CTM Business Plan

Business Plan

CLEARTUNEMONITORS.COM 1

Table of Content

About CTM 3
4
Industry Overview 6
16
Our products gallery 18

Business Proposal 27
44
New Markets 61
(Gamers, In-ear industry, cell phone market) 76

• New Markets
• New Products
• Gallery and Renders

Market Study

Financials

Business Corporate Structure

Appendix
• Taxes
• Historical P&Ls

2

About CTM

Cesar Milano, a Venezuelan born musician with an indisputable love and passion for
great sound, founded Clear Tune Monitors in 2010. As a musician he understood the
importance of reliable and clear monitoring to better perform on stage, and that’s how
Clear Tune Monitor was born. Ten years later, Clear Tune Monitors is undoubtedly one of the
big names in the In-Ear segment of the Music Industry.
Clear Tune Monitor holds among their clients Grammy Award winning artists such as,
Snarky Puppy, Pearl Jam, Timbaland and Mana as well as many other big players such as,
Aaron Spears (Drummer for Ariana Grande), Mutemath, Becky G, Max Cavalera (Sepultura),
Prince Royce, Farruko, Molotov, Jesse Carballo (Drummer for Mark Anthony) and Tony
Escapa (Drummer Ricky Martin) amongst many others.
CTM is currently seeking to double its sales figures for the following two years. This
document is to executively show how the company will achieve these goals, by teaming up
with the right partners and bringing on board the right team players to develop and put this
growth plan in action.
Since 2016 the company has sustained a 26% average growth in sales, allowing them to
reinvest its earnings into R&D of new products. CTM currently presents a portfolio of 40+
products which features In-Ear Monitors as its main category as well as specialized cables
and accessories to compliment it. The In-Ear Monitor line offers price points ranging from
$200 up to $2,400, offering Custom In-Ear Monitors (from 2 to 10 drivers) and Universal
Fit Monitors (from 2 to 10 drivers). The Cables category ranges from $50 to $400 and the
Accessory category has an assorted range of sub $100 products. The company’s strongest
markets are the U.S, Latin America and Asia.

3

Industry Overview

The global earphones and headphones market was valued at $9.5 bn in 2016 and is forecast
to grow at a modest CAGR of 6.5% between 2020 and 2024, culminating to global revenue
of $15.4 bn by 2024.

The global earphone & headphone industry is driven by escalating use of portable
music systems, such as smartphones, tablets, and portable music players. The market
is characterized by advancements and innovations resulting in the development of
sophisticated noise cancellation features, which have further added to the rising popularity.

The industry dynamics are changing rapidly with the trend for affordable and compact
earphones/ headphones. Technological advancements have significantly led to the
development of audio solutions for fitness/sports applications. Compatibility of these devices
with portable consumer electronics including tablets, smartphones, music players and other
home appliances is further expected to bolster market growth.

Additionally, incorporation of several features including Wi-Fi, Bluetooth and infrared in
wireless headphones is another emerging trend witnessed across the industry. The industry
is also observing escalating consumer demand for high fidelity and style along with elevating
adoption during work out which is anticipated to drive market growth significantly over the
forecast period.

Notable market drivers include technological advancements and miniaturization of earphones
and headphones, adoption of earphones and headphones during workout and other
activities, mounting penetration of tablets, smartphones, and other multimedia devices, and
demand for fashionable and trendy designs. Consumers actively strive for style and reliability
resulting in enhanced product demand.

The presence of counterfeit products primarily from the Chinese manufacturers is a
major challenge observed by the leading industry participants. In addition, the growing
manufacturing of low-cost fraudulent products with increased offerings and benefits is
expected to restrain market growth.

4

Competition

CTM fully understands the challenges from outside competitors, both large and small.

Big Competitors

• Sennnheiser
• JBL
• Bose
• Logitech
• Turtle Beach
• Sony
• Shure.

We acknowledge that these companies have been in the industry and with products in
the market for years, but we are still convinced that this does not pose a threat as these
companies have expressed no intention of entering into the customization segment of
IEMS ( CIEMS ), let alone the addition of specialized detachable microphones.

Thinking about the rise of mobile gaming and the increase of pro gamer teams all over
the world, it is just a matter of time before CIEMS become a popular trend in the gaming
industry.

With our 10 years of experience making CIEMS for the most famous artists and
musicians all over the world and creating the best sound quality and the best ergonomic
experience, complementing that with our top tier customer service, we have the
confidence that this industry would constitute a good percentage of revenue for the company.

Taking advantage of our extensive experience in the pro audio industry, we can develop
products to be used in the Gaming Industry that offer higher sound quality than products
currently available in this market, taking the user’s audio and ergonomic experience to a
new level backed up by our extensive knowledge of customized products that satisfy
specific needs.

5

Barcelona F.C. Goalkeeper 2008 - 2014
6

Custom In-Ears

• More than 10 different sound
configurations.

• Custom fitted for customers’ ears.
• Wide array of colors and options.

7

8

9

Da Vinci Series

DA VINCI IX DA VINCI X
• 9 B.A. Drivers • 10 B.A. Drivers
• 4-way Passive • 5-way Passive

Crossover Crossover

• WISE technology Inside
• Aluminum casing
• Annodized paint
• Interchangeable Sound Filters included.

10

CE320

• 3 B.A. Drivers.
• 2-Way Passive Crossover.
• Enhanced Bass.
• Fine Tuned Sound.

11

12

AS-7

• 7 B.A. Drivers.
• 4-Way Passive Crossover.
• WISE Technology Inside
• Interchangeable Sound Filters included.

