A Winning Report..

Grassroots Independent Research Report SMEV

On Monday, July 12, 2011, Cohen Independent Research issued their analyst report on our company Simulated Environment Concepts (we make the SpaCapsule) through its Grass Roots Research firm.   This of course was a tremendous day as once again the items we covered in our first shareholder conference call have once again come to fruition.  Not to mention, with a $0.29 price target, despite our still feeling undervalued, represents a potential win for our investors… especially the long-term supporters.

What we feel many investors don’t understand is the naturally inherent broad functionality of the SpaCapsusle.   You see… we’re not deliberately attempting to be all things to all people.  All we want to do is produce the best functioning medical device to act as a means to the overall good health and wellness of society.   It just so happens that a myriad of groups and industries have gravitated toward the SpaCapsule all on their own and for uniquely different reasons; inadvertently affording us the ability to essentially become “all things to all people.” This research report, in our opinion, may for the first time bring clarity to this.

Our potential reach and penetration is increasing constantly, but the report focused on:

The physical therapy market: A $10 billion dollar U.S. market.

Weight Loss: Where the treatment cost for obesity represents $147 billion dollars in domestic healthcare cost annually with well over 3,000 facilities dedicated to offering services for weight control.

Fitness centers: Accounting for nearly $15 billion dollars in domestic revenues with nearly 25,000 fitness centers across the country.

Massage Therapy:  An estimated $16 – $20 billion dollar industry in 2009; where franchises like Zen Massage Center and Massage Green have rapidly expanded to satisfy demand.

Franchise Market (massage Therapy):  Where massage therapy centers like Massage Envy have over 600 locations in 42 states with hundreds of millions of dollars in value.

The report also sheds light on a topic not normally discussed; company’s market sector.   While we’re not totally of the opinion we fall entirely into the Medical Appliances & Equipment Industry (a subsector of Healthcare), as the report suggest, it is not a bad title to carry.

SE Concepts, does in fact at this moment design, develop and manufacture aesthetic medical products.  According to this report, aesthetic medical products are normally produced by companies within the Medical Appliances & Equipment Industry… a $900+ billion dollar market.  We also seem to be in good company here with likes of Medtronic, Inc. and Edwards Lifesciences Corporation (trading on the NYSE) – sector competitors.   However, where the report really seems to drive this proposition home is in the discussion of our direct competition with Syneron Medical, LTD (NASDAQ: ELOS), makers of VelaShape™.

VelaShape™, a FDA cleared device that according to its website, effectively and safely contours, shapes and slims the body by reducing cellulite and firming problem areas in as little as 4 treatments, claims to be used by over 10,000 patients daily, Worldwide; aiding in Syneron Medical’s 52 week trading range of between roughly $7.00 and $15.00 per share and boasting a market cap of close to $500 million dollars.   This may very well be the clearest indication of where SE Concepts and the SpaCapsule could at the very least achieve.

At the end of the day, we’re very happy with what we have achieved and know very well the fullest potential of our company and the SpaCapsule.  With almost 900 capsules (an approximate $27,000,000 value) expected to be purchased over the next four years through our current distribution contracts, along with the three additional distributors we anticipate engaging, we strongly believe that our presence will be felt globally.   And as the Research Report leads us to reasonably conclude, with the various vertical markets accessible to us along with the sheer size of our addressable market place, even if we only managed to perform nominally, the potential to generate revenues in excess of $20,000,000 yearly appears to be all within the realm of possibility.

This research report was a win for us!

Grassroots Independent Research Report SMEV

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Spinal Cord Injury + Stroke Recovery = SpaCapsule

The SpaCapsule is proving to be useful in so many areas of life.  Be it leisure, medical, weight loss, and/or relaxation, when it comes to total health and wellness, the SpaCapsule massage therapy system possesses the ergonomics (or Human Factors) designed to assist the human body’s healing process.

