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water from hot attic air using an attic based heat exchanger in combination
with solar photovoltaic cells.
On March 28, 1994, Mr. Palmer filed for a third U.S. Patent on behalf of the Company. The
title of the U.S. Patent application by Edward G. Palmer is “A SELF-SUFFICIENT
APPARATUS AND METHOD FOR CONVEYING SOLAR HEAT ENERGY FROM AN
ATTIC.” In this application, Mr. Palmer disclosed a system and method for providing for the self-
sufficient extraction of solar heat energy from within the attic. Mr. Palmer has disclosed a solar-
generated attic heat method whereby domestic hot water may be obtained without the use of
external power from a utility company. On September 26, 1995, U.S. Patent 5,452,710 was
granted to Edward G. Palmer. The Company has been assigned 100% of the patent rights by Mr.
Palmer.
evenly all along its length by using an algorithm to perforate the duct to
offset the pressure loss along its length.
On September 15, 1995, Mr. Palmer filed for a fourth U.S. Patent on behalf of the Company.
The title of the patent application by Edward G. Palmer and co-inventor Ephraim M. Sparrow is
“AN AIR DISTRIBUTOR OR COLLECTOR.” In this application, Mr. Palmer and Mr. Sparrow
disclose a new duct technology for collecting or distributing air evenly along its length.
The new duct technology is useful for collecting all solar derived hot attic air (heat energy). The
collected heat can be used immediately at the intake of an air-to-liquid or air-to-air heat exchanger
or it can be relocated to another location such as the intake of a furnace. It is also useful and has
broad applications in air distribution, air collection and air ventilation systems.
On May 5, 1998, U.S. Patent 5,746,653 was granted to co-inventors Edward G. Palmer and
Ephraim M. Sparrow. The Company has been assigned 100% of the patent rights by Mr. Palmer
and Mr. Sparrow. By April 1999, SolarAttic had completed several international in-country filings
for overseas patent protection. The countries filed in are: Israel, Canada, New Zealand, Australia,
United Kingdom, Italy, Spain, France, Germany and Switzerland.
Upcoming Application: A temperature control technology patent for
eliminating ice-dams in northern climates; for use in the venting of attics;
and, for use in extracting free solar heat energy from the attic for purposes
of space heating.
On June 1, 1999, SolarAttic announced the introduction of its new SAVC02 electronic control
for ventilation of attics. The press release said the new control “Makes All Attic Ventilation Fans
Smarter” because it was designed to be compatible with existing attic fans. In the Company’s
press release, Ed Palmer, SolarAttic’s CEO said: “This is an exciting development for SolarAttic
and represents yet another expansion of our proprietary technology. The company now expects to
file for a fifth patent.”
It is the Company’s belief that when the new control system is combined with the Company’s
new duct technology, that ice-dams will be virtually eliminated. The combination of the two
technologies work to “dry-out” attics during the winter and to eliminate the temperature differences
across the roof deck itself, which is a major cause of ice-dams. This approach is new and unique
in that it controls attic ventilation from its inside based upon attic humidity and temperature. It
constitutes “a systems approach to attic ventilation.”
The Company’s primary business strategy is to expand its marketing, sales and manufacturing
operations. The Company believes that its management has the requisite skills and experience
necessary to succeed in its marketing, sales and manufacturing operations. The Company’s
secondary strategy is to continue to research and develop innovative products that capitalize on the
energy contained in solar-generated hot attic air. Also, to further develop the Company’s new duct
technology. The milestones below are major areas of focus for the Company’s resources. The
timing and costs for completion are uncertain and depend upon the availability of resources. The
Company’s milestones and plans include:
rely upon and its primary survival strategy has been to simply pace the business. The Company
continues to limit its overhead and operations so that they might not exceed available resources.
