ZenniHome Investor Fireside Chat with Caliber

Transcript:

Bob Worsley (00:00):
I'm Bob Worsley, the CEO and Founder of ZenniHome. I'll get into my background here shortly, and it looks like my wife is joining here. Go ahead, Brenton.

Brenton Smith (00:17):
I'm Brenton Smith. I'm with Caliber Companies based here in Scottsdale, Arizona. I'm VP of Acquisitions and Development, and working extremely close with ZenniHome, not only on their operations side, but also we are one of the larger buyers of the product and one of the first large investors into ZenniHome, so excited to be here.

Trevor Barger (00:38):
And Maggie, since you're helping us through this, just asking should we start right away or should we give everybody a few moments to load in?

Maggie Zheng (00:45):
I feel like we can go ahead and start. If everyone's filing in, feel free to introduce yourself in the chat, maybe where you're from, if this is your first time hearing of ZenniHome, or if you've been following them for a while, it's always exciting to see where people are coming from.

Trevor Barger (01:04):
So, welcome everybody. I'm Trevor Barger, the CRO of ZenniHome. With us today we have Brenton from Caliber Companies. Brenton is filling in for Chris who is out today, unfortunately, illness in the family, and Bob Worsley, CEO for ZenniHome. So, Bob, you and I have known each other for a long time, worked together for a long time. How many businesses, including SkyMall, have you started and taken public?

Bob Worsley (01:34):
I've probably started about a dozen businesses, Trevor, and taken two of those companies public. It's quite a ride and it's very exciting.

Trevor Barger (01:47):
So, I know you have a long background as a CPA, Pricewaterhouse Audit Manager, and you've been named 1999 ENYEOY. What's prepared you for this new challenge in city homes?

Bob Worsley (02:07):
Well, I think just since I was quite a young man after leaving Pricewaterhouse as a CPA in 1985, I just have been doing entrepreneur and was recognized by Ernst and Young in '99 for being an Entrepreneur of the Year here in Arizona. I just feel like being an accountant, understanding numbers, starting lots of businesses, those things accumulate as education and experience that's invaluable to not make the same mistakes over and over.

Trevor Barger (02:44):
Is it from those or other attributes that have really given you this unique set of skills to be so successful with our new startup ZenniHome?

Bob Worsley (02:53):
I guess that people that know me, they would say, "Bob's got a lot of grit and persistence." And I think that those are things that I would add to financial savvy, having been an accountant. But I think the other thing is I think I've accumulated over the years, almost a PhD in problem solving. And that just comes before you every day when you start a business, you're just constantly solving problems. I like to run to those problems and solve them versus avoid them. That's probably part of that grit nature of mine and persistence. That's my nature, and so I think that's why we've been successful in almost all the businesses we've started.

Trevor Barger (03:38):
Well, in ZenniHome, I mean the effort so far in the startup, the market reception, how does that compare with the other startups that you've had?

Bob Worsley (03:51):
I had a great experience with SkyMall. We had 96% market share. We grew the industry from about $6 million to our revenue of $150 million in about 13 years. It was very thrilling to see. And I've had a biomass business that runs very, very well with all the megawatts sold to the utilities. But I've never seen a business with this kind of demand. We started about three years ago talking to people about this, incorporating the business. And during that time, many days I've been on the phone five and six hours talking to people that are calling us from the website and what they've heard.

(04:32):
And we've now accumulated over 40,000 units that people have called wanting to order from us. I've never seen, in any business I've ever been part of, this kind of demand. We've never paid for a dime of advertising. It's just word of mouth. One gentleman put a little YouTube video up a year ago that generated 150,000 people coming to our website and wanting to talk about getting orders. I just have never seen something this impactful in terms of people wanting it, wanting to hear about it, and looking for this product.

Trevor Barger (05:13):
I know you have 30 plus grandchildren, so what inspired you to start ZenniHome?

Bob Worsley (05:21):
ZenniHome was after working in government and starting businesses, I did politics from '12 when I ran for Senate in Arizona, left in 2019 as Legislator of the Year in Arizona. And I just felt like the system is broken, and we have a terrible shortage of homes, and affordable housing homes are way too expensive. It seemed like a problem no one was really figuring out. So, when I retired from the Senate, I said, "I've got one more startup in me." I asked my wife, "Will you support me?" She has diligently, financially, and morally to get this thing off the ground, and show this industry that there is a way to do this, to bring affordable housing to a mass market, and give someone a chance for under half the price of what a starting home normally costs today to get into a home, start building equity, and we'll build these in mass in a factory the way cars are built, and this will be a whole new trend in our opinion.