13

14

Products and Services

CTM currently presents a portfolio
that offers Custom In-Ear Monitors,
Universal Fit In-Ear Monitors and
accessories as shown:
• Custom In-Ears: CT Series.
• Universal Fit In-Ear Monitors: Vintage
Series, DaVinci Series, AS-7 and
CE320
• Universal Fit Earphones (Consumer):
TWS True Wireless Earphones
• Accessories – Premium Cables,
Standard IEM Cables, Bluetooth Cable
• Accessories – Assorted and
Memorabilia

15

Business Proposal

Objectives

In 2020 the company has set forth the following objectives:
• Grow Custom Fit Sales from $700K to $1.0M (30%)
• Launch new Universal Fit models and grow Sales from $80K to $240K (300%)
• Sign agreements with main Distributors in the region to fill the channels in Q1.
• Roll out the marketing plan to increase the product demands in the Distribution
Channels (Q2, Q3 & Q4).

Mission Statement

Clear Tune Monitors, since its beginning has had a single mission “To deliver the
clearest possible sound into the musician’s ear so they can better perform their music”.
CTM monitors are engineered and crafted by musicians for musicians and great sound
lovers.

Keys to Success

The unique quality of any CTM monitor, either Custom or Universal fit, has been
responsible for the respect earned within its grassroots customer base which covers a
broad spectrum of users ranging from the newest musicians pursuing their dreams of
fame, to Billboard and Grammy award winners. The company is also proud to develop
and launch products at the right timing with above expectation quality standards.

16

Brand Recognition

The brand has set forth the following strategies to increase brand awareness:

• Market Segments:
- Pro Audio
• Create content with artists to maintain awareness in this segment.
• Procure more product reviews in online publications, at least one per month.
• New entry level products.

- Worship
• Hire more worship reps to increase white glove service to churches.
• Promote this personalized service.
• Create dedicated website section to address this segment specifically.
• Create content periodically for this section.

- Gaming (new market so requires higher effort and budget)
• Release detachable mic cable.
• Muting option.
• EQ Option.
• Infect the market with the concept of custom/personalized earphones.
• Procure business relationships with highly recognized gamers.
• Sponsor Teams.

- Consumer
• Consolidate line of sub $200 products.
• Increase sales channels where to place sub $200 line.

• According to market segment, research and identify communication channels with
intended audience, including but not limited to:
- Facebook groups
- Youtube channels
- Instagram accounts
- Blogs
- Trade publications (online)

17

New Markets

Market Opportunities

As a path to reach the desired growth, CTM has identified the following Market opportunities
which seem to best fit the company’s profile and strengths:

Consolidation of the LATAM Market

Traditionally, LATAM has been a stronghold for CTM, mostly due to the fact of our artists
being among the most recognized in the LATAM Music Industry which has ignited the
brand awareness and purchase intent in the region. This combined with the
understanding of how business is done in the region and the nurturing of personal
relationships with key players in the industry have contributed to solidify CTM’s
presence in this market.

The LATAM Region will end 2020 as a Six Million Dollar market, distributing the sales
between Universal Fit (75%) and Custom Fit Monitors (25%). CTM’s market share is
17% of the total sales; taking a shy 1.78% Universal Fit share; and a solid 61% share of
the Custom Fit.

The company is ready to kick off a 2021 growth plan, which involves resizing the
production capacity. Every key player (vendors, current employees and management
members) has been carefully assessed and we can state that CTM is aware, prepared,
and eager to increase their production capacity up to 2.5 times in the timeframe of two
months to supply the new coming demand.

Even though we are confident about our position, we definitely see a growth opportunity
represented by our line of Universal Fit products which are aimed to lower the bar of
entry into our high quality product line. By signing distribution agreements with the
biggest Distributors in the region we would give the company a more universal appeal
while reaching a broader audience. CTM is projecting a 2021 market of $8MM which will
represent a 25% Total Market growth and are eager to be the main contributors to that
growth.

Key to this consolidation would be:

• Launch of more sub $200 priced products
• New Distribution Channels
• New hires for Marketing, Sales and Distribution.

18

The Gaming Market

There is a potential user segment we have been taking into consideration for quite some
time and given the current global situation the timing seems just perfect. This segment is the
Gaming Market, which includes individuals from all genders, ages 12-50 focusing on Esports
and Mobile Gaming. It’s a great and logical extension of the music loving consumer oriented
line of our business.

Market size:

Games and esports analytics firm Newzoo released its highly cited annual report on the size
and state of the video gaming industry yesterday. The firm is predicting 2020 global game
industry revenue from consumers of $159.3 billion, a 9.3% increase year-over-year. Newzoo
predicts the market will surpass $200 billion by the end of 2023. 45% of this will come
from mobile, which is the largest segment in the gaming market. Mobile explicitly means
movement and in this context the convenience of using smaller, lightweight, ergonomic
earphones is likely to outperform the use of standard bulky over the head earphones,
especially when customization comes into the equation, and that is our area of expertise.

Importantly, the data excludes in-game advertising revenue (which surged +59% during
COVID-19 lockdowns, according to Unity) and the market of gaming digital assets traded
between consumers. Advertising within games is a meaningful source of revenue for many
mobile gaming companies. In-game ads in just the U.S. drove roughly $3 billion in industry
revenue last year, according to eMarketer.

To compare with gaming, the global markets for other media and entertainment formats are:

• Pay TV: $226 billion in 2019 (excludes streaming
services)

• Publishing: $261 billion in 2017, of which books
accounted for $121 billion

• Film: $101 billion in 2019 ($42.5 billion from box office)
• Music: $62 billion in 2017 ($30 billion recorded music,

$6 billion music publishing, $26 billion live music)
• Board games and playing cards: $12 billion in 2018
• Podcasting: $863 million 2020 advertising revenue

(there is no good data on subscription and live events
revenue in podcasting, but it is fair to estimate it at a
fraction of the total ad revenue figure)

19

New Markets

Segments:

• Mobile gaming which covers 45% of the market.
• Console gaming
• PC gamingMarket growth prospect:

The video gaming industry is expected to reach over 300 billions by 2025 with billions of
dollars in profit and 2.5 billion gamers around the world.

