USCIM Fund XLII Carepoynt, LLC
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US Capital Global Securities (“USCGS”) is offering 200 Membership Units in USCIM Fund XLII Carepoynt, LLC (the “Issuer”), a pooled investment vehicle on a “best efforts” basis. Fund XLII will be managed by San Francisco-based asset management firm US Capital Global Investment Management, LLC (“USCIM” or the “Manager”), investing in preferred membership units of Carepoynt, LLC (the “Company”).
Carepoynt, LLC is seeking an equity investment of up to $5MM to fund the next phase of growth. The investment will go towards scaling the Carepoynt solution and team to meet new and existing market demand, enhancing the product and integrating the platform into new and established market segments, and growing the member and customer base which will drive increased monetization of the companies multi-sided Software, Services and Transactions based business model.
Approximately $3.5MM has been invested into the company over two prior funding rounds. About 50 private investors (including the Carepoynt Founder and several members of the Carepoynt team) have invested about ~$2.5MM in cash and ~$1MM in deferred compensation into the quickly growing company since it started in 2016. Carepoynt completed its Start-up stage funding round for $1.5MM in March 2017 and Seed stage funding round for $2MM in July 2018. The prior investments were completed as convertible notes and will convert into equity along with new and existing Carepoynt investors upon securing the first $1MM milestone in this current funding round.
This new growth-stage equity investment will fund further development, enhancements and go to market growth plans for the proprietary CarepoyntTM ‘Rewardsware for Healthcare’ CRM platform and CARE.
Sources & Uses
Carepoynt™ has developed and delivered one of the first health-focused rewards program, platform and network that puts consumers at the center of their own healthcare experience. The company leverages a proprietary ‘Rewardsware for Healthcare CRM platform and the Carepoynt CARES program to Connect, Align, Reward and Engage our members within a network of both traditional healthcare system providers as well as thousands of national, local and online Health and Wellness partners, products and service, as well as providing a differentiated platform engages employees and other members with their employer and payer sponsored wellness programs and Care Coordination programs offered through their workplace, via health insurers or from others in the Healthcare and wellness ecosystem. The company launched its platform in 2017 and since has grown members to 19,000, currently has grown the team to over 25 people.
The proprietary Carepoynt platform, program and portable poynts based network solution was developed to address the fundamental need of the consumers to derive greater value from their health and wellness activities and spending, while aligning the needs of the multiple stakeholders within the current and emerging ecosystem of providers, partners, payers, employers and others that make up the massive Healthcare, Health and Wellness marketplace in the US. In time the company may also extend its offering to serve a huge and evolving global market as well. The company has more than doubled member acquisition and its customer/partner base each quarter since launch, and now plans to accelerate its local, national and online growth and operations in 2H2018.
According to S&P Capital IQ analysis, combining the current healthcare and information technology sector create a $20+ trillion market.
Carepoynt has first-mover advantage in this new market as it integrates its unique CRM platform, Rewards-based program and existing healthcare analytics markets into a single market that revolves around the consumer’s health & wellness.
The existing US healthcare system is a costly, inefficient, and uncoordinated program.
- Approximately 15% of the US GDP (2015-2020) is spent on healthcare, totalling $3-6 trillion¹.
- Americans on average spend 20% of their income on healthcare and insurance.
- 86% of the nation’s $2.7 trillion annual healthcare expenditures are for chronic and mental health conditions². These costs can be reduced through a shift towards digitally enabled and data-driven diagnostic platform.
Given the problems of the US healthcare system, Carepoynt’s well integrated platform provides following solutions:
- Connected and Consumerized Experiences
- Aligned & Engaged Stakeholders
- Rewarding experiences, new value, and results-based outcomes
- Visibility to activities, investment results & outcomes
- 'Rewards to Results' focused solution
With Carepoynt’s integrated platform and software, it incentives engagement in health & wellness activities, reduces personal and workplace cost for healthcare related expenses. Carepoynt also provides all parties in the health & wellness ecosystem with improved transparency, visibility, and outcomes.