Trevor Barger (06:32):
Maggie, I think we have a chance here to ask our participants a question. Bob mentioned the housing crisis in the United States, and so we have a question on that topic for our participants. If you're joining us, if you wouldn't mind, a couple of questions. Bob also mentioned the topic of tiny homes. Our units are 640 square feet and 320 square feet, and so really that classifies for most people as a tiny home. And wanting to know if you've ever had the experience of living in one? And then also, just so we get to know you a little better, your relationship with real estate, if you're someone who's coming to us as a homeowner, or an investor, or a developer.

Maggie Zheng (07:22):
All right, so, we're giving it a few more seconds and then I'll be ending the poll.

Trevor Barger (07:40):
Wow.

Bob Worsley (07:41):
Yeah.

Trevor Barger (07:43):
Now that explains a lot of the conversations we've been having with people. Clearly there's a housing crisis, or at least a great number of people are present to it. I love that we have so many people who haven't yet but want to live in a tiny home. That is fantastic. And it's nice that we have a nice mix of investors, developers, and homeowners. Brenton, what was it that interested Caliber in ZenniHome?

Brenton Smith (08:15):
So Caliber kind of got into the modular/tiny home game, I'll call it, probably about three years ago when ZenniHome started. It was actually through another group that we got very interested in this. However, Bob and us had been doing a handful of deals down in Mason. Obviously, that's kind of a vetting process for us as we like to walk before we run with anyone. So, we have a handful of other deals that Bob and I and the team here at Caliber got very close and comfortable with each other. And I still remember Bob, I think, when I flew up to Salt Lake City, I think that was two years ago with you and we were doing very early R&D. So, I think we flew out without looking to do an investment into ZenniHome itself at that point. But we were so amazed by the attention to detail on the product that Bob had in his vision, that we really couldn't say no to get involved with them on that side.

Trevor Barger (09:11):
How large is your Opportunity Zone Fund that became an investor in ZenniHome?

Brenton Smith (09:17):
So, we had a handful of funds at Caliber, and Opportunity Zone Fund is one of our larger ones. We closed our first Opportunity Zone Fund down this summer with $185 million in equity in it. We opened the next day with our Opportunity Zone number two, and that has a cap of $250 million equity in it. So, we're very excited with this investment in ZenniHome, not only to expand that opportunity, but to expand our development with ZenniHome.

Trevor Barger (09:47):
Love that. So I come from a background, my mentor was a last student of Frank Lloyd Wright. And Frank Lloyd Wright would often talk about his dream for the Usonian home, that every American should have the ability to get to home. At that time he was trying to design them for $5,000 or less. I looked up on Google what that would equate to today. It's $109,000. And Bob, I know we're right in that zone. And so what are the target prices for our 640 and 320 units? You mentioned that they were very affordable.

Bob Worsley (10:18):
Yeah, we're currently... We were starting to build these... We thought we might build them in China and we thought we could build them for $75,000 and $100,000. The small unit behind Trevor there is 320 square feet. We have a larger unit that's twice that size. We are trying to do that for $100,000. Reshoring this during COVID to the United States, I think it was the right thing to do. We're currently building these in Page, Arizona on the Navajo Nation, on the side of the old Navajo generating station. They let a thousand people go when they shut down the coal plant, and we're currently building them there. Our costs are going to probably be... Our prices are going to be in the $90,000 to $125,000 range being built here in America. It's just a little bit more expensive than building and shipping them from China. But we feel great about being here in America, building in America, and putting workers in America that were unemployed back to work.

Trevor Barger (11:22):
Well, I'm here at the planting page today. It's fantastic to see the activity going out on the floor. The crew, of course, is incredible and it's fun to have a firsthand relationship with all the folks that are making this all possible. It's also been fantastic as we've gone through and engineered our units not only for their comfort and livability, but also for their manufacturing, to work with these folks on the floor who are expert in so many different topics, helping us to refine and get just the right piece and the right part to make all of these possible. So Bob, why wait until now to come out when most of our competitors have been aggressively selling, taking money reservations, raising tons of money without being certified, permitted, or licensed to be able to do homes? Why have we waited in this arena?

Bob Worsley (12:18):
Well, this kind of goes back to how I started SkyMall. When I started SkyMall, there was a big question about whether or not we should collect sales tax. This is before Amazon and everybody else had to fight this in court. And I took the approach that we would pay sales tax and remit it to each city, 6,500 different jurisdictions in America. And that same conservative approach is how we've taken this startup. We did not go public with what we're doing and go out and start taking people's money until we were certified. We now have... I have a list here in front of me. We have a manufacturer, an M9A Manufacturer's License granted, in 2021. Our factory was licensed in 2022. Our dealer license was granted by the Arizona Department of Housing in February 2022, a year ago. They've approved our plans, they've approved... Gave us an occupancy certificate for our two models in Mesa at 29 South Robeson.

