wellness center profile
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Wellness Center (WCUI) $0.40
Anti-Counterfeiting Technology Gaining Momentum Wellness Center (WCUI), is a Chicago-based incubator for companies combining the best in class technologies,
software, and devices with an emphasis on healthcare technology. The Company added Stealth Mark, an anti-
counterfeiting company to its portfolio in 2014.
Stealth Mark gained considerable momentum in 2016, landing two high-profile partnering agreements in the
motorsports industry (luxury goods & auto-parts), including protecting products from companies like American
Indy Car/Formula One in association with RevBranding.
Stealth Mark’s technologies enable manufacturers to thwart the emergence of counterfeit and non‐compliant
parts in the motorsports industry, as well as in dozens of other industries - including the medical industry using
near invisible microparticle technology. In addition to protecting Companies from losing sales to counterfeiters,
sub-par products can also endanger the lives the drivers (or patients), when cut-rate parts or pills fail.
Wall Street’s Oldest Newsletter Covering Internet and Technology Stocks
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Stealth Mark doesn’t make products, it makes sure products made by others (in any industry) are authentic.
BACKGROUND:
In 2016, ABC News reported that NIKE was among the most counterfeited goods in the World. In fact, you could
be wearing a fake pair of Nike’s right now– if you ventured out of the Official Nike store network.
The market for fake goods is on the rise, with international trade in counterfeited or pirated products valued at
almost a half a trillion dollars.
The Organization for Economic Cooperation and Development (OECD) released a report that said the
international trade of ‘fakes’ represented 2.5
percent of overall world trade, or $461 billion,
in 2013. Most of the fake goods appear to
originate from China.
Almost 20 percent of the total value of seized
fake products violate the intellectual property
rights of holders registered in the U.S., followed
by Italy at 14.6 percent, France at 12.1 percent,
Switzerland at 11.7 percent, Japan at 8.2
percent and Germany at 7.5 percent.
Rolex, Nike, Ray Ban and Louis Vuitton are
brands that "seem to be more intensely targeted by counterfeiters," according to the report. The results
corroborate a previous World Customs Organization report that identified Nike as the most frequently
counterfeited brand in 2013.
Consumer Reports' senior projects editor Tod Marks told ABC News. "You’re unlikely to get burned by
counterfeits if you stick with established stores, legitimate retailer websites, and authorized seller. Otherwise,
you could be playing with fire. Fakes are sold everywhere: At flea markets, on eBay, via marketplace merchants,
at independent deep-discount and no-name stores -- like some of those “electronics and luggage storefronts in
New York City, purse parties, salons, swap meets, 'copycat' websites that mimic those of well-known merchants,
and rogue Internet pharmacies."
Of course, there is a natural assumption that when you buy from a ‘nice looking’ site, that it’s authentic. No one
after-all would buy from a poorly built site. The problem is the impostor sites are making so much money, they
often have the best-looking sites. And being on eBay or Amazon adds little protection from counterfeiters.
And many think “what’s the big deal.” With some products, to the consumer, it isn’t a big deal. But if you look
closer, there have been reports of paint in tubes of Crest and volatile organic compounds (toxic) parts in
children’s toys, as well as fake Viagra and even fake antibiotics and heart medications.
The problem is frightening for Corporations who lose can lose hundreds of millions individually, as in Nike’s
case. A lot of companies are losing a lot of money - to add up to $460 billion. In addition luxury brands like Kate
Spade, can lose reputational status, as expensive bags may fall apart on a consumer who wasn’t even aware
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they are fake. Handbags/Wallets ranked as the number one seized product in the US with an MSRP of $700.2
million. So one can only imagine how large the market is for the ‘ones that got away.’ The losses are staggering.
And finally, with better counterfeiting methods, there is a greater challenge of
detection. Consumers can no longer take for granted obvious signs of imitation
such as poor stitching or bad zippers. Now, the quality of fake products has
improved so dramatically that criminals have been able to charge at prices closer
to the price of the genuine article. A serious, serious problem indeed.
