Executive Summary

Horizon Technologies, Inc. has been created to operate and manage manufacturing facilities utilizing certain technologies relating to State of the Art production of pre-engineered homes and building components. There are twenty Manufacturing Facilities planned for the Southern United States. Three Facilities are designated “Primary Facilities” with one ea. located in California, Texas and North Carolina. The seventeen additional Facilities are designated “Sub-assembly Facilities” are to be located in pre-selected areas from the Southern West Coast to the Southern East Coast. Each manufacturing facility is identified by the location in a respective State where it maybe located. Each facility will be incorporated in the State in which it operates.

The foundation upon which Horizon Technologies (HTI) was created is the company’s expertise in a fully integrated CAD-CAM Manufacturing System. This State of the Art Manufacturing System, using the latest in computer technology and control, provides a vehicle to construct single family and multi family, as well as low-rise commercial buildings, much faster, with a considerably higher and consistent quality, and at a lower cost, than conventional construction.

As an operational base, HTI performs the following primary functions;
• Consolidate design and engineering of all structures, and provide the production drawings for the fabrication process at all operating facilities.
• Provide oversight on the operation of all facilities.
• Hire and train initial staffing at all facilities.
• Directly manage the site identification, site planning and permitting, and the construction of all facilities, and the installation of all equipment at each facility.
• Provide manufactured components from the facilities, identified as Primary facilities, to the Sub- assembly facilities.
• Monitor related technology trends, develop proprietary technology, and apply new technologies to provide improvements in components and processes.
The importance of the latter point cannot be underestimated. HTI’s advanced proprietary engineering systems and technologies provide the methodology to build and assemble entire housing communities that are high-quality, energy-efficient, structurally superior, cost-effective to produce, and resource-efficient in their production, while conserving labor and material costs. The development of specialized manufacturing equipment and techniques, coupled with highly specialized training, is central to the economies of scale produced, and provide for controlled, efficient production. Most significantly, HTI has been successful in implementing this technology. The company has demonstrable potential to revolutionize the home building industry in North America.

The founders and principals of Horizon, comprising a team of highly motivated, experienced engineers and senior managers, with many years of combined experience, are most qualified to perform the functions enumerated above. They represent decades of manufacturing experience, and over 30 years of direct experience with the Building System as it has evolved. Four of the five principals hold engineering and other advanced degrees from major Western educational institutions, with the other holding an MBA from one of the leading International Business Schools. Individual patents relating to certain aspects of the Building System are held by the principals, and additional patents are pending, as a result of the continuing quest for new technology, a quest that will never end, for HTI is dedicated to the principle of incorporating new technology wherever possible and practical in the continuing effort of maintaining the highest possible competitive position.
During the early days of research, the limitations of the traditional supply channels for the residential construction industry became apparent. HTI came to the conclusion that a certain amount of processing. 

(value-added) of raw material or semi finished product is necessary to assure the quality standards of the desired application to the manufacturing process. As a result, a fundamental goal of the manufacturing effort has become to vertically integrate wherever possible, and thus to control the material and the costs of the value added processes at every step. It is the philosophy of the Company to do as much as possible in the facility and as “little as possible on site.” The traditional domestic building industry is subject to material supply variables. The high degree of vertical integration in the manufacturing process of the Building System, together with the controlled environment of the manufacturing facility, minimizes this issue of instability in the supply of raw materials. The fundamental benefit is the production of a premium product in a consistent, timely, efficient and economical manner. Couple this vertical integration with production volume provides economy of scale and it is this coupling that is the fundamental basis behind which superior quality can be achieved at competitive prices.

The vertical integration effort and the technologies involved have resulted in the discovery of highly beneficial by-products. These by-products have significantly contributed to cost reductions and product quality. The creation of these by-products represents a continuing focus for HTI and all such by-products will be made available as an adjunct to HTI’s involvement with other operating entities.

Technology

1. CAD-CAM Manufacturing System:

This system eliminates the traditional “stick-built” wood frame construction process that is the predominant method of construction for single family and low-rise multi-family housing in the United States.

