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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Napster Group Plc | LSE:NAPS | London | Ordinary Share | GB00BN326503 | ORD GBP7.50 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 200.00 | 230.00 | 250.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMNAPS
RNS Number : 4382N
Napster Group PLC
30 September 2021
The information contained within this announcement is deemed by the Company to constitute
inside information
stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via
the Regulatory Information Service, this inside information is now considered to be in the public domain.
For Immediate Release 30 September 2021
Napster Group PLC (formerly Melody VR Group PLC)
('NAPS' or the 'Company')
Half-yearly Results
Napster Group PLC (AIM: NAPS), a leading music company and operator of the MelodyVR and Napster platforms , is pleased to announce its Half-yearly Results for the period 29 December 2020 to 30 June 2021.
Financial Highlights
-- Revenues of GBP32.9m for the half year, up from GBP0.2m on H1 2020; -- Adjusted Operating Loss of GBP8.1m (H1 2020 Loss GBP9.4m); -- Annualised integration savings of $5.7m secured during H1 2021; -- Monthly global streams increased by 18% on H1 2020;
-- On 8 February 2021, the Company secured GBP6.48m investment from Nice & Green S.A, a Swiss investment firm and a further GBP1.6m via open offer on the PrimaryBid.com platform. In April 2021, Nice and Green's investment increased to GBP8.0m;
Commercial Highlights
-- On 2 February 2021, the Company announced the extension of its platform services agreement with SONOS to 14 new territories;
-- On 5 February 2021, the Company launched its exclusive 5G music partnership with Singtel, Asia's leading communications technology company;
-- On 8 March 2021, the Company changed its name to Napster Group PLC;
-- On 13 March 2021, the Company appointed Emmy Lovell, ex Executive President of WEA Europe as Chief Strategy Officer;
-- On 14 April 2021, the Company entered in to an exclusive 12-month partnership with NOS, one of Portugal's largest mobile operators;
-- On 10 June 2021, the Company announced the expansion of its partnership with SONOS Radio HD into five new territories;
- Ends -
Napster Group PLC
Anthony Matchett , CEO email@napster.group
finnCap Limited: Nominated Adviser and Broker
Corporate Finance: Marc Milmo, James Thompson, Milesh Hindocha Tel:44 (0) 20 7614 5900
ECM: Tim Redfern, Sunila de Silva
Equitory (Investor Relations) napster@equitory.com
Clara Melia, Geoff Callow
Chief Executive's Statement
I am pleased to report our results for the period 29 December 2020 to 30 June 2021 (the "Period") which for the first time reflect the activities of the enlarged group, incorporating the activities of the Napster business which was acquired on 28 December 2020.
Our vision for the enlarged group is to create the music platform of the future, serving music fans all over the world with the broadest range of music content, available in multiple formats and across multiple connected devices. Our ability to offer high-definition music streaming, curated radio and playlisting, short form video series, long-form video such as documentaries and films, as well as exclusive immersive audio-visual experiences and live events will provide for a content focused acquisition strategy with an owned and operated proprietary technology platform enabling a new era in music content consumption.
The development of our new platform has been one of the key areas of focus for the Company since the acquisition of the Napster business. This focus is well illustrated by the fact that as we move in to Q4, nearly 65% of our staff are involved in the development of our new platform with its enhanced offering, and we anticipate this resource to continue to expand until launch in early 2022. The funding initiatives secured at the start of the year have allowed us to further strengthen our balance sheet and supplement our development efforts. Both Davis Capital and Nice & Green, two material sources of finance and two of our most significant shareholders have shown invaluable support and belief in our vision for the future of music.
