Investment Overview

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US Capital Investment Management

USCIM Fund XXIV DermSpectra, LLC


US Capital Investment Management

INVESTMENT OPPORTUNITY


US Capital Global Securities (“USCGS”) is offering 200 Membership Units in USCIM Fund XXIV DermSpectra, LLC (“Fund XXIV”, the “Issuer”), a pooled investment vehicle, on a “best efforts” basis. The Fund XXIV will be managed by San Francisco-based asset management firm US Capital Investment Management, LLC (“USCIM” or the “Manager”), investing in Series A Convertible Preferred Stock of DSI Acquisition, Inc. (“DSI”), doing business as Digital Skin Imaging and DermSpectra (the “Company”,). The Fund XXIV will have 25.0% ownership of DSI based on a fully-diluted pre-money valuation of $30,000,000¹. The preferred stock will pay a 8% cumulative annual dividend payable if and when declared by the Board of Directors. DSI will use the new financing for commercial units’ production, hire of key figures, sales and marketing, and scale operations.


1. Based on precedent transactions, industry multiples and company prepared financial projections.


Overview


DSI is a medical device company that develops and manufactures a patented imaging device designed to enable physicians to detect, track and monitor critical skin changes and strives to ensure the best healthcare outcomes for patients. Between 2015 and 2016, the company completed a beta testing program, with four units been installed and subsequently converted into commercial ones. The Company is now seeking capital to build the first twenty production commercial units and scale operations. The Company received a grant from the Science Foundation of Arizona to develop the original prototype, is a recent recipient of FY16 Army Advanced Medical Technology grant, and has raised $4M to date. DSI is based in Portsmouth, NH.


Target Market


Skin cancer is the most common cancer in the United States¹. Current estimates are that one in five Americans will develop skin cancer in their lifetime². The estimated 5-year survival rate in the US for patients whose melanoma metastasizes to distant organs (advanced stage) is 17%; the survival rate increases to 98% when the melanoma is detected early³.

The key target market for DSI’s technology is represented by dermatology, physicians‘ offices, and university systems, including but not limited to: primary care and general practitioner groups, high volume dermatology &skin health offices, hospital dermatology departments, research institutes, pharmaceuticals and teaching hospitals for clinical studies, and cosmetic surgery centers.


1. Source: Cancer Facts and Figures 2016, American Cancer Society.
2. Source: Skin Cancer Facts & Statistics, Skin Cancer Foundation.
3. Source: Skin Cancer, American Academy of Dermatology.


Product Offering


DSI offers a patented automated standardized total body imaging system that enables physicians to detect, track, and monitor critical skin changes. The systems combines total body imaging, standardization of imaging and post processing, and automation. The system is FDA approved Class I medical device in imaging, and will begin to build databases of standardized skin imaging data over time.

The Total Body Digital Skin Imaging System has 3 components:


  1. an automated imaging station with 9 high-resolution cameras and optimized illumination. The system is completely automated and allows total body imaging acquisition in less than 10 minutes.
  2. HIPAA compliant and secure database/storage. Data are stored in centralized database, obfuscated to protect patient privacy.
  3. An authenticated viewing application that allows annotation of images. The proprietary viewing application authenticates against the database, and permits zooming, comparison and direct annotation to the image, which is saved to a PDF report and scanned to an EMR.

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Picture: DermSpectra Total Body Digital Skin Imaging System - Commercial Unit.


Growth Strategy and Revenue Model


DSI plans to penetrate the market initially offering its medical imaging system via purchase or minimal equipment usage fee with the generated profits being shared between the facilities housing the system and the company.  As more physicians, dermatologists, major medical centers, and other market customers adopt the technology, the Company plans to discontinue selling and to move towards a leasing revenue model. In addition to the leasing fees, the Company plans to earn a percentage of the scan and analysis fees paid by end consumers (business model tested during the beta phase). In addition, DSI plans to launch a consumer awareness campaign and partner with key distributors to have a greater access to business customers and patients.


