Health Care Originals is offering Preferred Equity in its current funding round. The pre-money valuation for this round is set at $13 million, with shares priced at $1.5175 each. However, investors in the first $400,000 (and all Wefunder VIP) will receive 1.5x the number of shares purchased in warrants, After the first $400k, subsequent investors still receive 0.5X warrants.

Investing in preferred equity typically offers a more secure position in the capital structure, which can be beneficial in the event of a company's liquidation or sale. However, it may come with limitations on voting rights compared to common equity. This trade-off is often considered favorable by investors seeking a balance between risk and return. It’s notable in this case that the warrants also convert into preferred equity.

The exit potential for startups in the healthcare technology sector, such as Health Care Originals, can vary widely based on market adoption and competitive positioning. To achieve a 10X return on investment, the company would need to reach a valuation of approximately $130 million at the time of exit, not accounting for dilution.

The beachhead market Health Care Originals addresses is the $40.8B U.S. digital respiratory devices market, growing at a 28.5%% CAGR annually. This rapid growth is driven by the increasing prevalence of respiratory diseases such as asthma and COPD, as well as the growing demand for advanced healthcare solutions that enable continuous monitoring and personalized treatment. These trends create a favorable environment for companies like Health Care Originals, which offer AI-powered platforms for respiratory care.

A key market driver is the rising focus on remote patient monitoring, fueled by technological advancements and a shift towards value-based healthcare. As healthcare systems worldwide aim to reduce hospital readmissions and improve patient outcomes, there is an increasing demand for solutions that provide real-time health insights. This demand supports the growth potential for Health Care Originals, whose platform aligns with these healthcare trends by offering continuous respiratory monitoring.

Health Care Originals is positioned to target a broad segment within the respiratory care market, not limited to a niche. Its platform is designed for individuals suffering from asthma and COPD, which collectively affect a significant portion of the global population. This widespread applicability allows the company to address a substantial portion of the addressable market, enhancing its growth prospects.

HCO can also extend its market beyond respiratory since its core technology is a platform offering. The ability to expand to cardiology and gastroenterology markets significantly increases market size. In fact, one of the uses of funds from this round of funding is the continued development of cardiology applications.

Sharon Samjitsingh (CEO & Co-Founder): health tech disruptor who drove 20X revenue growth and managed a $150M portfolio at a $7B conglomerate. Named a Top 100 Woman in Wearables, she has 7 healthcare patents, 4 sustainability patents, an engineering BSc, and a master's in Entrepreneurship & Management from the University of Rochester.

Jared Dwarika (COO & Co-Founder): device sales and manufacturing expert with 20 years of industry experience. He holds 10 granted healthcare patents, with 12 more pending, and grew sales by 30X to $5M at Western Scientific. He earned his MBA from Henley Business School.

Jennifer Chambers (Chief Medical Officer) is a clinical expert and former Senior VP and Chief Medical Officer at Capital Blue Cross. She is board-certified in Internal Medicine and Hospice & Palliative Medicine and holds an MD and MBA from Penn State.

Cameron Jacox (Chief Growth Officer): proven track record in scaling growth, having previously served as Chief Growth Officer at Lark Health, scaling the AI chronic disease platform to $1B+. He has also been an executive at several successful startups and holds a BS in Business Management from Babson College.

Health Care Originals currently operates within the respiratory care market, facing competition from established companies such as Propeller Health and ResMed. Propeller Health offers digital health solutions for respiratory diseases, focusing on connected inhaler systems that provide data-driven insights. ResMed, a more significant player in the market, provides a range of respiratory care products, including devices for sleep apnea and COPD management. Regarding company size, ResMed is significantly more prominent with a broader product portfolio and market presence compared to Health Care Originals.

HCO holds a strong first-mover advantage in continuous monitoring of deep organ sounds to create novel digital biomarkers based on deep organ acoustics. They are the first ambulatory cough monitor in the world, and the technology is a platform technology broadly applicable across more conditions than merely respiratory. That multi-condition functionality is, on its own, a significant differentiator.

The product quality of Health Care Originals is supported by its AI-powered platform, which offers continuous and personalized respiratory monitoring. This differentiates it from competitors like Propeller Health, which primarily focuses on inhaler connectivity rather than comprehensive monitoring. Health Care Originals' platform may offer competitive pricing due to its focus on personalized care, though specific pricing details compared to competitors are not readily available.

The beachhead customer demographics for Health Care Originals include individuals diagnosed with asthma and COPD and healthcare providers and payers tasked with reducing the cost of managing these conditions. The platform is designed to support patients across various age groups who require continuous respiratory monitoring and personalized care solutions. This broad demographic appeal allows the company to address many patients within the respiratory care market.