(13:28):
We believe that you go through proper processes. Having served in government, you don't cheat. You don't just start because you want to start. You have to go through the process of being certified, licensed and legally doing business in the state. Many of our competitors just started building things and selling them. Some used RV standards which are not adequate for a home. Some decided to try to get HUD housing stamps. We are built exactly to the same standards as any home built in America on site. So, we honor, and obey, and adhere to the International Building Code that every home that's built on site you can buy in a subdivision has to honor. So, we meet the same plumbing, electrical, and other building code requirements.

(14:22):
It took a long time to get this done, and frankly it's taken us $10 million of startup money. About half of that was mine and about half of that has been Caliber's money. And Trevor, you helped us here with almost a million dollars of your investment. So, we have our skin in it, all of us on this panel. We want to do it right. And we wanted to wait until we were legal to come out and actually offer this product to the marketplace, and to ask for crowdfunding investors to participate in this with us.

Trevor Barger (14:55):
And so Bob, following all these standards in these homes as an individual home or as a extra room in the backyard of an existing home, they're then, I believe, able to get a regular mortgage like anybody else gets.

Bob Worsley (15:09):
That's another unique thing to us. It's not a chattel mortgage like a modular, or mobile home, or an RV. So, you don't get a chattel mortgage that has 15 to 20% interest rates and very short terms for amortization. We can be a 30 year mortgage with FHA, VA, USDA, Fannie Mae, Freddie Mac mortgage. We've worked really hard to be qualified for that. So, the same mortgage you would get on a home that's built by a contractor on your site is the same mortgage you would get on this home once it's placed on a lot and locked down to the land.

Trevor Barger (15:48):
And I assume then insurance is the same. You'd just get the standard insurance you would get to cover your house for these.

Bob Worsley (15:53):
Yes and warranties that you would normally get from home builder, we offer as well. So, things would be exactly the same, just half the price.

Trevor Barger (16:02):
Got it. And Brenton, with your project, of course, you're not looking at single family or a room for grandma in the backyard. Caliber Companies is also a developer in Arizona and looking to do a multi-family building. So, you're stacking 90 of these on top of a ground floor concrete podium that'll house a grocery store to have the densest non-high rise residential building in the state of Arizona. So, what attracted you to the ability to have these as units to be able to build a mid-rise building out?

Brenton Smith (16:36):
That was probably one of the top two on our list that required to have the versatility. I mean, you can do an ADU, like you mentioned. My wife already wants to put one in our backyard, and we're probably on the wait list, and we're probably 42,000 people deep, so I'll wait for-

Trevor Barger (16:53):
But that's where they are.

Brenton Smith (16:53):
I'll say wait. But the ability to do multiple iterations of a mid-rise, or a townhouse, or even single family home is what attracted it to us because we're in all kind of product types all over the southwest United States. And obviously housing is such a need everywhere, but we can't go to a regular modular manufacturer here and say, "I want to do this, this, and this with it," like we can do with ZenniHome. They don't have a variety of applications as the ZenniHome product does and that is so enticing to us.

Trevor Barger (17:28):
Well, I also know that you're a very detail-oriented developer. And so I know that you early on added some general contractor help to make sure that all of these units were connecting quick and easy on site, that they would be buildable on site, that they would go through the ability to have standard lifting by crane and setting, and that the precision construction was all there for your team.

Brenton Smith (17:54):
Yep. We did hire a group based here in Arizona to help us with that process. They're going to help with the quality, but also with this type of product and kind of posting our development side. But because it's modular and because you're going to get these out of the factory just in time, we're going to be able to set, and this thing's going to go up in weeks instead of years it would take a regular mid-rise to go up. So, that not only saves time on our development side, but it gets people in there quicker and gets your product out there faster, which there's no downfall on that.

Trevor Barger (18:30):
Well, I imagine as a landholder in the downtown area with several tenants in your building surrounding this construction site, that speaks to your commitment to them and the downtown area.

Brenton Smith (18:42):
Yep, yep. The speed, the quality, I mean, there's no downside with ZenniHome and this product. It saves us money in multiple buckets that I think I can talk on later in the talk.

Trevor Barger (18:56):
And Bob, the certifications you were talking about, the International Building Code, the International Residential Code, those and the factory certifications, so far those are all in Arizona that the plant and the models have been certified. And then currently I believe ZenniHome is in the process of getting certification in surrounding states as well.

Bob Worsley (19:15):
We are, We're in the process in California, Utah, Idaho, Texas, Colorado, Georgia, New Jersey, Rhode Island, Minnesota, North Dakota. We're at various stages of getting authorization. We're excited to do that. And I think one of the questions I think, Sam, a good friend of mine, is asking here, Trevor, it'd be great if you could answer it, there's how would you combine these units or how do you get bigger out of these smallish units?

