1. Confidential
An Innovative Pump Solution to the Longstanding and Costly
Homeowner Storm Water Back-up Problem
U.S. Patent 6,527,518
PCT 021/30284
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707 Skokie Boulevard
Northbrook, IL 60062
2. Introduction
A U.S. inventor has designed and patented a new high efficiency water
driven sump pump to address the problem of storm water back-up during
power outages.
By utilizing the virtually ever-present power available in the pressure
and flow provided by the local municipal water utility, this water driven
pump will assure that storm water does not back-up into below-grade
building spaces during power outages of any duration.
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3. Introduction
This presentation will cover five topics ...
• Market Overview
• Sales/Distribution Channels
• Unique Technology Solution
• Manufacturing/Cost Advantages
• New Business Opportunity
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4. Market Overview
Based on industry estimates, the current U.S. sump pump market is
$ 150-160 million, segmented as follows:
• A.C. powered $ 110-120 million, ~ 15% for new construction,
85% replacement, for single family homes, apartment buildings
and commercial building applications
(submersible and pedestal designs)
• D.C. battery back-up units $ 30-40 million, >95% retrofit and
replacement, including replacement batteries.
- Provide < 1 hour to 3 hours of operation depending
upon pump flow/head and battery amp-hr. capacity
• Water venturi devices < $ 1 million --- poor efficiency, ~ 3-5 gpm
not adequate --- most consume more water than they eject
- Most applications need 15-25 gpm
• Stand-by generators < 1% of homes - cost too high ( $1,200- 5K )
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7. Market Overview
Power outage frequency and duration are increasing.
• In the U.S., twice as many outages per year vs. ten
years ago for a typical homeowner
• Aging power grid transmission and distribution
systems, less generating reserve
• Declining budgets for tree trimming and other grid
maintenance programs
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8. Market Overview
According to insurance company estimates, annual storm water back-up
damage ~ $1.5 - 2 billion --- approx. 60% reimbursed by insurance ...
remainder uninsured/deductible.
• Mostly due to power outages that coincide with heavy rain,
lightening, and high winds, notwithstanding the significant
installed base of battery back-up units installed to date
• Storm water back-up insurance mandated by State
Departments of insurance
• A quot;lossquot; business for major homeowners' insurance
companies --- must provide to sell rest of policy
• Strong interest in this invention as a viable long term solution
to a problem that has existed for many decades
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9. Market Overview
The annual global sump pump market is an estimated $ 300 - 350 million,
with both A.C. and battery back-up units, and are found in most developed
countries.
• In many countries of Europe and Asia, finished quot;below
gradequot; construction is increasingly becoming similar to the
U.S. with increasing use of sump pumps, battery back-up
units, and increasing damage costs of storm water back-up
during power outages.
• In the U.K., quot;English basementsquot; and below grade quot;flatsquot;
have been common for decades
• In France, Germany and other countries, older construction
practices of unfinished quot;cellarsquot; shifting toward more
finished below grade spaces, as in the U.S.
• In Japan, mid-high rise, multi-family housing a much greater
percentage of total dwelling units
- Light commercial an interesting segment, below grade
inventory storage in stores and small businesses
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10. Market Overview
In the U.S. market, A.C. sump pumps sell at the end user level in the
$ 75 - 500 range plus installation.
• At the high end, units have 40-50 gpm flow rates and 10-15 ft.
head performance, for multi-family buildings and large, single
family houses.
D.C. battery back-up units sell in the range of $ 100 - 700 range plus
single or multiple battery prices ( $ 50 - 100 each ).
• High end units with multiple batteries for longer operation,
electronics to monitor battery condition, alarms to signal
operation, etc.
For new construction, low price A.C. units are typically specified by
builders and installed by their plumbing contractors.
• Often undersized vs. needed performance resulting in storm
water back-up during heavy storms, even when power availability
is normal
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11. Market Overview
Based upon the extensive market research conducted to date, solving
this significant, longstanding problem will result in more finished below
grade construction.
• Will result in a larger addressable market for this technology vs.
battery back-up systems that are only partially effective, with
the very real risk of recurrent storm water back-up.
• Homeowners and builders well aware of below grade flooding
risks --- many decades of awareness of the pervasive problem,
and in many cases first hand experiences
• A serious outage and storm water back-up every 1 - 3 years on
the average
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12. Market Overview
A quot; 24 - 7 - 365 - unlimited duration quot; storm water pump solution
will have significant impact on construction practices and attitudes
toward below grade space utilization in the entire market.
Current Market ... Future Market ... With Storm Water
Back-Up Problem Solved ...
55-60 million single family homes,
• More below grade construction vs. slab
•
est. 70% w/ municipal water
Shift toward higher percentage of
•
1-2 million new construction/yr.