Health Care Originals' robust patent portfolio enhances its differentiation by protecting its unique technology and approach to respiratory care. The company currently has 14 patents allowed and 9 pending globally. This intellectual property provides a competitive edge in a market where technological innovation is crucial for capturing market share and establishing credibility with healthcare providers and patients.

The company's wearable device is backed by three rigorous studies conducted at the University of Rochester, which demonstrated its ability to predict healthcare utilization up to three months in advance. This predictive capability enables proactive and preemptive care strategies, significantly reducing emergency visits and hospitalizations. The company has also received independent validation from the Validation Institute that its platform improves outcomes for people with asthma and COPD, and is clinically efficacious. The Institute has existed for more than 10 years, and has never had a validation challenge. Notably, the Institute offers a $100,000 credibility guarantee to HCO’s customers, which speaks volumes about their confidence in the HCO solution. HCO’s is the first wearable to be validated by the Institute, and the first respiratory-focused solution to be validated by the Institute.

HCO has collected over 3 million data points from its wearable, and over 1,000 people have used the device. The technology is stable and relatively de-risked compared to other technology companies at this stage.

The company's financial metrics reveal a significant monthly burn rate of approximately $63.2k, with cash on hand totaling $390k as of the most recent fiscal period. This suggests a runway of approximately six months, assuming no additional funding is secured. Such a burn rate requires the company to manage its expenses carefully while working to increase revenue and secure further investment. However, the company has raised significant funding since the last fiscal period, and the current fundraising is expected to provide a 14 - 18 months runway.

Health Care Originals reported a net loss of approximately $2.65 million for the most recent fiscal year, compared to a net loss of about $3.32 million in the previous year. While the reduction in net loss indicates some progress in managing expenses, the company continues to operate at a loss, underscoring the need for strategic financial planning and execution to move toward profitability. However, it is not uncommon for technology companies to operate at a loss in early stages until scale and growth is achieved.

The company has secured contracts for $5.5 million in projected annual recurring revenue, which, if realized, could significantly improve its financial standing. Additionally, with a waitlist of 12,000 members, there is potential for future revenue growth. Evidence suggests the company has already begun execution with a recent expansion from 1 state to 3 states and coverage by 23 insurers, up from 8 the previous quarter. The company generates ha ealthy gross margin, forecasts show the potential to be EBITDA positive within 24 months. Converting these opportunities into actual revenue will be crucial for the company's long-term financial health and sustainability.

Health Care Originals faces several specific risks that potential investors should consider. 

The company is in the early market phase, presenting adoption risks. As an early market entrant, Health Care Originals may face challenges in gaining widespread acceptance for its AI-powered respiratory care platform. Adopting new technologies in healthcare can be slow, and the company will need to continue to effectively demonstrate the value and reliability of its platform to capture its target market.

The company's current financial situation also highlights potential risks. Despite having a robust patent portfolio and contracts for projected annual recurring revenue, the financial metrics reveal a need for significant operational improvements to achieve profitability. The company's reported net loss of approximately $2.65 million for the most recent fiscal year underscores the financial challenges it faces. Continued losses could necessitate further fundraising, which may dilute existing investors' stakes.

Health Care Originals exhibits several factors that contribute to a bullish outlook. The company is poised to benefit from the growing market for intelligent digital respiratory devices, valued at $40.84 billion and expanding at an annual rate of 28.5%. This growth presents significant opportunities for Health Care Originals, whose AI-powered respiratory care platform aligns well with current healthcare trends favoring continuous monitoring and personalized care.

The company's robust patent portfolio provides a competitive advantage by safeguarding its unique technology and approach in the respiratory care sector. Health Care Originals has also secured contracts for $5.5 million in projected annual recurring revenue, indicating strong market interest and potential for future revenue streams. The waitlist of 12,000 members further underscores the demand for its platform, suggesting a ready customer base that could drive substantial growth once the product is fully commercialized. Further, the company has received 3rd party validation that it can effectively change user outcomes within 6 months, making the product very sticky and bodes well for market adoption.

Emerging technologies and trends, such as the increasing adoption of remote patient monitoring and AI in healthcare, are key growth drivers for Health Care Originals. The company's platform is well-positioned to leverage these trends, providing solutions that meet the evolving needs of healthcare providers and patients. Expansion plans include targeting new markets or partnering with healthcare institutions to broaden its reach.

Financially, while the company currently faces challenges, the substantial contracts and waitlist suggest the potential for revenue growth that could improve its financial standing. If these opportunities are realized, Health Care Originals may see enhanced financial health that supports its long-term objectives and investor interests.

