Project Homes

Situation

After spending significant amount of capital into staffing, equipment, land, legal structures, and business development efforts, the Company struggled to gain traction in the historically rigid affordable housing construction industry especially in developing countries. Even with the associated benefits of a higher quality product, the Company did not achieve any meaningful penetration (<1%) into the market when forced to compete on the pure economics of the alternatives. The Company reached the fully committed funding amount for the anchor investor which was roughly $90MM and projected additional funding requirement of at least $17MM through 2028, with no anticipated material improvement in the financial performance.

Engagement

G2 was retained to conduct a rapid Phase 1 Assessment of the Company and developed a thorough report that included the assessment of the business, operations, and financial condition of the Company, short-term liquidity, near-term capital requirements, and strategic alternatives.

Outcome

G2 conducted an independent and in-depth analysis of the business model and asset portfolio, scrutinized the financial and liquidity projections of the Company, and executed a comprehensive assessment of strategic alternatives. Subsequent to this evaluation, G2 reached the conclusion that the business model is not poised to achieve breakeven in the foreseeable future. The attainment of profitability would necessitate an unrealistic and exponential expansion in market share. Consequently, G2’s recommendation was for an organized wind-down of the Company. This strategic recommendation was proposed with the primary objectives of mitigating shareholder losses and maximizing the potential recovery for the shareholders.