Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Document Type | 10-Q | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Quarterly Report | true | |
Entity File Number | 001-39795 | |
Entity Registrant Name | RESERVOIR MEDIA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-3584204 | |
Entity Address, Address Line One | 75 Varick Street | |
Entity Address, Address Line Two | 9th Floor | |
Entity Address, City or Town | NY | |
Entity Address State Or Province | NY | |
Entity Address, Postal Zip Code | 10013 | |
City Area Code | 212 | |
Local Phone Number | 675-0541 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,069,253 | |
Entity Central Index Key | 0001824403 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share (the “Common Stock”) | |
Trading Symbol | RSVR | |
Security Exchange Name | NASDAQ | |
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share | ||
Title of 12(b) Security | Warrants to purchase one share of Common | |
Trading Symbol | RSVRW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Revenues | $ 30,435,488 | $ 20,985,117 | $ 47,153,638 | $ 34,629,310 |
Costs and expenses: | ||||
Cost of revenue | 12,091,903 | 8,228,951 | 19,784,290 | 14,132,243 |
Amortization and depreciation | 4,777,683 | 3,859,268 | 8,856,928 | 7,289,136 |
Administration expenses | 5,654,840 | 3,579,348 | 10,319,670 | 6,583,982 |
Total costs and expenses | 22,524,426 | 15,667,567 | 38,960,888 | 28,005,361 |
Operating income | 7,911,062 | 5,317,550 | 8,192,750 | 6,623,949 |
Interest expense | (2,728,825) | (2,201,090) | (5,507,877) | (4,408,786) |
Gain (loss) on foreign exchange | 193,260 | (91,333) | 174,939 | (207,260) |
Gain on fair value of swaps | 677,730 | 661,570 | 1,225,218 | 407,289 |
Interest and other income | 287 | 67 | 355 | 4,845 |
Income before income taxes | 6,053,514 | 3,686,764 | 4,085,385 | 2,420,037 |
Income tax expense | 1,575,325 | 899,586 | 1,064,679 | 577,663 |
Net income | 4,478,189 | 2,787,178 | 3,020,706 | 1,842,374 |
Net loss attributable to noncontrolling interests | 77,508 | 44,631 | 131,491 | 103,421 |
Net income attributable to Reservoir Media, Inc. | $ 4,555,697 | $ 2,831,809 | $ 3,152,197 | $ 1,945,795 |
Earnings per common share (Note 14): | ||||
Basic | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.04 |
Diluted | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.04 |
Weighted average common shares outstanding (Note 14): | ||||
Basic | 53,641,984 | 28,539,299 | 41,159,228 | 28,207,901 |
Diluted | 58,992,972 | 44,714,705 | 52,231,699 | 44,383,307 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 4,478,189 | $ 2,787,178 | $ 3,020,706 | $ 1,842,374 |
Other comprehensive income (loss): | ||||
Translation adjustments | (1,779,437) | 4,337 | (1,564,295) | 1,978,989 |
Total comprehensive income | 2,698,752 | 2,791,515 | 1,456,411 | 3,821,363 |
Comprehensive loss attributable to noncontrolling interests | 77,508 | 44,631 | 131,491 | 103,421 |
Total comprehensive income attributable to Reservoir Media, Inc. | $ 2,776,260 | $ 2,836,146 | $ 1,587,902 | $ 3,924,784 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 12,771,926 | $ 9,209,920 |
Accounts receivable | 19,329,072 | 15,813,384 |
Current portion of royalty advances | 12,772,425 | 12,840,855 |
Inventory and prepaid expenses | 4,406,145 | 1,406,379 |
Total current assets | 49,279,568 | 39,270,538 |
Intangible assets, net | 511,091,322 | 393,238,010 |
Investment in equity affiliates | 3,993,984 | 1,591,179 |
Royalty advances, net of current portion | 36,324,858 | 28,741,225 |
Property, plant and equipment, net | 273,723 | 321,766 |
Other assets | 740,946 | 781,735 |
Total assets | 601,704,401 | 463,944,453 |
Current liabilities | ||
Accounts payable and accrued liabilities | 5,326,502 | 3,316,768 |
Royalties payable | 17,448,203 | 14,656,566 |
Accrued payroll | 627,046 | 1,634,852 |
Deferred revenue | 1,310,414 | 1,337,987 |
Other current liabilities | 8,626,012 | 2,615,488 |
Amounts due to related parties (Note 11) | 100,596 | 290,172 |
Current portion of loans and secured notes payable | 0 | 1,000,000 |
Income taxes payable | 490,713 | 533,495 |
Total current liabilities | 33,929,486 | 25,385,328 |
Loans and secured notes payable | 203,937,323 | 211,531,875 |
Deferred income taxes | 20,569,924 | 19,735,537 |
Fair value of swaps | 3,341,319 | 4,566,537 |
Other liabilities | 1,120,769 | 6,739,971 |
Total liabilities | 262,898,821 | 267,959,248 |
Contingencies and commitments (Note 16) | ||
Shareholders' Equity | ||
Preferred stock, $0.0001 par value 75,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2021; 98,032,767 shares authorized, 16,175,413 shares issued and outstanding at March 31, 2021 | 0 | 81,632,500 |
Common stock, $0.0001 par value; 750,000,000 shares authorized, 64,069,253 issued and outstanding at September 30, 2021; 196,065,534 shares authorized, 28,539,311 shares issued and outstanding at March 31, 2021 | 6,407 | 2,854 |
Additional paid-in capital | 333,489,211 | 110,496,300 |
Retained earnings | 3,903,693 | 751,496 |
Accumulated other comprehensive income | 532,063 | 2,096,358 |
Total Reservoir Media Inc. shareholders' equity | 337,931,374 | 194,979,508 |
Noncontrolling interest | 874,206 | 1,005,697 |
Total shareholders' equity | 338,805,580 | 195,985,205 |
Total liabilities and shareholders' equity | $ 601,704,401 | $ 463,944,453 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Mar. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares, authorized | 75,000,000 | 98,032,767 |
Preferred stock, shares, issued | 0 | 16,175,413 |
Preferred stock, shares, outstanding | 0 | 16,175,413 |
Common shares, par value, (per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares, authorized | 750,000,000 | 196,065,534 |
Common stock, shares, issued | 64,069,253 | 28,539,311 |
Common stock, shares, outstanding | 64,069,253 | 28,539,311 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interests | Total |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retrospective application of reverse recapitalization | $ 2,734 | $ (2,734) | |||||
Retrospective application of reverse recapitalization (in shares) | 16,092,906 | 27,353,454 | |||||
Balance at Mar. 31, 2020 | $ 81,632,500 | $ 1 | 102,423,444 | $ (9,537,465) | $ (4,385,615) | $ 959,024 | $ 171,091,889 |
Balance (in shares) at Mar. 31, 2020 | 82,500 | 140,227 | |||||
Beginning balance at Mar. 31, 2020 | $ 81,632,500 | $ 2,735 | 102,420,710 | (9,537,465) | (4,385,615) | 959,024 | 171,091,889 |
Beginning balance (in shares) at Mar. 31, 2020 | 16,175,406 | 27,493,681 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares | $ 104 | 7,972,906 | 7,973,010 | ||||
Issuance of common shares (in shares) | 1,045,618 | ||||||
Share-based compensation | 25,674 | 25,674 | |||||
Net income (loss) | 0 | (886,014) | (58,790) | (944,804) | |||
Other comprehensive income (loss) | 0 | 1,974,652 | 1,974,652 | ||||
Ending balance at Jun. 30, 2020 | $ 81,632,500 | $ 2,839 | 110,419,290 | (10,423,479) | (2,410,963) | 900,234 | 180,120,421 |
Ending balance (in shares) at Jun. 30, 2020 | 16,175,406 | 28,539,299 | |||||
Balance at Mar. 31, 2020 | $ 81,632,500 | $ 1 | 102,423,444 | (9,537,465) | (4,385,615) | 959,024 | 171,091,889 |
Balance (in shares) at Mar. 31, 2020 | 82,500 | 140,227 | |||||
Beginning balance at Mar. 31, 2020 | $ 81,632,500 | $ 2,735 | 102,420,710 | (9,537,465) | (4,385,615) | 959,024 | 171,091,889 |
Beginning balance (in shares) at Mar. 31, 2020 | 16,175,406 | 27,493,681 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 1,842,374 | ||||||
Ending balance at Sep. 30, 2020 | $ 81,632,500 | $ 2,839 | 110,444,965 | (7,591,670) | (2,406,626) | 855,603 | 182,937,611 |
Ending balance (in shares) at Sep. 30, 2020 | 16,175,406 | 28,539,299 | |||||
Beginning balance at Jun. 30, 2020 | $ 81,632,500 | $ 2,839 | 110,419,290 | (10,423,479) | (2,410,963) | 900,234 | 180,120,421 |
Beginning balance (in shares) at Jun. 30, 2020 | 16,175,406 | 28,539,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 25,675 | 25,675 | |||||
Net income (loss) | 0 | 2,831,809 | (44,631) | 2,787,178 | |||
Other comprehensive income (loss) | 0 | 4,337 | 4,337 | ||||
Ending balance at Sep. 30, 2020 | $ 81,632,500 | $ 2,839 | 110,444,965 | (7,591,670) | (2,406,626) | 855,603 | 182,937,611 |
Ending balance (in shares) at Sep. 30, 2020 | 16,175,406 | 28,539,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retrospective application of reverse recapitalization | $ 2,853 | (2,853) | |||||
Retrospective application of reverse recapitalization (in shares) | 16,092,906 | 28,393,739 | |||||
Balance at Mar. 31, 2021 | $ 81,632,500 | $ 1 | 110,499,153 | 751,496 | 2,096,358 | 1,005,697 | 195,985,205 |
Balance (in shares) at Mar. 31, 2021 | 82,500 | 145,560 | |||||
Beginning balance at Mar. 31, 2021 | $ 81,632,500 | $ 2,854 | 110,496,300 | 751,496 | 2,096,358 | 1,005,697 | 195,985,205 |
Beginning balance (in shares) at Mar. 31, 2021 | 16,175,406 | 28,539,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 25,675 | 25,675 | |||||
Net income (loss) | (1,403,500) | (53,983) | (1,457,483) | ||||
Other comprehensive income (loss) | 215,142 | 215,142 | |||||
Ending balance at Jun. 30, 2021 | $ 81,632,500 | $ 2,854 | 110,521,975 | (652,004) | 2,311,500 | 951,714 | 194,768,539 |
Ending balance (in shares) at Jun. 30, 2021 | 16,175,406 | 28,539,299 | |||||
Balance at Mar. 31, 2021 | $ 81,632,500 | $ 1 | 110,499,153 | 751,496 | 2,096,358 | 1,005,697 | 195,985,205 |
Balance (in shares) at Mar. 31, 2021 | 82,500 | 145,560 | |||||
Beginning balance at Mar. 31, 2021 | $ 81,632,500 | $ 2,854 | 110,496,300 | 751,496 | 2,096,358 | 1,005,697 | 195,985,205 |
Beginning balance (in shares) at Mar. 31, 2021 | 16,175,406 | 28,539,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 3,020,706 | ||||||
Ending balance at Sep. 30, 2021 | $ 6,407 | 333,489,211 | 3,903,693 | 532,063 | 874,206 | 338,805,580 | |
Ending balance (in shares) at Sep. 30, 2021 | 64,069,253 | ||||||
Beginning balance at Jun. 30, 2021 | $ 81,632,500 | $ 2,854 | 110,521,975 | (652,004) | 2,311,500 | 951,714 | 194,768,539 |
Beginning balance (in shares) at Jun. 30, 2021 | 16,175,406 | 28,539,299 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
RHI Preferred Stock Conversion | $ (81,632,500) | $ 1,618 | 81,630,882 | ||||
RHI Preferred Stock Conversion (in shares) | (16,175,406) | 16,175,406 | |||||
Business Combination and PIPE Investment, net of transaction costs | $ 1,935 | 141,144,876 | 141,146,811 | ||||
Business Combination and PIPE Investment, net of transaction costs (in shares) | 19,354,548 | ||||||
Share-based compensation | 191,478 | 191,478 | |||||
Net income (loss) | 4,555,697 | (77,508) | 4,478,189 | ||||
Other comprehensive income (loss) | (1,779,437) | (1,779,437) | |||||
Ending balance at Sep. 30, 2021 | $ 6,407 | $ 333,489,211 | $ 3,903,693 | $ 532,063 | $ 874,206 | $ 338,805,580 | |
Ending balance (in shares) at Sep. 30, 2021 | 64,069,253 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net income | $ 3,020,706 | $ 1,842,374 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization of intangible assets | 8,780,146 | 7,176,770 |
Depreciation of property, plant and equipment | 76,782 | 112,366 |
Share-based compensation | 217,153 | 51,349 |
Non-cash interest charges | 591,795 | 380,695 |
Gain on fair value of swaps | (1,225,218) | (407,289) |
Dividend from equity affiliates | 23,896 | 25,562 |
Deferred income taxes | 834,387 | 405,136 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,515,688) | 120,846 |
Inventory and prepaid expenses | (2,999,766) | (477,050) |
Royalty advances | (7,515,203) | (4,495,264) |
Other assets | 71,277 | |
Accounts payable and accrued expenses | 3,466,757 | 1,527,624 |
Income tax payable | (42,782) | 451,860 |
Net cash used in operating activities | 1,712,965 | 6,786,256 |
Cash flows from investing activities: | ||
Purchases of music catalogs | (125,902,112) | (85,921,308) |
Investment in equity affiliates | (2,464,487) | |
Purchase of property, plant and equipment | (28,739) | (36,686) |
Net cash used for investing activities | (128,395,338) | (85,957,994) |
Cash flows from financing activities: | ||
Issuance of common shares, net of issuance costs | 7,973,010 | |
Proceeds from Business Combination and PIPE Investment, net of issuance costs | 141,146,811 | |
Proceeds from secured line of credit | 67,554,867 | 20,800,000 |
Repayments of secured line of credit | (55,000,000) | |
Repayments of secured loans | (18,500,000) | (500,000) |
Deferred financing costs paid | (3,241,214) | (325,968) |
Repayments of related party loans | (81,103,196) | |
Draws on related party loans | 80,913,620 | 292,102 |
Net cash provided by financing activities | 131,770,888 | 28,239,144 |
Foreign exchange impact on cash | (1,526,509) | 2,001,574 |
Increase (decrease) in cash and cash equivalents | 3,562,006 | (48,931,020) |
Cash and cash equivalents, beginning of period | 9,209,920 | 58,240,123 |
Cash and cash equivalents, end of period | $ 12,771,926 | $ 9,309,103 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 6 Months Ended |
