Invest in Gryphon Online Safety, Inc.

Family internet protection powered by AI

EARLY BIRD TERMS: $74,035 LEFT

$820,795

raised from 98 investors
INVESTMENT TERMS
Future Equity
 $35M  $31.5M valuation cap
Early Bird Bonus: The first $250K of investments will be in a SAFE with a $31.5M valuation cap and 10% discount
$5K, $10K, $25K

Financials

We have financial statements ending December 31, 2022. Our cash in hand is $73,796, as of February 2024. Over the three months prior, revenues averaged $171,617/month, cost of goods sold has averaged $106,118/month, and operational expenses have averaged $167,042/month.

At a Glance

Jan 1 – Dec 31, 2022
$1,932,463
-9%
Revenue
-$2,082,821
Net Loss
$2,405,366
+10%
Short-Term Debt
$901,288
Raised in 2022
$73,796
-9%
Cash on Hand
Net Margin:
-108%
Gross Margin:
41%
Return on Assets:
-86%
Earnings per Share:
-$0.08
Revenue per Employee:
$84,020.13
Cash to Assets:
3%
Revenue to Receivables:
1,314%
Debt Ratio:
145%
Gryphon 2021 2022 Audited Financials.pdf Gryphon 22 23 Audited Financials.pdf
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.

Overview

We are building family internet protection powered by AI

As a parent, I know firsthand how difficult it is to keep our kids safe online. I was frustrated with the solutions in the market and how difficult it is to use. In many cases, products are designed to keep you and your family online more without considering your digital health and safety.

Gryphon provides family friendly easy to use cybersecurity solution for homes and small businesses.


Milestones

Gryphon Online Safety, Inc. was incorporated in the State of Delaware in June 2014.

Since then, we have:
  • Over $12M in total revenue since launch
  • 3x growth in paid subscribers over the past 2 years
  • Over 80K Gryphons sold protecting families and small businesses
  • Growing B2B technology licensing pipeline worth up to $20M over the next few years
  • 10 patents awarded covering advanced network protection
  • Founders behind disruptive tech such as MiFi mobile hotspot & Apple iPod
  • $12M+ raised from noted angel groups including ATI and Frontier Angels
Historical Results of Operations
  • Revenues & Gross Margin. For the period ended December 31, 2023, the Company had revenues of $1,932,463 compared to the year ended December 31, 2022, when the Company had revenues of $2,146,155. Our gross margin was 41.22% in fiscal year 2023, compared to 36.14% in 2022.
  • Assets. As of December 31, 2023, the Company had total assets of $2,408,378, including $82,149 in cash. As of December 31, 2022, the Company had $3,481,017 in total assets, including $299,314 in cash.
  • Net Loss. The Company has had net losses of $2,082,821 and net losses of $3,174,318 for the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
  • Liabilities. The Company's liabilities totaled $3,490,408 for the fiscal year ended December 31, 2023 and $2,693,772 for the fiscal year ended December 31, 2022.
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 $1,709,166 in debt, $8,846,829 in equity, $3,347,558 in convertibles, and $862,118 in SAFEs.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 6 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 6 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

Gryphon Online Safety, Inc. cash in hand is $73,796, as of February 2024. Over the last three months, revenues have averaged $171,617/month, cost of goods sold has averaged $106,118/month, and operational expenses have averaged $167,042/month, for an average burn rate of $101,543 per month. Our intent is to be profitable in 12 months.

Since the date our financials cover, we raised $632,630 in capital from equity crowdfunding in the form of a SAFE note which we used for sales, marketing, and operations. We have also significantly reduced expenses over the past month by reducing staff. 
We had an inventory shortage issue that impacted overall hardware revenue in 2022. In 2023, due to the tight capitals market, we significantly reduced marketing spend and focused on growing subscription revenue and driving toward profitability.

We expect revenues to be in line with the past 3 months ($171,617 avg/month) with increasing revenue from subscriptions.  We expect expenses to be significantly reduced as we cut expenses related to headcount and other services. Over the next 3-6 months we expect expenses to be approximately $20k per month. 

We are not currently profitable. We would require additional funding of $2.5 million to reach profitability mostly driven by the growth of our subscription revenue and our new software licensing business. Our software licensing business is expected to start generating revenue second half of 2024 and we expect to be profitable by the end of 2025.

