Pure-Light Technologies
Pure-Light has invented a new type of LED Bulb--Makes all other bulbs Obsolete!
Overview
Raised: $279,757
Rolling Commitments ($USD)
01/30/2021
$3,291
395
2015
Energy, Power, & Natural Resources
Hardwaretech
B2B
Medium
High
Summary Profit and Loss Statement
Most Recent Year | Prior Year | |
---|---|---|
Revenue |
$125,511 |
$921,055 |
COGS |
$4,220 |
$234,342 |
Tax |
$0 |
$0 |
| ||
| ||
Net Income |
$4,211 |
$-166,107 |
Summary Balance Sheet
Most Recent Year | Prior Year | |
---|---|---|
Cash |
$5,922 |
$12,622 |
Accounts Receivable |
$0 |
$0 |
Total Assets |
$92,588 |
$99,475 |
Short-Term Debt |
$60,316 |
$198,434 |
Long-Term Debt |
$0 |
$14,230 |
Total Liabilities |
$60,316 |
$212,664 |
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Edge
Synopsis
Pure-Light Technologies is the maker of a new type of LED light bulb coated with a titanium dioxide film to supposedly reduce odors and kill bacteria in rooms where the light bulbs are left on. However, there is significant doubt as to whether Pure-Light’s bulbs actually live up to the company’s bold claims. Pure-Light offers virtually no scientific evidence to support these claims on its raise page. While the company does offer a list of supportive studies on a page on its website, the bulk of the research relies on bacteria’s 24- or 72-hour exposure to the light bulb, which is unrealistic in everyday use.
Pure-Light Technologies’ current WeFunder raise has been rated an Underweight Deal by the KingsCrowd investment team.
Price
Pure-Light Technologies is raising a Crowd SAFE at a $30 million valuation. Early bird investors will receive a 10% discount at a $27.5 million valuation. This price is absurdly high — for two principal reasons. First, Pure-Light generated just $125,511 in revenue last year (revenue for 2020 has been somewhat higher, but not significantly). This valuation constitutes nearly a 240x revenue multiple, which is almost unheard of among typical early-stage investments. Second, Pure-Light claims to hold patent-pending technology on its products, which presumably drives the company’s high valuation. However, these patents have not been granted, and there is significant doubt as to whether the company’s “technology” is actually effective. Therefore, Pure-Light’s price rating is extremely low.
Market
Pure-Light is theoretically addressing two markets simultaneously: that of LED light bulbs and that of air purifiers. The global market for LED light bulbs is around $54 billion as of last year, with an aggressive CAGR of 13.4% expected over the next seven years. The price of LED bulbs is declining, and they are increasingly seen as a sustainable and environmentally-friendly lighting solution. The air purifier market is also growing rapidly, with a projected CAGR of 12.4% to expand a U.S.-only market of $1.75 billion in 2019. Consumers are increasingly concerned about pollution and desire clean air. Furthermore, panic over air-borne COVID-19 caused a spike in air purifier interest.
A crucial caveat, though — these market figures imply that Pure-Light’s technology is actually effective, which is our chief contention with this deal. Assuming that Pure-Light’s light bulbs are actually no different than other bulbs (besides being twice as expensive at $20 each), the market for Pure-Light bulbs is very small. Therefore, Pure-Light’s market rating is very low.
Team
Pure-Light Technologies was founded by Roger Young. Little is known about Young, though Pure-Light’s WeFunder page states that he is an author, lecturer, and entrepreneur. His LinkedIn page reports that he holds a Bachelor’s in Education from Southern Utah University, and Young states that he is the “founder, owner and still CEO of Total Solar Technologies, LLC.” He then states that he is “currently spending most of his time working in his new technology company, Pure-Light.” It is unclear how Total Solar Technologies is related to Pure-Light, if at all.
Pure-Light’s additional team members appear to be part-time consultants. However, these additional team members do contribute some additional expertise in marketing and customer relations. Overall, Pure-Light’s team score is moderate.
Differentiators
Theoretically, Pure-Light’s primary LED light bulb project is relatively well-differentiated among the universe of LED light bulbs. While consumers likely view light bulbs as a commodity, Pure-Light bulbs offer a unique benefit by combining lighting with air purification. These bulbs purportedly kill bacteria, help to manage odors, and reduce the smell of smoke in homes and businesses.
However, once again, there is little trustworthy evidence that Pure-Light bulbs actually fulfill these benefits. The studies that Pure-Light promotes as proof rely on leaving the light bulbs on for 24-72 hours, which is unrealistic for a typical light bulb in a home or business. Note, too, that these studies are not linked on Pure-Light’s raise page and require additional digging on the Pure-Light site. The company does not provide any scientific proof for its product claims on its actual WeFunder page. Therefore, Pure-Light’s differentiators are dubious at best. The company appears to sell unusually-expensive LED light bulbs, and thus Pure-Light’s differentiation score is very low.
Performance
Financial performance is one of Pure-Light’s only areas of reasonable success. The company generated just over $125,500 in revenue in 2019 and has already generated almost $230,000 in revenue for January through August of 2020. Moreover, Pure-Light was profitable in 2019 and is on the path toward profitability again this year. The company’s net income was roughly $4,200 in 2019 and is at $43,478 through the first eight months of 2020.
Note, however, Pure-Light’s last two years of revenue are significantly less than the company’s revenue in 2018. That year, Pure-Light generated over $921,000 in revenue. The company’s overall claim that it has generated over $1.2 million in lifetime revenue is accurate, per financial records, but somewhat misleading as the vast majority of that revenue came from 2018, with much weaker performance for the last two years. Pure-Light does not explain this dramatic revenue decline on its raise page.
All in all, Pure-Light’s performance raises some questions but is reasonably solid for an early-stage company (particularly given its profitability). Therefore, Pure-Light’s performance score is its highest, while being middle-of-the-road compared to other deals.
Bearish Outlook
Put simply, Pure-Light does not appear to be an attractive investment opportunity. The company has extremely audacious claims about the efficacy of its products, implying and even stating directly that its light bulbs could be life-saving due to their bacteria-killing properties. There is no convincing proof of these claims.
Moreover, little is known about Pure-Light’s team, namely its founder and CEO. The company has faltered from almost $1 million in annual revenue to just $125,000 last year, with no explanation. Prospective investors should be wary of the limited potential upside of an investment in Pure-Light.
Bullish Outlook
Pure-Light is unlikely to grow to a scaled and successful business unless it can truly prove its products’ efficacy. Even in that case, prospective investors should be wary of the company’s unproven claims to date.
Executive Summary
Pure-Light claims that its LED light bulbs kill odors and bacteria, using titanium dioxide to combine lighting with air purification. However, these claims appear to be unfounded. Pure-Light once generated almost $1 million in revenue per year (which is somewhat remarkable) but posted just $125,500 in revenue last year. The company is not particularly transparent about scientific evidence or performance explanations on its raise page. Therefore, Pure-Light has been rated an Underweight Deal.
For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.
Analysis written by Katy Dolan.