Even the US Army isn’t safe from counterfeiting, In 2010, the U.S. military
unknowingly purchased 59,000 counterfeit Chinese microchips that could have
been hacked and used to shut down the country's missile defense system. And
let's not forget fake cigarettes, of which China produces 400 billion a year, into a
market which buys 2.2 trillion cigarettes a year. They also contain 80 percent
more nicotine and 130 percent more carbon monoxide, no extra charge.
STEALTH MARK SOLUTION
In 2014, Wellness (WCUI) announced the closing of its asset acquisition of Stealth
Mark Holdings, Inc. (SMI). The assets of SMI were acquired by StealthCo, Inc., a
wholly-owned subsidiary of Wellness with a combination of stock and warrants.
Stealth Mark® is a global product authentication solutions provider, that offers the most advanced product
security technologies available today within the security and supply chain management vertical sectors. Stealth
Mark® provides customers true brand protection from counterfeiting and diversion while maintaining the
integrity of product authentication.
It’s a simple to use, easy to implement, and cost-effective turnkey system, that is extremely difficult to
compromise. Stealth Mark's intellectual property portfolio is inclusive of numerous
patents issued and pending in software, hardware, and manufacturing.
Stealth Mark has demonstrated its emerging market awareness through encryption
and state of the art software products that aim to put an end to counterfeiting and
diversion via encrypted microparticle technology, state-of-the-art printing
technologies, and a reader that can be used with iPhone and other smartphones.
The reader working in conjunction with the StealthFire™ Software authenticates the
Microparticle Mark and captures the unique ID, GPS validated location, and QR code.
This software suite equips users with critical information and the flexibility needed
when tracking products in real-time.
Stealth Mark® Intelligent Microparticles.
Unduplicatable and undetectable to the human eye, Stealth Mark® Intelligent
Microparticles provide absolute authentication.
IPHONE READER APP.
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Stealth Mark is the only Intelligent Microparticles available with virtually unlimited codes and supported by a
security management portal, code verification software that is portable, fast and accurate. Stealth Mark®
Intelligent Microparticles are innovative advancements of the original taggant technology as developed by 3M.
A taggant is a chemical or physical marker added to materials to allow various forms of testing. Physical taggants
can take many different forms but are typically microscopic in size, included at low levels, and simple to detect
with a device such as a smart-phone. They can be utilized to differentiate the authentic product from
counterfeits, provide identifying information for traceability purposes (e.g. lot number, company name),
determine mixing homogeneity and cross-contamination, and to detect dilution of proprietary products.
Common taggant anticounterfeiting applications.
• Tax Stamp authentication
• Banknote authentication
• Cigarette anticounterfeiting
• Alcohol anticounterfeiting
• Pharmaceutical anticounterfeiting
• Building materials
• Consumer products
And while taggants has become a common term in the industry, not all taggants are equal. Stealth Mark®
taggants are created with a proprietary material that creates a unique numeric code that is assigned meaning
by the customer and is machine readable without the use of rare earth or chemical tracers.
Stealth Mark® Intelligent Microparticles have been used successfully in both covert and overt operation with
easy to implement technology and do-it-yourself in-the-field forensic caliber verification.
The application is non-intrusive and complimentary to brand strategy. With trend setting affordability, Stealth
Mark® Intelligent Microparticles are supported by a security management portal, code verification software that
is portable, fast and accurate, with a Stealth Mark® App now available on iPhone.
While primarily used for Authentication, Anti-Counterfeiting and Diversion, Stealth Mark® Intelligent
Microparticles can also help protect a brand’s reputation, create a marketing advantage, and in many cases safe
guard the public. In combination with Stealth Mark® Anti-Counterfeit Digital Threat Awareness program, aka
ActiveDuty platform, it can empower a company with actionable business insight and then help create strategy
to protect their assets.
Stealth Mark® ActiveDuty.
While Stealth Mark® Intelligent Microparticles protect the physical goods, Stealth Mark® Active Duty scours the
Internet for suspicious activity when it’s impractical to examine physical goods (online sales). In plain English,
microparticles on products can be scanned at the port, in a warehouse or in a retail store. But they can’t be
scanned when purchased on the Internet and shipped to the consumers home.
