SIMULATED ENVIRONMENT CONCEPTS, INC. (SE Concepts)
Simulated Environment Concepts, Inc. (SE Concepts) is a publicly traded company [Symbol: SMEV]. SE Concepts manufactures and develops health and wellness products for use in Medical Offices, Health Clubs & Gyms, Sport Teams, Spas, Salons, Retail Malls, Hotels, and Homes. The company was founded and is currently managed by the team of Physicians, Dr. Ella Frenkel – President and CEO and Dr. Ilya (Eli) Spivak – Products Development and Marketing. With several million dollars of their own money, the management team was able to attract engineers and designers with previous experience from prestigious companies such as the producers of MercedesBenz™ automobiles and Stingray® boats. With such diverse industrial backgrounds the team of Doctors and Engineers went on to develop unique equipment that’s currently used in medicine, rehabilitation, pain management, personal relaxation, massage, hospitality, cellulite reduction, weight-loss, anti-aging, and many others. SE Concepts continues to develop new technologies, cosmetics, and personal wellness products.
B r i ef his t o ry:
December 1997
Successful testing of the retail market proving public demand for the SpaCapsule® Concept.
August 2002
Granted first United States Patent # 6,428,466.
August 2004
Successfully defended its patent in the U.S. Federal Court.
December 2004
July 2005
August 2005
December 2005
December 2005
October 2006
January 2007
January 2008
August 2009
January 2010
Achieved full production and established World Wide presence within three years. Granted second United States patent. First in the industry to increase manufacturer’s warranty from 1 to 2 years. Company designed and manufactured the SpaCapsule® Anywhere™ a 110 volt version of the original. This factor alone gave way for the SpaCapsule® to be enjoyed in private residencies and be used in locations with inadequate electrical supply. Company sees a net profit within first three years of operations. The launch of the SpaCapsule® Business Solution System™ - offering solid marketing strategies and practical business guidance. SpaCapsule® wins the Leisure Trend Award for “Most Original Profit Center”. SpaCapsule is first to significantly penetrate Tanning Salon Market; prominently featured in many industry’s publications. SpaCapsule makes significant foray into European and Middle East Markets. Executed contract with Zen & O, a leading “Lady Fitness” European Franchise and delivery of first order of eight units.
Pate n ts As previously mentioned, currently, SE Concepts maintains two U.S. patents along with patents in Canada, Japan and Europe. To date, IP Attorney McHale and Slavin, is seeking to complete and file the company’s third U.S. patent. When successfully granted this new patent, SpaCapsule’s patent life will extend from 15 years to 35 years. The company believes it is cable of sufficient innovation to continue new patent filings for the next 10 years.
The P r o d u c t SpaCapsuleŽ, which is protected under two U.S. patents, as well as Canadian, Japanese, and European patents, is a full body massage, aroma-therapy, audio and video entertainment system packaged into a futuristic stylish capsule-shaped relaxation station. The capsules are fused with the most advanced modern technology and healing methods of aromatherapy and audiovisual relaxation techniques. SE Concepts’ SpaCapsuleŽ incorporates a waterjet and pressure-jet technology which requires no on-site plumbing as the water unit is self contained within the capsule. Computerized controls allows for easy set-up and implementation of a precise rate of pulsation and pressure to elicit physiological responses that result in pleasure and satisfaction. The device, weighing approximately 450 lbs., only requires standard electric service allowing it to be operated almost anywhere (space provided). The stations can also be color customized. The combination of these features fosters an incredibly progressive, convenient and ultimately inexpensive relaxation experience.
s pa c a p s u l e p r o d u ct i on li ne
SpaCapsule® assembly at our production facility in Miami.
The M a r ke t Massages seem to be particularly popular among people between the ages of 25 to 35 but attract upscale and affluent clientele of all ages. However, the traditional massage can be time consuming, intrusive and often carry negative connotations… especially for men. Massages can also be rather expensive – particularly full body massage or “body treatments” which are generally segregated to traditional “spa” type environments. A product such as the SpaCapsule® can command the patronage of a broader market. This would include users who are less affluent, do not wish to undress and/or be touched, who manage hectic schedules or those who desire greater control over their massage experience. In this instance, the market demand shifts from a select few who can afford the time or money, to nearly all people within any age group or financial class. This now broadened market opens up opportunities in cross markets such as fitness centers, spas (including salons and tanning), medical offices (including chiropractic offices, physical therapy, rehabilitation clinics, nursing homes) hotels and resorts, shopping malls and other retail locations. Even mobile massage services and airports [terminals and VIP Lounges] can utilize the SpaCapsule®. Along with its sole competitor, AMI, SE Concepts currently has the ability to provide, operate and service SpaCapsule’s in over 70 countries and to date, has generated millions of dollars in revenue from capsules sold worldwide.
