UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~quarter~~quarterly period ended ~~June 30,~~December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39795

RESERVOIR MEDIA, INC.

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its Charter)~~its charter)

Delaware

83-3584204

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

75 Varick Street

9th Floor

New York, New York 10013

(Address of principal executive ~~offices)~~offices, including zip code)

(212) 675-0541

(~~Issuer’s~~Registrant’s telephone ~~number)~~number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading ~~Symbol(s)~~symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share (the “Common Stock”)	RSVR	The Nasdaq Stock Market LLC
Warrants to purchase one share of Common Stock, each at an exercise price of $11.50 per share	RSVRW	The Nasdaq Stock Market LLC

~~Check~~Indicate by check mark whether the ~~issuer~~registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the ~~past~~preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated ~~filer”,~~filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”,~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	⌧☒	Smaller reporting company	⌧☒
		Emerging growth company	⌧☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ⌧☐ No ☐☒

As of ~~August 5, 2021,~~January 31, 2022, there were ~~64,069,253~~64,138,639 shares of ~~common stock, $0.0001 par value,~~Common Stock of Reservoir Media, Inc. issued and outstanding.

Table of Contents

RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~

FORM 10-Q FOR THE QUARTER ENDED ~~JUNE 30,~~DECEMBER 31, 2021

TABLE OF CONTENTS


			Page
Part I. Financial Information			1
Item 1. Financial Statements			1
Condensed ~~Balance Sheets as~~Consolidated Statements of ~~June 30, 2021 (unaudited)~~Income for the Three and Nine Months Ended December 31, 2021 and 2020 (unaudited)			1
Condensed Consolidated Statements of ~~Operations~~Comprehensive Income for the Three and ~~Six~~Nine Months Ended ~~June 30,~~December 31, 2021 and 2020 (unaudited)			2
Condensed ~~Statements~~Consolidated Balance Sheets as of ~~Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30,~~December 31, 2021 and ~~2020~~March 31, 2021 (unaudited)			3
Condensed Consolidated Statements of ~~Cash Flows~~Changes in Shareholders’ Equity for the ~~Six~~Three and Nine Months Ended ~~June 30,~~December 31, 2021 and 2020 (unaudited)			4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2021 and 2020 (unaudited)			5
Notes to Condensed Consolidated Financial Statements			56
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1928
Item 3. Quantitative and Qualitative Disclosures ~~Regarding~~About Market Risk			2249
Item 4. Controls and Procedures			2249
Part II. Other Information			2350
Item 1. Legal Proceedings			2350
Item 1A. Risk Factors			2350
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2350
Item 3. Defaults Upon Senior Securities			2350
Item 4. Mine Safety Disclosures			2350
Item 5. Other Information			2351
Item 6. Exhibits			2451
Part III. Signatures			2652

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

CONDENSED ~~BALANCE SHEETS~~CONSOLIDATED STATEMENTS OF INCOME

(In U.S. dollars, except share data)

(Unaudited)

June 30,

December 31,


2021

2020

(unaudited)

(as Revised)
ASSETS




Current assets




Cash

$
124,393

$
696,567
Prepaid expenses

309,961

395,887
Total Current Assets

434,354

1,092,454

Cash and marketable securities held in Trust Account

115,015,688

115,006,613
TOTAL ASSETS

$
115,450,042

$
116,099,067

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)




Current liabilities




Accounts payable and accrued expenses

$
297,117

$
83,654
Total current liabilities

297,117

83,654

Warrant liabilities

363,000

129,250
Total Liabilities

660,117

212,904

Commitments and Contingencies





Common stock subject to possible redemption; 11,500,000 and 11,088,616 shares at redemption value as of June 30, 2021 and December 31, 2020, respectively

115,000,000

110,886,160

Stockholders’ Equity (Deficit)




Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,150,000 and 3,561,384 shares issued and outstanding (excluding 11,500,000 and 11,088,616 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively

315

357
Additional paid-in capital

1,008,811

5,122,609
Accumulated deficit

(1,219,201)

(122,963)
Total Stockholders’ Equity (Deficit)

(210,075)

5,000,003
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$
115,450,042

$
116,099,067


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020

Revenues	$	27,127,779	$	21,554,880	$	74,281,417	$	56,184,190
Costs and expenses:
Cost of revenue		11,436,180		9,687,489		31,220,470		23,819,732
Amortization and depreciation		4,981,748		3,157,879		13,838,676		10,447,015
Administration expenses		6,731,953		3,816,176		17,051,623		10,400,158
Total costs and expenses		23,149,881		16,661,544		62,110,769		44,666,905

Operating income		3,977,898		4,893,336		12,170,648		11,517,285

Interest expense		(2,499,576)		(2,259,131)		(8,007,453)		(6,667,917)
Gain (loss) on foreign exchange		(48,304)		(342,448)		126,635		(549,708)
Gain on fair value of swaps		1,663,743		852,449		2,888,961		1,259,738
Interest and other income		2		1,307		357		6,152
Income before income taxes		3,093,763		3,145,513		7,179,148		5,565,550
Income tax expense		717,379		758,761		1,782,058		1,336,424
Net income		2,376,384		2,386,752		5,397,090		4,229,126
Net (income) loss attributable to noncontrolling interests		(226,930)		(115,506)		(95,439)		(12,085)
Net income attributable to Reservoir Media, Inc.	$	2,149,454	$	2,271,246	$	5,301,651	$	4,217,041

Earnings per common share (Note 14):
Basic	$	0.03	$	0.05	$	0.10	$	0.09
Diluted	$	0.03	$	0.05	$	0.09	$	0.09

Weighted average common shares outstanding (Note 14):
Basic		64,106,963		28,539,299		48,836,288		28,318,769
Diluted		64,716,756		44,714,705		56,405,487		44,494,175

~~The~~See accompanying notes ~~are an integral part of~~to the ~~unaudited~~ condensed consolidated financial statements.

Table of Contents

RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~COMPREHENSIVE INCOME

~~(UNAUDITED)~~(In U.S. dollars)

(Unaudited)


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020

Net income	$	2,376,384	$	2,386,752	$	5,397,090	$	4,229,126
Other comprehensive income (loss):
Translation adjustments		155,092		3,933,558		(1,409,203)		5,912,547
Total comprehensive income		2,531,476		6,320,310		3,987,887		10,141,673
Comprehensive (income) loss attributable to noncontrolling interests		(226,930)		(115,506)		(95,439)		(12,085)
Total comprehensive income attributable to Reservoir Media, Inc.	$	2,304,546	$	6,204,804	$	3,892,448	$	10,129,588

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

RESERVOIR MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In U.S. dollars, except share data)

(Unaudited)

Three Months

Six Months

Ended

Ended

June 30,

June 30,


2021

2020

2021

2020
Operating and formation costs

$
667,324

$
—

$
871,563

$
85
Loss from operations

(667,324)

—

(871,563)

(85)

Other income (expense):

Interest earned on marketable securities held in Trust Account

2,867

—

9,075

—
Change in fair value of warrant liabilities

(184,250)

—

(233,750)

—
Other expense, net

(181,383)

—

(224,675)

—

Loss before income taxes

(848,707)

—

(1,096,238)

(85)
Benefit from (provision for) income taxes

—

0

—

—
Net loss

$
(848,707)

$
0

$
(1,096,238)

$
(85)








Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

11,063,863

—

11,076,171

—








Basic and diluted net loss per share, Common stock subject to possible redemption

$
0.00

$
0.00

$
0.00

$
0.00

Basic and diluted weighted average shares outstanding, Non-redeemable common stock

3,586,137

2,500,000

3,573,829

2,500,000

Basic and diluted net loss per share, Non-redeemable common stock

$
(0.24)

$
(0.00)

$
(0.31)

$
(0.00)


	December 31,		March 31,
	2021		2021
Assets
Current assets
Cash and cash equivalents	$	14,632,795	$	9,209,920
Accounts receivable		18,547,999		15,813,384
Current portion of royalty advances		13,071,082		12,840,855
Inventory and prepaid expenses		4,542,654		1,406,379
Total current assets		50,794,530		39,270,538

Intangible assets, net		538,787,661		393,238,010
Investment in equity affiliates		4,011,250		1,591,179
Royalty advances, net of current portion		38,391,462		28,741,225
Property, plant and equipment, net		319,054		321,766
Other assets		753,066		781,735
Total assets	$	633,057,023	$	463,944,453

Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	5,168,739	$	3,316,768
Royalties payable		23,117,300		14,656,566
Accrued payroll		1,138,513		1,634,852
Deferred revenue		1,638,317		1,337,987
Other current liabilities		10,352,541		2,615,488
Amounts due to related parties (Note 11)		—		290,172
Current portion of loans and secured notes payable		—		1,000,000
Income taxes payable		524,442		533,495
Total current liabilities		41,939,852		25,385,328

Loans and secured notes payable		225,277,214		211,531,875
Deferred income taxes		20,599,049		19,735,537
Fair value of swaps		1,677,576		4,566,537
Other liabilities		1,017,591		6,739,971
Total liabilities		290,511,282		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 December 31, 2021; 98,032,767 shares authorized, 16,175,413 shares issued and outstanding at March 31, 2021		—		81,632,500
Common stock, $0.0001 par value; 750,000,000 shares authorized, 64,138,639 issued and outstanding at December 31, 2021; 196,065,534 shares authorized, 28,539,311 shares issued and outstanding at March 31, 2021		6,414		2,854
Additional paid-in capital		334,697,889		110,496,300
Retained earnings		6,053,147		751,496
Accumulated other comprehensive income		687,155		2,096,358
Total Reservoir Media, Inc. shareholders' equity		341,444,605		194,979,508
Noncontrolling interest		1,101,136		1,005,697
Total shareholders' equity		342,545,741		195,985,205
Total liabilities and shareholders' equity	$	633,057,023	$	463,944,453

~~The~~See accompanying notes ~~are an integral part of~~to the ~~unaudited~~ condensed consolidated financial statements.

