저자: Kevin · 외국인
요약 보기
Boxabl(비상장 주거용 컨테이너 주택 스타트업)에 대한 비판 영상. 공동창업자 지분 매도, 특허 허위성 의혹, 기업가치 대비 현금 희석(1백만달러 투자 시 실질 현금 318달러), 제품이 RV로만 인허가된 점, 매출 대비 고평가(약 167배)를 지적. 투자 권유가 아님을 강조하며 개인 투자 비추천 입장.
다듬은 글
Elon Musk once lived and may still live in a Boxabl Casita in Texas. A $50,000 home that promises to revolutionize the real estate industry. And folks, you know I'm a big fan of revolutionizing real estate. In fact, I have a housing startup that would benefit from working in partnership with a company like Boxabl because we were really excited about the idea of potentially having affordable homes that we can add to the backyards of properties that we own or in the future will own so we can increase the amount of affordable housing that exists in America.
The premise of Boxabl is fantastic and being not only a real estate broker but also a licensed financial advisor having an actively managed ETF and a real estate startup, I'm a big fan of teaching people about real estate and affordable housing. However, that's where my excitement ends because unfortunately some of the things that I realized with Boxabl just weren't what I thought they would be.
Now, it's taken me a bit of time to put this video together because I wanted to make sure it was as transparent as possible. I think I and our communities would benefit from partnering with companies that could manufacture affordable guest units. They would make permitting so much easier to have one consistent plan to be able to permit guest units, buy them, deliver them, build them, done.
It would be phenomenal. The dream is excellent and it's necessary to solve help solve the housing crisis in America. But unfortunately, what I ended up finding out was that Boxabl is nowhere close to helping us on that mission. And that's unfortunate because I wanted to love everything about the company.
But instead, what I found is that one of the three co-founders, one of the sons, is dumping their shares in the company, over $5 million of shares of the company. The patents the company says they have, they don't actually have. And the valuation of the company makes me very concerned for a product that isn't ready for prime time at all.
In fact, the current version of the Boxabl Casita is permitted as an RV, not as a home, because they can't get it through permitting. And that means all of the existing intellectual property they have isn't anywhere close to prime time and likely will never be. That's because at every step of the process in my Boxabl factory tour, I was told that here's how we're doing things now, but don't worry, we're completely changing how we're doing things now, and we're going to Casita version 2.0, and we're going to do it all better in the next version.
Well, where is the next version? There is no next version yet. That's because even though the company spends millions of dollars a year on research and development, at one point in my interview, one of the co-founders told me the only research and development team are the three co-founders. So, it seems to me that the three co-founders are actually funneling research and development money right into their own pockets because they are the R&D department.
Despite the fact that they are already taking hundreds of thousands of dollars in salaries and many millions of dollars in stock-based compensation. That at already an extreme valuation. Now, let's understand valuation for a moment. If you invested $1 million into a startup valued at $1 million, the startup would get $1 million and technically your cash is worth $1 million because you invested at net asset value.
Basically, the value of the company equals cash. That's extremely rare to find a company doing that because generally the company will sell you shares at some kind of diluted value because the company is getting paid for having established itself as a company. It's very rare to see a one-to-one ratio in valuations.
It's something that I'm doing with my startup, but again, my startup would benefit from working with a company like Boxable. We are not in competition at all. Now, here's how normally startups work. Let's say you invest a million dollars into an AI startup worth $10 million. The startup gets $1 million and you get 10% ownership.
Well, technically, that 10% is worth $1 million, right? Technically, it's worth that. But what you're really doing is you're saying 90% of your investment has gone to brand value at the company and 10% has gone to actual cash because of that valuation step-up at 10 mil, only 10% is cash at the company and so therefore 90% of your money is going towards brand value.
This is called dilution, a 10-to-1 dilution. This is actually extremely normal in the stock market to see stuff like this. Any kind of private equity, dilution is extremely normal because you're paying for the existence of the company. Okay, now there's Boxable. If you invest $1 million into Boxable at the over $3 billion valuation they have, Boxable gets $1 million in cash, but your cash is only worth $318.
That's because you're over 99.9% diluted by the valuation that Boxable has. Now, that's our opinion. You should check your math yourself on your public filings. But, let's just say the owner who just one of the co-founders who just sold $5 million of shares to normal investors did so at that $3 billion valuation.
Now, they say that the company has backers like D.R. Horton, really big institutional real estate players. But, they don't tell you that those backers actually invested via preferred and convertible shares at a valuation of around $0.07 per share. And now people are paying about $0.77 per share. So, in other words, that institutional partner invested at 1/10 the valuation and was getting paid about 10% interest in preferred shares to make that investment.
So, when we look at Boxable and you listen to this interview, I want you to pay specific attention to red flags. Most of the products we believe that Boxable sources are from China. Of course, Boxable tells us that they source things from all over the place. The company also tells us that they have over 60 different patents for their technology that they're actually going to redo because it's not good enough.
But, that's actually not true and is borderline dare I say fraudulent. When you advertise saying the company has over 60 different patents, but you don't actually say that it's actually one of the co-founders LLCs that owns all of the patents and they take 1% of all the revenue that Boxable makes and Boxable itself has zero on its balance sheet for intellectual property, it kind of susses me out a little bit.
Boxabl only had two customers in 2022 and 2021. And this year, they're only selling to certain partners who are willing to take Boxabl Casitas as RVs for temporary workplace sites. That's because you can't permit them right now as they are for homes. And what's important to look at as well is how much of the property that is the Boxabl Casita still needs to be built after it's delivered and unfolded.
It's not just the finish work of drywall and baseboards, but it's also the sewer, the electrical lines, the foundation for the property, the roof, the siding and cladding. Now, some of the siding and cladding may actually be waterproof and blasted from as tested by Boxabl as they say. That could be believable, but I don't know if it would actually meet code yet, and that's probably why this is being permitted as an RV.
Keep in mind also that when you see the factory, this is a company that says they have an over $3 million valuation, but has equipment on their floor of less than $10 million. And in 2022, the cost to manufacture a Casita was about $77,000. So, it's no surprise that the Boxabl Casita costs are going up, but that's just cost minus cost of goods sold.
The company also has operating costs, so it's going to be a while I think before they're profitable. But not just a while before they're profitable, probably going to be quite a while before they actually have a Casita that an individual could take delivery on. So, I'm not very enthusiastic for a company that appears to be selling for over 167 times revenue with a massive dilutive expense and owners that are actually dumping shares on retail investors at this insane valuation.
So, I'm very skeptical. While I think that there is hope for something like this, it is not an investment that I personally would make. Now, keep in mind, none of the information in this video is personalized invest- investing advice for you. And my opinions on valuation should not at all be construed as fact.
Any of the information that you gather from this video regarding permitting or investing or valuation or multiples or costs should be deemed my opinion. In other words, don't sue me, bro. Do your own research. Read through the investing pieces the way I did. Ask their investor relations the questions that you have for Boxabl and let them answer these.
But, I think Boxabl should be transparent about all of the in- mentions and discussions that I just made. And I actually think they are because towards the end of the video, none of this is hidden. It's in their investor relations documents. With the exception of the fact that they run ads saying that they hold patents when it doesn't look like they do.
Other than that, this information is available in their documents. And beyond that, it's also worth noting that in my interview with the co-founders, they are willing to be transparent when asked. So, I don't think they're trying to purposely hide these things. I just think nobody's actually given them a solid once-over.
And that's what I'm doing. We are at the home of the manufacturer of the home that Elon Musk allegedly lives in in Texas. Boxabl, we are here with the co-founder. How did you guys get Elon to live in a box? Twitter, obviously. Oh my gosh. No, actually he did find out about us through to Uh one of the channels he follows, I believe, posted our video of our house unfolding back in the early days before we had a factory.
We just had a few prototypes and turned out he wanted to buy one, so we sold him a house. Wow, so he got one of your initial prototypes essentially. Yeah, one of the first three Boxabl Casitas made. He wanted to buy them. I said I said I have three, I can give you one. And gave him the one of the first prototypes which we installed at SpaceX in Boca Chica, Texas.
Wow, that's incredible. Well, I'm excited to learn more about Boxabl. Yeah, excited to give you a tour. All right. I mean, we we spent a lot of time like kind of scouring the earth for all different building materials and manufacturing methods because, you know, there's all different requirements for buildings all over the place and we wanted one universal solution that would like exceed everything.
So Where do you guys get it all from and like they're mined out here in St. George. They were mining like crazy over there. Yeah, um, you know, really all all over. And as as we scale up, we're going to try to kind of vertically integrate some of that supply chain and bring more stuff in house. Do you guys want to like go mining yourself or like putting together the laminates or the Yeah, I mean, we we laminate our own panels here.
But definitely, you know, mining raw materials, I think that's in the future because what we're trying to do the scale is so crazy that I don't think it's even possible to buy the quantities of parts we want for a lot of things. And it's most Is it a steel frame or aluminum frame? It doesn't really have a frame.
Oh, on the inside even? Yeah, cuz it's it's basically a structurally insulated panel. So it's it's a It's your EPS. Yeah, EPS foam. It does have a lumber frame around the perimeter, but that's not actual actually structural. That just serves as something for us to kind of grab into with screws when we connect the panel to panel.
That makes sense. Okay. Got it. Okay, so you so you don't need like like on an RV which has a laminated wall panel, you don't actually need the aluminum frames for the foam panels to sit in because it's sitting within that wood frame, basically. Yeah, we we're we're kind of continuing to refine the design, but definitely, you know, very different than the way people traditionally think about, you know, buildings and and stuff.
see it. Um yeah, and you know, one thing I'll mention as well is we are starting out with the Casita product, but the company is not a tiny house company. Uh we have kind of a grand vision for a building system where different size rooms can stack and connect to build most building types. Uh but Casita is is seemed like a good place to start, and it turned out to be a good place to start, and we have this crazy interest, so we're running with that right now.
So in the future, for example, maybe you could get to that point where like a Lennar home builder comes to you and says, "Hey, you guys deliver, you know, six, seven, eight pods per property. We want to sell." They put it together, do all the finishes, and build out communities like that. Is that sort of a vision that you have?
Exactly the plan, and we actually already have uh DR Horton, which is the largest home builder in the country. Yeah, I talked about number two. Yeah, yeah. Oh, DR's your number one. That's awesome. they're an investor. They ordered 100 units, and that that's exactly what they want because they're basically a big contractor.
They don't directly employ any of their builders, and they don't want to be in a 6-month build. They don't want to have dozens of subcontractors. They don't want to have weather delays. If there was an easier way for all the work to be done before they receive any of it, they'd love that. So that's why they invested in this.
Now now do they sort of like get stock option after placing a big order? Or how does that usually work? Uh so so they just, you know, in invested, you know, cash in the company at at the same terms as everyone else, at the same terms as all the crowd funder. invested? dollars. Okay. And then they uh placed an order for 100 units, and then they also hooked us into a bunch of other resources at their company, like including their supply chain.
So, for example, we can now buy stuff at their pricing. And they're they're the biggest builder of like cabinets, toilets, so it's it's pretty good. That's for like your bathrooms, and like you said, cabinets, toilets, you can Yeah. buy in bulk like they do. Pretty much like I didn't expect it when we first met them, but they've been extremely like helpful, bending over backwards, and uh anything we need, we can call them and say, "Hey, do you have a source for copper wire or wood or whatever?" Wow.
And jump right to the front What are you guys' largest like supply chain hurdles right now? Uh so, we were kind of born into the the fire because we started we started manufacturing uh right when COVID was going on. There there's historic, you know, supply chain issues and and price inflation, and it was totally crazy.
Uh so, it was good though because we weren't like an established company hit with that all of a sudden. Mhm. Uh we were right as we were ramping up and gearing up, we were like, "Oh, this is what it's like." Wow. Okay, it's tough. Shipping containers are 25,000 from China, and uh uh the big one for us for quite a while was the EPS foam, which is like the core of of the wall and all the panels.