The Company’s financial focus is on cash-flow. It is the Company’s patents, the long-term nature
of the Company’s energy technology and the founder’s patience that gives the Company its ability
to simply pace itself and continue its growth. The Company has consistently continued to progress
in a forward direction from its inception, despite various periods of cash-flow difficulties, and
believes that regardless of the outcome of this Offering—that it shall continue to do so.
focus of the Minimum Offering is to expand the resources and staffing for the Company's sales
department. Upon receipt of the minimum proceeds, the Company will add both a local
salesperson and an on-the-road sales person. These funds will also allow the Company to expand
its advertising, trade show attendance, inventory and office staff in support of its sales efforts.
Management believes that the combination of these factors will allow the Company to expand its
gross revenues to $400k or beyond thereby helping to accelerate the Company's growth.
The Company believes its new electronic control technology is
novel and unique enough to file for a fifth U.S. Patent. The Company now expects to file for this
patent upon receipt of proceeds greater than the Minimum and less than 25% of this Offering.
acquired a customer list of 600,000 inground pool addresses in exchange for common stock in the
Company. This list, however, is in typewritten form and requires data entry input into the
Company’s computer database to be most useful in direct marketing programs. The list is being
entered into the database in anticipation of being used full time for marketing the Company’s
swimming pool heater in the near future. As of June 30, 1999, the database had reached 209,247
addresses and data entry is on temporary hold pending additional resources. The Company uses
Macintosh computers and 4th Dimension database software and has full customization capabilities
including laser printing on 600 dpi printers for use in direct mail marketing. The Company expects
to resume this effort upon receipt of 25% of this Offering.
launch a full-scale program for the marketing and sales of its products, which, among other costs,
would involve a substantial advertising budget. The Company is engaged in low cost marketing
methods such as public relations and direct mail marketing. Several other methods such as dealers
and distributors are also being tested. The Company needs substantial marketing funds to resolve
the best sales and distribution method for the pool heater and its other products. Upon receipt of
Minimum proceeds from the Company's Offering, the Company will begin to expand its sales
initiatives and marketing programs. This effort will expand significantly as additional proceeds
from the Offering are received.
The Company’s first product to make
use of the new duct technology was introduced at the 1997 Minnesota State Fair. The SolarAttic
Ridge Ventilator (model number 14-900) was introduced and received an enthusiastic welcome at
the fair. However, this product and its technology are still in its infancy. Additional capital is
required to develop several product variations. Upon receipt of 25% of this Offering, the Company
will expand its engineering efforts and begin this task.
Company’s combination space heating and ventilation system needs to be completed. The current
status of this product is that three different sized prototype models have been constructed.
However, the capital costs of placing the unit into production are a current constraint. Upon
receipt of 25% of this Offering, the GB-Series product will be completed and made available for
sale. The SAVC02 electronic control system developed for the SolarAttic Ridge Ventilator is
identical to that used in the GB-Series. This common control system will allow for earlier
economies of production to occur for both product lines. See “PRODUCTS.”
The Company’s proprietary control technology
for use in venting attics, space heating and combination space-venting products is already being
field-tested. Upon receipt of 25% of this Offering, the Company will begin efforts to get this
product into mass production and lower its cost.
enhance profits and effect the Company’s product strategy. The Company’s product
strategy is to offer a line of SolarAttic® products for heating swimming pools, space, and domestic
hot water. These products will be primarily heat exchange systems placed inside attic structures
and operated by electronic controls. The Company expects to not only manufacture the heat
exchangers but also to either manufacture or have manufactured a line of custom electronic control
systems to operate its heat exchangers. In addition, customized ventilation and combination space
heating/ventilation systems will be deployed with these custom electronic controls. Upon receipt
of 25% of this Offering, the Company will expand its engineering staff to accomplish these tasks.
