Recoup Fitness: Recoup like the Pros

What does your company do?

Recoup Fitness creates innovative recovery products trusted by professional athletes without the professional price tag. Our first product is the patented Recoup Cold Roller that helps recover sore muscles and painful injuries. Simply place the ball in the freezer for two hours and enjoy up to six hours of cold massage. Our 2-in-1 design philosophy sets us apart, which is why Olympic medalists, world cup soccer players and seven NFL teams are already customers.

Where will your company be in 5 years?

Our goal is to become the leading name in muscle recovery and injury treatment and prevention. Current products on the market lack innovation and can be out of reach financially for many consumers. We believe that everyone is an athlete. Through our game-changing innovation we can finally make the highest quality tools accessible to everyone at an affordable price. With the development of our hot ball, we are set to become the first company that is not a supplement to own pre-and post-workout.

What is “recovery”?

We use the word “recovery” to refer to muscle recovery. Typically this means what someone does post-workout or post-competition to keep them healthy and injury-free. We also extend this term to refer to helping people recover from any sort of injury or pain they are experiencing, so it doesn’t just refer to elite athletes.

How did you come up with the idea for this product?

I started Recoup Fitness out of my own self need. I was playing basketball one day and caught a knee right in the leg. I tried the typical recovery methods, but nothing really worked, and I just wanted to fill my own needs. So, I created a prototype and took it to the best trainers in Colorado, Denver Sports Recovery, who recovers all the Broncos players. I had them look at the prototype. Of course, they said (that version) sucked, but they loved the concept of it.

How exactly does Recoup work?

The Recoup Cold Roller is a stainless steel ball filled with 3.4 oz of cooling gel. It’s a more convenient, reusable ice cup with none of the mess. When used with the handle, it becomes a massager that free rolls across any muscle group. Outside of the handle the cold ball can be used for the bottoms of the feet, lower back and hips. It's one of the first 2-in-1 recovery products that can recover your entire body. All you have to do is put the ball in the freezer for two hours for up to six hours of cold relief.

What were people using before Recoup, and why is Recoup better than those alternatives?

The main thing they were using is an ice cup, followed by the foam roller and a lacrosse ball. In general, ice cups suck. That's how we originally closed our first NCAA teams. Ice cups are a hassle for trainers to make in the training room so we gave them a better and easier way to treat athletes. Dealing with all three of those different objects is a pain, and the fact that they're not combined into one means that you're not going to get the same quality of recovery. With Recoup, you get the combined advantage of massage and cryo (ice) therapy. Using ice constricts the blood vessels and pushes out all of the lactic acid build up. Then, when you add massage, you’re getting new blood flow to the area. When it rewarms, the blood vessels open up, allowing your body to naturally recover faster.

Since you were told by the Denver Sports Recovery team that your prototype “sucked”, how have you progressed?

We've learned a lot by asking consumers what they really wanted, and so we made sure that the ball is secure in the handle and can grow that way. Then we worked on bringing out the right market need. We have the best problem in the world; everybody in the world can use this product, but going after everybody is impossible. You'll never win, and you’ll lose a lot of money in the process. So, we're narrowing our focus by first starting with injuries, and then sports associated with injuries, and growing it that way.We've been able to grow fast. We're in 7 NFL teams and 21 NCAA schools. We have about 20 or 30 athletes using our product now. Actually, the Vipers, the D-League for the Houston Rockets, and who are in the finals, are using the product. Peyton Manning actually used it when he tore his plantar fascia. If we can recover these guys at the highest level, we think that we can recover everybody else.

Why target athletes first as your marketing strategy, and not non-athletes?

2016 was primarily about building our brand and making sure we were bringing the best product to market. We focused on building trust starting at the highest level with professional athletes and trainers. We felt that if we could work with professional athletes, and gain their trust in our product, it would be easier to bring non-professional athletes and even non-athletes into the mix.

How do you move from focusing on athletes to focusing on non-athletes?

