Broken Promises

I love it. Hey, Keith.

How are you doing, Catherine?

I'm good. How are you?

Doing fine, thanks.

Good. So I'm not sure who's all here. I don't know who United Tiny Homes is.

That's good. Awesome. We're also— we had to come up to meet with our developer today, so we are parked. Okay, great. Okay.

And Mark's here and Tommy's here and so is my partner Hoi is here as well. So we're here to talk about, um, sorry about that. Okay, uh, getting Hoy his money back, um, by the agreed-upon time, which is June 1st.

Is it June 1st or is it July 1st? June 1st. Um, okay, I just want to make sure that, that we all understand that this is a settlement conversation.

What do you mean a settlement?

I mean, this is a settlement conversation between all of us.

Yep.

So, um, it's not going further in, in— correct? It's Friday night.

I, I, I, I'm not sure what you're referring to. We're just— I— we're coming to the table trying to understand what exactly the plan is to get Hoy his money back. To get us our money back by the agreed-upon time, because as it stands, it doesn't appear that that's going to happen.

Okay, so just— hoi, thank you for being here, by the way. I appreciate it. Where we're at, and we just left a meeting with our developer that we've got our larger contract with. When we originally borrowed the money, it was to help us build some homes. And those homes to date are not finished. We had anticipated a couple of different things. We had anticipated two of our other homes that went out to go out quicker and for us to be paid on those faster, which when that didn't happen and we didn't have that cash flow, it stopped— it stunted our ability to make our payments. Not only to, to you, but to, to many other people. And it's just snowballed into, uh, a situation where we have been very, very tied up in our capital. Um, we do have a contract with a developer in Camp Verde for 65 homes that is also 9 months late. In getting started.

We were meeting with him.

That's who we just left the meeting with. Okay.

45 minutes ago.

So that is actually gonna fund at the end of this month and it's gonna help us catch up, but we actually need a bunch of those monies as well to build the homes that are gonna put us into production. We have two different groups that are looking at giving us working capital and one that is looking at, um, a large capital infusion as equity. All of those are predicated on us getting back into production, which is predicated on this large order. We have two other large orders, one with a new product that we're going to be utilizing, and, uh, our training on that product has been pushed now— it's been pushed for two months and it's supposed to start next week. That also puts us back into production. So being stalled on these and our customers not being able to receive their homes and being able to pay us for the homes and being able to pay you back is where this problem has stemmed from. We do have some money coming in this week. We are planning, uh, Keith, correct me if I'm wrong, but we are planning on getting some type of a payment to you this week out of those monies coming in. And I do not believe that we will be able to have the full amount paid to you by June 1st. So we would like to see what we can do in order to find a way forward through this and make sure that we're fulfilling our obligation to get this note paid.

So, I mean, Hoy can come on and tell you the impact that it's having on him and his company and all of his employees because he had planned for this inside of his company. And so this is like now putting lots of other families in jeopardy because of this. I would love to believe you, Gail, but the problem is, is you've told us multiple times and there's been multiple inconsistencies in what you've told us, and we have it in writing. You know, for instance, you know, December, um, December 26th, you're— it literally says attached is the requested— it's a picture of one of the homes with the VIN number attached. The second home was just painted and the VIN will physically be— go out on Monday. And when it goes out into build install, I will send that to you before the end of the day. Then when Tommy and, um, Roman went, you showed them two trailers that had chassis that with nothing built on them.

One of them actually has a home built on it. But let me just explain. In December, when that was happening, right? That was not for the money. That was not the monies that he had just given us. That was for— that we had monies coming in from homes going out.

Those were the VIN numbers that the money was backed with.

Not that this whole email is about the VIN numbers. Always, always for homes that were going to be built. They were never for homes that were already built. If it had been for homes that were already built We wouldn't have needed the funds.

And then your email doesn't make sense.

I think something's— please send it back over to me. But there was a whole conversation that we had when we did this in the first place.

Let's, let's not discuss the collateral because that's a moot point at this— in this conjuncture right now. We know, we know for certain that the collateral is not available.

So, so moving forward, moving forward.

Let's go ahead and have Hoi explain how this situation is affecting his business and could potentially cost him about 30 employees and a million-dollar company. So please, Hoi, if you don't mind, introduce yourself to Gail and Austin and Keith and explain to them how their inability to produce has left you kind of high and dry.

Yeah, um, from Summit Equity. Um, just to be on the same page, yeah, we're, we're currently in the full default of this loan, correct?

Yes.

Are we in agreement of that, Gail?

Yes, we are behind in our payments, correct?

No, are you in full default?

That was the question.

We are behind on the payments and we owe you the money, correct?

So that means full default.

That means full default. You've been given a, a cure notice and you, you didn't meet that.

You were unable to cure the notice that you sent us.