Um they they you we were not able to get it anywhere. We were like desperate to find it. Uh but things are changing now, and the suppliers are now coming to us like, "Hey, we're ready to sell you stuff. We have the foam available for you. Okay. Oh, that's awesome. Wow. Now, how do you uh insulate them on the outside because obviously it's it's uh you know, you've got your what it's like a 1-mil laminate on the outside.
How do you insulate those joints? Um so, when you look at our wall panel, and for example, like the front wall of the house, it's it's one big panel, all laminated one piece, basically uninterrupted EPS foam Mhm. through through the whole core of the wall. So, that gives you, you know, the the the thermal barrier uh that's better than a traditional wall cuz a traditional wall you have like lumber stud where energy is transmitting through the the low R-value of the of the lumber stud.
Uh and then, we're about to transition into a next gen of the product because Of the EPS? Of the of the whole product. Oh, or the way you've designed sort of the wall, basically the wall. So, like what we're running with right now is the same version that, you know, myself, uh Paolo, and Kyle, the three founders, drew on a napkin and and guessed at before we had done anything.
Got it. And luckily, you know, we we've got a big factory, hired hundreds of people, millions of dollars in equipment, ordered hundreds of units worth of stuff, and luckily everything fit together and worked, and the product's great. But now we have like a year of real-world experience with the combined brainpower of everyone here, and we're kind of re-engineering it, and we're going to come out with this next gen that's going to push everything in the right direction as far as like simplicity to design, Streamline manufacturing.
uh it's going to be great, yeah. That's awesome. Yeah, let's go take a look. Yeah, we'll go check out the factory. Uh before this, I had uh a marijuana farm, and before that I had a Bitcoin exchange business. Okay. And uh And you were there, and then just kind of moved some money Basically, I'm just seeing opportunities, jumping on things, kind of mastering, you know, all the all the all the info, and then uh you know, doing doing pretty well for myself, and and this is one where I was doing that marijuana business while I started this, and at a certain point I just realized like this is a crazy opportunity here, and I need to chase this down full-time, so I took my family and and moved to Vegas to to do it.
Yeah. This is the the first factory. This is the first factory. Yeah, this is the first factory. Oh, okay, okay. Where's two? That's the The next building is like um right over there. We can go outside later and see. Oh, so you have one and two here on the same block. Yeah, yeah, it was pretty cool like the amount of warehouse development that's going on in in Vegas.
Sure. There was just opportunity to grab these buildings that were right next door, and I was like, we got to get these buildings next door so as we as we scale up. Um Got it. Okay. And and the the the grand plan is that this is actually just really a proof-of-concept factory, and that we need to achieve like true mass production scale to really crush down the cost.
And when you look at like, you know, modern mass production, the best example is like automobiles, and and that's what we want to copy here and that's what we think we can get to. So what how how are the margins right now on them because they're selling for what 50 60k 60k-ish something like that right now?
Well, there's no margins right now. Yeah, you guys sure because you're just ramping up. But what do you think you can get them to? I mean I think what with the Well, so obviously we'll talk about with the Guantanamo's you all were I mean think you're spending like 77k or so to build them, right? So the people getting them are getting a good deal.
Yeah, and and since we started the cost have come down, the labor hours have come down. I don't want to jump into specific numbers, but I believe you know, we will get to profitability you know, relatively soon. Right now, you know, we're doing a huge overhaul. Like I mentioned before the the next gen product.
We're also putting in about 15 million dollars in manufacturing equipment, opening the second building. All that's going to come together later this year. We're also getting better at at buying stuff. Sure. You know, just even just increasing the size of the assembly line. It's all kind of getting massaged into place.
And the idea is that we will have the lowest cost building system ever done. And if we don't the whole company just didn't work and it's a failure. Sure. I guess right here. I mean where where does where does it start? It looks like you've got it all labeled out here. So staging raw materials in on this side or what do we got?
Yeah, so this is a really important part of the factory right here. This is the kind of the lamination area where all the parts of a wall come together into the finished wall. Do you CNC route those here? Yeah, so that's a CNC area. We've got two other CNC's over there and we've got more on our way for the next the next upgrade that I got mentioned before.
How long have you been in this building already? You were just over the last year you've been ramping this up. In in production here less than 18 months. Oh, less than 18 months. Okay. Okay. And right now we produce two houses per shift. Two per and you do one shift a day right now I imagine. Yes. Okay.
So and then how did that compare to last year, 22? Faster. Faster, yeah. I don't know exactly what if I remember looking, I think you were 143 for the first 6 months. So, closer to about one a day, maybe. Somewhere on there. Yeah, that would make sense. right now, we're not really focused on going faster because what we're doing here is this is a totally new product type, experimental.
There's a huge amount of unknowns, a huge amount of risk, and we have to really make sure everything's perfect before we before we ramp up. So, you know, we're we're going through all these changes with the manufacturing equipment and and the next gen. And at a certain point, we're going to say, you know what, we're ready.
We've had enough real-world testing. Now, we're going to focus on on ramping up, and I suspect that happens towards the end of this year. And we expect that we'll be able to hit 5,000 casitas between these two buildings once we're ramped up. Wow, so 2,500 each per year, which then you're looking at 360, what, 780 a day?
Uh, per per building almost. No, total. the the new the new factory building is not necessarily just a copy of this. It's more of an expansion of this. So, what we're doing is we're moving things around. Like, a lot of the shelving in here is going into the new building. For holding your raw materials.
lot of the parts manufacturing, like the CNCs are going to the new building. Then, the assembly line here is getting longer, and we're just going to kind of move things around and get more efficient. So, this might be sort of the core line, so to speak, and then all the racks with the raw materials might go over there.
So, you could forklift drive across the parking lot, pick up the parts, put them at the beginning of the line here, and go through. Yep. Yep. Yep. Got it. Got it. Really excited about that. And, you know, like some of that equipment we're getting, this whole uh manufacturing equipment here, that's all getting swapped out with new stuff.
So, this is where the panels are getting laminated. Right now, we make one wall, like so like, for example, the front wall of the house takes about 20 minutes. And of course, that's way faster than you can do it the traditional method, but once once this new That's the laminated part, right? Or is that with the phone?
Uh so that's like a fully finished wall going from this kit of parts into a wall that's then then going to get connected to a floor or something and built into the final And that's with your wood frame where they're connected basically. Those are at the corners. Got it. Got it. Got it. Yep. And then so so right now 20 minutes and then we'll be going to about under 5 minutes per panel.
And 4Xing, yeah. Yeah. And that will happen with that with very little human interaction throughout the process. So we're going to speed up. We're going to cut down the labor. Basically we're going to be dropping off pallets of wallboard on this side and picking up finished painted panels on the other side.
So it's going to be pretty cool. Nice. That's So how much equipment I mean this looks impressive and we've barely walked in it. How much equipment would you say you have here right now? I think we're at about $5 million in equipment and then we're doing another about 15 million. That's the the So the next 15 is more equipment here, more equipment there as well.
And you said you're replacing some of these machines? Yeah, a whole lot of this stuff is getting swapped out. Just upgrade or whatever. Yeah. And basically we we got in here and said let's use the the minimum money we can spend on equipment possible. Get everything done as manual as possible so that we can make sure we are the process is going to stay the same before we invest in this automated stuff.
And that's why you're saying hey you've sort of just come up with the Gen 2 version. So Gen 2 when when do you think that goes into production? All this stuff is going to kind of come together later this year. So that'll be new building, new equipment, next gen. And that's going to massage everything into place, you know, labor costs, material costs, assembly speed, all that.
Really exciting. For example, one of the changes we have is we're going from the current panel design to what we're calling a universal panel. So right now each house has maybe 12 separate panels. Okay. And each of those panels has its own separate kit of parts. What we're doing next is we're We're to one panel that's cut down at a a later stage into the right size and we're able to do that with any waste and then that dramatically reduces the the components that the number of components that go into making those panels.
Lots of different stuff like that that is going to contribute to these like really big improvements that we think we're going to see. That makes sense. Now in the front you have some of the examples and they don't have siding on them I know. Is there any issue with like elements potentially going in the gaps for hitting that foam whether it's icing or rain?
Uh it's it's funny you ask that because we're going through our modular certification that we have to do state by state to get these approved and just now I got back word that we passed the water intrusion test. Okay. Uh so we already knew that it water wouldn't go through it but now we have the official third party test out of that shows water won't go through it.
Yeah. That's awesome. It's good and then you know those units out front we have just a stock units set up which I'll show you later and then we have some that are kind of dressed up. So we have one with you know stone veneer, one some with different roof pitches. Sure. And start to understand that it's more than just this little casita product.
So how many people do you have right here right now? Um I think maybe like about 130 Okay. currently working uh and then probably probably another 30 or so in in the office. Nice. Nice. So you know you can see the these these parts um These are your end panels, yeah? Yeah, these are the the end lumber pieces um End lumber pieces with the vinyl on top, is that?
Yeah and and so like you know a lot of this stuff is is changing but you can see this is um this is like That's the vinyl end piece, yeah. Yeah, so so Nice. So you know a few different reasons to have this shape um And this is engineered which is great. So it's strong lumber that you have anyway. Yeah one of the reasons Straight.
Yeah, one of the that's the main reason we wanted engineered lumber was cuz everything is precision cut by CNC. You mean you don't want to do this at Home Depot anymore? And and the the other thing is it it just wouldn't fit. So it needed to be like you know It's always crooked when you go to Home Depot and pick up a 2 by so that that makes sense.
Yep, that's why we picked out stuff. And then, you know, the these end caps create just like like a a shape for for the panels to lock into place. They do things like allow for gaskets in there. We have a shape where like if water was to come in here, it wouldn't go up and then over and then you'll kind of see that how that goes together later on.
So, that way the wall could almost breathe basically out of your laminate. Yeah, and and then, you know, all these parts are are cut by CNC including, you know, these various shapes on the EPS foam. So, you have these delivered from someone else then. So, you order the EPS the way you need it basically.
We were at first and then we realized we need to be cutting this ourselves because we can save thousands. Yeah. We can save thousands per unit. So, we we just got that equipment. It's just being put into use recently. Wow. That's over this way? Yeah, we have the we have the big blocks of foam. We cut them down ourselves and then eventually we'll make the big blocks of foam as well.
Wow. Wow. Okay. All right. That's very cool. So, now getting into making the foam, do you think will be profitable? It it just it seems like making the foam would be or just get the block kind of thing. But, you all think there's a potential there. Well, so there's there's two issues. One is our plans to to grow and and scale the company.
We get to a point quickly where we can't even find enough foam. Enough. I get it. Because we're we're talking about as a next step. So, so that's the second issue. EPS foam is like 98% air. And that's one of the reasons it's a great product, but also we don't want to ship air. So, we're going to ship in the beads, expand it ourselves, and that'll save us another thousand bucks per unit on materials.
Wow. Wow, that's awesome. Yeah, everything we're doing is focused on pushing down the cost without compromising on anything. Nice. Nice. Okay. Wait, so it like lunch right now? Because I mean there are few people there are fewer people here right now. What do we got? 20 maybe on the floor? There's more.
There's Okay, okay, okay, okay, okay. So, this is your CNC for the laminates. Uh so, these cut down the lumber and tops. Um that one over there cuts the interior wall board. Oh, you're doing the vinyl attachments here. Yeah. you attaching the vinyl to the wood? Just glue? Glue, yeah. Okay. Yeah, it makes sense.
Actually, it's another improvement we're doing where we kind of realized in most cases we don't even need the vinyl. So, we're taking it out of the process completely for the next gen. Oh, wow. We're just going to shape the lumber with the the equipment. So, that'll be another cost savings. Nice. Nice.
Yeah, well, hey, less product the better. And then you don't have to glue it. Exactly. Actually, this is an example where we're prototyping that idea. So, you can see the lumber on this cart already has those shapes in them without having to Here are your channels. And that's your machinery here that's running the channels through.
Exactly. That's going to cut down this. Um so, you know, you have kind of the same shapes we saw before. Um this is this is a little spot for where the the rubber gaskets will get inserted in to seal the whole thing up. The smell of sawdust reminds me of my childhood because I would always sit after school in my dad's workshop.
