Sylvan Source M-600 Training Guide

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Sylvan Source M-600 Training Guide
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Agenda

• Company Overview L. Demmons
• Water Conditions
• Product Training
• Sales Training L. Demmons
• Installation Training L. Demmons

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Sylvan Source M-600 Company Training
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Company Overview
Mission Become the leading provider of pure water
solutions for a contaminated world.

• Technology IP
• Unique integration of the degasser, distiller
  and demister enables our products to
• consistently reduce more contaminants more
  effectively than any other technologies or
• products.
• Automated control functions and self-cleaning
  mechanisms for no maintenance no
• cleaning, no chemicals, no cartridges, no
  filters, no membranes - NO user intervention.
• 3 PCT patents pending
• 6 provisional patents filed
• Know-how core competencies in system design.
• 1 West Coast IP Firm, aggressively pursuing IP
  development

• Q1 Launch
• Two tier distribution North America
• SubZero, Viking and BSH Distributors
• Certifications complete
• NSF
• IAPMO
• UL
• California, Massachusetts and Wisconsin
• Shipping now

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Sylvan Source Management Team
Laura Demmons, CEO Chairman HP, Eastman Kodak,
and water and energy entrepreneur since
2001 Richard Deep, COOHP, GE, SanDisk, and
Trikon general management, executive management
and COO Gene Thiers, Ph.D., CTO SRI, several
years in water and energy technologies and
management William Deihl, CFO CPA, CFO for 2
public companies and multiple start-ups John
Orcutt, VP, Business Development BlueStream
Ventures, Actional, executive positions at 3DO,
Unisys and HP
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Clean Water in Decline

• Fresh water scarcity growing
• Global water supply dropped by33 since 1970
• Water tables dropping (USGS)
• Salt water incursions (USGS)
• Saline in ground water (USGS)
• Fresh water contamination increasing
• Contaminated drinking water is responsible for a
  large percentage of human disease (WHO World
  Health Organization)
• 2,000 new chemical compounds introduced each
  year
• 99.5 of chemicals in the U.S. do not have a
  federal or state standard
• Centuries-old infrastructure breaking down
• Waste and fresh water pipes crossed over in
  Atlanta resulting in tap water that looked like
  beer
• 650 water mains break every day, chronic leakage
  in about 20-30 of the infrastructure (USGS)
• Debris, fecal matter, drugs and toxins get sucked
  into fresh water pipes (USGS)
• European infrastructure even older than U.S.

Bernadette McDonald Douglas Jehl, Whose Water
Is It? Patrick Sullivan, Franklin Agardy, James
Clark, Americas Threatened Drinking
Water US News and World Report
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The Result
INCREASING CONTAMINATION

• 54 million people in the U.S. with arsenic in
  tap water at unsafe levels National Resource
  Defense Council (NRDC)
• Estimated 15 million to 40 million people in the
  U.S. with MTBE, a fuel additive which dissolves
  easily in water, in tap water or water source (no
  federal guidelines) Environmental Working Group
  (EWG)
• 20 million people in the U.S. with perchlorate
  in their tap water (no federal guidelines) - EWG
• More than 4,000 reported health-based violations
  in community water systems in the U.S. affecting
  23 million people Environmental Protection
  Agency

GROWING CONSUMER FEARS FUEL BOTTLED WATER DEMAND

• 9 billion spent in 2004 on bottled water in the
  U.S.
• Safety of tap water is biggest reason consumers
  purchase bottled water

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The Result Consumers

• Growing Consumer Fears Fuel Bottled Water Demand
• Bottled water is 240 to 10,000 times more
  expensive per gallon than average tap water
• Bottled water demand crosses all socio-economic
  boundaries