During the period we have also made some key hires, notable amongst these being Emmy Lovell, a seasoned music industry executive leader who joins us from Warner Music Group as Chief Strategy Officer, having developed digital promotions for artists including Kylie Minogue and The Chemical Brothers, as well as leading campaigns for the major artists including Gorillaz , Deadmau5, Danger Mouse and Tinie Tempah. In addition, Mark Kortekaas, a veteran of more than 30 years in digital media having formerly served as CTO of Univision and prior to that General Manager for the BBC's Online Technology Group joins us as Chief Technology Officer. Mark leads the technical creation of our new service, which will provide us with the ability to monetise our extensive content via multiple tiered subscription packages, live ticketed events and, in time, traditional merchandising sales. We believe the combination of our platform technology, unique immersive content, curation and monetisation will provide for unrivalled appeal and herald a new era of growth.
We have continued to refine our launch and content strategy with a significant program of market research and testing which underpin our assumptions and aspirations for 2022 and beyond. As we approach Q4, we have now completed the rebranding of our business which features throughout the user journey within our new music platform. In preparation for launch we have been able to share our vision of the future with many of our strategic partners who for the first time have been able to see visuals and "mockups" of the new combined App in advance of our beta launch. We expect the App to be available for preview by our partners next month.
The 5G roll out across the globe provides the opportunity for mobile operators to showcase their high-speed technology and for us to work with key strategic partners that have significant consumer followings. To date we have engaged with more than 20 mobile operators across 5 continents, as we seek to lay solid foundations for the Company so as to maximise potential consumer engagement at the time of our forthcoming launch. These partnerships will accelerate awareness and provide a catalyst for consumer growth.
As a business with annual revenues approaching $100m and a loyal subscriber base spread across 33 territories, the new music service that we are developing seeks to attract new users whilst preserving the existing subscriber base. Over the course of the first half of the current financial year, we have seen our monthly global streams increase by 18% per user and with an average customer lifetime exceeding 5 years, the preservation of our existing user base is important to us.
Despite this progress, our shareholders have experienced erosion in the value of their holding. We are committed to delivering long term shareholder value and to securing a valuation more appropriate to the scale of our operations, our revenues and the opportunity that stands before us. Our major stakeholders which include rightsholders, investors, artists, consumers and a growing employee base are now predominantly concentrated in the US. As a largely US centric business, we now believe that the interests of our shareholders would be better served by securing a listing in the US and accessing a valuation more aligned to the metrics which have been attributed to some of our music competitors and peers. We are therefore in the process of exploring the possible options available to the Board to deliver a listing in the US. Shareholders will be kept informed of any developments in this regard.
Principal Risks and Uncertainties
The success of our business is dependent upon the launch of our new music platform and its appeal to both consumers and partners throughout the various territories in which we operate. Our new platform will provide access to a broad range of music content including our immersive VR and 2D 360 content library and access to live ticketed events. This aspect will differentiate our service from all other music streaming services and the resumption of mass attended events and artist performances is essential if we are to generate new and exciting content for our platform. For the optimum user experience access to the full suite of platform content will require an uninterrupted high-speed internet connection through which to upload our content. For this we are dependent on the continued roll out of by the mobile operators of 5G technology, where increased bandwidth will facilitate heightened engagement for the billions of smartphone users on the move. Our proven ability to monetise our live and immersive content as demonstrated at the end of last year with Liam Gallagher in combination with our core streaming platform will provide for a peerless service to excite both music fans and shareholders alike.
Results
The results for the Group reflect the performance of the enlarged Napster Group for the period 29 December 2020 to 30 June 2021, and as such incorporate the consolidated activities of the Napster business for the first time.
During the Period the Group reported revenues of GBP32.9m, increasing from GBP0.2m in the period to 30 June 2020. After cost of sales comprising payments to rights holders and content capture and creation costs, the Group reported a gross profit of GBP8.3m (2020 : loss of GBP(1.1)m).
Adjusted Operating Loss before non-recurring and non-cash items totaled GBP(8.1)m compared with the previous year's first half result of GBP(9.4m).