Uh it was always sawdust. He made kitchen cabinets. So, what do you think in the future you'll make your own cabinets? It seems like you want to vertically integrate. So, uh we kind of already are. Oh, wow. Okay. Uh originally we went to Home Depot, bought some cabinets. It was like six grand per house.
Yeah, it's a lot. Yeah. Then we went to to China and bought our own cabinets. The price went down. Now, we've actually re-engineered all the cabinets to do two things. One, reduce material and the other uh uh speed up the assembly time. Okay. So, it's going to be really amazing and like simple changes.
Like, for example, if you went and bought two cabinets and you stick them together in your house. Yeah. You then have a wall in this cabinet and a wall in this cabinet. We only need one wall. So, we take that out. And then the back wall Because you already know the design you're making. So, exactly.
And then the back wall, well, that's going into the wall of the house, you don't need a back wall. The way the screws and the fasteners go in, we want everything to click together really quickly. Sure. So, the You're almost just hanging up. Yeah, exactly. The cost keeps going down and down on that. We're just kind of continuing to to fight against and and push everything into place.
That's awesome. That's great. Yeah, because you don't use drywall in these because the inside is is it another laminate on the inside? Yeah, so right now we have what's called magnesium oxide board on the interior wall, and in the next generation we'll just be switching to like hardy board fiber cement.
Oh, okay. Yeah, yeah, like for showers and that. Exactly, exactly. And it gives us a whole bunch of different benefits to do it that way, but one big one is, you know, sheetrock, if if you get a flood in your house, the sheetrock gets damaged really quickly. You end up with mold, you got to rip it out.
Our houses, if they flood, the water leaves, you dry it off, and and you're good. You don't have any significant damage. Hence the hardy backer, but hardy backer is expensive. Don't tell me you're getting into the concrete business, too. Uh you know, it's funny having uh definitely thinking about how that plays out long term and the various companies that will need to either acquire or like really partner with really closely.
Yeah, cuz I It's been a while since I've bought sheets, but I mean, I think a sheet of drywall, mold resistant was like eight bucks, and hardy was like 40 or 50. I mean, it's up there like a sheet of plywood. Why don't you do plywood? So, then So, then if if you look at our wall assembly, we've actually eliminated some parts.
So, a traditional wall assembly, you might have exterior, you know, siding, uh OSB, uh lumber frame, nails, insulation, sheetrock, um maybe some plywood or whatever. Ours is just going to be concrete board EPS concrete board. So, you want to do the concrete board instead of the laminate? Yeah, the next gen is just going to be concrete board laminated EPS foam laminated to concrete board.
How thick is this concrete board going to be? 5/16, I think. Okay, that's going to be heavy. Yeah, it it the the total weight doesn't come in much more than what we're at now. I'm impressed. Wow. Right now we're at about 14,000 lb per unit, which is dramatically less weight than a comparable sized modular home.
Okay. Okay. All right. Uh you know, it's important to be lightweight for shipping costs and heavy equipment required. Sure. And so this is one of the It looks like your hinges or or where it bolts together because I I there's half of a hinge here basically. So this is It looks like one of the wall units, I'm guessing.
Yeah, so actually this is kind of what we call the core of a unit. So this is a floor piece. You can see the flooring. Uh and then uh this is like an you know, an six eight-foot section. And then the other section is a 12-ft floor section that folds up. And yeah, this is this hinges. So what we've got here is a structural I-beam through the center of the of the floor Similar to what you have here then.
and the ceiling. Uh this is just a pocket for us to stick forklifts in so we can lift up the whole house and and move it around. Ah, interesting. Okay. Okay. So these are your wider forklifts. Yeah, we use this This is the big boy for the big forklift. Okay. Um and by the way, that's actually another part that's coming out in the next gen.
What? You're just going to do wood on each side? We figured out a better way to lift it and that's that's gone because Cuz it looks structural because yeah, I mean, if you're just lifting it a few times, you don't need that much lift. It's like $1,200 to just do something you're going to do once and then and then the unit sits down and it never moves again.
Um but this is important. I mean, this this is where you end up with a hinging I-beam and the hinge is stronger than the actual I-beam. Oh my gosh. Yeah. Yeah. So you know, all those parts come in there. They get fed into this uh they get adhesive. This is your floor paneling section, I I'm assuming.
so the the the panels the the components in the panels get assembled together. They get adhesive. They go into this machine, which is a big vacuum press. It puts like 100,000 plus pounds of pressure on while it cures. And then out come the finished panels looking somewhat like this. And then we'll see the panel library over there.
After it comes out of here, we roll it over there and and continue the process. Got it. And right now you're doing everything sort of going to be expected to be the same the same floor, the same cabinets, same bathroom, everything until you get a scale is the assumption. Yeah, I mean, when we started Boxabl, I thought maybe we would sell like a few hundred Casitas.
I never in a million years thought we would have a 160,000 plus people wanting these things. So, we're in the fortunate position now where we don't have to do anything different. We can just focus on this initial product, get really, really good at it, learn everything, and then in a future factory expand to the full building system where we would not only have different interiors, but different size boxes that can stack and connect to build single families, apartments, basically everything.
So, oh, go ahead. I was going to say and we're getting all the heavy lifting done for the builder, developer, and then they're just taking these boxes, deploying them, putting some custom finishing touches on them. And they can sell the upgrades then, too. Exactly. Exactly. Like, for example, the neighborhood that I used to live in in Vegas, we have you know, you drive in the neighborhood, you see all these different houses, but you won't what you won't realize right away is that they're all the same house.
There's maybe two or three models in there. Yeah, different veneers. Exactly. Exactly. Or they the mirror image them or whatever. Yeah, sure. And and people don't need like a perfectly custom house and and and and then, you know, in return for that blow the budget out of control and make housing unaffordable.
So, it's it sounds like it would be more efficient to start with larger customers. I mean, that I think that's what y'all started with, right? 21 and 20 20 were one customer. Yeah, so uh it's interesting and and we were fortunate to get these customers because without them it would have been really difficult to start.
give you the capital to like here's the large deposit to get the factory going, right? Yeah, and and even things like the modular approvals that we need to deploy these to end users, we we don't have those yet. Okay. And it's taken so long, it's absolutely incredible and it's blown my minds and it's this regulatory process that is stopping innovation.
And and we were lucky enough to find these initial customers, which by the way, one was the government who doesn't doesn't They don't follow their own rules. So, they didn't the modular Okay, so what happened? What what would you say to the NYT right now? Look, nobody really likes the NYT. I don't like them either.
They on me, too, man. I'm sorry, but you know. So, what happened in in in the first order with Guantanamo, we we we shipped units down there and you know, the crew that wasn't a Boxabl crew set up a few units. At a few of the units, they forgot to put the roof on. So, we have what's called a TPO roofing membrane and and you're supposed to just roll it over and secure it down and they didn't do that for a few of the units.
It rained, some water went in, they realized it, they fixed it and and that was it. So, that's what's pictured sort of on the NYT cover where they show the the nailed boards around the edge with the the what looks like a tarp. of putting the TPO roofing membrane, they just threw tarps on at the last minute to stop to stop the water.
And the the the reporter of that article, her whole job is to talk talk about Guantanamo Bay. If you look at her all her articles, she's always making Guantanamo Bay look bad. Um but but I after the article came out, I messaged her and I was like, "Hey, you know, you threw us under the bus." And she was like, she replied back to me and said, "I didn't mean to insinuate that it was your fault.
I meant to make it clear that it was their fault." Interesting. And actually, if you look under one of the the pictures on there, the caption of the picture, it says, you know, "Workers at Guantanamo Bay incorrectly installed some of the units and it resulted in water getting in." But luckily, like I said, but the houses are are mostly waterproof inside and the only thing that got damaged was some of the cabinets.
Sure. Which we just swapped out and it was no big deal. So, you initially delivered what about I think 30 by the end of was it 21 and then did you finish it or 2020 maybe and you finished delivering last year or are you still delivering to them? Uh that order is delivered in full. 156 houses. So, pretty pretty amazing.
I mean, what when we first got approached by the government, we had nothing. I had a few prototypes. I didn't have this building. Uh I brought them here before we even had the lease signed and it was an empty shell. Wow. Brand new empty shell and I was like, guys, like you know, you understand that we've never done this before.
We're not sure that we can do it. We don't have a factory. Uh you know, here it is an empty building. Are you sure you want to do this? And they were like, yeah, let's do it. And uh we managed to get in there. That was the government. It was like, Yeah, the government. Uh pull the trigger on the building, scale up, hire hundreds of people, turn on production of this fully experimental product, you know, order uh hundreds of components from from all around the world and and pull it off and and deliver in full.
So, I think it's it's amazing and you know, the fact that we've continued to kind of, you know, execute on the vision and and deliver on our promises, I think people see that when they look at the company and they see me starting off as a guy making these like, you know, grandiose claims. Sure. And then they're like, oh, but then this happened and this happened and this happened and now we're here and now we have two houses a day.
Who are you Where are the what units going to now? It looked like you were at two purchase orders in 2022. What Where are you guys now? Uh so, we ended up doing uh just a few like one-sy projects here and there but landed another order that was kind of a special order. Okay. And it's for a copper mine in Arizona.
The company is called uh Freeport-McMoRan. Uh they're the ultimate recipient of the houses. I think they're like a $50 billion mining operation. They're one of the biggest Yeah, they're one of the biggest employers in in Arizona and they do copper mining, and of course copper is needed for electric cars, so they're growing, and they need a workforce housing solution.
So, we currently have units shipping out to them. They're They're mid set up out in out in Arizona. And so, you have an installer network that you refer people to then because you guys don't install them. You ship them. Yeah. So, what happened there was we basically had a developer {slash} project manager that knew about Boxabl, knew about the mines workforce housing need, went to them and said, "Hey guys, you should buy from Boxabl.
We'll set it up. We'll do all the development." So, our actual customer is this developer who's selling the project or who's who's doing the project for for the for the mine. So, we're just shipping them units and they're doing the rest. Do you expect that mostly contractors will end up being your sort of sales force?
You know, no matter you know, where these units go, there always needs to be someone doing the groundwork. The nature of housing is you know, there's site prep required for the most part. I mean, it's minimized with our with our product, but yeah, I think, you know, builders, developers, they're going to always kind of be the middleman.
There's going to be added cost. So, you know, if a consumer wants, you know, to buy a casita for 60,000 for their backyard, they're also going to need to pay for site prep, permits, any upgrades they want to do, and so that's definitely part of the mix. What what do you expect on average somebody else is spending for, like you mentioned, electrical lines, plumbing lines, water lines, you know, foundation, roof, whatever?
Yeah, I think it it varies like very dramatically based on the the end use case. For example, if you're doing a backyard unit where the site's already developed, utilities are already there, you're connecting it to a main house, it's not going to cost as much unless as if you do raw land, you got to bring in utilities from the street.
Then there's other things like we have these certified right now as park model RVs. With a park model RV, you don't need a foundation. You don't need to add any roof pitch to it. You can almost plug it in with an extension cord. So, that's like lowest possible cost. You could take one of these right now, rent a telehandler, unfold it in your backyard, plug it in with an extension cord, hook up like a water tank, and and be good to go.
But, then you're like you said, like an RV. Like you're not It's personal property. You're not refinancing it. You're not getting a home equity line of credit or whatever, right? Yeah. Yeah. Or, you know, you want to add in a foundation, you want to dig a trench for real utilities, maybe add some kind of roof pitch, and get permits.
You know, the the price kind of goes up from there. We'll see. I mean, it's a big wide range of of different scenarios. And for example, I'm also right now looking at doing another project where we might buy an old uh mobile home park. Okay. And so, the mobile home park is roughly I think uh uh $800,000 for 100 spaces.
They're all ready to go. So, you know, round up, maybe we end up at 10 grand per space. Sure. And then you come and you connect the Boxabl Casitas in. There's not many more costs than that. So, you know, the Boxabl Casita 60, maybe 70, 80, 90, something around there is going to be your all-in cost for that.
