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|
 Venture Capital
-
Health & Wellness
About: Capsalus Corp.
(WELL-OTC: BB)
2675 Paces Ferry Road, Suite 100,
Atlanta, GA 30339
Phone: 888-400-7179
Company
Profile:
http://www.capsalus.com
Capsalus Corp., based in
Atlanta, is a public holding company that partners with and acquires
visionary enterprises producing progressive, broad-based solutions in the
health and wellness space for better physical, nutritional and emotional
health worldwide. Capsalus, which derives its name from “Salus,” the Roman
goddess of health and prosperity, provides companies in varying stages of
development with the operating infrastructure, strategic pathways and
financial support to get them to the mass market quickly and efficiently.
Its current portfolio includes companies across the consumer products, media
and technology, biotechnology and healthcare industry spectrum, including
Wish Upon a Hero, an online community pioneering a new model of philanthropy
by connecting people in need with people who can help; White Hat Brands, an
emerging player in the branded functional food and beverage market; and
PanTheryx, creating and selling biologics, pharmaceuticals and medical
products to the expanding number of healthcare professionals worldwide.
 Kevin
P. Quirk – Chief Executive Officer
Kevin P. Quirk assumes this
position with more than two decades of consumer products operating
experience spanning general management and senior marketing roles in Fortune
500 corporations and start-up ventures. As CEO he is responsible for
determining Capsalus’ strategic direction and managing performance against
overall business objectives in keeping with the company’s mission.
Quirk is the founder of
White Hat Brands LLC, a functional beverage manufacturer focused on
children’s health and wellness issues, which he sold to Capsalus earlier
this year after raising multiple rounds of financing and stewarding the
business to a successful exit. Before White Hat, he held a variety of
senior-level marketing positions for The Coca-Cola Company, initially hired
into the Coca-Cola Accelerated Program, the company’s coveted management
training program, from which he was charged with running the New England
market. He also served as director of marketing for Minute Maid brands prior
to his departure. In addition, Quirk spent nearly a decade at
Anheuser-Busch, working in brand management, field sales and marketing,
wholesaler development and strategic planning, most notably as market
development manager of the Wisconsin territory, and as founder of the
company’s business development group, providing internal management
consulting to a network of more than 800 distributors. Quirk earned a BS in
marketing and a BA in communications from Saint Louis University, and a
letter of MBA equivalence from Harvard Business School.
Interview
conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published –
January 21, 2011
CEOCFO: Mr. Quirk,
what is your vision for Capsalus as the new CEO?
Mr.
Quirk: It
is really quite simple: bring resources to early-stage, innovative
enterprises that otherwise do not have them. We’ll
provide companies in varying
stages of development with the operating infrastructure, strategic pathways
and financial support to get them to the mass market quickly and
efficiently.
In our team’s collective
experience, we have seen too many companies with great ideas never make it
to market or never hit the level of critical mass to be successful. This is
typically due to three things: a lack of capital funding, lack of strategic
vision or lack of execution. We have expertise in all three of these areas.
Therefore, our goal is to find these companies, strike a deal and then help
them succeed to where we can move them into the middle market and beyond.
CEOCFO:
How do you find companies and what is your criteria for deciding who fits
with your business model?
Mr.
Quirk: To
date we’ve been fortunate to find well-suited companies through trusted
partners. We seek companies that are “gazelle enterprises” -- companies
that have the ability to grow fast, that are focused on the health, wellness
and goodness sector and have something unique to offer. These are not “me
too” companies that are going to require a gazillion dollars to gain the
traction necessary to succeed; rather, they require less capital because
they have developed such innovative products and services that – with our
help – we expect them to catch fire to where bigger financial partners will
come in and back-stop us.
CEOCFO:
Do you find it hard to convince the owner/creator/founders that they are not
the right one to take the company to the next level?
Mr.
Quirk:
That is a great question. The answer to that is both yes and no. As fellow
operators, we are not going to go and beat you up and tell you all of the
terrible things you are doing wrong. My management style has always been
about business discipline and performance management. Once you start asking
the right questions, these entrepreneurs realize you know what they don’t,
and we are here to help them. They also understand that with our help they
have a much better shot at being successful. That’s not to say we don’t get
push-back -- it’s not easy telling somebody their baby isn’t perfect, but we
work through it. Part of our criteria in evaluating prospects is that, if
you are not willing to listen, participate and be open, then you are not the
right fit for us.
CEOCFO:
Would you tell us about the companies that are currently in your portfolio?
Mr.