In the world of gaming, there is often confusion between commonly used terms such as
“online gaming” and “esports”—when in fact esports is just one segment that sits within the
enormous online gaming ecosystem:

• Distributors and Retailers: Platforms that distribute and sell games
• Streaming Services: Services that allow users to livestream games
• Hardware Developers: Companies that build the electronic infrastructure required

to play games
• Gaming Arenas: Venues that host gaming events
• Esports: Organized, multiplayer video game competitions, typically between

professional players
• Software Developers: Develop applications that allow users to do specific tasks
• Game Publishers: Companies that finance and distribute games
• Game Developers: Studios that develop games
• This ecosystem creates dozens of revenue streams for the industry as a whole.

For every one of these channels, the shift to mobile gaming presents significant opportunities
for growth.

Trends & technologies:

• Streaming Gameplay
• Mobile Gaming
• E Sport
• Downloaded/Boxed Games
• Twitch

20

Product Niche

(Customized IEMS and UIEMS for gamers E sport teams with detachable boom
microphone.)

CTM has designed and created a product thinking about the need for comfortable earphones
used to play video games at home or on the move. By improving the comfort this product
would help users improve their skills as they seamlessly enjoy a richer audio experience, and
by offering unprecedented levels of customization this actually creates a bond between the
user and the earphone making it a source of pride becoming also an aspirational item within
the community.

We envision the expansion of CTM into the Gaming Market as a strategy to guarantee
its profitability over time, not only because it’s a big market but mainly because it lacks
companies like CTM which not only offers high quality products but also offers top tier
white glove customer service. At CTM it’s not only about selling products, it’s about making
customers part of it.

To be IN the game like never before

2211

2-PIN IEM CABLE WITH BOOM MIC

Compatible with 2-Pin
Custom & Universal IEMs
-26 dB Isolation
Hi-Fi Microphone
Light And resistant

a NEW dimension
for GAMES

Ultra HD 3D Sound

Memory Foam Pads
Noise Cancelling
Microphone with Mute Feat
Volume Control

22 22

long-lasting

700 mAH 6 Hours 4 Times

POWER BANK WORKING TIME CHARGING BOX

Nothing can go wrong when you have
up to a full day of wireless non-sopping music

p2

2233

listen
closer!

24 24

HD Bluetooth Headphones

Bluetooth V 5.0
Memory Foam Pads
-15dB Noise Isolation
Noise Cancelling
Fine Tuned Sound

25

HD Bluetooth Speaker

Bluetooth V 5.0
20 Hours Playback Time
1.5 Hours Full Charge
IPX7 Waterproof

26 26

Market Study

Research Methodology

We implement a mix of primary and secondary research for our market estimate and
forecast. Secondary research forms the initial phase of our study, where we conducted
extensive data mining, referring to verified data sources such as independent studies,
government and regulatory published material, technical journals, trade magazines, and
paid data sources such as Hoover’s, Factiva and ICIS and so on. This forms the basis of our
estimates.

For forecasting, the following parameters were considered, Market drivers and restraints,
along with their current and expected impact Technological scenario and expected
developments End-use industry trends and dynamics Trends in consumer behavior. We
assigned weights to these parameters and have quantified their market impact using
weighted average analysis, to derive an expected market growth rate.

All our estimates and forecasts were verified through exhaustive primary research with Key
Industry Participants (KIPs) which typically include, Market leading companies Technology
providers and Distributors. The key objectives of primary research are as follows: To validate
our data in terms of accuracy and acceptability. To gain an insight in to the current market
and future expectations .

Research Scope & Assumptions

The report provides market estimates for base year 2015 and a yearly forecast to 2025 in
terms of Volume (Million Units) and Revenue (USD Million). Market for each product, price,
technology and application segment has been provided on a regional basis for the above
mentioned forecast period.

Key industry dynamics, regulatory scenario, key products and applications are evaluated to
understand their impact on demand for the forecast period.

Growth rates were estimated using correlation, regression and time-series analysis.

27

We have used a bottom-up approach for market sizing, analyzing key regional markets,
dynamics and trends for products. Global market has been estimated by integrating regional
markets.

Market estimates have mainly been based on feedback obtained through primary interviews
with key industry participants. Inflation has not been accounted for in order to estimate
the market. Numbers may not add up due to rounding off. The industry is segmented
based on product into in-ear and over-ear. Casual application segment includes music and
entertainment.

List of Data Sources

List of secondary sources include but are not limited to:

• Wireless Speaker and Audio (WiSA) Association
• IEEE
• PC Magazine
• Electronics Weekly
• Consumer Electronics Association
• Company annual reports

Market General Overview

Global Earphones & Headphones Market Overview:

The global earphones and headphones market size was valued at USD 25.1 Billion in 2019
and is expected to grow at a compound annual growth rate (CAGR) of 20.3% from 2020 to
2025. Rising consumer preference for enhanced audio experience, growing music industry,
coupled with gaming and mobile technology and Internet penetration, are some of the
primary factors driving the market.

Asia Pacific dominated the earphones & headphones market with a share of 31.8% in
2019/20. This is attributable to rising consumer disposable income and rapidly growing music
industry in the region.

Some of the key players operating in the earphones and headphones market include
Apple, Inc., Bose Corporation, Alclair Audio, Inc., JVC Kenwood Corporation, Panasonic
Corporation, Plantronics, Inc., Sennheiser Electronic GmbH & Co. KG (Sennheiser),
Logitech, Inc. (Logitech International SA.), Skullcandy, Inc. and Sony Corporation.

28

Razer is the world leading player in global PC Gaming Peripherals market with the market
share of 12.83%, in terms of revenue, and followed by Logitech G (ASTRO), Turtle Beach,
Corsair and Sennheiser.