Why people buy bottled water
(NRDC, Aqua International)
(NRDC)
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Common Technologies Today
Filtration (including carbon) The process of
removing suspended particles from water by
passing it through one or more permeable
membranes or media of limited porosity (e.g.,
sand, activated carbon, diatomaceous earth). Only
removes insoluble solids (such as dirt and other
sediments). Requires periodic cleaning and
replacement, and performance immediately degrades
with time. What can remain Salts, bacteria,
viruses, pesticides, some gases and VOCs, heavy
metals Reverse Osmosis (RO) (without downstream
filtering) Removes water from dissolved
contaminants using differential permeation. In
R/O, water under pressure passes through a
semi-permeable membrane that separates it from
various contaminants. Requires periodic cleaning
and replacement, performance immediately degrades
with time, and small particles can rupture the
membrane. The RO process wastes more water than
any other process. What can remain Some VOCs
(with small molecules such as THMs and TCE), some
bacteria, viruses, gases Distillation (without
downstream filtering) The process of heating a
liquid to its boiling point, removing the vapors
through a cooling and condensing apparatus, and
finally collecting the condensed liquid in a
separate container. Typically a single batch
process requiring cleaning after each batch.
What can remain VOCs, gases, and some
carry-over of metals and salts
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Competition Existing Alternatives
Effectiveness
Compound Filtration R.O. Distillation Inor
ganic Chemicals Organic Chemicals
Salts Micro Organisms
Low Medium High
Consistency
Performance Over Time Media Replacement Cleaning
Water Efficiency
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Sylvan Source M-600 Product Training
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Sylvan Source M-600

• Ultra-Clean Water System for Residential Use
• Reduces contaminants more effectively than other
  available technologies
• No cleaning or maintenance
• Integrates degassing, distillation, and demisting
• Automated, on-demand, fully contained wall-mount
  unit
• Manufactured in the U.S.

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M-600 Advantages

• Advantages
• Able to consistently reduce a broader
• range of contaminants
• No need for filters, membranes,
• chemicals, or cleaning
• More consistent contaminant reduction
• Self-contained, fully automatic
• Multiple points of delivery
• Requires less waste water to produce
• ultra-clean water

• Benefits
• No need to identify specific contaminants in
• water. No worry if the mix changes.
• No added expense. No chance of doing more
• harm than good.
• Continuous, high-quality water no degradation
  
• as with systems that require membranes and/or
  
• cartridges.
• No assembly required - set it and forget it!
• One system can deliver ultra-clean water to
• multiple areas within the home.
• Uses 1/2 gallon of waste water versus RO
• system which require 5-10 gallons.

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Sylvan Source Process

• Sylvan Sources
• 4-Step Process
• Degassing
• Distillation
• Demisting
• Condensing

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Sylvan Source Process

• Degassing
• Water is heated to near boiling inside the
  degasser
• Pre-heating allows dissolved gases and organics
  to vaporize
• Counter-flowing steam from the distiller
  discharges contaminants out of the degasser
• In contrast, simple distillers carry gases into
  product water

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Sylvan Source Process

• Distillation
• After degassing, water moves into the distiller
  where it is heated to boiling and converted to
  steam
• Contaminated mist droplets remain in water and
  can be carried over
• Sylvan Source performs an intermediate step -
  Demisting

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Sylvan Source Process

• Demisting
• After distillation, mist droplets enter the
  demister
• Steam and heavier mist droplets are separated
  using a patent-pending process
• Droplets carrying residual contaminants are
  discharged from the demister
• In contrast, simple distillers carry
  contaminated mist droplets into product water

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Sylvan Source Process

• Condensing
• The condenser takes the steam and cools it into
  ultra-clean water
• Once condensed, water is ready to use for
  drinking and cooking

