facility eventually in the Pacific Northwest. We're looking at Moses Lake, Washington. We'll have a facility in the Midwest, somewhere around Kansas, Oklahoma, northern Texas, northern panhandle of Texas maybe. And then something on the east coast, Pennsylvania, south to Georgia, somewhere in that range where we can get to every person in America within one truck day from a facility. And if each facility is doing 7,000 homes, we'll be able to produce maybe 30,000 homes a year, which is huge. That would make us one of the largest home builders in America. So that's a long-term view. Certainly not tomorrow. So please don't misunderstand that. We're telling you we're going to do that next year. That's going to take a few years to get all that accomplished.

David Monson (01:04:48):

One automated factory at a time. Right. Let's get this first one done and then we'll expand from there. So the second question was, what's the biggest advantage over box? That's been probably, I think, the most recognized name in the ADU space and factory-built type home space. So yeah, tell us a little bit about that.

Bob Worsley (01:05:09):

David, as you know, we had a really nice conversation with the CEO last week of Boxabl. We're both sharing some concerns we have about the industry. One of the big concerns they have is how to get licensed in every state so that you're not dealing with every city and every county and their building codes and inspectors. We have a really good idea with them. We'd like to work together to make sure that we're able to get nationwide, hopefully someday a one stop shop for the entire country. If you're building to international building code, international residential code, they're focusing, they told us that they're going to really focus on California for their product. They don't build something that's really designed to be stackable like ours. It's not a steel structure like ours. Theirs is designed to fold up and ship and folded out. So it's got a sip, which is called a structured insulated panel versus ours is traditional kind of commercial construction, six inch walls with foam insulation with a rockwool in between, et cetera.

(01:06:28):

Where theres is more of a styrofoam with the steel sip structure on the outside heat rock on the inside, they're about 400 square feet. We have a 320 square foot and a 640 square foot model. We think ours is really designed probably more for multifamily than it is for single family casitas in the backyard. That's why we put a lot of steel into it, to be able to stand 75 feet tall. So we're a little different. But you know what? There is such a housing shortage in America at six and a half million homes short right now that no matter what box will did and what Zenni home did in any scale, within any imagination that they have or we have, we will not touch the potential that's needed here and the work that needs to be done. So we want everyone to succeed. We're not, the reason he called is let's work together on things we can work together on and let's make sure that this industry is successful and that's how we feel as well.

David Monson (01:07:38):

Yep. Love it. Yeah, I think we, all of the players in this space, we all want each other to succeed and we want to come together and make things easier to be able to deliver to more states, more efficiently depending on the sources you look at, there's a shortage of between five to 7 million homes across the United States. Prices have tripled since 2000. Interest rates have doubled. I saw they just climbed over 8% a couple of days ago. It's insane. So anybody trying to get into any sort of an affordable starter home or anything like that, the way things are currently done, it's almost impossible. So it's time for disruption, it's time for a lot of players to come in and change the game. So yeah, I think we hope everybody is successful here. This is not a, who's going to win? Is there one winner takes all? We're very different products, very different quality price point, things like that. So I think there's a lot of room for everybody to be successful. Alright, let's see. Okay, so here's a question on Navajo Nation. If there's a change in the administration, could future grant money be in jeopardy?

Bob Worsley (01:08:52):

Thank you, David. I think one thing we know about Republicans and Democrats and even factions of different families on Navajo Nation that although it's typically a democratic nation, they do have different clans and groups that fight like Democrats and Republicans do off the Navajo nation. But there's one thing that we all agree on, economic development, employment and housing. And so we feel like if we stay focused on that and not get involved in the petty politics, who wins, who loses President Nez? His administration approved us coming to Navajo Nation. President Nygren saw the big opportunity to partner with us and generated grants through the ARPA money, federal ARPA money for us. If President Nygren in the future is not the president of the nation, we think that there's still going to be a lot of pressure on the administration to provide housing and to provide jobs and to make sure that the nation has got economic development on the site where this coal plant was at one point, David, that provided 75 million a year of revenue to the general fund of the Navajo nation that just stopped in 2019 when they shut down the facility and there's a lot of people worried about who's going to fill that $75 million hole in the bucket in their budget and we are part of that solution.

