SLI: At the Forefront of Industrialized Construction

DON REID: Hi, everyone. My name is Don Reid, and I'm the chief strategy officer at Sustainable Living Innovations based in Seattle. I've been involved with SLI for more than a decade. And I'm passionate about our business and the opportunities that we have in front of us.

By way of description, we've been on a 13-plus year journey through multiple iterations. And we've arrived at a point in our business where we can build a 14-story high rise structure in a factory and assemble it on a jobsite as if it was a kit of parts.

The project, Real Free Battery in the Belltown District of Seattle, has topped out and will be commissioned in early January 2023. The buyer, Equity Residential, has partnered with us on the project. And we're thrilled to have collaborated with them on this important corporate milestone.

We're far from the end of our journey. For example, we're now 60% of the way from completing a load-bearing version of our solution, which is being assembled as a low-rise residential home for homeless people also in Seattle. We're equally on a journey in our manufacturing and our assembly processes. If we get this right, we'll achieve the level of affordability that we intend for our solution to provide.

So we clearly understand the necessity to transform our design manufacturing and our delivery processes by our comprehensive use of digital tools. In this regard, we're working extensively with Autodesk and other companies such as IMAGINiT, Topcon, XMPro, HDX Labs, DroneDeploy, and VARIO to develop solutions that make it easier to design, build, and operate buildings in this way.

SLI's comprised of experts in architecture, engineering, construction, digital, and low-voltage power network, system operations, IoT design and development, industrial design and manufacturing. We live the challenges of the lack of workflow coherence across the complex matrix of activities that today result in a roughly $2 trillion of construction industry waste.

For instance, we are our own OEM. We face supply chain challenges as both a builder and also as a manufacturer all in one shop. Beyond supply chain challenges, we face the reality that in numerous instances at least to date, no one has developed components or systems we need. So we have to invent, design, prototypes, submit for various types of certifications, and then either manufacture or contract with a third party to deliver those components of those system. We live the above reality every day, and we've been doing this for more than 13 years.

Our mission is to unlock exponential growth of sustainable infrastructure and address the global housing supply crisis by democratizing construction through our platform. Building owners, developers, and other industry participants can use our platform to digitally develop, design, manufacture, and assemble sustainable building. By redesigning the building from the ground up, we discovered it's possible to manufacture an entire building using an automotive-inspired chassis design approach.

Since the construction industry has been untouched by the manufacturing and digital revolutions, designing and manufacturing buildings, like the automotive industry, is unlocking the economies of scale, efficiencies, and cost reductions that the construction industry desperately needs. We build our platform from the ground up to address the growing challenges of our users and transform the construction industry into a seamless, digital first, and manufactured experience. Our sustainable products and services aren't limited to our buildings, allowing us to sell to conventional new build and retrofit projects.

While SLI is in the early innings of our journey, we have an impressive set of industry participants joining our ecosystem and a rapidly growing sales backlog. Our buildings will meet and exceed the world's leading sustainability standards and can reduce GHG emissions by 80% to 90% over the life of the building. As our platform benefits from compounding network effects of more users, we're empowering all industry participants to leave conventional construction and build a sustainable future. But that's a lie.

The market opportunity, despite being the largest industry in the world at roughly 13% of GDP, construction has been slow to embrace and adopt innovations in manufacturing and technology. The industry is ripe for disruption due to rising costs, systemic project delays, construction waste, housing shortages, and poor environmental performance. The construction industry is responsible for 40% of global GHG emissions making it the largest emitting sector on the planet. Our platform serves as a sustainable manufactured alternative to the global conventional construction market, the largest in the world at $15 trillion annually.

Our current focus is on the US multifamily building market, which is estimated at roughly $250 billion a year, expanding to other product verticals that will take our US total addressable market to 900 billion per year. Our bold mission, revolutionary platform, and breadth of sustainable products and services will enable us to service a large portion of that market share today and into the future.

We aim to have a regional presence but global scale. Our regional offices and factories will supply fast-growing markets. Decades of supply chains development enable the company to expand offices and factory capacity in a capital-efficient manner.