Gl ob a l Pr e s e nc e SE Concepts enjoys worldwide marketing and advertisement of its SpaCapsule® product. SpaCapsule® has been featured on national TV shows such as The Doctors and Good Morning America, and commercially advertised on German, New Zealand and Amsterdam television stations to name a few. SEC’s SpaCapsule® also benefits from prime international billboard placement.
T he C ompe t i t o r SE Concepts shares the market with one primary competitor, Aqua Massage International (AMI). Below is a brief description of AMI’s history (extracted directly from the site www.aquamassage.com). • 1988 - AMI is incorporated and the initial patent registered • 1990 - AMI ships its first Aqua Massage System • 1991 - Second and third patents are approved and first Aqua Massage shipment to Japan • 1992 - Aqua PT received FDA 510K acceptance as a Class II Medical Device. • 1993 - AMI expands its export shipments to 21 countries. • 1994 - First Aqua PT shipment to Japan and South Korea. • 1995 - AMI purchases the 21,000 sq. ft. Mystic facility with 4.5 acres. • 1996 - Export shipments expand to 47 countries. • 1999 - AMI awarded “Exporter of the Year” by SBA for the State of Connecticut and the
Aqua Massage is successfully pilot tested in the mall market.
• 2000 - Export shipments expand to 49 countries • 2002 - A new 9,000 sq. ft. factory expansion is completed and Aqua Massage Systems
are operating in more than 200 retail locations.
• 2004 - Export shipments expand to 61 countries and new global web site is completed. • 2005 - Design patent approved for Spa model and patent infringement lawsuit concluded
with a Court Injunction against SpaCapsule®.
• 2006 - Export shipments expand to 72 countries. A new patent pending for
the Body Profiler System and Design patent approved for the Spa Profiler model.
• 2007 - Export shipments expand to 72 countries and prototype development initiated
for the new World Eco Spa.
• 2008 - The World Eco Spa completes laboratory safety testing and starts production
AMI is one of the industry’s original innovators of pressurized dry water massage systems. The company, which is primarily responsible for the existing market place, has successfully contributed to its industry for over 21 years. Distributing various products in over 70 countries, AMI is currently the industry leader. To date, AMI has produced four variations of its pressurized dry water massage systems. These are (a) Aqua Massage Spa, (b) Aqua Massage XL, (c) Aqua PT, and, (d) the World Eco Spa.
aq u a m as s age
Aqua Massage Spa (Standard Model)
Aqua Massage XL 250 Profiler
Aqua Massage PT Pro
World Eco Spa
O the r C o mpe t i t o rs Other competitors in the “dry” massage markets include companies and products such as: AquaMed
MedyJet
While stations such as these are within the market of the “dry” massage, they are not necessarily competitors of the same nature as compared to SpaCapsule® and Aqua Massage.
T he C ompe t i t ive D i fference From the perspective of “form and function”, there is little fundamental difference between SE Concepts and AMI’s relaxation stations. Both machines use pressurized dry water massage systems whereby water is pumped throughout the upper half of the capsule in a systematic series of pulsations across the body in a pattern made to emulate an actual massage. Each system contains the recycled water in a high tensile parachute type material. Both simulate conventional massage techniques – meaning from the “Top-Down”, massaging relaxed and un-compressed muscles. Additionally, various amenities such as aromatherapy, audio/visual effects and user control massage customizations are offered by the stations. With that, the discerning differences and greater appeal of the SpaCapsule® as compared to the Aqua Massage product line, are prominently exhibited in a) the exterior design of the relaxation stations, b) the technology and related patents, and, c) the seamless delivery of amenities. First, it is plainly obvious the Aqua Massage stations are less aesthetically appealing in design. This unappealing facade of the Aqua Massage station, resembling a MRI type of device, may mentally hinder ones desire to actually find the appeal of lying motionless inside of a closed environment to receive what may appear to be a medically mechanic process as opposed to leisure relaxation. The SpaCapsule® does not have this issue. With the appearance of something straight out of futuristic movies, SE concepts’ SpaCapsule® resembles conceptualized space pods for individual sleep or travel. SpaCapsule’s colorful cocoons are designed with flowing curves and integrated sleek sexy lines. This aesthetically pleasing structure easily inspires intrigue, conversation and use. Even with AMI’s attempt to answer SE Concepts’ station with the “World Eco Spa”, a series allowing for the stations to be adorned in bright neon colorful coverings and bases, it is the same machine with inexpensive looking window dressing. Furthermore, bright neons do not typically promote peace and relaxation. As it pertains to technology, while the two stations operate nearly identical to one another, however, SpaCapsule® has the advantage of a “dual-barrier”. The water that is pumped through the station is pushed against a parachute material that lies close to the body when the machine is closed. However, although it is highly unlikely that this material can ever tear or rip under the pressure of the water or even sharp objects possibly sticking out of the user’s garment, Aqua Massage stations have just one barrier whereby SpaCapsule® uniquely uses two. Like the Aqua Massage station, SpaCapsule® uses the same barrier that lies against the user when closed. However, it also uses a second smaller barrier incasing the actual jet streams pumped along the body. This system allows for noise reduction, better maintenance and easier recycling of water. Most important, this “dual-barrier” design affords SpaCapsule® the ability to produce greater propulsions – allowing for a much deeper firmer massage.
