Click on "Follow for updates" to receive notifications about updates.

• VoyageLA magazine interviews Alelo CEO Lewis Johnson
• Alelo CEO Lewis Johnson speaks at Stanford on cloud-based cognitive services for learning.
• Enskill usage is expanding into 25 countries! Click here for more information.
• Alelo is now accepting investments through self-directed individual retirement accounts. Click here for more information.

Alelo's management believes the company's immersive learning products for interpersonal communication—languages and cultures, sales, customer service, leadership, employment interviews—may provide a disruptive solution that overcomes what it perceives as higher costs of instructor-based methods and limited effectiveness of competing e-learning methods. Alelo's cloud-based Enskill platform exploits advances in artificial intelligence, learning science, and virtual reality, and has already been adopted in over ten countries. Alelo plans to rapidly expand the adoption of Enskill and make it the platform of choice for learning interpersonal skills.

The world of work is changing. Automation and artificial intelligence have made many traditional jobs obsolete. Some people continually must develop new skills, and do it quickly!

Alelo management believes conventional education simply isn’t up to the challenge. Students sitting in large classes may not get sufficient opportunity to practice new skills. One-on-one coaching may work well but is often unaffordable. Conventional e-learning may offer few opportunities to practice, and consequently learners acquire few usable skill sets. And without further opportunities to practice skills start to decay.

Alelo developed the Enskill platform so people may learn new skills online through coached role-play with artificially intelligent, interactive characters. The platform is designed to provide the benefits of one-on-one coaching and live role-play, whenever and wherever learners need it. Accordingly, learners are able to practice realistic and challenging situations without fear of failure or embarrassment. Enskill has been designed to help learners develop usable skills quickly and maintain them over time.

Enskill builds on Alelo's experience in creating role-play simulations. As reported in a study by the Marine Corps Center for Lessons Learned, the first Marine battalion to return from Iraq without any combat fatalities learned Arabic in an Alelo game. The local people recognized that these Marines had more appreciation of their culture than any group of Marines that they had ever encountered before. It gave them that added measure of self-confidence—they knew they could do it because they had already done it in a simulation. Note that Ambassador L. Paul Bremer III, who served in Iraq, is a member of Alelo's Board of Advisors.

Management believes Enskill enables Alelo to pivot toward new opportunities and expand globally.

Enskill is designed to be a cloud-based virtual role-play learning platform. As the learners role-play scenarios the system assesses learner skills and recommends personalized instruction. The system captures and logs learner inputs, which are used to retrain the AI models and improve learner feedback. Enskill comprises three components:

• The Enskill Digital Learning Environment, an HTML5-based player that is designed to deliver virtual role-play content on a variety of devices,
• The Enskill SimServer, a cloud-based server incorporating artificial intelligence and speech and language technologies, and
• The Enskill Builder, a machine-learning-based tool designed to enable organizations to create content and deliver it on the Enskill platform.

As learners interact with Enskill simulations, the system assesses the mastery of the skills necessary to perform specific tasks. Enskill then selects tailored practice exercises focusing on the skill gaps identified by the assessment. Learners can continue to practice until they demonstrate full mastery of the target skills. Later they can re-use the simulations to refresh and sharpen their skill sets.

Laureate International Universities, a for-profit higher-education network with affiliates on six continents, has made Enskill available for free to all affiliate institutions. Laureate headquarters pays Alelo a usage fee for every Laureate student who registers with Enskill. Students access Enskill’s cloud-based servers and practice spoken conversations with simulated native English speakers. Laureate plans to use Enskill in its online courses to achieve student-teacher ratios of up to 500 to 1!

Enskill has a recurring-revenue business model, consisting of monthly subscriptions and managed hosting of customer-created content. List price is $40 per registered user per month.