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Effectiveness Comparison
Effectiveness
Compound Filtration R.O. Distillation
Sylvan Source Inorganic
Chemicals Organic Chemicals Salts Micro
Organisms
Low Medium High Highest
Consistency
Performance Over Time Media Replacement Cleaning
Water Efficiency
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Sample Test Results
NaCl input value suppressed for clarity. Actual
1000 ppm
Sodium Chloride (NaCl) is a reasonable proxy for
salts such as nitrates, sulfates, chlorides,
perchlorate and heavy metals such as lead,
mercury, antimony and arsenic present in water as
salts.
Isopropyl alcohol (IPA) is a reasonable proxy for
Dioxin, Phenol, EPTC, chloroneb, epichlorohydrin,
trans-nonachlor, and endosulfan sulfate.
Methyl ethyl ketone (MEK) is a reasonable proxy
for MTBE, PCBs, acetone, chlordane, trifluralin,
nitroso-diphenylamine, DBCP, di nitro toluene,
and diethyl phthalate.
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Operating Costs
Operating Cost Comparisons Operating Cost Comparisons Operating Cost Comparisons Operating Cost Comparisons
Cost per Gallon Consumables Total Cost/Month (3 gallons/day family of 5)
Sylvan Source 0.46/gallon 1.2 KW x 4 hours 4.8 KW hours KW hours 0.0967 Average Residential Retail Price (year-to-date through 2/06) None 41.77
Competitive Reverse Osmosis Systems Negligible 0.48/gallon Consumer Reports 1/05 43.20
Bottled Water Retail 0.69-3.79 Home Delivery 2.25 - 5.50 (Supermarket Snapshots) None except environmental cost of plastic bottles 62.10 - 495.00

• The cost for waste water is not factored into
  the table above. To produce 1 gallon of clean
  water
• Sylvan Source produces 1/2 gallon of waste
  water.
• Reverse Osmosis systems produce 5-10 gallons of
  waste water or more!
• Average drinking and cooking water
  consumption/day 2.6 gallons per family of 5
  (source Perchlorate in Drinking Water A Science
  and Policy Review, June 2004)

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Product Features

• No Cleaning
• Patent-pending, self-cleaning process
• Scrubs the floor of the boiling chamber
• Keeps scale in suspension so that it cannot
  harden
• Flushes suspended scale automatically after each
  cycle
• No Maintenance
• No filters, membranes, cartridges or chemicals
  required
• Saves money and time
• Consistent water quality over time

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Product Features

• Consistent High
• Water Quality
• No filter, membranes or cartridges that start to
  degrade immediately
• No degradation or bacterial growth with filter
  and membrane systems
• Consistent water quality with every cycle
• Clean, healthy, delicious water

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Product Features

• High Quality - Built to Last
• High quality stainless steel machined parts
• NSF approved tubing and subcomponents
• Heavy duty steel frame with powder coat for
  durability
• 10 year expected life
• 3 year warranty on parts and labor

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Product Features

• Integrated, Stylish
• Design
• Next generation design
• Self-contained, wall-mount unit
• Ready for installation in the garage, utility
  room or basement
• First true ultra-clean water appliance
• Install and walk-away

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Product Features

• Multiple Points of
• Delivery
• Provides clean water automatically and on-demand,
  to faucets, ice-makers and other water resources
• Points of entry can be located on different
  levels
• One unit provides multiple points of water
  delivery throughout the home

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Product Features

• Water Quality Monitor
• Monitors the level of Total Dissolved Solids
  (TDS) in storage tank
• Light on panel indicates if TDS is above
  acceptable level
• Easily viewable indicator light on front panel

TDS Indicator Light
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Product Specifications

• Water Production
• Produces 6 gallons of ultra-clean water per day
• Contains a 7 gallon water storage tank
• Stainless steel water processor and storage tank
• Automatic flow process keeps water storage tank
  filled
• Better than 21 ratio of clean water to waste
  water
• Use only 1/2 gallon of waste water to produce 1
  gallon of
• ultra-clean water

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Product Specifications

• Product Dimensions and Weight
• Unit Dimensions31 x 25.5 x 13.75 (HxWxD)
• Unit Weight (Empty)85 lbs
• Unit Weight (Full)135 lbs
• Electrical
• 1100 watts 115 VAC 60 Hz 10.7 amps
• General Specifications
• Operating Pressure.30-100 psi
• Operating Temperature..40o 90o F
• Demand Pump.1.4 gallons/minute
• Demand Pump Pressure40-60 psi
• Noise Levellt60 dBa
• Warranty3 year parts and labor

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Product Specifications

• Plumbing and Install Requirements
• Water in
• Water out
• Gravity drain
• Air gap
• Dedicated electrical outlet