Value Proposition


DSI’s medical imaging technology provides standardized high-resolution objective total body imaging, secure storage, and remote tablet viewing. It is estimated that the 5-year survival rate in the US increased from 17% to 98% when the melanoma is detected early¹. The Company, through its technology, plans to provide both professionals and end consumers with faster and cheaper² body imaging solutions, while increasing consumer awareness towards skin cancer. Moreover, the data storage feature of the technology is expected to be useful in collecting data to study and understand disease precursors appearing in the skin prior to a systemic diagnosis.


1. Source: Skin Cancer, American Academy of Dermatology
2. Compared to competitors current product and solution offering


FINANCIAL SNAPSHOT


Financial Projections are contingent upon a successful completion of the proposed $10,000,000 offering and execution by the management team.


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(a) DermSpectra, LLC historical financials. In June 2017, DSI Acquisition completed the purchase of DermSpectra, LLC assets.


COMPANY’S LEADERSHIP TEAM


Management


Karleen Seybold – Founder & Chief Executive Officer


Ms. Seybold brings over 20 years of engineering experience in complex product development, systems engineering and program management. Prior to founding the company., Ms. Seybold was a senior Program Manager at Raytheon Company. She led and managed international missile defense programs and new business initiatives with Israel, EU and NATO. Ms, Seybold holds five patents for image sequencing, alignment and a skin cancer display module. She received six Technology Achievement awards from Raytheon. Her work has been published in national and international trade publications. In 2014, the company was named as a top 10 finalist out of 154 companies in the Arizona Innovation Challenge. Karleen Seybold was awarded an Outstanding Female Entrepreneur award by Inside Tucson Business in March 2015. The company also won best manufacturing and use of technology awards, in 2015.


Linda A. Fanaras, Executive Vice President, Marketing and Strategic Alliances


Ms. Fanaras has over 25 years of expertise in strategic integrated marketing, branding strategies, communication and campaigns, and extensive expertise in health care, medical device technologies and imaging marketing services. Ms. Fanaras is President and Founder of Millennium Integrated Marketing. She is also a stakeholder and member of the Communications Team for Health Information Exchange Planning and Implementation project for the New Hampshire Department of Health and Human Services.  She holds positions with the Business and Industry Association’s Board of Directors and Executive and Governance Committees, and also holds a Board of Directors position on the American Association of Advertising Agencies’ New England Governor’s Council.



Board of Advisors


Michael Figueroa, Member of Board of Advisors


Mr. Figueroa is an entrepreneur and investor with over 40 years’ experience in finance, private lending, the legal field, asset protection strategies, mortgage lending (both private equity and institutional), construction, development and sales. Mr. Figueroa has also studied to obtain certain Securities Licenses and since 1983 has attended over 185 seminars regarding Tax Law, Foreclosures, Real Estate litigation, Private Placement / Securities Law, Bankruptcy, Entity Formation (Limited Liability, Corporations, Trusts), Estate Planning (Wills, Trusts), and Asset Protection Structures. In his philanthropic and community activities, Mr. Figueroa has served on the Naval Special Warfare Foundation (Navy S.E.A.L.S.) as Investment Committee Chairman and currently as Ambassador of the Navy S.E.A.L. Advisory Board. Mr. Figueroa is also a Board Member and Treasurer of the Goodwill Mission to China Foundation, Previous offices held have included serving on the Advisory Board of the Yangtze International University in Nanjing, China, Trustee to the Vatican Observatory Foundation.


Dr. Mitchell Kline, Member of Board of Advisors


Mitchell Kline is the principal Clinician and Board Certified Dermatologist at Kline Dermatology. He specializes in melanoma research, diagnosis and treatment as well as state-of-the-art aesthetic procedures. He is a Clinical Assistant Professor at the Weill Cornell Medical College of Weill New York. Dr. Kline’s clinic is an early adopter of DSI’s technology and future site of clinical studies.


Dr. Richard Carmona, M.D., M.P.H., FACS | 17th U.S. Surgeon General, Member of Board of Advisors


Mr. Carmona served as the 17th Surgeon General of the United States and is currently Vice Chairman of the Canyon Ranch Resort and Spa, President of the nonprofit Canyon Ranch Institute, and a professor at the Mel and Enid Zuckerman College of Public Health at the University of Arizona.