Sep. 30, 2021 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | NOTE 1. DESCRIPTION OF BUSINESS Reservoir Media, Inc. (formerly known as Roth CH Acquisition II Co. (“ ROCC Company On July 28, 2021 (the “ Closing Date RHI Merger Agreement Merger Sub Business Combination Common Stock NASDAQ The Business Combination was accounted for as a reverse recapitalization, with RHI determined to be the accounting acquirer and the Company as the acquired company for accounting purposes. All historical financial information presented in the unaudited condensed consolidated financial statements represents the accounts of RHI and its consolidated subsidiaries as if RHI is the predecessor to the Company. See Note 3, “ Business Combination and PIPE Investment The Company’s activities are organized into two operating segments: Music Publishing and Recorded Music. Operations of the Music Publishing segment involve the acquisition of interests in music catalogs from which royalties are earned as well as signing songwriters to exclusive agreements which give the Company an interest in the future delivery of songs. The publishing catalog includes ownership or control rights to more than 130,000 musical compositions that span across historic pieces, motion picture scores and current award-winning hits. Operations of the Recorded Music segment involve the acquisition of sound recording catalogs as well as the discovery and development of recording artists and the marketing, distribution, sale and licensing of the music catalog. The Recorded Music operations are primarily conducted through the Chrysalis Records platform and Tommy Boy Music, LLC (“ Tommy Boy Acquisitions COVID-19 Pandemic In March 2020, the World Health Organization characterized the coronavirus (“ COVID-19 The Company has evaluated and continues to evaluate the potential impact of the COVID-19 pandemic on its consolidated financial statements. Government-imposed restrictions and general behavioral changes in response to the pandemic adversely affected the Company’s results of operations for the three and six months ended September 30, 2021 and 2020. This included performance revenue generated from retail, restaurants, bars, gyms and live shows, synchronization revenue, and the release schedule of physical product. Even as government restrictions are lifted and consumer behavior starts to return to pre-pandemic norms, it is unclear for how long and to what extent the Company’s operations will continue to be affected. Although the Company has not made material changes to any estimates or judgments that impact its consolidated financial statements as a result of COVID-19, the extent to which the COVID-19 pandemic may impact the Company will depend on future developments, which are highly uncertain and cannot be predicted. Future developments surrounding the COVID-19 pandemic could negatively affect the Company’s operating results, including reductions in revenue and cash flow and could impact the Company’s impairment assessments of accounts receivable or intangible assets, which may be material to our consolidated financial statements. Paycheck Protection Program Loan During the six months ended September 30, 2020, the Company borrowed $616,847 (the “ PPP Loan PPP CARES Act The Company accounted for the PPP Loan as an in-substance government grant because it expected to meet the PPP Loan eligibility criteria and concluded that the loan represented, in substance, a grant that was expected to be forgiven. Proceeds from the PPP Loan were initially recognized as a deferred income liability and presented as an operating activity within the Company’s consolidated statement of cash flows. Subsequently, the Company reduced this liability and recognized a reduction in payroll expenses on a systematic basis over the period in which the related costs for which the PPP Loan was intended were incurred. No interest for the PPP Loan was recognized in the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiaries and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “ SEC US GAAP The condensed consolidated balance sheet of the Company as of March 31, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by US GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods. The results for the three and six months ended September 30, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending March 31, 2022 or any other period. The following include significant accounting policies that have been adopted by the Company: Use of Significant Accounting Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Significant estimates are used for, but not limited to, determining useful lives of intangible assets, intangible asset recoverability and impairment and accrued revenue. Actual results could differ from these estimates. Foreign Currencies The Company has determined the U.S. dollar to be the functional currency of the Company and certain subsidiaries as it is the currency of the primary economic environment in which the companies operate while other subsidiaries have been determined to have the British Pound as their functional currencies. Monetary assets and liabilities denominated in foreign currencies other than the functional currency are translated into the respective functional currencies at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities at the exchange rates in effect at the time of acquisition or issue. Revenues and expenses are translated at rates approximating the exchange rates in effect at the time of the transactions. All exchange gains and losses are included in operations. Financial statements of subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using the current rate method. Under this method, assets and liabilities are translated at the rate of exchange in effect at the balance sheet date. Revenue and expenses are translated at the average rate of exchange for the fiscal year. Exchange gains and losses are deferred and reflected on the balance sheet in accumulated other comprehensive income and subsequently recognized in income upon substantial disposal of the net investment in the foreign operation. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. Accounts Receivable Credit is extended to customers based upon an evaluation of the customer’s financial condition. The time between the Company’s issuance of an invoice and payment due date is not significant. Customer payments that are not collected in advance of the transfer of promised services or goods are generally due 30-60 days from the invoice date. The Company monitors customer credit risk related to accounts receivable and, when deemed necessary, maintains a provision for estimated uncollectible accounts, which is estimated based on historical experience, aging trends and, in certain cases, management judgments about specific customers. Based on this analysis, the Company did not record a provision for estimated uncollectible accounts as of September 30, 2021 or March 31, 2021. Concentrations of Credit Risk Customer credit risk represents the potential for financial loss if a customer is unwilling or unable to meet its agreed upon contractual payment obligations. In the Music Publishing segment, the Company collects a significant portion of its royalties from global copyright collecting societies. Collecting societies and associations are generally not-for-profit organizations that represent composers, songwriters and music publishers. These organizations seek to protect the rights of their members by licensing, collecting license fees and distributing royalties for the use of the members’ works. The Company does not believe there is any significant collection risk from such societies and associations. In the Recorded Music segment, the majority of the revenue is collected from the Company’s distribution partners, rather than directly from the customers. These distribution partners primarily pay through the revenue to the Company on a monthly basis. The Company routinely assesses the financial strength of its distribution partners and the Company does not believe there is any significant collection risk. Acquisitions and Business Combinations In conjunction with each acquisition transaction, the Company assesses whether the transaction should follow accounting guidance applicable to an asset acquisition or a business combination. This assessment requires an evaluation of whether the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, resulting in an asset acquisition or, if not, resulting in a business combination. If treated as an asset acquisition, the asset is recorded in accordance with the Company’s intangible asset policy and related acquisition costs are capitalized as part of the asset. In a business combination, the Company recognizes identifiable assets acquired, liabilities assumed, and non-controlling interests at their fair values at the acquisition date. Any consideration paid in excess of the net fair value of the identifiable assets and liabilities acquired in a business combination is recorded to goodwill and acquisition-related costs are expensed as incurred. Intangible Assets Intangible assets consist primarily of publishing and recorded music catalogs. Intangible assets are recorded at fair value in a business combination and relative fair value in an asset acquisition. Intangible assets are amortized over their expected useful lives using the straight-line method. The Company periodically reviews the carrying value of its amortizable intangible assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable or that the lives assigned may no longer be appropriate. To the extent the estimated future cash inflows attributable to the asset, less estimated future cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. If the Company determines that events and circumstances warrant a revision to the remaining period of amortization, an asset’s remaining useful life would be changed, and the remaining carrying amount of the asset would be amortized prospectively over that revised remaining useful life. Goodwill The Company had $402,067 of goodwill as of September 30, 2021 and March 31, 2021, which is classified with “Other assets” in the Company’s condensed consolidated balance sheets. All of the goodwill arose in connection with an acquisition on December 29, 2019 and has been assigned to a reporting unit within the Music Publishing segment. There were no impairments, disposals or other acquisitions of goodwill in the six months ended September 30, 2021 and 2020. Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company evaluates goodwill for potential impairment on an annual basis on the first day of the fiscal fourth quarter (January 1), or at other times during the year if events or circumstances indicate that it is more-likely-than-not (greater than 50%) that the fair value of a reporting unit is below the carrying amount. In reviewing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount, the Company performs a quantitative goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount. If the fair value of the reporting unit is less than its carrying amount, the Company will measure any goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. Investments in Equity Affiliates The Company accounts for investments in affiliates using the equity method of accounting when it has significant influence over an affiliate’s operations. The Company’s share of investee’s net income or loss and basis difference amortization is classified as “Interest and other income” in the consolidated statements of income. Deferred Revenue Deferred revenue principally relates to fixed fees and minimum guarantees received in advance of the Company’s performance or usage by the licensee. Reductions in deferred revenue are a result of the Company’s performance under the contract or usage by the licensee. Deferred Finance Costs Deferred finance costs are amortized on an effective interest basis over the term of the related obligation. Deferred finance charges are netted against the loans. See Note 8, “ Loans Deferred Charges Deferred charges consist of direct costs incurred in connection with the potential acquisition of entertainment interests in music compositions pursued by the Company. Such costs are deferred when closing of the transaction is deemed probable and are added to the cost of the asset once acquired or expensed if the acquisition does not proceed. Revenues The Company recognizes revenue when, or as, control of the promised services or goods is transferred to its customers and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Music Publishing Music Publishing revenues are earned in the form of royalties relating to the licensing of rights in musical compositions and the sale of published sheet music and songbooks. Royalties principally relate to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images. Music publishing royalties, except for synchronization royalties, are recognized when