Health Care Originals operates in a healthcare sector where regulatory hurdles are significant. Obtaining FDA clearance will enhance product deployment efforts; delays here may limit medium-term scalability.

The competitive landscape presents additional hurdles. Companies like ResMed and Propeller Health, with established market presence and broader product offerings, pose a competitive threat that Health Care Originals must navigate. The company's platform, while technologically advanced, may face challenges in differentiating itself sufficiently to capture a substantial market share amidst well-resourced competitors.

Financial concerns also support a bearish perspective. Like many companies at this stage, Health Care Originals exhibits low current revenue, and with a substantial cash burn rate of $63.2k against cash reserves of $390k, there is limited runway for sustained operations without additional funding. This financial constraint could impact the company’s ability to invest in growth initiatives and respond to market opportunities swiftly.

Market adoption remains a potential growth inhibitor. As an early entrant in the market with innovative technology, the company faces the risk of slow adoption. Healthcare providers and patients may be hesitant to transition to new platforms, mainly if the perceived benefits are unclear or integration with existing systems is complex.

Health Care Originals is a health tech company that is focused on using novel digital biomarkers based on deep organ sounds to change care paradigms. Their beachhead market is focused on respiratory care. The company's primary customers include patients and healthcare providers seeking advanced respiratory care solutions. Health Care Originals is currently in a growth stage, offering Preferred Equity at a pre-money valuation of $13 million, with shares priced at $1.5175 each. Financially, Health Care Originals reported a net loss of $2.65 million in the most recent fiscal year, with a monthly burn rate of $63.2k and cash reserves of $390k, indicating a limited runway.

The beachhead market Health Care Originals addresses is $40.84B in TAM, growing at a 26.8% CAGR annually. . Health Care Originals is positioned to capture a broad segment of this market with its AI-driven platform. The company's differentiation lies in its robust patent portfolio and focus on personalized respiratory care, setting it apart from competitors like Propeller Health and ResMed. The target demographic includes a wide range of patients requiring respiratory monitoring, providing a significant market opportunity.

From a bullish perspective, the growing demand for respiratory care solutions and the company's technological capabilities offer potential for significant market penetration. The projected annual recurring revenue of $5.5 million and a sizable waitlist suggest strong interest in the platform. Conversely, the bearish outlook highlights financial challenges, early market risks, and a high valuation relative to revenue, which may limit upside potential.

Kingscrowd Capital, after an in-depth analysis of Health Care Originals, has decided to invest $10,000 into the company’s current Wefunder round. There are multiple reasons we are excited to invest in Health Care Originals at this valuation. 

Firstly, Health Care Originals (HCO) presents a compelling investment opportunity with impressive financial growth projections and a clear path to profitability. With revenues anticipated to grow from $300K by the end of 2024 to $5.6M by the end of 2025, and profitability expected at $34.5M by the end of 2026, the company is poised for rapid expansion. Beyond its financial trajectory, HCO boasts a strong intellectual property portfolio, holding 14 patents with 10 more pending, underscoring its commitment to innovation in the health technology space.

Secondly, the company's wearable device is backed by three rigorous studies conducted at the University of Rochester, which demonstrated its ability to predict healthcare utilization up to three months in advance. This predictive capability enables proactive and preemptive care strategies, significantly reducing emergency visits and hospitalizations. The company has also received independent validation from the Validation Institute that its platform improves outcomes for people with asthma and COPD, and is clinically efficacious. The Institute has been in existence for more than 10 years, and has never had a validation challenged. Importantly, the Institute offers a $100,000 credibility guarantee to HCO’s customers, which speaks volumes about their confidence in the HCO solution. HCO’s is the first wearable to be validated by the Institute, and the first respiratory-focused solution to be validated by the Institute.

HCO's current focus is on selling into markets that do not require FDA approval, such as clinical trials and chronic care management, where patients collaborate directly with providers. However, the company is planning to seek FDA clearance soon to expand its use case and marketing allowance. Once cleared, patients will be able to use the product independently, unlocking new market potential and further cementing HCO’s position as a leader in predictive healthcare technology.

Lastly, we are encouraged by HCO’s venture backing, with this round being led by Safar Partners, who is investing $1M. Also participating are  Cranberry Capital, Simon School Venture Fund, and the Allyn Family Capital Fund, headed by Eric Allyn, Former Chairman of WelchAllyn, the ubiquitous medical device company who also sits on the board of directors of HCO. At its current valuation, we believe this is a great entry point for KC Capital, and we are excited to join Health Care Originals on its journey to becoming a leader in respiratory care.