Table of Contents

RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN ~~STOCKHOLDERS’~~SHAREHOLDERS’ EQUITY

~~(UNAUDITED)~~(In U.S. dollars, except share data)

~~THREE AND SIX MONTHS ENDED JUNE 30, 2021~~(Unaudited)

Additional



Total

    Common stock

Paid-in

Accumulated

Stockholders'


Shares

Amount

Capital

Deficit

Equity (Deficit)
Balance – January 1, 2021

3,561,384

$
357

$
5,122,609

$
(122,963)

$
5,000,003










Common stock subject to possible redemption

24,753

2

247,528

—

247,530










Net loss

0

0

0

(247,531)

(247,531)

Balance – March 31, 2021

3,586,137

$
359

$
5,370,137

$
(370,494)

$
5,000,002

Change in value of common stock subject to possible redemption

(436,137)

(44)

(4,361,326)

0

(4,361,370)

Net loss

0

0

0

(848,707)

(848,707)










Balance – June 30, 2021

$
3,150,000

$
315

$
1,008,811

$
(1,219,201)

$
(210,075)


	For the Nine Months Ended December 31, 2021
	Preferred Stock			Common Stock
									Retained		Accumulated
									earnings		other
							Additional		(accumulated		comprehensive		Noncontrolling		Shareholders'
	Shares	Amount		Shares	Amount		paid-in capital		deficit)		income (loss)		interests		equity
Balance, March 31, 2021	82,500	$	81,632,500	145,560	$	1	$	110,499,153	$	751,496	$	2,096,358	$	1,005,697	$	195,985,205
Retrospective application of reverse recapitalization	16,092,906		—	28,393,739		2,853		(2,853)		—		—		—		—
Balance, March 31, 2021 after effect of reverse recapitalization conversion	16,175,406	$	81,632,500	28,539,299	$	2,854	$	110,496,300	$	751,496	$	2,096,358	$	1,005,697	$	195,985,205
Share-based compensation	—		—	—		—		25,675		—		—		—		25,675
Net loss	—		—	—		—		—		(1,403,500)		—		(53,983)		(1,457,483)
Other comprehensive income	—		—	—		—		—		—		215,142		—		215,142
Balance, June 30, 2021	16,175,406	$	81,632,500	28,539,299	$	2,854	$	110,521,975	$	(652,004)	$	2,311,500	$	951,714	$	194,768,539
RHI Preferred Stock Conversion	(16,175,406)		(81,632,500)	16,175,406		1,618		81,630,882		—		—		—		—
Business Combination and PIPE Investment, net of transaction costs	—		—	19,354,548		1,935		141,144,876		—		—		—		141,146,811
Share-based compensation	—		—	—		—		191,478		—		—		—		191,478
Net income (loss)	—		—	—		—		—		4,555,697		—		(77,508)		4,478,189
Other comprehensive loss	—		—	—		—		—		—		(1,779,437)		—		(1,779,437)
Balance, September 30, 2021	—	$	—	64,069,253	$	6,407	$	333,489,211	$	3,903,693	$	532,063	$	874,206	$	338,805,580
Share-based compensation	—		—	—		—		1,208,685		—		—		—		1,208,685
Issuance of shares	—		—	69,386		7		(7)		—		—		—		—
Net income	—		—	—		—		—		2,149,454		—		226,930		2,376,384
Other comprehensive loss	—		—	—		—		—		—		155,092		—		155,092
Balance, December 31,2021	—	$	—	64,138,639	$	6,414	$	334,697,889	$	6,053,147	$	687,155	$	1,101,136	$	342,545,741

~~THREE AND SIX MONTHS ENDED JUNE 30, 2020~~

Additional



Total

Common stock

Paid-in

Accumulated

Stockholders'


Shares

Amount

Capital

Deficit

Equity
Balance – January 1, 2020

2,875,000

$
288

$
24,712

$
(1,225)

$
23,775










Net loss

0

0

0

(85)

(85)

Balance – March 31, 2020

2,875,000

$
288

$
24,712

$
(1,310)

$
23,690

Net income (loss)

0

0

0

0

0










Balance – June 30, 2020

$
2,875,000

$
288

$
24,712

$
(1,310)

$
23,690


	For the Nine Months Ended December 31, 2020
	Preferred Stock			Common Stock
									Retained		Accumulated
									earnings		other
							Additional		(accumulated		comprehensive		Noncontrolling		Shareholders’
	Shares	Amount		Shares	Amount		paid-in capital		deficit)		income (loss)		interests		equity
Balance, March 31, 2020	82,500	$	81,632,500	140,227	$	1	$	102,423,444	$	(9,537,465)	$	(4,385,615)	$	959,024	$	171,091,889
Retrospective application of reverse recapitalization	16,092,906		—	27,353,454		2,734		(2,734)		—		—		—		—
Balance, March 31, 2020 after effect of reverse recapitalization conversion	16,175,406	$	81,632,500	27,493,681	$	2,735	$	102,420,710	$	(9,537,465)	$	(4,385,615)	$	959,024	$	171,091,889
Issuance of common shares	—		—	1,045,618		104		7,972,906		—		—		—		7,973,010
Share-based compensation	—		—	—		—		25,674		—		—		—		25,674
Net loss	—		—	—		—		0		(886,014)		—		(58,790)		(944,804)
Other comprehensive income	—		—	—		—		0		—		1,974,652		—		1,974,652
Balance, June 30, 2020	16,175,406	$	81,632,500	28,539,299	$	2,839	$	110,419,290	$	(10,423,479)	$	(2,410,963)	$	900,234	$	180,120,421
Share-based compensation	—		—	—		—		25,675		—		—		—		25,675
Net income (loss)	—		—	—		—		0		2,831,809		—		(44,631)		2,787,178
Other comprehensive income	—		—	—		—		0		—		4,337		—		4,337
Balance, September 30, 2020	16,175,406	$	81,632,500	28,539,299	$	2,839	$	110,444,965	$	(7,591,670)	$	(2,406,626)	$	855,603	$	182,937,611
Share-based compensation	—		—	—		—		25,675		—		—		—		25,675
Net income	—		—	—		—		0		2,271,246		—		115,506		2,386,752
Other comprehensive income	—		—	—		—		0		—		3,933,558		—		3,933,558
Balance, December 31,2020	16,175,406	$	81,632,500	28,539,299	$	2,839	$	110,470,640	$	(5,320,424)	$	1,526,932	$	971,109	$	189,283,596

~~The~~See accompanying notes ~~are an integral part of~~to the ~~unaudited~~ condensed consolidated financial statements.

Table of Contents

RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(UNAUDITED)~~(In U.S. dollars)

(Unaudited)

Six Months Ended June 30,


2021

2020
Cash Flows from Operating Activities:




Net loss

$
(1,096,238)

$
(85)
Adjustments to reconcile net loss to net cash used in operating activities:




Interest earned on marketable securities held in Trust Account

(9,075)

—
Change in fair value of warrant liabilities

233,750

—
Changes in operating assets and liabilities:




Prepaid expenses

85,926

—
Accounts payable and accrued expenses

213,463

(225)
Net cash used in operating activities

(572,174)

(310)




Net Change in Cash

(572,174)

(310)
Cash – Beginning

696,567

25,000
Cash – Ending

$
124,393

$
24,690




Non-cash investing and financing activities:




Change in value of common stock subject to possible redemption

$
4,113,840

$
—


	Nine Months Ended December 31,
	2021		2020
Cash flows from operating activities
Net income	$	5,397,090	$	4,229,126
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets		13,713,202		10,278,508
Depreciation of property, plant and equipment		125,474		168,507
Share-based compensation		1,425,838		77,025
Non-cash interest charges		1,067,946		577,613
Gain on fair value of swaps		(2,888,961)		(1,259,738)
Dividend from equity affiliates		17,584		—
Deferred income taxes		863,512		833,768
Changes in operating assets and liabilities:
Accounts receivable		(2,734,615)		(3,003,789)
Inventory and prepaid expenses		(3,136,275)		(465,120)
Royalty advances		(9,880,464)		(3,181,225)
Other assets		345,682		240,168
Accounts payable and accrued expenses		10,107,397		8,477,794
Income tax payable		(9,053)		358,902
Net cash provided by operating activities		14,414,357		17,331,539
Cash flows from investing activities:
Purchases of music catalogs		(157,555,894)		(107,225,238)
Investment in equity affiliates		(2,464,486)		(18,839)
Purchase of property, plant and equipment		(122,762)		(69,157)
Net cash used for investing activities		(160,143,142)		(107,313,234)
Cash flows from financing activities:
Issuance of common shares, net of issuance costs		—		7,973,009
Proceeds from Business Combination and PIPE Investment, net of issuance costs		141,146,811		—
Proceeds from secured line of credit		89,554,866		31,500,000
Repayments of secured line of credit		(55,000,000)		—
Repayments of secured loans		(18,500,000)		(750,000)
Deferred financing costs paid		(4,377,473)		(609,212)
Repayments of related party loans		(81,203,792)		—
Draws on related party loans		80,913,620		116,797
Net cash provided by financing activities		152,534,032		38,230,594
Foreign exchange impact on cash		(1,382,372)		5,912,546
Increase (decrease) in cash and cash equivalents		5,422,875		(45,838,555)
Cash and cash equivalents beginning of period		9,209,920		58,240,123
Cash and cash equivalents end of period	$	14,632,795	$	12,401,568

~~The~~See accompanying notes ~~are an integral part of~~to the ~~unaudited~~ condensed consolidated financial statements.