Besides funds raised through Wefunder, we currently generate revenue through product sales and subscriptions. We also expect to start generating revenue from our software licensing business towards the end of the year. In addition, we have loans that we can tap into to extend runway. We are aggressively reducing expenses until we can generate enough funding to extend the runway. We also have $357K in inventory that’s already paid for that we will be selling through that represent over $550K in sales.

All projections in the above narrative are forward-looking and not guaranteed.

Risks

1

We face substantial competition and our inability to compete effectively could adversely affect our sales and the results our of operations.


We operate in intensely competitive markets that experience frequent technological developments, changes in the industry and regulatory standards, changes in customer requirements, and frequent new product introductions and improvements. If we are unable to anticipate or react to these competitive challenges, or if existing or new competitors gain market share in any of our markets, our competitive position could weaken, and we could experience a decline in our revenues that could adversely affect our business and operating results. To compete successfully, we must maintain an innovative research and development effort to develop new solutions and enhance our existing solutions, effectively adapt to changes in the technology or product rights held by our competitors, appropriately respond to competitive strategies, and effectively adapt to technological changes. If we are unsuccessful in responding to our competitors or to changing technological and customer demands, our competitive position and our financial results could be adversely affected.
Many of our competitors have greater financial, technical, marketing, or other resources than we do and consequently, may have the ability to influence customers to purchase their products instead of ours. Further consolidation within our industry or other changes in the competitive environment could result in larger competitors that compete with us. We also face competition from many smaller companies that specialize in particular segments of the market in which we compete.

2

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.

3

Quality management plays an essential role in determining and meeting customer requirements and improving the Company's products and services.


Our future success depends on our ability to maintain and continuously improve our quality management program. An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, and a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products. In addition, a successful claim brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that results in significant adverse publicity against us could have an adverse effect on our business and our reputation.


Other Disclosures

The Board of Directors

Director Occupation Joined
John Wu CEO @ Gryphon Online Safety 2014
Arup Bhattacharya CTO @ Gryphon Online Safety 2016
Sanjeev Kumar Partner @ The Kumar Law Firm PLLC 2019
Fleming Shi CTO @ Barracuda Networks 2023

Officers

Officer Title Joined
John Wu CEO 2014
Arup Bhattacharya CTO 2016

Voting Power

No one has over 20% voting power.

Past Fundraises

Date Security Amount
Current SAFE $169,365
3/2024 Loan $60,000
11/2023 SAFE $634,830
10/2023 SAFE $634,830
11/2022 Loan $55,000
9/2022 SAFE $217,288
9/2022 SAFE $10,000
8/2022 Loan $150,000
8/2022 Loan $49,000
5/2022 Loan $120,000
3/2022 Convertible Note $300,000
12/2021 Other $0
3/2021 Loan $85,000
12/2020 Other $113,510
12/2020 Other $47,095
9/2020 Loan $250,000
9/2020 Priced Round $6,178,177
8/2020 Loan $148,500
8/2020 Convertible Note $400,000
8/2020 Loan $250,000
6/2020 Loan $500,000
4/2020 Loan $41,666
9/2019 Priced Round $2,668,652
11/2018 Convertible Note $567,000
5/2018 Convertible Note $971,565
1/2018 Convertible Note $856,493
1/2017 Convertible Note $212,500
8/2016 Convertible Note $40,000

Convertible Notes Outstanding

Issued Amount Valuation Cap
3/3/22
$300,000
$35,000,000

Outstanding Debts

Issued Lender Outstanding
6/24/20 SBA Loan
$510,530
8/2/22 Amazon Lending
$5,657
3/21/24 Arup Bhattacharya
$56,721

Related Party Transactions

Use of Funds

$100,000 52.5% Marketing and Sales40% Operations7.5% WeFunder Fees

$2,500,000 40% Marketing and Sales30% Research & Development 10% Operations12.5% General & Administrative 7.5% WeFunder Fees

Capital Structure

Class of Security Securities (or Amount) Authorized Securities (or Amount) Outstanding
Series A 2 454,544 454,544
Series A 1 9,100,000 5,616,525
Series Seed Preferred 9,582,809 9,136,468
Common Stock 40,000,000 10,756,391

The Funding Portal

Gryphon Online Safety, Inc. is conducting a Regulation Crowdfunding offering via Wefunder Portal LLC. CRD Number: #283503.

Form C Filing on EDGAR

The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.

Details