Video guru with 13 years of experience in production and social media marketing. Fluent in Spanish, Portuguese, & English.
Advisory Board Member
Eli has 25 years of experience in pediatric seating and positioning. He has worked with many wheelchair companies, has evaluated over 1500 clients domestically & internationally, and is an accomplished conference speaker.
Some of our investors
180+ investors since our founding
https://www.participant.life/ Affordable wheelchairs are changing lives in countries around the world. Brooke Thomas and David Calver, hosts of The Conversation, break it down. Hosts: Brooke Thomas, David Calver Cast: Brooke Thomas, David Calver *** The Largest Online News Show in the World. Hosted by Cenk Uygur and Ana Kasparian.
Summary In this episode we cover: The story of how Keoke and the team at Participant. Life got started in the Wheelchair industry and what they're set out to solve. The current status of the wheelchair industry. Understand the basics of how the Participant business model works and their plan to scale.
Able bodied children access education and engage in rich social opportunities. For the 8 million children with mobility disabilities, these basic human rights are often denied. Without a proper wheelchair these children miss out on their childhood and experience preventable secondary medical complications.
Increasingly, hearts – and funding – have moved to the needs of these children. This is marvelous and underreported good news. Unfortunately, reasonable quality wheelchairs are absurdly expensive.
Product1 solves problems with affordability, durability, and ease of provision for lower income countries, a rapidly growing $69M market, and offers an affordable product for US customers, a $100M market. This cross subsidy marketing strategy affords healthy margins, brand awareness, and product feedback from the US market; and, allows economies of scale and massive social impact through discounted sales to lower income country markets.
A Social Impact and Business Opportunity
Now is a pivotal time when a scalable, commercial solution is needed to fulfill requests by governments, non-profits, and parents - both in the USA and abroad.
Lessons learned from the global fight against HIV/AIDS, like pooling procurement from smaller nations, are being used to serve kids with disabilities. The World Health Organization, the UK, the USA, and the Norway governments have joined forces. Together they are pushing for governments to do their job and serve these kids.
What Makes This Wheelchair Special
After seeing our prototype, over 120 experts, users, and parents have agreed that Product1 solves big problems for users and caregivers.
A Different Kind of Company
Participant will be a lasting company that serves basic needs for decades - we're not selling out to a big company. Our mission is to increase the participation of people with disabilities by making affordable, user-centered products. As a Public Benefit Corp (B-Corp Pending), our starting point puts users’ needs and massive-scale impact at the center of our vision. American users are fed up with outrageous prices, delays, and broken chairs. We're out to change that.
Our designers are watching the near horizon for the distributed manufacturing revolution. Currently, designs are being simultaneously developed for conventional methods and for localization with 3D printing. (Revenue for repayment of this debt investment will come from conventional manufacturing, not from industrial 3D printing.) When 3D printed parts are commercially viable, new opportunities will open for production near to users and employment for people with disabilities.
Participant Assistive Products has financial statements ending December 31 2018.
Our cash in hand is $188,924, as of September 2019. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,000/month.
At a Glance
to December 31
Short Term Debt
Raised in 2018
Cash on Hand
As of 09/12/19
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 affordable assistive products, starting with a groundbreaking supportive wheelchair for children with Cerebral Palsy and similar conditions. Our product roadmap follows the World Health Organization's list of 50 Priority Products that is being used by many countries to guide their national insurance. Our products are durable, affordable, and high quality. Our mission is to increase the participation of people with disabilities in society.
In 5 yrs we hope for: 500,000 people served, a $30m valuation, 20 products, and $7m in profits. We hope tp be a certified B-Corp with 25 employees and offices in Colombia, USA, Thailand, Indonesia, Jordan, Kenya, Nigeria, India. We will have launched our 'factory in a box' which will be capable of producing our products to serve local demand with 3D printing. We will be a preferred source of disability products for UNICEF, ICRC, USAID, and many lower income country health systems.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
Participant Assistive Products was incorporated in the State of California in March 2018.
