ROI Appendix A

Capability Risk

Maximum care has been taken to establish that a market exists for Buzz Fit’s waiting room solution, however, what we are trying is to (1) create the market for the product by making physicians aware of the issue in their waiting rooms and the potential of resolving this and (2) selling the solution to the physician.

There are multiple elements to success, these include creation of a brand, design and delivery of content for Buzz Fit and design and delivery of apps and a device for delivery of our content. Risk exists in terms of the team’s capability to succeed in delivering a multi faceted first of a kind solution to the market on time and within the available budget.

Design Risk

Risks exist that the brand may not resonate with the target market, that the device and apps may not achieve the desired levels of performance for a premium brand and that the video content and/or marketing campaigns may not resonate with physicians or patients.

Development Risk

There is a risk that the device and apps may not be completed on time and on budget due to the complex technical development requirements. Our apps need to cater for the main platforms (stores) and be kept up to date for all security and performance updates. Similarly the device needs to be pre-programmed with all functional elements to be self updating and keep pace with modern consumer demands and changing technology. Finally there is a challenge in achieving the high performance levels of a premium brand from a device and the accompanying software while remaining within budget.

Economic Risk

Due to the design of this company particularly because we intend to win by taking many physicians on as investors, we are particularly prone to economic risk. A downturn in macro economic environment is likely to reduce the probability of investment, in particular in high risk ventures such as Buzz Fit, albeit the investment would be in the physician’s own industry in which they are very knowledgeable.

Economic Life Risk

While our solution should quickly become best in class once launched, the roll-out of 5g technology in the near future is likely to have implications for everyone in the tech sector. IoT or the Internet of Things is likely to significantly improve and the nature of healthcare may well change substantially.

Funding Risk

Achieving the appropriate level of funding is key to success, not only that but the timing of funding is important. The correct level of funding ensures that the leadership team can make decisions based on what is best for the product. Timing of funds can lead to decisions being made based on a particular outlook at a particular point in time, where the same decision would not be made if funding was in place (i.e MVP decisions, device specifications, 3rd party suppliers, freelance resources, etc)

Legislative and Policy Risk

Buzz Fit has a number of key risks based on legislative and policy decisions.

  1. As an offshore company Buzz Fit very much depends on our ability to establish a structure that is fully compliant with SEC rules to make a public offering.
  2. Buzz Fit will operate in the healthcare space in U.S. markets, this area is heavily regulated and in particular in relation to advertising or any content that may be relied upon in decision making.
  3. Buzz Fit also needs to navigate with great precision the marketing rules for the U.S. and for individual states for both our product and our investment offering to avoid delays, suspensions, fines or worse.
  4. Significant changes to policy across all three risks above have the ability to seriously disrupt our business, up to and including preventing us from operating in some or all areas.

Maintenance Risk

The model for this company is asset light, however, there is one major area of risk, that is our content. Content creation is an ever evolving game and the continued trend of improvement in devices and production methods could render content dated rapidly. For example a transition to 8k devices as a standard where we have rendered our videos in 4k or HD could lead to an expensive re-rendering effort. Similar the content itself could and will become dated and require retiring and reproduction.

Management Risk

While the core team is made up of highly competent individuals with a track record of delivery in their respective fields, this is a new and never before attempted venture and this presents risks in the form of unknowns. Furthermore, the requirement for management presence in the Cayman Islands presents its own challenges:

  1. Cost of living – wage premium
  2. Attracting the right talent
  3. Obtaining visas for individuals and partners or families
  4. Ability to adapt to Island life

Operations Risk

As a never attempted before model there are certain challenges to budgeting the exact cost to market for Buzz Fit. In particular finance, U.S. legal and Cayman legal are difficult to estimate. The freelance professional market is also an elastic market and so specific talents are subject to major fluctuations.

Elsewhere on an operational level, the procurement and retention of top talent in key areas as the company expands may be limited due to the company’s location, while there are already established jobs markets on Cayman for Legal, Finance and Fund Professionals, there is not yet an established market for roles relevant to Buzz Fit (actors, creatives, production specialists, I.T. specialists, project managers, script writers, copy writers and graphic designers. As the company’s needs increase the lack of an appropriate talent pool for these disciplines may prove disruptive.

Another element of the asset light nature of Buzz Fit is that many of our systems and processes include a reliance on a 3rd party providers. This inherently creates a risk of a catastrophic event for a 3rd party provider having a similar impact for our business. Risks include cessation of operations, suspension of services, denial of service, or data security breaches.

Procurement Risk

Our model includes the requirement for procurement of content for use in Buzz Fit’s waiting rooms, availability, brand compliance and fit and price may all be risks for the company before it moves to full-time in house content production.

Research Risk

Initial indications are that there is a market for Buzz Fit’s waiting room solution, however, due to budget limitations to date, this research is not as sophisticated or complete as management would like and for that reason a risk exists that the size of the market or willingness of the market participants to adopt the product may be overstated.

Similarly, while we believe that our lead database asset contains the email addresses for all of our target market, this was procured some time ago and as such is an aged asset. The ageing process in such an asset will have caused deterioration in quality, the extent of which is as of yet undetermined.

Technology Risk

Buzz Fit as a tech based solution believes that the product designed in technologically superior to current products in the market, however we note that our competitors (in particular Outcome Health) have significantly higher budgets for R&D and may be able to outpace us in the rate of progress.

Volume / Demand Risk

Assumptions that we can reach 5,000 waiting rooms in year 1 and 40,000 by year 3 are based on research into standard conversion rates for email marketing campaigns then discounted for factors that the business consider limiting. These are merely assumptions and so carry a high level of risk that actual volume or demand does not match.

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