Psi Bands
NO DEAL
EPISODE SUMMARY
🕓 Air Date: March 1, 2013
Asking For:
$250,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Psi Bands are stylish, FDA-cleared acupressure wristbands designed to relieve nausea in various situations, such as morning sickness, motion sickness, or chemotherapy-induced nausea.
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Background Story
Romy Taormina, the co-founder of Psi Health Solutions, experienced severe morning sickness during her pregnancies and found existing acupressure wrist bands unsatisfactory due to their limitations. Determined to create a better solution, she developed Psi Bands, which are both fashionable and functional.
Taormina’s personal experience with nausea inspired her to create a product that could provide relief for others facing similar challenges. The company, founded in 2007, has since grown nationally and internationally, reaching over 6,000 U.S. retail locations and achieving nearly $1 million in sales annually.
The Product
Psi Bands utilize acupressure technology to alleviate nausea by applying pressure to the Nei Guan acupressure point located on the wrist. Unlike traditional wrist bands, Psi Bands are waterproof, adjustable, and available in various colors.
The adjustable orb allows users to personalize the pressure for maximum comfort. They are suitable for individuals experiencing morning sickness, motion sickness, or chemotherapy-induced nausea.
Each band retails for $15 and offers a gross profit margin of 60%. The product has received FDA clearance as a medical device, supported by clinical studies demonstrating its effectiveness in relieving nausea.
How It Went
The company’s position before Shark Tank
Psi Health Solutions has demonstrated strong growth, with nearly $1 million in sales over the past 12 months. The company has established partnerships with over 6,000 U.S. retail locations and expanded internationally. Despite generating substantial revenue, the company faces challenges with profitability due to overhead costs and existing debt of $600,000, which includes deferred salaries for the founders.
With a gross profit margin of 60%, Psi Bands has proven to be a popular choice among consumers seeking relief from nausea. The company’s funding primarily comes from sales revenue, but they are seeking additional investment to fuel further growth and expansion.
The Negotiations:
Despite the strong sales and potential of Psi Bands, the negotiations on Shark Tank did not result in a deal. Romy Taormina sought $250,000 for 10% equity in the company but faced skepticism from the sharks regarding the company’s financials and valuation. Barbara Corcoran expressed concerns about the company’s debt and the founders’ decision to consider deferred salaries as part of the debt.
Mark Cuban questioned the product’s effectiveness and lack of ongoing research and development. Despite Kevin O’Leary’s offer of $250,000 for 40% equity, Taormina stood firm on her valuation, leading to a rejection of the offer. Ultimately, none of the sharks were willing to meet Taormina’s valuation, citing concerns about the company’s financial health and valuation. Taormina remained steadfast in her belief in the product and its potential to help those suffering from nausea, despite the sharks’ skepticism and rejection.