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The ActiveDuty platform uses leading-edge digital sociology algorithmic technology, to provide actionable
intelligence that gives Companies more than just data. It gives any Company’s fraud detection team insight to
empower senior management to make effective decisions on how to direct anti-counterfeiting budgets.
ActiveDuty platform stands on-guard, around-the-clock (scouring auction sites, chat rooms, e-commerce sites
and more), providing a unique algorithmic platform for deriving at data-driven research, essentially comprised
of; advanced computational linguistics, deep data mining, heuristic learning, socio-psychological and network
science research model. It’s like have an army of fraud detectives listening and watching.
On top of Stealth Mark® Intelligent Microparticles and Stealth Mark® ActiveDuty, is a team of determined
Stealth Mark individuals dedicated to the restraint or elimination of illicit Counterfeiting activities, the accurate
identification of the sources of Product Diversion, and accurate authentication of items and products.
Once fraudulent activity has been detected, (counterfeit, diverted, lost or stolen item) is identified, the team can
alert the brand owner who can then properly activate their investigators, inform law enforcement, and even
reward consumers for assisting in the fight against counterfeiting.
RECENT EVENTS
April 2016. LUXURY BRANDS. The company announced that it partnered with RevBranding. Rev Branding has an
elite clientele in the motorsports industry including, but not limited to, American IndyCar / Formula One (F1)
standout driver Alexander Rossi, Manor Racing team, and the premier Circuit of the Americas racing venue
where Rev Branding provides exclusive, high-end, limited edition
collectible VIP gifts for F1 guests.
Through the partnership, Rev Branding will actively market Stealth
Mark’s cutting-edge authentication technology to its clientele via
specialized security labeling, that can be accurately and easily read in
the field using the Stealth Mark® Mobile App.
In addition, a full-service suite of complete authentication and diversion
resources and strategy for individual clients, tailored to meet their
unique security needs, will be offered.
The agreement provides the Company with the opportunity to move
into both the popular and expansive world of motorsport, and that of
celebrity authentication, protecting fans who purchase items drivers and team-related memorabilia. The
Company stated initial efforts with Rev Branding, would commence immediately, with the delivery of Stealth
Mark® particle-authenticated security labeling.
Gaining a high-profile client in the luxury memorabilia sector of auto-racing could lead to new accounts
throughout the luxury goods sector - which loses $100’s of millions each year to counterfeiters. Can Michael
Kors, Rolex, and Nike be far behind? Only time will tell.
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August 2016. AUTOMOTIVE-PARTS. The company it is working with SFI Foundation, Inc. (SFI), a non‐profit
organization established to issue and administer standards for the quality assurance of specialty performance
and racing equipment.
The SFI Foundation has served the automotive aftermarket and motorsports industry since 1978 with a system
of developing and administering various standards, certifications and testing criteria for use in motorsports. SFI
strives to equally serve the manufacturers, consumers, sanctioning bodies, racers and government agencies
through fairness, efficiency, and respect.
The agreement reached between SFI and Stealth Mark signifies significant advancement in SFI’s technology in
their certification process, ensuring compliance with SFI quality standards, and to thwart the emergence of
counterfeit parts and non‐compliant parts in the motorsports
industry.
Initial efforts to integrate into SFI’s existing processes are already
underway and production‐ level activities utilizing the complete
Stealth Mark™ technology suite, including its software, hardware, and
marking systems, are scheduled to commence immediately and
expand at various intervals over the coming year.
Jennifer Faye, Vice President of SFI. “Our decision to use Stealth
Mark’s labels is nothing less than our concern for the safety of racers
around the world. With this in mind, it is so very important that we do
everything possible to not allow non‐compliant parts on the track. We
recognize the importance of our role in the racing industry and the
team at Stealth Mark shares our passion and respect for motorsports which helps us do our job efficiently and to
our fullest potential. We are pleased to be working with them to upgrade and enhance our quality assurance
program!”
SFI has an international presence with approximately 250 member and affiliate sanctioning bodies and well
over 500 individual equipment manufacturers who participate in more than 110 specification programs.