Cost control is a key operational focus particularly during this pre-launch period when development resourcing is at its height. Integration of all business functions is now complete with the integration process delivering annualized saving of approximately $5.7m, primarily from a reduction in our work force in areas where functions overlapped. An efficient process of cash collection has been key in managing our working capital requirements and we are pleased to report a debtor day figure of 52 days (2020 : 66 days)
Cash on hand at the end of June 2021 totaled GBP9.7m (2020 : GBP2.6m). On 20 December 2020, the Company announced that it had entered into a US$25 million secured loan facility arrangement with Davis Capital Partners LLC an investment company and significant shareholder owned by Lanse Davis, one of the Company's non-executive Directors. At the half year US$15 million of the loan had been drawn down.
In addition, on February 2021, the Company entered in to an GBP8.0m convertible loan note facility with Nice & Green S.A a Swiss Investment firm, all of which had been advanced by the end of the half year.
At 30 June 2021, the Group's net assets totaled GBP18.6m (2020 : GBP12.2.m).
Outlook
With the technical development of our music platform at an advanced stage and discussions with key strategic partners progressing to a stage of commercial substance, we are confident that our technology will provide us with the ability to scale and that the launch of our new music service will set new standards for content and the way in which it is delivered. As set out above, we are committed to delivering shareholder value and believe that securing a US listing will enable the Group to secure an appropriate valuation that is consistent with our industry peers. With new 5G mobile networks providing the conduit for content delivery, we will be able to provide an unrivalled mobile experience for music fans around the world. We have a committed and capable leadership team supported by staff drawn from all corners of the music and digital industry. I would like to thank all of our team for their commitment, energy and vision and I look forward to the second half of the year and the planned launch of our new platform with great anticipation.
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR NAPSTER GROUP PLC
for the period 29 December 2020 to 30 June 2021
Hot Features
Premium
Notes Unaudited Unaudited Audited
29 December six months year to
2020 to to 28 December
30 June 2021 30 June 2020
2020
GBP GBP GBP
Revenue 32,907,681 189,932 987,726
Cost of Sales (24,562,085) (1,283,116) (5,562,891)
-------------- ------------ -------------
Gross Profit/(Loss) 8,345,596 (1,093,184) (4,575,165)
Administrative expenses (22,127,504) (9,391,361) (21,451,129)
-------------- ------------ -------------
OPERATING LOSS (13,781,908) (10,484,545) (26,026,294)
-------------------------------------- ------------- ------------- -------------
Operating loss before non-recurring
and non-cash items (8,116,668) (9,353,223) (23,618,216)
Transaction fees (1,285,000) - -
Depreciation, Amortisation and
Impairment (3,656,641) (1,002,638) (2,272,386)
Gain on disposal of non-current 5,369 - -
assets
Share based payments (728,968) (128,684) (135,622)
------------- ------------- -------------
OPERATING LOSS (13,781,908) (10,484,545) (26,026,294)
-------------------------------------- ------------- ------------- -------------
Finance income 725,984 21,204 29,597
Finance costs (1,102,520) (15,726) (67,990)
Foreign exchange loss (1,326,578) (262,333) (749,808)
------------- ------------- -------------
LOSS FOR THE PERIOD BEFORE TAXATION (15,485,022) (10,741,400) (26,814,495)
Taxation 805,399 - 4,377,298
NET LOSS AND TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD (14,679,623) (10,741,400) (22,437,197)
============= ============= =============
Attributable to:
Owners of the Company (14,679,623) (10,741,400) (22,437,197)
Loss per share
Basic and Diluted from Continuing
Operations 3 (0.56)p (0.68)p (1.3p)
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR NAPSTER GROUP PLC
for the period 29 December 2020 to 30 June 2021 (unaudited)