the sale or usage occurs. The most common form of consideration for publishing contracts is sales- and usage-based royalties. The collecting societies submit usage reports, typically with payment for royalties due, often on a quarterly or biannual reporting period, in arrears. Royalties are recognized as the sale or usage occurs based upon usage reports when these reports are available for the reporting period or estimates of royalties based on historical data, such as recent royalties reported, company-specific information with respect to changes in repertoire, industry information and other relevant trends when usage reports are not available for the reporting period. Synchronization revenue is recognized as revenue when control of the license is transferred to the customer. Recorded Music Revenues from the sale or license of Recorded Music products through digital distribution channels are recognized when the sale or usage occurs based on usage reports received from the customer. Digital licensing contracts are generally long-term with consideration in the form of sales- and usage-based royalties that are primarily received monthly. For certain licenses where the consideration is fixed and the intellectual property being licensed is static, revenue is recognized at the point in time when control of the licensed content is transferred to the customer. Revenues from the sale of physical Recorded Music products are recognized upon delivery, which occurs once the product has been shipped and control has been transferred. Principal versus Agent Revenue Recognition The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in a transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service. The Company is typically required to pay a specified portion of the fees, earnings, payments and revenues received from the exploitation of the underlying music compositions to the original songwriter (the “ Royalty Costs Royalty Costs and Royalty Advances The Company incurs Royalty Costs that are payable to its songwriters and recording artists generated from the sale or license of its music publishing copyrights and recorded music catalog. Royalties are calculated using negotiated rates in accordance with the recording artist and songwriter contracts. Calculations are based on revenue earned or user/usage measures or a combination of these. There are instances where such data is not available to be processed and royalty cost calculations may be complex or involve judgments about significant volumes of data to be processed and analyzed. In many instances, the Company commits to pay its recording artists and songwriters royalties in advance of future sales. The Company accounts for these advances under the related guidance in the Financial Accounting Standards Board (the “ FASB ASC Entertainment—Music ASC 928 Share-Based Compensation Compensation expense related to the issuance of share-based awards to the Company’s employees is measured at fair value on the grant date. We use the Black-Scholes option pricing model to value stock options. The compensation expense for awards that vest over a future service period is recognized over the requisite service period on a straight-line basis. The Company recognizes share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate. Earnings Per Share The consolidated statements of income present basic and diluted earnings per share (“ EPS participating securities Diluted EPS is computed similar to basic EPS, except that the denominator is increased to include the number of additional shares for potential dilutive effects of the RHI Preferred Stock (as defined below), stock options and warrants outstanding during the period. The dilutive effects of the RHI Preferred Stock were calculated in accordance with the if-converted method, or two-class method, whichever was more dilutive. The dilutive effects of stock options and warrants are calculated in accordance with the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As a result of the reverse recapitalization, the Company has retroactively adjusted the weighted average shares outstanding prior to the Closing Date to give effect to the Exchange Ratio (as defined in the Merger Agreement) to determine the number of shares of Common Stock into which they were converted. Employee Benefit Plans The Company has a 401(k) retirement savings plan open to U.S. based employees who have completed three months of eligible service. The Company contributes $0.60 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participant’s election. Income Taxes Income taxes are determined using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the differences between the accounting bases of assets and liabilities and their corresponding tax basis. Deferred taxes are measured using enacted tax rates expected to apply when the asset is realized, or the liability is settled. A deferred tax asset is recognized when it is considered more likely than not to be realized. Companies subject to the Global Intangible Low-Taxed Income provision (“ GILTI Comprehensive Income The Company reports in accordance with ASC Topic 220, “ Comprehensive Income ASC 220 Derivative Financial Instruments The Company’s interest rate swaps have not been designated as a hedging instrument and, therefore, are recognized at fair value at the end of each reporting period with changes in fair value recorded in the condensed consolidated statements of income. Fair Value Measurement and Hierarchy The Company reports in accordance with ASC Topic 820, “ Fair Value Measurements and Disclosures ASC 820 i.e. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability and are based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: ● Level 1 ––Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. ● Level 2 ––Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. ● Level 3 ––Valuations based on inputs that are unobservable and significant to the overall fair value measurement. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. See Note 15, “ Financial Instruments Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1993, as amended (the “ Securities Act JOBS Act Sarbanes-Oxley Act Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement declared effective under the Securities Act or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “ Exchange Act Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In February 2016, the FASB issued Accounting Standards Update (“ ASU Leases (Topic 842) ASU 2016-02 ROU Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) In June 2016, the FASB issued ASU 2016-03, “ Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-03 In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes ASU 2019-12 Reference Rate Reform (Topic 848) ASU 2020-04 |
BUSINESS COMBINATION AND PIPE I
BUSINESS COMBINATION AND PIPE INVESTMENT | 6 Months Ended |
Sep. 30, 2021 | |
BUSINESS COMBINATION AND PIPE INVESTMENT | |
BUSINESS COMBINATION AND PIPE INVESTMENT | NOTE 3. BUSINESS COMBINATION AND PIPE INVESTMENT As discussed in Note 1, “ Description of Business Immediately prior to the consummation of the Business Combination, each share of Series A preferred stock, par value $0.00001 per share, of RHI (the “ RHI Preferred Stock RHI Common Stock RHI Preferred Stock Conversion Exchange Ratio RMI Exchanged Option In connection with the Business Combination, ROCC entered into subscription agreements with certain accredited investors (the “ PIPE Investors ROCC Common Stock PIPE Investment Approximately $20,900,000 of transaction fees and expenses were incurred in connection with the closing of the Business Combination and the PIPE Investment, which have been accounted for as a reduction in proceeds. A portion of the proceeds from the Business Combination and the PIPE Investment was used to pay transaction fees and expenses, and approximately $81,300,000 was used to retire the Tommy Boy Related Party Notes (as defined below) and related accrued interest, repay the secured loan outstanding in an amount of $18,250,000 and make a payment totaling $36,750,000 on the secured line of credit in connection with a refinancing of the Previous Credit Facilities. See Note 8, “ Loans On the Closing Date, the Company also amended and restated its certificate of incorporation to adjust the number of its authorized shares of capital stock to 750,000,000 shares of Common Stock and 75,000,000 shares of preferred stock. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Sep. 30, 2021 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 4. REVENUE RECOGNITION For the Company’s operating segments, Music Publishing and Recorded Music, the Company accounts for a contract when it has legally enforceable rights and obligations and collectability of consideration is probable. The Company identifies the performance obligations and determines the transaction price associated with the contract. Revenue is recognized when, or as, control of the promised services or goods is transferred to the Company’s customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Certain of the Company’s arrangements include licenses of intellectual property with consideration in the form of sales- and usage-based royalties. Royalty revenue is recognized when the subsequent sale or usage occurs using the best estimates available of the amounts that will be received by the Company. The Company recognized revenue of $ 993,503 and $ 2,325,320 from performance obligations satisfied in previous periods for the six months ended September 30, 2021 and 2020, respectively. Disaggregation of Revenue The Company’s revenue consisted of the following categories during the three and six months ended September 30, 2021 and 2020: Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Revenue by Type Performance $ 4,386,093 $ 4,872,944 $ 7,048,849 $ 7,975,356 Digital 11,582,156 8,035,301 18,229,588 13,941,189 Mechanical 959,142 1,090,269 1,369,090 1,478,621 Synchronization 4,144,920 2,804,869 6,096,758 4,348,222 Other 1,076,098 780,148 1,669,594 1,181,685 Total Music Publishing 22,148,409 17,583,531 34,413,879 28,925,073 Digital 4,752,522 1,761,802 7,573,891 3,484,392 Physical 2,537,924 825,849 3,506,943 1,018,198 Synchronization 312,383 284,964 420,381 350,077 Neighboring rights 469,964 371,896 803,195 575,780 Total Recorded Music 8,072,793 3,244,511 12,304,410 5,428,447 Other revenue 214,286 157,075 435,349 275,790 Total revenue $ 30,435,488 $ 20,985,117 $ 47,153,638 $ 34,629,310 Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Revenue by Geographical Location United States Music Publishing $ 10,815,930 $ 10,058,429 $ 17,669,953 $ 16,953,140 United States Recorded Music 5,092,686 1,426,172 6,675,535 2,084,423 United States other revenue 214,286 157,075 435,349 275,790 Total United States 16,122,902 11,641,676 24,780,837 19,313,353 International Music Publishing 11,332,479 7,525,102 16,743,926 11,971,933 International Recorded Music 2,980,107 1,818,339 5,628,875 3,344,024 Total International 14,312,586 9,343,441 22,372,801 15,315,957 Total revenue $ 30,435,488 $ 20,985,117 $ 47,153,638 $ 34,629,310 Only the United States represented 10% or more of the Company’s total revenues in the three and six months ended September 30, 2021 and 2020. Music Publishing Music publishers act as copyright owners and/or administrators of the musical compositions and generate revenues related to the exploitation of musical compositions (as opposed to recorded music). Music publishers receive royalties from the use of the musical compositions in public performances, digital and physical recordings, and through synchronization (the combination of music with visual images). Performance revenues are received when the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations ( e.g. e.g. Included in these revenue streams, excluding synchronization and other revenues, are licenses with performing rights organizations or collecting societies ( e.g The Company excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction, and (ii) collected from customers. Recorded Music Recorded Music mainly involves selling, marketing, distribution and licensing of recorded music owned by the Company. Recorded Music revenues are derived from four main sources, which include digital, physical, synchronization and neighboring rights. Digital revenues are generated from the expanded universe of digital partners, including digital streaming services and download services. Digital licensing contracts are generally long-term with consideration in the form of sales- and usage-based royalties that are typically received monthly. Additionally, for certain licenses, including synchronization licenses, where the consideration is fixed and the intellectual property being licensed is static, revenue is recognized at the point in time when control of the licensed content is transferred to the customer. Physical revenues are generated from the sale of physical products such as vinyl, CDs and DVDs. The Company uses distribution partners to