Sanjeev Javia, CEO/Founder at Javia Wellness Group, Member of Board of Advisors


Javia Wellness Group is a health and wellness firm that focuses on innovative research, formulation and design of nutritional, exercise, and wellness initiatives. The firm plays a significant role in not only the development of these initiatives but also the branding/marketing, messaging, and further business development aspects. Clients and/or Ownership include Youngevity Health Sciences, Steadman Hawkins Sports Medicine Clinic, Greenville Hospital System, Splash Beverage Group, SuperFlex LLC, SpeedFlex Training LLC and various Professional and Olympic Athletes and Teams.



SOURCES AND USES OF FUNDS


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CAPITALIZATION CHART


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INVESTMENT OPPORTUNITY


DSI Acquisition Inc. shall issue Series A Preferred Stock through a private placement to raise $10.0 million.


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SERIES A PREFERRED STOCK TERMS


The Series A Preferred Stock that the Issuer will invest the proceeds of the investment is expected to have the following terms:


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RISK FACTORS


You should be aware that an investment in Units of the Issuer, and the Issuer's investment in DSI Acquisition Inc. Securities, involves considerable risks, including the possible loss of all or a material portion of your investment. The abbreviated risks set forth below, as well as the detailed risk factors set forth in the Confidential Offering Memorandum and Supplement, are not the only risks facing investors.

DSI Acquisition Inc. is a medical imaging company. DSI develops and manufactures a patented imaging device designed to enable physicians to detect, track and monitor critical skin changes. 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 current operations are not profitable and there is no guarantee that the Company will achieve profitability.
  • The Company currently does not have a Chief Financial Officer in its management team.
  • Company’s growth plan is dependent upon adoption of Company’s technology by physicians, dermatologists, major medical centers, and other market customers.
  • The Company has a pricing model that has not been completely tested yet
  • Company’s business is dependent on its intellectual property.
  • Company relies on 3rd party for product supply and distribution which may impact the Company’s ability to execute on its product development plan.
  • Company will face intense competition that could adversely impact its market share and its revenues.
  • Competitors may be much larger than the Company, have better name and/or brand recognition than the Company, and have far greater financial and other resources.
  • The Company’s product will be subject to the changing technology and failure to improve, introduce, or otherwise perform new technology will negatively impact market acceptance of its products and services.
  • Company will be dependent on the dermatology, healthcare, and medical research industries.
  • Company will be exposed to the regulatory environment.
  • If a public market for the Company’s shares of common stock and preferred stock does not develop, your stock will be illiquid and you may lose all or a portion of your investment.
  • There may be restrictions placed on the transfer of the preferred stock purchased in this Offering.
  • There may not be sufficient funds to make cash distributions to Company’s shareholders.

Investors must understand that by purchasing Units they are voluntarily assuming all of the risks of the investment, including any and all risks relating to the Company and Company Securities, whether disclosed in this Fund Summary, Offering Memorandum and Supplement or not.



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 an indirect stockholder and Co-Managing of an affiliate company of the Manager and USCGS. Jeffrey Sweeney is Co-Managing Partner of the Manager and an indirect controlling stockholder of the Manager and USCGS. Conflicts of interest may arise in connection with Mr. Towle’s and Mr. Sweeney’s indirect 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.



DISCLOSURES


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”). Offers 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 Fund 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 any projections in this presentation, and such variations may be material, including the possibility that an investor may lose some or all of its invested capital.

This presentation is confidential. By acceptance hereof, you agree that (i) the information must not be used, reproduced, or distributed to others without prior written consent; (ii) you will maintain the confidentiality of all information herein that is not already in the public domain; and (iii) you will use the information contained herein solely for preliminary informational purposes.

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Securities offered through US Capital Global Securities, LLC, member FINRA, SIPC.

IMPORTANT: All investing is risky, and no investor should decide to commit funds without first consulting with a competent professional adviser. Some or all invested funds can be lost. The past performance of any investment, investment strategy or investment style is not indicative of future performance. Future results may vary, and are not guaranteed. The value of investments and their income may increase or decrease, and a loss of principal – including all principal – may occur.

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