Share Share Merger Share Retained Reverse Non-Controlling Currency Total Equity
capital premium Relief Option Losses Takeover Interest Translation
Reserve Reserve Reserve Reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1 July
2020 17,806,119 47,599,443 486,611 2,546,427 (45,983,990) (10,002,543) (44,990) (169,123) 12,237,954
Share issue 3,243,085 7,622,259 - - - - - - 10,865,344
Grant of share
options/warrants 177,505 30,975 - 6,936 - - - - 215,416
Loss for the year - - - - (11,695,797) - - - (11,695,797)
Other
comprehensive
income:
Currency
transaction
reserve - - - - - - - 447,155 447,155
Balance at 28
December 2020 21,226,709 55,252,677 486,611 2,553,363 (57,679,787) (10,002,543) (44,990) 278,032 12,070,072
----------- ----------- -------- ---------- ------------- ------------- ---------------- ------------ -------------
Share issue 6,990,995 12,131,399 - - - - - - 19,122,394
Grant of share
options/warrants - - - 728,968 - - - - 728,968
Loss for the year - - - - (14,679,623) - - - (14,679,623)
Other
comprehensive
income:
Currency
transaction
reserve - - - - - - - 1,335,747 1,335,747
Balance at 30
June 2021 28,217,704 67,384,076 486,611 3,282,331 (72,359,410) (10,002,543) (44,990) 1,613,779 18,577,558
=========== =========== ======== ========== ============= ============= ================ ============ =============
CONSOLIDATED STATEMENT OF FINANCIAL POSISITON FOR NAPSTER GROUP PLC
as at 30 June 2021
Notes Unaudited Unaudited Audited
As at As at As at
30 June 2021 30 June 28 December
2020 2020
GBP GBP GBP
ASSETS
NON CURRENT ASSETS
Property, plant
and equipment 4 1,743,577 1,082,766 1,019,662
Right of Use Assets 5 1,623,203 620,369 1,498,740
Financial Assets - 258,107 243,809
Goodwill 6 13,049,140 - 603,476
Intangible assets 6 34,404,932 3,800,128 811,737
-------------- ------------- -------------
TOTAL NON-CURRENT
ASSETS 50,820,852 5,761,371 4,177,424
-------------- ------------- -------------
CURRENT ASSETS
Inventories - 368,025 -
Trade and other
receivables 18,086,900 5,101,554 16,359,041
Cash and cash equivalents 9,699,987 5,320,925 2,622,526
-------------- ------------- -------------
TOTAL CURRENT ASSETS 27,786,887 10,790,504 18,157,991
-------------- ------------- -------------
TOTAL AS890SETS 78,607,739 16,551,874 23,158,991
============== ============= =============
CURRENT LIABILITIES
Trade and other
payables (42,967,207) (3,682,997) (5,156,790)
Borrowings 8 (15,221,986) - (4,317,451)
Lease liabilities (712,650) (368,928) (644,018)
-------------- ------------- -------------
TOTAL CURRENT LIABILITIES (58,901,843) (4,051,925) (10,118,259)
NON-CURRENT LIABILIITES
Lease liabilities (1,128,338) (261,995) (970,660)
NET ASSETS 18,557,558 12,237,954 12,070,072
============== ============= =============
EQUITY
Share capital 9 28,217,704 17,806,119 21,226,709
Share Premium Reserve 67,384,076 47,599,443 55,252,677
Retained Losses (72,359,410) (45,983,990) (57,679,787)
Share Option Reserve 3,282,331 2,546,427 2,553,363
Merger Relief Reserve 486,611 486,611 486,611
Non-controlling
Interests (44,990) (44,990) (44,990)
Currency Translation
Reserve 1,613,779 (169,123) 278,032
Reverse Takeover
Reserve (10,002,543) (10,002,543) (10,002,543)
TOTAL EQUITY 18,557,558 12,237,954 12,070,072
============== ============= =============
CONSOLIDATED CASH FLOW STATEMENT FOR NAPSTER GROUP PLC
for the period 29 December 2020 to 30 June 2021
Unaudited Unaudited Audited
29 December six months Year to
2020 to to 28 December
30 June 2021 30 June 2020
2020
GBP GBP GBP
Loss for the period before
taxation (15,485,022) (10,741,400) (26,814,495)
Adjustments for:
R&D taxation credits - - 1,747,190
Depreciation of tangible assets 388,749 359,411 889,549
Amortisation of intangible
assets 2,783,968 522,036 996,046
Depreciation of right-of-use
assets 483,926 121,192 386,791
(Gain)/loss on disposal of
intangible assets (5,369) - 356,905
Share based payment expense 728,968 128,684 135,622
Other non-cash movements 1,469,873 - -
Decrease in inventories - 3,851 371,877
Decrease/(increase) in trade
and other receivables 11,541,483 (1,718,735) (10,346,114)
(Decrease)/increase in trade
and other payables (15,223,439) 2,539,686 4,013,479