Let’s take Spinal Cord Injury (SCI) as an example.  Spinal Cord Injury (SCI) occurs when there is trauma to the spine.   This can be caused by an array of injuries that could arise from events such as car accidents, falls and neck impacts from sports such as football and, swimming, etc.   SCI can also be caused indirectly by such ailments as rheumatoid arthritis, osteoporosis and spinal stenosis.

These types of serious injuries and conditions can tremendously affect a person’s quality of life if not completely destroy it. SCI can result in the complete loss of movement, loss of sensory sensation, loss of bowel or bladder control, loss of sexual function, loss in respiratory control and bouts of uncontrollable painful stinging sensations throughout the body caused by damage to the nerve fibers.

So where does the SpaCapsule enter the picture?  Can the SpaCapsule aid in the treatment and reversal of SCI??   We say the answer is a resounding yes, and we are not the only one with this opinion, Neuroxcel seems to think it is very possible as well.

Neuroxcel is a unique and state-of-the-art strength training facility sought by people who have suffered spinal cord injuries, strokes and other neurological disorders.   With clients who come from all over the world, the Palm Beach facility maintains a waiting list as it receives a tremendous amount of traffic from patients hoping to use Neuroxcel’s system to optimize recovery from spinal and neurological problems.

Neuroxcel employs its C.A.S.T. Program (Comprehensive Activity-based Strength Training) as a means of offering various levels of neuro-recovery.   The C.A.S.T. model is based on building strength, independence and functionality through advanced neuro-recovery training within a single system at a single location.  C.A.S.T. incorporates robotic gait strengthening, repetitive treadmill stepping, weight bearing, etc..  and you guessed it, the SpaCapsule.

Within the C.A.S.T system, the SpaCapsule is very effective in addressing painful and stiff joints, muscle tension, muscle pain, muscle spasticity and poor circulation.  The atrophy fighting attributes of the SpaCapsule greatly assist Neuroxcel’s clients who have decreased mobility and an inability to exercise.  Keeping the body from atrophy due to immobility is crucial to recovery treatment; a primary function of the SpaCapsule within this program.

SCI was once considered completely irreversible.   However, many scientists are optimistic that advances in medical research will soon make total repair of SCI possible.   In the meantime, advanced methods in rehabilitation and physical therapy treatments have allowed sufferers of both stroke and SCI the ability to regain control of their bodies and their lives.  This is the power of the SpaCapsule.

Good Times..

As previously stated and announced, it’s been a heck of a week for SE Concepts and the SpaCapsule!

To recap, we spent three very exciting days this week in New York City meeting with some well-heeled financial and political individuals who have indicated, so it seems, rather serious interest in our company.   The highlight… our presenting to the affluent membership of the National Eagles and Angels Association NYC chapter at a delicious luncheon in The Oak Room, of The Plaza Hotel!!  This organization, chaired by Mr. George Jarkesy of John Thomas Capital Management Group, LLC allowed SE Concepts to stand up in front of an exclusive investment crowd representing upwards of a billion dollars in investment capital.   What a feeling!

We presented alongside just two other companies.   This means that unlike with those other type of financial conventions where there are a hundred presenters and a couple of hundred more questionable investors, the NEAA kept the attention very focused and the capital interest very real.    Both of the other presenting companies operated under some aspect of healthcare industry, and in fact, we believe one of the contributing factors to our being invited by the NEAA was that they probably recognized many characteristics of the SpaCapsule as being an aesthetic medical product, which would make Simulated Environment Concepts a valid competitor within the Medical Appliance & Equipment Industry – a segment of the Healthcare Sector boasting a market cap of over $900 Billion Dollars.   Widely thought to be a “Defensive Sector” [Healthcare], we believe SE Concepts was identified as having a place within this sector, suggesting that SE Concepts and the SpaCapsule likely have long term investment viability.

The presentation went very well.  In fact, the opening video clip actually brought a room full of applause before Allen Licht, COO of SE Concepts even had a chance to speak!  There was a good flow of intelligent questions asked, all of which, from our perspective, were answered to the satisfaction of the attendees.   Following the luncheon we had some very positive conversations with many of the investment/merchant bankers and other investment groups in attendance, and then it was off to Copia NYC to attend a cocktail party co-sponsored by SE Concepts where we enjoyed delicious hor d’oeuvre and incredible soup from NYC’s own Soup Man!