Quirk: At
the moment, our portfolio consists of three different companies, and we have
a letter of intent out on a fourth one. First, there is White Hat Brands, a
functional beverage venture focused on children’s health and wellness
issues. White Hat markets an all-natural juice product formulated and
branded for the eight to twelve market. The insight here was a company that
had a solid product formulation and an excellent brand, laser-focused on a
specific demographic, as well as a national partnership with the Juvenile
Diabetes Research Foundation. With the increasing prevalence of childhood
obesity, diabetes, and heart conditions among children, White Hat carved out
a nice position for their brand. The team did a great job building
distribution through large format grocery chains in the northeast, and they
have other products on the way.
Another company of which we
own a small percentage is called PanTheryx. They develop and distribute
advanced healthcare products, including pharmaceuticals, biologics and
medical products. Specifically, they have an orally administered biologic
therapeutic for treatment of pediatric diarrhea, a massive problem in
under-developed countries. They have made great inroads into India and are
aggressively pursuing other markets around the world where there is
overwhelming demand for this sort of innovation.
The third one in which we
are involved is a multimedia company called Wish Upon a Hero. We are very
excited about this one. We took a significant stake in the company a couple
of months ago. “Wish” is a social helping network and website -- it’s been
dubbed the “Facebook of Philanthropy.” Simply put, it represents a new model
of philanthropy and a kind of peer-to-peer charity with both for-profit and
not-for-profit components. As an online destination, WishUponAHero.com has
garnered a community of 150,000 members. On one side, there are the
“wishers” – people in need who log on and post their personal wishes. Then
on the other side, there are the “heroes” – those who log on and respond to
those in need. Wishes range from more straightforward matters, say someone
needing help buying their children’s back-to-school clothes, to more serious
issues like someone seeking funds for life-threatening surgeries. In one
unprecedented case, a kidney was actually matched to someone in need. More
than 69,000 wishes have been granted since the site was launched a few years
ago. And, it’s all done through social networking and communication. The
program has been receiving a lot of buzz -- in fact, ABC’s Charles Gibson
named the founder, Dave Girgenti, Person of the Week on his nightly news
program. We’ve even seen interest from celebrities like Leann Rimes and
Taylor Swift who have expressed their support for the charity.
CEOCFO:
What is your involvement with the Wish Upon a Hero company and how do they
make money?
Mr.
Quirk: We
have a significant ownership stake in the company, but we are minority
stakeholders. In other words, we’re able to influence the strategic
direction of the business, we steward planning and performance management,
and we get involved in execution where our expertise is needed. But Dave and
his team have done such a great job thus far that our primary task is to
stay out of their way to let them drive the growth of the business. They’ve
built an active online community that’s generated 150,000 members and
counting, granting more than 69,000 wishes since the site’s inception in
under four years. And, the site’s traffic trends are through the roof.
Revenues are generated
through user donations, advertising, affiliate marketing and merchandising.
Of these four streams, a lot of attention is being paid to affiliate
marketing right now; the team is focused on streamlining the purchasing
process for users visiting the site to grant merchandise to people in need.
So, when a member wants to help someone with their holiday shopping, we need
to make it as simple as possible. Integration between the Wish domain and
leading retailers like Walmart.com needs to be tighter. Since the Wish Upon
a Hero Foundation was launched to enable corporations to grant
tax-deductible wishes, Wish already has working relationships with big-name
retailers donating merchandise of their own. By integrating with these
retailers, we see huge e-commerce opportunities in areas like appliances,
electronics, durables and consumables that have only just begun to take
shape. Another big opportunity is with the introduction of Charity Builder,
a new site feature that enables emerging non-profits to get off the ground
by allowing them to create and host a website and process credit card
donations, as well as promote themselves to the Wish community. From that
service, Wish collects a monthly or one-time annual fee as well as a
percentage of donations. Irrespective of new non-profits that have yet to
launch, there are more than 100,000 existing ones with limited capabilities
that Charity Builder will benefit, so the demand is there. Lastly, we are in
the process of shopping a reality program to network and cable TV. Initial
response has been as positive as we anticipated. We’re confident Wish will
soon evolve to become a cross-platform content provider which will have a
major impact on valuation.
CEOCFO:
For Wish Upon a Hero is there a filtering process to make sure that these
are really people in need?
Mr.
Quirk:
Yes, there is an automated filtering component embedded in the back-end of
the site, and we also have a monitoring team that does an excellent job of
qualifying questionable wishes. But these mechanisms are by no means
perfect. With the proceeds from our investment in Wish, the team is
allocating funds to enhance the filtering technology. We are also working on
improving the way in which the growing number of wishes are organized and
presented on the site to make it easier to navigate through such a vast body
of content. This is all part of the plan. This site is a living, breathing
asset, and the expectation has always been that it will need to evolve as
the business grows.
CEOCFO:
You have a nice mix of companies that you are working with as far as types
of products and services; are you looking to maintain a particular mix or is
it really opportunistic?
Mr.