We went after the professional athletes to just get the proof of concept that this is something that elite athletes can use, but we really do believe that everyone is an athlete. It doesn't matter if you play for the 49ers or if you're just somebody who plays with your kids in the backyard. With trust built, we are now focusing on helping people with injuries, no matter if you’re an athlete or not. Our marketing efforts have been focused on people with an immediate need (ie people with plantar fasciitis, shin splints and other injuries) and we are converting at an extremely high level with that strategy.

How successful have you been with professional athletes? Who is using Recoup?

We went and met with Brandon Marshall, the linebacker for the Denver Broncos. He had us over to his house because he was interested in helping us pitch the product. He said, "I use this every day, I keep it in my freezer and then I take it with me." It's sort of turned into a viral word of mouth for those guys. We have used just about any connection that we have with sports teams around the country, from NCAA to the pros to Olympians as well.We send out 50 samples a month, and a lot of those find their way into professional athletes hands. We reach out to them and try to get their thoughts about Recoup, and see if they can get it to their trainers, and so far that's been working. Right now we have three NFL teams that have purchased Recoup. The Houston Rockets, an NBA D-League team, has purchased Recoup, and a mix professional athletes that use Recoup, including Olympic medalists, 10 to 15 NFL players, MLS, NHL and 5 or 6 MLB players. We are also targeting CrossFit athletes in our marketing, because they have a huge social media following.

Are the sports teams purchasing Recoup for all of the athletes, or focusing on the trainers?

They buy it for the trainers. We closed a deal with the 49ers, which was what made me drop out of college to run this. They were voted the best recovery facility last year. The Jets also bought them for their trainers. Then, each year, they rebuy. They purchased 12 of the units, and while it isn’t a huge financial break, but it does give credibility to the product.

What is your marketing strategy for gaining non-professional athletes as customers?

The goal, right now, for our team is to get a little bit more involved with the influencers on Instagram, who basically have a big following in the more amateur level athletic communities; the weekend warrior types. So far, that's going pretty good. Up to this point, we’ve been writing most of our content ourselves, but we've started to reach out to a lot of bloggers that are influential in the athletic space that they write about. We want to give them some product, let them write about it, and spread it to their audience and go from there, because one thing that we've noticed is if a brand tells you something good, you don't necessarily trust it. If you see a little bit of credibility from the higher level athletes, that helps, but if there's people that they listen to in Facebook, Instagram, blogging, whatever, it seems to be a little bit more powerful. Over the next probably 3 to 6 months, we’ll really be working on our content strategy; a lot of video, a lot of writing, a lot of photography. Basically every week, we should be adding a significant amount of content to all those channels. Then, we’ll spend a little bit of money to push that stuff out there as well. If we get good reviews,, we'll hop on Facebook and post it. We noticed one of our videos today had 991 shares, so it seems like we're hitting the right audiences. We just need to keep going and figuring out what the best injury is for us to make money, so we're a little bit in that testing phase. For individuals, one thing that we're doing locally to go after non-athletes is, we're picking three chiropractors, three physical therapists, three bike shops, three baseball places, three golf shops, and once we get some product into those three shops, we're going to sit back, let them run for about 60 days, and then see where Recoup does the best. That is where we will then try to saturate the market. One thing that we're trying to mix is the online and offline. How we are doing that is, when people are researching a marathon or a 10k or whatever, we're actually buying the keywords for those marathons to create a page on our site that has information for that event. They come and check it out, they get re-marketed, and they start to see us on Facebook or Google. That's one piece of mixing the online and offline. Another thing we're doing is actually going to quite a few events. By next summer we plan to be at a ton of festivals and sports specific events. If there's a race or a Tough Mudder, something like that, we'll try to have a booth there, because we've noticed that once people start playing with the product and they have it in their hand and it's hot outside, it sells a lot better that way. Next year, we plan to get to events nationwide and to hire people in major cities that can buy Recoup for wholesale and sell them for retail, so that they are out there representing the brand and getting more people to touch the product.Word of mouth is obviously just as important as other means of drawing customers in. Matt is really, really good about writing back to people who contact us with both good and negative reviews of our product. We recently were contacted by an older lady in the Midwest who said, “I really want these for my yoga class. Everybody in there loved it.” What we do is create custom discount codes for individual customers. They might be 30, 60, 90 days, where they can go and refer people and just say, "Oh, I have a custom code. Here you go." It seems like mixing traditional e-commerce, brick and mortar events, and just great customer service is really going to help us grow.