(01:10:28):

We're going to take that site, we're going to employ everybody back that lost their jobs. We're going to be paying property taxes, sales taxes and employment taxes, and we're going to be paying rent to the Navajo Nation to use that facility. So we think we're going to quickly start filling up that hole in the bucket that happened. And that's good for anybody that becomes the leader of the Navajo nation.

David Monson (01:10:56):

Yeah, the sizable need for housing does not change with any sort of administration change. And that's regardless of party or anything like that. These are basic human needs. When you need a home, you need a home. And ZenniHome is set up on Navajo Nation, like you said, paying taxes, you're employing Navajo workers, you're delivering homes at the potential fastest rate possible. So that old 35,000 number, or as President Nygren said in his video, you watched over maybe over 50,000 now a need of over 50,000 homes. How in the world do you make a dent in that, if not with some sort of a scalable housing manufacturing solution. And so I think the right pieces are aligned here. Everybody wants these needy families to be able to get the home that they deserve. Alright, here's a question. Is there a delivery estimate for those that placed a deposit on a home reservation a couple of years ago?

Bob Worsley (01:12:03):

Yes. I think what we're going to do is given all the demand that we have, we'll be dividing up this reservation group into geographies and working with general contractors that might want to take that geography and get with you and we can work with them with a larger quantity of orders and get some line time set aside and get something moving in your direction. You want a general contractor that has set these homes before. We've seen prices, outrageous prices from general contractors that have never done this before, and we know how reasonable it can be for those that have experience. So we'll work and find people geographically near you and then we'll have that contractor talking to you about your needs. Do you have the permits? Are you really ready for this to come and organize it in such a fashion that it can be done in organized way at the right time for you and for the others in your geographic area?

David Monson (01:13:06):

Right. Here's an interesting question. Is the Navajo Nation a shareholder in Zenni Corp?

Bob Worsley (01:13:14):

Oh, that's really fascinating. We did give them an opportunity to invest and the money from the federal government was, it was not legal to invest in the company. They could only give grants and so at this point, they're not shareholders, but we would welcome that opportunity if there was a chance in a future equity round that they wanted to participate in.

David Monson (01:13:43):

Awesome. Next question. How will these homes last quote forever, how have you tested for durability?

Bob Worsley (01:13:51):

Well, our steel studs are galvanized G 90 steel studs that last 140 years. So let's start with the basic bones and skeleton of the unit. The red steel will last that long as well. The main structure of the unit we're to build things in that will last a long time, but inevitably the cabinets, the wearable things are going to have to go through a refresh. You'll probably be tired of it and want to change the colors and look of things before it hits its lifetime. But the great thing is that there is a home, a roof over your head walls and floors that we think will last over a hundred years, which is not the case for the units that have been delivered to them in the previous housing programs. They are falling apart after 15, 20 years. And so President Nygren wants something that last a hundred years, maybe not forever, but a long time.

David Monson (01:14:57):

Yeah, and again, we think about those huge numbers. If the homes you are building are falling into disrepair at 15 years, you at some point now you're already replacing the ones that you were building in the first place and so can you ever catch up to that demand? It's an interesting problem. Let's see. Here's a question, an anonymous question. Is there an effort from the government to make prefab home install easier since it is billed per code at the factory?

Bob Worsley (01:15:32):

That's what the President of Boxabl and David were talking about the other day. Is there a way to get a new agency or maybe a subsidiary of HUD that would agree to international building code and not the crappy HUD code that exists today? Those rules were made in 1978. The reason those homes don't hold up is that they don't have high quality standards. Everything you build today on a stick-built site-built home is international building code and those get updated every three years. Our homes are to 2021, the latest international building code, international residential code standards that would be in any city in America and frankly in the world. This is the standard for the world. The HUD code was built in 1978 and it's really terrible quality and that's why when hurricanes went through the Midwest, you'll notice the places where most of the fatalities, most of the homes were destroyed were trailer homes, mobile home parks, and that's just not what we're doing. We're building homes as good or better than a home on your site and we're working and thinking about how to do that nationally.

