Epilog

Transforming how machines see the world

Analytics

Raised to Date: Raised: $3,703,426

Aggregate Commitments $

Platform

StartEngine

Start Date

03/22/2021

Close Date

12/19/2021

Min. Goal

$51,750

Max. Goal

$5,675,000

Min. Investment

$251

Security Type

Equity - Common

Funding Type

RegA+

Series

Seed

Price Per Share

$1.40

Pre-Money Valuation

$21,200,000

Rolling Commitments $

Status
Funded
Reporting Date

12/31/2021

Days Remaining
Funded
% of Min. Goal

7,156%

% of Max. Goal

65%

Likelihood of Max
Funded
Avg. Daily Raise

$13,616

Momentum
Funded
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Location

San Jose, California

Industry

Transportation, Automotive, Aviation, & Aerospace

Tech Sector

AutomationTech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

High

Business Type

High Growth

Epilog Imaging Systems, a technology company, is raising funds on StartEngine through Reg A+ crowdfunding. The company has developed a digital vision technology with image quality similar to human eyes. The technology finds use in queue management, remote inspection, and driver assistance. Michael and Lance Mojaver founded Epilog Imaging Systems in 2015. The current round of crowdfunding has a minimum target of $51,750 and a maximum target of $5,675,000, and the proceeds will be used to further develop and produce Sherpa, Luma, Thermion, and Cinapse into production systems. Epilog Imaging Systems has a strong IP position with nine patents granted and software, optics, and robotic flow ready to scale manufacturing.

Balance Sheet

Cash and Cash Equivalents

$30,704

Investment Securities

$0

Total Investments

$0

Accounts and Notes Receivable

$0

Loans

$0

Property, Plant and Equipment (PP&E)

$0

Property and Equipment

$0

Total Assets

$359,565

Accounts Payable & Accrued Liabilities

$291,509

Policy Liabilities and Accruals

$0

Deposits

$0

Long Term Debt

$0

Total Liabilities

$555,316

Total Stockholders' Equity

$-195,751

Total Liabilities and Equity

$359,565

Statement of Comprehensive Income Information

Total Revenues

$9,990

Total Interest Income

$0

Costs & Expenses Applicable to Rev

$0

Total Interest Expenses

$0

Depreciation and Amortization

$22,942

Net Income

$-64,856

Earnings Per Share - Basic

$0

Earnings Per Share - Diluted

$0

Auditor: Fruci & Associates II, PLLC
Financials as of: 03/22/2021
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Epilog 12/19/2021 StartEngine $21,200,000 $3,703,426 Equity - Common Funded RegA+
Epilog 03/21/2021 StartEngine $21,200,000 $135,377 Equity - Common Funded Test the Waters
Epilog 06/26/2020 StartEngine $9,200,000 $1,069,999 Equity - Common Funded RegCF
Epilog 12/13/2019 SeedInvest $10,000,000 $923,187 Convertible Note Not Funded RegCF / RegD 506(c)
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

In order for robotics and other automated technologies to attain the functionality depicted in science fiction and dreamt about by engineers, computer vision must first be developed. Computer vision is a subfield of artificial intelligence (AI) that focuses on teaching computers to interpret images in order to properly interact with the environment. It can use real world images captured by cameras or rely on purely digital images passed directly to a program. Facial recognition technology is based on computer vision.

However, one hurdle that this field of AI is still working to overcome is the ability to properly classify and understand the real world in real time. While the accuracy rate for object identification has risen substantially in recent years, it still does not have the fine detail recognition of a human eye. Epilog, formerly known as Epilog Imaging Systems, is working to change that. The company has spent more than five years developing an AI vision system that can have 8K or better image resolution. Now, it is applying that technology to multiple verticals.  Its primary product — SideCar — is driver assistance tech, which is compatible with around 50 million cars in use today. SideCar is a breakthrough 8K camera matched with a computer that links into the vehicle and activates when the driver engages cruise control. Though the driver still needs to watch the road, the system takes over gas, steering, and brakes. Reserving a SideCar system is much cheaper than buying a self-driving car.

Epilog has two other main products that it is bringing to market. Tempo is a patent-pending device that measures body temperature in people as they pass by. This product has applications in both health diagnostics and access management. Epilog’s final product is Luma, a devkit based on the company’s 8K camera. Luma will allow Epilog to benefit from other developers and companies using its technology in their own applications. 

Epilog’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

Epilog is raising through common equity at a pre-money valuation of $21.2 million. Considering the company’s lack of significant revenues, this represents a significant and perhaps unwarranted jump from the valuation in its previous raise, where it was valued at $9.2 million. While this is not entirely unreasonable for a tech startup with several high-margin verticals, it’s still quite high compared to many other startups currently seeking funding. A third-party valuation will take place next month as of this writing.

Market

The global computer vision market size is expected to reach $19.1 billion by 2027, growing at a CAGR of 7.6%. Similarly, the market for machine vision was valued at $29.7 billion in 2019. WIth a CAGR of 11.3%, it’s expected to reach $74.9 billion by 2027. Epilog sits comfortably in both these markets. The high resolution cameras it makes are part of the machine vision market, while the AI it has developed sits in computer vision. By tackling both aspects of the technology needed to enable image recognition across applications, the company is more likely to be able to adapt as market needs evolve and change. Epilog is well-positioned to secure a healthy niche for itself in these growing market sectors.