What have sales been like, and how is that scaling over the past year?

Last year, we did $84,000 without much focus on consumer marketing. This year we’ve already done $120,000 dollars in sales and growing fast. HSN contacted us, and we are in the running to make Shark Tank. We're also in talks with Costco buyers and and several other large distributors. Eastern Mountain Sports just contacted us for all the wholesale stuff that they need, so we're growing that distribution side as well as the online side. It was only two of us in the very beginning of this year, and we have been to hire on our team to help us grow even faster. Right now we're doing about $30,000 to $40,000 dollars a month, and next month we're going to be having a much larger month with summer coming up. Distribution is growing fast, and in just the last quarter we have already beaten our entire last year’s sales. Aside from February, we’ve been growing about $4,000 to $5,000 a month. Like I said, in May we're expecting anywhere between $20,000 to $25,000 in growth, if not more.

What is your cost to manufacture Recoup, and what does it sell for, both retail and wholesale?

Originally, it cost $6.96 to make each unit. With our second order from our new manufacturer, the price dropped down to $5.96, and will be dropping with each order. We retail for $39.99, and our wholesale price is $20.

Where is your manufacturing taking place, and do you have constraints there?

We're not constrained right now. Our current manufacturer can do 10,000 units in 30 days, and then we can airship them, which is 7. We already ramped up on inventory of handles with 20,000 units, and we are about to place another order for balls at 10,000 units. We know eventually when we land large retailers like Costco, we're going to have to completely switch manufacturing. It's not a problem yet, but we're getting prepared for that with setting up other manufacturers for the balls and the handles. Both are made in China, and then we assemble them here in the US. Our packaging is also made here in the US.

When you think about competition, are there other recovery products out there that are causing people to have to choose between yours and theirs?

One company is SKLZ. They came up with a cold roller, but it is sub-standard. Rogue Fitness sells both our product and SKLZ, and we outsell them almost 10 to 1 now, because of our secondary functionality of the ball coming out, and the size of the ball. They do have a big grasp on the market because of their brand, but the proof is in the numbers with Rogue Fitness, the largest CrossFit company in the world, and we are just completely beating them. Then GoFit came out with one. Actually, we have consumers returning their product because they break it, and buying our product instead. It's a ball with a mallet-like handle. Unlike Recoup, you can only use the GoFit with the handle. The other drawback with their product is the fact that it only stays cold for about an hour.

When you think about the size of the market, how do you define that?

It's hard to describe the actual size of the market, because we’re targeting not only people for recovery, injury, and general pain and stiffness. The recovery market on its own is climbing toward $9bn in value. Broken down by some of our largest markets there are roughly 60 million runners, and they get injured at a 37% to 55% rate. We classify those injury rates as our consumers. There are 31 million people with plantar fasciitis in the US alone. Additionally, there are 7 or 8 million people that do CrossFit now in the US, and they get injured at a 73.5% rate.

Do you plan on offering other products down the line?

We actually have 9 products in total that we want to develop. Our goal is to revolutionize everything in recovery and injury treatment and prevention. One product that nobody has ever seen before involves the same ball. The difference is that when you put it into the handle, you can actually control the temperature with an app. If you want to warm up, you click the warm up button on the app, and it will send a Bluetooth signal to the ball that heats it up to that right temperature. Then, if you have an injury, and you want to do ice and heat therapy, you have that option as well, all within the same app. Burning-point starts at 120 degrees, so it will max out at 113, so we're not even getting close to playing with that burn line. That will be the next product we come out with. As an athlete, STKs on the market are decent, and the STK company actually came out with one you can split in half. We're going to create a STK that's retractable. It breaks down to about 4 inches. You can use both handles, something those half sticks don't have, then expand it out up to a foot so you can use it just like a normal stick. The trainers asked us for that because they hate traveling with them because they're so long, so that's an easy way to problem solve. We also want to do a cold version of the STK, a hot version of the STK, and then get into the foam rolling, hot and cold, and just start looking at those products that are already out there that we know have traction, and make them so much better, adding heating and cooling elements and just actually designing them better and for everybody to use. We’re not necessarily trying to invent a bunch of new recovery items, but rather reinvent and innovate what’s already out there to make it better for everyone’s needs.