David Monson (01:16:50):

Great. Okay. Here's another question. Is there any options here available for investing out of already existing simple IRA or a 401k plan currently held in Charles Schwab?

Bob Worsley (01:17:04):

Yes, if you want to call us, set up an appointment on our website with Manny Chavez. He works with planned administrators. We've been doing tons of IRAs and other plans like this, 401Ks and directing that in investment toward the ZenniHome stock. So we have expertise in that. We can help you with that.

David Monson (01:17:33):

Yeah, great. And just again, so if you go to this link, the invest page on the website and on any one of those options, click learn more. There'll be a form that you can fill out and that'll put you in contact with Manny. Here's an interesting question. Is there a plan to build a basement based on the same unit?

Bob Worsley (01:17:58):

We're still thinking about what we might sell in the future. For example, we can take our three 20, our Denizen and make a two car garage and use the same metal shell with the same cladding, set it on the same concrete pier and then pour a slab in the base where you would be able to drive your car and put it at a level so that you can drive your car straight in, put garage doors on the units and have a garage. I think it's worth thinking about what a basement might look like in the same idea that a hole is prepared. You basically drop this in the ground and we would have to think through what waterproofing and everything would have to go on, but wouldn't it be nice to have your basement already done and finished and then you can stack on top of that. So haven't got it figured out yet, but that is definitely like a garage in the future

David Monson (01:19:02):

Or just go more stories up. Right. That's another option. Here's a question. Can you go over ballpark numbers of profit unit projections now and then with the new factory?

Bob Worsley (01:19:16):

Yeah. We know right now that going from our existing factory to the automated factor is about a $7,000 improvement in labor efficiency. So that gives you a dollar and cents number on how much we benefit being automated versus manual factory that we currently operate. In addition to that, we're Dr. Michael Schmidt from Tesla, our COO. He's already made connections all over the world, cladding in China, cabinets and potentially could come from Vietnam flooring material from Vietnam as well windows out of Poland or Mexico and appliances from Turkey. So there's ways to continue to improve what we call the bomb, the bill of materials. That's all of the raw goods that go into this, to the point that there's not a general contractor that can touch these prices to build you a home on a lot near your home. So we hope to get those efficiencies in our business so it's even more cost effective to consider something built in a factory versus the very inefficient way of building on site.

David Monson (01:20:37):

Love it. Next question. As a gc, am I able to have a targeted area to place homes in?

Bob Worsley (01:20:47):

Talk to us. We'd love to talk to you. Right now we have a GC in Elgin. I've given them two projects I'm personally doing. They're doing a model home for us and Page and they're down in Elgin watching these nine units get installed. So if a GC will spend a little time with us and take a couple jobs and learn how this goes, it's going to blossom very likely into a relationship where we can feed you people that are coming into our website that want these units and we can feed you customers that are within a radius you want to work in.

David Monson (01:21:27):

And I'm dropping a link, so this is a link to our page for developers on our website to be able to submit a project. I think you could go ahead and fill out this same form and tell us a little bit about where you are, who you are, and how you'd like to work with us. That'll put you in our system and we'll be able to get in contact with you. Okay. There's questions on expansion. We answered that. Someone's asking when Southern California might be a possibility.

Bob Worsley (01:22:00):

We're currently in the process of getting approved in California. California has kind of like six mini areas, like little six mini states, and so we're currently working on Southern California and I think shortly a couple months we'll be able to give you a firm date of when those approvals are done and give you some sense of when we can ship into California. We're currently approved in Arizona and Utah. We just got a bill passed here in Utah to be able to serve any part of Utah instead of working with each of the 400 cities and towns and counties. So that's where our focus is today, but we will soon be available in Texas. We're currently applying in Texas, Colorado, Idaho, California, Nevada. So hold tight will be in those areas next.