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RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

NOTE 1. DESCRIPTION OF ~~ORGANIZATION AND~~ BUSINESS ~~OPERATIONS~~

Reservoir Media, Inc. (formerly known as Roth CH Acquisition II Co. (“ROCC”)), a Delaware corporation (the ~~“Company”~~“Company”) ~~was incorporated~~, is an independent music company based in ~~Delaware on February 13, 2019. The Company is a blank check company formed for~~New York City, New York and with offices in Los Angeles, Nashville, Toronto, London and Abu Dhabi.

On July 28, 2021 (the “Closing Date”), ROCC consummated the ~~purpose~~acquisition of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. Unless the context otherwise requires, references to the “Company” mean (i) Reservoir ~~Media,~~Holdings, Inc., a Delaware corporation ~~and its consolidated subsidiaries following the consummation of the Business Combination (as defined below) and (ii) Roth CH Acquisition II Co., a Delaware corporation~~ (“~~ROCC”~~RHI”), ~~and its subsidiaries prior to the consummation of the Business Combination.~~

~~Business Combination and PIPE Investment~~

~~On July 28, 2021, the Company consummated the previously announced business combination~~ pursuant to anthe agreement and plan of merger, dated as of April 14, 2021 (the ~~“Merger Agreement”~~“Merger Agreement”), by and among ~~the Company,~~ROCC, Roth CH II Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of ~~the Company~~ROCC (“Merger ~~Sub”~~Sub”), and ~~Reservoir Holdings, Inc., a Delaware corporation (“Reservoir”). In connection with~~RHI. On the ~~consummation of the transactions contemplated by the~~Closing Date, Merger ~~Agreement, Merger~~ Sub ~~was~~ merged with and into ~~Reservoir and, as a result, the separate corporate existence of Merger Sub ceased and Reservoir survived~~RHI, with RHI surviving the merger as a wholly-owned subsidiary of ~~the Company~~ROCC (the ~~“Business Combination”~~“Business Combination”). In ~~addition, in~~ connection with the consummation of the Business Combination, “Roth CH Acquisition II Co.” was renamed “Reservoir Media, Inc.”

~~In connection with the consummation~~ effective as of the ~~Business Combination, an aggregate of 44,714,705 shares of~~Closing Date. The common stock, $0.0001 par value of Reservoir Media, Inc. (the “Company Common Stock”) was issued to the stockholders of Reservoir (the “Merger Consideration Shares”), resulting in the former stockholders of Reservoir owning approximately 69.8%per share, of the Company ~~following the consummation of the Business Combination.~~

~~In connection with the consummation of the Business Combination, holders of 10,295,452 shares of common stock, par value $0.0001 per share, of ROCC~~ (the ~~“ROCC Common Stock”) sold in its initial public offering consummated in December 2020 (the “Initial Public Offering”) properly exercised their right to have their shares of the ROCC~~ “Common Stock ~~redeemed at a redemption price of approximately $10.00 per share, or approximately $103.0 million in the aggregate.~~

~~Pursuant to the subscription agreements entered into in connection with the Merger Agreement (collectively, the “Subscription Agreements”~~”), certain accredited investors agreed to subscribe for an aggregate of 15,000,000 shares of the ROCC Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $150.0 million (the “PIPE Investment”). and warrants are traded on The ~~Company consummated the PIPE Investment immediately prior to the consummation of the Business Combination.~~

~~The Company Common~~Nasdaq Stock ~~and the Company’s warrants commenced trading on the Nasdaq Capital~~ Market LLC (“NASDAQ”) under the ticker symbols “RSVR” and “RSVRW,” ~~respectively, on July 29, 2021,~~respectively.

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 ~~lieu~~the unaudited condensed consolidated financial statements represents the accounts of RHI and its consolidated subsidiaries as if RHI is the ~~ROCC Common Stock~~predecessor to the Company. See Note 3, “Business Combination and ROCC’s warrants, respectively. ROCC’s units have automatically separated into the ROCC Common Stock and ROCC’s warrants and ceased trading separately on the Nasdaq Capital Market LLC following the consummation of the Business Combination.

~~Business Prior~~PIPE Investment” for additional information with respect to the Business Combination and related transactions.

~~All activity for~~The Company’s activities are organized into 2 operating segments: Music Publishing and Recorded Music. Operations of the ~~period~~Music Publishing segment involve the acquisition of interests in music catalogs from ~~February 13, 2019 (inception) through June 30, 2021 relates~~which royalties are earned as well as signing songwriters to exclusive agreements which give the ~~Company’s formation~~Company an interest in the future delivery of songs. The publishing catalog includes ownership or control rights to more than 140,000 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 ~~initial public offering~~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 (“~~Initial Public Offering”~~Tommy Boy”), acquired in June 2021, and ~~a business combination with Reservoir.~~

~~The registration statement~~include the ownership of over 36,000 sound recordings. See Note 5, “Acquisitions” for ~~the Initial Public Offering was declared effective on December 10, 2020. On December 15, 2020, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and,~~additional information with respect to the ~~shares~~Tommy Boy acquisition.

COVID-19 Pandemic

In March 2020, the World Health Organization characterized the coronavirus (“COVID-19”) as a pandemic, and the President of ~~common stock~~the United States declared the COVID-19 outbreak a national emergency. The rapid spread of COVID-19 and the continuously evolving responses to combat it have had a negative impact on the global economy.

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 nine months ended December 31, 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 ~~Units sold, the “Public Shares”),~~Company’s impairment assessments of accounts receivable or intangible assets, which includes the full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 3.may be material to our consolidated financial statements.

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RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

~~Simultaneously with~~Paycheck Protection Program Loan

During the ~~closing~~nine months ended December 31, 2020, the Company borrowed $616,847 (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”). The PPP, established as part of the Initial Public Offering, the Company consummated the sale of 275,000 units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement to certain of the Company’s stockholders, generating gross proceeds of $2,750,000, which is described in Note 4.

~~Transaction costs amounted to $1,654,977 consisting of $1,150,000 of underwriting fees,~~Coronavirus Aid, Relief and ~~$504,977 of other offering costs.~~

Following the closing of the Initial Public Offering on December 15, 2020, an amount of $115,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), located in the United States and will be held in cash items or invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment CompanyEconomic Security Act of ~~1940,~~2020, as amended (the ~~“Investment Company Act”~~“CARES Act”), provided loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as ~~determined by~~long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. In accordance with the terms of the PPP, the Company ~~until~~applied for and received confirmation of loan forgiveness for the ~~earlier of: (i)~~entire amount borrowed under the ~~completion of a Business Combination~~PPP.

The Company accounted for the PPP Loan as an in-substance government grant because it expected to meet the PPP Loan eligibility criteria and ~~(ii) the distribution of the Trust Account.~~

~~Risks and Uncertainties~~

~~Management continues to evaluate the impact of the COVID-19 pandemic and has~~ concluded that ~~while it is reasonably possible~~the loan represented, in substance, a grant that was expected to be forgiven. Proceeds from the ~~COVID-19 pandemic could have~~PPP Loan were initially recognized as a ~~negative effect on~~deferred income liability and presented as an operating activity within the Company’s ~~financial position and/or search~~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 ~~a target company,~~which the ~~specific impact is not readily determinable as of~~PPP Loan was intended were incurred. NaN interest for the ~~date of~~PPP Loan was recognized in the Company’s consolidated financial statements. ~~The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

NOTE 2. ~~SUMMARY OF~~ SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying ~~unaudited~~ 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”) for interim financial information. All intercompany transactions and balances have been eliminated in these condensed consolidated financial statements. Certain information and note disclosures typically included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“~~GAAP”~~US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to ~~the~~such rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unauditedregulations. Therefore, these condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

~~The accompanying unaudited condensed~~consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s ~~Annual report~~audited financial statements as of and for the fiscal years ended March 31, 2021 and 2020.

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 ~~Form 10-K, as filed with~~an annual reporting basis.

In the ~~SEC on March 29, 2021.~~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 ~~interim~~ results for the three and ~~six~~nine months ended ~~June 30,~~December 31, 2021 are not necessarily indicative of the results to be expected for any subsequent quarter, the ~~period~~fiscal year ending ~~December~~March 31, ~~2021~~2022 or ~~for~~ any ~~future periods.~~

~~Emerging Growth Company~~other period.

