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Botanic Air Corporation (BAC) Introduction BAC will design and build indoor plant wall installations (aka green wall, living wall) to measurably: 1) reduce.

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Presentation on theme: "Botanic Air Corporation (BAC) Introduction BAC will design and build indoor plant wall installations (aka green wall, living wall) to measurably: 1) reduce."— Presentation transcript:

1 Botanic Air Corporation (BAC) Introduction BAC will design and build indoor plant wall installations (aka green wall, living wall) to measurably: 1) reduce indoor airborne toxic gaseous volatile organic compounds (VOCs) and improve indoor air quality (IAQ), 2) thereby improve occupants’/ workers’ health and productivity, 3) reduce HVAC energy consumption, and 4) reduce building CO2 emissions, at commercial and institutional buildings and facilities. These installations will employ phytoremediation (plant bio-filtration, pioneered by NASA) and (optional) UV photocatalytic oxidation, actively integrated with building HVAC systems, to reduce VOCs and improve IAQ, thereby reducing the need for introducing outdoor air. BAC is seeking $112,500 in seed capital funding to design and build a prototype, integrating several systems to accomplish its mission. Contact: Mike McCarthy, ,

2 The Problem(s) Most Americans spend 90% of their time indoors. Most indoor air quality (IAQ) pollutants- toxic gaseous volatile organic compounds (VOCs) including formaldehyde, come from sources inside the building- chemical and biological contaminants from adhesives, carpeting, upholstery, cleaning agents, etc. which may emit (VOCs). Indoor air is typically 2-5, even 10 times, more polluted than outdoor air. Exposure to VOCs can cause headaches, acute illnesses (asthma, nausea) and chronic diseases- cancer, immunologic, neurologic, reproductive, developmental, and respiratory disorders. Most sick building syndrome (SBS) is related to poor IAQ and VOCs, causing- irritation of the skin, eyes, nose, throat, neurotoxic or general health problems The World Health Organization (WHO) estimates that 30% of the buildings in the US experience IAQ problems and up to 30% of new and remodeled buildings worldwide may be the subject of excessive complaints related to IAQ. The EPA ranked indoor air pollution as one of the top five environmental threats to public health and one of the largest remaining health risks in the USA. Of more than 70 million Americans working indoors, 21 million are exposed to poor IAQ. 40% of absenteeism and 12% reduction in productivity is attributed to poor IAQ. OSHA estimated a savings to employers of $15 billion every year due to increased employee productivity and reduced absenteeism due to poor IAQ. Typical HVAC systems filter particulates, but cannot remove gaseous VOCs Filtering, heating, and/or cooling the outdoor air intake consumes HVAC energy. Increasing the building intake of outdoor air (ventilation) is often not an attractive option due to outdoor air pollution. Commercial buildings in North America contribute 18% of total world CO2 emissions. Current indoor plant installations are not integrated into building air circulation or HVAC systems, and do not offer any on-site ongoing VOC, IAQ, HVAC, CO2, or health benefits measurement.

3 Our Solution(s) Phytoremediation of indoor air utilizes plants to remove, reduce, or neutralize airborne environmental contaminants and volatile organic compounds (VOCs) in the air of offices and other enclosed buildings. Evidence exists of the ability of plants also to balance indoor humidity and remove airborne particles, also reducing stress, improving actual health, perceived health, mood, and productivity. Plants reduce the need for outside air intake and HVAC energy consumption by improving IAQ. Also, plants convert CO2 to carbohydrates and oxygen during photosynthesis, thereby reducing building CO2 emissions. Ultraviolet photocatalytic oxidation (PCO) is also used for removal of airborne VOCs, and requires less energy to operate than many existing filter systems. BAC will develop attractive plant wall installations using phytoremediation, plus PCO, which are actively integrated into building HVAC/airflow systems, providing indoor re-circulation of the treated air, conversion of CO2 into oxygen, and on-site ongoing measurement and documentation of results. BAC will also research and develop new plant varieties and plant micro- organisms with greater phytoremediation abilities, in tandem with improving methods to integrate photocatalytic oxidation, phytoremediation, aeroponic plant culture, and VOC measurement, reporting, analysis, and system feedback. All aspects will be designed and used with IP protection in mind.

4 The Market Up to 60 million people working indoors suffer with eye, nose and throat irritation, headache and fatigue. 60mlln. people = 60mlln. plants = 3.75mlln BAC 4’x8’ panels of 16 plants each) The five billion square feet of private office space located in the 91 markets served by BOMA’s local associations provide work space for an estimated 21 million office jobs. 21mlln. people = 21mlln. plants = 1.3mlln. BAC 4’x8’ panels. Of more than 70 million Americans working indoors, 21 million are exposed to poor IAQ. 70mlln. people=70mlln. plants = 4.375mlln BAC 4’x8’ panels of 16 plants each. The range of market is 1.3 to 4.3 million BAC panels in the US market alone. Air purification equipment manufacturers, NAICS , industry revenue for the year 2011 was reported at $3.0 billion, with an estimated gross profit of 32.57% BAC target markets are facilities with: 1) SBS/VOCs, 2) 24/7 occupancy, 3) Green Building/LEED goals, 4) high salary workers, 5) desirable/high profile facility, 6) IAQ results oriented clients, 7) poor outdoor air quality Seattle, Western, and USA area target markets will be surveyed early to profile and identify potential/interested clients and sites, and desire for performance based pricing of installations. Industry trade organizations- BOMA, NAIOP, IFMA, ASHRAE, AIA, USGBC/LEED, PIA, ASID, IAQA, AIHA, (fuller list is in Business Plan) will be utilized