The evening was great and we continued to meet, greet, mingle and talk about our favorite topic… the SpaCapsule of course!!  Throughout the evening we made several significant contacts, including a few of whom indicated a willingness to assist SE Concepts in gaining inroads to major fitness franchises across the country.

Good times indeed!!

Now, as we write this we are back in Miami continuing to build, sell and deliver the SpaCapsule to nearly 40 countries around the globe.  As a matter of fact, we recently delivered and installed SpaCapsules for the first order of our preferred vendor agreement with Elements Diet and Fitness (women’s health and fitness center franchise).  This market [Fitness Franchise] has well over 30,000 gyms and fitness centers globally and we’ve already begun to crack this open.  Sky’s the limit on this one.

Looking back at the week’s events, if we had to name the biggest takeaway it would be that the investment community is really beginning to like us.   We only say “beginning,” not because they didn’t like us before, but rather because they just didn’t know that we as a company were out there… not the BIG SMART money at least.  However, now they are beginning to learn about who we are, what we do and the incredible potential we possess for explosive growth.  They are now beginning to clearly see:

  • We are an 11 year old company
  • Generated a near $20,000,000 in revenue since inception
  • Possess global distribution agreements for approximately 900 capsules; estimated at approximately $27,000,000 of immediate possible revenue
  • Have a broad but extremely viable target markets (Health & Fitness, Medical & Healthcare, Massage Therapy, Travel & Hospitality, Corporate Centers (such as Google), Religious and Cultural, Affluent Residences)
  • Possess scientific evidence of SpaCapsule’s ability to induce significant weight loss, cellulite reduction and skin toning
  • Potential to see upward of $60,000,000 within 36 months of full investment

Investors seem to like our story, like our company and LOVE our product.  They recognize there is a significant opportunity, and it would seem that we are now officially on the Big Banking radar.

As a result, there has been strong indication that over the next few weeks, we can expect to be visited by several interested investment parties, right here in Miami Florida at our manufacturing facility.   Now this is VERY exciting.  We will have the opportunity to provide prospective investors insight into the day to day operations of the company; certainly demonstrating the strength of the SpaCapsule and the value add that SE Concepts can bring to an investment portfolio.

Stay tuned, we will provide more updates as we get them!  Also, go to www.otcvoice.com to listen to a great interview with Allen Licht, COO of SE Concepts where he talks about the event and what it means to the company!

A No Brainer?? You don’t Say..

Today I had to smile.  Not that we all don’t smile often here at SpaCapsule, but this evening I came across a Christopher Guerriero video.  You know.  One of these popular fitness guru types (weight loss seems to be his thing).  And what he said within the first 3 seconds of the video was music to my ears.

He “sang” a melodic harmony [as he lectured on various weight loss techniques], “…the next technique, is to get a weekly deep tissue massage.”

Doesn’t that sound nice?

Even better, he followed that statement up with, it’s “a No Brainer,” as he proceeded to describe all of the other benefits of a massage; many of which you must know by now:

  • Improved Oxidation of the blood
  • Decreasing Blood Pressure
  • Strengthening the heart
  • Eliminating cellular waste
  • Nerve point stimulation
  • Lymphatic system maintenance
  • Improved skin elasticity

Of course I’m not leaving out the fact that it feels incredibly good.   That’s an obvious.  However, much of the above are items we tend to overlook when we run down to our favorite massage franchises (Hand&Stone, Massage Heights, Zen Massage, Massage Envy, etc.).   Most folks care about relieving stress or releasing muscle tension.  The idea of total health evades most; likely because it’s not what really sells.

Weight loss sells.   Anti-cellulite sells.  Relaxation sells.  And yes… sex sells too, but this isn’t that type of massage.