And then when you talk about like a 30-year mortgage on on 100 grand, you know, it gets to the point where this is a very low-cost housing solution as far as a monthly price. Do you think that might be the direction you ultimately go where you can where you go get DMV registration rather than, let's say, housing registration?
So, we did that, but only kind of as a reaction to the time it took us to get the modular cert. So, as the the government order was was getting closer to being finished, I'm like, "Oh we don't have modular cert. We can't sell to anyone. How else can I get these approved?" I went out and certified us for park model RV.
We have RVIA that inspects our factory and and approves them as a as as RVs. And that kind of brings them more into the realm of like mobile home type type vehicles. And then there's lax rules and regulations surrounding that. And and it's just another avenue for the customer. And hopefully we'll have every avenue for the customer covered.
So one day we'll have park model RV, we'll have modular. Maybe we'll maybe we'll be able to get them approved through a panelized certification at the at the local level. Maybe we'll even do the the HUD manufactured housing as well. So how long do you think until maybe somebody like a retail customer is looking at I can get a permit on this in my backyard?
I think that we might be a few months away from Arizona state modular certification. For the RV style then? No, for a modular for our customers. Okay. And at that point we can actually sell to customers. Yeah. Yeah. Uh right now the only way we can sell to customers is the park model RV which isn't ideal.
Sure. Um so once we get that modular cert, we can start shipping to to end users. Then we'll quickly do uh uh California and Nevada as well. Sure. Uh unfortunately it is a state-by-state thing. I don't know why, you know, other products don't have to do a state-by-state approval and it's it's not it's not good, but a big part of what Boxabl's doing also is going to be fighting back and trying to change these regulations and also showcasing a project a product that that doesn't need these regulations.
Right. Well, because if you get to California they might turn around and go you need fire sprinklers. And that's a whole new system that that has to be put in, right? Oh, there's going to be stuff like that for sure. Okay. Okay. we'll work through it all. Yeah, yeah. I mean that's part of the process.
So what's um So right now it's really hey, where can you get the temporary use cases like the mine maybe where they're good with here's our industrial temporary power grid or whatever, plug them in. That's sort of what y'all thinking right now. Yeah. Yeah, and you know, we're we're fortunate to have these two big customers that allowed us to run really fast and do this, but without those customers, I don't know where we would be because we might be in a situation where we have this whole factory set up and we can't sell a single house.
And that could be the situation for like another competitor that was trying to start up unless they found these really special customers like Guantanamo Bay, Cuba or a huge, you know, copper mine that they would be sitting on their hands for over a year trying to get their buildings uh modular certified.
Wow. So, what's what's back here in this gray box? Yeah, let's keep going. And so, and where do you do all the research? I mean, for like the next gen product? YouTube. You got to stop. I swear to god. No, that's awesome. YouTube. YouTube, Google, calling people, asking weird questions. That's kind of what it's been the whole time and then testing stuff for real.
Testing, okay, got it. And you test that, I imagine so okay, it's a little slippery here, guys. So, your panels come out of the lamination system here and then we bring them up right here where we kind of have a panel library, so you'll see the different panel um images there. And and then what we're doing is painting and sanding to get rid of the interior seam and then we do some electrical work as well.
doing that with like drywall mud? Are these with drywall mud panels? Yeah. So, so you'll see like this is a panel This is a panel as it comes out of the lamination machine minus the electric. Sure. So, what we want to do is get rid of my the seams between the wallboard. Yeah. Um and what we're actually trying to work on better solutions for that for the next gen that's more more automated, but right now, yeah, it's just drywall mud.
And are you trying to finish it smooth with this? Yeah, you'll see how they look down here after they get some paint on them. Okay, so drywall mud then paint and the paint blends it all in basically. So, so the end user doesn't know if they're touching this or drywall mud. Yeah, it's just the panel and the wall.
That's okay. Okay, it makes sense. know, you can feel also like like how solid these are. Like you're not you're not getting through them. And this is the laminated you mentioned the magnesium or whatever, right? This is also about another like Yeah, it's very similar it's very similar to Hardie Hardie's fiber cement board products.
Okay. And then of course EPS foam in the in the core. And then you can see stuff like the electrical What? The electrical Oh. are already cut out. So there's a network behind the walls. Sure. And that makes um install of electrical a lot easier in our factory and uh modifications easier in the field.
So and then I imagine you would just sort of train your existing employees on the electrical or whatever. You don't like have need an electrician to come in to do that. Very important point. Uh we do not have skilled labor in our factory. We can take anyone off the street and just train them as a technician to do a do a job.
Okay. And that's the only way you're going to be able to actually push push the cost down is if you can use just, you know, regular labor uh to to do something for as part of mass production. Okay. All right. Huh. So is it mostly you and your dad who do the research or who all does the research? So it's uh me, uh Paulo, my dad, and and Kyle Denman.
Uh the three of us, you know, sort of together do the research. Yeah, we worked on it. Um Paulo and Kyle are, you know, engineers. They're experts in like 3D modeling on the computer. Uh so Kyle has drawn up all of this in in great detail in 3D model. Um and then we'll have meetings where we'll go back and forth refining the design and dialing it in.
Um you know, constantly trying to change things, improve them, um all that kind of And then I imagine obviously you're going to patent the like this new casita design, right? I mean cuz you're giving all the tours. Like I feel like you're like, "Here's what we do." You know? How are you guys going to protect it?
Yeah, you know, a lot of companies are like scared to show their stuff and I think it kind of holds you back from opportunities. We have over 60 patent filings. Wow. On on all the various stuff that we do here. Boxabl has 60 patent filings. Holy smokes. Beyond that, there's a certain amount of barrier to entry just in the the sheer amount of money you would need to do something like this.
You know, the the permitting like I said. And then also what hasn't been filed yet, what hasn't been done yet. So we're actually already you have in the pipeline in terms of patents, right? If someone comes in here and copies everything we do, They're already a year behind is what you're saying. Yeah, cuz all of this is no good.
We already figured a way better way to do it all. So we'll be implementing all that. And and that's you're going to sort of remake this facility here into the Gen 2 as you're ready to implement it. Yeah, I mean basically for the rest of this year we're going to be changing everything here, installing all this equipment.
You know, after that panel lamination line, we have a whole new paint system that's basically a tunnel where these panels come right out of the lamination system and get fed right through a tunnel and get painted automatically and you know, and then we have the assembly line here where the panels go together.
You have a conveyor system that the the houses will sit on and they'll move automatically through the station. In the future, the conveyor system. That's all the upgrades that are going on. see. And yeah, you can see how they end up getting getting painted here. So like there they mudded they mudded the seams and here they they get No, it's pretty good.
You I mean you can't really tell. I mean it's just I mean a house has seams and and you can sometimes tell where the drywall is, too. So looks good. Cool. Okay. And this is how you stack them up to hinge them together. Yeah, and just just be just everyone just be aware that there is stuff like hanging from cranes and stuff.
So just please walk carefully in this area. Um Huh. And also, these are your mini splits? Yep. So this is your inside unit for your mini split. Exactly, yep. And and so that way you guys can install the minis and then the outside units on a shelf probably somewhere like that and outside. Yeah, the mini splits are great.
Um they're super compact, energy efficient. I put mini splits everywhere. I love those things. Okay, so I mean you only really need one mini split for these. Yeah, it's totally overpowered for it. Yeah, and then what what's the tonnage on those suckers? I don't know. Yeah, it's not that big. Yeah, probably okay.
What about um I you did a demo of a a two-story. How do you do a staircase in a in a So, actually the project we're doing for the workforce housing right now, those are all two-story units, but they're separate apartments. So, they have an external staircase. Got it. Got it. And then at the builder show, we connected three units together.
It was a two-story to show like one single house and that had an internal spiral stair. We could do regular stairs, cut it out of the floor there? Yeah, that's what we did. Yeah, but but for demo unit. For for these smaller units, it's kind of a waste of space to put in a really big staircase, but down the line when we have our bigger units, cuz these are 20 by 20, but we'll go 20 by 30, 20 by 40, 20 by 60.
You think you can get these that wide and still get them in a container, basically? Well, so they'll all be 20 and that folds up to 8 and 1/2. But then on the length, we can keep going. And then on the bigger side of that, like a 60 by that's a 1200 square feet in one room. In most use cases, you're never going to need a room that big and you'll end up subdividing it.
So, That makes sense. But yeah, so here's kind of where the assembly line starts and you have you know, these various stations where the the same task is being done on on the different units every time. So, the guys are you know, really good at it. We keep dialing in the process. We make sure the right tools are there.
Um These are your backless cabs? No, they have backs. These are still they're current version of cabs. This is like a middle generation. We have another gen in the in the pipeline coming in. Um but you can see like these are kind of getting pre-assembled and then they'll be bolted in there pretty quickly.
Um another thing worth mentioning is that uh this is what we call the core of the unit. So that's where all the all the magic happens in this section of the unit and that's the part of the house that is not folded up. This is where you guys are also water testing now. And yeah, they're For the PEX plumbing.
They're doing they're doing testing and everything and of course another advantage of factory production is the quality control level that you can have with the precision and Yeah, ordinarily you just get a building inspector. Plumbing works, right? So you can actually test it here. Good. Yeah, I mean the level of quality you could see in a factory using like CNC to cut is is on another planet than what is going to happen at on the on the site.
Yeah. Yeah, I agree with you. And and you know at at the end of the day our our pitch is, you know, site construction is not sustainable, it's not scalable. You know, you're never going to be able to achieve the amount of housing needed by doing it that way. It has to be done on an assembly line because assembly lines are proven to rapidly produce products at the lowest possible cost and at Boxabl it was just about solving the problems that have stopped housing from working on the assembly lines.
Of course that's, you know, shipping is the big one and then there's a lot of other stuff. Because you do have manufactured homes that exist. Yeah. But they just haven't gotten competitive with the shipping I think is your edge that you're talking about. Yeah, so you have about 10% of the market that is actually factory built housing.
But they've really kind of gotten stuck and they failed to to gain market share. You would assume that if it was better they would take over cuz they'd have a lower cost product. But between the fact that they are shipping these wide loads which are incredibly expensive uh and that limits the size and scale of the factory because then they have a limited shipping radius.
Uh they're also just using the traditional methods. There's no innovation on the building materials. Obviously we have all different building materials. They're just using lumber frame but doing it inside. Makes sense. Yeah. Yeah. Okay. All right. Anything else to see this way? Yeah, we can go downstairs.
Um, another example of something we're doing ourselves is the shower. So, you'll see in here uh, the shower's got the the Boxabl logo on it. So, Yeah, it's a fiberglass enclosure there. Oh, and then you guys How'd you get the custom Boxabl logo? so we didn't find a great solution I want a custom logo on my shower.
You just want your Boxabl logo? Yeah, right. Sorry, you were you were going to say you found a Yeah, it's just another example of us, you know, taking things in-house. We didn't find any great solutions out there and we said let's just engineer our own and we'll get a bunch of different advantages by doing it that way.
Can I go in here? Yeah, go ahead. Oh, thank you. Yeah, that's awesome. So, you actually Okay, this is your your vent, right? Because you don't have a ducted mini split. It's just this is your exhaust vent. I understand. Okay. And then you're making fiberglass panels in-house? Or how did you Or did you you're doing the imprint?
China shower's from China, but it's our design. Okay. Oh, oh, okay, you guys designed it. I understand. I understand. Okay. Yeah. Okay. stuff it makes sense to to build to actually manufacture ourselves. Sure. Um, but a lot of stuff we we need to design ourselves. And then how do you end up finishing like just with like a molding or something like that, the plumbing between them or cuz I know that obviously there's base missing here and the trim mold in that.
Is We'll see them in the next one. Deal. Okay. All right. That's the best way to explain it. It gets prettier. Yeah, we'll go look at it. Oh, and your your water heater's actually in the kitchen. Yeah, you know, I wanted to use like a like a tankless, but the the power demands. That was the real issue.