Several of these companies have manufactured their products considering the Ingress
Protection Ratings (IPX), which is a safety ranking system to offer the consumers with
measurable grades of protection against environmental factors.

For example, IPX1 rated device is resistant to water droplets and can be dripped with water
for 10 minutes. The level of protection ranges from the number 0 to 9 and increases with the
highest level being IPX9.

A product with an IPX9 rating, will safely offer protection against the spray of water from a
high-pressure nozzle. Similarly, in the case of dust, the rating ranges from IP0X to IP6X, with
IP6X being the highest.

In some cases, the product may be resistant against both dust and water. For instance,
products with an IPX5-7 rating are dust tight and water resistant to high pressure sprays.
Presence of such useful features and some significant development in product technology is
expected to keep the product in demand over the forecast period.

In the other hand, the introduction of advanced features like Active Noise Cancellation (ANC)
and Near Field Communication (NFC) is expected to offer a user with enhanced listening
experience and fluidity in connectivity with their music devices.

For instance, presence of ANC technology in earphones and headphones eliminates the
background noise, thus improving sound quality. NFC establishes the connection between
the wireless headphones and music device by just tapping them to each other. Such
advanced features are anticipated to fuel the market growth.

29

Gaming Industry Analysis

This part of the report focuses on Gaming Accessories volume and value at global level,
regional level and company level. From a global perspective, this report represents overall
Gaming Accessories market size by analyzing historical data and future prospect. Regionally,
this report focuses on several key regions: North America, Europe, China and Japan.
At company level, this report focuses on the production capacity, ex-factory price, revenue
and market share for each manufacturer covered in this report.
Segment by Type
Headsets, earphones and general audio.
Segment by Application
Distribution Channels
Third-Party Retail Channels
Direct Channels
Segment by Regions
North America
Europe
Asia-Pacific
China
India
Japan

For CTM, the product niche would be Customized IEMS and UIEMS for gamers E-Sport
teams with detachable boom microphone.

30

Gaming Industry Overview

The impressive Gaming Industry is currently
one of the most powerful and resection resistant
markets in the general worldwide economic
scenario. In this regard, Video Game sales
statistics show that Gaming Industry revenue
dwarfs all other entertainment industries
combined.

For instance, the global box office revenue in
2018 amounted to US$ 41.7 Billions, while the
gaming market, according to the latest gaming
industry statistics provided by the top game and
E-sports analytics companies, has been a value
of US$ 152.1 Billions for 2020, of which

45% derives from mobile gaming, which is the
largest segment in the general gaming market.
Throughout the last decade, the gaming
industry has steadily outpaced its counterparts
in the movie and music businesses in terms of
revenue. In 2019, video games remained the
most profitable entertainment sector. Video
game industry revenue comes from both game
and hardware sales but also includes in-game
transactions made by players of premium and
free to play titles.

In this regard, the mobile games industry is
currently worth around US$ 68.5 Billion, with a
10% year-over-year growth rate. Additionally,
according to the mobile versus desktop and
console usage statistics, just the mobile gaming
is expected to become a US$196 Billion market
by the end of 2022.

*Data gathered by Mediakix on mobile games market size shows that there are 2.2
Billion people playing mobile games worldwide. This amounts to almost 30% of the total

world population. Mobile game revenues are enjoying year-on-year growth of 26.7%.
China will be the largest mobile games market, followed by the US and Japan.

31

The gaming industry is constantly evolving and inspiring innovation. From simple one-time
purchases and single player experiences to full-priced and free-to-play games, the gaming
industry has been completely reshaped throughout the last decade.

Video game sales statistics show that annual spending on games is on the rise. The new
console generation is right around the corner followed by an avalanche of new releases that
gamers are expected to swoop up and play on their brand new hardware. Changing trends
and the arrival of new generations are expected to inject fresh excitement into the business.

As the world braces for a console war, another battle is brewing among developers of mobile
games. Gaming statistics for 2019/20 show that mobile games earn more than half of the
total video game revenue. Mobile games now have aggressive marketing and advertising
campaigns on television, in cinemas and even during the Super bowl.

PC gaming versus console gaming statistics made for an interesting comparison. The
biggest surprise was the $29.6 Billion in earnings by PC games compared to US$ 15.4 Billion
by console games. These stats include both paid games, also known as premium games,
as well as free to play titles that end up with higher earnings due to a bigger player base.
Contrary to popular belief, PC gaming’s market share is quite large. That’s why one of the
biggest online stores, Steam, offers tens of thousands of PC games and has 10+ million
concurrent users at any given time.

Some of today’s most popular video games are free, with optional in-game purchases offered
along the way. This monetization model has proven to be highly successful. Gamers will
gladly support a game they spend a lot of time with by purchasing various doodads. Modern
free to play games offer character customization items, experience and point boosters, even
power-ups for as little as a couple of cents. The players that end up spending a lot of money
on games are usually referred to as “whales,” and they are the ones that support the game in
the long run. These Free to play games account for 80% of all gaming revenue.

32

Much of the revenue growth comes from
demanding hard-core gamers. As video
games get more complex and competitive,
the most dedicated players are looking for
any edge they can get.

People have been enjoying games all over
the world for quite some time. Video game
player statistics reveal that a significant
percentage continue to enjoy them well into
adulthood being the average age of a gamer
of between 33 and 35 years old, with almost
75% of all gamers being 18 years or older.

The number of people playing video games
rose from the 1.84 Billion calculated in 2014
to well over 2.5 Billion in 2020. If the current
projections and video game industry statistics
are accurate, that number will grow by an
additional 200 Million people by the end of
2021.