Carepoynt leverages a proprietary multi-sided B2P2C (Business-to-Provider-to-Consumer) business model, comprising of a CRM Platform and Reward Points-based Social Network. Utilizing Carepoynt’s technology, customers and patients can earn and redeem points with trusted healthcare providers, payers, employers and strategic partners that encourages healthy patient behaviour and improved healthcare literacy. On a macro level, Carepoynt is a data collection and transactional platform for healthcare.
Carepoynt partners have the opportunity to create personal health plans and wellness goals, track members and patient progress and compliance, and enable the pooling and sharing of Poynts with members of established friends-and-family cliques or donate Poynts to worthy causes and charitable organizations via Share the Care™.
BUSINESS & REVENUE MODEL
The Company’s business model is focused on sequentially engaging and then successively expanding the services, transactions, and members in the Carepoynt ecosystem. The Carepoynt’s ecosystem comprises 5 Ps - healthcare patients, providers, payers, employers and partners.
Examples of the 5 P’s:
1. Patients: Consumers of healthcare products and services
2. Providers: Doctors, dentists, chiropractors, clinical and quasi clinical services providers
3. Payers: Entities such as insurers and brokers that purchase Carepoynt packages to issue and/or redeem Poynts and customize their own Carepoynt plans.
4. Employers: Companies that provide healthcare benefits to employees
5. Partners: Health & wellness businesses such as gyms, yoga studios, massage therapists, pharmacies, grocers, department stores, and nutrition product retailers
Carepoynt membership is free for Consumers. The partners, providers, employers and payers pay a combination of software fees, transactional fees, and services fees. Software fees consist of SaaS platform fees and member fees. Transactional fees include purchase and redemption of Poynts and commission earned as a percentage of revenue generated by sales on the network. Services fees include network services support provided by Carepoynt, such as marketing and ancillary services. Below are the three sources of revenue that every Carepoynt deal has a component of:
The company estimates its’ revenue to grow from ~ USD3.2 million in FY 2018³ to USD392 million by FY 2023. Gross Profit Margin is expected to achieve ~95% by FY 2023 4.
The Carepoynt program, platform, and Portable Poynts network is more than a stand-alone loyalty program at a local physician’s office. Poynts can be earned and redeemed at hundreds of connected health and wellness locations.
Carepoynt cuts through the chaotic healthcare system and connects, aligns, and engages consumers and the “5Ps” in the health & wellness ecosystem.
Rewards and incentives empower patients to take a proactive approach to their health, improving their health and lowering costs throughout the system. Carepoynt solution is proven, perfectly timed and is already bringing about impactful outcomes with Carepoynt’s growing network of members, partners and investors.
Carepoynt uses trade secrets and licensing agreements to protect the proprietary processes of its software platform. The Company plans to file multiple trademarks and has been granted a service mark for “CAREPOYNT”.
Given the Company’s projected growth rate and the sectors it operates in, the Company expects to exit at a high valuation multiple. The Company anticipates a potential exit through an acquisition by a large healthcare or rewards-based organization in 2 to 5+ years 5. Alternatively, the Company could register its shares and become publicly traded.
RISK FACTORS 6
The Company is a Healthcare CRM Rewards Program provider that leverages cloud computing, mobile applications, and advanced data analytics to power applications that provide a platform and network for health and wellness market. The Company is subject to a number of significant risks that could result in a reduction in its value and the value of the Company Securities, potentially including, but not limited to:
- The Company has not proven the profit potential of the business model, and even if the Company meets its revenue expectations, there is no guarantee that the Company will be profitable or that costs will not continue to exceed revenue. The Company has experienced negative cash flow from operations in the past and may do so again in the future. If the Company’s capital resources are insufficient to satisfy its liquidity requirements and overall business objectives, it may seek to sell additional equity securities or obtain debt financing.
- The difficulties Company faces in managing rapid growth in personnel and operations. Pricing pressure could adversely impact Company’s planned pricing structure and have an adverse effect on Issuer’s results of operations.
