# Linearity Co. Ltd. proposal to Pension Fund

## Project Overview

### Background

Current elevator technology is 150 years old and suffers from limitations, most importantly the need for separate operating spaces for each elevator.

Multiple elevators in the same shaft would reduce the occupied space and generate huge savings to developers, resulting in increased earnings on the order of USD400M over the lifetime of a typical high-rise building.

The next generation will be direct-drive elevators using linear motors. This had been the goal of all major elevator makers, but until recently none of them succeeded. Linear motor elevators will enable a new generation of building design and eventually take over the USD130B global elevator market.

The new generation of linear motor drives will also enable a new solution to the urban "last one mile" mobility problem, and will compete for a slice of the USD120B new mobility market.

### Our solution

Linearity (Kyoto, Japan) has personnel with a 20 years track record in developing linear motor elevator technology. We are in partnership with Desird Design R&D (Antalya, Turkey), doing our development work together; furthermore, Desird is in charge of manufacturing. We have developed a linear motor drive for elevators, that we will supply to all major elevator makers, first in Japan then worldwide.

Our achievements and assets so far are:
- a highly efficient linear motor design for elevators and mobility
- completed working prototypes proving its validity
- full capability for production, including machinery and processes
- a new dedicated factory to be built in Antalya, Turkey
- cooperation with a Japanese major elevator manufacturer
- cooperation with a Japanese top level general contractor
- 5 international and Japanese patents, with 20 more in preparation

Our product "L-DRIVE" is ready for sales to elevator manufacturers, pending certification.

## Our plan

(below, all currencies are in EUR)

### Financing

We require the amount of 120M for the following costs:

- 30M to transfer the IP, machinery, personnel etc. from Desird to Linearity,
- 20M to finish the Antalya factory,
- 30M to procure a part ownership in a medium-size Japanese elevator manufacturer,
- 20M to build a Japanese factory and warehouse,
- 10M to finance the Japanese government certification of the L-DRIVE,
- 10M to finance the running costs of Linearity in Japan and Turkey during FY23 through FY25.

These will be required during FY2022-23.

After volume sales start in 2025, further expansion including branches in Middle East, China, US, will be financed by revenues.

### Revenues

#### Markets

1. New high-rise buildings (our share: 50 jobs/yr)
2. New low and mid-rise buildings (our share: 1000 jobs/yr)
3. Renewal of existing buildings (our share: 400 jobs/yr)
4. New urban mobility installations (our share: 10 jobs/yr)

#### Sales volumes to mature markets after 2026

| Market | Jobs/yr | Units/job | Unit cost | Total |
| ---: | ---: | ---: | ---: | ---: |
| 1 | 50 | 15 | 1M | 750M |
| 2 | 1000 | 4 | 0.2M | 800M |
| 3 | 400 | 8 | 0.4M | 1280M |
| 4 | 10 | 8 | 4M | 320M |

Total annual revenue: 3,150M

EBITDA: 630M/yr (at 20% profit margin)

### Milestones

- 2022/Q3 completing first linear motor elevator
- 2023/Q4 completion of new factory
- 2024/Q2 certification from Japanese MLIT
- 2024/Q4 announcement of commercial availability of L-DRIVE
- 2025/Q1 linear motor elevators available on market
- 2025/Q2 start of volume sales
- 2026/Q4 sales over 1B