Another important statistic is that video
games demographics have long painted a
picture of a strictly male-dominated hobby.
But the percentage of female gamers has
risen steadily throughout the years. In 2006,
females accounted for 38% of all gamers.
That figure is now rising above 46% and
shrinking the gender gap.

3333

Gamer Demographics

• There are nearly 2.5 Billion gamers around the world.
According to the latest video gaming industry statistics, one in
three people around the world play video games. Whether they’re
on their PCs, consoles, or smartphones, Billions are enjoying
these games at home, during their daily commutes or with
friends. This number is set to rise to 2.7 Billion during the next
two years, especially with the next generation of home consoles.

• An average gamer is 33 years old.
There has always been a misconception about gamers being
kids. While plenty of children and teenagers do play a lot of video
games, the average gamer in the US is in his thirties. These
gamers have been playing for 14 years on average and are
usually the person with the highest number of game purchases in
any household.

• Gamers account for 65% of the adult population in the
US.

Gaming statistics show that gaming has become a mainstream
activity. It is no longer considered nerdy or underground. Today,
the majority of the adult US population is playing video games,
whether in front of their TVs or on their smartphones. Video game
developers responded by catering to increasingly broader tastes
so that everyone can find their niche.

• 46% of the American gamers are female.
Gaming is no longer just for boys. It hasn’t been for many years
now. Over the past decade, the gender ratio has become closer
to equal. In 2019, 54% of the gamers in the US were male. But
the growing number of female gamers serves to underscore the
gaming industry’s universal appeal.

• Action and shooter games make up for almost half of all
video games sold in the US.

Gamers love action, and it’s no surprise that explosive titles with
plenty of shooting are the most played games. The action genre
is the best seller in the US, accounting for 26.9% of all video
game sales. Meanwhile, the shooter genre accounts for 20.9% of
all game sales.

34

• 63% of gamers play multiplayer games.
It’s in our nature to be competitive or just gather around friends
for a nice evening of Mario Kart and other party games. Whether
it’s couch co-op or online gaming, statistics show that gamers
like playing with others. With today’s increased Wi-Fi bandwidth,
modern games don’t even require you to bring your friends over
and can even help with finding new friends across the world.
• 49% of adult gamers own a console.
For many, consoles are synonymous with gaming. It has become
quite common to see more than one game console hooked up
to the TV in many American households. This is why the video
game market is centered around console players. Consoles are
also known as Plug and Play devices, requiring nothing more
than flipping the switch and inserting a disk or a cartridge to start
the game.
• In 91% of the cases, adults purchase games for their

household.
As previously mentioned, adults make up the bulk of the gaming
population. Since they also manage the household finances,
they are the ones responsible for video game purchases in most
cases.

35

Gaming Industry
General Statistics:

-YouTube videos are the most influential factor on game purchase decisions followed by
user reviews from communities or digital storefronts.

-Gaming industry analysis from 2019 showed that over 57% of all game developers reside in
the US.

-Some 67% of video game executives believe that the number of mergers and acquisitions
within the industry will increase. This statistic indicates that powerful and well-funded
conglomerates and corporations will probably infuse the market with a variety of new
products and technologies.

-The global E-Sports industry is growing at a rate of 30% year-over-year.

-Data from online gaming statistics indicates that gamers will gamble US$ 23.5 on E-Sports
in 2020/21. This statistic denotes massive money disbursements by consumers that are
not even included in the quantification of the buy-sale market value (software-hardware-
accessories markets)

-Statistics on video games show that the E-Sports audience grew to 453.8 Million in 2019,
representing a 15% year-on-year growth.

-Analysts predict gamers will be spending $196 Billion annually on video games by 2022.

-Just the PC gaming market is set to be worth $45.5 Billion in 2021.

-Statistics on gaming on PCs indicates that some 48% of all owners use the device to play
video games.

-The company Razer leads the industry with 12.83% of the total Gaming market share for
peripherals.

-The global Virtual Reality (VR) Gaming and entertainment market size is exhibiting a 40.1%
compound annual growth rate.

36

-VR statistics indicate that shipments of PCs, and Consoles in one side and in the other,
earphones, headsets and all-in-one virtual reality headsets, are projected to reach 62
million units by 2025. This statistic denotes additional monetary market share growth not
contemplated in the previously referred indicators.

-While it’s still a novel concept, VR is steadily finding its way into many homes. In 2019,
Facebook released two VR headsets, Oculus Rift S and Oculus Quest. The latter quickly
became a hit due to its completely standalone nature and low price of $350. A total of 2.8
million standalone VR headsets were sold in 2019, but the market for PC-based VR is also
growing stronger. Valve has seen tremendous success with its Index VR headset. The device
sold out almost immediately after its launch despite the $1,000 price tag.

-Mobile games reached a 60% market share in gaming consumer spending in 2019.

-50% of all mobile users open at least one gaming app during the week.

-Gaming facts from 2020 show that there are more than 2.2 Billion mobile gamers worldwide.

-Analysts predict gamers will be spending $196 Billion annually on video games by 2022.

-Just the Apple The App Store generated $14.6 Billion from mobile video sales in Q1 2019.

-PC and Console video game industry market statistics are pointing to a 13.4% revenue
growth year-on-year.

-China held the top spot as the world’s largest gaming market by revenue since 2015. But
in 2019, the US dethroned the Chinese and became the number one country for the gaming
industry. Nevertheless, there is no continent more lucrative than Asia when it comes to
the mobile gaming industry. Statistics for 2019 underscore the continent’s dominance of
the gaming market. Asia is home to nearly half of the world’s population, and many of its
inhabitants play games on their phones or consoles. Most are more than ready to dish out
cash to enhance their experience. North America generated the second-highest revenue for
free to play games of US$ 16.5 Billion, while Europe recorded US$11.5 Billion in earnings.

3377

Audio factor within the
Video Gaming Industry:

Within the International Earphones and Headphones industry, one
gigantic factor making considerable changes in the segment is the Global
Gaming Accessories Market.