While Christopher Guerriero was speaking from a place of experience and expertise, to me it felt as if the next thing he was going to do was walk over to a SpaCapsule and introduce it as:  “SpaCapsule: The Future in Total Health, Wellness and Weight Loss.”   Especially when he touched upon the fact that with a regular massage someone else is always touching you, or perhaps you don’t have the time to get to a spa, or access  to a massage therapist may be limited (likely money related).   Then what do you do?

Ahhh ha!  You jump into a SpaCapsule for total health, wellness and weight loss.

The SpaCapsule can simulate just about any massage technique.    The science behind the various massage techniques and how they are reproduced by the SpaCapsule, we’ll talk about another time.  But what I will say is this.   One of the most necessary components to an effective massage treatment of any kind is Consistency (especially a deep tissue massage which is what Christopher Guerrio references).

Consistent technique.  Consistent muscle focus.  Consistent strength.  Consistent pressure.

And if we are talking about effectuating weight loss and fighting cellulite… I mean, if we are really serious about using massage to effectuate weight loss and fight cellulite, there is no massage therapist in the world who can give you a focused and invigorating, weight crushing/cellulite busting therapy session day in… day out… for as long as you like, however you like, CONSISTENTLY every day – UNLESS that therapist is the SpaCapsule.

This is why the SpaCapsule will become the Starbucks of the massage therapy universe.

Believe, and We Will Win Together

Monday’s (5/2/11) press release, “SE Concepts Makes Major Change to Compensation Model,” was accompanied by a few shareholder cheers (Yeeaahhh!).   Quite honestly… while this decision was about business, to some degree, it was personal.

Why?

Well, if you do not know this, let’s get it clear.

Simulated Environment Concepts has been in operation for a little over 10 years now.  To boot, the founders and some members of management were in this very same space a few years prior to the SpaCapsule conception.   We were not just born yesterday, and we certainly have not been dancing around the market place trying to figure out who we are, what we do or where we plan to be tomorrow.

“Yesterday” we had a concept.   Today we are a reality.   Tomorrow…. let’s just say our aspirations take us to a place where we see our products in nearly every fitness facility and physical therapy practice.  We will become the center of corporate relaxation programs… the “must have” for high-end luxury lifestyle, a primary asset in weight loss and the fight against cellulite.  We may also become the top competitor in the massage and relaxation markets; only, our brand will offer total health and wellness features as well as global consistency.   No other franchise can boast that.  Hand&Stone, Massage Heights, Zen Massage, Massage Envy, etc, etc.  Ready or not, here we come!

We know our capability.  January 2011, best January ever… that was no fluke.     Opened up new channels in Morocco… no mistake.   Secured CFO services to assist in completing our audit and managing future financial compliance… that is because we are serious about uplisting.  Not to mention we signed a new deal with…. Ooops.  Sorry, we haven’t made that announcement yet.   But we will.  😉

Bottom line, we’re no longer going to allow ourselves to be mistaken for “the other guys.”  We’ve come to understand that many company’s trading in our peer group may not care much about being exploited, but we sure do.   And what we know, is the same way there are service providers and investors who only care about the short-tem because they are so accustomed to working with company’s who are less than stellar, there are service providers and investors out there who believe in the long-term proposition.  Just take a good long look at who we are, where we come from and what we plan to do next, and one may be considered a fool to bet against us.

It would be nice if all of the public companies within our peer group forced or “encouraged” long-term positions to be taken by their service providers.  It would have made our negotiations easier.   But hey… like we said, nearly all of our providers have agreed to the modified compensation plan; signifying their belief in Simulated Environment Concepts and the SpaCapsule.  We believe this speaks volumes as to how people in the markets and around the world see our business and love our products.

Next, we will work on how we raise capital!

We cannot do it all overnight, but it’s a start, and maybe even a precedent – an example – for the entire market to follow.  Hopefully, by the time we are ready to announce the biggest news of the year, we would have possibly curbed the rate of dilution significantly, strengthened market confidence and without subjecting our shareholders to any major changes, we may then likely be on the verge of seeing the shareholder value built to a level that’s more in line with one of the most innovative health and wellness products selling in more than 10 markets across the globe.