facilitate the sale of physical products. Revenues from the sale of physical Recorded Music products are recognized upon transfer of control to the customer, which typically occurs once the product has been shipped and the ability to direct use and obtain substantially all of the benefit from the asset have been transferred. In accordance with industry practice and as is customary in many territories, certain products, such as CDs and DVDs, are sold to customers with the right to return unsold items. Revenues from such sales are generally recognized upon shipment based on gross sales. Synchronization revenues represent royalties or fees for the right to use sound recordings in combination with visual images such as in films or television programs, television commercials and video games. In certain territories, the Company may also receive royalties when sound recordings are performed publicly through broadcast of music on television, radio and cable and in public spaces such as shops, workplaces, restaurants, bars and clubs. These public performance royalties on sound recordings are classified as “Neighboring rights” revenue. For fixed-fee contracts, revenue is recognized at the point in time when control of the licensed content is transferred to the customer. Royalty based contracts are recognized as the underlying sales or usage occurs. Deferred Revenue The following table reflects the change in deferred revenue during the six months ended September 30, 2021 and 2020: Six Months Ended September 30, 2021 2020 Balance at beginning of period $ 1,337,987 $ 473,022 Cash received during period 1,451,623 5,254,965 Revenue recognized during period (1,479,196) (3,431,916) Balance at end of period $ 1,310,414 $ 2,296,071 |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Sep. 30, 2021 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 5. ACQUISITIONS In the ordinary course of business, the Company regularly acquires publishing and recorded music catalogs, which are typically accounted for as asset acquisitions. During the six months ended September 30, 2021 and 2020, the Company completed such acquisitions totaling $128,125,285 and $83,084,327, respectively, inclusive of deferred acquisition payments. Significant acquisition transactions, all of which have been accounted for as asset acquisitions, completed during the six months ended September 30, 2021 and 2020 included the following: ● On June 2, 2021, the Company acquired U.S. based record label and music publishing company Tommy Boy for approximately $100 million. Two members of the Company’s board of directors (the “ Board ”) were also members of Tommy Boy’s board of managers and had an equity interest in both companies. The acquisition of Tommy Boy was accounted for as an asset acquisition as a result of the significant concentration of the fair value of gross assets acquired in a recorded music catalog intangible asset (weighted average useful life of 30 years ). ● On April 13, 2020, the Company acquired all of the copyrights to the musical compositions owned by Shapiro, Bernstein & Co., Inc. (“ SBI ”), one of the oldest music publishers in the United States. The transaction was accounted for as an asset acquisition as a result of the significant concentration of the fair value of gross assets acquired in a publishing catalog intangible asset (weighted average useful life of 30 years ). |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS Intangible assets subject to amortization consist of the following as of September 30, 2021 and March 31, 2021: September 30, March 31, 2021 2021 Intangible assets subject to amortization: Publishing and recorded music catalogs $ 584,157,948 $ 457,662,303 Artist management contracts 971,825 995,464 Gross intangible assets 585,129,773 458,657,767 Accumulated amortization (74,038,451) (65,419,757) Intangible assets, net $ 511,091,322 $ 393,238,010 Straight-line amortization expense totaled $4,732,180 and $3,802,792 in the three months ended September 30, 2021 and 2020, respectively. Straight-line amortization expense totaled $8,780,146 and $7,176,770 in the six months ended September 30, 2021 and 2020, respectively. |
ROYALTY ADVANCES
ROYALTY ADVANCES | 6 Months Ended |
Sep. 30, 2021 | |
ROYALTY ADVANCES | |
ROYALTY ADVANCES | NOTE 7. ROYALTY ADVANCES The Company made royalty advances totaling $13,253,141 and $9,565,877 during the six months ended September 30, 2021 and 2020, respectively, recoupable from the writer’s or artist’s share of future royalties otherwise payable, in varying amounts. Advances expected to be recouped within the next twelve months are classified as current assets, with the remainder classified as noncurrent assets. Six Months Ended September 30, 2021 2020 Balance at beginning of period $ 41,582,080 $ 40,263,439 Additions 13,253,141 9,565,877 Recoupments (5,737,938) (5,070,613) Balance at end of period $ 49,097,283 $ 44,758,703 |
LOANS
LOANS | 6 Months Ended |
Sep. 30, 2021 | |
LOANS | |
LOANS | NOTE 8. LOANS Long-term debt consists of the following: September 30, March 31, 2021 2021 Secured loan bearing interest at LIBOR plus a spread $ — $ 18,500,000 Secured line of credit bearing interest at LIBOR plus a spread 209,645,715 197,090,848 Debt issuance costs, net (5,708,392) (3,058,973) 203,937,323 212,531,875 Less: short term portion of secured loan — 1,000,000 $ 203,937,323 $ 211,531,875 Credit Facilities On December 19, 2014, Reservoir Media Management, Inc. (“ RMM RMM Credit Agreement Secured Loan Secured Line of Credit Credit Facilities Debt Refinancing New Senior Credit Facility The New Senior Credit Facility has a scheduled maturity date of October 16, 2024. Borrowings under the New Senior Credit Facility bear interest at a rate equal to either the sum of a base rate plus a margin of 1.25% or the sum of a LIBO rate plus a margin of 2.25%. RMM is also required to pay an unused fee in respect of unused commitments under the New Senior Credit Facility, if any, at a rate of 0.25% per annum. Substantially all tangible and intangible assets of the Company, RHI, RMM and the other subsidiary guarantors are pledged as collateral to secure the obligations of RMM under the RMM Credit Agreement. The RMM Credit Agreement contains customary covenants limiting the ability of the Company, RHI, RMM and certain of its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, make investments, make cash dividends, redeem or repurchase capital stock, dispose of assets, enter into transactions with affiliates or enter into certain restrictive agreements. In addition, the Company, on a consolidated basis with its subsidiaries, must comply with financial covenants requiring the Company to maintain (i) a total leverage ratio of no greater than 6.00:1.00 as of the end of each fiscal quarter, (ii) a fixed charge coverage ratio of not less than 1.25:1.00 for each four fiscal quarter period, and (iii) a consolidated senior debt to library value ratio of 0.55, subject to certain adjustments. If RMM does not comply with the covenants in the RMM Credit Agreement, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding under the New Senior Credit Facility. The New Senior Credit Facility also includes an “accordion feature” that permits RMM to seek additional commitments in an amount not to exceed $50,000,000 that would increase the New Senior Credit Facility. As of September 30, 2021, the New Senior Credit Facility had a borrowing capacity of $248,750,000. Interest Rate Swaps As of March 31, 2019, RMM had entered into two interest rate swaps, both of which expire on March 10, 2022, one with a notional amount of $40,228,152 and one for $59,325,388. Under the terms of the interest rate swaps, RMM pays a fixed rate of 2.812% and 2.972% respectively, to the counterparty and receives a floating interest from the counterparty based on LIBOR with reference to notional amounts adjusted to match the original scheduled principal repayments pursuant to the indenture agreement. The notional amount of the interest rate swaps was $97,157,674 as of September 30, 2021 and $97,533,496 as of March 31, 2021. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9. INCOME TAXES Income tax expense for the three months ended September 30, 2021 and 2020 was $1,575,325 (26.0% effective tax rate) and $899,586 (24.4% effective tax rate), respectively. Income tax expense for the six months ended September 30, 2021 and 2020 was $1,064,679 (26.1% effective tax rate) and $577,663 (23.9% effective tax rate), respectively. The effective tax rates during these periods reflect the amount and mix of income from multiple tax jurisdictions. |
SUPPLEMENTARY CASH FLOW INFORMA
SUPPLEMENTARY CASH FLOW INFORMATION | 6 Months Ended |
Sep. 30, 2021 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
SUPPLEMENTARY CASH FLOW INFORMATION | NOTE 10. SUPPLEMENTARY CASH FLOW INFORMATION Interest paid and income taxes paid for the six months ended September 30, 2021 and 2020 were comprised of the following: 2021 2020 Interest paid $ 4,916,082 $ 4,028,091 Income taxes paid $ 40,000 $ 83,174 Non-cash investing and financing activities for the six months ended September 30, 2021 and 2020 were comprised of the following: 2021 2020 Acquired intangible assets included in other liabilities $ 2,326,000 $ — Conversion of RHI Preferred Stock to Common Stock $ 81,632,500 $ — |
AMOUNTS DUE TO _ (FROM) RELATED
AMOUNTS DUE TO / (FROM) RELATED PARTIES | 6 Months Ended |
Sep. 30, 2021 | |
AMOUNTS DUE TO / (FROM) RELATED PARTIES | |
AMOUNTS DUE TO / (FROM) RELATED PARTIES | NOTE 11. AMOUNTS DUE TO / (FROM) RELATED PARTIES The Company has various shared services agreements with its majority shareholder and other affiliated entities under the control of its majority shareholder. These agreements cover services such as IT support and re-billed services of staff who perform services across multiple entities. The acquisition of Tommy Boy was financed using cash on hand and borrowings from related parties (the “ Tommy Boy Related Party Notes Business Combination and PIPE Investment September 30, March 31, 2021 2021 Due to (from) Wesbild Holdings Ltd., parent company of Wesbild Inc. Unsecured, bears no interest, with no specific terms of repayment $ 17,216 $ 83,480 Sub-total 17,216 83,480 Due to (from) DRI Capital Inc., a subsidiary of Wesbild Holdings Ltd. Unsecured, bears no interest, with no specific terms of repayment — 81,738 Due to Reservoir Media Management (Canada) Inc., a subsidiary of Wesbild Holdings Ltd. Unsecured, bears no interest, with no specific terms of repayment 83,380 124,954 Sub-total 83,380 206,692 $ 100,596 $ 290,172 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Sep. 30, 2021 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 12. SHAREHOLDERS’ EQUITY The condensed consolidated statements of shareholders’ equity reflect the reverse capitalization as of the Closing Date. Because RHI was deemed to be the accounting acquirer in the reverse capitalization with ROCC, all periods prior to the Closing Date reflect the balances and activity of RHI. The consolidated balances, share activity and per share amounts in these condensed consolidated statements of equity were retroactively adjusted, where applicable, using the Exchange Ratio. See Note 1, “ Description of Business Business Combination and PIPE Investment RHI Preferred Stock Prior to the Business Combination, RHI had 16,175,406 shares of RHI Preferred Stock outstanding. The RHI Preferred Stock was convertible into an equal number of shares of RHI Common Stock at the option of the preferred shareholder and was mandatorily converted into an equal number of shares of RHI Common Stock upon a qualified public offering of RHI Common Stock. Immediately prior to the effective time of the Business Combination, each share of RHI Preferred Stock that was issued and outstanding was automatically converted into a number of shares of RHI Common Stock pursuant to the RHI Preferred Stock Conversion. See Note 3, “ Business Combination and PIPE Investment While outstanding, the RHI Preferred Stock participated in dividends declared on common shares, if any, on the basis as if the shares of RHI Preferred Stock were converted into shares of RHI Common Stock. The Company did not declare any dividends subsequent to the issuance of RHI Preferred Stock through the RHI Preferred Stock Conversion. As of September 30, 2021, the Company had no shares of RHI Preferred Stock outstanding. RHI Common Stock Issuance During the six months ended September 30, 2020, RHI issued 1,045,617 shares of RHI Common Stock for an aggregate consideration of $8,000,009 to existing shareholders to fund its publishing and recorded music catalog acquisitions. RHI incurred $27,000 of issuance costs in connection with this issuance, which RHI accounted for as a reduction in the proceeds from the RHI Common Stock. Warrants As of September 30, 2021, the Company’s outstanding warrants included 5,750,000 publicly-traded warrants (the “ Public Warrants Private Warrants Warrants The Company may redeem the outstanding Public Warrants in whole, but not in part, at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of Common Stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the registered holders. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a cashless basis. In no event will the Company be required to net cash settle the warrant exercise. The Private Warrants are identical to the Public Warrants, except that the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Warrants under ASC Topic 480, Distinguishing Liabilities from Equity ASC 480 Derivatives and Hedging ASC 815 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Sep. 30, 2021 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 13. SHARE-BASED COMPENSATION 2021 Incentive Plan On July 28, 2021, in connection with the Business Combination, the Company adopted the Reservoir Media, Inc. 2021 Omnibus Incentive Plan (the “ 2021 Incentive Plan Previous RHI 2019 Incentive Plan Beginning on April 1, 2022 and ending on March 31, 2031, the aggregate number of shares of Common Stock that may be issued under the 2021 Incentive Plan will automatically increase by the lesser of (a) 3% of the total number of shares of Common Stock issued and outstanding on the last day of the preceding fiscal year on a fully diluted basis and assuming that all shares available for issuance under the 2021 Incentive Plan are issued and outstanding, or (b) such number of Shares determined by the Board. There have been no grants of equity awards under the 2021 Incentive Plan since the effective date of the 2021 Incentive Plan through September 30, 2021. As of the effective date of the 2021 Incentive Plan, no further stock awards have been or will be granted under the Previous RHI 2019 Incentive Plan, and the Previous RHI 2019 Incentive Plan is no longer in effect. See Note 18, “ Subsequent Events The 2021 Incentive Plan is administered by the compensation committee of the Board (the “ Compensation Committee Stock Option Activity As discussed in Note 3, “ Business Combination and PIPE Investment Share-based compensation expense totaled $191,478 ($147,599, net of taxes) and $217,153 ($167,391, net of taxes) during the three and six months ended September 30, 2021, respectively. Share-based compensation expense totaled $25,675 ($19,791, net of taxes) and $51,349 ($39,582, net of taxes) during the three and six months ended September 30, 2020, respectively. Share-based compensation expense is classified as “Administration expenses” in the accompanying condensed consolidated statements of income. The increase in share-based compensation expense during the three and six months ended September 30, 2021 reflects the accelerated vesting discussed above. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Sep. 30, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 14. EARNINGS PER SHARE The following table summarizes the basic and diluted earnings per common share calculation for the three and six months ended September 30, 2021 and 2020: Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Basic earnings per common share Net income attributable to Reservoir Media, Inc. $ 4,555,697 $ 2,831,809 $ 3,152,197 $ 1,945,795 Less: income allocated to participating securities (370,386) (1,024,398) (637,294) (709,141) Net income attributable to common shareholders $ 4,185,311 $ 1,807,411 $ 2,514,903 $ 1,236,654 Weighted average common shares outstanding - basic 53,641,984 28,539,299 41,159,228 28,207,901 Earnings per common share - basic $ 0.08 $ 0.06 $ 0.06 $ 0.04 Diluted earnings per common share Net income attributable to common shareholders $ 4,185,311 $ 1,807,411 $ 2,514,903 $ 1,236,654 Add: income allocated to participating securities 370,386 1,024,398 637,294 709,141 Net income attributable to Reservoir Media, Inc. $ 4,555,697 $ 2,831,809 $ 3,152,197 $ 1,945,795 Weighted average common shares outstanding - basic 53,641,984 28,539,299 41,159,228 28,207,901 Weighted average effect of potentially dilutive securities: Assumed conversion of RHI Preferred Stock 4,747,130 16,175,406 10,430,043 16,175,406 Effect of dilutive stock options 603,858 — 642,428 — Weighted average common shares outstanding - diluted 58,992,972 44,714,705 52,231,699 44,383,307 Earnings per common share - diluted $ 0.08 $ 0.06 $ 0.06 $ 0.04 Prior to the RHI Preferred Stock Conversion in connection with the Business Combination, shares of the RHI Preferred Stock were considered participating securities. Because of their anti-dilutive effect, 5,887,500 shares of Common Stock equivalents comprised of warrants have been excluded from the diluted earnings per share calculation for the three and six months ended September 30, 2021. Because of their anti-dilutive effect, 1,494,848 shares of Common Stock equivalents comprised of stock options have been excluded from the diluted earnings per share calculation for the three and six months ended September 30, 2020. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS | NOTE 15. FINANCIAL INSTRUMENTS The Company is exposed to the following risks related to its financial instruments: (a) Credit Risk Credit risk arises from the possibility that the Company’s debtors may be unable to fulfill their financial obligations. Revenues earned from publishing and distribution companies are concentrated in the music and entertainment industry. The Company monitors its exposure to credit risk on a regular basis. (b) Interest Rate Risk The Company is exposed to market risk from changes in interest rates on its secured loan. As described in Note 8, “ Loans, The fair value of the outstanding interest rate swaps was a $3,341,319 liability as of September 30, 2021 and a $4,566,537 liability as of March 31, 2021. Fair value is determined using Level 2 inputs, which are based on quoted prices and market observable data of similar instruments. The change in the unrealized fair value of the swaps during the three and six months ended September 30, 2021 of $677,730 and $1,225,218, respectively, was recorded as a gain on changes in fair value of derivative instruments. The change in the unrealized fair value of the swaps during the three and six months ended September 30, 2020 of $661,570 and $407,289, respectively, was recorded as a gain on changes in fair value of derivative instruments. (c) Foreign Exchange Risk The Company is exposed to foreign exchange risk in fluctuations of currency rates on its revenue from royalties, writers’ fees and its subsidiaries’ operations. (d) Financial Instruments Financial instruments not described elsewhere include cash, accounts receivable, accounts payable, accrued liabilities, secured loans payable and borrowing under its line of credit. The carrying values of these instruments as of September 30, 2021 do not differ materially from their respective fair values due to the immediate or short-term duration of these items or their bearing market-related rates of interest. The fair value of amounts due from and owed to related parties are impracticable to determine due to the related party nature of such amounts and the lack of a readily determinable secondary market. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 6 Months Ended |
Sep. 30, 2021 | |
CONTINGENCIES AND COMMITMENTS | |
CONTINGENCIES AND COMMITMENTS | NOTE 16. CONTINGENCIES AND COMMITMENTS On September 8, 2020, an action was filed in the U.S. District Court for the Southern District of New York against a consolidated subsidiary of the Company and certain prior owners (the “ Prior Owners Engagement Letters In addition to the foregoing, the Company is subject to claims and contingencies in the normal course of business. To the extent the Company cannot predict the outcome of the claims and contingencies or estimate the amount of any loss that may result, no provision for any contingent liabilities has been made in the consolidated financial statements. The Company believes that losses resulting from these matters, if any, would not have a material adverse effect on the financial position, results of operations or cash flows of the Company. All such matters which the Company concludes are probable to result in a loss and for which management can reasonably estimate the amount of such loss have been accrued for within these condensed consolidated financial statements. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Sep. 30, 2021 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 17. SEGMENT REPORTING The Company’s business is organized in two reportable segments: Music Publishing and Recorded Music. The Company identified its Chief Executive Officer as its Chief Operating Decision Maker (“ CODM OIBDA The accounting policies of the Company’s business segments are consistent with the Company’s policies for the consolidated financial statements. The Company does not have sales between segments. The following tables present total revenue and reconciliation of OIBDA to operating income by segment for the three and six months ended September 30, 2021 and 2020: Three Months Ended September 30, 2021 Music Recorded Publishing Music Other Consolidated Total revenue $ 22,148,409 $ 8,072,793 $ 214,286 $ 30,435,488 Reconciliation of OIBDA to operating income: Operating income 4,745,697 3,149,271 16,094 7,911,062 Amortization and depreciation 3,324,860 1,428,004 24,819 4,777,683 OIBDA $ 8,070,557 $ 4,577,275 $ 40,913 $ 12,688,745 Six Months Ended September 30, 2021 Music Recorded Publishing Music Other Consolidated Total revenue $ 34,413,879 $ 12,304,410 $ 435,349 $ 47,153,638 Reconciliation of OIBDA to operating income: Operating income 4,429,677 3,687,154 75,919 8,192,750 Amortization and depreciation 6,509,196 2,297,857 49,875 8,856,928 OIBDA $ 10,938,873 $ 5,985,011 $ 125,794 $ 17,049,678 Three Months Ended September 30, 2020 Music Recorded Publishing Music Other Consolidated Total revenue $ 17,583,531 $ 3,244,511 $ 157,075 $ 20,985,117 Reconciliation of OIBDA to operating income: Operating income 3,891,917 1,378,878 46,755 5,317,550 Amortization and depreciation 3,311,067 548,201 — 3,859,268 OIBDA $ 7,202,984 $ 1,927,079 $ 46,755 $ 9,176,818 Six Months Ended September 30, 2020 Music Recorded Publishing Music Other Consolidated Total revenue $ 28,925,073 $ 5,428,447 $ 275,790 $ 34,629,310 Reconciliation of OIBDA to operating income: Operating income 4,931,482 1,649,584 42,883 6,623,949 Amortization and depreciation 6,197,114 1,092,022 — 7,289,136 OIBDA $ 11,128,596 $ 2,741,606 $ 42,883 $ 13,913,085 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS In October 2021, the Company granted an aggregate of 247,045 restricted stock units (“ RSUs |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiaries and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “ SEC US GAAP The condensed consolidated balance sheet of the Company as of March 31, 2021, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by US GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods. The results for the three and six months ended September 30, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending March 31, 2022 or any other period. The following include significant accounting policies that have been adopted by the Company: |
Use of Significant Accounting Estimates | Use of Significant Accounting Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Significant estimates are used for, but not limited to, determining useful lives of intangible assets, intangible asset recoverability and impairment and accrued revenue. Actual results could differ from these estimates. |
Foreign Currencies | Foreign Currencies The Company has determined the U.S. dollar to be the functional currency of the Company and certain subsidiaries as it is the currency of the primary economic environment in which the companies operate while other subsidiaries have been determined to have the British Pound as their functional currencies. Monetary assets and liabilities denominated in foreign currencies other than the functional currency are translated into the respective functional currencies at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities at the exchange rates in effect at the time of acquisition or issue. Revenues and expenses are translated at rates approximating the exchange rates in effect at the time of the transactions. All exchange gains and losses are included in operations. Financial statements of subsidiaries with functional currencies other than the U.S. dollar are translated into U.S. dollars using the current rate method. Under this method, assets and liabilities are translated at the rate of exchange in effect at the balance sheet date. Revenue and expenses are translated at the average rate of exchange for the fiscal year. Exchange gains and losses are deferred and reflected on the balance sheet in accumulated other comprehensive income and subsequently recognized in income upon substantial disposal of the net investment in the foreign operation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. |