The Gaming Accessories Market, currently valued in staggering US$
21,01 Billions, is expected to reach above US$ 60 Billions by the end of
2025.

In this Regard, a considerable percentage of said Gaming Accessories
Market share is comprised by the Gaming Earphones and Headphones
market, which size was roughly estimated at USD 11,2 Billions in 2019
and is expected to grow at a compound annual growth rate of 5.9% from
2019 to 2025 to reach USD 15,9 Billions by 2025

Razer is the world-leading player in the global Gaming Peripherals market
with the market share of 12.83%, in terms of revenue, and followed by
Logitech G (ASTRO), Turtle Beach, Corsair and Sennheiser.

Considering all of the aforementioned, is important to emphasize that
CTM has designed and created a variety of products thinking about the
need for comfortable earphones used to play video games at home or on
the move.

By improving the comfort this product would help users improve their
skills as they seamlessly enjoy a richer audio experience, and by offering
unprecedented levels of customization this actually creates a bond
between the user and the earphone making it a source of pride becoming
also an aspirational item within the community.

We envision the expansion of CTM into the Gaming Market as a strategy
to guarantee its profitability over time, not only because it’s a big market
but mainly because it lacks companies like CTM which not only offers
high quality products but also offers top tier white glove customer service.
At CTM it’s not only about selling products, it’s about making customers
part of it.

38

Product in Market
General Overview

In terms of revenue, earphones dominated the market
with a share of 53.0% in 2019. This is attributed to the
comfort in hearing music, low cost, and compact size.
The lightweight design and portability of earphones
make them a preferred choice for fitness and sports
enthusiasts. Additionally, earphones provide good
passive isolation from external sound, which translates
into an immersive music listening experience for the
user and is expected to drive the segment.

The bulky size and cost have reduced the popularity
of the on-ear and over-ear headphones in recent
years. However, technological advancements in these
headphones with features, like active noise cancellation
(ANC) and rich bass signature, make them a preferred
choice among the audiophile community.

The large-sized ear cups allow the manufacturers to
equip the headphones with dynamic and electrostatic
sound drivers, resulting in enhanced and clear
sound quality. Companies like Bose Corporation,
Sony Corporation, Sennheiser GmbH & Co. KG, and
Skullcandy.com are engaged in improving the design
and styling of their headphones by offering foldable
headphones, leather ear cup cushions, and better build
quality, which is expected to keep the headphones
trending among the users.

Market Price Insights

In terms of revenue, the 50 to 100 USD segment dominated the market with a share of
39.2% in 2019. This is attributed to the technological developments in this segment, which
are primarily driven by growing consumer demand for style and high fidelity.

Additionally, a short product replacement cycle results in positive impact on earphone and
headphone adoption. Rising demand for enhanced sound quality experience, coupled with
economic volatility associated with these devices, is driving the adoption of 50 to 100 USD
earphones and headphones.

39

The less than 50 USD segment is anticipated to witness significant growth in terms of
volume over the forecast period on account of rising adoption, particularly in the emerging
economies, including India, China, Brazil, and the Middle East.

Wide availability of these products under this price category on e-commerce websites and
retail outlets is likely to boost the segment sales. Additionally, presence of multiple players in
the low range category is expected to drive the segment. Premium brands like Skullcandy.
com, Xiaomi, Koninklijke Philips N.V., Sony Corporation, and JBL are some of the players
offering their products in the low to mid-range price segment.

Technology Indexes

In terms of revenue, the wireless segment dominated the market with a share of 76.2%
in 2019. This is attributed to the introduction of true wireless earbuds and technological
advancements in Bluetooth connectivity of wireless devices.

Wireless earbuds were first introduced by a company named Bragi, based in Munich,
Germany. Meanwhile, the launch of AirPods from Apple, Inc. in 2016, shifted the momentum
entirely from wired products to wireless products. Besides, local players like boAt, Zebronics
India Pvt. Ltd., Xiaomi, Boult Audio, GoNoise, and Portronics, and MiVi are engaged in
offering wireless earphones at lower prices, which is further expected to drive the segment.

Furthermore, introduction of smart features like voice assistance,
gesture recognition, fitness tracking, and wearing detection for play
and pause of music is expected to increase the adoption of wireless
earphones and headphones.

Nowadays, wireless earphones and headphones are also equipped
with better Bluetooth technology to facilitate better connectivity at
long distances and enhanced battery life for long hours of listening.
Such advanced features and continuous innovations are anticipated
to drive the market for wireless products.

However, wired products are expected to maintain their market share
in future owing to the low price, zero latency, and better audio quality
offered by these devices.

40

Application Insights

In terms of revenue, the music and entertainment
segment dominated the market with a share of
41.6% in 2019. This is attributed to the rising
adoption of earphones and headphones for
casual music listening, usage by audiophiles, and
listening and creating sound effects in the music
and entertainment industry.

The virtual reality application segment is
expected to witness significant growth over the
forecast period owing to the growing adoption
of earphones and headphones across the
education, construction, business, and armed
forces sectors primarily for training purposes. For
example, in armed forces, the headphones are
generally used along with simulators to provide
realistic sound experience during training.

The fitness segment is expected to witness
high adoption of wireless earphones, with the
inclusion of fitness trackers and heart rate
monitoring in the earphones. The fitness trackers
allow the athletes and individuals to monitor and
plan their daily workout regime, diet, calories
burnt, and distance covered.

The heart rate monitoring technology measures
the heart rate through the ears and transmits the
beats per minute (BPM) data to the smartphone
application, which can be used to plan the
workout. Brands like Bose Corporation, Jabra,
Sony Corporation, and Samsung Electronics Co.,
Ltd. have introduced fitness tracking and heart
rate monitoring.