That is correct. Correct. Okay. And so again, the purpose of this is to understand that based on what you've said, I'd like for Hoy to continue with, with his question.

Okay, let's let him talk.

Yeah, so I mean, you missed first couple payments that accelerated us to 20%, still missed the period of time that we gave you, and now we're not able to make— well, you're not able to make up the full payment by the agreed-upon date. So where we stand, it's a full default in effect. Just to reiterate that I cut out, my internet was cut out.

Correct?

Yes, we understand.

All right. So what I plan to do with that capital, um, Q1, Q2 is slower. So we want, as some of us actually, I wanted to deploy that capital to add a little bit extra cash flow to pay for a couple bills, but I strategically planned it out to return next month so I can reallocate that capital for my business. It's a multimillion-dollar operation, and I can flip that money 10 to 15 times over in 6 months. So that's, that's where I stand. I'm doing like 50+% every time I flip it over. So that's, that's how big the impact is for this $200,000 to come back. And as far as I know, we— I was told that there was collateral, but now there isn't.

The collateral is being built.

No, they're collateral.

Let me just finish. You know what, you always interrupt me. Let me finish.

Two finished Denalis, uh, ready, and, and you sent me pictures of them. So we have pictures of the Denali that is out on somebody else's property right now, and an email from you saying that they're both done and ready, because the plan was if you didn't, if you didn't get the money in time, I, I insured Hoy, that these things were valuable enough to sell and make his money back. And so because of the fact that I understand, like, you guys make an excellent product. And so I convinced Hoy and Catherine both that it's worth the loan to take it because if we needed to collect the collateral, it was 100% worth it because you guys were basically insuring the money. With $150,000 homes, which totaled $300,000 in what I called collateral. And so having just a flat, like, deck is not collateral. We both know that. And the, the, the, uh, the third-party MVD is being investigated by ADOT right now because of the fact that they signed a vehicle inspection that had no vehicle attached to it.

So we build trailers, we build homes, we don't build vehicles. I don't want to get into all of the details.

So, so based on the documentation that we have, Hoy, I'm just making it clear with you here present in front of Hoy. Hoy, the paperwork— because Hoy doesn't live in Arizona, so that's why we represent him here, is because we have to do this legwork. According to the ADOT, a park model which is what is on the MCO and which is on the vehicle, uh, the Level 1 vehicle inspection. According to Arizona Department of Transportation, a park model is a trailer with axles, tires, walls, and a roof. It doesn't have to be livable, it doesn't have to be highway ready, but it has to have that to get a VIN number. Okay.

We create the VIN numbers. I don't think that this is the moment to go into all of the details.

No, it's not. We're looking at—

we, we, we want to find a way forward, and we would like— so if we can't, if we can't collect the collateral and sell it, stop talking, please.

Do you have anything that you can sell that's valuable enough to equate to the $240,000 you owe?

All of the homes that we build are purchased. So, Hoyt, just so you understand, when we borrowed this money, it was because we have customers, if they buy a $100,000 house, they only have to give us $5,000, 5% down for ease of clarity with this. So with only $5,000 down, we do not have enough money right now in our current situation with the business until we're back into full production to complete the home. Which is why we've taken out some of these short-term loans, including yours. The purpose and the reason— normally we only take them out for 3 to 4 months. We knew that we were running behind and this was going to take a little bit longer because of the holidays and because of the situation that we were in. So that's why we asked for a 6-month note. In order to be able to get these done. That was, that was under, with the understanding that some of the other homes that were almost done were going out the door and bringing in cash flow. Does this make sense so far?

Not really.

I'm not asking you. I'm asking Hoy.

Well, respectfully, that doesn't, that doesn't have anything to do with me.

Well, I'm just, I'm explaining the situation and where we got in trouble. That's all, just so you know what the money was for. And that was always the purpose of the money, was to get the homes built. The homes that you're— they're not—

I'm here, Gail, is because the boy's trying to talk and you keep talking over him. So I can be a bully.

That's what you're doing, Tommy.

You're damn right I am, Austin. Shut your mouth, boy, and sit down. No, don't, don't start this on your girlfriend, buddy. Don't, don't fuck with me.

Let's just be— we want to find a good resolution here.

Yeah, we do. We want to know when you're going to pay the money back or how we're going to proceed moving forward.

We would like to come up with a payment plan, Hoy, that makes sense, that we can get you the money as quickly as possible.

So what, what do you propose?

What do you propose?

I won't have a proposal. We just left this meeting.

You don't have a proposal because you don't have any money. People with money can make proposals. You don't even have a contract for 64 houses. I, I do. I have a contract for 54 houses and $15 million. You ever heard of involuntary bankruptcy, Gail? I'll go buy your debt.