-------------- ------------- -------------
Net cash outflow from operating
activities (13,316,863) (8,785,275) (28,263,150)
-------------- ------------- -------------
Investing activities:
Purchase of property, plant
and equipment (949,551) (628,449) (1,216,595)
Proceeds on sale of property, 103,144 - -
plant and equipment
Investment in intangible assets - (1,675,114) -
Acquisition of a subsidiary (1,938,867) - -
net of cash acquired
Net cash generated used in
investing activities (2,785,274) (2,303,563) (1,216,595)
-------------- ------------- -------------
Financing activities:
Proceeds from share issues
net costs 6,682,394 9,795,964 20,794,827
Proceeds from the exercise
of warrants - 133,519 208,480
Repayment of lease liabilities (365,762) - -
Prepayment of borrowings (3,781,330) - -
Proceeds from borrowings 18,732,183 - 4,317,451
-------------- ------------- -------------
Net cash generated from financing
activities 21,267,485 9,929,483 25,320,758
-------------- ------------- -------------
Increase/(decrease) in cash
and cash equivalents 5,165,348 (1,159,355) (4,158,987)
Effect of changes in foreign
exchange 1,912,113 (315,061) (13,828)
Cash and cash equivalents brought
forward 2,622,526 6,795,341 6,795,341
Cash and cash equivalents carried
forward 9,699,987 5,320,295 2,622,526
============== ============= =============
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR NAPSTER GROUP PLC
for the period 29 December 2020 to 30 June 2021
1. Basis of preparation of interim financial information
The consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as endorsed by
the European Union ("IFRS") and expected to be effective for the year ended 31 December 2021.
The consolidated interim financial statements are unaudited and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 28 December 2020, prepared in accordance with IFRS, have been filed with the Registrar of Companies. The Auditors' Report on these accounts was unqualified, did not include any matters to which the Auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under section 498 of the Companies Act 2006.
The consolidated interim financial statements are for the period 29 December 2020 to 30 June 2021.
The consolidated interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the group's annual financial statements for the year ended 28 December 2020, which were prepared in accordance with IFRS.
Going Concern
The executive management has prepared detailed cash flow forecasts for the Board . The Directors believe that the launch of the Group's new music platform will provide a catalyst for both subscription and revenue growth, but that over the course of the short to medium term prior to launch, it will place reliance on a number of its strategic stakeholders including rights holders and its principal lender Davis Capital to ensure that there is sufficient liquidity to meet its liabilities as and when they fall due.
Whilst such support cannot be guaranteed, the Directors are confident that the discussions to date provide sufficient confidence in securing the continued support from Davis Capital and ultimately securing its listing the US in combination with a further equity fundraising.
In the event of a delay to the timetable, the Directors are confident that cost savings could be implemented, or alternative financing sought to accommodate such a delay.
If ultimately the Directors are not able to secure the requisite support from its key stakeholders and fail to secure additional equity funding doubt would be cast as to the Group's ability to continue as a going concern. However, having regard to their assessment of the potential sources of finance and the existing working capital position, the Directors are of the opinion that the Group has the ability to secure the resources required to enable it to undertake its planned activities for the next twelve months.
Revenue Recognition
Revenue is recognised to the extent that it is probable that economic benefit will flow to the group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received in the ordinary course of the group's activities, excluding discounts, rebates, value added tax and other sales taxes.