5 Competition Ambius (USA, UK, EURO, AU, NZ, etc.), walls/index.html, “a certified specifier, installer, and service provider for multiple green wall manufacturers” Nedlaw (Toronto vicinity), Cleaning Air, Naturally ™ “Our Active Living Wall Biofilters remove Volatile Organic Compounds” GSky (Vancouver BC), gsky.com/green-walls/versa, “the most versatile interior Green Wall system in the industry” McCaren Designs, (MN), greenwalls.com, “blends engineering ingenuity with striking design” Sage Botanic Media/ Biotile Vertical Garden Systems (IL) “is a vertical gardens company based in Chicago, working internationally” RPI/CASE/SOM (NYC)- Center for Architecture Science and Ecology (CASE), a collaboration between Rensselaer Polytechnic Institute (RPI) and Skidmore, Owings & Merrill (SOM), “has created a new prototype that would work with a building’s existing HVAC system to reduce energy loads and improve indoor air quality”. technology/active-phytoremediation-wall-system.aspx

6 Marketing/Distribution/Sales Plan Promote a message of measurable benefits: 1) better indoor air quality, 2) better health and productivity, 3) lower HVAC energy consumption, and 4) lower building CO2 emissions; plus indoor plant aesthetics. Five regional Service Centers (NE, SE, Midwest, SW, NW); regional sales staffs that network among local building trades chapters. Service Centers design, build, install, train, service, and monitor quality, supported by BAC HQ/central R&D of plants, technologies, practices/policies, marketing, etc.. As available, local interior plantscape partners are contracted (under Non- Compete) and trained to service BAC installations, not as BAC competitors but as trained local service partners. BAC strategy is to develop new markets, programs, and value propositions, not compete in existing “decorative” interior plantscape markets. Promote / market / network within commercial and institutional established building trade groups’ local chapters- AIA, BOMA, NAIOP, IFMA, ASHRAE, IAQA, AIHA, USGBC, etc.. NOT aimed at retail / household sales. BAC installations provide services/benefits (1-4 mentioned) and remain as BAC property throughout. Intellectual property will be protected by patents and design and implementation of equipment, plants, procedures, systems, and IT. BAC sells measureable benefits and leases installations, retaining ownership of all equipment, material, and procedures at all times.

7 Revenue Model A plant wall installation fee is based on client ROI calculations (see below) for cost of 1 plant per 100 sq. ft. or per 1 employee vs. savings of employee absentee cost. BAC 4’x8’ panel contains 16 plants. Installation fee of $15,000 per 4’x8’ panel (=$937.50/plant or per employee), versus $20,800 estimated value of reduced employee absenteeism, equals $5,000 client savings per employee. Estimated life of installation is twenty years. Installations are leased, not sold. Lease terms include periodic servicing by BAC/contractor with pay for performance terms. Value proposition: 3% worker $40,000+/year salary = $1,200 / year / employee ($24,000+ over 20 years/employee) of productivity benefit, VERSUS $15,000 installation fee for 16 employees = $46.88 / year / employee ($ over 20 years/employee) of cost. PLUS- employee reduced health care cost and reduced HVAC energy bill, over 20 years. (greenplantsforgreenbuildings.org) One plant per 100sq.ft.=334% employer ROI. $36,100 salary, 3.6% absentee rate = $1,301 per employee. “Studies prove absenteeism can be reduced by 14% in offices with at least one plant per employee. That amounts to $ ($1,301 x 14%) or about a day and a half of saved absenteesim per employee. The cost to provide a plant program of one plant per employee is about $3.50 per month per employee or $42 per year. That investment in a plant program will return $ per employee or a 334% ROI”. $42/year/plant= $672/year/BAC panel. Researchers at the Center for Building Performance and Diagnostics at Carnegie Mellon University: a typical office with 500 $45,000 salary, a 2.3% productivity improvement savings would be $975 per employee. Versus $98 per employee to purchase a plant (=$1,568 for a BAC panel) plus $60/year per employee (=$960/yr for BAC panel) to maintain the plant = 995% ROI for employer. A BAC 4’x8’ panel module estimated installed cost is $2,000-$5,000. The greatest variable is the cost of VOC/CO2/RH/IAQ sensor(s) and data logging and analysis. Additional value proposition is from Green Building LEED certification (LEED IEQc3.2 requires formaldehyde, carbon monoxide (CO) and total VOCs limits), generating 3.5% higher occupancy rates, 3% higher rental rates, 6.6% higher ROI, and 7.5% higher building value.