Okay, Gail, by when are you gonna have an actual plan and a solution?

We would like to be able to have a plan, a move forward plan with actual dates that we can make payments to, to you by Monday. We just got out of this.

So another week? We need— you're asking for yet another—

I'm asking for 3 days.

Monday—

what do you mean 3 days?

Wednesday, Thursday, Friday.

You said Monday.

Monday.

Yeah, well, again, I guess Monday is 7 days. Cruise ships all the time, the weekends don't count.

So I, I counteroffer. No, I counteroffer with Friday. We need a very clear plan on Friday.

And give them till Monday. They're not going to come in the day, right?

Either, like, you can give them till Monday. That's not going to happen. I want to know what's going to happen if they don't accomplish it.

I can't, I can't hear anything because Tommy just keeps talking, so Well, take the fucking shit out of your ears and listen, buddy. Keep talking, Tommy.

Okay, please, please show some respect, boy.

You spent my— show some respect.

Not one more word out of you.

Show some respect, young man.

More than happy to have a conversation with you without, without this background noise.

Then that includes Austin as well. Here's the deal. I want a crystal clear laid out plan. Who, what, by when, and what the consequences are if it's it's not going to be followed through. Like, this doesn't work, Gail. You haven't honored your word multiple times with us, including getting back to me on the same day.

Yep. And I'm sure you understand we're in a pickle as well. So yes, we'll get something to you by the end of the day Friday. We'll be as clear as we possibly can by the end of the day Friday.

And if it doesn't happen, what are the consequences?

We will have it to you by Friday.

And if it doesn't happen, what are the consequences?

I'm not your 2-year-old. We will have it done by Friday. We'll have something to you on Friday.

You can understand that you've broke your word multiple times with me, right?

And we will have something to you on Friday.

Hoy, are you fine with if she actually gets something to us by Friday?

That does not give me any clarity.

Um, we have everything down on paper, and we're working on bringing in other funding, and you are on the top of our list of things that need to get paid along with our rent. We just left a meeting. I have not even had a chance to talk to Keith yet. We need to sit down and make a plan, and I cannot commit to you to giving that to you before the end of the day Friday.

So here's what we're going to need as a part of this plan is we're going to need to see these signed contracts that you're claiming that you have. We need, uh, proof that these people are going to be paying you, by when they're going to be paying you, and bank statements if necessary. We need actual proof.

I am going— I would need, in order to divulge those contracts, I need clarity and, and, and promise from you guys that you are not going to go and call my clients out of the blue.

I have no need to call your clients.

I do not trust that Tommy is not going to do that.

Then don't send it to Tommy, send it to me so that Hoy and I can dig into this.

Are you scared to show documentation now? It's just documentation.

I have the documentation.

Yeah, prove it.

I call bullshit.

So you want to show me your 65-home order, Tommy?

As a matter of fact, I would love to show you. I will show you the PPM and the $15 million check I've got written for 54 homes if you step down and you take your clowns with you.

Okay, we're not going there right yet, Gail. By Friday, you're gonna have it in writing, a crystal clear plan— who, what, by when. You're going to have Hoy back. You're also going to produce the evidence of these— this funding that you claim that you have, these orders that you claim that you have. You're going to provide all of that so that we actually have, like, actual evidentiary support.

Yes. Fair enough.

Okay, great. Hoy, is there anything else?

Yes, and add me as your number one priority in that I know that, like you mentioned, you owed— you owe multiple people. So there's no promises from you until we have it down on writing that I will be the first person to be paid back when you get the funding, and a crystal clear date of when I get the funding, because our date is due the 1st of next month.

Yeah, we will have a plan to you by Friday.

Great, we look forward to it.

The plan has to meet those criterias.

I understand.

I have taken all the notes. Hoi.

Sounds good. Thank you, Catherine.

You're welcome.

And Tommy.

So Tommy, if you have a plan of somebody who would like to to invest in the company, we'd be open. And I don't know where 15 homes comes— or 54 homes would come to $15 million.

So yes, I have made that happen. And as it stands right now, unfortunately, um, the current management's inability to keep their word is the very thing that's holding back the purchase order and the money. So that would be— have to be a whole separate conversation of how that would be resolved. Because when it comes to investment, it comes to the investment and it comes to the team. The company and the investment are absolutely solid. The team, unfortunately, there's so much evidence that they cannot be trusted inside of keeping their word. That the investor is not interested in that particular team. So that would be a whole separate conversation if you want to have that conversation.

Make us a proposal.

Okay, great. I will go back to my investor and have that conversation.

Okay. Okay.

Yep. Anybody have anything else?

I don't.

Okay, thanks, Mark. Thanks, Keith.

All right, thanks, guys.

Thanks, Hoi. Thanks, Tommy.

All right, bye-bye.

Bye-bye.