• below grade construction
quot;finishedquot;
Est. 60-65% with below grade space/
•
remainder quot;slabquot; - $ 50 - 75 /sq.ft. vs. $ 100-125/ sq.ft.
above grade )
- Est. 40-45% of below grade space
finished Potential surge in below grade
•
quot;finishingquot; both for new construction
- Additional 40-45% unfinished, and home improvement
( need to protect/storage --- and/or
potential to finish )
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13. Sales/Distribution Channels
Battery
A.C. Pump D.C. Pump
Manufacturers
Manufacturers Manufacturers
Plumbing and Pump Automotive
Heating Distributors Distributors Battery Distribution
Channels
Home Centers - DIY
Plumbing Contractors ( Home Depot, Sears,
Lowe's, etc. )
Multifamily Apartment Building
Single Family Homeowners and Light Commercial Building Owners
and Management Companies
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14. Unique Technology Solution
The key differentiating attributes of the subject new water powered
design and technology are as follows:
• The ability of this design to operate for unlimited duration ...
- Municipal water supplies typically two-three
orders of magnitude more reliable than electric
utility power
• Very high efficiency vs. current/prior venturi designs
- 95 - 98% efficient, vs. 30-40% for venturi designs
• Potentially very long life/maintenance free operation
• No motors, no batteries, no electronics to fail
• Strong potential as a truly quot;global productquot; --- no country-by-
country electrical standards --- UL / VDE / CSA, etc.
• Plumbing threading standards for supply line and discharge
connections easily accommodated
Unique Technology Solution
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17. Principles of operation of this high efficiency, positive displacement
water powered sump pump design ...
• Diaphragm design with key advantages vs. pistons
• More tolerant to hard water conditions for upper actuator
• More tolerant to debris --- dirt, sand, bark, etc. typically found in
storm water --- and will better address any raw sewage in cases
where cross connections / contamination with raw sewage
back-up possible
• No need for precision upper or lower cylinders
• Simple upper and lower diaphragm housings
Manufacturing/Cost Advantages
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18. As compared to A.C. and D.C. pumps in the current market ...
• Simple design, no motor, no battery --- potential for low
cost, yet high value to customers
• Key component --- Self-reversing valve on upper actuator -
ref. Sullivan prior art patent ... three options ...
- Source from Hydromaid $ 10-15 per valve ( cost
prohibitive )
- License for $1 - 2/valve and build internally
- New valve design
• Other components very straightforward
Manufacturing/Cost Advantages
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19. Preliminary design for manufacturing considerations ...
• Plastic diaphragm housings, center support tube and
conventional plastic/rubber check valves
• Lower half of upper actuator/diaphragm housing and upper
half of lower pump/diaphragm housing as single piece part
with center support tube
• Upper half of upper diaphragm housing and lower half of
lower diaphragm housing capturing diaphragms with
clamping rings for assembly
• Connecting rod and rod seals --- est. $ 2 - 3
• Production diaphragm designs suitable for water service at
relatively low pressures widely available from diaphragm
vendors
• Potential for approx. $ 35 - 40 total factory cost
Future Product Development ...
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20. • A hybrid A.C. powered and water powered design
will be submitted as a new provisional patent, or as
a continuation-in-part patent filing during the next
one-two months
• A.C. gear motor and one-way clutch with a cam or linkage
driving the connecting rod of the designs above when power
available --- during power outage, water driven actuator will
operate and gearmotor/one-way clutch/cam
or linkage will quot;free wheelquot;
• Will redefine the market --- historically, a separate A.C.
and D.C. market, with discrete sales/distribution channels
- A quot;combination designquot; --- A.C. when power
available, water powered during outages
- Will address new construction and retrofit and
quot;reshapequot; the market
New Business Opportunity
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21. The target market detailed in this summary and the unique solution
that is now patent protected in the U.S., with foreign patents pending,
represents a significant new business opportunity.
• $ 150 -160 million total U.S. market size, $ 300 - 350 million
global market
• Key target in the U.S. is $ 30 - 40 million battery back-up
market, and $ 60 - 80 million worldwide
• This technology will result in growing the back-up market at a
faster rate than that which would otherwise occur with battery
back-up units only
• Significant margin/profitability potential --- as superior
alternative to battery back-up units, a value driven selling price
in the range of $ 150 - 250 not unrealistic
• With hybrid design, total market addressable longer term
New Business Opportunity
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22. Potential next steps ...
• Prototype design and testing
• Further evaluations of alternate designs and
- Internal component fabrication vs. vendor supplied
- Self-reversing valve evaluations
- Detailed cost evaluations vs. design alternatives
• Identification of sources for manufacturing
• Formulate market entry plan
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