Several Seeking Alpha contributors have posted their analyses of GlassesOff (OTCQB:GLSO) in the last few weeks, some more positive than others. We read with interest all of them. What became quite clear to us is that some of the writers lack in-depth clarity of the company, the science and the product. Obviously, such lack of knowledge does not always prevent certain contributors from telling the audience their insight with great confidence.
First, let me introduce myself. My name is Shai Novik, and I am the co-founder and Chairman of GlassesOff. I have an MBA degree from Cornell University, with distinction. I am also President of PROLOR Biotech, Inc., a biotech company that I co-founded in 2005. We raised our first $3.2 million financing for PROLOR in December 2005 at a pre-money valuation of $9 million. PROLOR initiated trading on NYSE-Amex in 2010. A few months ago, on August 29, 2013, we sold PROLOR to Opko Health (NASDAQ:OPK), for $560 million. We worked very hard to build PROLOR into a high-quality biotech company over the years and learned many lessons on how to create shareholder value. We are constantly attempting to implement what we've learned from PROLOR at GlassesOff as well.
In my opinion, GlassesOff is a unique company, which we believe has a truly disruptive technology platform that can potentially affect, via a series of products, hundreds of millions of people around the globe. In order to provide some insight into what GlassesOff is all about, perhaps we should start with few words on the science, and everything should become clearer thereafter.
The human vision system is affected by two main factors. The first is the quality of the image captured by the eyes and sent to the visual cortex area of the brain (our image processing unit). The second is the degree to which the visual cortex has an ability to interpret these images. Vision actually occurs in the brain and not in the eye, which acts as a photographic sensor. Until recently, scientists' understanding of the brain's visual cortex was limited, hence technologies and solutions to assist with vision problems were commonly restricted to optic correction (i.e. focusing on the quality of images captured by the eyes). This is accomplished by wearing eyeglasses or contact lenses or undergoing refractive surgery.
GlassesOff's first product is designed to help people who experience difficulties reading up close (usually over the age of 40). Estimates are that over 1 billion people worldwide experience difficulties when reading. How do they deal with their near vision reading challenges today? Most use reading glasses. How many of them would like to get rid of their dependency on reading glasses? While I do not have statistics to answer that question, I would surmise that the number is significant.
GlassesOff has developed an innovative product, based on years of scientific research and achievements in the field of neuroplasticity that can potentially help most people in the 40-60 year-old age group with near vision reading challenges, and possibly eliminate their dependency on magnifying devices, such as reading glasses. The GlassesOff product is based on neuroscientific breakthroughs that involve significant enhancement in the function of the image processing unit in our brain (the visual cortex), to such a degree that even blurred images coming from the eyes, which someone without reading glasses could not read, can be interpreted properly without the need for reading glasses after completion of the GlassesOff program.
The GlassesOff product has no impact on the eyes themselves. The eyes continue to send back to the brain blurry images. Interpretation of blurry images requires more processing time and resources by the brain compared to sharp images; however, the overall time that the brain has for interpretation is limited by the eyes' micro movements, sending new images for interpretation every few hundreds milliseconds. After completion of the GlassesOff program, users are expected to achieve an improved image processing function that should allow them to complete the interpretation of blurry input in this limited time.
How do we know it works? A formal study of the product's efficacy was conducted at one of the leading optometry schools in the world, at the University of California at Berkeley. The study's results were highly successful - after completion of the GlassesOff program, all study participants' vision sharpness allowed them to read standard newspaper font size without the use of reading glasses, measuring an average 80% improvement in their near vision function. In addition, the study results were published in Nature Scientific Reports - one of the world's premiere scientific publication outlets, in which each publication is reviewed by some of the world's top experts in the field. In addition, as one would imagine, we had more than one hundred beta-testers of the product prior to the formal launch, and we thank them for allowing us to see the impact the GlassesOff product has had on them.
Margie is one of our beta-testers who has been using the GlassesOff product for the past four months. Margie informed us that the product changed her life, as she can now read without using her reading glasses. Now, we understand that perhaps not everyone would be as excited as Margie about becoming independent of reading glasses, but we believe that most people would. Are we certain it will work on everyone? It probably will not, which is why we designed the product with a built-in evaluation module that provides the user with an estimate of whether the product can be of help or not and to what degree. For most people between the ages of 40-50, we would assume a 90%+ success rate in eliminating dependency on reading glasses. The foregoing is an estimate based on data we reviewed to date and assumes that persons using the product follow the program as designed. For more on the science of GlassesOff's technology, please click here.
Now let's move on to the business side. We were somewhat surprised to see analyses by some contributors on Seeking Alpha who wonder why people would want to pay for GlassesOff when they can, for the same price, buy several pair of reading glasses. In other words, these contributors believe that most people buy products solely based on price comparison to the expected utility. This is the same thing as asking why anyone would pay $50,000 for a new BMW when a new Hyundai of similar size, fuel consumption and safety is available at half that price? or, why do millions of people around the world who cannot see from afar go through an invasive eye surgery named LASIK, for which they pay thousands of dollars, only to free themselves from the burden of wearing eyeglasses? Why not buy a pair of eyeglasses for 10% of cost of the surgery and be happy?
GlassesOff competition is not reading glasses that you can purchase at your local drugstore. We believe that the people who would choose to use GlassesOff to become independent of reading glasses are people who care about their overall health, fitness, state of mind and appearance and invest time and money to be at their best. We believe that most people, regardless of whether they could purchase a single premium pair of reading glasses or ten simple pair for the same price, would prefer to get rid of their dependency on reading glasses.
As mentioned above, we have had beta testers using the app for the last few years, and some of them waited for the formal launch of the app to write their reviews. Regarding the product itself, much like most software products, upon launch of the first version there could be a number of technical problems that users may experience. With the app becoming the #1 ranked in the U.S. App Store's medical category very quickly, the product has shown robust stability and functionality to many who have started using it. We stand ready to respond to technical difficulties experienced by users of our product and to attempt to correct any issues in updates to the software.
Lastly, something that I think is critical for investors to know - the GlassesOff product designed for eliminating the need for reading glasses is just the first product that came to market out of a large and diverse pipeline of products that the company intends to develop and commercialize, and which stem out of the same technology platform.
Therefore, we expect that GlassesOff will diversify its offerings significantly over time. As an example, because the image processing unit in the brain is becoming more efficient as a result of using the GlassesOff app, reaction time to visual events in general becomes faster. Let your imagination run for a few minutes … possibilities include reading speed for kids, batting average for a teenage baseball player …. We believe that anyone using the GlassesOff product will get real value.
Disclosure: I am long GLSO.
Business relationship disclosure: Shai Novik is the Co-founder and Chairman of GlassesOff (OTCQB:GLSO)