Trevor Barger (19:44):
Well, that's a lot of fun, 'cause for me, a lot of my time has been spent on how to connect the boxes, how to connect the utilities, and how to make these really make some interesting elements. At ZenniHome, of course, we build the box. And I've worked in the development industry for a long time, master plan communities with a lot of different developer, home builder and architectural companies, and as a result wanting to engage the industry. And so these are designs that you could very easily set two of them next to each other with little vestibule between the two of them, have the living spaces in one of our citizen units, and have the bedroom spaces in the other. You could easily stack them as well. They stack five tall with their structure pre-built into the boxes. And so you can imagine a three story where you have a carport on the ground floor with a office space above it, the living space, and above that the bedroom spaces.

(20:34):
And so this could be a very conventional home or as we've done with them, since you have the robotic furniture options throughout, behind Bob, the Ori bed that drops from the ceiling that converts the living room into a bedroom, or make my case, probably a bedroom into a living room. You have the Ori closet over his left shoulder there, which opens like a librarian's closet does to be able to have a full walk-in closet in those spaces. And so you rarely easily could take two or three of these units and have four bedroom sleeping areas, as well as lots of daytime living space in the same box.

(21:11):
We've tried to make them very livable. As a result, each of them have a long glass wall, one long wall on the long length of the building that really lets in all the light, it's floor to ceiling glass since we're built out of all steel construction, that really makes these wonderful indoor outdoor living spaces in that setting. We've asked kind of what sort of setting does this go on? Because they're all steel, bear only on the corner weight points and midpoint on the large unit, and so the foundations are pretty simple. You can do a slab with built up edges. You can do just the six or nine peer points. Or you could attach it to he piers or helical piles that go into the ground and be able to anchor these.

Bob Worsley (21:58):
Trevor, let me answer another question here. The volume ramp up we're looking to get by the end of this month a unit a day, a home, a day out of the factory. We hope by the end of the year to be in the range of two to three homes per day. We will open four of these factories like this around the country all within a truck day of your lot, where you want these units. And we think when these four factories are fully, fully engaged, we'll be doing roughly a billion dollars a year in revenue. We think we'll be profitable by the end of next year 2024. So, this is a rocket ride and we're just kind of coming out of the silo here with our ducks lined up, and hope that you'll take the ride with us.

Brenton Smith (22:43):
I can add to that demand side, too, Bob, because that's what I spend my day in and day out looking for new developments. But I was out in Texas just last month, and I was talking to a gentleman and he showed me an article that said, From South San Antonio to North Dallas, they're three to four million units short on housing." That's just in that corridor. Obviously, we know what Phoenix market needs, what Denver needs, not only that, combined with the ADU law passed in California, the needs for this. So demand is... I do not see the problem with thing like this. If I could get 100 or 1000 or 10,000 units from ZenniHome right now, I could place them in the next few weeks.

Bob Worsley (23:32):
And that's the issue we're finding, Trevor, you and I. This is not an issue of demand. It's not an issue that the price point's wrong. It's not an issue that people are unwilling to live in a little smaller space. The issue is production. And Elon Musk refers to this as production hell. We are going to go through that, and it means you're sleeping a lot of nights. Trevor, we were in St. Louis yesterday working with a very large partner potentially. We flew in last night. I got home and went to bed. Trevor crawled into a car with the driver, and he's in five hours north of Phoenix, and was at meetings this morning at eight o'clock, essentially sleeping at the factory, making sure that we can get these units into production and get it ramped so we can start filling some of this tremendous demand we have.

Trevor Barger (24:27):
Bob, we got the fun question. Are these approved for hurricane prone areas?

Bob Worsley (24:33):
We designed one box to rule them all. And I'm quoting Trevor. We have two models. Both models we're designed by structural engineers to live happy in Miami with hurricanes, live happy with earthquakes in Los Angeles, and live happy in Park City with snow. And our units are designed to stack five stories with those three conditions in almost some of the worst conditions in the country. We are trying to build these so that they can go anywhere and we don't have to change the line in the factory because it's going to Poughkeepsie, or it's going to Stanley, Idaho.

(25:16):
So we've got a few little tweaks we have to do. If you're in a high snow area. We'll add an extra column. We have a design to get over a hundred pounds of snow per square foot. But it's really minor hat we have to do to make these things work. In Miami, we probably need to have hurricane blinds, but that's again an add-on at the end that makes things work. But this unit will be there when the hurricane's over. And the trailer court and the manufactured homes will be gone, so we'll be there when it's over.