Really? So, if you have a accessory dwelling unit, then you're still working off the the power that's already on existing on the house, so 200 amps or whatever. Sure. And I didn't want to go and then have a really big power demand and bump over that number and then it requires new power to run from the street and and increase the cost a lot.
that's how you're trying to keep that down. Okay. But now, okay. Um, Um Alternatively, if somebody did run another line, then they could go tankless. Or they just had enough power, you know. Okay. But right now, this option's going to come with the what, 30 or whatever it is. Yeah, and we did all all electric as well, you know.
We could have gone gas and that would have solved that issue as well. Throw in induction cook Wait, do Would there be a cooktop? Yeah. Yeah, we'll see We'll see that in there. Okay. All right. Or in the demo unit out front. Okay. This is actually the big the big floor. Oh, interesting. Wait, so your your water heater's actually behind the range.
So, you're not going to do a built-in range because you didn't do the countertop all the way. Actually, we have to move it because the modular certs Uh uh based on the code, it can't be there. Can't block the water heater. You need access to the water heater, and even though we have it through an access panel, they were like, "It's not enough.
The code says 30 in so we're moving it soon." Uh Because code wants you to drain the sucker every year. Nobody does. Yeah. Yeah, cuz that's cuz in order to drain it, you have to take off one of the top valves and drain it off the bottom. Yeah, and I and we were like, "All right, well, you just move the the oven." The Yeah.
But they were like, "You can't move the oven. You have to have access without moving the Without moving the oven. Yeah. So, that's getting moved. Interesting. Okay, so not sure yet where that's going. I think in the bathroom, um well, it's just another one of those things that we have to work through.
TBD. Got it. Got it. Okay. I like the lazy Susan. It also doesn't have I think that's going away as well in the next design. Why? In the next design. Where's the lazy Susan going? That's right, those are expensive. They're They're not needed. Honestly, like nobody's going to look at a place and go, "There's no lazy Susan." You know?
If it's there, they'll notice it. All right, all right, what else we got? We got big stuff that looks like it's going to fall. I don't want to stand next to it too close. It won't fall quite that quickly. Yeah. So, here's all your Romex going through. Now, how do you guys handle the heat transfer on this because if all these loads are going, that's a lot of heat bundled.
I don't know. TBD. TBD. TBD. Okay. All right. It's approved. Okay. All right. That's all right. Very well. Okay. Uh what is this? This is what the wall goes on. Uh so so um these are just big screws that that kind of fasten fasten it together. This will fasten the the ceiling to the walls. the floor to the wall.
This is the floor. This is your I-beams. So this screw ends up going all the way through. This is the other flipped part that attaches to the hinge we saw. Exactly, yeah. Yeah, and the reason we have an I-beam through the floor and the ceiling was to reduce the span of the panels so that they could be smaller panels and they didn't have to span 20 ft.
They only span 10 ft and rest on the I-beam. Okay. Yep, that makes sense. Okay. All right. Yeah. So I now I now you're seeing some of the other panels starting to go together into the house. Okay. Um like I said, we're folding up all the empty space and we're not folding kitchen, bathroom, everything else.
So it gives us, you know, room for activities. And how many of these are are you able to do right now at a time? You said two a day? We output two per shift. Two per Okay. Yeah. All right. Wow. Okay. And then this would be for your sub panel then here. Is it okay to walk over here, I imagine? Yeah, this is like uh mini split line and then this is where the power the box will go on.
This is where your sub will go. Okay. Got it. So if somebody wanted to deliver a main, they could bring pull the main and it you'd have your own power over here, your own 200 or whatever. Yeah. Okay. Um Cool. And then you got the windows over here. Pallets of uh dual pane windows. Oh yeah, we got a lot of stuff.
Yeah, and it's all going to get um kind of shifted. Right now we have 10 stations here and we'll end up with 20 stations plus feeder lines once we reorganize the two buildings. Oh, look at this. All the employees are great. This is awesome. So, you want to get into the foam making business. Yeah, part of our plans in the future, I think definitely has to be uh a foam factory.
And the reason is we're going so big with this. Like I mentioned before, this factory is just proof of concept. We're trying to get into a $1 billion factory next. Wow. So, we're currently trying to raise $1 billion to build the world's largest house factory. Because right now you have uh I what is it?
How much inventory? How much How much machinery? Maybe like 10 in total of both? So, you want to 100x the factory investment basically. Yeah, we need to. Where you going to build it? Uh we have um um request for proposal for a whole bunch of different sites right down the street from here. Basically out in the desert, raw lands.
We're going to go out there. We're going to build hopefully build millions of square feet of warehouse. Yeah, sweet. We're turning it on an absolute monster. And that's And that's what we need, you know, it's a no-brainer. Okay. It's It In In my opinion, it's it's a it's a no-brainer that we should be building houses just the way we're building cars.
And we think our product is compatible with all those principles. I like how you have a crane that goes basically up and down the line. Yeah. Yeah. Well, that beats moving a crane around. Ah, well, it looks cool. So, next gen will have smaller smaller cranes. Yeah, yeah. that to, you know, put the panels in the place and unfold the house and all that.
Nice. Nice. Okay, we're getting to the end of the line here. So, six six That's nine. final units. Um just getting some final QC. Uh we could we could probably walk in this one while they're cleaning. take a peek. And then they'll fold them up and they'll send them out back. Oh, you caulk these joints?
Oh, no, this is the caulking. You caulk here. This is the This is the steel to steel and it just we just peel the plastic off it looks great. And then that's So, this you got the waterproofing on, so that the water can't get in between this joint. Yeah. Wow. Okay. But, people obviously still add siding just for cosmetic purposes then.
Uh yeah, I mean, you'll see the ones out front where we added siding, uh but you don't necessarily need it. Okay. What we're trying to create is like a universal building box that's architecturally neutral that gets bulk of the heavy lifting done for the builder. Are they retrofit windows or No. You have No, you know, you have them flange mounted.
Okay. Never new construction windows. Yeah, we we put We actually glue them in. Big one. Put glue around and then stick them in. Um Oh. And put some of the clamps on. Okay. All right. Sorry. Hey guys. Hi. So, here we are just doing some uh some finishing touches, and the next step is this unit will be folded up and shipped out.
Oh, this is where you get lots of the storage. I like that. That you've got that in here. That's great. a ton. Um and then we'll have the the Oh, yeah, see, you box it up. You got the little box in the corner there to mold it in. See, look at that. Yeah. Box is there. Christian, could you show that cuz that's that's pretty neat.
That's what we were showing in the last one. You In the corner, in the gap between this unit and the shower, a little box right there, that's where the plumbing's going through. So, that's finished up. Nice. Very cool. Yeah, awesome. And you have two angle valves there. Three angle valves there. Is that Is there a washing machine somewhere?
There will be. that Where does the washing machine Oh, right there. Oh, it comes out on this side. unit. Ah, okay. we're actually able to get all the appliances in as well in the folded up unit. So, there'll be like a fridge and an oven and washer all in here. What? This is where the seam is. Yeah, so when when this is installed, they're basically going to come in, they're going to drop a trim piece in here, they're going to cut this, and and it'll be done.
Okay. So, And then you don't feel the divot because it has to be filled in. What do you fill it in with? There's a little trim piece that will come with Oh, wood trim piece or something? or something that That just sort of wedges in there. Yeah, okay. Okay, got it. And then this is the other hinge where because it all folds up onto this here.
So, do you just get rid of these? Uh this side is actually just covered by cabinets and stuff. So, you can put a cabinet there. Um the next gen we have a new hinge design that's hidden within the wall panel. Oh, okay. And um yeah, then it's going to fold up. You basically end up like 6 ft here. And we're going to have 6 ft by the length of the unit to put anything we need to in it.
So, you know, this is kitchen, bathroom. Other units could be other stuff. Uh the rest of the space is all fully compressed down. And it's so important, you know, if you can't if you can't ship, you can't scale production, and you can never get efficient, and then we're stuck with the situation where now our housing is very slow and expensive.
So, I mean, when this unfolds, you've obviously got the hinges here. So, the installer has to come drywall this or what happens? Uh we have some covers for those hinges that pop out. Um a lot of this stuff kind of changes in the next gen. We end up with some trim pieces. Um you you can you can do some just regular repairs with mud.
It depends on how you So, whoever's installing it is going to generally finish the seams, I guess, do the finish work. Yeah. Yeah. And like, for example, this seam down the middle here, that actually um doesn't need to be there. It probably won't be in the next design cuz that doesn't actually fold.
Obviously, the fold is happening there and there. And then just who would put like I guess the finish installer would put in baseboards as well then and finish that. Yeah, that's part of the instructions. You're going to come around with these uh screws. Uh you unfold it, and then you screw in all those, and you put on the baseboard.
Okay. Um And like, you know, the baseboard and all that afterwards, the finish guys. But Like I mentioned, this is the first generation that we are running with that we designed before having done anything at all. And luckily, it all works. Uh but now we have all these upgrades based on everything we've learned and the next gen is going to be amazing.
You know, one of the planned upgrades in the future for example is you're going to unfold the house. You're not actually going to use screws to lock in the place. We're going to have Allen keys. So the the whole house is going to get set up just with an Allen key. You're going to go around and turn the Allen key in a few locations and a hook will go in the wall and grab on.
So when you unfold this, this is how you actually attach the foundation. Not to foundation but that's how the wall goes to the floor. Wall to floor. I understand the foundation is done with screws. Your foundation I mean. Yes, yes, okay, okay. And then where are those are those plates for floor to real foundation?
That actually the the metal plates you pointed to earlier, that's what the real use of those are. Those are those are foundation connections. Those are your connections. Or unit to unit connection plates. And and I mean California's going to give you a lot of seismic headaches. I imagine you all are thinking about that.
So the house is just like rock solid. When you talk about these laminated panels, first of all we have hurricane speed wind ratings on them. So like we could drop these in Miami, Florida or Guantanamo Bay, Cuba where they have crazy hurricane issues and and they can handle it. It's incredibly strong.
If I kick this wall, I'm not getting through it. Sure. So so Because obviously the concern would be if like the outside wall somehow shifted or whatever even an earthquake and the foam is exposed, then the foam is exposed. Um So we got to keep the outside together. Yeah, yeah. I mean when you talk about a laminated panel with a structural adhesive, I mean nothing's moving.
In a laminate, you have different like composites that are basically becoming one one piece. Um it's Sure. Sure. it's The two outside layers in the foam. Yeah, the whole thing's just just filled with glue and Have you done the seismic calculations there? Uh yeah. Yeah, because I know I I know that we only have one test left for a modular cert.
That's hopefully happening this week. Okay. Uh so I know size mix being done. Okay. Um and then uh yeah, we we've done, you know, every kind of test under the sun uh far as taking our panels, breaking them, measuring how they how they withstood the various loads and stuff against the bottom. Wow. Wow.
Yeah. Uh I wonder how flexible it is. Cuz is the foam seems like it would be very rigid. And like one of the reasons we have like, for example, Miami's doing cinder block because of the hurricanes. And in California, we've got lumber so that the house can move. I wonder how that works with I think if you go to like a really tall skyscraper, they have some of those crazy foundations with like shock absorbers on them and stuff.
And I think that could be achieved with this based on how the units are connected together and how the foundation was set up. Okay. But like like for example, right now, this whole unit is not sitting on the ground. It's sitting on some like six wheels. Oh. So right here, final stage of the assembly line, they're basically just going to fold this thing up, wrap it in plastic, and and send it out the door.
So you can see it's uh Okay, so it's going to get folded now. folding They folded back the roof already. You see the three pieces there. And uh we can take a walk outside and see the folded up units. Yeah, absolutely. Oh, and here are your stencils. That's awesome. I think we're swapping those for stickers next.
Oh, there you go. Yeah. A spray paint. And the scooters to get around. That's awesome. Three wheelers. I want one. That looks great. There's your other Is it a directly this one? Next building behind that. The next building behind that. Okay, okay, okay. So you'd have to drive the forklift around if you were moving between the two.
Or just deliver where you need it. to have trucks that bring bring the stuff back and forth that needs to go. Trucks between the two. Okay. Okay, got it. And uh so here you can see a bunch of units waiting to get shipped out. Um you You see our our trailer system that we built. So, um of course chassis right here.
