Commercializing an innovative air conditioning drain line cleaning smart system

1. Automated Condensate
Drain Line Cleaning System
U.S. Patent Nos. 7,857,004; 8,646,474; 9,372,036
Steven L. Pearson
Visionex Holdings, LLC
© Emanus, LLC, Avon, Connecticut, April 2016

2. Behind the technology and patents…
Steve Pearson is the founder of Pearson Strategy Group, LLC, which helps
companies accelerate innovation and product development.
• Steve is the founder of The Pearson Strategy Group, LLC which provides
services mimicking Innovation Boards in patent research, Competitive
Intelligence, Innovation Support, and Strategic Development to the technology,
power, consumer, and transportation industries. His second company, Visionex
Holdings, LLC, is an intellectual property holding and licensing company.
• Steve has two issued patents with a third coming soon, all for improvements
to the evaporator units of air conditioning systems.
• Steve served aboard a Navy submarine as a nuclear reactor operator and
electronics technician, graduated from UT San Antonio as an electrical
engineer, and has worked in various engineering roles in semiconductor
manufacturing with Motorola Semiconductor, piping and fitting manufacturing
with Applied Materials, and in research and consulting.
• Steve is past chairman and current program chair for the Austin chapter of the
IEEE’s Power and Energy Society and is a board member of the Austin
Inventopreneurs.
Head of Strategy
and Innovation;
Founder of
Pearson Strategy
Group, LLC
© Emanus, LLC, Avon, Connecticut, April 2016

3. Patented technology…
• U.S. Patent Nos. 7,857,004 and 8,646,474 “Automated
Condensate Drain Line Cleaning System”
• IoT technology embodied in an automated and automatic
apparatus for cleaning of microbial material and other debris
from consumer/commercial buildings A/C, and automotive
compressor, drain lines.
• Includes internet connected sensing/notification, clocking,
and calendaring methods for executing drain cleaning action.
• Eliminates shortcomings of current solutions in the
marketplace, including need for cutting into drain lines,
disassembling pipes, and external pressurization apparatus.
• Engineering, Components and Manufacturing resources
readily available in vendor community for product delivery.
• Industry recognized value - Pearson patents cited by Safe T
Flush Corporation, Aspen Pumps, and Plexaire, LLC
© Emanus, LLC, Avon, Connecticut, April 2016

4. Surpass "clogged" innovation landscape and deliver on
ignored market demands
• Dozens of drain cleaning solutions in the market; however, little “sea change”
differentiation amongst product offerings.
• Only a handful of major players in the market; condensate drain management invention
space reveals Rectorseal and UTC/Carrier as the dominant players.
• Upward trend in patenting activity is indicative of market seeking innovative solutions.
• SmartHome platforms largely ignored – existing patents and product descriptions moot
regarding internet connectivity of drain line management technology with existing smart
home platforms – e.g., thermostatic controls.
© Emanus, LLC, Avon, Connecticut, April 2016

5. Market influences and demand drivers…
• Ninety percent (90%) of all central-air service calls related to leaks.1
• Mold and mildew are among the most expensive and most frequent results of water damage.2
• $3 billion for mold claims paid in 2011; claims rising 9.6% per year. Lloyd’s Insurance predicts toxic mold
claims to drive Homeowner insurance premiums up by 10% (2001)3.
• Mold remediation projects can cost $2,000-$6,000 and as much as $10,000-$30,000 for more widespread
damage.4
• Market driven by “avoidance of liability and insurance costs”. Market also seeks modern conveniences
provided by “hands-off” solutions to unpredictable and costly problems.
• According to an Inman.com report, 81 percent of survey respondents are more likely to buy a home if smart
technology were already installed. Half of Millennials own at least one smart home product; 28% of all
respondents own at least one product.5
• Current technology for managing clogged drain lines shuts A/C systems down and signals the need for
service technicians – not automatic cleaning; expensive service calls.
• Pearson drain cleaning technology offers “peace of mind”, real-time, automated, communicated solution.
© Emanus, LLC, Avon, Connecticut, April 2016

6. An overview of the market shows…
• Fragmented suppliers – non-public and predominantly small (revenue) players.
• Major players driving market toward sophisticated products for high-end homes and commercial
establishments requiring professional installers.
• Homeowner A/C unit repair cost averaged $167 - $495; costs for simple condensate pumps
ranged from $90 - $250 per unit.6
• Water damage repair costs to homeowners ranged from $912 - $2,676 per incident.7
• Condensate management systems applicable to A/C and Heat Pumps; combined shipments of
A/C and Heat Pumps topped 6.85 million units.8
• Estimated total market of $1.7B (assumed drain condensate unit price of $250).
© Emanus, LLC, Avon, Connecticut, April 2016

