Music firm wants to cross-list on JSE
MUSIC LICENSING Inc, a small US-based music rights firm with a big catalogue, wants to cross-list on the Jamaica Stock Exchange, JSE, while adding Jamaican music to its repertoire.
The company has informed its shareholders, but has not filed anything with the JSE at the moment.
“We have no documentation as yet on this company,” said the JSE in response to Wednesday Business queries.
“Music Licensing Inc plans to list on the Jamaica Stock Exchange as soon as possible, pending a number of factors such as approval from regulatory authorities and the Jamaican Stock Exchange,” stated Music Licensing Inc. CEO, Jake Noch, in response to Wednesday Business queries.
The company’s shares trade under the ticker SONG on the penny-stock, or over-the-counter exchange in the United States of America, USA. Noch also heads the affiliated ProMusicRights, which holds a large intellectual property, IP, catalogue.
The company is one of a handful of music rights bodies. Others include ASCAP, BMI and SESAC. The company states that it represents works from artistes such as A$AP Rocky, Wiz Khalifa, Pharrell, Young Jeezy, Juelz Santana, Lil Yachty, MoneyBaggYo, Larry June, Soulja Boy, Lex Luger, Lud Foe, Young Scooter, Nipsey Hussle, Famous Dex, Fall Out Boy, and others. The company adds that it also represents the rights of music created by artificial intelligence.
Noch told Wednesday Business that the company plans to start the process this week with his legal team.
“Our local law firm who we are scheduled to formally retain later today (yesterday), has informed us that the process could be completed within only four weeks, provided that all the necessary requirements and procedures are met. We will keep our shareholders and the public informed of any updates regarding our listing plans on the JSE,” stated Noch in response to Wednesday Business queries.
Once the company secures legal representation, the law firm will introduce them to three potential broker-dealer firms for the listing by introduction. Listing by introduction allows companies to list without raising capital.
Noch believes the listing could open doors for the company to acquire valuable music assets within the Jamaican and Caribbean markets. He sees “great potential” for acquisitions of Jamaica-based music IP and music companies, including publishers, distribution companies, and local music catalogue.
“The team believes these assets have often been overlooked, and that the JSE listing could provide significant resources to utilise the company’s shares as share capital for potential acquisitions,” added the company in a release.
Noch said that a JSE listing by introduction would allow the company to expand its reach and visibility within the Caribbean market. It would also provide access to margin loans to the firm or its shareholders.
“A local Jamaican securities law firm has informed Music Licensing Inc that the listing process could be completed within just four weeks, streamlining the company’s entry into the Jamaican market. The firm also believes that this listing could make Music Licensing Inc’s shares margin-eligible in Jamaica, as well as for other local Caribbean-based banks, broker-dealers, and wealth management firms that deal in Jamaican listed equities, such as those in the Cayman Islands,” it added.
Noch, via ProMusicRights, manages some 2.5 million musical IPs in the company’s catalogue. The company protects the IP of the artistes in its catalogue, in exchange for paying them royalties. Rights entities usually earn royalties by charging fees to radio stations and online sites. In turn, rights firms earn a fee from the royalties they pay out.
The affiliated ProMusicRights explained that it is owed over US$432.35 million in what it called deferred revenue, at June 2022.
That’s because “various downstream customers have failed to continue payments under their respective agreements”, according to the company, in its latest June financials.
The company’s revenues are sporadic, but it generated US$35,000, according to its financials up to June 2022, and made a net loss of US$171,000.
The latest financials indicate that the company required a cash injection by December. Noch, however, added that it has a series of fundraising rounds that will unlock funds.
“Music Licensing Inc has no intention of raising capital as part of its listing on the JSE,” stated Noch, adding that it will be unlocking cash by taking various entities to court to pay royalties that it is owed.
“Additionally, Music Licensing Inc has a US$75-million regulation A+ tier-two offering qualified by the United States Securities and Exchange Commission that the company may use to raise capital if and when needed.”
A potential listing of Music Licensing Inc would become the first music rights entity listed on the JSE, following the loss-making C2W Music.
In 2018, the brokerage firm Stocks & Securities Limited, SSL, executed a reverse takeover of loss-making music publisher C2W Music through SSL Venture Capital Jamaica Limited. Then in 2022, a separate entity, MFS Capital, enacted a reverse takeover of SSL Venture Capital.