Accounts Receivable | Accounts Receivable Credit is extended to customers based upon an evaluation of the customer’s financial condition. The time between the Company’s issuance of an invoice and payment due date is not significant. Customer payments that are not collected in advance of the transfer of promised services or goods are generally due 30-60 days from the invoice date. The Company monitors customer credit risk related to accounts receivable and, when deemed necessary, maintains a provision for estimated uncollectible accounts, which is estimated based on historical experience, aging trends and, in certain cases, management judgments about specific customers. Based on this analysis, the Company did not record a provision for estimated uncollectible accounts as of September 30, 2021 or March 31, 2021. |
Concentrations of Credit Risk | Concentrations of Credit Risk Customer credit risk represents the potential for financial loss if a customer is unwilling or unable to meet its agreed upon contractual payment obligations. In the Music Publishing segment, the Company collects a significant portion of its royalties from global copyright collecting societies. Collecting societies and associations are generally not-for-profit organizations that represent composers, songwriters and music publishers. These organizations seek to protect the rights of their members by licensing, collecting license fees and distributing royalties for the use of the members’ works. The Company does not believe there is any significant collection risk from such societies and associations. In the Recorded Music segment, the majority of the revenue is collected from the Company’s distribution partners, rather than directly from the customers. These distribution partners primarily pay through the revenue to the Company on a monthly basis. The Company routinely assesses the financial strength of its distribution partners and the Company does not believe there is any significant collection risk. |
Acquisitions and Business Combinations | Acquisitions and Business Combinations In conjunction with each acquisition transaction, the Company assesses whether the transaction should follow accounting guidance applicable to an asset acquisition or a business combination. This assessment requires an evaluation of whether the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, resulting in an asset acquisition or, if not, resulting in a business combination. If treated as an asset acquisition, the asset is recorded in accordance with the Company’s intangible asset policy and related acquisition costs are capitalized as part of the asset. In a business combination, the Company recognizes identifiable assets acquired, liabilities assumed, and non-controlling interests at their fair values at the acquisition date. Any consideration paid in excess of the net fair value of the identifiable assets and liabilities acquired in a business combination is recorded to goodwill and acquisition-related costs are expensed as incurred. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of publishing and recorded music catalogs. Intangible assets are recorded at fair value in a business combination and relative fair value in an asset acquisition. Intangible assets are amortized over their expected useful lives using the straight-line method. The Company periodically reviews the carrying value of its amortizable intangible assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable or that the lives assigned may no longer be appropriate. To the extent the estimated future cash inflows attributable to the asset, less estimated future cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. If the Company determines that events and circumstances warrant a revision to the remaining period of amortization, an asset’s remaining useful life would be changed, and the remaining carrying amount of the asset would be amortized prospectively over that revised remaining useful life. |
Goodwill | Goodwill The Company had $402,067 of goodwill as of September 30, 2021 and March 31, 2021, which is classified with “Other assets” in the Company’s condensed consolidated balance sheets. All of the goodwill arose in connection with an acquisition on December 29, 2019 and has been assigned to a reporting unit within the Music Publishing segment. There were no impairments, disposals or other acquisitions of goodwill in the six months ended September 30, 2021 and 2020. Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company evaluates goodwill for potential impairment on an annual basis on the first day of the fiscal fourth quarter (January 1), or at other times during the year if events or circumstances indicate that it is more-likely-than-not (greater than 50%) that the fair value of a reporting unit is below the carrying amount. In reviewing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount, the Company performs a quantitative goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount. If the fair value of the reporting unit is less than its carrying amount, the Company will measure any goodwill impairment loss as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit. |
Investments in Equity Affiliates | Investments in Equity Affiliates The Company accounts for investments in affiliates using the equity method of accounting when it has significant influence over an affiliate’s operations. The Company’s share of investee’s net income or loss and basis difference amortization is classified as “Interest and other income” in the consolidated statements of income. |
Deferred Revenue | Deferred Revenue Deferred revenue principally relates to fixed fees and minimum guarantees received in advance of the Company’s performance or usage by the licensee. Reductions in deferred revenue are a result of the Company’s performance under the contract or usage by the licensee. |
Deferred Finance Costs | Deferred Finance Costs Deferred finance costs are amortized on an effective interest basis over the term of the related obligation. Deferred finance charges are netted against the loans. See Note 8, “ Loans |
Deferred Charges | Deferred Charges Deferred charges consist of direct costs incurred in connection with the potential acquisition of entertainment interests in music compositions pursued by the Company. Such costs are deferred when closing of the transaction is deemed probable and are added to the cost of the asset once acquired or expensed if the acquisition does not proceed. |
Revenues | Revenues The Company recognizes revenue when, or as, control of the promised services or goods is transferred to its customers and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Music Publishing Music Publishing revenues are earned in the form of royalties relating to the licensing of rights in musical compositions and the sale of published sheet music and songbooks. Royalties principally relate to amounts earned from the public performance of musical compositions, the mechanical reproduction of musical compositions on recorded media including digital formats and the use of musical compositions in synchronization with visual images. Music publishing royalties, except for synchronization royalties, are recognized when the sale or usage occurs. The most common form of consideration for publishing contracts is sales- and usage-based royalties. The collecting societies submit usage reports, typically with payment for royalties due, often on a quarterly or biannual reporting period, in arrears. Royalties are recognized as the sale or usage occurs based upon usage reports when these reports are available for the reporting period or estimates of royalties based on historical data, such as recent royalties reported, company-specific information with respect to changes in repertoire, industry information and other relevant trends when usage reports are not available for the reporting period. Synchronization revenue is recognized as revenue when control of the license is transferred to the customer. Recorded Music Revenues from the sale or license of Recorded Music products through digital distribution channels are recognized when the sale or usage occurs based on usage reports received from the customer. Digital licensing contracts are generally long-term with consideration in the form of sales- and usage-based royalties that are primarily received monthly. For certain licenses where the consideration is fixed and the intellectual property being licensed is static, revenue is recognized at the point in time when control of the licensed content is transferred to the customer. Revenues from the sale of physical Recorded Music products are recognized upon delivery, which occurs once the product has been shipped and control has been transferred. |
Principal versus Agent Revenue Recognition | Principal versus Agent Revenue Recognition The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in a transaction. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service before transfer to the customer. When the Company concludes that it controls the good or service before transfer to the customer, the Company is considered a principal in the transaction and records revenue on a gross basis. When the Company concludes that it does not control the good or service before transfer to the customer but arranges for another entity to provide the good or service, the Company acts as an agent and records revenue on a net basis in the amount it earns for its agency service. The Company is typically required to pay a specified portion of the fees, earnings, payments and revenues received from the exploitation of the underlying music compositions to the original songwriter (the “ Royalty Costs |
Royalty Costs and Royalty Advances | Royalty Costs and Royalty Advances The Company incurs Royalty Costs that are payable to its songwriters and recording artists generated from the sale or license of its music publishing copyrights and recorded music catalog. Royalties are calculated using negotiated rates in accordance with the recording artist and songwriter contracts. Calculations are based on revenue earned or user/usage measures or a combination of these. There are instances where such data is not available to be processed and royalty cost calculations may be complex or involve judgments about significant volumes of data to be processed and analyzed. In many instances, the Company commits to pay its recording artists and songwriters royalties in advance of future sales. The Company accounts for these advances under the related guidance in the Financial Accounting Standards Board (the “ FASB ASC Entertainment—Music ASC 928 |
Share-Based Compensation | Share-Based Compensation Compensation expense related to the issuance of share-based awards to the Company’s employees is measured at fair value on the grant date. We use the Black-Scholes option pricing model to value stock options. The compensation expense for awards that vest over a future service period is recognized over the requisite service period on a straight-line basis. The Company recognizes share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate. |
Earnings Per Share | Earnings Per Share The consolidated statements of income present basic and diluted earnings per share (“ EPS participating securities Diluted EPS is computed similar to basic EPS, except that the denominator is increased to include the number of additional shares for potential dilutive effects of the RHI Preferred Stock (as defined below), stock options and warrants outstanding during the period. The dilutive effects of the RHI Preferred Stock were calculated in accordance with the if-converted method, or two-class method, whichever was more dilutive. The dilutive effects of stock options and warrants are calculated in accordance with the treasury stock method. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As a result of the reverse recapitalization, the Company has retroactively adjusted the weighted average shares outstanding prior to the Closing Date to give effect to the Exchange Ratio (as defined in the Merger Agreement) to determine the number of shares of Common Stock into which they were converted. |
Employee Benefit Plans | Employee Benefit Plans The Company has a 401(k) retirement savings plan open to U.S. based employees who have completed three months of eligible service. The Company contributes $0.60 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participant’s election. |
Income Taxes | Income Taxes Income taxes are determined using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the differences between the accounting bases of assets and liabilities and their corresponding tax basis. Deferred taxes are measured using enacted tax rates expected to apply when the asset is realized, or the liability is settled. A deferred tax asset is recognized when it is considered more likely than not to be realized. Companies subject to the Global Intangible Low-Taxed Income provision (“ GILTI |