The ~~Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified~~following include significant accounting policies that have been adopted by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

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 Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.Company:

Use of Significant Accounting Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires ~~the Company’s~~ management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and ~~liabilities~~expenses and the related disclosure of contingent assets and ~~liabilities at the date~~liabilities. Significant estimates are used for, but not limited to, determining useful lives of ~~the financial statements~~intangible assets, intangible asset recoverability and ~~the reported amounts of revenues~~impairment and ~~expenses during the reporting period.~~

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actualaccrued revenue. Actual results could differ ~~significantly~~ from ~~those~~these estimates.

~~Cash and Cash Equivalents~~

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2021 and December 31, 2020.

~~Marketable Securities Held in Trust Account~~

At June 30, 2021, substantially all of the assets held in the Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities. Interest income is recognized when earned. The Company’s portfolio of marketable securities is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act. Upon the closing of the Initial Public Offering and the Private Placement, $115 million was placed in the Trust Account and invested in money market funds that invest in U.S. government securities. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statement of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

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RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

~~Common Stock Subject~~Foreign Currencies

The Company has determined the U.S. dollar to ~~Possible Redemption~~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 December 31, 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.

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RESERVOIR MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

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 December 31, 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 0 impairments, disposals or other acquisitions of goodwill in the nine months ended December 31, 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.

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RESERVOIR MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

The Company performed its annual impairment testing of goodwill as of January 1, 2022 and no impairment was required. Our impairment testing consisted of a qualitative assessment. Changes in market conditions, laws and regulations, and key assumptions could negatively impact the results of future impairment testing and could result in the recognition of an impairment charge.

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” for additional information with respect to the Company’s financing arrangements.

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 ~~stock subject~~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 ~~possible redemption~~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

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RESERVOIR MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

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”). The Company records revenues on a gross basis reflecting its position as a principal in the transaction and any royalties payable to third parties, including the writer’s fees, are recorded as expenses.

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”) Accounting Standards Codification (“~~ASC”~~ASC”) Topic ~~480 “Distinguishing Liabilities~~928, “Entertainment—Music” (“ASC 928”). Under ASC 928, the Company capitalizes as assets certain advances, which it believes are recoverable from ~~Equity.” Common stock subject~~future royalties to ~~mandatory redemption~~be earned by the recording artist or songwriter when paid. Recoverability is ~~classified as~~assessed upon initial commitment of the advance based upon the Company’s forecast of anticipated revenue from the sale of future and existing albums or musical compositions. In determining whether the advance is recoverable, the Company evaluates the current and past popularity of the recording artist or songwriter, the sales history of the recording artist or songwriter, the initial or expected commercial acceptability of the product, the current and past popularity of the genre of music that the product is designed to appeal to, and other relevant factors. Advances vary in both amount and expected life based on the underlying recording artist or songwriter. To the extent that a ~~liability instrument and~~portion of an outstanding advance is no longer deemed recoverable, that amount will be expensed in the period the determination is made.

Share-Based Compensation

Compensation expense related to the issuance of share-based awards to the Company’s employees is measured at fair ~~value. Conditionally redeemable common~~value on the grant date. The Company uses the Black-Scholes option pricing model to value stock ~~(including common stock~~options. The compensation expense for awards that ~~features redemption~~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.

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RESERVOIR MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

Earnings Per Share

The consolidated statements of income present basic and diluted earnings per share (“EPS”). Basic EPS is computed using the two-class method, which includes the weighted average number of shares of Common Stock outstanding during the period and other securities that participate in dividends (the “participating securities”). Under the two-class method, all earnings, both distributed and undistributed, are allocated to shares of Common Stock and participating securities based on their respective rights to receive dividends.

Diluted EPS is computed similar to basic EPS, except that the denominator is ~~either within~~increased to include the ~~control~~number of additional shares for potential dilutive effects of the ~~holder or subject to redemption upon~~RHI Preferred Stock (as defined below), stock options and warrants outstanding during the ~~occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity.~~period. The ~~Company’s common stock features certain redemption rights that are considered to be outside~~dilutive effects of the ~~Company’s control~~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 ~~subject to occurrence of uncertain future events. Accordingly, at June 30, 2021 and December 31, 2020, common~~warrants are calculated in accordance with the treasury stock ~~subject to possible redemption~~method. Diluted EPS excludes all dilutive potential shares if their effect is ~~presented at redemption value as temporary equity, outside~~anti-dilutive.

As a result of the ~~stockholders’ equity section~~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 ~~the Company’s balance sheets.~~shares of Common Stock into which they were converted.

Employee Benefit Plans

The Company ~~recognizes changes in redemption value immediately as they occur and adjusts the carrying value~~has a 401(k) retirement savings plan open to U.S. based employees who have completed three months of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.

~~Warrant Liability~~

eligible service. The Company ~~accounts~~contributes $0.60 for ~~warrants as either equity-classified or liability-classified instruments based on an assessment~~every $1.00 of employee contributions up to a maximum of 6% of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as ofemployee’s salary based upon each ~~subsequent quarterly period end date while the warrants are outstanding.~~individual participant’s election.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

Income Taxes

~~The Company follows~~Income taxes are determined using the asset and liability method of ~~accounting for income taxes under ASC 740, "Income Taxes." Deferred~~accounting. Under this method, deferred tax assets and liabilities are recognized for the ~~estimated future tax consequences attributable to~~ differences between the ~~financial statements carrying amounts~~accounting bases of ~~existing~~ assets and liabilities and their ~~respective~~corresponding tax ~~bases.~~basis. Deferred ~~tax assets and liabilities~~taxes are measured using enacted tax rates expected to apply ~~to taxable income in~~when the ~~years in which those temporary differences are expected to be recovered~~asset is realized, or the liability is settled. ~~The effect on~~A deferred tax ~~assets and liabilities of a change in tax rates~~asset is recognized ~~in income in the period that included the enactment date. Valuation allowances are established,~~ when ~~necessary, to reduce deferred tax assets to the amount expected~~it is considered more likely than not to be realized.

Companies subject to the Global Intangible Low-Taxed Income provision (“GILTI”) have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for outside basis temporary differences expected to reverse as GILTI. The Company has elected to treat taxes on GILTI as period costs and no deferred tax asset or liability is recorded.

Comprehensive Income

The Company reports in accordance with ASC Topic 220, “Comprehensive Income” (“ASC 220”). ASC 220 requires companies to classify items of other comprehensive income/loss by their nature in the financial statements and display the accumulated balance of other comprehensive income (loss) separately from capital stock and accumulated deficit in the shareholders’ equity section of a statement of financial position.

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

~~ASC 740 prescribes a recognition threshold~~Fair Value Measurement and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. Hierarchy

The Company ~~recognizes accrued interest~~reports in accordance with ASC Topic 820, “Fair Value Measurements and ~~penalties related~~Disclosures” (“ASC 820”). Under ASC 820, fair value is defined as the price that would be received to ~~unrecognized tax benefits~~sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

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 ~~income tax expense. There were 0 unrecognized tax benefits~~to what market participants would use in pricing the asset or liability and ~~0 amounts accrued~~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 ~~interest and penalties as of June 30, 2021 and December 31, 2020.~~ 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” for additional information.

Emerging Growth Company

The Company is ~~currently~~an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1993, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not ~~aware~~emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any ~~issues~~golden parachute payments not previously approved.

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 ~~review~~the Securities Act or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that ~~could result in significant payments, accruals or material deviation from its position. The Company~~a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is subject to income tax examinations by major taxing authorities since inception. The effective tax rate differs from the statutory tax rate of 21% for the three and six months ended June 30, 2021 and 2020, due to the valuation allowance recorded on the Company’s net operating losses.

~~Net income (Loss) per Common Share~~

Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture.irrevocable. The Company has elected not ~~considered~~to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the ~~effect~~Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the ~~warrants sold in~~Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the ~~Initial Public Offering and private placement to purchase an aggregate of 5,887,500 shares in the calculation of diluted loss per share, since the exercise~~extended transition period, difficult or impossible because of the ~~warrants are contingent upon the occurrence of future events.~~

~~The Company’s statements of operations include a presentation of income (loss) per share for common shares subject to possible redemption~~potential differences in a manner similar to the two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted, for Common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Common stock subject to possible redemption outstanding since original issuance.

Net income (loss) per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or loss on marketable securities attributable to Common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.

Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.accounting standards used.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE~~DECEMBER 31, 2021

(Unaudited)

Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of income. For public entities, ASU 2016-02 was effective for annual reporting periods beginning after December 15, 2018, including interim periods within that annual reporting period. Under ASU 2020-05, “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842),” the new standard is effective for the Company beginning April 1, 2022 and interim periods within the fiscal year beginning April 1, 2023.

ASU 2016-02 requires a modified retrospective transition approach with application in all comparative periods presented (the “comparative method”), or alternatively, as of the effective date as the date of initial application without restating comparative period financial statements (the “effective date method”). The new guidance also provides several practical expedients and policies that companies may elect under either transition method. The Company currently expects to apply the effective date method and elect the package of practical expedients under which it will not reassess the classification of its existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. Rather, the Company will retain the conclusions reached for these items under ASC Topic 840, Leases. Additionally, the Company expects to elect a practical expedient to not separate non-lease components, such as common area maintenance, from lease components. The Company does not expect to elect the practical expedient that permits a reassessment of lease terms for existing leases.

