Dear shareholders

A letter from Steve Baer, President of Zomeworks Corporation, to shareholders dated September 29, 2004. It announces the next stage of the Double Play heating and cooling system: contracting for a roll-form machine to produce metal roof panels that heat and cool buildings.

The Double Play pitch

Baer summarizes five years of proof-of-concept — backed by “tests and collecting data, starting with our Cool Cells, for over fifteen years”: “We have proven that an unglazed collector/radiator can cool the building beneath it and also do most of the heating in climates like Albuquerque.” Zomeworks holds US Patent 6,357,512 B1 (Passive Heating and Cooling System). The letter encloses photos and data from the Bruce Davis studio installation completed that summer, plus a theoretical report on the system’s financial advantage written by Jay Burch and Craig Christiansen of the National Renewable Energy Laboratory (NREL), with Baer’s own layman’s explanation.

The vision is aluminum or copper roll-formed panels with snap-in water tubes. Water circulates through the roof, collecting heat in winter days and radiating it on summer nights. Baer emphasizes simplicity: “Cooling is done without using power or pumps. The heating cycle need only use a small photovoltaic pump.”

Active prospects

The letter lists six projects in various stages:

Army buildings in Iraq — a government contractor sees the Cool Cell as ideal; Senator Domenici contacted for help.
Border and Navajo Reservation buildings — with architect Alfred von Bachmayr; sites with no gas or power where Double Play avoids expensive conventional HVAC.
Utah project — with Mark Chalom and Bristol Stickney, who “have repeated many of our experiments on night cooling.”
Spec house — Tim James (Zomeworks employee who installed the Davis system) looking for a property.
Bruce Davis studio — continues as a showpiece for clients.
David Harrison (VP of Zomeworks) — believes in a strong local market: “I’ve worked with this and Cool Cell technology for over 12 years and know it is reliable and really works.”

The letter is candid about the retrofit problem: the two-month-old Davis job “has not yet produced more work,” and “many will never accept water tanks in any configuration in their living room, but some people will.” Garages, studios, workshops, warehouses and some commercial buildings are named as the good candidates.

Costs

The letter asks shareholders for $93,000 in additional capital:

Item	Amount
Roll form machine (down + 6 months)	$5,200
Salaries — 4 months continued R&D	$20,000
Roll of metal (1,000 lbs)	$2,800
Travel	$2,000
Patents	$10,000
Printing	$2,000
Tools and equipment	$1,000
Prototype subsidies	$50,000
Total	$93,000

The roll former itself costs $26,000, financed by lease-purchase ($1,300 down, $650/month for five years); the four months of continued R&D would be done by Baer, David Harrison, Kent Johnson and Tim James. Stock price held at $3.00/share for the next 30,000 shares.

Looking forward

Baer envisions trained teams with roll-formers and coiled aluminum operating in Amarillo, Denver, Salt Lake City, Tucson, and California — “perhaps the businesses will be franchises.” Future designs include roll-formed metal roofs plumbed to radiant floors: “good for heating, so-so for cooling,” but with “a much greater appeal to the public because the building will look like any other building.”

Dear shareholders

The Double Play pitch

Active prospects

Costs

Looking forward

See also