Simulated Environment Concepts, the manufacturer and developer of the SpaCapsule, today announced that it will engage a research analyst to conduct and prepare independent research reports to offer greater transparency to shareholders while underscoring what management believes is the company’s unrealized value in light of the fact that existing contracts have an estimated value as high as $15 million.
“We believe that our Company is substantially undervalued when compared to our current and growing operations,” commented Dr. Ella Frenkel, President & CEO of Simulated Environment Concepts, Inc. (SE Concepts). “SE Concepts is approaching its 11 year anniversary, but in the past 15 months, we’ve made significant progress. We’ve secured short term financing, improved our business model, established multi-million dollar – multi-year international distribution contracts, reduced sales related expenses and have begun to employ a cost reduction strategy in manufacturing.”
SE Concepts continues its robust growth as a leading provider of the medical grade high pressurized dry water massage therapy system, SpaCapsule, having already exceeded its 2010 sales projections. Now being used in 37 countries around the world, the SpaCapsule is expected to continue increasing sales of the company in the upcoming year with confirmed weight-loss and medicinal attributes being key selling points.
“We’ve been consistent, usually generating average annual revenues of between $1.8mm and $2.2mm,” stated Dr. Ilya Spivak, Marketing Director of SE Concepts and Co-Inventor of the SpaCapsule. “However, this year has been remarkable. Strengthening our sales model has allowed us to secure close to 600 units in manufacturing and distribution contracts,” – a total estimated value of between $12,000,000 and $15,000,000; to be satisfied within 4 years. “Not only are we ahead of the projected sales schedule for this year, we intend to engage an additional distributor by year end.”
In years past, SE Concepts averaged 80 units a year at a retail price as high as $30k per capsule, resulting in approximately $2.4 million in revenues per year. Based solely on existing distribution contracts, the projected minimum sales of 120 units per year, over the next four to five years, is estimated to potentially produce revenues of between $3mm and $3.75mm per year. This projected sales increased, combined with the company’s initiative to reduce manufacturing costs, may increase the profitability of each unit by 50%.
“In seeking FDA registration, receiving excellent results of the Dermscan Group’s study, being featured on such shows as CBS’s ‘The Doctors’, Good Morning America, and recent introduction into various fitness programs like the BodySmart program and LadyFitness Europe, has significantly increased our exposure and broadened our markets,” stated Dr. Frenkel. “We believe that an independent research report will provide further confirmation to the markets of our viability, both as a product and an investment opportunity. As always, we will continue to work diligently in an effort to deliver greater shareholder value in the coming fiscal quarters.”
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