The Company has commenced an analysis of the impact of ASU 2016-02 and developed a plan for its implementation. The project plan includes analyzing the impact of the new guidance on our current lease contracts, reviewing the completeness of the Company’s existing lease portfolio, comparing the Company’s accounting policies under current accounting guidance to the new accounting guidance and identifying potential differences from applying the requirements of the new guidance to the Company’s lease contracts. Under current accounting guidance for leases, the Company does not recognize an asset or liability created by operating leases where the Company is the lessee. Therefore, the Company expects an increase to its assets and liabilities on the Company’s consolidated balance sheet as a result of recognizing assets and liabilities for operating leases where the Company is the lessee on the date of initial application of the new guidance. The Company does not expect the adoption of this new guidance will have a material impact on the amount or timing of the Company’s cash flows or liquidity.

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”), which replaces the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses. Subsequent to ASU 2016-03, the FASB has issued several related ASUs amending the original ASU 2016-03. The updates are intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public entities, ASU 2016-03 was effective for annual reporting periods beginning after December 15, 2019, including interim periods within that annual reporting period. For the Company, ASU 2016-03 is effective beginning April 1, 2023, including interim periods within that fiscal year, with early adoption permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the effect that ASU 2016-03 will have on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. For public entities, ASU 2019-12 was effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. For the Company, ASU 2019-12 is effective beginning April 1, 2022 and interim periods beginning April 1, 2023. Early adoption of ASU 2019-12 is permitted. The Company does not expect a material impact to its consolidated financial statements or the Company’s disclosures as a result of the adoption of ASU 2019-12.

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In April 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting; particularly as it relates to the risk of cessation of LIBOR. The amendments in ASU 2020-04 apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by ASU 2020-04 do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the effect that ASU 2020-04 will have on the Company’s consolidated financial statements.

NOTE 3. BUSINESS COMBINATION AND PIPE INVESTMENT

As discussed in Note 1, “Description of Business,” on the Closing Date, the Company consummated the Business Combination pursuant to the terms of the Merger Agreement. The Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP, primarily because former shareholders of RHI continue to control the Company upon closing of the Business Combination. Under this method of accounting, the Company is treated as the “acquired” company for accounting purposes and the Business Combination is treated as the equivalent of RHI issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company are stated at historical cost, with no goodwill or intangible assets recorded. In addition, 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.

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”) that was issued and outstanding was automatically converted into a number of shares of common stock, par value $0.00001 per share, of RHI (the “RHI Common Stock”) at the then-effective conversion rate as calculated pursuant RHI’s second amended and restated certificate of incorporation (the “RHI Preferred Stock Conversion”). Additionally, each share of RHI Common Stock (including the RHI Common Stock resulting from the RHI Preferred Stock Conversion) that was issued and outstanding immediately prior to the consummation of the Business Combination was canceled and converted into the right to receive 196.06562028646 (the “Exchange Ratio”) shares of Common Stock. Furthermore, each option to acquire a share of RHI Common Stock that was outstanding immediately prior to the consummation of the Business Combination became fully vested in accordance with the original terms of the awards and was converted into an option to purchase shares of Common Stock (each option, an “RMI Exchanged Option”), with the number of shares of Common Stock subject to the options and exercise price of each RMI Exchanged Option adjusted commensurately with the Exchange Ratio.

In connection with the Business Combination, ROCC entered into subscription agreements with certain accredited investors (the “PIPE Investors”), pursuant to which ROCC issued 15,000,000 shares of common stock, par value $0.0001 per share, of ROCC (the “ROCC Common Stock”) at a purchase price of $10.00 per share for an aggregate purchase price of $150.0 million (the “PIPE Investment”). ROCC consummated the PIPE Investment immediately prior to the consummation of the Business Combination.

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” for additional information with respect to the Company’s financing arrangements.

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.

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(Unaudited)

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 $1,210,132 and $2,263,778 from performance obligations satisfied in previous periods for the nine months ended December 31, 2021 and 2020, respectively.

Disaggregation of Revenue

The Company’s revenue consisted of the following categories during the three and nine months ended December 31, 2021 and 2020:


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Revenue by Type
Performance	$	3,997,209	$	3,759,701	$	11,046,058	$	11,735,057
Digital		8,480,193		11,654,043		26,709,781		25,595,232
Mechanical		744,416		510,330		2,113,506		1,988,951
Synchronization		2,443,767		1,366,885		8,540,525		5,715,107
Other		2,737,128		454,995		4,406,722		1,636,680
Total Music Publishing		18,402,713		17,745,954		52,816,592		46,671,027

Digital		4,891,724		1,541,215		12,465,615		5,025,607	^(a)
Physical		1,279,588		1,169,102		4,786,531		2,187,300	^(a)
Synchronization		1,189,929		90,138		1,610,310		440,215	^(a)
Neighboring rights		748,972		476,098		1,552,167		1,051,878	^(a)
Total Recorded Music		8,110,213		3,276,553		20,414,623		8,705,000

Other revenue		614,853		532,373		1,050,202		808,163
Total revenue	$	27,127,779	$	21,554,880	$	74,281,417	$	56,184,190

^(a)Reflects correction of misclassifications of $828,177 between previously reported types of Recorded Music revenue for the nine months ended December 31, 2020. The corrections had no impact on the Company’s consolidated statements of income, Recorded Music total revenue or segment income.

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(Unaudited)


	Three Months Ended				Nine Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
Revenue by Geographical Location
United States Music Publishing	$	9,013,231	$	7,359,825	$	26,683,184	$	24,312,965
United States Recorded Music		4,010,666		583,430		10,686,201		2,667,853
United States other revenue		614,853		532,374		1,050,202		808,164
Total United States		13,638,750		8,475,629		38,419,587		27,788,982
International Music Publishing		9,389,482		10,386,128		26,133,408		22,358,061
International Recorded Music		4,099,547		2,693,123		9,728,422		6,037,147
Total International		13,489,029		13,079,251		35,861,830		28,395,208
Total revenue	$	27,127,779	$	21,554,880	$	74,281,417	$	56,184,190

Only the United States represented 10% or more of the Company’s total revenues in the three and nine months ended December 31, 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., bars and restaurants), live performance at a concert or other venue (e.g., arena concerts and nightclubs) and performance of musical compositions in staged theatrical productions. Digital revenues are derived from musical compositions being embodied in recordings licensed to digital streaming services and digital download services and for digital performance. Mechanical revenues are generated with respect to the musical compositions embodied in recordings sold in any physical format such as vinyl, CDs and DVDs. Synchronization revenues represent the right to use the composition in combination with visual images such as in films or television programs, television commercials and video games as well as from other uses such as in toys or novelty items and merchandise. Other revenues represent earnings for use in printed sheet music and other uses. Digital and synchronization revenue recognition is similar for both Recorded Music and Music Publishing, therefore refer to the discussion within Recorded Music.

Included in these revenue streams, excluding synchronization and other revenues, are licenses with performing rights organizations or collecting societies (e.g., ASCAP, BMI, SESAC and GEMA), which are long-term contracts containing a single performance obligation, which is ongoing access to all intellectual property in an evolving content library. The most common form of consideration for these 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 and, when these reports are not available, royalties are estimated based on historical data, such as recent royalties reported, company-specific information with respect to changes in repertoire, industry information and other relevant trends.

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.

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(Unaudited)

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 nine months ended December 31, 2021 and 2020:


	Nine Months Ended
	December 31,
	2021		2020
Balance at beginning of period	$	1,337,987	$	473,022
Cash received during period		3,891,627		6,464,140
Revenue recognized during period		(3,591,297)		(5,063,609)
Balance at end of period	$	1,638,317	$	1,873,553

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 nine months ended December 31, 2021 and 2020, the Company completed such acquisitions totaling $160,566,608 and $98,991,836, respectively, inclusive of deferred acquisition payments. Significant acquisition transactions, all of which have been accounted for as asset acquisitions, completed during the nine months ended December 31, 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. NaN 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).

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(Unaudited)

NOTE 6. INTANGIBLE ASSETS

Intangible assets subject to amortization consist of the following as of December 31, 2021 and March 31, 2021:


	December 31,		March 31,
	2021		2021
Intangible assets subject to amortization:
Publishing and recorded music catalogs	$	616,806,912	$	457,662,303
Artist management contracts		974,851		995,464
Gross intangible assets		617,781,763		458,657,767
Accumulated amortization		(78,994,102)		(65,419,757)
Intangible assets, net	$	538,787,661	$	393,238,010

Straight-line amortization expense totaled $4,933,056 and $3,101,738 in the three months ended December 31, 2021 and 2020, respectively. Straight-line amortization expense totaled $13,713,202 and $10,278,508 in the nine months ended December 31, 2021 and 2020, respectively.

NOTE 7. ROYALTY ADVANCES

The Company made royalty advances totaling $17,888,739 and $10,951,740 during the nine months ended December 31, 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.