Who makes up your executive team?

Matt Hyder: I was training for the Olympics in Tae Kwon Do when I was in college, and I had to make the deciding factor, do I want to go to college or do I want to train for the Olympics? Well, I lost passion for it and stopped training. I fell in love with entrepreneurship when I was working for the former Lieutenant Governor of Colorado, Barbara O'Brien, helping to run their DPS school campaign. I just saw a lot of inefficiencies with how people were connected. I wanted to do something about it, tried, failed miserably. I ran three other businesses into the ground, but I made it further and further with each one and just fell in love with the process. I knew that this was what I was born to do, and just kept with it until I found Recoup and realized it was the business I was meant to do. It combined fitness, working out and staying healthy, all things that I love. Being able to develop really great relationships with people that have been idols of mine is amazing, and some of these athletes have become some of my best friends. Did I fail my way to this point? Yes, but I think that's how a lot of entrepreneurs should do it, because it teaches you a lot of good lessons of what not to do so you can do things right the next time around.Nick Coy: I was a marketing director at an email encryption company for seven years. When I started there in 2010, that company was already eight years old. They had a total of 60 customers using their software, and it was all in the Denver area for the most part. By the time I left, we had gone from those 60 customers to right around 3500, 4,000 customers across all 50 states. I helped grow that company from not a whole lot to a pretty sizeable company. I've got my own little e-commerce store for dog accessories, and then I've been consulting with small businesses on the side for the last year or two, and just met up with Matt. When we met, he basically had a non-working website and a pretty good idea. In my spare time I've helped build it to what he has now, and have been full time here for just a few weeks now. Natalie Dunn: I've been working with Recoup since July of last year. I started full time in January with Matt. My role involves the operational side of things to make us more efficient and try and cut our costs; everything from shipping and cutting our overhead to help us scale as best we can. I went to the University of Denver here in Colorado and was a student athlete on a tennis scholarship. I was an athlete for my entire life, and then got involved in early-stage startups my second year of college. I worked with two early-stage software startups and most recently was employee number one at a hardware startup for two and a half years prior to this one. I started out by working with Matt on the side and then jumped over full time. My background is technically more in the marketing side, but I'm really currently most involved in managing and growing our distributors, and helping cut costs and become more efficient.

What do you feel will be your biggest risk you will have to take to make this into a big company?

I think scaling is going to be one of our biggest risks, because we have so much market potential that we need the people in place, getting the multiple manufacturers set up. So many people can use this product, so just getting out to them in the right way, and making sure the message sticks with them will be important. That's how we're really controlling that problem right now with the scalable growth, just going after specific injuries and then a sport associated with that.

How much do you hope to raise, and what will you be using the money for?

Raising $50,000-$1,000,000Development of new products - We have already created first prototypes of our second product the hot ball and we will immediately start manufacturing the hotball with the money we raise. We will also start engineering 1-2 additional products before holiday season of 2017. We will be the first fitness company to own the pre and post workout markets. Manufacturing - we will ramp up manufacturing of our cold roller and new products in order to fill our large distributor orders and continue our fast growth. Distribution - we will add verticals we have yet to tap into including yoga, physical therapy and massage therapy

Why equity crowdfunding versus other more traditional methods of raising funds?

We are extremely excited to have the ability to raise funds through equity crowdfunding and really do see it as a way to say thank you to our customer base and the people who have believed in us from the start. We’ve had an overwhelming amount of positive feedback from our customers and we want to have the opportunity to bring that enthusiasm to our core team as investors. We know that not everyone has the ability to invest in traditional raises that might want to and WeFunder finally gives everyone an equal opportunity. Our mission at Recoup Fitness is to give everyone access to the highest level of pain relief and recovery products and see equity crowdfunding as something that echos this mission.