The CAD-CAM process provides inherent accuracy and speed. These are fundamental benefits, which the application of CAD-CAM has demonstrated in a wide variety of applications from the manufacture of automobiles to semiconductors and brings production of quality homes in line with real Market conditions resulting in efficiency and economy to scale. With respect to housing, these benefits translate to:

• quality (low maintenance costs and extended life). Quality comes from the intrinsic accuracy of the process, which cannot be duplicated by conventional construction,
• energy efficiency (75% or better energy cost savings also resulting in an increase of sound insulation)
• greatly reduced construction time, to the extent that spec building in tract developments is eliminated,
• greatly reduced labor content (total labor content of less than 15% compared to over 50% for conventional construction), and
• significant construction cost savings due to elimination of waste and the preservation of natural resources.
The above benefits accrue, irrespective of product design. The Building System is capable of building any product of any size and any architectural design that can be built conventionally.

The Building System is essentially a high-tech approach to building and a substitute to conventional construction. The fundamental difference is that the Building System applies a very high level of value added to the raw material prior to the manufacturing process, whereas in conventional construction, with some exceptions (roof trusses, window/door assemblies), the site material has no value added. The full benefits of the system are realized, irrespective of the positioning of the product in the marketplace, if there is sufficient volume to fully achieve the economies of scale the CAD-CAM system offers.

As with other CAD-CAM processes, the Building System has, and continues to, evolve with time and technological change. The combined experience of HTI’s technology engineers in this evolutionary process is over 50 years. During this period, a number of proprietary technological processes and procedures have been created. These processes add value to the Building System as it applies to the US and/or the Global market. In addition, the basic CAD-CAM process has evolved to accommodate the international building standards and by far exceeds most if not all energy conservation standards.

2. Building Components

Horizon has developed a number of state of the art building components. A common basis behind the fabrication of these components is the preservation of the natural resource comprising the raw material. The development process is comprehensive and includes the design and construction of the machinery used to fabricate the components. Development includes the remanufacture of the raw materials into components, which are stronger, lighter, more durable and more cost-effective intermediate products. These components may generally be categorized as “engineered structural material” (ESM) and include structural columns, joists and rafters and a direct replacement for the ubiquitous dimensional lumber. HTI principals hold several patents relating to this general area. In addition, several other patents are pending.

The cost advantages of ESM will be compounded when a pending JV with a large lumber producer is consummated. This JV will provide HTI with a low cost source of raw material for ESM. The raw material is a species found near the arctic circle in northern Canada that is generally considered of little utility because of its extreme hardness and the practical difficulty this presents in nailing. With the Building System, and the highly automated production equipment that is part of the system, this natural hardness represents no obstacle.

HTI also has access to state of the art technology through third party relationships. A new window technology utilizing specially grown straw, recycled household components, wood fiber and other organic matter are combined into a strong, durable and extremely energy efficient window profile which can then become the basic window component for windows used by the Building System.

FERMACELL, a product produced from wood fiber, recycled paper fiber, nylon fiber reinforcement and small amounts of natural gypsum, the FERMACELL product represents a direct replacement for conventional drywall. FERMACELL is a much stronger, structurally superior product and it is highly fire resistant and withstands water penetration to make it virtually water proof. In addition, the installed product does not require tape or texture and, as a result, long smooth flat walls can be realized without resorting to the expensive procedures of conventional drywall. While conventional construction can use FERMACELL, it is heavier and its utility is somewhat limited, since it is difficult to realize long, straight walls.

Another state of the art process being implemented by HTI concerns the heat treating of wood resulting in a product identified as “Therm-wood”. This new technology has managed to negate the operating risks of applying extreme heat to the drying process. The advantage of heat treating is that the associated cellular changes within the wood can literally turn scrap lumber into material with highly desirable building qualities. The finished product is usable for exterior application without adversely being affected by moisture, humidity and other weather conditions. The elimination of pressure treated wood from the market place, due to the carcinogenic affects to the environment and people, will tremendously increase the popularity of this Technology. HTI, has exclusive use of that technology in the United States and has first right of refusal in other countries.

The third party technologies described above are a sample only. There are a number of other situations under investigation or designed into use with the Building System. In sum, these technologies, when applied to the Building System, will produce a finished product that continues to further enhance the quality and price advantages of the finished housing product.

3. Electric Power

Due to the need of using heat to dry lumber and heat-treating of lumber, a fossil fuel boiler of significant size is needed and will be employed by HTI in order to absorb waste product created by the Company, i.e. planer shavings, saw dust, hog-fuel etc. This technology is centered on the production of electric power using the Organic Rankin Cycle (ORC). ORC technology employs a bio-mass fired CHP plant in which the combustion occurs at a high temperature, high enough to meet all environmental standards as they are known today and those elevated standards which must reasonably be assumed to be coming in the near future.

