BOXABL Achieves Reduction of Inspections to 25% from California for Casita Studio Product Line

Rhea-AI Summary

BOXABL (proposed merger with FG Merger II Corp, NASDAQ: FGMC) said California reduced state inspections for its Casita Studio units to 25% per unit, a 75% cut after initial approvals. BOXABL received Commercial Modular Manufacturer approval last month and says the change speeds deliveries into California.

The proposed merger with FGMC remains subject to customary approvals.

Positive

• Inspection burden reduced by 75% to 25% per Casita Studio unit
• Commercial Modular Manufacturer approval received last month
• Faster deliveries to California properties due to fewer state inspections

Negative

• First ten units of a new model still require 100% state inspection
• Merger with FGMC remains proposed and is subject to customary approvals

Key Figures

Inspection rate: 25 percent Inspection reduction: 75 percent Initial inspections: 10 units +5 more

8 metrics

Inspection rate 25 percent Share of BOXABL Casita Studio units requiring California state inspection

Inspection reduction 75 percent Reduction in state inspections for each Casita Studio unit

Initial inspections 10 units First ten units of a new model subject to 100% inspection under Title 25 §3032

Housing need 2.5 million homes California HCD estimate for new homes needed through 2032

Estimated shortage 3 million units Some sources’ estimate of broader California housing shortage as of 2025

ADUs permitted 2023 27,000 ADUs Accessory Dwelling Units permitted in California in 2023

Share of new units 21% ADUs as a share of all new California housing units approved in 2023

ADUs 2016 baseline 1,336 permits ADU permits in California in 2016, before growth inflection

Market Reality Check

Price: $10.07 Vol: Volume 53,597 is 11% abov...

normal vol

$10.07 Last Close

Volume Volume 53,597 is 11% above the 20-day average of 48,088. normal

Technical Trading above 200-day MA with price at 10.07 vs 200-day MA of 9.95.

Peers on Argus

Peers show mixed moves: RFAIU up 1.21%, DTSQ up 0.33%, NOEMU down 4.45%, while F...

1 Down

Peers show mixed moves: RFAIU up 1.21%, DTSQ up 0.33%, NOEMU down 4.45%, while FGMC is roughly flat at -0.10%, suggesting stock-specific dynamics around the Boxabl update.

Historical Context

5 past events · Latest: Dec 24 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 24	CA license milestone	Positive	+0.0%	Secured California Commercial Modular Manufacturer license enabling state-compliant deployments.
Dec 15	Board appointment	Positive	+0.0%	Added experienced housing economist to board alongside progress on $3.5B merger.
Dec 15	Correction notice	Neutral	+0.0%	Corrected effective date and details of new director appointment at Boxabl.
Nov 04	Merger extension	Neutral	-0.1%	Extended outside date for Boxabl–FGMC merger completion to March 31, 2026.
Oct 14	New contracts	Positive	+0.6%	Announced 71 new California units, lifting 2025 faith-vertical volume to 122 units.

Pattern Detected

Recent Boxabl/FGMC news around licenses, contracts, and merger steps has generally seen minimal price reaction, indicating subdued trading response to company updates so far.

Recent Company History

Over the past several months, FGMC-related news has focused on the Boxabl business combination and Boxabl’s operational progress. On Oct 14, 2025, Boxabl announced new California faith-based contracts totaling 122 units (~$7 million), with FGMC up 0.58%. Subsequent items included extending the merger outside date to March 31, 2026 and adding housing economist Morris A. Davis to the board at a stated $3.5 billion valuation, all with little immediate price impact. The latest California inspection reduction continues this operational expansion theme.

Market Pulse Summary

This announcement underscores Boxabl’s operational momentum in California, with inspections for Casi...

Analysis

This announcement underscores Boxabl’s operational momentum in California, with inspections for Casita Studios reduced to 25%, improving delivery efficiency. It comes alongside a proposed merger with FGMC and follows prior milestones such as a Commercial Modular Manufacturer license. The article highlights structural housing demand, including an estimated need for 2.5 million new homes and rising ADU permits. Key watchpoints include merger approvals, execution on scaling production, and ongoing state-level regulatory relationships.