What is your cash on hand and burn rate as of June 25, 2017?

$70,000 cash on hand$20,000 burn rate/month

1	Men's Fitness Holiday Gift Guide. Featured on The Doctors TV show
2	NHL, NBA, NFL. MLB teams all official customers
3	Rehabilitation market is a $30 billion industry
4	Beat 2016 sales in Q1 of 2017
5	60.7 million runners in the US alone
6	1 out of 10 Americans will suffer from Plantar Fasciitis

1	Key Man Risk: Founder and CEO Matt Hyder is critical to the company's continued success. The loss of Matt as CEO of Recoup Fitness presents a significant risk.
2	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.
3	The company is still early stage. The market for retail muscle recovery tools may not materialize as planned and sales may be insufficient to support future growth.
4	The patent protection of our removable cold ball could be challenged and put defensibility of our product at risk.
5	Larger better funded companies that have been selling other product to our target customers could produce a competititve product to ours to the market.
6	A customer could use the product improperly, incur injury to themselves, and hold us liable.
7	Competitors have close relationships with key distribitors in our industry that could makes breaking into market more challenging.
8	At the time we are not a registered medical device so insurance does not cover the purchase of our product which hinders sales growth, and limits claims we can make about the product.

Date	Amount	Security
03/2018	$1,400,000
10/2017	$238,824	SAFE
04/2017	$12,600	Convertible Note
10/2016	$7,500	Convertible Note
05/2016	$200,000	SAFE
06/2017	$160,000	Priced Round

Issued	Amount	Interest	Discount	Valuation Cap	Maturity
10/22/2016	$7,500
04/22/2017	$12,600			None

$50,000	Hire needed staff to expand into other markets such as Yoga, Gymnastics, Physical Therapy and Massage Therapy and offline retail in Running
$100,000	Start production of our second product, the Hot Ball. We will be the first company that is not a supplement to own pre and post workout
$250,000	Complete production and first 5000 units of the Hot Ball. Our current distributors have already requested samples and will start selling the product immeditaly. We will also start our third product a new design of the Stick.
$500,000	Run production for the Stick of 5000 units, marketing budget for all three products for before and during holiday which is our highest season of growth
$1,070,000	Start production of our 4th and 5th products, opening up big box retailers with a product line.

Class of Security	Securities (or Amount) Authorized	Securities (or Amount) Outstanding	Voting Rights
Common Stock	3,000,000	2,000,000	Yes
Series Seed Preferred Stock	493,000	493,000	Yes

Why you may want to support us...

Our Team

And Our Major Accomplishments

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we've raised $2,018,924 from 436+ investors since our founding

In the news

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The Recoup Cold Roller

Next Three Products

The Cold Roller

The Hot Ball

The Heat Roller

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Professional athlete tested. Trusted by everyone.

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Timeline

Launched 18 months ago, we plan to own the recovery market

Recoup's Next Steps

Our first year with our flagship product helped us prove that the market craves better recuperation. Now, we're expanding.

Manufacturing

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New Products

Let's Change the World of Recovery

Investor Q&A

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At a Glance

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Past Equity Fundraises

Convertible Notes Outstanding

Outstanding Debts

Related Party Transactions

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Form C Filing on EDGAR

$4.2m for 2019

Updates for Dec. Over $1.6m in 18 days

Update

June and July Updates. We officially broke the $1m revenue benchmark

CRYOSLEEVE IS OUT!!

Double Header is Now Out!

Touch of Modern

We just closed the largest PT Supply Store

Outside Magazine Voted Recoup Best Home Gear For 2018!!

New Air Date For HSN

Recoup Investors! We Need Your Help!!

Jack Rabbit Sports!!! 2nd largest running retailer in the US

Used on National TV Again!! Check Out The Video

CLOSING IN 7 DAYS

UFC Light Weight Devin Powell!

Aqib Talib Using The Products

HSN Sept 13th

Quake AcceleratorProgam

Hot Ball CAD

STAR Magazine Feature

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