Trevor Barger (25:48):
And these also are built to the international shipping standards. So, these come down the road on a standard flatbed step bed truck. They can be shipped by train anywhere in the country. And I think people forget that truck going down the road's going 75 miles an hour. Plenty of wind ripping around that sucker as it's traveling to site.

Bob Worsley (26:11):
I think your joke, Trevor, is that you put them on a truck out of Page. When you go over the whoopdie woos on Highway 89 to Flagstaff, you're given it at least a 7.0 earthquake, and you're certainly given it 75 mile an hour winds, no problem. We got our units to Mesa and we had no broken windows, no broken doors, really amazingly intact, no problem, on some of the worst roads in America.

Trevor Barger (26:40):
We were asked about the R-values in the floors, the walls and the roof. These are all built out of six inch steel studs that do all of that pieces with mineral wool insulation in the walls, floor, and ceiling, giving us R-24 in all of those settings with an additional two inches of insulation on the exterior, providing an additional layer of insulation in the building. So Bob, I know you have a lodge off the grid and you love that possibility of living off the grid. Are these units designed to also be off grid?

Bob Worsley (27:15):
Yeah, since 1996, Trevor, we've been living at our ranch up on the White Mountains off grid. We're eight miles from power, sewer, water, broadband, internet, et cetera. And we've learned how to live that way quite well. So, I felt like let's add all this technology, and it's so much better today than it was in 1996. So, our units can come with gray water and black water separated so you can reuse your black water with a $400 charcoal filter. You can water your plants with it. Why waste the water? Arizona could be in a real water crisis. We're also working with Busa Engineering out of Germany to take all the black water and actually turn that into a very high quality water that can go into the gray water as well. So, that means 98% of the water that comes into your home could go back out onto your plants, and keep it on site without a septic system or a sewer system.

(28:12):
We also are working with people that do atmospheric water harvesting, which is very exciting, where you can take humidity out of the air and get several liters of drinking water per day without using any potable water from the street. We also have solar with batteries and inverters that allow you to live off grid, huge believer in solar. Lithium ion batteries and inverters that are either grid tied, not grid tied, or you have a small generator for a string of cloudy days. We've lived that way since 1996. It can be done. We also have Google Smart Home features throughout the house. You can talk and the bed bed comes down behind me. You ask it to come down. You have to come and see our models, 29 South Robeson. If you will contact us, we will make sure you get a tour. You walk in and people's mouths are just open. They can't believe the technology we put into these units. It's a very exciting... It's the home of the future.

Trevor Barger (29:13):
My favorite is having them walk in and they say, "This is much bigger than I thought it was going to be," Almost universally, everyone walking in. I think it's the floor to ceiling glass, and that the rooms aren't cut up into small spaces, that they're all very large living spaces, that you have a 15 by 15 living room bedroom as the main space in the large unit. I know people used to live in smaller spaces all the time. My grandparents lived in what we would now consider a tiny home with nine kids. And so the social element has changed, but really we're finding that the younger generations are moving back into smaller spaces as are the elderly who live in more urban settings in smaller spaces.

(30:00):
We have a question if anybody has lived in these yet, and really it's about being a startup and moving fast. So, we have just barely gotten our first two units installed in Mesa. It's our proof of concept, really. We were going to install them in {age, but we've had so many requests to come see them. We put them as close as we could to right in between two large airports to be able to land people in, come and see them, and see what we're all about there. If you go to ZenniHome.com, you can sign up for a tour there as well.

(30:33):
Bob, what sort of warranties are offered with the units?

Bob Worsley (30:38):
Almost all of our products on the inside or five to seven year warranty. We will honor those. We'll do a 10 year structural warranty on the units. Because these are all steel, we think that they have a very high likelihood of lasting maybe as much as a hundred years. The galvanized steel we use in our light gauge steel is good for 140 years. We have huge HHS members on all the corners. These units will last a very long time without termites, bugs, rot, and they're spec perfect. Everything is straight as an arrow because they come out of the fabricating process for steel studs very, very straight. When we make our own studs in Page out of a machine we bought from Auckland New Zealand, it's the fastest stud making machine in the world that makes a mile and a half of light gauge steel studs an hour. So, we're excited. We're all about steel, recycled steel, galvanized, so that it doesn't rust and deteriorate and you can be in this home for your entire lifetime.

Trevor Barger (31:47):
We also, I know, have a question about customizing the look. Well I am the strong focus supporter of one box to rule them all. It's primarily to get to factory scale, that doing master plan communities, I learned the value of scale and being able to provide really high quality and affordable price as a result of that. We do, unlike Henry Ford, we offer it in five colors on the exterior, and you have two choices of interior colored choice material choices for the finish it. There are several different options in the bed if you want it to rise to the ceiling, a Murphy bed into the wall, closet options as well. We will certainly shortly be able to option in or out kitchen if you'd like to use it just as a sleeping space rather than a living space. And the large unit comes with a full ADA bathroom. You can actually do wheelies in there. And the smaller one comes with ADAB bathroom. So, we have really accessibility built into these for long-term living arrangements.