Alelo is currently marketing to higher education institutions, especially online programs. It is partnering with digital publishers and learning providers such as McGraw Hill Education (MHE) and Educational Testing Service to integrate Enskill into their learning products. A trial of an integrated MHE-Enskill product is currently underway in Colombia and Peru. When the Enskill Builder product is complete, organizations in a variety of industry verticals are expected to create their own role-play simulations and host them on the Enskill SimServer. We charge a fee per registered user, and as the community of Enskill developers grows Management expects the population growth of users will accelerate.

The Enskill SimServer runs in the cloud on servers in the USA, Latin America, Europe, and Southeast Asia. Learners may either access the Enskill SimServer directly or through a learning management system. The SimServer is designed to interoperate with a variety of digital learning tools using the LTI (Learning Tools Interoperability) standard.

Enskill intends to leverage cloud-based speech and language technology along with Alelo's proprietary algorithms for interpreting learner inputs, detecting learner errors, and evaluating learner performance. We plan to add a virtual reality (VR) interface, designed to populate virtual worlds with interactive role-players and increase the realism and instructional effectiveness of VR.

Enskill intends to build upon Alelo's patents using animated characters for simulated conversations [1], as well as what the Company considers a decade of experience in applying them in educational products.

[1] US Patent 7,778,948 and Australian Patent 2006252392, W. Lewis Johnson & Hannes Högni Vilhjálmsson, Mapping each of several communicative functions during contexts to multiple coordinated behaviors of a virtual character.

The global e-learning market was $165B in 2014 [1], and is projected to grow at a CAGR (compound annual growth rate) of 17.8% to 2020 [2]. We intend to initially target these segments:

• Digital language learning products, a $2.9B market in 2013 that was just 5% of the total market for language learning products and is likely to grow [3]. Globally, we believe the greatest demand is for English as more global companies adopt it as their transaction and business language.
• Soft-skills training, a segment that is projected to grow to $26B by 2020 [4].

Enskill Builder expects to enable Alelo's customers to create virtual role-play content in a variety of sectors such as medical education ($38B by 2024) [5], outsourced sales training ($2.2B) [6], customer service training, and hospitality.

Management believes Alelo is well positioned to take advantage of growth trends in artificial intelligence (AI) and virtual reality markets. The CAGR for AI in education is projected at 32% by 2020 [7]. The VR market will grow at a CAGR of 46.7% to $48.5B by 2025 [8].

[1] "Global E-Learning Market Outlook (2014-2022)", Stratistics MRC, Sept. 2015.

[2] "Global E-Learning Market (2016-2022)", Technavio Research & Markets, Jan. 2016.

[3] "The 2013-2018 Worldwide Digital English Language Learning Market", Ambient Insight, Aug. 2014.

[4] "Global Soft Skills Training Market: 2016-2020", Technavio, Nov. 2016.

[5] "Medical Education Market -- Global Industry Analysis, Size, Share, Trends and Forecast 2016 - 2024", Transparency Market Research, Aug. 2016.

[6] "How Big is the Training Market?", Doug Howard, trainingindustry.com.

[7] "Global Artificial Intelligence Market in the Educational Sector 2016-2020", Technavio, Aug. 2016.

[8] "Virtual Reality (VR) Market Analysis By Device, By Technology, By Component, By Application (Aerospace & Defense, Commercial, Consumer Electronics, Industrial, & Medical), By Region, And Segment Forecasts, 2014 - 2025", Grand View Research, May 2017.

Management believes Enskill may be the only learning product that supports the creation of interactive spoken dialogues. We believe language learning products such as Rosetta Stone incorporate speech recognition but in our opinion do not support the creation of unscripted dialogues. Spoken dialogue is rarely used in learning products outside of language learning.

In Alelo's opinion, Skillsoft and ZebraZapps simulations consist of sequences of static screens and multiple choice prompts. Captivate and Articulate may create interactive content, but not role-play simulations. We believe ChatMapper and Muzzy Lane may support only limited role-play simulations in which learners choose between scripted alternatives. SIMmersion, Kognito Interactive, and Kinection may offer role-play solutions but not tools for content creation.