Key Terms

commercial modular manufacturer, accessory dwelling units, special purpose acquisition company

3 terms

commercial modular manufacturer regulatory

"approval as a 'Commercial Modular Manufacturer' from the State of California last month"

A commercial modular manufacturer builds factory-made, ready-to-assemble units or components for businesses—think of shipping-container style rooms, prebuilt hotel modules, or plug-in factory systems—designed to be combined on-site into finished commercial facilities or products. For investors it matters because modular production can cut construction time and costs, enable faster revenue recognition and repeatable sales, but also concentrates risk in factory capacity, supply chains and standardization choices.

accessory dwelling units technical

"Accessory Dwelling Units ("ADUs"), such as the BOXABL Casita Studio, have emerged"

Accessory dwelling units (ADUs) are self-contained living spaces built on the same lot as a primary home — for example a converted basement, garage apartment, or small backyard cottage — that have their own entrance, kitchen, and bathroom. For investors, ADUs matter because they can boost rental income and property value while facing local rules, construction costs, and neighborhood demand that affect returns; think of an ADU as adding a small, separate rental apartment to an existing property.

special purpose acquisition company financial

"FG Merger II Corp. (NASDAQ: FGMC), a publicly traded special purpose acquisition company"

A special purpose acquisition company (SPAC) is a company formed with the sole purpose of raising money through a public offering to buy or merge with an existing private business. It acts like a vehicle that allows private companies to go public more quickly and with less complexity. For investors, it offers an opportunity to invest early in a potential acquisition, though it also carries risks if the intended deal doesn’t materialize.

AI-generated analysis. Not financial advice.

California Department of Housing and Community Development reduces inspection of BOXABL by 75 percent for each Casita Studio unit as proposed merger with FG Merger II Corp (NASDAQ: FGMC) makes progress.

LAS VEGAS, Feb. 18, 2026 /PRNewswire/ -- BOXABL Inc. ("BOXABL"), a leader in innovative, factory-built modular solutions, today announced the California Department of Housing and Community Development ("HCD") reduced the inspection burden on BOXABL Casitas shipped to their state. This arrangement streamlines the delivery process for BOXABL to California properties. 

Under California Title 25 §3032, new models produced at a manufacturing facility are initially subject to 100% inspection. Specifically, the first ten (10) units of a new model must be fully inspected and approved before any reduction in inspection frequency can be considered. After working closely with HCD, now only 25 percent of each BOXABL Casita Studio will require state inspection. This translates into units reaching the state quicker and getting into the hands of customers with increased efficiency. 

"Since we received our approval as a 'Commercial Modular Manufacturer' from the State of California last month, our team has demonstrated the quality of our products and the stringent quality controls we have in our production process.  We have worked closely with state officials to streamline the process of getting our innovative solutions delivered and assembled by reducing state-level inspections to 25 percent of each of our Casita Studios," said Martin Costas, Chief Financial Officer of BOXABL. "Reducing inspections by 75 percent will help BOXABL accelerate our growth in the largest housing market in country."

California faces a severe housing shortage, with HCD estimating a need for 2.5 million new homes over the current planning cycle which looks forward through 2032.¹ This official target accounts for projected household growth, existing overcrowding, low vacancy rates, and affordability challenges across income levels. Some sources within the state cite a broader ongoing shortage of around 3 million units as of 2025.²

In parallel, Accessory Dwelling Units ("ADUs"), such as the BOXABL Casita Studio, have emerged as a potential solution, with permitting surging due to statewide reforms. In 2023, California permitted almost 27,000 ADUs—representing more than 21% of all new housing units approved statewide that year—according to HCD data.³ This marked a dramatic 20-fold increase from 1,336 permits in 2016, and trends indicate continued strong growth into 2024 and beyond with projections for at least 10% annual increases, potentially exceeding 30,000 units yearly in high-demand areas.⁴

"We believe, these dynamics present a significant opportunity for innovative, factory-built modular solutions like BOXABL's Casita and larger models, which align perfectly with California's push for faster deployment, to help close the supply gap efficiently and cost-effectively," Costas added.

BOXABL continues its ongoing progress toward its proposed merger with FG Merger II Corp. (NASDAQ: FGMC), a publicly traded special purpose acquisition company. The proposed merger, which remains subject to customary approvals, could provide BOXABL with enhanced resources to scale production and expand its impact across diverse industries.