SolarAttic brand name captures the essence of its heat transfer technology. Further, the Company
plans to expand its category of products which use hot attic air — to include products that will
enhance and/or control the heat absorbing and storing capacity of attic spaces. Upon receipt of
25% of this Offering, the Company will begin a strong branding campaign using AM Radio ads in
combination with the Company's extensive Web site, toll free number and other branding tools.
energy contained in hot attic air. The education of the general public is a marketing
necessity since the Company has been pioneering a new solar and ventilation technology. The
need exists to simply get the word out, to inform and to educate people on the availability of the
Company’s new technologies and products. The Company therefore publishes booklets and
technical manuals and has an active Public Relations program, which distributes information.
Prior to the Company’s World Wide Web site development, this was a considerable effort for the
Company to maintain from an operational standpoint.
1999, for example, SolarAttic’s web site recorded 103,212 requests or hits. SolarAttic has,
among other things, made its complete technical manual for its pool heater available free for
downloading in an Acrobat PDF file format (portable document file). This format is cross platform
compatible and is readable on all personal computers that have the free Acrobat Reader software.
Expanding the web site with this type of educational information is important and ongoing. Upon
receipt of 25% of this Offering, the Company will expand further its Web site to include more
commercial transaction and feedback capabilities including the use of secure server technology.
Company intends to form alliances with appropriate solar, swimming pool, plumbing and heating
dealers. In addition, alliances with other business entities will also be sought to distribute and
market the Company’s products nationally. Upon receipt of 25% of this Offering, the Company
will expand significantly its presence in certain trade journals, trade shows and other industry and
business related areas where the Company expects it could attract independent dealers.
everyone worldwide. The Company plans to introduce applications of its technology to
international markets where there is strong economic return for the Company and for users of the
Company’s technology. The Company also plans to seek out international alliances to distribute
and market the Company’s products. Such alliances may license overseas production of the
Company’s products for distribution overseas when such production is deemed advantageous. To
date, the Company has received product inquiries from several foreign countries. However, the
Company has not sought any such international alliances to date. Upon receipt of 75-100% of this
Offering, the Company will begin exploring international relationships to expand the global
markets for the Company's technology and products.
Company is interested in pursuing the reduction of its overall product costs and in powering its
products with photovoltaic cells. Low cost products when powered by PV cells could find mass
appeal in third world countries where power distribution is limited or non-existent. For example,
ventilation, water heating and space heating applications could essentially be made free of monthly
utility costs on the African continent where solar energy is abundant. A low-cost product strategy
would be advantageous to third world countries where product costs could be a severe constraint to
the implementation of SolarAttic's new technology. A low-cost product strategy might involve the
use of cardboard and plastic where more expensive materials are currently being used for ducts,
etc. Upon receipt of 75-100% of this Offering, the Company will begin a serious effort to
engineer PV cell power options for all of its products. The Company will also explore the use of
low cost materials with the aim of reducing the cost of its technology for use in third world
countries.
have been thoroughly developed and disclosed. However, the current line of manufactured
products and the Company's technologies are still in their infancy. Additional product
development work will be required by the Company to fully exploit these new technologies. The
recent design of a custom electronic control for space heating and ventilation systems is just one
area of product development that needed to be addressed. However, many other variations of this
control technology are possible and are useful in the market.
volume production runs, final cabinet changes and other product refinements will need to be made.
Upon receipt of 25% of this Offering, the Company will significantly expand its internal product
development process by adding the requisite engineering staff to accomplish these tasks.
BECOMING AVAILABLE TO THE COMPANY. THERE CAN BE NO ASSURANCE AS TO
THE AVAILABILITY AND TIMING OF THOSE RESOURCES OR EVEN THAT THE ABOVE
STRATEGIES AND MILESTONES WILL BE SUCCESSFULLY DEPLOYED.
EVENT OR MILESTONE, POTENTIAL INVESTORS SHOULD REFLECT UPON WHETHER
ACHIEVEMENT OF EACH IS REALISTIC AND SHOULD ASSESS THE CONSEQUENCES
OF DELAYS OR FAILURE OF ACHIEVEMENT IN MAKING AN INVESTMENT DECISION.