- An interruption in or breach of the Company’s information systems may result in lost business.
- The Company relies on 3rd party for product development, management, and planning, which may impact the Company’s ability to execute on its product development plan.
- The Company may face intense competition that could adversely impact its market share and its revenues.
- Future results will depend on the Company’s ability to provide products and services that compare favourably on the basis of appearance, performance, market acceptance, market dynamic and cost with the products and services of its competitors.
- The Company will be dependent on the software and technology industries.
- The Company’s customer subscription level may not be an indication of engagement or company success.
- The Company’s reliance on contracted team members may lead to potential for high turnover, impacting knowledge base continuity and stability.
- The Company's management shall have wide discretion as to the exact priority and timing of the allocation of funds raised from this Offering.
- You will have little (no) control over operations of both Company and Issuer.
- You will have limited (no) voting rights and will have no control over the Company or Issuer management and must rely almost exclusively on the management.
- There may be restrictions placed on the transfer of the Membership Units purchased in this Offering.
- There may not be sufficient funds to make cash distributions to Shareholders.
- The Company has a pricing model that has not been completely tested yet.
- The Company’s business may be negatively affected if the Company is unable to protect effectively its intellectual property.
- Company will be exposed to general market and economic fluctuations which may impact the demand for its product.
- Company has a security lien on the following assets: present and future accounts, receivables, chattel paper, deposit accounts, personal property, assets and fixtures, general intangibles, instruments, equipment and inventory.
CONFLICT OF INTEREST DISCLOSURES
The Manager and USCGS are affiliated entities. Charles Towle is Co-Managing Partner of the Manager, the Division Head and licensed principal of USCGS, and a stockholder of the parent company of the Manager and USCGS. Jeffrey Sweeney is Co-Managing Partner of the Manager and is also Chairman, CEO, and the controlling stockholder of the parent company of the Manager and USCGS. Conflicts of interest may arise in connection with Mr. Towle’s and Mr. Sweeney’s control of both the Manager and USCGS. Investors should be aware that these conflicts of interest, and a number of other conflicts of interest relating to the Manager and its affiliates, are permitted under the terms of the Fund’s offering documents. You should not invest in the Fund unless you are willing to accept these conflicts of interest and the associated risk.
This presentation does not constitute an offer to sell or a solicitation of an offer to buy any security and may not be relied upon in connection with the purchase or sale of any security. Any offer would only be made by means of a formal offering memorandum. No offer or solicitation will be made prior to delivery of a confidential information memorandum, private placement memorandum, or similar offering documents (“Offering Documents”). Offer and sales will be made only in accordance with applicable security laws and pursuant to the Offering Documents, operating agreement, subscription agreement, and other definitive documentation.
This presentation does not purport to be all-inclusive or to contain all of the information that the Recipient may require and is qualified in its entirety by reference to the Offering Documents. This presentation is not a part of or supplemental to the Offering Documents or such definitive documentation. The Offering Documents and any supplements will supersede this Presentation in its entirety. Projections and other forward-looking information as to events that may occur in the future (including projections of revenue, expense, net income and stock performance) are based on information provided by the Issuer and other publicly available information as of the date of this presentation. There is no guarantee that any of these estimates or projections will be achieved. The Recipient should not rely on any information contained herein. No investment, divestment or other financial decisions or actions should be based solely on the information in this presentation. Actual results will vary from the projections and such variations may be material, including the possibility that an investor may lose some or all or its invested capital. This presentation is confidential. By acceptance hereof, you agree that (i) the information must not be used, reproduced, distributed to others without the prior written consent; (ii) you will maintain the confidentiality of this information, not already in the public domain; and (iii) you will on use the information contained herein for informational purposes.
1. Preferred Membership Units – assumes current round is fully subscribed.
2. Carepoynt presentation
3. CDC Link
4. Assumes current round is fully subscribed
5. Carepoynt Investor Overview - 6.1.2018
6. Full Risk Factors in USCIM- SPV Offering Documents Carepoynt