8 Financials Botanic Air estimated budget 6mos A- # plant wall installations B- est. number of 4'x8' panels per installation610 C- Revenue- per panel$90,000$600,000$1,800,000$3,750,000 D- COGS- installed panels $6,000 per panel36,000240,000720,0001,500,000 E- Gross margin/gross profit$54,000$360,000$1,080,000$2,250,000 Fixed Operating Expenses/Overhead F- advisors/consultants/labor28,00080,000 60,000 G- R&D laboratory16,00060,000 H- Founder / Manager / CEO9,00036,00048,00060,000 I- rent, miscellaneous expenses11,00024, ,000 J- Total operating cost / overhead64,000200,000212,000300,000 K- Total Cost / Expenses100,000440,000932,0001,800,000 L- EBITDA profit / $160,000$868,000$1,950,000 M- funding needed- (Total Cost less prev. EBITDA)$112,500$450,000$772,000$932,000 N- beginning cash balance (=prev. ending cash)0(10,000)150,0001,018,000 O- ending cash balance (=beginning cash + EBITDA)(10,000)150,0001,018,0002,968,000 P- Pre-money valuation (Concept=$500k,Proto=$1mln)$750,000 $1,000,000$5,000,000 Q- Startup Stagedevelopment prototyperevenue

9 Management Strategy is to use technical Advisors and (1099) labor to design/build/install prototype(s), and recruit a team with revenue income beginning in 2014, beginning with CEO as early as possible. Founder, interim CEO- Mike McCarthy, during Concept, Product Development, Prototype, and field test periods ( ), HVAC- Richard Ward, P.E., RMW Engineering Seattle; Andreas Winardi, Mechanical & Chemical Engineer, Puget Sound Energy; Rodney Dwyer E.I.T., Mechanical Engineer, Seattle; Jon Vlaskamp, Intern, Honors- Cascadia Community College, Environmental Technologies IAQ Sensors- Bernt Blomgren, President, Global-Controls Inc., Seattle Indoor Air Quality- Clinton Holzhauser, EHS-International Inc., Bellevue Phytoremediation- Prof. Emeritus Stanley J. Kays, Univ. Georgia Horticulture; Prof. Stuart Strand, Strand Laboratory, UW Environmental Engineering, Seattle Photocatalytic oxidation (PCO)- tbn- Univ.Wisconsin, three Texas commercial practitioners Plants- Rachel Sacks, Twyford Nursery, Florida Interior Plantscape Industry- Joe Haslett, Cal Poly San Luis Obispo CA; Scott Barron, Botanical Designs, Seattle; Alex Fell, National Foliage Foundation, Kraft Gardens- Florida Market Survey- Seattle University, Greg Scully, Project Center- College of Science and Engineering and the Albers School of Business and Economics, &/or Bainbridge Grad..Institute Wall design & material- Mike Slota, SlotaDesign.com; Dan Terry, DanTerry Inc. Woodinville Aero/hydroponics- Nathan Ryweck, AquaSerene, Seattle Solar/photovoltaic, LED lighting,battery/energy storage- tbn

10 Traction As of September no customer, no contract, no revenue, no prototype. Founder’s research began in Dec is ongoing; D-U-N-S and WA UBI# are obtained; “Botanic Air Corporation” name has been reserved with State of Delaware; Patent Pending has begun. Business Plan, PowerPoint, webpage, gust.com portal company site is completed. Several green buildings/clean tech/building services industry potential strategic partners / investors / professionals have been contacted. Investment communications from a VP at a prominent western building DBOM services firm since late April- “keep in touch”. Comment from Sustainability Solutions Practice Director, CH2M Hill, "It sounds like your system will provide innovative solutions for building owners, and we may be interested in applying it for our clients once you have it commercialized." One south Seattle DBOM firm office/workshop incubator site is under consideration. Product is in development: prototype 4’x8’ expanded aluminum 2-2.5” mesh screens for plant wall structure were purchased by Founder. Sending full diagram to USPTO. Several Advisors in relevant fields have been identified and interviewed. Confirmation from an interior plantscape industry Advisor that no other similar installations exist (i.e. plant walls with HVAC integration and measurable IAQ results).

11 The Offer TERM SHEET September, 2012 Cap Table: All shares held by the Founder, Michael M. McCarthy; no debt Offer Terms Pre-Money Valuation as of $750,000 as Development stage (between Concept $500,000 and Prototype $1 million) 15% of current shares for $112,500., divisible as 1.5% of current shares for each $11,250. Funding Rounds Funding requested: A) now, for $112,500 for first 6 months to design/build prototype, start lab Anticipated follow-on rounds: B) in 6-9 months 2013, $450,000 for four more prototypes, build up R&D lab C) $772,000 for twelve paying test installations, more lab build up D) $932,000 for twenty-five paying test installations, more lab build up


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