Material Agreements

9 Months Ended

Sep. 30, 2019

Material Agreements

Material Agreements

Note G– Material Agreements

1. On May 26, 2019 the Company entered into an agreement with Aska Electronics Co., Ltd of China. Aska is a manufacturer of Bluetooth headphones, sport earbuds and associated listening devices and provides its products as an OEM and as an ODM for projects worldwide.

Under the Agreement:

● Aska will provide its design and manufacturing services for the Company’s customers.

● the Company will provide branding, sales and distribution services for existing and newly developed products that Aska manufactures for sale in the North American market;

● the Company will pay a sales commission to Aska equal to 98% of the revenues received from the sales to Aska’s existing clients in North America in which revenue from those clients was approximately $13,922,000 (unaudited). As of the date of this commission has not been paid and no revenues or costs have been accounted for.

● Aska will receive 700,000 shares of the Company’s Series I preferred stock, Each Preferred Share is convertible into one share of the Company’s common stock. As of the date of this report these shares had not been issued.

The Company, upon no less than thirty days written notice, may redeem the Preferred Shares at a price of $2.00 per share. The Preferred shares will automatically convert into shares of the Company’s common stock if the Company’s common stock closes at a price of $2.20 or more during any 30 consecutive trading days and if the average trading volume of the Company’s common stock during such 30 consecutive trading days is at least 10,000 shares per day.

A “leak out provision” was established such that Aska may not sell more than 100,000 shares per month.

As of the date of this report the Company has not generated any revenue related to this transaction and no shares have been issued.

However, because of the financial structure of the purchase of a percentage of certain profits that were part of the overall distribution rights, the Company was unable to obtain a financial institution that would facilitate the transaction as documented and ASKA, being a Chinese based entity, is prohibited from certain financial structures. Accordingly, the agreement has yet to be consummated and may not be consummated under the original terms and the Preferred Shares were never issued. Consequently, both Companies remain set on utilizing each’s resources for future business, the anticipated revenues that could have possibly been realized are not available at this particular time.

2. The Company signed a Strategic Partnership and Manufacturing Agreement with manufacturer and exporter Shenzhen Ferex Electrical Co., Ltd of China to manufacture and supply electrical components and systems at the end of 2018. The Company began offering design, engineering and manufacturing services to its customers in the beginning of 2019. Currently, the Company has a manufacturing contract to provide these services with AfterMaster Audio Labs regarding two new products, subject to certain financing requirements. As of the date of this filing the Company has not generated any revenue related to this transaction and no shares have been issued.