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Artist Partner
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“It has to be seen and heard to be believed!”
“It makes people’s eyes pop out!”
“Synthesizers have too much tracking error”
“Its so reliable, fast, and accurate . . . It's different because it works.”
“Recommend to anybody who wants toexperiment”
Jimmy Page,Led Zeppelin
Customers & Endorsers*
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Jimmy Page* Led ZeppelinPete Townshend The WhoJoe Perry Aerosmith
Eddie Van Halen Van HalenGraham Nash* CSNY & The HolliesKenny Loggins* Loggins & MessinaPeter Buck REMEd Roland* Collective SoulMick Fleetwood Fleetwood MacTom Keifer* Cinderella
Pat Metheny* Jazz ArtistPeter Frampton* Rock ArtistGlen Ballard Alanis MorissetteRick Springfield* Rock ArtistRobert Hunter* The Grateful DeadDavid Lynch* Movie / Audio ProducerArt Alexakis* EverclearOliver Leiber* Paula Abdul, Rod StewartMark Slaughter* SlaughterSonny Landreth* Cajun Rock Artist
The System
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• AxCent‘s tuning systems allow you to touch up
or change the tuning of an electric guitar at the
touch of a button.
• New music is created by the ability to change
key and tuning at will.
• Never waiting for a performer to manually
tune.
• Hearing accurate covers of the Rolling Stones, Crosby Still and
Nash, or Joni Mitchell.
• Working in a studio or rehearsal and never needing time to
tune.
• Needing fewer guitar techs to support artists.
This is what AxCent can do today!
What it does for the Artist
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• Opens New Tuning Territories
• Inspirational Song Writing Tool
• Compose Songs In Multiple Tunings
• Change Tuning Or Pitch While You Play
• Tuning Change Can Be Used as an Effect In Itself
• Pitch Adjustable To Match Vocal Range Or Prerecorded Source
• Tuning Change Can Be Synced To Match The Tempo Of A Song
• Compensates For Neck Warp, Temperature And Humidity
• Precise Well-Tempering For Specific Key Tunings
• Avoid Embarrassing Tuning Problems On Stage
• Back Lit LCD Easily Viewed On A Dark Stage
• Saves Time And Money In The Studio
• Reduce Need For Additional Guitars
• No Computer Skills Required
Mission
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“Be the world leader and gold standard for all self-tuning musical instruments.”
Bringing automatic tuning to:
• The worldwide $17B musical instrument
market
• All skill levels and players making music
accessible to everyone.
The World wants Self Tuning
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Only AxCent has the patented open-loop technology endorsed by so many Rock Legends. Our breakeven
is only 2,400 units per year.
Guitar makers all need self tuning. Guitar companies have tried to introduce self tuning systems but have only achieved
marginal acceptance because they have all used inferior closed loop technology. AxCent Tuning Systems uses open loop
technology that yields a feature rich and user friendly system that is second to none!
Worldwide Market - 2011
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Music Industry Revenue• World Wide• US
Guitar Industry Revenue• World Wide• US
Guitar Industry Units Sold• World Wide• US
Candidate Guitar Units Sold• WW Estimated in use today• WW Cumulative 5 yr. shipments• US Cumulative 5 yr. shipments
$ 17 B$ 6.6 B
6.4 M2.5 M
45 M18.5 M
7.4 M
Source: Music Trades Magazine
$ 3.8 B$ 1.5 B
Position and Competition
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• Traffic attractor
• New high dollar high margin product
• Up sell new guitars
• Minimal floor space
• Minimal capital commitment
• Easy to install
• Easy to setup
• Easily maintained by the customer
• Visually appealing add on
• High margin business
What it does for Retailers
• Develop a product line to match the needs of our customers
• Offer accessories and other after-market products
• Perform product development in-house
• Increase the functionality of the systems
• Offer more advanced and cost-effective products than our competitors
What it does for Luthier and Repair Shops
Who Needs a Self Tuning Guitar
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• BeginnersBeginners often quit because of tuning challenges.
• IntermediatesExploring alternate tunings becomes
quick and convenient.
• Nightclub ArtistsNo need to haul several guitars to the show.
• Professional MusiciansBoundless creative possibilities composing and performing. Saves time and money.
• SongwritersExpands the palette for popular music.
System Components
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• Mechanical device
• Computer
• LCD Color Touch Screen (STI)
• Rechargeable Internal Battery
• PC Link & Graphic User Interface (GUI)
Objective and Strategies
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“To make automatic tuning for guitars as common as the automatic
transmission for cars.”
Multi–tier Distribution Strategy Product Strategy
Manufacturing StrategyTechnology Strategy
Our product strategy is dedicated to bringing the best quality self tuning products to
market and to continually advance the technology.
Our current technology enables nearly all the features and functions desired by our
high-end artists and endorsers. Our new product expands the market with a mass
market price.
Our primary sales and marketing goal is to secure contracts from one or more large
OEM guitar manufacturers.
We will do this by making the product available directly and through retail
distributors to demonstrate that we are dependable suppliers of reliable and desirable
products.
Patents: Currently we have two issued patents. Our primary patent also relates to
future products. Our goal is to continue to build a protective wall of patents around
automatic tuning. At the same time, we will carefully keep many elements of the
core technology as trade secrets.
Our manufacturing strategy is designed to minimize capital investment and
maximize quality. Over time, we expect to use 2 different suppliers for electronic
and mechanical units. In so doing AxCent will always be the final assembly, test
and inspection point.
Market Trends
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Franchise brands like Fender, Gibson, and Martin remain at the lead but are under attack by new entrants like Seagull, Parkwood,
IRC, Yamaha, Samick, Montana, L’Arivee, Godin, Hamer, Carvin, Cort, Danelectro, ESP, Ibanez, Fernandes and more.
The issue for everyone is how to differentiate:
• Companies have tried automatic tuning with inferior technology
• Gibson and Fender have emphasized lower priced lines, Epiphone and Squire – each with high end quality
• Paul Reed Smith – very high end, very successful
“Automatic tuning is the easiest and fastest path to differentiation.”
Continual Platform Enhancement
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Axcent is not resting on its laurels, expect developmentto follow three paths – Function, Interface, and Cost.
Functional enhancement
• We expect to enhance our products with the features and options today’s guitar player demands.
• Indeed, we are far along in developing the STI’s first major enhancements.
• We will continue with two basic mechanical platforms, expect us to expand and contract features and
functions so that we can address the broadest market possible.
• These basic tuning systems are just the beginning.
• Range of products.
Cost & Pricing
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Costs
We anticipate the cost for the tuning system kits to be $163 per unit in moderate volumes, and lower prices in high volume.
• includes parts, labor, warranties, insurance and shipping costs.
• unit cost to decrease as we refine our processes and utilizeeconomies of scale in purchasing of materials.
Contemplated Pricing
Retail $695
Wholesale $495
OEM $300
LLC Managers and Advisors
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Managers:
Mark Bitter, 56 CEO/Managing Director
Neil Skinn, 57 CTO/Managing Director Peter Janssen
Advisors:
Chairman: Jim D’Addario, D’Addario Strings
Peter Frampton, Frampton
Graham Nash, CSN
Mark Slaughter, Slaughter
Revenue & EBITDA
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Revenue, years 1-5, all products $100 MM
Revenue, year 5 $50 MM
EBITDA years 1- 5 $58 MM
EBITDA, year 5 $31 MM
This forecast assumes we capture only 1.8% of the candidate domestic guitarmarket or .72% of the candidate global guitar market by the fifth year. We believeit is possible to attain that share even earlier.