As previously mentioned, each company’s stations offer similar amenities to enhance the users massage experience. However, only SpaCapsule® has integrated all of the amenities directly into the design of the capsule. Both devices have a “Profiler” which allows a massage to be tailored to a specific user whereby those settings would be stored for recall. Aqua Massage uses a $3,000 add-on unit that is separate and free standing on a tripod. This feature was added as a response to SpaCapsule’s profiler. SpaCapsule’s profiler is built directly into the machine which again is esthetically attractive and doesn’t distract the user. Also, SpaCapsule’s new electronics and software packages allow for profiling software that both remembers each user and allows access to massage profiles anywhere a person may travel so long as the station is connected to the internet. Another amenity is aromatherapy. While both stations offer this, SpaCapsule® actually integrates it directly into the design and electronics of the system. Aqua Massage stations began offering aromatherapy after SpaCapsule® introduced it to market. Their [AMI] response was simply a diffuser placed next to the machine that does not adequately give consideration to the human olfactory process (sense of smell). Contrarily, the SpaCapsule® team of engineers and doctors devised an integrated unit with the human physiology in mind. This, thereby allowing the proper placement of emitters and disbursement of a vast array of aromas loaded into the circuitry of the station. SpaCapsule’s audio/video unit supports IPOD connectivity, larger full color monitor and incredible sound. With the station’s new electronics package, SE Concepts will also be able to set up creative retail points with “On-The-Fly” accounting and tech support for its stations. Each capsule will also receive video downloads that can play advertisements to a captive audience. Where it relates to other “dry” massage type devises such as the AquaMed, MedyJet and Quatro Wave System, the SpaCapsule® station and market trumps these devises in use, purpose and design. Each of the mentioned devices uses a “Bottom-Up” approach to the massage which does not effectively replicate a conventional massage. This technique causes compression in the muscles and inhibits the circulation of blood; causing lymph nodes to remain filled – preventing the proper oxygenation of muscle tissue. The SpaCapsule® uses a “Top-Down” method. Here, the muscles are uncompressed, allowing for proper blood circulation and relaxation. Further, only stations like the SpaCapsule® can be offered for commercial use in retail environments (i.e. shopping malls) because it does not render the users completely exposed. SpaCapsule® provides an ergonomic cocooned environment affording a user privacy even if in a public place.
O u tl o o k Overall, SE Concepts is in a position to experience explosive growth between 2010 and 2012. With, nearly 50% of individuals who have received a massage in 2009 having done so for leisure; 32% for medical purposes (trend documented by the American Massage Therapy Association), the viability of SE Concepts’ products has and continues to be substantiated by the marketplace. The company’s reach abroad is growing tremendously daily. This was demonstrated during the fourth quarter of 2009 when Simulated Environment Concepts and the French company, Zen & O, completed an international deal securing a multi-million dollar contract to manufacture 250 SapCapsules over the next four years. Zen & O, which operates approximately 54 franchises for Lady Fitness and other retail outlets throughout France, Belgium, Luxembourg, Switzerland, and Spain, anticipates making SpaCapsule® the centerpiece of its Lady Fitness operations. Up until January of 2010, Zen & O establishments solely used the Aqua Massage. Today, the Aqua Massage will be replaced by SE Concepts’ flagship product over the duration of the agreement. SE Concepts and the French company have already fulfilled the initial order of 8 units. SE Concepts is also taking advantage of the developing trend in “corporate fitness” and “corporate destressing.” With advances in health care reform and the accent on preventative care, many corporations are exploring the ways to de-stress and energize their office work-force to improve productivity. Currently, there are 700,000 corporate centers who are potential customers for the use of the SpaCapsule®. Companies like Google, Delta Airlines, IBM, Eddie Bauer, and many others offer massage to their employees. Recent installation of the SpaCapsule® at Hyland Software, a 900 employee software developer, only proves the viability of the SpaCapsule® amongst Corporate America’s fitness and de-stressing trend. With unprecedented international growth potential, the company’s accent on to the growing American corporate fitness and de-stressing trend, as well as SpaCapsule’s relevance to the weight-loss market, medical facilities, spas, tanning and beauty salons, gyms, airports, entertainment venues and private residences, the opportunity to develop extremely lucrative vertical markets globally is immeasurable. SE Concepts expects that it will certainly be able to exploit every facet of its marketplace, and ultimately generate greater revenues, decrease overall cost of goods, positively impact net profit margins, and most importantly, build and maintain substantial stock value while producing an amazing product.
P r o d u c t and f i nanci al i nformat i on For more extensive look at our product and financial structure, please visit: spacapsule.com and seccorporation.com