|1||Backed by Y Combinator, Harvard Business Angels, & other big VCs.|
|2||$160,000+ in estimated revenue from 9 signed contracts over the past 3 mos.|
|3||Manufacturing and core machine learning algorithms completed.|
|4||Granted utility patent on sensor low-cost construction with electrically conductive fiber.|
|5||Experienced founder with 8 years of startup experience that generated millions in revenue with previous products and backed by Y Combinator.|
|6||Advisors: Natsuko Watanabe (10 yrs as a PT), Dominic Leung (UC Berkeley PhD), and Keith Brodie (MIT, 25 patents).|
I got hit by a bus. I had a lot of back pain. Like millions of others, I went to yoga, massages, the chiropractor, and the physical therapist. Managing back pain is a pain in the ass.
Our vision is to become the primary way people manage their pain from muscle strain and aches. We do this with an easier-to-use product that costs 1/10th as much as competing systems. Our technology has been used by leading research centers at MIT, NYU, and Virginia Tech elite athletes at the Tampa Bay Buccaneers, US Olympic team, and US Air Force.
Americans don’t know how to reduce their back pain and they hate going to the doctor. We realized that people don't like to fight traffic and fitting within the clinic's schedule. Yet, Americans spend $50 billion annually to relieve their pain. It's no wonder why only 35% of people stick to their care plan.
BackAlert makes getting back pain relief convenient, fun, and inexpensive by developing good posture and exercising key areas of the body.
BackAlert ships physical therapy exercise equipment with a library of engaging therapeutic exercise video classes designed by world-class physical therapists.
The cornerstone of BackAlert is a sensor that connects to an app and can automatically track exercise movement and vibrates when they slouch to fix spinal alignment. They use movement data to get the most therapeutic exercise session.
The trainer gives exact instructions on what kind of exercises they should be doing and how exactly they should be doing them - how many reps, how fast you're doing it, and they challenge you to hit your goals. As the workout ramps up and the music starts pumping, the user is going to stretch and melt away all their muscle tension. They’re going to get insanely relaxing deep tissue massages.
We launched 3 months ago, we have received $160,000+ in estimated revenue in signed contracts and we’re growing 25% month over month.
We use a technique of artificial intelligence known as "Machine Learning". This technology enables us to automatically categorize, identify, and calculate exercise statistics about the user - without the user having to do anything. For instance, machine learning analyzes the user's form and technique and the effort they are exerting in real-time.
As the user performs more workouts and as they wear BackAlert to correct posture over time, we can provide insights and guidance to help the user feel better. The maturity of our technology separates us from our competitors.
BackAlert is based on our patented technology called Enflux. Enflux is the motion capture system we have been developing since 2015. Enflux is a shirt and pants with sensors embedded directly into the fabric. BackAlert uses the same exact sensors and software found within Enflux. It's that good.
We aim to use the patented technology to create other products for many parts of the part, such as the knee, shoulder, wrist, and more.
We have invested over a million dollars in our hardware production and tooling. Majority of hardware startups fail because they cannot get past this point. We manufacture in Shenzen, China, and our manufacturing process is complete with close to 99% successful yield.
This is a picture of our progression to make the circuit board smaller. The picture below is the progression of the design and size changes of the sensor.
How we make money: We sell BackAlert online and enable people to buy BackAlert in clinics through our very own Redbox-style vending machines.
We charge up to $40 per month for the premium BackAlert package (see investor Q&A for complete price breakdown). We realized that 29 million Americans going to clinics annually are uniquely qualified leads. We installed our own Redbox-style kiosk into clinics and it enables patients to purchase or rent. The kiosk occupies space and draws customer attention leading to a sustainable and scalable customer acquisition model that costs approximately $350 to manufacture the kiosk and sensors. After that, the investment pays off as the equipment pays for itself.
Total Addressable Market: $50 billion in back pain treatment annually.
Customer spending habits: It's a lot. A real lot.
Market Comparisons: Peloton's IPO.
Strong Defenses: Army of BackAlert kiosks within clinics.
We turn clinics into BackAlert retail spaces by putting our kiosks into their facility. There are 93,300 clinics in the United States.
Clinics love us because it keeps their patients coming back and keeps patients more engaged. This means it brings them more patient visits and patient visits equals more revenue. We have tight-knit relationships with the owners where it is unlikely that they install a competitor kiosk in their clinic as they are trained to use BackAlert and it would confuse their patients.
Clinics are just the start. We can install our kiosks into massage parlors, yoga studios, pilates studios, and much more.
Our team is lead by Doug Hoang (left), a mechanical engineer and former head of Safety for Harley Davidson and a Chief Engineer for an engine design startup. His products have generated $50M+ in revenue.
Joshua McCoy (right), a serial entrepreneur and has been programming since the age of 13.
Doug invested $108,000+ into this company because it is his mission to help people get access to more fun and affordable wellness solutions.
Who has invested in us and why they are so great:
We have some very big and noteworthy investment groups invest in our company. Some of their notable investments include Dropbox, AirBnb, and so many more. There is a common thread.
What are the next milestones and use of funds?