41

Regional Insights

In terms of revenue, Asia Pacific dominated the
market with a share of 29.7% in 2019. This is
attributed to high penetration of smartphones
and rising disposable income in the region.
Furthermore, various key business players
are investing significantly in China owing to
the emergence of low-cost technology and
availability of cheap labor in the region. However,
increasing availability of counterfeit products
designed and manufactured, especially in India,
has enabled various key players to establish their
manufacturing facilities in the region, thereby
resulting in market growth.

North America held the second largest market
share in 2019, followed by Europe. This is
attributed to the already established market,
coupled with high technology penetration in
these regions. Companies in this region are
focused on investing in R&D and continuous
innovation in product development. Furthermore,
presence of major industry players in the region,
such as Apple Inc., Bose Corporation, GN Store
Nord A/S, Harman International Industries,
Incorporated, and Sennheiser GmbH & Co., KG,
is expected to drive the market across North
America and Europe.

42

Key Companies & Market
Share Insights

The market is highly fragmented and is characterized
by high competition with the presence of major global
players. These companies particularly focus on
enhancing the product quality by adopting advanced and
innovative techniques to enhance their market presence
and expand their geographical reach. For instance, in
September 2018, Skullcandy, Inc. announced the launch
of a new wireless headphone known as Riff Wireless.
Riff Wireless headphone is lightweight, includes a
bendable band, and is equipped with Bluetooth and
Rapid Charge technology.

SkullCandy Riff Wireless

Similarly, various key players are increasingly focusing on
enhancing their network and customer base in order to
cope with the growing competition from new vendors. For
instance, in September 2018, Beats by Dre announced
its merchandising and marketing partnership with the
National Basketball Association (NBA). Through this
partnership, Beats by Dre aims to be the official and the
only wireless speaker, headphone, and audio partner for
NBA. Some of the prominent players in the earphones and
headphones market are:

• Apple Inc. Beats by Dre
• Bose Corporation Golden State Warriors NBA Collection

• Harman International Industries, Incorporated

• Sony Corporation

• Sennheiser Electronics GmbH & Co. KG

• GN Store Nord A/S

• Skullcandy.com

43

Profit and Loss Statement Projection

Revenue Website YEAR 2021 % VS. Total
Revenue Outside Sales $ 47.62%
Total 52.38%
$1,000,000.00
$1,100,000.00 100.00%
$2,100,000.00

Payroll Salary Payroll % VS. Total 36.90%
Payroll Personnel $ 61.29%
Total Payroll 38.71% 29.97%
($ 474,996.67)
($ 299,976.67) 100.00% 16.00%
($ 774,973.33) 14.29%

Inventory (pro/worship) Inventory % VS. Total 1.19%
Inventory (consumer/gaming) $ 22.72%
Total Inventory 77.28% 1.65%
$143,000.00
$486,466.00 100.00%
$629,466.00

Digital Marketing

$ % VS. Total
50.00%
Digital marketing pro/worship ($ 168,000.00) 50.00%

Digital marketing consumer/gaming ($ 168,000.00) 100.00%

Total Digital Marketing ($ 336,000.00)

Trade Shows $299,999.00
Office Expansion ($ 25,000.00)

Capital Inv. Pref Return ($ - )
$ % VS. Total

EBITDA Total $34,561.67 0.00%

Ownership Percentage Year

Investor Operators

Ownership % 40% 60%

EBITDA $13,824.67 $20,737.00

Total Investment $4,015,434.33

ROI 0.34%

Disbursement to Partners $13,824.67 $20,737.00

44

Profit and Loss Statement Projection

Revenue Website YEAR 2022 % VS. Total
Revenue Outside Sales $ 45.63%
Total 54.37%
$1,200,000.00
$1,430,000.00 100.00%
$2,630,000.00

Payroll

Payroll Salary ($ 850,976.67) 84.49% 38.30%
Payroll Personnel ($ 156,230.00) 15.51%
Total Payroll ($ 1,007,206.67) 100.00% 23.69%

Inventory 15.97%
13.94%
Inventory (pro/worship) $199,200.00 31.97%
Inventory (consumer/gaming) $423,974.40 68.03% 0.00%
Total Inventory $623,174.40 100.00%
8.10%
Digital Marketing

Digital marketing pro/worship ($ 210,000.00) 50.00%
50.00%
Digital marketing consumer/gaming ($ 210,000.00) 100.00%

Total Digital Marketing ($ 420,000.00)

Trade Shows $366,667.00
Office Expansion

Capital Inv. Pref Return ($ - )
$ % VS. Total

EBITDA Total $212,951.93 0.00%

Ownership Percentage Year 2

Investor Operators

Ownership % 40% 60%

EBITDA $85,180.77 $127,771.16

Total Investment $4,015,434.33

ROI 2.12%

Disbursement to Partners $85,180.77 $127,771.16

45

Profit and Loss Statement Projection

Revenue Website YEAR 2023 % VS. Total
Revenue Outside Sales $ 43.65%
Total 56.35%
$1,440,000.00
$1,859,000.00 100.00%
$3,299,000.00

Payroll

Payroll Salary ($ 1,069,368.33) 100.00% 32.41%
Payroll Personnel ($ 1,069,368.33) 0.00%
Total Payroll 20.49%
100.00%
15.28%
Inventory 11.11%

Inventory (pro/worship) $239,040.00 35.37% 0.00%
Inventory (consumer/gaming) $436,769.28 64.63%
Total Inventory $675,809.28 100.00% 20.71%

Digital Marketing

Digital marketing pro/worship ($ 252,000.00) 50.00%
50.00%
Digital marketing consumer/gaming ($ 252,000.00) 100.00%

Total Digital Marketing ($ 504,000.00)

Trade Shows $366,667.00
Office Expansion

Capital Inv. Pref Return ($ - )