(32:55):
We have someone asking if we can ship to states where we haven't gone through the approval process. While I know some people have done that, we are committed not to do that. We are getting a formal approval each place that we go. There are a few states like Utah that do not yet have a statewide process. We're trying to see if we can't encourage and help that out. We like the idea of having statewide processes, but we are also helping individual GCs get one-on-one approvals for places that need individual jurisdictional approvals for buildings.

Bob Worsley (33:37):
Trevor, I see that Parish is asking if employees are vested as owners. A lot of our employees are, and we're actually implementing a program to get stock into everybody's hands. So Parish, yes, we believe that everyone should benefit from their hard work, and benefit from an equity appreciation on the company.

Trevor Barger (34:00):
We have a question about the price being so low. Well, much like Frank Lloyd Wright's goal, which he never accomplished to get them down to $5,000 a piece, $109,000 now, really while we do know there's a massive demand out there, the goal is to provide housing that is accessible to everyone. And to do that, really the large part of the market now cannot afford houses in the $400,000 average price that they are. And so we're trying to find ways that with the cost of the home from us, with the installation cost and the land cost, that you would still be able to have access to a home under $200,000. We have a question. Does being an investor get you priority for production if you've already placed a deposit?

Bob Worsley (34:55):
Well, one thing I can tell you about Caliber's investment, they made sure when they made their $3 million investment, that they had access to our production commensurate with their ownership in the company. So, they have roughly 10, 15% dibs on units coming out of the factory. And we'll try to honor that as much as we can with people that invest with us that we will put them, move them up and make sure that they get a unit as soon as possible. We would love to have people live in our homes and make money from the equity appreciation of the company's stock.

Trevor Barger (35:37):
Another question is if they put their deposit down today, what is the expected lead time before they can receive a unit? We have 188 individual deposits already placed for units, one in our individual units for individual home settings, and that will put us at delivering those by summer of next year. There are things that have to happen to have the site ready. We can't just drop one off in your front driveway and give you the keys. And so we have a list on the website under the Q&A that sort of rocks through the process of what's necessary to happen on site before we can deliver one to you. Bob, how much are we hoping to raise through this crowdfunding effort?

Bob Worsley (36:24):
Yeah, the SEC raised the amount that you can raise on this crowdfunding offering we're making from a million to $5 million. The minimum investment here is $250. So the idea here is that anyone can get into the game. Most people can. And if you're over $25,000, you have to be an accredited investor. We have a team here, Manny Chavez is working with investors who are trying to invest more than $25,000. We'll work with you on that and get you approved to do that if you are an accredit investor. It's a pretty simple question, yes and no, you have certain income and a net worth requirement to invest more. I fully support this concept because so many times things like this get going and get hyped up, and people that really can't afford to lose money get involved. And if things don't work out, it's a tragedy for them financially.

(37:25):
So this is intended to let everybody get involved a little bit to the degree you probably should or should not. And those who have money to invest in larger quantities can. The big difference here is that we have a fund for those wanting to spend ozone funds. We have a fund for that if you have capital gains that you want to shelter. We also have a Reg D offering parallel with this. And we're the first company that I know of that offered these three things at the same time, the $5 million crowd fund, the Reg D offering, and an Opportunity Zone Fund, and they're the same priced offerings. We are not giving venture capitalists a better deal than you're getting.

(38:13):
So this is kind of fun to let people in on the ground floor at the same price. The company we're valuing at $75 million. They're competitors of ours that are valuing these company or beneath our level of development and billions of dollars. We think that's not fair to people to invest at outrageously high valuations. We think this is a fair valuation. And given the work we've done and the money we've invested, we think this is a very fair price, and we hope you make lots of money by investing at this level. Thank you.

Trevor Barger (38:48):
Maggie, will you provide the link for those who want to invest through Wefunder in ZenniHome?

Maggie Zheng (38:54):
Yeah, I'll drop it in the chat. Also, it looks like there was one more question about the robotic walls and your partnership with Ori.

Bob Worsley (39:05):
Trevor, do you want me to take that one?

Trevor Barger (39:07):
Sure.

Bob Worsley (39:09):
Ori spun out of MIT Robotics a couple of years ago, and their CEO is a wonderful friend of ours. Now we are big supporters of theirs. We are good partners with them and are helping to get many, many units out and demonstrated. They run by voice or they have a little square. You can see the square behind me on the wall. There's one back here and there's another one over here. And those are easy ways to tell the robot to open the walk-in closet or bring the master bed down. It's a great company. We are very supportive of them and they are of us, and we hope we have a long partnership with them for a long time.