The the flat You built the chassis? yep, exactly. And and Did you patent those things, too? Yes. Yes. There you go. Yeah, so so of course we have um you know, a 20-ft unit that folds up to 8 and 1/2 ft wide. Uh then it can be shipped highway legal without extra permits or or flag cars. Flags, yeah. not only are we shipping a highway legal load, but we're shipping uh a a highway legal load that would usually be two over wide loads.
Yeah. is an over wide, so you would end up with two. And then, we're also able to tow them with a pickup truck, not a big rig. Uh or if we use a big rig, we can actually put two on one truck. Uh and then beyond that, we can actually tow four units with a Tesla. I see you have them daisy-chained there.
So, if you if you look at the picture at the video we just put on on uh Twitter, uh we we daisy-chained them and drove them around the parking lot just for But you have them 14,000 lb each, yes. And you can tow four, so 15, you're looking at 60,000 Okay. But just to showcase how shippable and transportable they are.
I understand. Um Okay. So, here here are units ready to ship out, so you can see of course How many deposits did you guys say you had already? Like Uh paid deposits, probably about 8,000. Wow, 8,000 paid deposits. Yeah, and then the the the the full names is 100 about 160,000. Like people who are interested, expressed interest or whatever.
Okay. on them. Yeah. Okay. Wow. Yeah, it's been crazy. I can Yeah, and then you can just spray paint sort of your your name on them while they're shipping. Okay. And you're you guys are leasing the building, so when if you guys want to move up to a bigger room when your lease expires, you can just move.
Yeah, we've got like five and five here. Um probably by the time that bigger factory is online, you know, I don't know. We'll be just keep this and let it keep rocking, maybe. We'll see what happens. So, what's the scoop with the roof? Do you need it? Is it Are most agencies requiring a pitched roof?
I think you mentioned something or something. Yeah, yeah. So, what we have now, it's snow-load rated, insulated, waterproof roof with a TPO roofing membrane that comes from I'm forgetting the name of the company, but it's got a long warranty and all that. And this membrane is is like a Usually used in commercial roofings.
Okay. Okay. because it is flat in most cases, if you're going for like a fully permanent build and not a park model RV or something, you're going to have to put some other roof system on there. So, we'll end up selling those as well separately, or you can just have a regular roof contractor come out and do different things based on, you know, do you want it to match the style of your existing house or whatever you want.
That makes sense. And and uh is is the because I'm thinking about the foam the foam frame is going to have to carry that roof load, which will probably be framed out with lumber. It's very heavy. What How does that work? Uh so so the panels are are incredibly strong. You know, not only could they handle a roof, but they could handle another house on top, you know, cuz we're doing the two stories.
And we even just the flat roof as is does have significant snow-load rating on it as well. So, I mean, it's it's good to go as is, but just because there's so many different use cases, there's so many different jurisdictions, we didn't want to have a set roof style from the factory. I think we'll end up with a really low-pitch roof system kit that we sell that'll be pretty cheap.
Okay. Um that will be for most use cases like, you know, Southern California, Nevada, areas where they don't have big pitch requirements cuz of heavy snow. Um I think Well, I also think an end-user is going to want to know from you guys that when I buy this and when it gets delivered, in order for me to get my permit and I need a roof, that the roof's actually going to pass the permit.
Yeah, yeah. And part of the the rollout to the general public is building all that in, you know, the the financing, the contractor, the the approvals, and and making that user-friendly for them. And so, your your dad, you, and it's Kyle started the company? Okay. Yeah, it was about um 2018. 2018. then just had really drawing and a a website.
Okay. And then uh ended up getting invited to go to the the builder show in Las Vegas and bring and bring a house. Oh, nice. Um we just went actually a few weeks ago. Again, um and and back then we didn't have a house or anything and we had a meeting and we're like, "Should we do it?" And like commit to it and build a house?
And then we're like, "Yeah, let's do it." And then we ended up uh going ahead and building the first prototypes and deploying them and everyone was excited and just kept running with it from there and scaling up. Wow, that's incredible. Now, uh you think April for Gen 2? Or maybe a little later? I don't know, I'm thinking like, you know, middle of this year.
Um we'll see. I mean, there's so many moving parts with it. Is that Is your design final for that or still working on that? Pretty much because all the equipment we've ordered is for the new design. Ah, okay. There'll be some small changes uh probably forever, you know, as the company grows uh every year, but Oh, always.
ordered, you know, 15 million plus in in equipments to build this this new the new design. Got it. Uh which hopefully dramatically reduces um build times, cost, increases structural ratings, reduces parts, all that good stuff. Gotcha. This is also your office then. So, somebody calls in with customer service questions or whatever, is that all through here?
Yeah, we have um you know, a few customer service staff, investor relations uh in here. We also have a few tour guides that give tours cuz we have people every single day that come for tours. Wow. Um then we have a few uh off-site people for customer service as well. Um we do have, you know, 160,000 person waitlist, 40,000 investors, you know, massive amount of inquiries, so we have to deal with all that and talk to everyone and What's your average investment?
So I mean, I guess you raised 140 mil, so it was just divided two offerings. There's Reg A, which is non-accredited, which we sold that quick. You can do 75 mil per year. Yep. And then we did Reg D. It's about half and half. I guess the average is like 5,000 or something. 5K, okay. If you just divide it, but then if you look at the Reg A, the average is lower versus the Reg D, the middle was 10,000.
Okay, on the Reg D. Basically, this is your finished unit. This is a casita set up and and ready to go and, you know, take a take a step inside and take a look. Okay, so here are sort of the the hinge covers. Yeah, there you go. You can see how it's all kind of finished off. Okay. So, you know, you've got the high high 9 and 1/2 ceilings, 20-ft rooms, bed, couch, kitchen, full-size appliances, everything you need.
Yeah. Oh, you even had sort of a bar in here. Well, we'll be in need of a lot of ADUs in the long term. California needs them especially. It's ridiculous. Did you know California is giving grants to people? To build ADUs? $40,000 each. I did not hear about that. California I don't trust them as far as I can throw them off California, but if if they can pull that off, that'd be great because that that would make it more affordable to add ADUs and more housing.
Yeah. So, that's great. Now, are all of them coming with the extended countertop? Is that the goal? Yeah. Yeah. Oh, that's awesome. Okay. Yeah, this just pops in. You know, basically all your appliances are jammed in here. This is installed. This cabinet goes in. Cover that hinge you mentioned before.
And then, you know, furniture separate. Um And this has the the cross seam like we saw being built. Yeah, you can see it just being kind of mudded and painted and And then the water heater's under here. But you got a Euro style door. Uh these are nice. So uh this is then Does it ship with the Euro door?
Uh ships everything just just like this. Uh this would be a stock unit minus furniture. So actually I don't feel the seam on this one because either Or where is it? Somewhere over here. is. Somewhere. You can't It's somewhere there. So you can't even tell. That's good. That's good. You found it? McKay found it.
He didn't find it. Uh hey. That's awesome. Okay. Yeah, yeah, yeah. So it's a little bit there. Okay. Wow. Yeah, we got the uh barn door And this is where And again, the shutoffs were over there for that. Got it. And and your dad, he was uh doing something related to like designs for this? Uh well, maybe not necessarily for Boxabl at the time, but he was working industrial designer or whatever.
Yeah, so his background is intellectual property licensing where he would basically invent stuff, patent it, and then sell the patent. I see. And uh so this was uh kind of one of one of the No. No, he's a he's an engineer and a and a designer. Ah, I got you. So he actually came up originally with the folding house design uh as one of those patents back in the day, and then we took it and and ran with it.
Wow. They are now consulting with uh Munro's team, uh Sandy Munro and and his firm. That's really cool. Uh that's actually who we just kicked out of the conference room so we could sit here. Wow. I feel honored. Uh uh Uh but now I also feel bad. They'll be fine. We have another conference Um how long have they been consulting for y'all?
Uh so we did the original walk-through with Sandy, and we posted that on YouTube like maybe a couple months ago. Okay. Um And you've since hired them? So that's that's when we started with them, and uh definitely, you know, great guys. Like I said, the goal here is automobile style mass production. So we have not only them, uh we have we have Porsche, uh and then some of our employees came from automobile manufacturing before that because what we're doing here, it's not uh it's not that crazy.
I mean, building one one house for for for per minute shouldn't be that that crazy. This is standard operating procedure for That's your goal, one per minute in the in the future? We're just looking at what what they're doing with cars, and we're saying our houses are not even as complicated as cars.
We should be able to exceed, you know, all the stuff they're doing, you know, the labor costs, the production rates. It should be a no-brainer, and the quality level. Yeah. Yeah, that's that's uh that that would be awesome. And Sandy's obviously really good at manufacturing and cars and consulting. And YouTubing, too.
Yes. Yeah, he's he's funny. He's great. He's also He also helped I think consult with Arcimoto. And and I mean, he's been around with so many of them. What what were some of his thoughts and suggestions? Um you know, he he came, we did the the the walk-through with him, and just just posted it online.
Um I'm looking forward now to to seeing, you know, what the actual full team comes back with, and all the improvements that that they have. So, So, you hired them to make improvements to the Gen 2 version, I'm assuming? Yeah, it's really um about the manufacturing process. How you should set up the new line, basically.
Yeah. Yeah, not just Gen 2, but beyond that. You know, we are planning to do, you know, the biggest the world's biggest housing factory. Uh so, we're also asking for that their help planning that. Got it. Got it. And you said you've raised what, about 148? Somewhere in there? Yeah, over over 140 million uh raised that all basically on the on the website by getting the word out on social media.
It's been uh absolutely incredible for us in in fueling all of this and making it possible. And, you know, if we didn't have all these people interested in what we're doing, we would not be here right now. Yeah. Yeah, that makes sense. Uh so, social media has been really the way to get this out. And how's the construction industry been responding?
I mean, you got DR Horton for a million dollars. That's awesome. What round did they invest in, by the way? Uh so, not the current round, but the one before that. Was that the ones that converted? There was shares that gave in the convertible note round at the same terms as everyone else and um, you know, they having them invest means a lot because they know building construction better than anyone.
They're the biggest builder in the country. They know what makes sense, what doesn't make sense and the fact that they looked at us and said, you know what, these guys might be on to something, we want to get on board now, uh, it says a lot about about what we're working on and they've been a great partner so far, not only with just the investments, uh, the order of houses and then giving us, you know, access to their other, um, you know, opportunities and and things, yeah.
Yeah, yeah, absolutely. And what So, you said you have like 60 patents. There's transportation, there's the folding. I'm what else? I mean, I'm sure there's so many things I don't see. Foundation, roof. Yeah, it's it's a lot of different stuff. It's a lot of technical stuff. It's, you know, the design of the the product, it's the manufacturing process, it's it's the shipping, the building materials.
the shipping is is awesome. Yeah, it's probably like hundreds of pages of all that patent stuff. that's crazy. How do you guys, how much are you expecting it's generally going to cost wide load versus your style of shipping, let's say here to Cali, here to LA? Well, you know, the shipping issue is what makes scaling of factory production of buildings not work.
It's the single reason why houses are not just mass-produced in a factory like everything else. If if they could actually ship these things cost-effectively, then we would be mass-producing buildings on the scale that we're mass-producing automobiles, televisions, sneakers, everything else. So, you know, what we've done is we've made it work.
You know, our product, our first order shipped across the trucked in across the entire country to Florida and that still made sense for them to do that. So, you know, not only are we getting That's for Guatemala? Yeah. Okay. Okay. Not only are we not doing a wide load. Um and the problem with the wide load is it's basically an illegal load for the highway.
So, you end up needing not just the truck driving the load, but you need a follow car. So, another car and another driver. Obviously, that costs more. Then you have restricted routes, restricted travel times, route planning permits. Some states actually require a police escort. Jeez. It is like totally uh not scalable.