7. Filling the gap – key market players…
Company Rating Licensing Approach for Pearson
Company A 3 Lock out competition in commercial market segment; leverage
existing brand for consumer/home market segment
Company B 3 Size of portfolio; build up/lock out competition in commercial
market segment
Company C 1 New product offering; market differentiation
Company D 2 Improved design reliability; stave off competition’s use of technical
approach
Company E 3 Build portfolio; manage potential infringement
Ratings – 1 being weakest; 3 being strongest - based on assessment of certain target attributes, including size and strength of patent
portfolio, products in marketplace, technological alignment (i.e., similarity to the technical concepts proposed by Pearson)
© Emanus, LLC, Avon, Connecticut, April 2016

8. Filling the gap…why Pearson technology?
• Pearson Technology offers differentiation via Smart-Home Automation (IoT)
• Twelve years remaining patent life provides substantial time to exploit the marketplace, grow
share and generate substantial revenue; leverage technology for convoyed product sales; gain
access to/control of condensate management data
• The market is ripe for an innovative approach to A/C condensate management as signaled by
patenting activity and product introductions.
• Pearson Technology is uniquely designed for use with compressed air and/or municipal water
supply resources for elimination and/or reduced dependence on separate internal pump(s).
© Emanus, LLC, Avon, Connecticut, April 2016

9. Attractive market revenue potential…
A/C, % Shr NPV, Royalty ($) NPV, Revenue ($) Royalty % Revenue, Total ($)
2% $209,553.78 $4,191,075.62 5% $225,543,218.67
5% $523,884.45 $10,477,689.05 5% $563,858,046.69
10% $1,047,768.90 $20,955,378.10 5% $1,127,716,093.37
25% $2,619,422.26 $52,388,445.24 5% $2,819,290,233.44
50% $5,238,844.52 $104,776,890.48 5% $5,638,580,466.87
Heat Pump, %Shr NPV, Royalty ($) NPV, Revenue ($) Royalty % Revenue, Total ($)
2% $111,817.23 $2,236,344.70 5% $120,349,148.30
5% $279,543.09 $5,590,861.75 5% $300,872,870.76
10% $559,086.17 $11,181,723.49 5% $601,745,741.52
25% $1,397,715.44 $27,954,308.73 5% $1,504,364,353.81
50% $2,795,430.87 $55,908,617.45 5% $3,008,728,707.62
Pearson Patent Utilization Revenue & Royalty Estimate
© Emanus, LLC, Avon, Connecticut, April 2016

10. References
1. “Quick Fixes for Leaky A/C Systems”. Popular Mechanics web site, http://www.popularmechanics.com/home/how-
to/a7782/quick-fixes-for-leaky-ac-systems-8925561/ (accessed April 5, 2016).
2. “The Asbestos of the New Millennium”. Mealey's Online web site, http://www.arobertsonlaw.com/articles/asbestos-new-
millennium (accessed February 2016).
3. “Post-Sandy Risks: Mold Hazards and Solutions”. William Gallagher Associates web site,
http://www.wgains.com/Assets/WhitePapers/MoldHazardsandSolutions.pdf. (accessed February 2016).
4. “Mold Remediation Costs – How Much Does Mold Remediation Cost?”. CostHelper Home & Garden web site,
http://home.costhelper.com/mold-remediation.html. (accessed April 2016).
5. “More buyers want ‘smart home’ tech in new digs, Consumers will expect the technology to be already installed”. Erik Pisor at
Inman.com web site, http://www.inman.com/2015/08/11/more-buyers-want-smart-home-technology-in-new-digs/.
(accessed February 2016).
6. “How Much Does it Cost to Repair an AC Unit?”. HomeAdvisor web site, http://www.homeadvisor.com/cost/heating-and-
cooling/repair-an-ac-unit/. (accessed February 2016).
7. “How Much Does it Cost to Repair Water Damage?”. HomeAdvisor web site, http://www.homeadvisor.com/cost/disaster-
recovery/repair-water-damage/. (accessed February 2016).
8. “World air conditioning market grows thanks to hot spotsJune 2015”. BSRIA web site,
https://www.bsria.com/news/article/world-air-conditioning-market-grows-thanks-to-hot-spots/. (accessed February 2016).
© Emanus, LLC, Avon, Connecticut, April 2016

11. Contact: Wil Jacques, President & Founder
E-mail: wjacques@emanus.com
Voice: 860.214.6043
Web: www.emanus.com
Technology Information Contact
© Emanus, LLC, Avon, Connecticut, April 2016