David Monson (01:22:58):

Yeah, someone asked, the next question was about Canada, so I think that sort of answers that as well

Bob Worsley (01:23:05):

Is any Yeah, but our audit committee chair on our board is in Toronto. We've got people interested in British Columbia, so Canada's in worse shape than America is in terms of the housing shortage and cost of housing. So we're placing our factories where we can serve 90% of Canada's population as well.

David Monson (01:23:29):

Where is any home sourcing? Its steel.

Bob Worsley (01:23:34):

We're currently all US based. If you know much about steel, there's huge tariffs that come from China. Doesn't make sense. South Korea is a big provider, they're great, but they have a certain allocation when they hit that allocation, you have to buy us. So today all of our steel is coming from US factories.

David Monson (01:23:58):

Love it. Next question is on the new factory expansion with the grant we talked about. When will that be ready?

Bob Worsley (01:24:08):

We plan to be fully ramped up in 2026 in the new factory. Amazing. We've got nine months for planning, nine months for building shell and nine months for robotic implementation and then we'll start ramping.

David Monson (01:24:27):

Alright, that was all the questions in the q and a on Zoom. Now there's all the questions that people submitted beforehand. Here's one, do you have financing available for ZenniHomes? Yeah,

Bob Worsley (01:24:46):

Yeah, because we are our IRC/IBC International Building Code, international Residential Code, you automatically qualify for every 30 year mortgage program, Fannie Mae, Freddie Mac, FHA, et cetera. One challenge we're having with the very first people is that appraisers are required to have a comp and we're still struggling through. We may have to have a few cash buyers in your area before we can give them a comp that will meet the requirements of Fannie Mae, Freddie Mac, but it's really down to that level of getting qualified for a mortgage.

David Monson (01:25:28):

Love it. Next one. Do you have any supply chain issues that need solving?

Bob Worsley (01:25:36):

I would say during covid, that was an emphatic yes, but since Covid settled down, the supply chains of the world have settled down, it was costing us $5,000 to get a container from Shenzhen to Long Beach 40 foot container that went to 25,000 during COVID from five to 25. It's back now down into the range below 10,000. So supply chains have kind of settled down. I think there's a couple little things happening on bigger factory issues around electrical components, big electrical components that still have a year backlog for a big electronic 600 amp service into a building. That's still backed up a bit, but I think all of the home base, 200 amp and smaller electrical things are now readily available at Home Depot or even any other supplier. So I think that's all settled down. Covid was a mess. Now we're having an opportunity to actually save money by formulating a more robust supply chain.

David Monson (01:26:54):

Cool. Here's a fun question from Julie in the chat. She said you have a log going or way to create a community of folks wanting to create multifamily investment groups wanting to use your product for different areas.

Bob Worsley (01:27:10):

Yeah, there's some really cool trends. People have told us our next big task should be to come up with community development, community connections. So we've had a group of women that have come to us over 50, no children. We're really worried about aging and we'd like to have 20, 30 women with 2030 any homes that could look after each other and garden and cook and have sociality connection together. I am just really excited about things like this developing. There's also spa groups that have come to us, people that want to have wellness areas where there's vineyard's. A good example, David, of people that want to go down and spend three days in like Napa Valley, but it's in Elgin, Arizona. It's a beautiful part of the state. They have a restaurant with fantastic award-winning this year, the number one wine in Arizona, and the last gospel show was from Los Milics, our client. And so people want to go down and spend three days, eat great food and just meet some nice people. There's room now for nine Casitas to go and spend time there on the vineyard and talk wine and with your sommelier and others that care about that and want to have some fantastic dining for three days.

David Monson (01:28:44):

Yep. Love that. Yeah, so I think there's ways to bring people together that want to live together in a community and I think there's also options for those that maybe just want to invest in some projects in the future. So I think there are some fun options there to bring maybe kind of crowdfund, if you will. Maybe a multifamily building or something like that could definitely be in our future. Awesome. Oh, here's a great question from, I believe it's Jerry, may we get an estimated delivery date of the first homes to be installed on Navajo?