Regarding our platform, we're revolutionizing the way that buildings are developed, designed, and constructed. Our platform empowers developers and owners to digitally develop, design, manufacture, and assemble ultra-sustainable building. We provide our users with an alternative to conventional construction making it easier, faster, more efficient, and cost-effective to build sustainable infrastructure.

We offer these industry-transforming capabilities through an integrated user-centric platform that provides customers what they need at each phase of the project-building lifecycle. Our platform supports customers and industry participants, including building product companies, architects, engineers, building owners, general contractors, property management companies, service providers, lenders, insurers, and tenant.

Our platform will be further enhanced by compounding network effects as more industry participants come to rely on SLI's platform to develop commercial infrastructure. We'll be able to launch and scale products by leveraging the growing network in the SLI ecosystem and providing more value to customers from a growing catalog of products and services, which include an omnichannel construction platform.

The SLI platform enables developers and owners to develop, design, manufacture, and assemble ultra-sustainable buildings across different sales channel. Our platform provides developers and other industry participants with a single view of their project combining and synchronizing all the relevant project data into an intuitive digital-first user interface, product and services for conventional building.

The SLI platform also provides developers and owners with an opportunity to integrate SLI products and services into their existing or new build conventional building making them more tech-enabled and sustainable-- a simplified development and construction experience.

The SLI platform provides developers and owners with an intuitive development experience that addresses the myriad challenges they currently face, including a lack of data to inform decision-making, long development timelines, project delays, conflicting interest, and of course, cost overrun. Construction is transformed from a highly complicated on-site process to a more simplified and efficient offsite manufacturing process with simplified on-site assembly. The latest sustainability technologies seamlessly integrated.

The SLI platform is designed to integrate the latest green technologies and building products that developers and owners seek to bring ultra-sustainable buildings to light. A platform designed to launch and grow brands. Developers can launch and build their development brands and businesses on the SLI platform.

We help developers and owners deliver beautiful, sustainable building to their tenants-- a platform for developers and owner's success. Our goals are aligned with those of our developer and owner partners as evidenced in how we design the SLI platform to support their growth.

We offer development and design tool and resources to help our customer increase the number of projects that they assess, reduce the time to market for their completed buildings through manufacturing, and increase the number of developments they can pursue and manage. All of this leads to more predictive revenue and profit for SLI and our user base-- an open platform with a thriving ecosystem.

A rich ecosystem of building products companies, architects, engineers, developers, building owners, general contractors, property management companies, service providers, lenders, insurers, and tenants has evolved around the SLI platform. The contribution of each and every participant enhances the value of the platform to all users.

Let's talk briefly about our business model. Today, we generate substantially all of our recurring revenue from the sale of complete, productized buildings to building owners delivered by SLI. Our intent is to change our delivery systems and sales channels to sell our products and services to platform users who will assemble and integrate our ultra-sustainable buildings leading to scalable recurring revenue. The company also generates revenue from product and service sales to new or retrofitted conventional buildings making them more tech-enabled and sustainable.

Let's talk about our growth strategy. In the first instance, we want to grow our base of developers and owners. We believe that we have a significant opportunity at SLI to increase the size of our current developer an order base. We intend to strategically invest in marketing programs that enhance the awareness of our brand and our solution to large, medium, and small developers looking to participate in productized development, grow our developer revenue.

Our goals are closely aligned with the goals of our developers. The more a developer or owner interfaces with our platform, the more revenue we generate as they assess and develop more SLI building. We intend to continue helping our developers be successful by improving and expanding our platform and providing additional solutions and resources.

Continuous innovation and expansion of our platform. We intend to build more products, services, and solutions with additional features and functionality to further differentiate our platform, continue to grow and develop our ecosystem. We intend to grow our ecosystem of building product companies, architects, engineers, developers, building owners, general contractors, property management companies, service providers, lenders, insurers, and tenants to bolster the use of the platform.

To continue to expand our investor and lender programs, we intend to strengthen our existing relationships with institutional equity investors, green bond providers, and lenders to provide programmatic financing solutions to our platform users.

And finally, we continue to build for the long term. We have a culture at SLI and iteration and testing new ideas, materials, and systems with a focus on maximizing long-term value. As we continue to build for the future, we will consider focused international expansion, more strategic partnerships, new solutions, and selective acquisition. I appreciate your time, and I hope you enjoyed this interview. Thank you.