Since then, we have:
Strong team - 100 years of industry experience, 150 wheelchairs developed, two successful exits, and 100,000+ units sold
Customers believe - Letters of Intent to buy over 2500 units per year
Strategic manufacturing partnership - with Nissin Japan, the second largest wheelchair company in Japan
Product1 fills a gap - in the market and there are few competitors in this middle-market niche
Field trials demonstrate effectiveness - one complete, one in progress, and 17 booked
Straightforward approvals - Product1 is an FDA Class 1 medical device, which we have completed many times.
A lasting company - our intent is a solution on the scale of the need that stays on track, guided by our Benefit Corporation status
Historical Results of Operations
Our company was organized in March 2018 and has limited operations upon which prospective investors may base an evaluation of its performance.
Revenues & Gross Margin. For the period ended December 31, 2018, the Company had revenues of $4,760. Our gross margin was 27.75%.
Assets. As of December 31, 2018, the Company had total assets of $24,674, including $24,674 in cash.
Net Loss. The Company has had net losses of $15,620 for 2018.
Liabilities. The Company's liabilties totaled $40,264 for 2018.
Liquidity & Capital Resources
To-date, the company has been financed with $200,000 in debt and $20,700 in equity.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 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 14 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
Participant Assistive Products cash in hand is $188,924, as of September 2019. Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $3,000/month, for an average burn rate of $3,000 per month. Our intent is to be profitable in 24 months.
Since the date our financials cover, we have raised $200,000 from angel investors on a Revenue Share instrument. We started regular compensation for one founder and one regular contractor. We purchased a 3D printer ($7,000) and several prototypes of Product1. We need $150,000 in order to achieve mass production, get FDA approval, do a few marketing trips and advertising campaigns, etc.
We have access to additional investment from founders. We expect revenues from Product1 to begin in 3-6 months. We will begin monthly compensation for one additional founder.
Assuming we start mass pro in February and run the marketing plan, we will spend all of this raise by August. Assuming we are actually selling, then we will be OK to run indefinitely at a minimal level. To grow, we would need to raise again.
A note from Wefunder. Unlike companies on the NASDAQ, early-stage startups have little operating history. Financial analysis is not as useful when there is limited data. It's more important to predict the size of the future market. If the founder achieves their vision, will enough customers pay the company enough money?
It's also common for fast-growing startups to lose money even faster: they are investing in future growth. In these cases, it's often better to check if the Cost of User Acquisition (CAC) is lower than the Lifetime Value (LTV) of that customer. If one spends $1000 today to make $10,000 over the next five years, that may be a smart bet. Amazon is a famous example of re-investing potential profits to maximize growth over 20 years.
The Company is an early stage company incorporated in March 2018. Accordingly, the Company’s operations are subject to all the risks inherent in the establishment of a new business enterprise, including potential operating losses. Any investment in the Company must be considered in light of the risks, expenses and difficulties frequently encountered by companies in an early stage of development in new and rapidly evolving markets. In addition to being subject to all of the risks associated with the creation of a new business, the Company will be subject to factors impacting business generally, such as general economic conditions, increasing government regulatory activity, scarcity of resources, and competition. No assurance can be given as to the ultimate success of the Company. The likelihood of the success of the Company must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the formation of a new business.
The Company will continue its research and development activities for its initial product and begin its production operations. Though development is planned and budgeted based on experience, it is uncertain that the initial financing will be sufficient to establish that the initial product line is financially viable, in which case additional financing will be required. If the Company is successful, the Company will certainly have to obtain further additional capital beyond this financing round to expand inventory and distribution reach. As such, it is absolutely certain that the Company will need additional financing. The ability of the Company to secure future capital will depend on many factors, including continued progress in product success, the cost of manufacturing and production, market requirements, advertising costs and fluctuations in raw material prices.
Participant is committed to offering a safe, effective, durable, and affordable products. Achieving these design goals is notoriously difficult. Though our first product, Product1, is showing excellent potential and we have vast experience in this product category, we may encounter substantial delays in solving design problems, in organizing trials, solving problems related to preparation of mass manufacture, or other supply chain problems, which would cause a delay of revenue.
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.
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