Risks Specific to Recoup Fitness
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.