We are still refining and making product improvements to the software, the functionality, and it's the interface.
We aim to allocate the funds (if we are able to raise a total of $300,000 some of which is from Wefunder, but others capital sources outside of Wefunder): 25%, 25%, 42%, 8%, 5% on purchasing hardware inventory, payroll, marketing, general office expenses, and Wefunder fee, respectively.
Our next milestone is $500k in annual revenue and 240 clinics signed up.
This opportunity won't last: This is the very beginning of our company and we have great traction and solving a huge problem that nearly everyone has. We bring the expertise of building and shipping a great product and we have the connections with the finances to go to the next level. We are bringing a rare opportunity to invest in what could be a great, impactful company.
With the limited resources and grit, we already have launched a product that people want and are developing the infrastructure needed. Investors are taking notice. We are backed by Y Combinator. So join us. We got your back.
BackAlert has financial statements ending October 12 2019. Our cash in hand is $27,429, as of October 2019. Over the three months prior, revenues averaged $2,003/month, cost of goods sold has averaged $2,003/month, and operational expenses have averaged $4,439/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We make getting back relief more convenient, inexpensive, and more fun. BackAlert is a wellness center brought to your home. We ship you all the necessary physical therapy style equipment you need, such as vibration massager, exercise resistance bands, and a sensor that corrects your posture and can analyze your exercise motion. The sensor connects to an app with a library of video-game-like therapeutic exercise video programs that are created by our world-class physical therapists.
We want to be the way people reduce their back, shoulder, knee, and wrist pain. We hope to be in millions of people's homes helping them manage their pain. We want to be generating $100M+ in revenue.
Enflux, Inc. was incorporated in the State of Delaware in August 2015.
Since then, we have:
Historical Results of Operations
Related Party Transaction
Refer to Question 26 of this Form C for disclosure of all related party transactions.
Liquidity & Capital Resources
To-date, the company has been financed with $2,203,000 in SAFEs and $241,290 in debt.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 10 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 8 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
Enflux, Inc. cash in hand is $27,429, as of October 2019. Over the last three months, revenues have averaged $2,003/month, cost of goods sold has averaged $2,003/month, and operational expenses have averaged $4,439/month, for an average burn rate of $4,439 per month. Our intent is to be profitable in 6 months.
We discovered that we didn't have product to market fit with our original product offering, so we scaled down headcount and burn to focus on taking the mistakes and lessons that we learned to rebuild the product offering by testing, experimenting, and talking to users. We reduced burn, which was at times as high as $80,000 per month (in 2016 and 2017) down to $5,000 a month (2019), as we focused on things that only returned high return on investment.
If we don't raise the required fundraising amount, we expect to be generating $2,000 to $4,000 a month in 6 months. We expect to maintain expenses at $3,000 to $6,000 a month. If we do raise our required amount, we expect to be $10,000 to $15,000 per month in revenue and $18,000 to $20,000 in monthly expenses.
The demand for back pain or posture products can certainly fluctuate. There are many risks including but not limited to competition, economic landscape, and more. Poor demand or shifts in market spending for back pain or posture products can have a negative impact on the financial performance of the company.
Medical regulations change from state to state, which could have negative implications on how we distribute or if we can sell BackAlert through clinics. Our team is always researching this and working with consultants and legal offices to make sure we are within the bounds of the law. However, we have not done an exhaustive search outside of California and there could be some issues, but we are always doing our due diligence.
Manufacturing and logistics. There could be delayed delivery or struggles to get inventory based on the financial performance of the company or uncontrolled changes in the geopolitical environment. There could be supply change issues if the supplier changes something without our knowledge, but we do have a good and rigorous manufacturing method where we are confident these issues won't occur. Shortages in inventory can have significant negative impact on the financial well-being of the company.
Legal. Competitors can try to challenge the company on areas included, but not limited to, trademarks, patents, or copyright. We do our due diligence and try to ensure that we do not put the company in financial risk. If there are legal implications, the company may have a significant negative impact on the financial well-being of the company.
Competition. There may be other companies that try to mimic or outperform our product offerings. With large emerging markets, this happens frequently. It is our job to be able to improve our product and attract new customers as well as build long-lasting relationships with our partners and customers. Competition may have a significant negative impact on the financial well-being of the company.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
Business model, pricing, and product can pivot. This is an early-stage company that is creating a new market category. While we have done a lot of market testing and are earning revenue on our small tests, the future is always uncertain. Uncontrollable market forces, such as competition or the performance of the economy, may cause shifts in the financial performance of the company as well as the product functionality and business model.
The Company may never receive a future equity financing or elect to convert the Securities upon such future financing. In addition, the Company may never undergo a liquidity event such as a sale of the Company or an IPO. If neither the conversion of the Securities nor a liquidity event occurs, the Purchasers could be left holding the Securities in perpetuity. The Securities have numerous transfer restrictions and will likely be highly illiquid, with no secondary market on which to sell them. The Securities are not equity interests, have no ownership rights, have no rights to the Company’s assets or profits and have no voting rights or ability to direct the Company or its actions.
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