Lee Anne Patterson, VP of Sales and Marketing for Stealth Mark noted. “Our technology is at its best when we
are protecting lives threatened by counterfeiters and cut‐rate parts. While drivers accept a certain amount of
risk every time they roll on track, we can all still do our part to keep them safe as they push limits of themselves
and their cars.”
Again, like with the luxury goods sector, Stealth Mark appears to be using a top-down approach to marketing.
If the most prestigious automotive industry certification firm in the world deems Stealth Mark to be the number
one authentication service out there, can the actual OEM manufacturers be far behind? Again, only time will tell
– but it’s an impressive start.
December 2016. TECHNOLOGY PRODUCTS. The Company announced it would be opening an office in Silicon
Valley, to deploy its advanced anti-counterfeiting technology to protect brands and consumers from fake
smartphone batteries, chargers, components, and more.
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Second, only to luxury goods, the technology industry is losing $100’s of millions, if not billions. China even has
fake Apple stores! It’s so bad, USA Today reported that Alibaba formed a coalition that will leverage the power
of big data to crack down on purveyors of fake goods.
Stealth Mark's push into Silicon Valley comes after Apple's announcement to file a lawsuit against Mobile Star, a
company making fake Apple chargers and cables and selling them on Amazon.com disguised as authentic goods.
Apple is warning consumers to stay
away from these fake products as
they are a risk to the public and
could cause fires, injury, and even
death, due to their poor
construction, inadequate insulation,
and inferior components.
As per Apple's statement in Wired's
article, "Consumers, relying on
Amazon.com's reputation, have no
reason to suspect the power
products they purchased from
Amazon.com are anything but
genuine.” Apple further stated, it
bought more than 100 products sold
on Amazon that carry the "Apple" branding. Apple says that nearly 90% of the products it purchased weren't
actually made by Apple and were instead counterfeit goods.
The Company has retained serial entrepreneur Michael D. Metcalf in the role of Executive Vice President of
Business Development to manage Stealth Mark's new office in Silicon Valley and pursue strategic partnerships
with top brand name companies. Mr. Metcalf is an accomplished executive and is listed in the top 100 in
Technology, Entrepreneurs, and Silicon Valley. He is a proven technology leader with multiple patents who
previously won 25 top industry awards by evangelizing new products. "Mr. Metcalf is tech savvy and has a great
reputation with other top executives. We feel honored to have him join the team to lead our business
development efforts," said Andrew Kandalepas, CEO & Chairman of WCUI, the parent company of Stealth Mark.
Metcalf stated. "The top tech companies in Silicon Valley are primary targets, and Stealth Mark's patented
microparticle technology is the best solution for major firms seeking brand protection. The biggest brands in the
world will be very excited once they see the 3D microparticles for themselves and learn how they can be used to
protect their intellectual property. Stealth Mark microparticles have the potential to be as common as bar
codes, yet impossible to duplicate making counterfeits extremely difficult. We intend to pursue the best OEM's
branded products at the microparticle level. Imagine if Apple, came knocking on Stealth Marks door.
January 2017. AUTOMOTIVE-PARTS. The Company announced it rolled out the first of SFI’s new label designs
for the 2017 racing season, all of which are marked with Stealth Mark™ Intelligent Microparticles or “Stealth
Marked” for future authentication.
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The new Stealth Marked labels will add assurance that the SFI labels are 100% authentic and will allow
verification by sanctioning bodies during event technical inspections to be handled quickly and with confidence.
This roll out of the first 135,000 labels of their new design, carrying the mark of authentication, is complete and
will continue to escalate throughout the year as the different label styles deployed by SFI come up for renewal.
The primary users of SFI standards, or specifications (specs), are equipment manufacturers whose products are
tested and self-certified to the appropriate procedures. SFI Specs are included as part of the rules of race
sanctioning organizations. Ultimately, the consumer benefits from the SFI program because it establishes
recognized levels of performance or quality for a given product which results in a safer racing environment.