Comprehensive Income | Comprehensive Income The Company reports in accordance with ASC Topic 220, “ Comprehensive Income ASC 220 |
Derivative Financial Instruments | Derivative Financial Instruments The Company’s interest rate swaps have not been designated as a hedging instrument and, therefore, are recognized at fair value at the end of each reporting period with changes in fair value recorded in the condensed consolidated statements of income. |
Fair Value Measurement and Hierarchy | Fair Value Measurement and Hierarchy The Company reports in accordance with ASC Topic 820, “ Fair Value Measurements and Disclosures ASC 820 i.e. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability and are based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the observability of inputs as follows: ● Level 1 ––Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. ● Level 2 ––Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. ● Level 3 ––Valuations based on inputs that are unobservable and significant to the overall fair value measurement. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. See Note 15, “ Financial Instruments |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1993, as amended (the “ Securities Act JOBS Act Sarbanes-Oxley Act Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement declared effective under the Securities Act or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “ Exchange Act |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In February 2016, the FASB issued Accounting Standards Update (“ ASU Leases (Topic 842) ASU 2016-02 ROU Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) In June 2016, the FASB issued ASU 2016-03, “ Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-03 In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes ASU 2019-12 Reference Rate Reform (Topic 848) ASU 2020-04 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
REVENUE RECOGNITION | |
Schedule of revenue | Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Revenue by Type Performance $ 4,386,093 $ 4,872,944 $ 7,048,849 $ 7,975,356 Digital 11,582,156 8,035,301 18,229,588 13,941,189 Mechanical 959,142 1,090,269 1,369,090 1,478,621 Synchronization 4,144,920 2,804,869 6,096,758 4,348,222 Other 1,076,098 780,148 1,669,594 1,181,685 Total Music Publishing 22,148,409 17,583,531 34,413,879 28,925,073 Digital 4,752,522 1,761,802 7,573,891 3,484,392 Physical 2,537,924 825,849 3,506,943 1,018,198 Synchronization 312,383 284,964 420,381 350,077 Neighboring rights 469,964 371,896 803,195 575,780 Total Recorded Music 8,072,793 3,244,511 12,304,410 5,428,447 Other revenue 214,286 157,075 435,349 275,790 Total revenue $ 30,435,488 $ 20,985,117 $ 47,153,638 $ 34,629,310 Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Revenue by Geographical Location United States Music Publishing $ 10,815,930 $ 10,058,429 $ 17,669,953 $ 16,953,140 United States Recorded Music 5,092,686 1,426,172 6,675,535 2,084,423 United States other revenue 214,286 157,075 435,349 275,790 Total United States 16,122,902 11,641,676 24,780,837 19,313,353 International Music Publishing 11,332,479 7,525,102 16,743,926 11,971,933 International Recorded Music 2,980,107 1,818,339 5,628,875 3,344,024 Total International 14,312,586 9,343,441 22,372,801 15,315,957 Total revenue $ 30,435,488 $ 20,985,117 $ 47,153,638 $ 34,629,310 |
Schedule of change in deferred revenue | Six Months Ended September 30, 2021 2020 Balance at beginning of period $ 1,337,987 $ 473,022 Cash received during period 1,451,623 5,254,965 Revenue recognized during period (1,479,196) (3,431,916) Balance at end of period $ 1,310,414 $ 2,296,071 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | September 30, March 31, 2021 2021 Intangible assets subject to amortization: Publishing and recorded music catalogs $ 584,157,948 $ 457,662,303 Artist management contracts 971,825 995,464 Gross intangible assets 585,129,773 458,657,767 Accumulated amortization (74,038,451) (65,419,757) Intangible assets, net $ 511,091,322 $ 393,238,010 |
ROYALTY ADVANCES (Tables)
ROYALTY ADVANCES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
ROYALTY ADVANCES | |
Schedule of royalty advances | Six Months Ended September 30, 2021 2020 Balance at beginning of period $ 41,582,080 $ 40,263,439 Additions 13,253,141 9,565,877 Recoupments (5,737,938) (5,070,613) Balance at end of period $ 49,097,283 $ 44,758,703 |
LOANS (Tables)
LOANS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
LOANS | |
Schedule of long-term debt | September 30, March 31, 2021 2021 Secured loan bearing interest at LIBOR plus a spread $ — $ 18,500,000 Secured line of credit bearing interest at LIBOR plus a spread 209,645,715 197,090,848 Debt issuance costs, net (5,708,392) (3,058,973) 203,937,323 212,531,875 Less: short term portion of secured loan — 1,000,000 $ 203,937,323 $ 211,531,875 |
SUPPLEMENTARY CASH FLOW INFOR_2
SUPPLEMENTARY CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
Summary of interest paid and income taxes paid | 2021 2020 Interest paid $ 4,916,082 $ 4,028,091 Income taxes paid $ 40,000 $ 83,174 |
Schedule of non-cash investing and financing activities | 2021 2020 Acquired intangible assets included in other liabilities $ 2,326,000 $ — Conversion of RHI Preferred Stock to Common Stock $ 81,632,500 $ — |
AMOUNTS DUE TO _ (FROM) RELAT_2
AMOUNTS DUE TO / (FROM) RELATED PARTIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
AMOUNTS DUE TO / (FROM) RELATED PARTIES | |
Schedule of amounts due to / (from) related parties | September 30, March 31, 2021 2021 Due to (from) Wesbild Holdings Ltd., parent company of Wesbild Inc. Unsecured, bears no interest, with no specific terms of repayment $ 17,216 $ 83,480 Sub-total 17,216 83,480 Due to (from) DRI Capital Inc., a subsidiary of Wesbild Holdings Ltd. Unsecured, bears no interest, with no specific terms of repayment — 81,738 Due to Reservoir Media Management (Canada) Inc., a subsidiary of Wesbild Holdings Ltd. Unsecured, bears no interest, with no specific terms of repayment 83,380 124,954 Sub-total 83,380 206,692 $ 100,596 $ 290,172 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
EARNINGS PER SHARE | |
Summary of basic and diluted earnings per common share calculation | Three Months Ended Six Months Ended September 30, September 30, 2021 2020 2021 2020 Basic earnings per common share Net income attributable to Reservoir Media, Inc. $ 4,555,697 $ 2,831,809 $ 3,152,197 $ 1,945,795 Less: income allocated to participating securities (370,386) (1,024,398) (637,294) (709,141) Net income attributable to common shareholders $ 4,185,311 $ 1,807,411 $ 2,514,903 $ 1,236,654 Weighted average common shares outstanding - basic 53,641,984 28,539,299 41,159,228 28,207,901 Earnings per common share - basic $ 0.08 $ 0.06 $ 0.06 $ 0.04 Diluted earnings per common share Net income attributable to common shareholders $ 4,185,311 $ 1,807,411 $ 2,514,903 $ 1,236,654 Add: income allocated to participating securities 370,386 1,024,398 637,294 709,141 Net income attributable to Reservoir Media, Inc. $ 4,555,697 $ 2,831,809 $ 3,152,197 $ 1,945,795 Weighted average common shares outstanding - basic 53,641,984 28,539,299 41,159,228 28,207,901 Weighted average effect of potentially dilutive securities: Assumed conversion of RHI Preferred Stock 4,747,130 16,175,406 10,430,043 16,175,406 Effect of dilutive stock options 603,858 — 642,428 — Weighted average common shares outstanding - diluted 58,992,972 44,714,705 52,231,699 44,383,307 Earnings per common share - diluted $ 0.08 $ 0.06 $ 0.06 $ 0.04 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
SEGMENT REPORTING | |
Summary of total revenue and reconciliation of OIBDA to operating income (loss) by segment | Three Months Ended September 30, 2021 Music Recorded Publishing Music Other Consolidated Total revenue $ 22,148,409 $ 8,072,793 $ 214,286 $ 30,435,488 Reconciliation of OIBDA to operating income: Operating income 4,745,697 3,149,271 16,094 7,911,062 Amortization and depreciation 3,324,860 1,428,004 24,819 4,777,683 OIBDA $ 8,070,557 $ 4,577,275 $ 40,913 $ 12,688,745 Six Months Ended September 30, 2021 Music Recorded Publishing Music Other Consolidated Total revenue $ 34,413,879 $ 12,304,410 $ 435,349 $ 47,153,638 Reconciliation of OIBDA to operating income: Operating income 4,429,677 3,687,154 75,919 8,192,750 Amortization and depreciation 6,509,196 2,297,857 49,875 8,856,928 OIBDA $ 10,938,873 $ 5,985,011 $ 125,794 $ 17,049,678 Three Months Ended September 30, 2020 Music Recorded Publishing Music Other Consolidated Total revenue $ 17,583,531 $ 3,244,511 $ 157,075 $ 20,985,117 Reconciliation of OIBDA to operating income: Operating income 3,891,917 1,378,878 46,755 5,317,550 Amortization and depreciation 3,311,067 548,201 — 3,859,268 OIBDA $ 7,202,984 $ 1,927,079 $ 46,755 $ 9,176,818 Six Months Ended September 30, 2020 Music Recorded Publishing Music Other Consolidated Total revenue $ 28,925,073 $ 5,428,447 $ 275,790 $ 34,629,310 Reconciliation of OIBDA to operating income: Operating income 4,931,482 1,649,584 42,883 6,623,949 Amortization and depreciation 6,197,114 1,092,022 — 7,289,136 OIBDA $ 11,128,596 $ 2,741,606 $ 42,883 $ 13,913,085 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 6 Months Ended | ||
Sep. 30, 2021USD ($)segmentitem$ / shares | Jul. 28, 2021$ / shares | Mar. 31, 2021$ / shares | |
Subsidiary, Sale of Stock [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Number of Operating Segments | segment | 2 | ||
Paycheck Protection Program Loan | |||
Subsidiary, Sale of Stock [Line Items] | |||
PPE Loan interest | $ | $ 0 | ||
Music Publishing | |||
Subsidiary, Sale of Stock [Line Items] | |||
Minimum ownership or control rights | item | 130,000 | ||
Recorded Music | |||
Subsidiary, Sale of Stock [Line Items] | |||
Minimum ownership or control rights | item | 36,000 | ||
Reservoir Holdings Inc And Subsidiaries | Paycheck Protection Program Loan | |||
Subsidiary, Sale of Stock [Line Items] | |||
Amount of loan | $ | $ 616,847 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Goodwill | $ 402,067 | $ 402,067 | |
Impairment of goodwill | 0 | $ 0 | |
Disposals of goodwill | 0 | 0 | |
Acquisitions of goodwill | $ 0 | $ 0 | |
Eligible month of service | 3 months | ||
Employer contribution, amount | $ 0.60 | ||
Employer contribution, percent | 6.00% |
BUSINESS COMBINATION AND PIPE_2
BUSINESS COMBINATION AND PIPE INVESTMENT (Details) | 6 Months Ended | |||
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Jul. 28, 2021$ / shares | Mar. 31, 2021$ / sharesshares | |
Business Acquisition [Line Items] | ||||
Preferred stock, shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common shares, par value, (per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Aggregate purchase price | $ | $ 7,973,010 | |||
Fees in connection with the closing of the Business combination and PIPE Investment | $ | $ 20,900,000 | |||
Repayment of Related Party Notes | $ | 81,300,000 | |||
Repayment of secured loan | $ | $ 18,250,000 | |||
Common stock, shares authorized | shares | 750,000,000 | 196,065,534 | ||
Preferred stock, shares, authorized | shares | 75,000,000 | 98,032,767 | ||
RHI Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Preferred stock, shares, par value | $ / shares | $ 0.00001 | |||
RHI Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common shares, par value, (per share) | $ / shares | 0.00001 | |||
Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common shares, par value, (per share) | $ / shares | $ 0.0001 | |||
Exchange ratio | 196.06562028646 | |||
PIPE investors | ||||
Business Acquisition [Line Items] | ||||
Number of shares issued | shares | 15,000,000 | |||
Purchase price | $ / shares | $ 10 | |||
Aggregate purchase price | $ | $ 150,000,000 | |||
Repayment of secured lines of credit | $ | $ 36,750,000 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue recognized from performance obligations satisfied in previous period | $ 993,503 | $ 2,325,320 | ||
Revenues | $ 30,435,488 | $ 20,985,117 | 47,153,638 | 34,629,310 |
United States | ||||
Revenues | 16,122,902 | 11,641,676 | 24,780,837 | 19,313,353 |
International | ||||
Revenues | 14,312,586 | 9,343,441 | 22,372,801 | 15,315,957 |
Music Publishing | ||||
Revenues | 22,148,409 | 17,583,531 | 34,413,879 | 28,925,073 |
Music Publishing | United States | ||||
Revenues | 10,815,930 | 10,058,429 | 17,669,953 | 16,953,140 |
Music Publishing | International | ||||
Revenues | 11,332,479 | 7,525,102 | 16,743,926 | 11,971,933 |
Recorded Music | ||||
Revenues | 8,072,793 | 3,244,511 | 12,304,410 | 5,428,447 |
Recorded Music | United States | ||||
Revenues | 5,092,686 | 1,426,172 | 6,675,535 | 2,084,423 |
Recorded Music | International | ||||
Revenues | 2,980,107 | 1,818,339 | 5,628,875 | 3,344,024 |
Other | ||||
Revenues | 214,286 | 157,075 | 435,349 | 275,790 |
Other | United States | ||||
Revenues | 214,286 | 157,075 | 435,349 | 275,790 |
Performance | Music Publishing | ||||
Revenues | 4,386,093 | 4,872,944 | 7,048,849 | 7,975,356 |
Digital | Music Publishing | ||||