	Nine Months Ended
	December 31
	2021		2020
Balance at beginning of period	$	41,582,080	$	40,263,439
Additions		17,888,739		10,951,740
Recoupments		(8,008,275)		(7,770,515)
Balance at end of period	$	51,462,544	$	43,444,664

NOTE 8. LOANS

Long-term debt consists of the following:


	December 31,		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		231,645,715		197,090,848
Debt issuance costs, net		(6,368,501)		(3,058,973)
		225,277,214		212,531,875
Less: short term portion of secured loan		—		1,000,000
	$	225,277,214	$	211,531,875

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

Credit Facilities

On December 19, 2014, Reservoir Media Management, Inc. (“RMM”), a subsidiary of RHI, entered into a credit agreement (the “RMM Credit Agreement”) governing RMM’s secured term loan (the “Secured Loan”) and secured revolving credit facility (the “Secured Line of Credit” and together with the Secured Loan, the “Credit Facilities”). The Credit Facilities were subsequently amended multiple times and were refinanced in July 2021 in connection with the consummation of the Business Combination, pursuant to that certain Fourth Amended and Restated Credit Agreement, dated as of July 28, 2021 (the “Debt Refinancing”). On December 7, 2021, RMM entered into an amendment (the “First Amendment”) to the RMM Credit Agreement. The First Amendment amended the RMM Credit Agreement to increase RMM’s senior secured revolving credit facility from $248,750,000 to an aggregate amount of $350,000,000 (the “New Senior Credit Facility”) and modified certain covenants (discussed below).

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 (net of up to $20,000,000 of certain cash balances) of no greater than 7.50:1.00 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 0.475, 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 December 31, 2021, the New Senior Credit Facility had a borrowing capacity of $350,000,000.

Interest Rate Swaps

As of March 31, 2019, RMM had entered into 2 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 $96,969,763 as of December 31, 2021 and $97,533,496 as of March 31, 2021.

In October 2019 and January 2020, RMM added two additional interest rate swaps in the amounts of $8,875,000 and $88,098,862, respectively. These swaps have an effective date of March 10, 2022, and expire in September 2024. RMM pays a fixed rate of 1.602% and 1.492%, respectively, 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. On December 1, 2021, RMM added an additional interest rate swap in the amount of $53,030,237, which has an effective date of December 31, 2021, and expires in September 2024. RMM pays a fixed rate of 1.042% 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.

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RESERVOIR MEDIA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

NOTE 9. INCOME TAXES

Income tax expense for the three months ended December 31, 2021 and 2020 was $717,379 (23.2% effective tax rate) and $758,761 (24.1% effective tax rate), respectively. Income tax expense for the nine months ended December 31, 2021 and 2020 was $1,782,058 (24.8% effective tax rate) and $1,336,424 (24.0% effective tax rate), respectively. The effective tax rates during these periods reflect the amount and mix of income from multiple tax jurisdictions.

NOTE 10. SUPPLEMENTARY CASH FLOW INFORMATION

Interest paid and income taxes paid for the nine months ended December 31, 2021 and 2020 were comprised of the following:


	2021		2020

Interest paid	$	6,939,505	$	6,090,304
Income taxes paid	$	727,431	$	106,607

Non-cash investing and financing activities for the nine months ended December 31, 2021 and 2020 were comprised of the following:


	2021		2020

Acquired intangible assets included in other liabilities	$	4,625,990	$	1,782,500
Conversion of RHI Preferred Stock to Common Stock	$	81,632,500	$	—

NOTE 11. AMOUNTS DUE TO / (FROM) RELATED PARTIES

The Company has various shared services agreements with a shareholder and other affiliated entities under the control of its shareholder. These agreements cover services such as IT support and re-billed services of staff who perform services across multiple entities. Amounts due to this shareholder and other affiliated entities totaled $0 as of December 31, 2021 and $290,172 as of March 31, 2021.

The acquisition of Tommy Boy was financed using cash on hand and borrowings from related parties (the “Tommy Boy Related Party Notes”). The Tommy Boy Related Party Notes bore interest of 4.66% per year and were payable upon the earlier of the consummation of the Business Combination and December 21, 2021. The Tommy Boy Related Party Notes and accrued interest were paid on the Closing Date. See Note 3, “Business Combination and PIPE Investment” for additional information with respect to the consummation of the Business Combination.

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” and Note 3, “Business Combination and PIPE Investment” for additional information.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

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” for additional information with respect to the RHI Preferred Stock Conversion.

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 December 31, 2021, the Company had 0 shares of RHI Preferred Stock outstanding.

RHI Common Stock Issuance

During the nine months ended December 31, 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 December 31, 2021, the Company’s outstanding warrants included 5,750,000 publicly-traded warrants (the “Public Warrants”), which were issued during ROCC’s initial public offering on December 15, 2020, and 137,500 warrants sold in a private placement to ROCC’s sponsor (the “Private Warrants” and together with the Public Warrants, the “Warrants”), which were assumed by the Company in connection with the Business Combination and exchanged into warrants for shares of Common Stock. Each whole Warrant entitles the registered holder to purchase 1 whole share of Common Stock at a price of $11.50 per share, provided that the Company has an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a registered holder may exercise its Warrants only for a whole number of shares of Common Stock. The Warrants will expire five years after the completion of the Business Combination, or earlier upon redemption or liquidation.

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 3 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”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”), and in accordance with its accounting policies, concluded they meet the criteria to be equity classified as they were determined to be indexed in the Company’s stock and meet the requirements for equity classification.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

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”), which became effective on such date. 9,726,247 authorized shares of Common Stock were reserved for issuance under the 2021 Incentive Plan. In addition, pursuant to terms of the Merger Agreement, at the effective time of the Business Combination, options previously granted under the Reservoir Holdings, Inc. 2019 Long Term Incentive Plan (the “Previous RHI 2019 Incentive Plan”) to purchase shares of RHI Common Stock were converted into options to purchase 1,494,848 shares of Common Stock pursuant to the 2021 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. 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.

In October 2021, the Company granted an aggregate of 247,045 restricted stock units (“RSUs”) with an aggregate grant date fair value of approximately $2.2 million to certain employees and executive officers under the 2021 Incentive Plan. During the three months ended December 31, 2021, 69,386 of these RSUs vested, with another 114,088 expected to vest during the three months ending March 31, 2022. The remainder will vest in the following two years. As of December 31, 2021, 7,984,354 shares of Common Stock were available for the Company to grant under the 2021 Incentive Plan.

The 2021 Incentive Plan is administered by the compensation committee of the Board (the “Compensation Committee”). The exercise prices, vesting and other restrictions are determined by the Board, except that the exercise price per share of a stock option may not be less than 100% of the fair value of the Common Stock on the date of grant. Stock options awarded under the 2021 Incentive Plan typically expire 10 years after the date of the grant and generally have vesting conditions that the Compensation Committee will determine.

Stock Option Activity

As discussed in Note 3, “Business Combination and PIPE Investment,” each option to acquire a share of RHI Common Stock issued under the Previous RHI 2019 Incentive Plan that was outstanding immediately prior to the consummation of the Business Combination became fully vested in accordance with the original terms of the awards. Each fully vested option was then converted into an option to purchase shares of Common Stock, with the number of shares of Common Stock subject to the options and exercise price adjusted commensurately with the Exchange Ratio.

Share-based compensation expense totaled $1,208,685 ($931,705, net of taxes) and $1,425,838 ($1,099,096, net of taxes) during the three and nine months ended December 31, 2021, respectively. Share-based compensation expense totaled $25,675 ($19,791, net of taxes) and $77,025 ($59,373, net of taxes) during the three and nine months ended December 31, 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 nine months ended December 31, 2021 reflects the accelerated vesting discussed above.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(Unaudited)

NOTE 14. EARNINGS PER SHARE

The following table ~~reflects~~summarizes the ~~calculation of~~ basic and diluted ~~net income (loss)~~earnings per common share ~~(in dollars, except per share amounts):~~calculation for the three and nine months ended December 31, 2021 and 2020:

Three Months

Six Months

Ended

Ended

June 30,

June 30,


2021

2020

2021

2020
Common stock subject to possible redemption

Numerator: Earnings allocable to Common stock subject to possible redemption

Interest earned on marketable securities held in Trust Account

$
2,867

$
0

$
9,075

$
0
Unrealized gain on marketable securities held in Trust Account

0

0

0

0
Less: interest available to be withdrawn for payment of taxes

(2,867)

0

(9,075)

0
Net income

$
0

$
0

$
0

$
0








Denominator: Weighted Average Common stock subject to possible redemption








Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption

11,063,863

0

11,076,171

0
Basic and diluted net income (loss) per share, Common stock subject to possible redemption

$
0.00

$
0.00

$
0.00

$
0.00

Non-Redeemable Common Stock








Numerator: Net Loss minus Net Earnings








Net loss

$
(848,707)

$
—

$
(1,096,238)

$
(85)
Net income allocable to Common stock subject to possible redemption

0

0

0

0
Non-Redeemable Net Loss

$
(848,707)

$
0

$
(1,096,238)

$
(85)

Denominator: Weighted Average Non-redeemable common stock








Basic and diluted weighted average shares outstanding, Non-redeemable common stock

3,586,137

2,500,000

3,573,829

2,500,000
Basic and diluted net income (loss) per share, Non-redeemable common stock

$
(0.24)

$
0.00

$
(0.31)

$
0.00


		Three Months Ended			Nine Months Ended
		December 31,			December 31,
		2021	2020		2021		2020

Basic earnings per common share
Net income attributable to Reservoir Media, Inc.	$	2,149,454	$	2,271,246	$	5,301,651	$	4,217,041
Less: income allocated to participating securities		—		(821,616)		(659,721)		(1,533,091)
Net income attributable to common shareholders	$	2,149,454	$	1,449,630	$	4,641,930	$	2,683,950
Weighted average common shares outstanding - basic		64,106,963		28,539,299		48,836,288		28,318,769
Earnings per common share - basic	$	0.03	$	0.05	$	0.10	$	0.09

Diluted earnings per common share
Net income attributable to common shareholders	$	2,149,454	$	1,449,630	$	4,641,930	$	2,683,950
Add: income allocated to participating securities		—		821,616		659,721		1,533,091
Net income attributable to Reservoir Media, Inc.	$	2,149,454	$	2,271,246	$	5,301,651	$	4,217,041

Weighted average common shares outstanding - basic		64,106,963		28,539,299		48,836,288		28,318,769
Weighted average effect of potentially dilutive securities:
Assumed conversion of RHI Preferred Stock		—		16,175,406		6,940,720		16,175,406
Effect of dilutive stock options and RSUs		609,793		—		628,479		—
Weighted average common shares outstanding - diluted		64,716,756		44,714,705		56,405,487		44,494,175
Earnings per common share - diluted	$	0.03	$	0.05	$	0.09	$	0.09

~~Concentration~~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 nine months ended December 31, 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 nine months ended December 31, 2020.