Trevor Barger (40:03):
And Bob, we're being asked do we have a planned date to go public?

Bob Worsley (40:09):
We don't, but Wefunder is an interesting thing. They call them a little mini IPO. So, I'm sure there will be an event in the future where there will be an exit opportunity for all of you and hopefully having made good profits on your investment.

Trevor Barger (40:28):
I also have a question here if we have a timeframe for our approval in California. California has seven different zones for us to get an approval in. We're typically having approvals go concurrent with projects that we're trying to do in each of those locations. And so as you can imagine, we're starting in the more metropolitan areas and then working our way through the other six districts as we go through California. We also have a question about the cash burn rate and what we think we might face as cashflow challenges.

Bob Worsley (41:05):
Yeah, I'll take that one Trevor. We again think that we'll be profitable in 2024. We're raising this round of funding to give us a 36 month runway. Today I'm providing backstopping this. Caliber has provided very fair advanced deposits to build their units for 29 West. We'll see their unit... The demo work will be later this month and you'll see their units going up very quickly. By the end of summer, you should see a very exciting building already standing there in downtown Mesa from their deposits. So we're working through that. It's never easy on a startup that's burning money. We are now in revenue mode, and so we're hoping that that from startup mode the last three years to the mode going forward, we have a nice cash inflow from customers as we ship these units that slows down dramatically and then stops the cash burn in 2024 when we'll be profitable.

Trevor Barger (42:14):
Brenton, I haven't lobbied one over to you for a while. So, as both a fund investor and as a developer, how does this fit into your overall vision as a company?

Brenton Smith (42:27):
It helps us get vertically integrated throughout the process. I know that's a term that everyone says in business, but it's really true in this instance. I'll tell you how we came to that. We have about 800 acres just north of Denver, Colorado. And we do any product type except single family home or any kind of homes, because we cannot compete with the larger developers such as DR Horton or Lennar. They can count every ounce of paint they use, every nail they use. And we were selling off these lots, and just from a profit motive, we were missing out on this piece of the full development. We can go in and do the horizontal work, but we were selling off these lots, and then the development was kind of in someone else's hands.

(43:10):
So, we like to make sure the quality's there for our entire development as a whole, and to see these things go up in a right amount of time. So, we started searching. And when Bob and us got together and we started talking about this, it just checks that box instantly for now we can go from A to Z on a full development instead of skipping that step for Caliber. And once we work this into not only multifamily townhome, single family, and then the ADUs, I think is going to be a huge spot too of demand as well. So, all over the place it fits us perfectly where we're at.

Bob Worsley (43:52):
Trevor, why don't you address the pilings building on how we only bear on a few points?

Trevor Barger (44:02):
So again, as they're an all steel structure, when we look at these units, they have their own floor. The floor spans from column to column, and midpoint in the larger unit. And when we build a multifamily then, everyone has their own floor, their own ceiling, and their own wall. So, if you pound on your wall, you're not pounding on your neighbor's wall. If you jumped up and down on your floor, you're not jumping up and down on your neighbor's ceiling. And so the sound barrier between them, you have six inches of insulation in your floor, a two inch air gap, six inches of insulation in your ceiling. And the only points they bear on are those columns. And so very isolated for sound noise transmission going between those.

(44:45):
For the structures, then they bear very simply on foundation points. So, a three story walk-up garden apartment, a five story mid-rise, five over two mid-rise is done very easily with a typical podium layout, with these points then bearing on the podium or bearing on point foundations underneath of that with spread footers. So, it's a very simplified system of building and being able to connect to the earth below.

Bob Worsley (45:11):
And Trevor, I think they were wondering if there was some way they could build in a coastal area where there might be some flooding or in a storm. And so you've seen Hawaii like this, and our situation is that our homes love to live on steel piers. Go ahead.

Trevor Barger (45:30):
They do. So, I could imagine in tropical zones even, you anchor into the ground rather securely at depth below where you would get any washout, and you could just have the steel or concrete piers coming up to the house, and you could actually be out over the water if you had such legal permission. I know we have a couple of sites in extreme mountainous conditions that are looking at no grading to the and disturbance of the natural environment. Simply come in and build the six caissons and then lower the unit onto site, leaving the natural grade flowing right underneath. And so they're pretty flexible on how they can be installed.

Maggie Zheng (46:12):
Okay, so it sounds like we have time for perhaps one last question. Let's see. Looks like Parish asked, "Any revenue or market projections over the next five years?"