Jennifer Faye, Vice President of SFI stated, “I’m excited to have the first Stealth Marked labels on the way to our
manufacturers as we start the 2017 race season. I am very pleased with the process and the result of these
initial labels, and look forward to continuing to work with the Stealth Mark team as we expand the program to
encompass the variety of labels that we use in certifying products.” As previously stated, “Our decision to use
Stealth Mark labels is nothing less than our concern for the safety of racers around the world and with this in
mind, it is so very important that we do everything possible to not allow non-compliant parts on the track. We
recognize the importance of our role in the racing industry and the team at Stealth Mark shares our passion and
respect for motorsports, helping us do our job efficiently and to our fullest potential. We are pleased to be
working with them to upgrade and enhance our quality assurance program!”
Lee Anne Patterson, VP of Sales and Marketing stated “The variety of labels that SFI uses to certify the wide
range of race car components and safety equipment makes this project particularly interesting. Finding the
correct adhesive and suspension solutions in which to apply our Intelligent Microparticles is a substantial portion
of the work we do with our clients. Every application is unique, whether we are marking cloth labels in the
manufacturing process or the rear wing of a race car. We are honored to work with SFI and to support the vital
work that the SFI team is doing to keep racers safe. Our technology is at its best when we are protecting lives
threatened by counterfeiters and cut-rate parts, and while drivers accept a certain amount of risk every time
they roll on track, we are proud to do our part to keep them safe as they push limits of themselves and their
cars.”
Echoing the sentiment, Michael Metcalf, EVP of Business Development stated, “When brand authenticity
becomes mission critical, Stealth Mark is the leading choice available providing absolute authentication.”
April 2017. MONEY LAUNDERING.
The Company announced that its Internet scouring ActiveDuty for covert applications (including money
laundering) has already begun, with initial deployment planned to begin in the next 30 to 45 days. Recent
government estimates show that money laundering in current US Dollars is $800 billion to $2 trillion. That’s 2%
to 5% of the global GDP. The scope of the work is being conducted in collaboration with prominent
organizations and is classified in nature.
“When we created our ActiveDuty system, it was designed knowing that the advancement of the internet has
made the selling of illicit goods online easy and very accessible. We knew we needed to build a powerful
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weapon to help defend against that threat,” explained Lee Anne Patterson, VP of Sales and Marketing for
Stealth Mark.
“Some of our initial ActiveDuty reports have provided us powerful insights demonstrating that the links between
counterfeiting, human trafficking, and money laundering are heavily entwined. The same tools that we
developed to fight the online battle of counterfeiting are providing a global understanding of the inter-
workings of criminals that move in these circles. The opportunity to support the efforts of organizations and
law enforcement to pursue criminals in this fashion is something that we are excited to be a part of and we
believe this work will be impactful on numerous battle lines,” Patterson added.
Sounds like a Government or potential Government contract in the works. Time will tell.
SUMMARY
Early in its monetization efforts, the Company is understandably tight-lipped about its pricing schedules so it is
impossible to estimate potential revenues, with even the slightest level of confidence. Nonetheless the
addressable markets are so enormous, that even if they were able to earn a fraction of a penny from each
application of a 3D microparticle, the numbers could be mind boggling.
With 80 million shares outstanding and a $0.40 current market price, the market capitalization is $36 million.
With no pricing guidance from management, it is challenging to gauge if the share price is undervalued, fair-
valued or even over-valued.
What we do know is having a technology that’s been vetted by SFI, a leading certification firm which would not
risk its reputation working with a product which didn’t ‘absolutely, positively’ work, we are excited about the
potential due to the depth of the counterfeiting problem. This isn’t a problem which would be nice to solve. This
is a problem any manufacturing executive will tell you (including Apple) must be solved.
As with any speculative investment, investors can sit on the sidelines until further transparency with regards to
client wins and/or revenues surface. Of course, the risk is if an investor is on the sidelines when significant news
is released, in all likelihood they will not be able to get invested at a price AFTER the news, anywhere near where
the stock would be trading BEFORE the news was released – which could result in a doubling in price, quickly as
news can spread instantaneously.
Imagine if Nike came knocking. Regardless of the size of a Nike contract, it would tell the world a solution to
counterfeiting has finally arrived. What we wonder, would that do the price of the stock?
INSTITUTIONAL ANALYST INC. NY - CHICAGO - BEVERLY HILLS - ROLAND RICK PERRY, EDITOR.
Roland@InstitutionalAnalyst.com
310-594-8062
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