(a) Content sales
Content revenue is recognised in the period the content is purchased from the platform either directly or via third party resellers. Revenue from content sales are recognised gross of costs paid to third party license and right holders in line with contracts, with the corresponding cost recognised as cost of sales.
(b) Content license revenue
Revenue from license contracts for the use of artist/label content is recognised over the period to which the contract relates.
(c) Interest income
Interest income is recognised using the effective interest method.
NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR NAPSTER GROUP PLC
for the period 29 December 2020 to 30 June 2021
Intangible assets - Development and content creation costs
The group recognises both internal development costs as well as VR content creation costs as intangible assets only when the following criteria are met: the technical feasibility of completing the intangible asset exists, there is an intent to complete and an ability to use or sell the intangible asset, the intangible asset will generate probable future economic benefits, there are adequate resources available to complete the development and to use or sell the intangible asset, and there is the ability to reliably measure the expenditure attributable to the intangible asset during its development.
Intangible assets with finite lives are amortised on a straight-line basis over their estimated useful lives and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation of intangible assets is recognised in the consolidated statement of comprehensive income/costs in the expense category consistent with the function of the intangible assets.
Amortisation rates applicable to development costs is 33% straight line.
Amortisation rates applicable to content assets released during the period is as follows:
-- Year 1: 80% -- Year 2: 15% -- Year 3: 5%
Content assets in production are not amortised as these assets are still in development and not in the condition necessary to be capable of operating in the manner intended by management. At the point the asset is in operational condition it is reclassified to Content Assets - released and is amortised in line with the above amortisation policy.
2. Statement of compliance
The financial statements comply with IFRS.
The Group currently adopts all relevant accounting standards that have been endorsed by the
EU. There are
various standards that are expected to be endorsed in 2021. The Group believes these
standards will have no material
impact on the financial statements.
3. Loss Per Share
Loss attributable to equity holders Unaudited Unaudited Audited
of the Company 30 June 2021 30 June Year to
2020 28 December
2020
GBP GBP GBP
Continuing and total operations (14,679,623) (10,741,400) (22,437,197)
No of shares No of Shares No of shares
Weighted average number of ordinary
shares in issue for basic and
fully diluted earnings 2,599,276,563 1,590,872,778 1,770,398,225
Price per Price per Price per
Share Share Share
Loss per share (0.56)p (0.68)p (1.3p)
Basic and diluted: (0.56)p (0.68)p (1.3p)
4. Tangible fixed assets
Audio-Visual Fixtures Computer Leasehold Motor Total
Prod Equipment & Equipment Improvements Vehicle
Fittings
GBP GBP GBP GBP GBP GBP
Cost
As at 28 December
2020 674,256 252,203 208,583 547,028 13,190 1,695,260
Additions 30,612 78,663 602,783 50,443 187,051 949,552
Business combination - 17,213 394,593 360,786 - 772,592
Disposal - (7,998) - (124,013) - (132,011)
Foreign exchange - 292 (7,114) (8,611) - (15,434)
As at 30 June
2021 704,868 340,372 1,198,845 825,633 200,241 3,269,959
================ ========== =========== ============== ========= ==========
Depreciation
As at 28 December
2020 424,180 59,033 95,018 95,169 2,198 675,598
Charge for the
period 80,731 70,075 79,731 156,013 2,198 388,749
Business combination - 10,694 157,144 335,788 - 503,626
Disposal - (7,998) - (26,238) - (34,236)
Foreign exchange - (211) 3,000 4,567 - 7,355
---------------- ---------- ----------- -------------- --------- ----------
As at 30 June
2021 504,911 132,015 328,893 556,166 4,397 1,526,382
================ ========== =========== ============== ========= ==========
Net Book Value
As at 28 December
2020 250,076 193,170 113,565 451,859 10,992 1,019,662
---------------- ---------- ----------- -------------- --------- ----------