Bob Worsley (46:40):
Yeah, Parish, I mentioned that with the four factories, we think we can do a billion dollars in revenue. We certainly have the demand it looks like from the calls and the interest around us. 75% of these calls, 75% of the 40,000 unit soft back order backlog we have, 75% are developers like Brenton who have land, who want to go vertical. They have an urban project. Cities that want... Salt Lake just did a survey and found out they had 900 parcels in Salt Lake City that they own, that they really didn't know they owned and hadn't worked on. And we have affordable housing needs of thousands of units in Salt Lake. The same thing is happening in Mesa, Gilbert. We just had a meeting with Gilbert, the city of Gilbert, an interesting parcel on Ray Road that's not deep enough to build homes on but would be ideal for us.

(47:40):
We've had churches approach us. There's a beautiful little church in Mesa on Gilbert Road that wants to put 16 of these in their church parking lot to assist their parishioners who need affordable housing. Some churches have done used clothing things, and things to help the less fortunate. I think there's a need now for people to put a roof over the head of some people, and that's a whole new level of involvement by a church for its members. So, we're going to see some of that. Schools are coming to us and wanting on-site housing for teachers. Teachers can't afford a house. So, we're talking to several school districts, including Tempe, about how do we get housing for teachers that can't afford this outrageous price for housing. So, there's going to be some very unique ideas. And when you're looking at half the cost for a key compared to a traditional build, we think that there's going to be more than enough demand to reach these objectives if we can get our production house in order.

Trevor Barger (48:51):
We had a couple more questions about timeframes for state approvals. We're hoping to be in Colorado by the end of the year. Texas, we're still trying to figure out but also trying to hope to be there by the end of the year. Maggie, we have a question, "Will be possible to access a video recording of this presentation?"

Maggie Zheng (49:11):
Yes, we'll be sending it out via email as well as posting on the Wefunder page for everyone who wants to revisit or wasn't able to.

Trevor Barger (49:19):
Well, thank you everybody for joining us today. We would love to have you living in a ZenniHome. And so if you're thinking about ordering one, or renting one from a developer, or being a part of a project, or building your own project out of them, we'd love to hear from you. We are getting a startup off the ground so if you have the ability to support us financially, become one of the owners of ZenniHome, we'd love to have you on our own ownership team as well.

Maggie Zheng (49:49):
I'll also say that currently ZenniHome's campaign on Wefunder is still in the private mode, still in stealth, which means that only people within the ZenniHome network. So, whether you've signed up, or if you're on the email list, or you're with Caliber or any of the partners, you get priority access to invest in ZenniHome. ZenniHome will likely launch publicly after May, which means everyone will be able to find it. And as ZenniHome is such a popular company right now, we cannot guarantee your allocation in this round after that. So, currently this would be the best time to invest, as well ask Bob or team any of your questions. And you can out the link. I'll drop it again in the chat. But feel free to email us or respond and we're happy to get back to you.

Bob Worsley (50:47):
And Maggie. I think by definition the folks that are on the phone probably are on our friends and family list, so we can get you into the investment before the end of May. So, we'll work with you and make sure family and friends are taken care of.

Trevor Barger (51:06):
Family, friends, or coworkers, or employees. It's a big list, but we wanted to make sure we had room for everybody who's been a part of this so far to be able-

Bob Worsley (51:17):
Grandkids-

Trevor Barger (51:17):
To be part of company

Bob Worsley (51:18):
Grandkids. You helped a young lady years ago when she was born, get a little college fund started, and she's invested in the crowdfunding round as her foray at age 19 leaving high school to learn how to invest. And this is a unique opportunity. So we're going to do this for all of our grandkids, and our children and in-laws, just to have them be supportive along the way and enjoy the fruits of our laborers.

Maggie Zheng (51:51):
Great.

Trevor Barger (51:51):
Brenton, any closing remarks?

Brenton Smith (51:54):
I think we've covered it all. Looking forward to seeing all the questions, getting back to them, and looking forward to the journey we're going on.

Bob Worsley (52:01):
Brenton, you have [inaudible 00:52:03], you have the best beard on the call, Brenton.

Brenton Smith (52:04):
Appreciate that.

Maggie Zheng (52:05):
Great. Well, thank you all so much for attending. Someone asked how do you get on the friends and family list. If you are in here, you are already on the list. And I dropped the link again. So, if you want to invest now, you can actually go and invest today. Or if you want a little bit more information, we will be in private mode until end of May. So, you have about two weeks left to mull it over. And we hope to see you very soon as a ZenniHome investor.

Bob Worsley (52:42):
Thank you.

Trevor Barger (52:42):
Thank you, everyone.

Brenton Smith (52:42):
Thanks, guys.

Bob Worsley (52:42):
See you soon.