About BOXABL

BOXABL is transforming the housing market with its modular building systems designed to deliver affordable, high-quality homes at unprecedented speed. Founded in 2017, BOXABL's innovative approach has attracted worldwide attention as it aims to solve housing challenges for individuals and communities alike. BOXABL'S flagship product, the Casita, is a 361 square foot studio unit with a full kitchen, bathroom, and utilities. The Casita unfolds on-site in less than an hour and is manufactured inside BOXABL's facilities. BOXABL also has announced the Baby Box, a smaller 120 square foot unit built to RV code, intended for simpler, no foundation-setups. BOXABL is also developing stackable and connectable box models that can be combined to form townhomes, multifamily units, or larger single-family homes.

For more information about BOXABL and its innovative products, visit www.boxabl.com.

About FG Merger II Corp.

FG Merger II Corp. is a blank check company, also commonly referred to as a special purpose acquisition company, or SPAC, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

https://fgmerger.com/

Additional Information About the Proposed Transaction and Where to Find It

Additional information about the transaction, including a copy of the merger agreement has been filed by FGMC in a Current Report on Form 8-K with the U.S. Securities and Exchange Commission (the "SEC"). The proposed transaction will be submitted to shareholders of FGMC for their consideration. FGMC has filed a registration statement on Form S-4 (the "Registration Statement") with the SEC, which includes preliminary and definitive proxy statements to be distributed to FGMC's shareholders in connection with FGMC's solicitation of proxies for the vote by FGMC's shareholders in connection with the proposed transaction and other matters to be described in the Registration Statement, as well as the prospectus relating to the offer of the securities to be issued to BOXABL's shareholders in connection with the completion of the proposed transaction. After the Registration Statement has been filed and declared effective, a definitive proxy statement/prospectus and other relevant documents will be mailed to BOXABL stockholders and FGMC shareholders as of the record date established for voting on the proposed transaction. Before making any voting or investment decision, FGMC and BOXABL shareholders and other interested persons are advised to read, once available, the preliminary proxy statement/prospectus and any amendments thereto and, once available, the definitive proxy statement/prospectus, as well as other documents filed with the SEC by FGMC in connection with the proposed transaction, as these documents will contain important information about FGMC, BOXABL and the proposed transaction. Shareholders may obtain a copy of the preliminary or definitive proxy statement/prospectus, once available, as well as other documents filed by FGMC with the SEC, without charge, at the SEC's website located at www.sec.gov or by directing a written request to FG Merger II Corp., 104 S. Walnut Street, Unit 1A, Itasca, Illinois 60143 or to BOXABL 5345 E North Belt Rd Las Vegas NV 89115.

Forward-Looking Statements

This communication includes "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as "plan," "project," "will," "estimate," "intend," "expect," "believe," "target," "continue," "could," "may," "might," "possible," "potential," "predict" or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. We have based these forward-looking statements on current expectations and projections about future events. These statements include: projections of market opportunity and market share; estimates of customer adoption rates and usage patterns; projections regarding the value of autonomous driving solutions; projections of development and commercialization costs and timelines; expectations regarding BOXABL's ability to execute its business model and the expected financial benefits of such model; expectations regarding BOXABL's ability to attract, retain, and expand its customer base; BOXABL's deployment of Casita; BOXABL's expectations concerning relationships with strategic partners, suppliers, governments, regulatory bodies and other third parties; future ventures or investments in companies, products, services, or technologies; development of favorable regulations and government incentives affecting BOXABL's markets; the potential benefits of the proposed transaction and expectations related to its terms and timing; and the potential for BOXABL to increase in value.

These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions, many of which are beyond the control of BOXABL and FGMC. 