If you've ever seen one driving up down the road, you can understand why. What we have is just a standard highway legal load. And uh right now, we're shipping to Arizona two per truck. So, I mean, that is the lowest cost it's ever going to get. It's amazing. And that's what's going to allow us to scale up production, have, you know, huge automation, have a huge assembly line, push the labor costs down next to nothing, uh increase our our bulk purchasing, uh and just get all these principles and efficiencies that traditional builders will never have.
So, you ship the actual box, but then the baseboard and the interior cabinetry comes in a separate box or it's inside of it somehow or or you just order on site for some of these other things you might need? So, uh cabinets, plumbing, electric, windows, flooring, all that's done in the factory. Uh what happens on site is basically uh unfolding of the unit, placing of the unit, uh you know, a few touch-ups, a few trim pieces.
and the the mudding or whatever that has to be done baseboard and that Yeah, there's a few spots where you might want to do like some some simple repairs on on uh mudding, but even in the next gen, that that's all gone. Uh really it would just be trim pieces. Um I think we're going to end up with a few kind of plastic, you know, accent trim pieces.
Um like what they used to do with sort of the um Oh, when like commercial offices, you see the they've got the little trim T-bar that goes in Yeah, there's a number of things and even just design. Like for example, like you look at this wall here. So you you see how this is part of the design. Sure.
That doesn't have any mud in it and it looks fine. You would never notice it or question it. Just okay. So we'll we'll see how it how it rolls out in the next gen. No demos yet of next gen. Just just concept right now. Yeah, and you know, a lot of that differences are kind of going on behind the wall.
People aren't going to going to see the difference cuz the product looks great as it is, but the improvements that are coming in next gen are in things like the the reduction in components, the speed to manufacture, the structural ratings, you know, all these engineering changes. Got it. Why don't you just stay with mobile if you go in that RV mobile home market where I mean, there are so many units from the 70s and 80s that need to be replaced.
It would be such an easy market to start selling thousands of these too. You know, we're we're we're going to put it out there and we're going to sell to anyone that wants it and see see where the customers come from as far as like the the use cases. I mean, there are so many. We we have 160,000 names on the wait list and each one of those people has a different use case where they're saying, I want to do this with it.
I want to do this with it. So we'll see. complicated for manufacturing and scale. Like everybody who buys for example, like Tesla Model 3, it's the same thing for every single Model 3 essentially. Maybe a different hub cap or something like that, but if people if retail starts getting into customizing these things, that seems like it would really No, not customizing.
Just like what they're going to do with it. Oh, oh, oh, their use purpose. Okay, use case. but definitely we have enough demand where we can stick to this one, you know, standardized product. It's like a product do you think you're going to get out this year? Uh so we produce, let's say, eight per week.
Okay. Um if we maintain that production rate, that's what we'll maintain, but I suspect we'll ramp it up towards the end of the year after that new equipment comes online, after we, you know, finish rolling out the new building and not really sure on what what that number is going to be And that's this year that you're doing the 15 mil in upgrades or whatever okay.
Oh yeah, it's all changing this year. So if if if you're I mean you're you're probably looking at burning probably somewhere around 25 to 30 mil over the next year in in just upgrades for automation but then also the loss on on the existing early models. Yeah, I think definitely spending money on equipment and then as far as like the unit economics everything's kind of headed in the right direction you know labor cost I think last month we had our lowest labor cost month per unit ever per unit yeah yeah you know What are you looking at?
labor cost per unit? um I don't want to say a number that might be wrong. Would you say it's less than 10? I think our direct labor is around around that number right now and and and we expect it to go down quite a lot like as I described the various equipment or belts even Yeah, I mean a ton of labor is getting removed from the process a ton of components are getting removed it's it's all getting simpler and and faster and then you know just the material cost based on engineering changes is is coming down we're getting better at buying things Mhm.
you know we're going to keep kind of massaging it into place and you know hopefully come out you know profitable relatively early on as far as like the the life cycle of of the company you know because if you look at other kind of hardware manufacturing startups great example is like like Tesla I don't know when they became profitable but I think it took a decade or something.
while that's for sure. I think we'll be it'll be happening for us you know way sooner than that which is pretty extraordinary. Yeah yeah absolutely it seems like for me the big hurdle is that permitting what you're going to go through with the states what they're going to put you through I imagine you all are fully aware of those headaches.
It been a nightmare so far and really frustrating. It's taken way longer than we would have liked. It's one of the reasons we're not you're not seeing more units in in the end end user, you know, retail customers is because of this permitting stuff and I think it's going to be a like an ongoing fight.
Like, you know, no different than maybe Uber or Airbnb having to fight against, you know, taxi regulation or or rental regulations. I think Boxabl will be fighting against building code stuff. Because what they're what the codes are designed for right now is like an environment where you have fractured, you know, thousands of individual builders all doing all different stuff.
You know, you have supply chains, you have building departments and when you look at Boxabl a lot of that stuff is just kind of not needed anymore. You know, we're going to have this, you know, established quality control environment where everything's standardized. A lot of these unknowns that the regulations are meant to uh solve protect for protect for are not going to be in the mix anymore.
So, it it'll happen and I think, you know, it's not just us that want to change it. I think, you know, the regulators that want to change it, the politicians want to change it. They want to make housing make more sense. But, the simple fact that we have to go through 50 different state agencies to get our one building approved is crazy and what other products do you see that in?
Well, and then they update every 2 years to 4 years depending on what cycle you're in. So, you're constantly fighting that. Yeah. Yeah. Yeah. It's It's It's all part of it, but, you know, on on the flip side, we're in a situation now where there's so much demand for our product. If there's a regulation issue in one area, we just won't go there right now.
Just sell where you can. somewhere else and there's plenty of demand. And you think you're close in Arizona, you said. Yeah, I think that's the first state we're going to get modular. That's for modular. So, is that going to be modular on foundation or Uh Yeah, there's there's basically uh three paths.
Uh you know, this park model RV, which we already have. Yes. Uh modular, which modular is equivalent to the regular residential building code. Um that's the main thing that we'll be getting around the country. Uh and then you have manufactured housing, which is what a trailer park home would be under.
And that's actually a federal HUD code. Yeah. And and there's the drawbacks to that, too. Uh oh, and and there's one more path, which is um basically a local building code that would possibly consider us as as penalized Sure. buildings. So, we're just trying to pursue all of this so that we can show our customers, "Hey, here are your choices.
Here are our approvals, our certifications." And they can go whichever route is easiest for them. And oh, for the customer. Yeah, for the customer. Oh, so the customer could potentially go, "Hey, here. You could go through the panelized process or the modular process." And we'll arm them with all the documentation they need to say, "Here it is." Um and then you have cool stuff going on like in California and LA, they're allowing for pre-approvals.
So, um a manufacturer like us could go to the the city of LA and and get our buildings pre-approved. So, the homeowner literally goes in. They don't even need a building permit. They just say, "I'll take that one." And it's on a on a list. way to do it. Because the last thing you want is to start delivering these things and then you're in the permit process for 2 years in California.
Yeah. Yeah. And you know, we originally thought when we started Boxabl, you know, we have this building system that we think can build most buildings. Where do we start? Uh maybe we'll go with our smallest room module, which is the Casita, and we'll target that towards ADUs. So, California is super pro ADU.
They've passed laws to basically enable those and legalize them all around the the state. They've reduced things like setbacks and permitting requirements, so it's kind of opening the floodgates for those ADUs. Okay. Uh and you think you're cost-competitive on the uh I mean, if if if I've got to do a foundation and a roof, utilities, landscaping, siding, really the difference between you and conventional is me stick building it.
Drywall stucco. Although you might do siding or stucco anyway on yours. So the difference is is really just the inside. It's It's again the studs, the insulation, the kitchen, the floor. That stuff is done. And do you think you can be cost competitive versus conventional on that? Yeah, so so site prep, you know, that's always got to be done on site.
Sure. You need a foundation, yeah. Um we can reduce a few things um and reduce kind of the friction on that, we think. But at the end of the day, it's it's always kind of a custom job for a building. And when you look at traditional uh building construction and the costs associated with it, uh well, first of all, not only is it is it going to be much slower because an average build time for a single-family is, you know, whatever, 6 months.
But, you know, it's not cheap. Uh I think I've called around many times to try and find pricing to build an ADU, and you're looking at, you know, 150, 200, 250 Sure. um for an ADU, a comparable product to to Boxable. So I think that, you know, we can come in as the lowest cost product right now with our current unit cost and the and the site um site development cost.
And of course, that that's what the company needs to do. We need to have the lowest cost housing solution that we're done. Right, because I mean, if if a contractor quotes you 200K, let's say, for an ADU uh conventionally built, uh that's going to include already, I imagine, the utilities, the foundation, the roof, the siding, and all of that, and the permits, right?
So we're looking at I mean, you would have to be manufacturing these for probably somewhere around what? I mean, 30,000 bucks, 35,000 bucks. You sell them for, say, 60K, and uh maybe you're you're trying to be 20, 30,000 bucks less expensive than than the other guy. Yeah, I mean, what we're trying to do is end up with the lowest cost solution.
And eventually one day, probably bulk sale to, you know, large national home builders at a lower cost than they can build for while also providing them with a product that's higher quality, better ratings, and faster to deploy. And then let them sell the customizations of the cosmetics, the veneer on the outside, the roof, and all that.
That probably that I think is the best one of the best ways forward. I think dealing with individual customers, I'm saying this, not you guys, is hell. Yeah, well, it's definitely adds a layer of complication and and stuff to things. Um and and at the end of the day, we're not a a real estate developer, we're just the manufacturer of these real modules.
We have to get really good at that, really fast at that, bring the bring the price down on that. Right, because now you are you're really competing against with your staff against the existing home builder's staff. To where the existing home builder says, "Wait a minute, you're more affordable for that ADU.
Let's just do you than have all of this staff, or whatever." That's where you're competing. And so you're not actually really competing against that individual contractor, you're competing with those builders who are already at scale for conventional building. Yeah, I mean, we're offering them a product that's going to dramatically simplify their whole business model.
You know, if you're if you've ever built anything and you've dealt with subcontractors and and weather delays and cost increases, I mean, it's a nightmare. And just to take all those variables out of the mix, you know, it's going to be a game changer for these guys. Numbers, uh you've been transparent that obviously you take a salary and and your dad does.
I think uh what we can can you disclose those? Uh I don't know the exact number, but it's on the on the filings. Okay. It's all that everything's public already. We have um a huge amount of transparency with the company. I think it's like 400 each. Does that sound right? At least that. It's because then there's stock comp on top of that.
We do not have stock options, but we do own the company. Uh we don't have stock options right now, I don't think. Okay. Okay. Uh and then it's it looks like at least as of one of the earlier filings, it was about 74% your dad and 26% issue. The common shares uh is split up roughly that amount. Um but then we've sold off 25 to 30% to investors.
So, our percentage of the total is a little less than that. That's a good question. Okay. Uh and then um at one point you sold some shares. Yeah. Uh about $5 million worth? Yeah. Yeah. Why? Just to live. You know, wanted to wanted to uh pocket some money and uh you know, it's it's about uh Paladin as well.
It's about uh 1% less than 1% of our of our total holdings in the company and uh you know, our our uh uh our mission here is not just to you know, change the world and and and you know, do housing. It's to you know, be successful for ourselves and and take care of our family and Of course. Yeah, I mean ultimately that's everybody's goal.
If you if you can have a win-win product, then that's the Yeah. Yeah, that's okay. Uh and then now uh how did you all arrive at at the valuation uh for the company? Uh so, you know, it's a bunch of different factors, but the the big one is just like if you think about, you know, the upside here and and what we're what we're trying to change and what the the market size is is for this and and how disruptive the the potential is.
Yeah. Um you can look at this and say, all right, this is one of the biggest industries in the world. It's multi uh trillion dollars. Um it's very old school. We're basically saying we think we can take the whole thing and transition it into our factory and you know, be the the the cheapest, fastest guy.
And if we do that, I think we can clean up and and scale up uh really quickly. Um so, so that's one way of looking at it. Um then we could talk about like, you know, projected revenues for, you know, this factory, uh what are what our short-term uh goals might be. And um you know, then then of course, you know, the ultimate deciding factor of price is going to be or valuation is going to be demand for for the shares.