NOTE 15. FINANCIAL INSTRUMENTS

The Company is exposed to the following risks related to its financial instruments:

(a)

Credit Risk

Credit ~~Risk~~

~~Financial instruments~~risk arises from the possibility that ~~potentially subject~~ 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 ~~concentrations of~~ credit risk ~~consist of cash accounts in~~on a ~~financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts.~~

~~Fair Value of Financial Instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.regular basis.

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RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

(b)

Interest Rate Risk

~~Fair Value Measurements~~The Company is exposed to market risk from changes in interest rates on its secured loan. As described in Note 8, “Loans,” the Company entered into interest rate swap agreements to partially reduce its exposure to fluctuations in interest rates on its Credit Facilities.

The fair value of the outstanding interest rate swaps was a $1,677,576 liability as of December 31, 2021 and a $4,566,537 liability as of March 31, 2021. Fair value is ~~defined as~~determined using Level 2 inputs, which are based on quoted prices and market observable data of similar instruments. The change in the ~~price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier~~unrealized fair value ~~hierarchy, which prioritizes~~of the ~~inputs used~~swaps during the three and nine months ended December 31, 2021 of $1,663,743 and $2,888,961, respectively, was recorded as a gain on changes in ~~measuring~~ fair ~~value.~~value of derivative instruments. The ~~hierarchy gives~~change in the ~~highest priority to unadjusted quoted prices~~unrealized fair value of the swaps during the three and nine months ended December 31, 2020 of $852,449 and $1,259,738 , respectively, was recorded as a gain on changes in ~~active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:~~fair value of derivative instruments.

●

(c)

~~Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;~~

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)

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Financial Instruments

●

~~Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity~~

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 December 31, 2021 do not differ materially from their respective fair values due to ~~develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.~~

~~In some circumstances,~~ the ~~inputs used to measure~~immediate or short-term duration of these items or their bearing market-related rates of interest.

The fair value ~~might be categorized within different levels~~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.

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 ~~fair value hierarchy. In those instances,~~Company and certain prior owners (the “Prior Owners”) of certain music copyrights acquired by such consolidated subsidiary of the ~~fair value measurement is categorized~~Company. The legal action asserts that in ~~its entirety~~2000, the plaintiff entered into certain engagement letters (the “Engagement Letters”) with certain of the Prior Owners, which purportedly gave the plaintiff, among other things, an exclusive right to broker any future sale by the Prior Owners of the music copyrights acquired by such consolidated subsidiary of the Company, as well as a commission fee. Based on the Engagement Letters’ alleged grant of a security interest in such music copyrights, the plaintiff filed UCC financing statements and various notices of liens in the ~~fair value hierarchy based~~amount of $2,651,125 in the U.S. Copyright Office between 2000 and 2018. The plaintiff alleges, among other things, that the Prior Owners breached the Engagement Letters by consummating a purchase agreement with a consolidated subsidiary of the Company in 2018 without involving the plaintiff; that a consolidated subsidiary of the Company tortiously interfered with the Engagement Letters; and that the plaintiff is permitted to foreclose on the ~~lowest level input that is significant~~liens, including foreclosing on those music copyrights acquired by a consolidated subsidiary of the Company under the 2018 purchase agreement. Effective January 10, 2022, the plaintiff, the Prior Owners, and such consolidated subsidiary of the Company entered into a settlement agreement and mutual release which required the Prior Owners to pay a settlement amount to the ~~fair value measurement.~~

~~Derivative Financial Instruments~~

plaintiff no later than February 1, 2022. The Prior Owners made such payment prior to the stipulated deadline. Accordingly, the liens granted to plaintiff have been automatically released and terminated. The consolidated subsidiary of the Company ~~evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance~~has filed a notice of termination (executed by plaintiff) with ~~ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities,~~ the ~~derivative instrument is initially recorded at its fair value on the grant date~~U.S. Copyright Office and is ~~then re-valued at each reporting date, with changes~~ in the ~~fair value reported~~process of terminating all UCC financing statements naming the Prior Owners as debtor and the plaintiff as secured party. Finally, the plaintiff is then required to file an agreed-upon notice of dismissal with prejudice with the U.S. District Court for the Southern District of New York. Neither the Company nor its consolidated subsidiary named in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversionaction were required to pay any portion of the ~~instrument could be required within 12 months of the balance sheet date.~~

~~Recent Accounting Standards~~

~~In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion~~settlement amounts pursuant to such settlement agreement and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2020-06 effective as of January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.

mutual release.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30,~~DECEMBER 31, 2021

(Unaudited)

~~NOTE 3. PUBLIC OFFERING~~

~~Pursuant~~In addition to the ~~Initial Public Offering,~~foregoing, the Company ~~sold 11,500,000 Units, which includes a full exercise by~~is subject to claims and contingencies in the ~~underwriters~~normal course of ~~their over-allotment option in~~business. To the extent the Company cannot predict the outcome of the claims and contingencies or estimate the amount of ~~1,500,000 Units, at~~any loss that may result, 0 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 ~~price~~material adverse effect on the financial position, results of ~~$10.00 per Unit. Each Unit consists~~operations or cash flows of ~~1 share~~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 common stock and 1-half of one redeemable warrant ("Public Warrant"). Each whole Public Warrant entitles the holder to purchase 1 share of common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 7).such loss have been accrued for within these condensed consolidated financial statements.

NOTE ~~4. PRIVATE PLACEMENT~~17. SEGMENT REPORTING

~~Simultaneously~~The Company’s business is organized in 2 reportable segments: Music Publishing and Recorded Music. The Company identified its Chief Executive Officer as its Chief Operating Decision Maker (“CODM”). The Company’s CODM evaluates financial performance of its segments based on several factors, of which the primary financial measure is operating income before depreciation and amortization (“OIBDA”). While each segment incurs direct administration expenses reflected in segment income, all corporate-level administration expenses, such as executive management, are included in the Music Publishing segment and are not allocated between segments.

The accounting policies of the Company’s business segments are consistent with the ~~closing of~~Company’s policies for the Initial Public Offering, the Initial Stockholders purchased an aggregate of 275,000 Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $2,750,000, in a private placement. Each Private Unit consists of 1 share of common stock (“Private Share”) and 1-half of one redeemable warrant (“Private Warrant”). Each whole Private Warrant entitles the holder to purchase 1 share of common stock at a price of $11.50 per full share, subject to adjustment (see Note 7).consolidated financial statements. The ~~proceeds from the Private Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the~~ Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).

~~NOTE 5. RELATED PARTY TRANSACTIONS~~

~~Founder Shares~~

In February 2019, the Initial Stockholders purchased an aggregate of 100 shares of the Company’s common stock for an aggregate price of $25,000. On June 29, 2020, the Company effected a stock dividend of 43,125 shares of common stock for each share of common stock outstanding, resulting in an aggregate of 4,312,500 shares of common stock being held by the Initial Stockholders. On August 31, 2020, the Initial Stockholders transferred back to the Company 1,437,500 shares of common stock, for nominal consideration, which shares were cancelled, resulting in there being an aggregate of 2,875,000 shares of common stock outstanding and being held by the Initial Stockholders (the “Founder Shares”). That same day, CHLM Sponsor-1 LLC, an entity affiliated with Craig-Hallum Capital Group LLC, and certain of the Company’s directors, officers and affiliates of the Company’s management team purchased from CR Financial Holdings, Inc. an aggregate of 745,840 shares for an aggregate purchase price of $6,486. All share and per-share amounts have been retroactively restated to reflect the stock dividend and cancellation. The Founder’s Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (excluding the Private Shares and the Private Shares underlying the Private Warrants). As a result of the underwriters’ election to fully exercise their over-allotment option, no Founder Shares are currently subject to forfeiture.

The Initial Stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until (1) with respect to 50% of the Founder Shares, the earlier of six months after the completion of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30- trading day period commencing after a Business Combination and (2) with respect to the remaining 50% of the Founder Shares, six months after the completion of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.sales between segments.

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RESERVOIR MEDIA, INC. ~~(F/K/A ROTH CH ACQUISITION II CO.)~~AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~Promissory Note — Related Party~~

On August 23, 2020, the Company issued an unsecured promissory note to the sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $200,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) the consummation of the Initial Public Offering or (ii) the date on which the Company determines not to proceed with the Initial Public Offering. The outstanding balance under the Promissory Note of $200,000 was repaid at the closing of the Initial Public Offering on December 15, 2020.