The ORC process can utilize virtually the entire spectrum of solid organic material including household trash, construction debris, hospital waste and any other solid matter with a moisture content of up to 60%. This technology is highly compatible, for example, with any Building System facility because of the fuel source represented by scrap from the CAD-CAM process.

As a by-product, the ORC power plant provides thermal heat and refrigeration with no detrimental effects to the environment. A significant feature of the ORC process is the absence of the traditional steam turbine, an absence which substantially increases operational safety and reduces operating costs.

The ORC process is scalable, with about 2.5 to 3 MW being the practical lower limit of plant power. Capital costs currently representative and economies of scale can reduce this for larger power units. Operating costs depend on many factors, particularly the fuel source and its cost. Nevertheless, operating costs of 2-5c/kWHr are representative. Excess power is available from the facility to provide electricity to the local residential area to power a substantial number of homes. Additionally, there is a great amount of thermal power, which is a by-product from the manufacturing process and can be used to provide hot water for heating and domestic use to the residential customers in the immediate area.

Horizon Technologies has developed a strategic relationship with the European company that has developed this technology and the hardware utilizing the technology. A driving force behind this strategy is the synergy the technology offers with the Building System.



Strategic Relationships

Tentative Partnerships have been formed with the express purpose of the to underwrite selected Housing and infrastructure development projects in the United States, Mexico and on a global basis. A common element to these programs is a humanitarian component. Affordable and economic housing projects are one example. Assets are employed to facilitate the financing of such projects. HTI‘s responsibility is to implement the various developments in a partnership with a selected Group of Partners to benefit humanity. The Building System technology is highly compatible with the goals of this partnership.

Various strategic relationships with a number of third party entities that are essentially technology or resource related. All of these relationships were created and maintained for the express purpose of building and maintaining a technological base, which HTI deems essential in order to sustain a competitive position. These relationships are quite varied in their structure but do include the potential to enter into exclusive arrangements which will create additional profit centers.

The primary manufacturer of the highly sophisticated production equipment needed to effectively produce this product, has agreed to Joint Venture the partial production of the CAD/CAM machinery in a separate facility owned by HTI and it will be produced for the North American Market under a licensing agreement, thus adding control to HTI’s activities as well as assuring total vertical integration.

Building System Facilities

USA: There is a need for three Primary Facilities in the Continental United States, one on the West Coast, one on the East Coast and one in the Central US and most likely in Texas. Additionally, there are 17 Sub-assembly facilities needed throughout the southern United States. (See plant location map attached). The reason for this is the need to produce components and sub components for distribution to the Sub- assembly facilities. The availability of the raw-material, the need for processing equipment and the location to the market place, requires the Primary facilities to be located in those geographical areas as described above.

The Primary Facility is larger, more complex, requires more staffing and skill as well as much more equipment to facilitate the needs of the sub-assembly facilities. The three Primary Facilities combined, will be able to serve up to 17 Sub-assembly facilities efficiently.

Personnel: Even though the manufacturing process employed does not rely on the skill of personnel, it requires a tremendous amount of unskilled or low skilled people who affectively use this process to produce a product for the market place which is unequalled in quality, energy efficiency and structural superiority. Highly skilled key personnel and the application of robotics in the manufacturing process assure the delivery of a high quality product. The application of low-skilled or un-skilled labor provides an enormous opportunity to local communities which supply that type of labor from the labor pool consisting of the “difficult to employ” personnel which do not possess the skill level needed in today’s market place. The humanitarian impact to those communities is therefore immeasurable.

Benefits of the System:

The establishment of these types of manufacturing facilities has enormous benefits in the communities in which they are located as well as to the market place at large. Each manufacturing facility will employ hundreds of low skilled personnel who will be able to earn competitive wages and learn a new skill with benefits which are far reaching in to the future of each employee. Locations have been selected based on the need of the economic level of activity respective to the location and to the market place. Direct and indirect benefits to the communities will be very effective and stimulate increased business activities. HTI has worked with the Economic Development Agencies around the country to identify and bring employment to the people who need it the most.

The product delivered to the market place introduces the ability to afford a quality product by the people who are presently displaced from the home buying segment of the market. This new, high-tech approach to home building, using revolutionary robotic applications to the manufacturing process, makes all this possible.