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
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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END
IR SEMFIUEFSEIU
(END) Dow Jones Newswires
September 30, 2021 02:00 ET (06:00 GMT)
Napster (LSE:NAPS)
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