• 2005: Alelo founded on technology developed at the University of Southern California and funded by DARPA (Defense Advanced Research Projects Agency).
• 2005-present: Alelo government training products developed for languages and cultures of over 90 countries, used by Department of Defense, Voice of America, NATO.
• September 2016: First learning product using Enskill delivered on Joint Knowledge Online, a major defense learning portal with 1.2M registered users.
• April 2017: First Enskill SimServer trial with Laureate Education students in Thailand and Chile. 
• September 2017: Twenty-five more Laureate Education institutions sign up. An integration with McGraw Hill Education's ELLevate product undergoes trials in Colombia and Perú.

• 2005: Alelo's first game-based English-learning course, Tactical Iraqi, received a Signficant Technology Achievement Award from DARPA (the Defense Advanced Research Projects Agency).
• 2016: Alelo was highlighted as a Success Story of the Air Force's Small Business Innovative Research program [1].
• 2017: Dr. Lewis Johnson and co-authors won the Influential Paper Award from IFAAMAS (the International Foundation for Autonomous Agents and Multi-Agent Systems) [2].

[1] "Alelo: An Air Force Small Business Innovative Research Success Story", https://www.youtube.com/watch?v=7fGq9TTBDRs&feature=youtu.be

[2] "Alelo CEO Lewis Johnson and NCSU Professor James Lester Receive Prestigious Award for Influential Paper on Pedagogical Agents", http://www.prweb.com/releases/2017/05/prweb14292744.htm

• Expansion of our sales and marketing team, to grow beyond early adopters and scale revenue.
• Achievement of our next projected development milestones including release of Enskill Builder v1.0.
• Offer additional simulations for workplace skills, for subscription and through publishers.

Management projects that Enskill-based revenue will be $4.4M in 2018, increase to $12M in 2019, and then continue to grow. It believes such revenue will help make Enskill the global platform of choice for immersive learning.

Through 2018 we expect to expand our inventory of role-play simulations. We intend to offer subscriptions to organizations and their learners, both directly and through our publisher channel partners (e.g., McGraw Hill Education). As Enskill Builder gains its expected traction, increased revenue should result from hosting services to customers using Enskill.

As Enskill-based revenue and gross margin increase we expect to have diminished reliance on the low-margin government services relationships.

If you have further questions, please send email to inquiries@alelo.com.

Insider investments are permitted in this Offering. However, this offering will only close if the minimum offering contingency is fully met with non-insider purchases. Upon the future investment of an insider, such information will be disclosed here. 

As of 9/26/2017, names of the insiders that have invested or are expected to invest:

W. Lewis Johnson, Chief Executive Officer

What is the maximum amount of investment that will be accepted from insiders?:

Any above listed individual may invest up to the maximum total investment amount sought in this offering unless otherwise disclosed. Additionally, any investment accepted from an insider will not count toward the offering's minimum contingency. The investment will only be reflected as a part of the total amount raised after the contingency has been reached. 

*Definitions:

Transactions for or on behalf of the issuer or broker-dealer, their affiliates or associated persons (including control persons, officers, employees, and immediate family members thereof), or any entities through nominee accounts require disclosure. 

• “affiliate” means a person that directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with, the issuer.
• “officer” means an issuer's president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller), any vice-president of the issuer in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the issuer. Officers of the issuer's parent(s) or subsidiaries shall be deemed officers of the issuer if they perform such policy-making functions for the issuer. In addition, when the issuer is a limited partnership, officers or employees of the general partner(s) who perform policy-making functions for the limited partnership are deemed officers of the limited partnership. When the issuer is a trust, officers or employees of the trustee(s) who perform policy-making functions for the trust are deemed officers of the trust.
• “immediate family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.
• “control person” person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the issuer or broker/dealer
• “control” is the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise

** This offering will only close if the minimum offering contingency is fully met with non-insider purchases.

Pursuant to written agreements, previously outstanding Convertible Notes issued by the Company may be converted into FlashSeed Preferred Stock in this financing.

** This offering will only close if the minimum offering contingency is fully met excluding Convertible Note conversions.