$ % VS. Total

EBITDA Total $683,155.39 0.00%

Ownership Percentage Year

Investor Operators

Ownership % 40% 60%

EBITDA $273,262.15 $409,893.23

Total Investment $4,015,434.33

ROI 6.80%

Disbursement to Partners $273,262.15 $409,893.23

46

Profit and Loss Statement Projection

Revenue Website YEAR 2024 % VS. Total
Revenue Outside Sales $ 41.69%
Total 58.31%
$1,728,000.00
$2,416,700.00 100.00%
$4,144,700.00

Payroll

Payroll Salary ($ 1,063,537.33) 100.00% 25.66%
Payroll Personnel ($ 1,063,537.33) 0.00%
Total Payroll 17.83%
100.00%
14.43%
Inventory 10.46%

Inventory (pro/worship) $286,848.00 38.82% 0.00%
Inventory (consumer/gaming) $452,123.14 61.18%
Total Inventory $738,971.14 100.00% 31.63%

Digital Marketing

Digital marketing pro/worship ($ 298,944.00) 50.00%
50.00%
Digital marketing consumer/gaming ($ 298,944.00) 100.00%

Total Digital Marketing ($ 597,888.00)

Trade Shows $433,335.00
Office Expansion

Capital Inv. Pref Return ($ - )

$ % VS. Total

EBITDA Total $1,310,968.53 0.00%

Ownership Percentage Year

Investor Operators

Ownership % 40% 60%

EBITDA $524,387.41 $786,581.12

Total Investment $4,015,434.33

ROI 13.05%

Disbursement to Partners $524,387.41 $786,581.12

47

Profit and Loss Statement Projection

Revenue Website YEAR 2025 % VS. Total
Revenue Outside Sales $ 39.76%
Total 60.24%
$2,073,600.00
$3,141,710.00 100.00%
$5,215,310.00

Payroll

Payroll Salary ($ 1,206,952.00) 100.00% 23.14%
Payroll Personnel ($ 1,206,952.00) 0.00%
Total Payroll 15.62%
100.00%
13.76%
Inventory 8.95%
0.00%
Inventory (pro/worship) $344,217.60 42.25%
Inventory (consumer/gaming) $470,547.76 57.75% 38.53%
Total Inventory $814,765.36 100.00%

Digital Marketing

Digital marketing pro/worship ($ 358,732.80) 50.00%
50.00%
Digital marketing consumer/gaming ($ 358,732.80) 100.00%

Total Digital Marketing ($ 717,465.60)

Trade Shows $466,669.00
Office Expansion

Capital Inv. Pref Return ($ - )

$ % VS. Total

EBITDA Total $2,009,458.04 0.00%

Ownership Percentage Year

Investor Operators

Ownership % 40% 60%

EBITDA $803,783.21 $1,205,674.82

Total Investment $4,015,434.33

ROI 20.01%

Disbursement to Partners $803,783.21 $1,205,674.82

48

Profit and Loss Statement Projection

Revenue Website YEAR 2026 % VS. Total
Revenue Outside Sales $ 37.86%
Total 62.14%
$2,488,320.00
$4,084,223.00 100.00%
$6,572,543.00

Payroll

Payroll Salary ($ 1,206,952.00) 100.00% 18.36%
Payroll Personnel ($ 1,206,952.00) 0.00%
Total Payroll 13.78%
100.00%
12.72%
Inventory 7.46%
0.00%
Inventory (pro/worship) $413,061.12 45.61%
Inventory (consumer/gaming) $492,657.32 54.39% 47.68%
Total Inventory $905,718.44 100.00%

Digital Marketing

Digital marketing pro/worship ($ 418,037.76) 50.00%
50.00%
Digital marketing consumer/gaming ($ 418,037.76) 100.00%

Total Digital Marketing ($ 836,075.52)

Trade Shows $490,000.00
Office Expansion

Capital Inv. Pref Return ($ - )

$ % VS. Total

EBITDA Total $3,133,797.04 0.00%

Ownership Percentage Year

Investor Operators

Ownership % 40% 60%

EBITDA $1,253,518.82 $1,880,278.23

Total Investment $4,015,434.33

ROI 31.21%

Disbursement to Partners $1,253,518.82 $1,880,278.23

49

Profit and Loss General Projection

Website Revenue 2020 2021 2022 2023 2024 2025 2026
% growth $580,000 $1,000,000 $1,200,000 $1,440,000 $1,728,000 $2,073,600 $2,488,320
Outside Sales
% growth $150,000 $1,100,000 $20 $20 $20 $20 $20
Total Sales Revenue $1,430,000 $1,859,000 $2,416,700 $3,141,710 $4,084,223
$730,000 $2,100,000
$30 $30 $30 $30 $30
$2,630,050 $3,299,050 $4,144,750 $5,215,360 $6,572,593

inventory (pro/worship) $143,000 $199,200 $239,040 $286,848 $344,218 $413,061
inventory (consumer/gaming) $486,466 $423,974 $436,769 $452,123 $470,548 $492,657
digital marketing pro/worship $168,000 $210,000 $252,000 $298,944 $358,733 $418,038
digital marketing consumer/gaming $168,000 $210,000 $252,000 $298,944 $358,733 $418,038
trade shows pro $150,000 $183,334 $183,334 $216,668 $233,335 $245,000
trade shows consumer $150,000 $183,334 $183,334 $216,668 $233,335 $245,000
salary $474,997 $850,977 $1,069,368 $1,063,537 $1,206,952 $1,206,952
personnel $299,977 $156,230
office expansion
$25,000

expenses $480,000 $2,065,438 $2,417,048 $2,615,845 $2,833,731 $3,205,852 $3,438,746
profit $250,000 $34,562 $213,002 $683,205 $1,311,019 $2,009,508 $3,133,847

50