As at 30 June
2021 199,956 200,357 869,952 269,468 195,844 1,743,577
================ ========== =========== ============== ========= ==========
5. Right of use assets
Land & Buildings Total
Cost GBP GBP
As at 28 December 2020 1,900,265 1,900,265
Additions 763,664 763,664
Business combination 1,379,785 1,379,785
Disposal (1,878,223) (1,878,223)
Foreign exchange (22,009) (22,009)
----------------- ------------
As at 30 June 2021 2,143,482 2,143,482
================= ============
Depreciation
As at 28 December 2020 401,525 401,525
Charge for the period 483,926 483,926
Business combination 1,200,107 1,200,107
Disposal (1,544,004) (1,544,004)
Foreign exchange (21,275) (21,275)
----------------- ------------
As at 30 June 2020 520,279 520,279
================= ============
Net Book Value
As at 28 December 2020 1,498,740 1,498,740
----------------- ------------
As at 30 June 2021 1,623,203 1,623,203
================= ============
6. Intangible assets
Goodwill Development Customer Trade Content Total
and relationship name - in Cost
technology production
GBP GBP GBP GBP GBP GBP
As at 28
December
2020 603,476 1,880,493 - - 1,231,131 3,715,100
Additions 3,169,599 - - - - 3,169,599
Business
combination 9,708,069 836,415 15,847,861 19,787,815 - 46,180,160
Foreign
exchange - (12,085) (228,962) (285,884) - (526,931)
As at 30
June 2021 13,481,114 2,704,823 15,618,899 19,501,931 1,231,131 52,537,898
=========== ============= ============== =========== ============= ===========
Amortisation
As at 28
December
2020 - 1,162,327 - - 1,137,560 2,299,887
Charge for
the period 432,004 508,488 778,216 971,689 93,571 2,783,968
As at 30
June 2021 432,004 1,670,815 778,216 971,689 1,231,131 5,083,855
=========== ============= ============== =========== ============= ===========
Net Book
Value
As at 28
December
2020 603,476 718,166 - 718,166 93,571 1,415,213
----------- ------------- -------------- ----------- ------------- -----------
As at 30
June 2021 13,049,140 1,034,008 14,840,683 18,530,242 - 47,454,073
=========== ============= ============== =========== ============= ===========
7. Business combination
On 29 December 2020 the Group acquired 100% of the issued capital of Rhapsody International Inc, which trades as Napster, for $25.3m (GBP GBP18.2m).
Napster, the original music industry disruptor, and a global music streaming service has over 1.1m paying subscribers and 5m total users. Over the coming year, we intend to leverage the existing Napster userbase, partners and underlying technologies developed by the Company as part of the foundation to build a next-generation music platform. At present, music content consumption is extremely fragmented for fans, with audio, video and live-events spanning multiple-platforms with a consequent need for multiple subscriptions. Our ambition over the coming months, with the support of our existing partners, is to build a cross-platform, hybrid music service, delivering audio recordings including the latest albums, video content incorporating music videos and documentaries, as well as renowned live-events, all via a single platform. The aim is to provide rightsholders and artists with fair compensation for their works in conjunction with a new suite of tools for both artists and rightsholders to deliver better engagement from their content and enable cross-promotion between their multiple content outputs.
The fair value of the assets acquired and liabilities assumed were as follows:
Book value Adjustment Fair value
$000 $000 $000
Intangible assets 15,731 48,877 64,608
Property, plant and
equipment 367 - 367
Current assets 30,514 (273) 30,241
Current liabilities (72,273) 1,048 (71,225)
Non-current liabilities (38,477) 35,463 (3,014)
Total net (liabilities)/assets (64,138) 85,115 20,977
============== ================ ===============
Goodwill 4,320
25,297
===============
The consideration for the acquisition and the goodwill arising
on acquisition are as follows:
$000
Purchase consideration:
Cash 15,000
Fair value of shares issued 10,297
---------------
25,297
===============
241,403,508 ordinary shares were issued at 3.56 pence per share to the vendors as part of the consideration for the acquisition as noted above. The fair value of the 241,403,508 ordinary shares issued as part of the consideration was determined on the basis of a Black-Scholes option pricing model.
