Monster Products Eyes $300-M Crypto Offering
Headphones maker Monster Products, Inc. is discreetly planning an initial coin offering (ICO) of $300 million in a move to overturn the company’s current situation.
Monster is seeking to mount one of the largest crypto token offerings of all time by selling monster money tokens, according to the firm’s filing with the US Securities and Exchange Commission.
Under its plan, the headphones maker will produce 500 million tokens and sell about 300 million in its offering that will last for one year. It is also issuing 75 million shares of common stock, which can be exchanged for one share of stock (instead of money) for every four tokens in the event of failure to launch the network.
More than half of the budget is allocated for the network’s technical development, while one-third is for marketing (both the protocol and monster products) and developing ties with partners who will sell Monster products.
But, if Monster successfully reached its target amount, this would lead to the creation of Monster Money Network, a new e-commerce website for selling products of the company and other entities using ethereum tokens.
The token to be sold has no equity or voting rights. Rather, it will serve as a payment scheme for e-commerce site being designed, one with faster settlement and lower processing fees.
The planned network will be used for “for payment processing, market analysis, accounting, audit and payroll services, inventory management and shipping operation” pertaining to Monster products sold online.
The online site will have a three stage process for the product. First, the platform will be a payments scheme, using an ERC-20 token. Second, it will reduce or remove transaction fees by allowing micro-transactions off-chain. Lastly, it will shift into its own blockchain.
“We consider Amazon, Ebay and Alibaba as examples of our main competitors with respect to the new Monster Money Network and our existing e-commerce platform,” Monster mentioned.
Although the filing recognized such a move won’t suffice to prevent it running afoul of existing securities law, the company intends to take advantage of the “emerging growth company” designation under the Jobs Act, which accords wider investor solicitation rights and certain lighter disclosure prerequisites.
Moving forward, Monster seeks to boost its global connections and brand visibility along with blockchain to recruit other e-commerce platforms into its and expand the customer base of MMNY Tokens to set up the blockchain standard for e-commerce platforms.
Founded in 1978, Monster is engaged in the business of manufacturing electronic accessories including headphones and Bluetooth speakers. For the longest time, the company has primarily relied on retailers to distribute its goods.
Monster has evolved a lot since it started as Monster Cable because its founder, Noel Lee, had found out various kinds of cables produced different levels of audio fidelity. Lee then launched a company to cash in on this discovery and then expanded into other related items.
“We primarily design, engineer, market and sell headphones, cables, docks, speakers, power products and mobile accessories,” Monster said.
However, it has been losing a substantial amount of money. The headphones maker incurred a net loss of $26.7 million at the end of 2017. It lost another $19.6 million in the first quarter of this year alone.
“The amount of future losses and when, if ever, we will achieve profitability are uncertain,” Monster said.
The ICO is not the first step taken by the company to reverse its current situation. It has axed several employees, ditched some products, slashed its marketing budget, and closed a factory in Mexico.
Nevertheless, Monster stated in their filing “[o]ur independent auditors have indicated … that there is substantial doubt about our ability to continue as a going concern.”