Expanding our international presence is an important aspect of our plans for growth. With those efforts come potential costs and risks that could impact our business success. We may need to devote substantial time and resources to opening branch offices in foreign countries, learning to satisfy the preferences and needs of foreign markets, understanding and complying with local laws and regulations applicable to our business, protecting our intellectual property rights, and navigating foreign tax laws that could be financially detrimental. We may not be able to meet our goals for international expansion.

Participant is subject to all of the business risks and uncertainties associated with any new business enterprise, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources, lack of significant revenue and the risk that we will not achieve our growth objectives. If sales revenue from any product is insufficient, if we are unable to develop and commercialize any of our potential product candidates, or if our product development is delayed, we may require a bridge loan.

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. Though we will carry Key Person Insurance, there can be no assurance that we will be successful in attracting and retaining other personnel required to successfully grow our business. Insurance payout may need to be used to cover obligations to investors.

In regards to user safety, wheelchairs are in the lowest risk category, a Class 1 medical device according to the FDA, and require approval before sales. The team has extensive experience in achieving FDA and other regulatory body approval; however, regulatory processes are a serious hurdle in the progress toward sales that must be acknowledged. Participant currently has only one product candidate, which is still in development, and we have not obtained authorization from the FDA to commercially distribute the device in the United States, or a CE Mark for commercial distribution in Europe. The regulatory framework in lower income countries typically follows FDA or CE standards, but may require time consuming registration before market entry. A delay of approval or registration in a market will delay revenue from that market and may adversely impact Participant’s financial performance.

Though planned and budgeted, the process of obtaining regulatory authorization is expensive and time-consuming and can vary substantially based upon, among other things, the type, novelty of a product, and the regulatory framework of the market concerned. Changes in regulatory policy, the enactment of additional regulations, or changes in regulatory review for each submitted product application may cause delays in the authorization of a product candidate or rejection of a regulatory application altogether. Participant is very active in standards committees and bodies which contribute to regulatory developments. As lower income country markets are evolving quickly, changes are common. These changes may result in new openings or closing of some markets. This will certainly impact  Participant’s revenue and financial performance.

For Product1, in lower income countries, there is limited market awareness of the product category, supportive pediatric wheelchairs/strollers. The market education job is shared with many NGOs and multilateral actors, such as the World Health Organization. Buyer’s ability to discriminate between low and high quality products, as well as overall demand, is related to the effectiveness of this market education activity. A slower than anticipated advancement in product category awareness will have a negative impact on Participant’s financial performance, especially during and after Year 3 when sales growth is expected.

For Product1, the product category at the intended price point is not strongly contested. If a competitor were to enter the market, this may significantly impact our growth and resulting revenue.

To become an attractive addition to distributor’s catalogs, Participant will need to develop additional products which cover other product categories. To achieve this cumulative effect and become a strong alternative to the existing high price competitors, additional product development is needed and this must be done in a timely fashion or growth in sales and market share will not meet expectations, especially in Year 4 and after.

The intellectual property protection in some of the intended markets is weak. Participant maintains relatively low margins, which is protective by decreasing the payoff of copying by competitors. However, Participant’s products may become copied causing revenue problems, as well as other problems.

Participant is innovating and producing new intellectual property. However, the manual wheelchair product space is aged and new intellectual property is not always possible. We regard our intended and future intellectual property as important to our success, and we intend to rely on patent law to protect our proprietary rights. Despite our precautions, unauthorized third parties may copy certain portions of our devices or products or reverse engineer or obtain and use information that we regard as proprietary. We may seek additional patents in the future. We do not know if any future patent application will be issued with the scope of the claims, we seek. Patents that we receive may be challenged or invalidated. Thus, we cannot assure that any intellectual property rights that we may receive can be successfully asserted in the future or that they will not be invalidated, circumvented or challenged. Any failure to protect our proprietary information and any successful intellectual property challenges or infringement proceedings against us could have a material adverse effect on our business and financial performance.

Unexpected foreign currency fluctuations between the US Dollar and Chinese Yuan could negatively impact our costs related to manufacturing or R&D respectively. Initially, Participant will perform all manufacturing activities in China and, initially, will not be diversified.

Participant uses a number of off-shore consultants, particularly in South America. Currency fluctuations can increase the burden to the company for maintaining consistent actual compensation.

Due to market shaping activities by AT Scale (referenced as ‘lessons learned from combating the global HIV/AIDs epidemic’) demand in lower income countries is expected to rise. If this does not work out, then revenues will be below projections, especially in the long term after Year 3.

Participant intends to market wheelchairs as Over The Counter products, direct to customers from manufacturer. Wheelchairs require significant customization and user training. In more resourced settings like the USA, this is typically done via specialized vendors. In less resourced settings, specialist vendors are not used. Participant will develop products which are more simple and easy to provide. And, Participant will develop support materials which will empower users for self-help. The effectiveness of these support materials and the adoption of Participant’s new method will impact sales volume, especially in the US and Canada markets.

Cross subsidy marketing in the USA and lower income countries can be challenging. Participant assumes, based on buyer response to date, that one base model can be successfully marketed in multiple markets. If this is not actually effective in the USA then, Participant’s products will not gain market share. This risk is mitigated by setting a low forecast.

The global market appears to be entering a period of rapid growth. This may attract entry by experienced competitors with significant capital from more expensive markets. This may result in sales below expectations and adversely impact financial performance.

Participant is a strong candidate for a number of different grants (free money from AID agencies or philanthropic foundations). In regards to our short term budget, significant grant funding is not necessary and would be supplemental for advancement of special projects. The arrival time and size of these awards is uncertain. Also, the awards have complex reporting requirements which can complicate operations and increase HR costs

Transition into a production localization strategy requires continued improvement in industrial 3D printing technology, which is outside of Participant’s scope. Though there is great incentive for third party vendors to create this capability, this is a challenging project which does not have a reliable delivery date.

Participant intends to launch Product1 globally with an emphasis on sales in the USA and sales to NGOs, with whom Participant has existing relationships. In addition, Participant intends an  opportunistic approach to distributors in Middle Income Countries. The complexity of sales in this manner may be a challenge.

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.

Wayne Hanson is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.

Ryota Yamada is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.