8. Borrowings
Unaudited Unaudited Audited
As at As at As at
30 June 2021 30 June 28 December 2020
2020
GBP GBP GBP
Current (15,221,986) - (4,317,451)
Non-current - - -
Total borrowings (15,221,986) - (4,317,451)
============== ========== ==================
8. Borrowings (continued)
US$25 million loan facility
In December 2020, the Company announced that it had secured a US$25 million secured loan facility arrangement (the "Facility") with Davis Capital Partners LLC. The Facility attracts interest at a rate of 10 per cent per annum on drawn down funds, together with an arrangement fee of 2% payable on each draw. Interest is paid quarterly on the principal amount outstanding and can be paid in either cash or equity at the Company's option. The latest date for repayment is 20 months from the commencement of the Facility, however it may be repaid earlier at the Company's election. Any amounts repaid will not be available for subsequent drawdown. The Facility is secured against the assets of the Group and contains events of default which are customary in nature for this type of loan facility. As at 30 June 2021, US$15 million had been drawn down under the Facility and US$10.0 million of the Facility remained undrawn.
GBPGBP8 million Convertible Loan Note facility
In February 2021, the Company announced that it had secured an investment of GBPGBP6.48 million by way of unsecured, interest free Convertible Loan Notes (the "CLN") from Swiss Investment firm Nice & Green S.A. (the "Investor"). In April 2021, this investment was increased to GBP 8.0 million. Under the terms of the CLN, the loan notes are convertible into Ordinary Shares at the Investors request and will have a conversion price calculated with reference to 93 per cent. of the lowest daily VWAP during the 6 trading days immediately preceding the date of notice of conversion. The Company has the option to redeem the Loan Notes at its absolute discretion in cash at a 3 per cent premium to their nominal value.
In addition, the Investor will receive a commitment fee equal to 5 per cent of the principal amount of each tranche of CLN subscribed for. The CLN agreement contains customary representations and warranties for a financing arrangement of this nature. As at 30 June 2021, GBP GBP8.0 million of the CLN had been advanced. Of this GBP3.84m had been converted to equity.
9 . Share Capital
30(th) June 30(th) June
2021 2020
(unaudited) (unaudited)
Number Number
Ordinary shares of 1.1
pence each 506,735,267 499,725,635
Ordinary shares of 1.16
pence each 231,750,344 231,750,344
Ordinary shares of 1.2
pence each 4,615,090 4,615,090
Ordinary shares of 1.4
pence each 41,024,988 41,024,988
Ordinary shares of 1.7
pence each 205,232,810 205,232,810
Ordinary shares of 1.767 130,164,120 -
pence each
Ordinary shares of 1.85
pence each 33,419,076 33,419,076
Ordinary shares of 2.06 63,310,069 -
pence each
Ordinary shares of 2.77 9,747,292 -
pence each
Ordinary shares of 3.3 48,458,130 -
pence each
Ordinary shares of 3.5 335,024,248 -
pence each
Ordinary shares of 3.56 241,403,508 -
pence each
Ordinary shares of 3.75
pence each 481,427,404 275,419,966
Ordinary shares of 4.5
pence each 111,111,111 111,111,111
Ordinary shares of 8
pence each 187,500,000 187,500,000
Ordinary shares of 9 25,050 -
pence each
Ordinary shares of 15.399
pence each 4,997,041 4,997,041
Ordinary shares of 16
pence each 125,000,000 125,000,000
Deferred shares of 0.24
pence each 150,520,616 150,520,616
Deferred shares of 0.95
pence each 26,000 26,000
Total 2,937,466,164 1,896,307,667
Further copies of this document are available both at the registered office of the Company. The statement
will also be available to download on the Company's website: https://napster.group/
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