Bob Worsley (01:29:20):

Yeah, we're currently talking to President Nygren. We're trying to get the first 50 million contracted. It's been announced, so getting the T's crossing the i's dotted is where we are and as soon as that gets finished, we'll immediately turn on the factory and start building those Navajo homes. We've been working with Tamara Begay out of IDSA in Albuquerque who was given the assignment by President Nygren to Navajo-ize or indigenize our units, and so we've been spending a lot of time with her to make this culturally sensitive. I didn't realize it, but Navajos are very, very modest people. They don't like the floor to ceiling windows. They want smaller windows. Some of 'em don't want to have washing machines, dishwashers. They feel a great sense of satisfaction serving and cleaning dishes manually. So we're trying to become sensitive to colors, textures, and what the Navajo people want and we've made some changes to accommodate that.

David Monson (01:30:35):

Next question, is Hawaii in the plan?

Bob Worsley (01:30:40):

It is. Hawaii still does not have a department of housing. We just proposed a bill and got it passed and got the governor to sign it in Utah. They were one of 10 states that didn't have it. Hawaii's one of those as well. Alaska, Wyoming, North Dakota. So I'd love to see something done. So it's easier to do business in Hawaii. But in the meantime, we are working, we're on Oahu with a developer looking at a project 180 unit project there, and then we're talking to FEMA about Lahaina in Maui to replace those homes that burned there. So yes, I think we will. And the beautiful thing is our modules ship like shipping containers on a ship, so getting them to Hawaii and getting 'em off the ship will be much easier than a wooden volumetric home built by a competitor that would probably not handle the shipping very well.

David Monson (01:31:38):

Right. Here's a couple investment related questions. What is the company valuation at this round?

Bob Worsley (01:31:47):

We're doing a $75 million pre-money valuation for this round. That works out to be $7.11 cents a share. We think with about $300 million in the pipeline of business. That's a very fair valuation. I think our competitor Boxabl is much higher than that in the billions, maybe

David Monson (01:32:11):

Multiple.

Bob Worsley (01:32:13):

Yeah, we're pretty happy that we can give folks a reasonable valuation to get involved at the ground level.

David Monson (01:32:21):

Yeah. Next one is kind of a bunch of questions on fundraising. So one is how much has been raised details on preferred equity versus common? What's the current long-term exit strategy? Is the cap table available? Is it available under NDA and is there any upside to larger investments? 50 K up to 500 K plus.

Bob Worsley (01:32:48):

Great. Let's talk about each one of those. This is a preferred stock round, so I own a lot of the common stock, and so the preferred actually is in preference to the common. We drafted the PPM, the private placement memorandum to the liking of venture capitalists. So it's very friendly to investors, less friendly to the company. We're not afraid of that. We're not afraid of audits, we're not afraid of SEC rules and things like that. So we've been more than happy to accommodate those rules. I've taken two companies public, I've been a CEO of two public companies, so those are complicated, seriously complicated things to do. I'm not afraid of those. The cap table is available under NDA and if you want to invest up to a half a million dollars, we'd be happy to accommodate that. Jump into the website where it says, invest now as an accredited investor, and Manny will set up some time for us to talk and we'll get you information, even get you into the data room if you're going to invest more money.

David Monson (01:34:04):

Awesome. Dora asked, what is the minimum investment and what's the ROI?

Bob Worsley (01:34:12):

The minimum investment as a Wefunder investor is $250. We've had people invest. I've invested over 7 million myself. I'm the largest investor in the company, individual investor in my family office, but we have other investors that have invested, 3 million investors that have invested a million and a half this round was 25 million. We've raised a little over half of it, and we will finish that if needed, but with the Navajo grant money coming in, we're less concerned about getting all 25 of that done since we have this grant money coming in from the Navajo Nation. But we will, if we have interested investors, we'll go ahead and do that. Did I answer that question, David?