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such statements. Such risks and uncertainties include: that BOXABL is pursuing an emerging technology, faces significant technical challenges and may not achieve commercialization or market acceptance; BOXABL's historical net losses and limited operating history; BOXABL's expectations regarding future financial performance, capital requirements and unit economics; BOXABL's use and reporting of business and operational metrics; BOXABL's competitive landscape; BOXABL's dependence on members of its senior management and its ability to attract and retain qualified personnel; the capital requirements of BOXABL's business plans and the potential need for additional future financing; BOXABL's ability to manage growth and expand its operations; potential future acquisitions or investments in companies, products, services or technologies; BOXABL's reliance on strategic partners and other third parties; BOXABL's ability to maintain, protect and defend its intellectual property rights; risks associated with privacy, data protection or cybersecurity incidents and related regulations; the use and regulation of artificial intelligence and machine learning; uncertainty or changes with respect to laws and regulations; uncertainty or changes with respect to taxes, trade conditions and the macroeconomic environment; the combined company's ability to maintain internal control over financial reporting and operate a public company; the possibility that required regulatory approvals for the proposed transaction are delayed or are not obtained, which could adversely affect the combined company or the expected benefits of the proposed transaction; the risk that shareholders of FGMC could elect to have their shares redeemed, leaving the combined company with insufficient cash to execute its business plans; the occurrence of any event, change, or other circumstance that could give rise to the termination of the merger agreement; the outcome of any legal proceedings or government investigations that may be commenced against BOXABL or FGMC; failure to realize the anticipated benefits of the proposed transaction; the ability of FGMC or the combined company to issue equity or equity-linked securities in connection with the proposed transaction or in the future; and other factors described in FGMC's filings with the SEC. Additional information concerning these and other factors that may impact such forward-looking statements can be found in filings and potential filings by BOXABL, FGMC or the combined company resulting from the proposed transaction with the SEC, including under the heading "Risk Factors." If any of these risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. In addition, these statements reflect the expectations, plans and forecasts of BOXABL's and FGMC's management as of the date of this communication; subsequent events and developments may cause their assessments to change. While BOXABL and FGMC may elect to update these forward-looking statements at some point in the future, they specifically disclaim any obligation to do so. Accordingly, undue reliance should not be placed upon these statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this communication, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

An investment in FGMC is not an investment in any of our founders' or sponsors' past investments, companies or affiliated funds. The historical results of those investments are not indicative of future performance of FGMC, which may differ materially from the performance of our founders' or sponsors' past investments.

Participants in the Solicitation

FGMC, BOXABL and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from FGMC's shareholders in connection with the proposed transaction. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of FGMC's and BOXABL's shareholders in connection with the proposed transaction will be set forth in proxy statement/prospectus when it is filed by FGMC and BOXABL with the SEC. You can find more information about FGMC's directors and executive officers in FGMC's final prospectus related to its initial public offering filed with the SEC on January 29, 2025 and in periodic reports filed by FGMC with the SEC. You can find more information about BOXABL's directors and executive officers in its Annual Report on Form 10-K, filed with the SEC on April 14, 2025. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be included in the proxy statement/prospectus when it becomes available. Shareholders, potential investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the sources described above.

No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This communication is not, and under no circumstances is to be construed as, a prospectus, an advertisement or a public offering of the securities described herein in the United States or any other jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or exemptions therefrom. INVESTMENT IN ANY SECURITIES DESCRIBED HEREIN HAS NOT BEEN APPROVED BY THE SEC OR ANY OTHER REGULATORY AUTHORITY NOR HAS ANY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OR THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

¹ California HCD Annual Report Dashboard (Link)
² McKinsey Global Institute: A Toolkit to Close California's Housing Gap: 3.5 Million Homes By 2025 (Link)
³ California HCD Annual Report Dashboard (Link)
⁴ California HCD Annual Report Dashboard (Link)

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SOURCE Boxabl

FAQ

What change did BOXABL announce on Feb 18, 2026 about Casita Studio inspections?

BOXABL said inspections for Casita Studio units were reduced to 25% per unit, a 75% reduction. According to the company, this follows its Commercial Modular Manufacturer approval and aims to speed deliveries into California.

Does BOXABL still require full inspection for any Casita Studio units under California rules?

Yes, the first ten units of any new model must be fully inspected before reductions apply. According to the company, initial 100% inspection for the first ten units remains in effect.

How will the inspection reduction affect BOXABL deliveries to California customers?

The change should allow units to reach customers more quickly by lowering state inspection frequency to 25%. According to the company, this streamlines delivery and assembly for California properties.

What regulatory approval did BOXABL receive recently relevant to California shipments?

BOXABL received approval as a Commercial Modular Manufacturer from California last month. According to the company, that approval supported reduced inspection frequency for Casita Studio units.

What did BOXABL say about its proposed merger with FG Merger II Corp (FGMC)?

BOXABL said the proposed merger with FG Merger II Corp (NASDAQ: FGMC) is progressing but remains subject to customary approvals. According to the company, the transaction is not yet finalized.

How does California's housing shortage relate to BOXABL's announcement on Feb 18, 2026?

California faces an official need for 2.5 million new homes through 2032, highlighting demand for ADUs. According to the company, reduced inspections could help deploy BOXABL Casitas faster to address housing needs.