Revenues | 11,582,156 | 8,035,301 | 18,229,588 | 13,941,189 |
Digital | Recorded Music | ||||
Revenues | 4,752,522 | 1,761,802 | 7,573,891 | 3,484,392 |
Mechanical | Music Publishing | ||||
Revenues | 959,142 | 1,090,269 | 1,369,090 | 1,478,621 |
Physical | Recorded Music | ||||
Revenues | 2,537,924 | 825,849 | 3,506,943 | 1,018,198 |
Synchronization | Music Publishing | ||||
Revenues | 4,144,920 | 2,804,869 | 6,096,758 | 4,348,222 |
Synchronization | Recorded Music | ||||
Revenues | 312,383 | 284,964 | 420,381 | 350,077 |
Other. | Music Publishing | ||||
Revenues | 1,076,098 | 780,148 | 1,669,594 | 1,181,685 |
Neighboring rights | Recorded Music | ||||
Revenues | $ 469,964 | $ 371,896 | $ 803,195 | $ 575,780 |
REVENUE RECOGNITION - Change in
REVENUE RECOGNITION - Change in Deferred Revenue (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUE RECOGNITION | ||
Balance at beginning of period | $ 1,337,987 | $ 473,022 |
Cash received during period | 1,451,623 | 5,254,965 |
Revenue recognized during period | (1,479,196) | (3,431,916) |
Balance at end of period | $ 1,310,414 | $ 2,296,071 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) | Jun. 02, 2021USD ($)item | Apr. 13, 2020 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) |
Asset Acquisition [Line Items] | ||||
Number of Members of Board, Holding Membership in Acquired Company's Board | item | 2 | |||
Publishing and recorded music catalogs | ||||
Asset Acquisition [Line Items] | ||||
Total consideration transferred | $ 128,125,285 | $ 83,084,327 | ||
Tommy Boy | ||||
Asset Acquisition [Line Items] | ||||
Total consideration transferred | $ 100,000,000 | |||
Tommy Boy | Recorded music catalog | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | 30 years | |||
Shapiro, Bernstein & Co., Inc. | Publishing catalog intangible asset | ||||
Asset Acquisition [Line Items] | ||||
Weighted average useful life | 30 years |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross intangible assets | $ 585,129,773 | $ 585,129,773 | $ 458,657,767 | ||
Accumulated amortization | (74,038,451) | (74,038,451) | (65,419,757) | ||
Intangible assets, net | 511,091,322 | 511,091,322 | 393,238,010 | ||
Amortization expense | 4,732,180 | $ 3,802,792 | 8,780,146 | $ 7,176,770 | |
Publishing and recorded music catalogs | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross intangible assets | 584,157,948 | 584,157,948 | 457,662,303 | ||
Artist management contracts | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Gross intangible assets | $ 971,825 | $ 971,825 | $ 995,464 |
ROYALTY ADVANCES (Details)
ROYALTY ADVANCES (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
ROYALTY ADVANCES | ||
Balance at beginning of period | $ 41,582,080 | $ 40,263,439 |
Additions | 13,253,141 | 9,565,877 |
Recoupments | (5,737,938) | (5,070,613) |
Balance at end of period | $ 49,097,283 | $ 44,758,703 |
LOANS - Schedule of long-term d
LOANS - Schedule of long-term debt (Details) - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Debt issuance costs, net | $ (5,708,392) | $ (3,058,973) |
Loans and secured notes payable | 203,937,323 | 212,531,875 |
Less: short term portion of secured loan | 0 | 1,000,000 |
Long-term portion | 203,937,323 | 211,531,875 |
Secured loan | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Debt, bearing interest at LIBOR plus a spread | 18,500,000 | |
Secured line of credit | ||
Long-term Debt, by Current and Noncurrent [Abstract] | ||
Debt, bearing interest at LIBOR plus a spread | $ 209,645,715 | $ 197,090,848 |
LOANS - Credit Facilities (Deta
LOANS - Credit Facilities (Details) | 6 Months Ended | |
Sep. 30, 2021USD ($) | Dec. 19, 2014USD ($) | |
Debt Instrument [Line Items] | ||
Unused fee (in percent) | 0.25% | |
New Senior Credit Facility | ||
Debt Instrument [Line Items] | ||
Aggregate amount | $ 248,750,000 | |
Consolidated senior debt to library value ratio | 0.55 | |
Additional commitments | $ 50,000,000 | |
Borrowing capacity | $ 248,750,000 | |
Base rate | ||
Debt Instrument [Line Items] | ||
Margin (in percent) | 1.25% | |
LIBOR | ||
Debt Instrument [Line Items] | ||
Margin (in percent) | 2.25% | |
Maximum | New Senior Credit Facility | ||
Debt Instrument [Line Items] | ||
Total leverage ratio | 6 | |
Minimum | New Senior Credit Facility | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 1.25 |
LOANS - Interest Rate Swaps (De
LOANS - Interest Rate Swaps (Details) | Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Jan. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Mar. 31, 2019USD ($)item |
Interest rate swaps | |||||
Debt Instrument [Line Items] | |||||
Number of instruments held | item | 2 | ||||
Notional amount | $ 97,157,674 | $ 97,533,496 | |||
Interest rate swap one | |||||
Debt Instrument [Line Items] | |||||
Notional amount | $ 8,875,000 | $ 40,228,152 | |||
Fixed rate (in percent) | 1.602% | 2.812% | |||
Interest rate swap two | |||||
Debt Instrument [Line Items] | |||||
Notional amount | $ 88,098,862 | $ 59,325,388 | |||
Fixed rate (in percent) | 1.492% | 2.972% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
INCOME TAXES | ||||
Income tax expense | $ 1,575,325 | $ 899,586 | $ 1,064,679 | $ 577,663 |
Effective tax rate (in percent) | 26.00% | 24.40% | 26.10% | 23.90% |
SUPPLEMENTARY CASH FLOW INFOR_3
SUPPLEMENTARY CASH FLOW INFORMATION (Details) - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
SUPPLEMENTARY CASH FLOW INFORMATION | ||
Interest paid | $ 4,916,082 | $ 4,028,091 |
Income taxes paid | 40,000 | $ 83,174 |
Acquired intangible assets included in other liabilities | 2,326,000 | |
Conversion of RHI Preferred Stock to Common Stock | $ 81,632,500 |
AMOUNTS DUE TO _ (FROM) RELAT_3
AMOUNTS DUE TO / (FROM) RELATED PARTIES (Details) - USD ($) | Dec. 21, 2021 | Sep. 30, 2021 | Mar. 31, 2021 |
Related Party Transaction [Line Items] | |||
Total | $ 100,596 | $ 290,172 | |
Wesbild Holdings Ltd. | |||
Related Party Transaction [Line Items] | |||
Due to (from) related parties | 17,216 | 83,480 | |
Total | 17,216 | 83,480 | |
DRI Capital Inc. | |||
Related Party Transaction [Line Items] | |||
Due to (from) related parties | 81,738 | ||
Reservoir Media Management (Canada) Inc | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 83,380 | 124,954 | |
Total | $ 83,380 | $ 206,692 | |
Tommy Boy | |||
Related Party Transaction [Line Items] | |||
Percentage of interest rate per year | 4.66% |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | 6 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2021 | Jul. 28, 2021 | Mar. 31, 2021 | |
Class of Stock [Line Items] | ||||
Preferred stock, shares, outstanding | 0 | 16,175,413 | ||
RHI Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares, outstanding | 0 | 16,175,406 | ||
RHI Common Stock | ||||
Class of Stock [Line Items] | ||||
Number of shares issued | 1,045,617 | |||
Consideration for shares issued | $ 8,000,009 | |||
Stock issuance costs | $ 27,000 |
SHAREHOLDERS' EQUITY- Warrants
SHAREHOLDERS' EQUITY- Warrants (Details) - Common Stock Warrants | Dec. 15, 2020shares | Sep. 30, 2021D$ / sharesshares |
Class of Warrant or Right [Line Items] | ||
Number of warrants outstanding | shares | 5,750,000 | |
Number of warrants sold | shares | 137,500 | |
Number of shares issuable per warrant | shares | 1 | |
Exercise price of warrants | $ / shares | $ 11.50 | |
Warrants expiration term (in years) | 5 years | |
Redemption price per public warrant (in dollars per share) | $ / shares | $ 0.01 | |
Minimum threshold written notice period for redemption of public warrants | 30 days | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ / shares | $ 18 | |
Threshold trading days for redemption of public warrants | 20 days | |
Threshold consecutive trading days for redemption of public warrants | 30 days | |
Threshold number of business days before sending notice of redemption to warrant holders | D | 3 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | Jul. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 191,478 | $ 25,675 | $ 217,153 | $ 51,349 | |
Share-based compensation expense net of taxes | $ 147,599 | $ 19,791 | $ 167,391 | $ 39,582 | |
2021 Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of authorized shares of Common Stock were reserved for issuance | 9,726,247 | ||||
Number of shares to purchase the Common Stock | 1,494,848 | ||||
Number of shares of Common Stock available to grant | 8,231,399 | 8,231,399 | |||
Threshold percentage on total number of shares issued and outstanding | 3.00% | ||||
Number of equity awards granted | 0 | ||||
Percentage of exercise price of stock | 100.00% | ||||
Expiration term (in years) | 10 years |
EARNINGS PER SHARE - Summary of
EARNINGS PER SHARE - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Basic earnings per common share | ||||
Net income attributable to Reservoir Media, Inc. | $ 4,555,697 | $ 2,831,809 | $ 3,152,197 | $ 1,945,795 |
Less: income allocated to participating securities | (370,386) | (1,024,398) | (637,294) | (709,141) |
Net income attributable to common shareholders | $ 4,185,311 | $ 1,807,411 | $ 2,514,903 | $ 1,236,654 |
Weighted average common shares outstanding - basic | 53,641,984 | 28,539,299 | 41,159,228 | 28,207,901 |
Earnings per common share - basic | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.04 |
Diluted earnings per common share | ||||
Net income attributable to common shareholders | $ 4,185,311 | $ 1,807,411 | $ 2,514,903 | $ 1,236,654 |
Add: income allocated to participating securities | 370,386 | 1,024,398 | 637,294 | 709,141 |
Net income attributable to Reservoir Media, Inc. | $ 4,555,697 | $ 2,831,809 | $ 3,152,197 | $ 1,945,795 |
Weighted average common shares outstanding - basic | 53,641,984 | 28,539,299 | 41,159,228 | 28,207,901 |
Weighted average effect of potentially dilutive securities: | ||||
Assumed conversion of RHI Preferred Stock | 4,747,130 | 16,175,406 | 10,430,043 | 16,175,406 |
Effect of dilutive stock options | 603,858 | 642,428 | ||
Weighted average common shares outstanding - diluted | 58,992,972 | 44,714,705 | 52,231,699 | 44,383,307 |
Earnings per common share - diluted | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.04 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive effect of common shares | 5,887,500 | 5,887,500 | ||
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive effect of common shares | 1,494,848 | 1,494,848 |
FINANCIAL INSTRUMENTS - Additio
FINANCIAL INSTRUMENTS - Additional Information (Details) - Level 2 - Interest rate swaps - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Fair value of swap liability | $ 3,341,319 | $ 3,341,319 | $ 4,566,537 | ||
Gain on changes in fair value of derivative instruments | $ 677,730 | $ 661,570 | $ 1,225,218 | $ 407,289 |
CONTINGENCIES AND COMMITMENTS -
CONTINGENCIES AND COMMITMENTS - Additional Information (Details) - USD ($) | Sep. 08, 2020 | Sep. 30, 2021 |
CONTINGENCIES AND COMMITMENTS | ||
Amount sought | $ 2,651,125 | |
Provision made | $ 0 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) | 6 Months Ended |
Sep. 30, 2021segment | |
SEGMENT REPORTING | |
Number of reportable segments | 2 |
SEGMENT REPORTING - Total reven
SEGMENT REPORTING - Total revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total revenue | $ 30,435,488 | $ 20,985,117 | $ 47,153,638 | $ 34,629,310 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 7,911,062 | 5,317,550 | 8,192,750 | 6,623,949 |
Amortization and depreciation | 4,777,683 | 3,859,268 | 8,856,928 | 7,289,136 |
OIBDA | 12,688,745 | 9,176,818 | 17,049,678 | 13,913,085 |
Music Publishing | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total revenue | 22,148,409 | 17,583,531 | 34,413,879 | 28,925,073 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 4,745,697 | 3,891,917 | 4,429,677 | 4,931,482 |
Amortization and depreciation | 3,324,860 | 3,311,067 | 6,509,196 | 6,197,114 |
OIBDA | 8,070,557 | 7,202,984 | 10,938,873 | 11,128,596 |
Recorded Music | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total revenue | 8,072,793 | 3,244,511 | 12,304,410 | 5,428,447 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 3,149,271 | 1,378,878 | 3,687,154 | 1,649,584 |
Amortization and depreciation | 1,428,004 | 548,201 | 2,297,857 | 1,092,022 |
OIBDA | 4,577,275 | 1,927,079 | 5,985,011 | 2,741,606 |
Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total revenue | 214,286 | 157,075 | 435,349 | 275,790 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 16,094 | 46,755 | 75,919 | 42,883 |
Amortization and depreciation | 24,819 | 0 | 49,875 | 0 |
OIBDA | $ 40,913 | $ 46,755 | $ 125,794 | $ 42,883 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - 2021 Incentive Plan - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Oct. 31, 2021 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | ||
Restricted stock units, granted (in shares) | 0 | |
Restricted stock units (RSUs) | Subsequent event | ||
Subsequent Event [Line Items] | ||
Restricted stock units, granted (in shares) | 247,045 | |
Restricted stock units, aggregate grant date fair value | $ 2.2 |