David Monson (01:35:07):

Yep. Next question. Where could ZenniHome be in 10 years from now?

Bob Worsley (01:35:17):

I think it's very possible given the interest. We've got over 2000 we under investors now that I've been in public companies, taking companies public a number of times, this feels like a public company candidate. So I think in 10 years it's very likely this would be a public company. And this is David. One of the other questions I saw that people want to know how to get their money out, get their investment out, and that's a very likely way to do that and have the company do. Well see the stock price rise and then sell when they need the liquidity event.

David Monson (01:35:58):

Right. This one. Can ZenniHome fire resistance be increased in the future?

Bob Worsley (01:36:14):

Yes. We currently have an MGOA cementitious cladding, which is not flammable. We then have a mag oxide rock on product that is not flammable. Then we have steel studs that are not flammable filled with rockwool that are not flammable. Then on the inside we have sheet rock, which is not flammable, so it's pretty hard to start our unit on fire. In fact, as a high rise or mid-rise building, we're a class two building, not a class five flammable building. What that means is a developer, as you save $1 million of builder's risk policy, because a lot of people building with wood end up having a fire, somebody's using a welder, a torch, and then at night it kind of smolders and then starts a fire in our units. There's really nothing to burn it. It's steel, so you're not going to have a fire start over the course of the night. So I think it would be hard to, at certain temperatures, even steel melts. So that can happen, but maybe concrete at some point. We're looking at some concrete panel ideas that might be a little bit longer. Fire dwell time before the building gives way. So we'll look at that in the future.

David Monson (01:37:50):

Awesome. I think we're coming to the end of the questions. We'll go through a few more here. This next question is can you go completely off grid? Can the units run on solar?

Bob Worsley (01:38:06):

Yeah. This is something I've got a personal interest in since 1996. My wife and I have been off grid on one of our homes and we have solar inverters, batteries, propane backup, diesel backup, well septic system, starlink, internet with Elon Musk, voiceover IP with that, et cetera. So we basically took everything I've learned since 1996 and we packaged it into an off grid option. So if people really need to be off grid and some of the Navajo homes will be off grid, we think for less than $50,000, we can provide everything you need to be off grid, and that's power, water, sewer, and internet with no grid anywhere near you for $50,000, we can make these units completely off grid capable.

David Monson (01:39:15):

Awesome. Let's see. I have a big chunk of questions from Julie Fitz. I think we've actually answered quite a few of them. Julie, I think we'll follow up with you. I think you have a bunch of specific questions on the units and plumbing and things like that. That is great. I will go back through these and see if we had missed any questions. Last time we did a webinar, we had so many questions. We actually went through and recorded every single one, answered them, put them up on the Wefunder site. We'll do that again for anyone that we feel like we missed here. But thank you again everybody for joining us today as we're closing up this Wefunder. Again, we would not be where we are today without so many of you investing and participating in this round.

(01:40:14):

We hope that those that haven't invested can join the family. I would make one ask here at the end, I know we've got quite a lot of people have stayed on here till the end, but this link to our Wefunder page, that is where you can make a crowdfunding investment. The accredited, we dropped that link in as well before, but my ask is if you know someone that is interested in the housing space would be interested in what we're doing with robotic automation, anything about our mission, affordable housing, Navajo Nation, all of that, please take this link and send it along all the major updates, most of the company information, a lot of stuff we reviewed today should be in that main page for you to review. But yeah, thank you again and we encourage you to invest and if you have already invested, we invite you to invest further and join us. This will be the last time this is offered at this price point. So again, the closing date will be midnight eastern time on the third, so that is Friday. So do not miss that deadline for some folks. Got lucky. There's a few extra days in what we were originally anticipating, but thank you again, Bob. Any last words?

Bob Worsley (01:41:42):

No, thank you. Come and join us and we are very, very fortunate where we are and look forward to growing this thing with you and hopefully making lots of money for all of us. Thank you very much.