Team

Co-founder and CEO Michael Mojaver holds a Bachelor of Science in engineering and physics from the University of California San Diego and spent seven years in research of elementary particle physics at Cornell University. He entered the startup leadership game with his role as president and CEO of Tempest Microsystems, a microchip design company. He spent two years working as CEO for Gaming Innovation Group (GiG) in Norway, a computer vision company. Tempest was acquired, while GiG went public.

Co-founder and CTO Lance Mojaver is the more hands-on architect of the company product. He is an expert in super-resolution computational imaging processes and has deployed software used for monitoring locations such as schools, airports, and military bases. Vice President of Business Development Marc Munford has extensive experience working with tech startups, including a role as co-founder of NetDrive, the first internet personal storage service. Finally, Professor Dieter Koller works part-time with Epilog from Germany. He holds a PhD in computer science and physics from the Karlsruhe Institute of Technology and conducted postdoctoral work on vision-based car tracking and tracking in video sequences at the University of California at Berkeley and Caltech. Generally, the team has the levels of experience in tech that are quite appropriate for their roles at Epilog.

Differentiators

There’s quite a lot of interest in the applications for computer vision technology, given the vast benefits automation has already generated for the economy. To that end, Epilog needs to set itself apart. The company has picked up nine patents to protect its products with more pending — for example, a pending patent for its health diagnostic camera, Tempo.

Epilog has established a partnership with Jabil to scale manufacturing and lower costs while still providing a system that provides a cost-performance improvement of more than 10 times over existing vision systems. Existing offerings generally just don’t pick up nearly as much information as the human eye, but Epilog is changing that. Although 8K has been called extravagant and pointless, when it comes to gathering information for steering a vehicle, that level of high resolution really matters. Even so, it isn’t being offered right now.

Major competitors in the computer vision space include such giants as NVIDIA, Intel, and Apple, but the good news in that regard is that after years of development in a capital-intensive space, Epilog’s patents set it up well for acquisition by one of these larger companies. 

Performance

Although Epilog was officially incorporated in 2010, most activity at the company has been happening from 2015 onwards. The company has taken in just $9,990 in total revenue but thanks to smart management has kept liabilities down to $555,316. Prior fundraising has been successful with $1,069,999 raised on StartEngine in mid-2020. Epilog has entered into beta trials for its Tempo system with various medical offices and other places of business. It also has leads on clients like airports and metro areas to use Luma for queue management. Through a partnership with manufacturer Jabil, Epilog has attained rapid scaling of its SideCar product. Overall, Epilog has laid a solid foundation for itself, but it has yet to see that work begin to pay off in a financial sense.

Risks

As Epilog continues towards commercialization and enters its products into the testing phase, investors should be leery of time risk. The kinds of markets it intends to break into — automated driving and automated monitoring — are highly regulated. Overcoming those hurdles on the corporate and consumer level could take years, so there is something of a time concern. In addition, as with any product yet to actually complete development, there is always the chance that it could not be as effective or efficient as the company predicts. When it comes to computer vision, high standards are absolutely demanded.

Bearish Outlook

Looking at a deal with a rapidly-increased valuation and relatively few revenue-generating verticals in the near future, it’s prudent to be cautious. There are significant barriers in the way of widespread adoption of computer vision and not just technological ones. Consumer wariness and government regulation are phenomena with real impact on the adoption of these technologies, and ongoing woes in the auto industry — due to chip shortages — are putting pressure on Epilog’s highest-priority market.

Investors should be wary of investing in a product that is still testing after years of development and has yet to generate any significant revenue. Considering the hurdles of regulation and potential competition, Epilog still faces a long road ahead before generating returns for investors.

Bullish Outlook

It’s encouraging to see a startup with tech that is applicable across several verticals, and Epilog is providing that. Queue management, diagnostic monitoring, and self-driving cars are all quite utilitarian and useful to a variety of industries. Now that Epilog has developed high-power, patent-protected tech, it is ideally positioned for establishing partnerships or even reaching an acquisition deal. In early 2020, Facebook acquired London-based Scape Technologies for $40 million, which developed 3D map infrastructure — very similar to what Epilog does and might be able to do in the future.

Executive Summary

Epilog is a tech startup raising funds for development of its digital vision technology, which is of a quality on par with what can be perceived by the human eye. While the tech has applications across a number of verticals, the startup’s primary focus at this time is on driver assistance. Its patent-protected 8K camera tech is also being used for a remote health diagnostic tool called Tempo, created in response to the COVID-19 pandemic. 

After years of development, the company has partnered with a manufacturer to drive down costs on its Luma devkit. Despite that progress and a fruitful raise last year, Epilog is still going through the testing phase for its products, and its pre-money valuation has risen significantly from a prior raise in 2020. Development has proven to be quite capital-intensive. After securing extensive patent-protection, though, Epilog could be well-positioned for acquisition by any of many companies interested in computer vision technology. Therefore, Epilog is a Neutral Deal.

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

Analysis written by Benjamin Potts.

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Epilog on StartEngine
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Platform: StartEngine
Security Type: Equity - Common
Valuation: $21,200,000
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