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Product Certifications

• Certification and Testing
• NSF/ANSI 62 Water Distillation Systems tested
  and certified
• IAPMO UPC certified
• UL Safety tested and certified
• State Product Certifications
• California Department of Health Services
  certified
• Massachusetts product approval
• Wisconsin Department of Commerce approved
• Independent Testing
• Additional contaminant reduction testing
• Independent, EPA approved laboratories

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Hard Water Condition

• Miniscule deposits from hard water cause scale
  build-up in pipes and damages water- using
  appliances
• If water hardness is 120ppm (calcium
  magnesium) a water softener is recommended with
  the M-600
• Using without a water softener may require
  additional servicing to prevent hard water damage
• Using M-600 without a water softener where hard
  water concentrations exceed 400ppm of calcium and
  magnesium will void the Sylvan Source warranty

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Sediment

• Sediment sed-i-ment n
• Solid fragments of inorganic or organic material
  that come from the weathering of rock and/or
  chemical reactions in pipes.
• Recommend household sediment trap
• In areas with high levels of sediment
• Trap and captures large particles
• Dirt
• Sand
• Rocks
• Installed ahead of inlet water line
• Helps protect all water appliances in your home
  

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Warranty Service

• 3 year warranty on parts and labor
• Nationwide support service ServicePower, Inc.
• www.servicepower.com
• Service documentation available on Sylvan
• Source website www.sylvansource.com/documenta
  tion.html

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Summary

• High Growth Potential
• Sylvan Source has defined a new category by
  launching the first in a line of
• breakthrough products that will establish
  Sylvan Source as a market leader
• Sylvan Source Partnership
• Opportunity to participate in future,
  industry-leading product solutions
• Profitability
• The increasing awareness and demand for safe,
  clean drinking water creates an
• expanding market for Sylvan Sources premier
  products that offer its partners
• unparalleled profitability
• Market Acceptance
• Strong early indicators of consumer and
  industry acceptance
• Unique and Proprietary Product Line
• Offers ultra-clean water systems
  differentiate and compelling value proposition
• Sylvan Source will employ multiple clean water
  and solar technologies patent
• pending, proprietary technology

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Q A
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Sylvan Source M-600Sales Training
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Key Points M-600

• What its not
• Yet another water purification product
• What it is
• A true water appliance
• A technology breakthrough
• A paradigm shift in the approach to providing
  clean, delicious, healthy water

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Paradigm Shift
NEW
EXISTING

• APPLIANCE
• Fully integrated, automated systems
• 21st century industrial design
• Install and walk away
• no maintenance
• Differentiated good margins
• Sold through premium appliance distributors

• PARTS-IN-A-BOX
• Components with
• Replacement parts
• Visible cartridges, connectors
• maintenance required
• Undifferentiated margin pressure
• Sold through OEMs, plumbing wholesalers,
  dealers, VARs

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Key Messages

• Consistently reduces contaminants more
  effectively
• No cleaning or maintenance required
• No cartridges, filters, chemicals or membranes
• Multiple points of delivery with one system
• Consistent water quality
• Significantly reduced water waste vs. other
  technologies
• Installs and works like a true appliance

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Sales Marketing Support

• Product brochure and data sheet
• Consumer white paper
• Point-of-sale display
• Owner and installation manuals
• Architect builder guide
• Training materials and video
• Third-party testing certification
• NSF
• UL
• IAPMO
• California, Massachusetts and Wisconsin
• Active public relations campaign

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Buyer Appeal

• Safety
• Convenience
• Savings
• Image

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Builder Appeal

• Additional revenue opportunity
• Enhanced builder image unique offering
• Many builders looking for a competitive edge
• Paying attention to consumer needs
• Offering worlds finest water system

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Distributor Appeal

• Sales Opportunity
• An exclusive
• Unique product no one else has it
• Compelling story
• A new income opportunity
• Diversify your product portfolio
• Add on/cross sell opportunity
• A way to build upon relationship with builders
• A reason to call on builders directly
• Adding value exposing builders to new
  cutting-edge products
• Exciting new technology you can share with
  dealers and end users

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Questions?
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Sylvan Source Installation Training