Quirk: We
have a set of core criteria on which we judge a prospective investment and
we have a range of services we bring to the table as an investment company
with extensive operating expertise. When there is a good fit in that regard
and there is an attractive deal to be had, and as long as timing, financial
and bandwidth considerations make sense, then we may be opportunistic.
Having said that, we are focused solely on the health, wellness and goodness
sector.
CEOCFO:
What is the financial picture like for Capsalus today?
Mr.
Quirk:
Since closing the doors on a couple businesses last year and acquiring White
Hat Brands last April, we have gone to significant lengths to re-tool our
corporate vision, improve the financial performance of the company and build
a much more compelling business plan. We are working our way through legacy
debt and looking at ways to make our stock a much more appealing play. As we
tackle some of these tough issues and begin to execute on the new business
plan, I am extremely confident the street will respond positively to our
story as it unfolds. With White Hat, Wish and a couple other significant
deals coming down the pike, we have been able to raise funds through the
sale of stock and with a palatable level of additional debt. As we proceed
in building out new opportunities, we will raise capital to fund each one.
CEOCFO:
With regard to White Hat Brands, is there much competition for the target
age group?
Mr. Quirk: There really is no
competition laser-focused on the children ages eight to 12 – the “tween”
market. This was one of the key insights the company brought forward: that
if you are an eight- to 12-year old, it is very much about the brand and so
much of what is available on store shelves is “uncool.” Historically for
this age group the most innovative options have been either the juice
beverage in a pouch, like Capri-Sun, or the juice box -- both considered not
cool by tween standards, though admittedly very attractive in terms of
price. And, Mom wouldn’t buy soda regularly for the obvious reasons. Of
course, now there’s Gatorade, which meets the cool requirement but is not
ideal for children that age because of the high amount of sodium and
calories that come in those over-sized “single-serve” bottles. And, no kid
should be drinking Red Bull or Starbuck’s caffeinated drinks. So, White Hat
Brands enters the market with Dog On It! fortified juice beverages, cracks
the code in terms of what today’s tweens find cool – without being
objectionable to Mom – and delivers a healthier, all-natural juice beverage
fortified with vitamins, low in sugar and packaged in an 8-ounce
portion-controlled bottle. Mom’s happy with the nutritional panel and kids
love the brand and taste. A good example of a smart niche brand play with
solid execution. Our team identified a gap in the market and plugged it.
CEOCFO:
Do you do much investor outreach, and if so, how do you reach potential
investors?
Mr.
Quirk:
Coming on board as CEO, I’ve primarily focused on improving communications
with current investors. We’re about to distribute the first investor update
on my watch. This will be a regular communications vehicle I will use to
encourage a two-way dialogue and get our stakeholders excited about our
future. We just commissioned a research report on Capsalus we expect to be
completed sometime in the 1st Quarter, which will be a tool to
generate interest among prospective investors by giving some guidance on
metrics like revenue targets and stock price. It will go to fund managers,
market makers and penny stock investors, and they will receive quarterly
updates. Finally, we’ve begun outreach to the financial media to help spread
the word.
CEOCFO:
In closing, why should potential investors look at Capsalus?
Mr.
Quirk:
Number one, I think it is the space we are focused on: the $600 billion
health, wellness and goodness arena. This is a huge space with plenty of
room for countless players big and small, and which is only just beginning
to hit its stride in light of shifting preferences among increasingly health
conscious, beneficent consumers. We’re not without our issues – legacy debt,
historical stock performance – but we’re righting the ship, so keep an eye
on us. In the coming quarters we will demonstrate our ability to seek out
and secure investments in consumer products and services that are pragmatic,
that are unique and that have a huge opportunity for ‘hockey stick’ growth
-- the gazelle companies that I spoke of earlier. Our business development
pipeline is rich. We are about to sign a deal with a Hall of Fame
professional athlete who will be instrumental to our growth in terms of
attracting financial and strategic partners, generating awareness for our
brands and opening doors. We just put out a letter of intent to acquire an
emerging franchise called Guava Home and Healthcare, which we are looking to
close by the end of the quarter. The thing that my management team and I
have been good at and have done a nice job over the last decade is in
trend-spotting -- moving to where the hockey puck is going to be. We are
always looking ahead to determine what trends are materializing, the right
entry point and how we get in on the ground floor. Given the growth
projections for the space in which we’re playing, I’m confident we’re going
to make a lot of investors very happy.
disclaimers
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|
Print Version
Wish Upon a Hero, philanthropy, I need help with, social network for help,
White Hat Brands, food and beverage market, functional beverage, all-natural
juice, low sugar juice, juices for diabetics, food for diabetics, juvenal
diabetes, PanTheryx, treatment for pediatric diarrhea, provide capital
funding, gazelle enterprises, gazillion dollars, children’s health and
wellness,
Medical Tech Stock,
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