OVERVIEW
? Complete product development and establish channels of distribution, and
? Expand SKUs within the headphone market for both music and gaming
Activities to date
We incorporated in the state of
We accomplished the following:
1) We completed the molds for the Psyko™ PC model and are working on the molds
for the Psyko™ console unit, and the Psyko®5.1 Surround Sound Gaming Headsets (with built-in microphone) with external amplifier for Personal Computers.
2) We have an "Exclusive Distributor" Agreement with Axcel Electronics Thailand
Company Limited (Cableicons, Inc. ) to distribute and sell the "Ford Officially Licensed Cell Phone Accessories" in all wholesale and retail channels in theUSA andCanada .
3) We are also working with Vegas Golden Knight NHL team and have designed a
custom Krankz headphone for them. Products and Services
Products under development include the Psyko™ 5.1 surround sound gaming headphones for consoles and Krankz™ MAXX Bluetooth™ wireless headphones.
Strategy and Marketing Plan
Manufacturing is established, so we intend on utilizing existing consumer
electronics distributers, such as Synnex Corp. (SNX) and
Competition Psyko ™ Headphones
While our Psyko™ headphone offering differs from the competition in the method
of 5.1-surround sound delivery, we will face competition from manufacturers with
established channels of distribution, mature capital structures, and
significantly larger marketing budgets. Well established gaming headphone
manufacturers include Turtle Beach; a private company, Tritton - a subsidiary of
Mad Catz Interactive (MCZ), and
While other headphone manufacturers replicate 5.1 surround sound through Digital Signal Processing (DSP), the Psyko™ headphones use a patented method of sound delivery that doesn't require the use of DSP. Management believes that the difference in audio quality is a major differentiating factor between our product offering and what is currently available on the market.
21 Krankz™ Headphones
The driver design provides a deep bass sound with clear midrange audio for a
full-range for use up to 30' distance. These headsets work with most mobile
devices and have a retractable, foldable design with built-in microphone and
noise cancelling feature. We expect to face competition from lifestyle headphone
companies such as Beats by
We are also, working with Vegas Golden Knights NHL team and have designed a custom Krankz Headphone for them. This is part of the sponsorship agreement we entered into during 2018 and renewed in 2019.
Management however acknowledges that while it cannot find any commercially available products that our patents may never be awarded and that we could face competition from any number of existing video game accessory manufacturers.
Distributor Agreement
We have an "Exclusive Distributor" Agreement with
Sources and Availability of Suppliers and Supplies
Currently we have access to an adequate supply of products, from various manufacturers. These companies and their products are new, not well established, and are a subject to significant risk and uncertainty.
Dependence on One or a few Major Customers
We do not anticipate dependence on one or a few major customers into the foreseeable future.
Patents, Trademarks, Licenses, Franchise Restrictions and Contractual Obligations and Concessions
We executed a license agreement with Psyko Audio Labs Canada to manufacture and distribute the Carbon and Krypton line of patented headphones. US Patent # 8,000,486 (for the Psyko Krypton™ surround sound gaming headphones.) With regard to intellectual property rights associated with Psyko® Headphones, we have a license to use this mark as well as the patented technology.
We entered into a license agreement with
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DXT applied to the
In regard to intellectual property rights associated with Krankz™ Bluetooth®
wireless headphones, we do not have a federally registered trademark as to the
word marks Krankz or Krankz Maxx. Therefore, we do not have the same presumptive
rights which might otherwise apply had we obtained a federally registered
trademark. We have an "Exclusive Distributor" Agreement with
Sponsorship Agreement
On
COVID-19
Since the outset of the pandemic the US and worldwide national securities
markets have undergone unprecedented stress due to the uncertainties of the
pandemic and the resulting reactions and outcomes of government, business and
the general population. Closures and disruptions to business in the
Subsidiaries
We do not have any subsidiaries.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
COMPARISON OF THREE MONTHS RESULTS FOR THE QUARTERS ENDED
Revenues and Gross Profit
For the three months ended
Operating Expenses
Operating expenses were
Other Income and Expenses
During the course of our business, we experienced a gain from foreign currency
transactions of
Interest expense associated with obligations to related parties was
Interest expense and financing expense associated with non-related party
obligations was
Liquidity and Capital Resources
Other than what is described in this Report, the Company had no material
commitments for capital expenditures at
On
Unless the Royalty Agreement is modified by Psyko Audio Labs Canada and the
Company, at
The Company entered into the office lease extension agreement with the landlord
in
Cash Flow Information
On
The Company had cash and cash equivalents of approximately
Cash used in Operating Activities
The Company used approximately
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Cash used in Investing Activities
The Company used
Cash Provided by Financing Activities
Financing activities in the three months ended
The Company's principal sources and uses of funds are investments from accredited investors. The Company would need to raise additional capital in order to meet its business plan. Management intends to secure additional funds using borrowing or the further sale of Regulation D, Section 506 securities to accredited investors in the future.
The Company anticipates that its future liquidity requirements will arise from the need to fund its growth, pay its current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from private sources and/or debt financing.
Going Concern Consideration
Management included an explanatory paragraph in their footnotes on the accompanying financial statements expressing concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure.
As of
We have negative working capital and have not yet received significant revenues from sales of products. Due to the coronavirus pandemic, the Company has adversely affected our business, which the demand for our products has decreased. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Since the outset of the pandemic the US and worldwide national securities markets have undergone unprecedented stress due to the uncertainties of the pandemic and the resulting reactions and outcomes of government, business and the general population. The demand for our products has decreased and the ability of our customers to make payment for the products they currently purchase has been negatively impacted. It is unclear how a prolonged outbreak with travel, commercial and other similar restrictions, may adversely affect our business operations and the business operations of our customers and suppliers. However, we anticipate a prolonged period will have a negative effect on our business operations.
Our ability to continue as a going concern is dependent on our generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management's plans include increasing revenue, selling our equity securities and/or obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Forward-Looking Statements
Many statements made in this report are forward-looking statements that are not based on historical facts. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements made in this report relate only to events as of the date on which the statements are made.
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