Um, and then if you want to look at like comps in the market, I think a good example might be a lot of these like EV EV car manufacturers, especially the ones that didn't have a manufacturing setup first. So, you have these like Like a Lucid. We have the crazy valuations on these companies where they haven't built anything yet.
Um, they don't really have a lot of new technology. Of course, we do. Um, and they've got, you know, these these monster uh valuations. So, uh and then, you know, at the end of the day, what do we think is is the exit for investors? Like what valuation do we think we can achieve once we go public so that everyone ends up ahead.
What do you think that is? Uh, I don't I don't really know, you know, um, what what a a public company valuation could be for for Boxabl. I do know that, you know, we have this plan in the in the in the near term to basically set up, you know, a factory that will cost, you know, $1 billion down the street.
It'll be the largest house factory ever done, um, produce tens of thousands of of units and and billions in in revenue. Um, and I think that, you know, sooner or later we're going to get into that because uh sooner or later it's going to be obvious that we have a like a real game-changing solution and that like every day that goes by, you know, the the risk is kind of continues to uh evaporate and we um get closer and closer to proving like we have the the holy grail of of housing here.
Uh, and I think um a certain point everyone's going to start signing on. Oppor- resources are going to pour in and we're going to go really, really big. Uh, so what I'd like to do is basically, you know, um, you know, get break ground on on a on a big factory like that, and then hopefully deliver on some kind of you know, liquidity for investors like an IPO.
That would be factory three then. Maybe three. Yeah. Yeah, okay. We're calling it Boxzilla. Boxzilla, okay. So, you would be going from essentially what we have now about a $10 million facility including inventory, so $5 million facility to to $1 billion. Is that why you brought people like Sandy on board because that's a it's 100 to 200 X of a facility?
You know, it's it's definitely quite quite a heavy lift and ambitious, but but so is this. Okay. And you know, look around at what we're doing right now and where we were a few years ago, and people were saying like, oh, you know, a $50 million valuation is a lot, and you know, you've never done this before, and what you're doing is ambitious, but you know, here we are.
Yeah. The houses are are churning out every day. So, hopefully hopefully we'll be in that position again in a few years where we're saying permits for like the retail guys. Yeah, we need that to be nice. Need permits, you know, to sell to be able to sell the houses. But yeah, we need a lot a lot of help, and we and we have a lot of help rolling in.
And part of that's been from social media and getting the word out. And you know, interest flowing in like literally from all around the world. It's been it's been incredible. Is is anybody calling asking about the valuation when they want to invest in your reggae? Yeah, a lot of people ask about it.
And and you just the same answer probably? Yeah, I mean, those are kind of the the main points on it. Yeah. Okay. So, the you had mentioned the projected revenues. What projected revenues do you have? I mean, I don't like to talk too much about projections, but like roughly we think that this current setup between this building and the other one, once we're ramped up, we might hit like about 5,000 units per year.
Okay. So, you know, 5,000 * 60 is, you know, 300 and we'll see if that's the only product in the mix at that point. There may be other products in the mix as well. Sure. Maybe like a higher price model or or an empty bedroom model or or something. When when do you hit profitability per model? Because obviously you have cost of goods sold, which right now are about 77 per 60k unit.
Right. So, obviously that scales, but you also have OpEx after that. So, if you have, you know, 5,000 units at $3 of of rev, you don't want the cost to be, you know, four, right? Because then or 20% higher. Yeah, the the current material cost is not that. That was like an an older filing. It's obviously it's come down and continue to to come down.
But yeah, so so, you know, just on a basic level, materials plus plus labor, you know, minus retail cost has to be there. And then our fixed overhead has to divide up amongst the amount of units we're making. So, you know, we we only have this much rent on this much square feet. So, if we make uh you know, 10 units, the the cost per unit is much higher on that rent than than if we had 100 units.
Can you get to profitability in this building or do you need to get to factory three? Yeah, we we think that we have a clear path to profitability between, you know, the these two buildings. And of course like that's the main focus of of what we're doing here. It's get to that. So, right now you've as of your last filing you had about $57 million of cash, seven and a half of inventory.
Where are you going to get the money to for a billion dollars? Is that that's the nature of the fund raise, I guess. Uh yeah, I think we've got over 80 million in the bank right now. So, With new funding, okay. Yeah, I believe we're like in a good spot to, you know, play out everything under the current square footage with the current plan and and get to profitability.
Uh even if we didn't raise another dollar. So, like under the current factory, I I think we have a clear path to to making it happen. Uh and then of course, the bigger factory is that's all new all new funding. So, Oh, that'll be a new funding round in the future for the new factory. Yes, yeah. Um pretty much like that's kind of what we're looking to raise money for now.
Um so, we're looking to raise uh you know, a billion dollars to to set up, you know, what would be the the world's largest house factory and um chasing down like a whole bunch of different opportunities on that. Yeah. Um from everyone under the sun, you know, institutional investors, strategics, um investment banks, you know, all all that kind of stuff.
Um a big part of that cost is is just land and warehouse building cuz it'll be like a from scratch building several million square feet. Sure. You're owning this and buying the land rather than leasing it. Is the goal. Yeah. Yeah. Yeah. Yeah. But, you know, even even that's another possibility for for funding.
Like, for example, here in Las Vegas, we have huge amount of warehouse development, which you might have noticed driving in. And we're going to get to um you know, possibly we we could say, "Hey, you know, build to lease." Um cuz they'll they'll put up a million square feet here with no tenant and just put it on the market.
So, we could potentially just actually lease the big factory building and that would take the cost 7 or 10-year lease and they build that out for you? Cost would come off our plate if we did that and that would bring the total capital amount down. Uh but, you know, this this is a big it's a big problem.
It requires the big solution. I think there's 3.8 million housing units short according to some statistics least. It's more, yeah. Um and uh you know, it's it's a it's a big opportunity. And then uh beyond the United States, this potentially scales everywhere. Uh even without that bigger factory because one avenue for us is we take everything we're doing here once it's dialed in maybe at the end of this year maybe once we're we're profitable and then we say to other players around the world, "Hey, do you want to copy what we've done?" And we bring them on as you know, franchise license license down partner factories.
So, that's a possibility for us. We actually have a growing list of inquiries for that on our website. Um so so we'll see how that plays out as well. The uh D.R. Horton investment you mentioned was during the convertible round. That looked like it was at a valuation of about 10 to 15 times smaller than the valuation now.
What changed? So, that round basically ended before we had done anything. Okay. So, you know, I think uh it was a convertible note, so uh I think it's around 200 million valuation something like that. Okay. Um and uh they basically Now you're at 3.1. Something like that roughly, yeah. And and and uh basically they they they signed into that I think you know, as this factory was being set up or before that set up before we had really proven that we could do it.
So, you know, a big reduction in risk happening from when we're kind of just planning and setting up to when we're actually shipping houses to when we're actually starting to refine the unit economics. Right. Right. Uh okay, I think I've got uh like two more questions and then I'm done. Cool. Um it looked like in the first 6 months of uh 2022, you all wrote in 3 and 1/2 million dollars of R&D.
Plus you had part of your cost of goods sold R&D. You mentioned that it's you, Kyle, and your dad that do the R&D. So, how do those re- expenses go to you guys? Just the check? No, it doesn't come to us. Okay. No. That's probably like scrapped parts and stuff. Oh, okay. Okay. Yeah. No. The only The only payments that came to us is salary.
Salary. And then if there's stock comp, whatever that or whatever shares you sold. And yeah, selling shares is a separate thing from that. Yeah. Um Yeah, you you sold about 6.25 million shares at 80 cents. That's what you're raising money at right now. Yeah. If somebody uh let me know if this sounds right.
If somebody were to invest a million dollars, they would get about 1.25 million shares at 80 cents. So uh million bucks uh well, 1.25 million shares at 80 cents is about a million bucks. It's exactly a million bucks. So, million-dollar investment uh at the current valuation y'all have 3.92 billion shares outstanding.
That puts you at that valuation of about 3.1 billion dollars. That person's $1 million investment would essentially be the equivalent of about $318 of of cash that they would have ownership of in your company after that investment, which means the person is spending $999,782.20 of their million-dollar investment on the intellectual property and the brand y'all have built.
Do you think that's fair? First of all, let me say I feel like that that gift where the numbers are flying all around. You know? Okay. Okay. Cuz that was a lot of numbers. Um But yeah, of course they're not buying one-for-one cash. So, I don't think that that's, you know, really makes sense to to make that comparison.
They're buying They're buying the company, not the cash. If they were buying cash, it would be, sure, you know, totally different type of deal. Um but yeah, you know, they are buying on to a vision that is an absolutely massive vision. Uh it's kind of all or nothing. This is uh play for world domination, change how all buildings on the planet are are made um in a a multi-trillion dollar industry.
Uh this is not a a a small play that we're doing here. You know, this is this is a a big uh a big risk and a big, you know, undertaking and we are trying to mass-produce housing on a scale that's never been done before in the in the history of the world. We're trying to build the largest house factory in the in the history of the world.
We're trying to dramatically reduce housing costs for for everyone and yeah, it it may not work. Um but, you know, but but yeah, and and but I I think it is working. You know, it's it I think it's working and uh you know, if if someone wants to look at like me and the company and what we've done from the beginning, we've consistently like delivered.
Um basically from, you know, an an idea, no no experience in this at all, and we've gone in and just, you know, made a plan and executed it on it and delivered and scaled up, you know, a factory from nothing with an experimental product and all new manufacturing equipments. And I think it's absolutely amazing and now it's going beyond, you know, me and Paolo and Kyle and we're expanding in into a team of like really amazing employees that are um taking the vision and and running with it and pushing it beyond me.
Um so, like up until a certain point, you know, it was all me and Paolo and Kyle. Uh but now we have, you know, it's now resting on the backs of of this whole team. Uh so, it's kind of grown beyond me into this, you know, um you know, uh creature on it on its own. Um so, But you three are still the core of the R&D right now, right?
Yeah, yeah, of course we're we're directing the company, um you know, but um But nobody else is doing the research right now. Uh we we yeah, quite a lot of people are are are doing research. Um, I guess the core the core direction comes from us. Sure. Sure. But but uh you know, my my point is it's kind of it's coming alive on its on its own.
It's separate from us now at this point. Last question, uh you had mentioned uh in your valuation sort of you let the market decide that that the market decides uh you know, if they want to invest or not at 80 cents. Uh, it's about 167 times your your old revenue from from last year. Uh, have you had any institutions or venture capital other than D.R.
Horton at the valuation that was, you know, 15 times lower? Um we do have some you know, I don't know, institutions, companies Is that Dalmore? Um, Dalmore is our uh investment bank, yeah. Okay. Yeah. And actually, you should you should hire them as well if you're looking to do Reg A. I tell you I'll tell you why later, but they're the best game in town for this kind of thing.
Great. Well, I'm done with my questions, so why don't you um pitch uh how people can invest and anything else you want to add? Uh, well, I'm not going to tell them to invest, but you know, if you want to learn more about the company, um we we are um kind of posting everything we do online, so you know, YouTube, uh Instagram, check us out.
You're welcome to come for a a tour of the factory and uh and learn more about what we're doing. And uh uh one thing I I will mention about investing is right now investing is not open to the general public. It's only open to accredited investors. So, because you've maxed your Reg A. Yes. I And um another thing you'll learn about about Reg A and and uh Reg D, you have to be very careful about disclosures and what you say.
Um, so that's why I'm making sure to tell people that it's not open to just anyone. We Where can somebody go to read your prospectus? Uh, just go to the website, click invest. Um, you'll see See the prospectus on there. So, to be clear, this video is not a solicitation. Go to boxable.com. It's a website.
It's boxable. Go to boxable.com, read the prospectuses there. Not financial advice. Any other disclaimers? So I think we did good. Yeah? Good? that's about it. we're Thank you. Cool. Awesome. Yeah, great answers. Thank you so much.
Comments 0