Dynaris is offering membership units (the equivalent of common stock) on a $19.3 million pre-money valuation. This valuation is too high for its early stage and traction to date. Despite sitting on $500,000 of inventory, the company scores very low compared to other early-stage companies in our database, as the company is still pre-revenue. As such, Dynaris scores very low in the price metric.

The 2021 global portable oxygen device and oxygen cylinders market is valued at approximately $3 billion. According to Grand View Research, the US accounts for a little over 30% of the market — about $1 billion of the total market. This market is rather small and niche in comparison to other markets in our database. This market is also growing at a rate of 4.2%, which is quite slow in comparison to other markets. As its market focuses on treating a specific condition, Dynaris doesn’t have much potential to expand its current products and offerings. Overall, the small market and slow growth rate result in a low market score.

Dynaris founder Alonzo Aylsworth has multiple patents under his name. Aylsworth’s LinkedIn profile doesn’t provide much background into his roles at Anhelo LLC, 3 Inventing Guys, and CHAD Therapeutics. The only detail provided is that Anhelo was focused on respiratory and sleep apnea devices. Aylsworth has a degree in aviation science from Northwestern Michigan College and a BA in business management from Webster University. Overall, Aylsworth has a long but unclear history in the medical device industry. 

Lawrence Spector is also a co-founder and co-inventor of Dynaris’ devices. Unfortunately, there is little information about Spector and the homecare companies he’s founded, which were supposedly acquired. Public searches on Spector mention a “Respiratory Home Care Inc.” that was voluntarily dissolved. Spector’s work experience is a bit of a mystery, but having a founder with an acquisition under his belt would definitely be valuable to Dynaris.

Although the founding team has a somewhat questionable work history, its members still appear deeply knowledgeable and experienced, including apparent exit experience. This results in an overall high founding team score. That said, Dynaris still needs to flesh out its team with key marketing and sales professionals. Those team members will be essential for the company to reach its goal of monetizing within the next six months.

Dynaris’ Apogee oxygen therapy device seems to have a few advantages over competing oxygen therapies. The device supposedly saves up to 50% oxygen compared to current therapies, provides more freedom and greater range, and reduces nasal dryness. Additionally, Dynaris’ pricing stands out. Compared to other devices like the Inogen One G3 and Philips Respironics SimplyGo, which run patients nearly $3,000, Dynaris’ $600 to $800 device is magnitudes cheaper. Unfortunately, Dynaris is competing with multiple portable oxygen therapy devices that are also better than traditional solutions. Although the company claims its device compares favorably to other devices, it hasn’t been proven by any third parties so far. As such, Dynaris’ products don’t seem overly differentiated in terms of quality. Still, the company’s uniquely low price point results in a strong differentiation score.

Dynaris has little to no revenue traction and, as such, hasn’t performed well. The company has not yet fully completed manufacturing of its device. Likely due to supply chain problems caused by the pandemic, Dynaris has had trouble securing parts for its device. Additionally, Dynaris is still missing a marketing and sales member of the team, which it badly needs in order to start selling its product in six months. Lastly, many forms of insurance — including Medicare and Medicaid — do not cover Dynaris’ devices. This could severely limit the company’s potential customer base. 

Among the company’s positive notes, Dynaris’ Apogee device cleared its FDA premarket notification — meaning the FDA has approved its use, but not yet fully authorized it — and has FDA emergency use authorization (EUA). EUA is a positive for Dynaris as it grants the company additional authority for its devices to be used despite it not having fully cleared the FDA approval process. EUA may bring Dynaris customers sooner than expected as a result. Additionally, Dynaris’ founders have done a remarkable job raising capital, with $3.7 million raised to date. The company is burning capital at a reasonable rate. Dynaris has also managed to use its capital for the generation of $500,000 in inventory. Lastly, the company has seven US patents with other domestic and foreign patents pending. The company has also taken several steps to ensure commercialization takes off without issues. Dynaris’ ability to receive FDA premarket clearance, raise significant amounts of capital, and secure several patents make up for its lack of revenue. So overall, Dynaris receives an above-average performance score.

An investment in Dynaris is moderately risky. Despite being active for more than six years, the company has yet to commercialize its product. The company supposedly expects to see purchases of its device within six months, but that seems optimistic given the company’s current pace. Additionally, the ability to scale up production will take a long time due to the technical nature of manufacturing the device along with the company’s difficulty in securing parts. 

The regulated nature of the healthcare industry also presents a risk. While Dynaris reached FDA premarket notification clearance, it still hasn’t received full approval of its product. Any future products will also need to undergo rigorous testing. 

This round’s terms and pre-money valuation of $19.3 million also present a risk. Since the company has limited revenue traction and no real market acceptance as of yet, a nearly $20 million pre-money valuation is very high. Additionally, the company’s lack of sales and marketing expertise and manufacturing expertise — as well its inability to secure components for its devices — make the valuation even less favorable. The company would need to be generating $2 million in revenue to even reach a reasonable 10-times multiple. If the company does reach its projected $720,000 in revenue in six months, that’s a lofty multiple of 27 times, which is normally saved for software-as-a-service and financial technology companies, not hardware companies like Dynaris.

Overall, the production risk and investment terms risk result in a moderate risk score for the company.

Investors should carefully consider any future projections and promises from Dynaris. If Dynaris isn’t able to manufacture and sell any of its devices within the projected six months, that makes its current pre-money valuation of $19.3 million less justifiable. Additionally, the company’s product has yet to be directly compared to competing devices on the market. If the company’s product isn’t as differentiated as it claims, then its main selling point would likely be its price. Lastly, the number of competitors in the space is not encouraging, and current competitors have  proven track records and strong branding.

If Dynaris’ claims are accurate, its Apogee device seems to be a more effective and affordable solution than other oxygen delivery products on the market. Additionally, if the company can hire an experienced marketing and sales executive with experience in healthcare, the company could potentially reach its projected revenues in six months. As such, the company could create a  moat to enable strong growth. This could lead the company to expand its product offerings in a few years. If everything works as planned, then the company could prove to be a rewarding investment.

Dynaris is a pre-revenue company manufacturing and selling oxygen therapy devices for those suffering from chronic obstructive pulmonary disease. The company’s Apogee device is patented and has received FDA premarket notification clearance (though it has not yet received full FDA approval). Dynaris has already raised more than $3.7 million in funding and has some completed products, which means its devices seem well on their way to reaching the market. 

But given Dynaris’ lack of revenue, its current valuation is too high. Additionally, the market has a number of established competitors with proven products. Dynaris also suffers from having no marketing or sales expertise on its team. Unless the company fills the position soon, it could struggle when the Apogee devices reach the market. Dynaris also has a number of risks to consider, like sourcing parts, scaling manufacturing, and regulatory risks. 

Overall, Dynaris’ raise is rated a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out at support@kingscrowd.com. 

Analysis written by Francis Vu.