~~Related Party Loans~~

In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of June 30, 2021 and DecemberDECEMBER 31, ~~2020 there were no amounts outstanding under the Working Capital Loans.~~

~~NOTE 6. COMMITMENTS AND CONTINGENCIES~~

~~Registration Rights~~

Pursuant to a registration rights agreement entered into on December 10, 2020, the holders of the Founder Shares, as well as the holders of the Private Units (and underlying securities) and any securities issued to the Initial Stockholders, officers, directors or their affiliates in payment of Working Capital Loans made to Company, will be entitled to registration rights. The holders of a majority of these securities are entitled to make up to 2 demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) and securities issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to consummation of a Business Combination. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Notwithstanding the foregoing, the Company may not exercise demand or piggyback rights after five (5) and seven (7) years, respectively, from the effective date of the Initial Public Offering and may not exercise demand rights on more than one occasion in respect of all registrable securities.

~~Underwriting Agreement~~

~~The underwriters were paid a cash underwriting discount of 1.00% of the gross proceeds of the Initial Public Offering, or $1,150,000.~~

~~Table of Contents~~

~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

~~Business Combination Marketing Agreement~~

The Company entered into a business combination marketing agreement with the representatives of the underwriters as advisors in connection with a Business Combination. The Company will pay the representatives of the underwriters a marketing fee for such services upon the consummation of a Business Combination in an amount equal to, in the aggregate, 4.5% of the gross proceeds of the Initial Public Offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment option. As a result, the representatives of the underwriters will not be entitled to such fee unless the Company consummates its initial business combination.

~~Merger Agreement and PIPE Investment~~

On April 14, 2021, the Company entered into the Merger Agreement with Merger Sub, a Delaware corporation and a wholly-owned subsidiary of the Company, and Reservoir. On July 28, 2021, in connection with the consummation of the transactions contemplated by the Merger Agreement, Merger Sub was merged with and into Reservoir and, as a result, the separate corporate existence of Merger Sub ceased and Reservoir survived the merger as a wholly-owned subsidiary of the Company. In addition, in connection with the consummation of the Business Combination, “Roth CH Acquisition II Co.” was renamed “Reservoir Media, Inc.”

Immediately prior to the effective time of the Business Combination (the “Effective Time”), each share of Series A preferred stock, par value $0.00001 per share, of Reservoir that was issued and outstanding immediately prior to the Effective Time was automatically converted immediately prior to the Effective Time into a number of shares of common stock, par value $0.00001 per share, of Reservoir (the “Reservoir Common Stock”) at the then-effective conversion rate as calculated pursuant to Reservoir’s second amended and restated certificate of incorporation as in effect as of the Effective Time (the “Reservoir Holdings Preferred Stock Conversion”). At the Effective Time (and, for the avoidance of doubt, following the Reservoir Preferred Stock Conversion):

●

each share of the Reservoir Common Stock (including the Reservoir Common Stock resulting from the Reservoir Preferred Stock Conversion) that was issued and outstanding immediately prior to the Effective Time (other than any shares held in treasury immediately prior to the consummation of the Business Combination) was canceled and converted into the right to receive 196.06562028646 shares of the Company Common Stock;

●

each share of the Reservoir Common Stock held in the treasury of Reservoir immediately prior to the Effective Time, if any, was cancelled without any conversion thereof and no payment or distribution was made with respect thereto;

●

each share of common stock of Merger Sub, par value $0.0001 per share, issued and outstanding immediately prior to the Effective Time was converted into and exchanged for one validly issued, fully paid and non-assessable share of the Reservoir Common Stock; and

●

each option to acquire a share of the Reservoir Common Stock pursuant to the Reservoir Holdings, Inc. 2019 Long Term Incentive Plan (a “Reservoir Option”) that was outstanding immediately prior to the Effective Time was converted into an option to purchase a number of shares of the Company Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of the Reservoir Common Stock subject to such Reservoir Option immediately prior to the Effective Time and (y) the exchange ratio of 196.06562028646 at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Reservoir Option immediately prior to the Effective Time divided by (B) exchange ratio of 196.06562028646.

In connection with the consummation of the Business Combination, an aggregate of 44,714,705 shares of the Company Common Stock was issued to the stockholders of Reservoir, resulting in the former stockholders of Reservoir owning approximately 69.8% of the Company following the consummation of the Business Combination, on an as exchanged basis, which constituted a majority interest in the Company following the consummation of the Business Combination.

~~Table of Contents~~

~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

In connection with the consummation of the Business Combination, holders of 10,295,452 shares of the ROCC Common Stock sold in the Initial Public Offering properly exercised their right to have their shares of the ROCC Common Stock redeemed at a redemption price of approximately $10.00 per share, or approximately $103.0 million in the aggregate.

Pursuant to the Subscription Agreements entered into in connection with the Merger Agreement, certain accredited investors agreed to subscribe for an aggregate of 15,000,000 shares of the ROCC Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $150.0 million. The Company consummated the PIPE Investment immediately prior to the consummation of the Business Combination.

The Company Common Stock and the Company’s warrants commenced trading on the Nasdaq Capital Market LLC under the symbols “RSVR” and “RSVRW,” respectively, on July 29, 2021, in lieu of the ROCC Common Stock and ROCC’s warrants, respectively. ROCC’s units have automatically separated into the ROCC Common Stock and ROCC’s warrants and ceased trading separately on the Nasdaq Capital Market LLC following the consummation of the Business Combination.

~~NOTE 7 — STOCKHOLDERS’ EQUITY~~

~~Common Stock~~ — The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share. At June 30, 2021 and December 31, 2020, there were 3,150,000 and 3,561,384 shares of common stock ~~issued~~ ~~and~~ ~~outstanding, excluding 11,500,000 and 11,088,616 shares of common stock subject to possible redemption, respectively.~~

The Company determined the common stock subject to redemption to be equal to the redemption value of approximately $10.00 per share of common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Upon considering the impact of the PIPE Investment and the Subscription Agreements, it was concluded that the redemption value should include all the Public Shares resulting in the common stock subject to possible redemption being equal to $115,000,000. This resulted in a measurement adjustment to the initial carrying value of the common stock subject to redemption with the offset recorded to additional paid-in capital and accumulated deficit.

~~NOTE 8 – WARRANTS~~

~~Warrants~~ — The Company will not issue fractional warrants. The Public Warrants will become exercisable 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within 120 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants will expire five years from the closing of a Business Combination.

~~Once the warrants become exercisable, the Company may redeem the Public Warrants:~~

●~~in whole and not in part;~~

●

~~at a price of $0.01 per warrant;~~

●

~~at any time after the warrants become exercisable;~~

●

~~upon not less than 30 days’ prior written notice of redemption to each warrant holder;~~

~~Table of Contents~~

~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

●

if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share, for any 20 trading days within a 30-day trading period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and

●

if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Initial Stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the Market Value and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Price.

The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or saleable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be 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.

~~NOTE 9. FAIR VALUE MEASUREMENTS~~

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

~~Table of Contents~~

~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30, 2021~~

~~(Unaudited)~~

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

~~Level 1:~~

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

~~Level 2:~~

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

~~Level 3:~~

~~Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.~~

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

June 30,

December 31,
Description

Level

2021

2020
Assets:

Marketable securities held in Trust Account

1

$
115,015,688

$
115,006,613

Liabilities






Warrant liabilities – Private Placement Warrants

3

$
363,000

$
129,250

The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our accompanying June 30, 2021 condensed balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the condensed statements of operations.

The Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The binomial lattice model’s primary unobservable input utilized in determining the fair value of the Warrants is the expected volatility of the common stock. The expected volatility as of the IPO date was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own public warrant pricing.

~~There were 0~~ ~~transfersbetween~~ ~~Levels 1, 2 or 3 during the three and six months ended June 30, 2021.~~

~~Table of Contents~~

~~RESERVOIR MEDIA, INC. (F/K/A ROTH CH ACQUISITION II CO.)~~

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~

~~JUNE 30,~~ 2021

(Unaudited)

The following ~~table provides quantitative information regarding Level 3 fair value measurements:~~tables present total revenue and reconciliation of OIBDA to operating income by segment for the three and nine months ended December 31, 2021 and 2020:

At

As of

December 31,

June 30,


2020

2021

Stock price

$
9.54

$
9.93

Strike price

$
11.50

$
11.50

Volatility

17.5
%

35.6
%
Risk-free rate

0.41
%

0.84
%
Dividend yield

0.0
%

0.0
%
Fair value of warrants

$
0.94

$
2.64


	Three Months Ended December 31, 2021
	Music		Recorded
	Publishing		Music		Other		Consolidated

Total revenue	$	18,402,713	$	8,110,213	$	614,853	$	27,127,779

Reconciliation of OIBDA to operating income:
Operating income		908,425		2,747,216		322,257		3,977,898
Amortization and depreciation		3,541,393		1,416,039		24,316		4,981,748
OIBDA	$	4,449,818	$	4,163,255	$	346,573	$	8,959,646

~~The following table presents the changes in the fair value of warrant liabilities:~~


	Nine Months Ended December 31, 2021
	Music		Recorded
	Publishing		Music		Other		Consolidated
Total revenue	$	52,816,592	$	20,414,623	$	1,050,202	$	74,281,417

Reconciliation of OIBDA to operating income:
Operating income		5,338,102		6,434,370		398,176		12,170,648
Amortization and depreciation		10,050,589		3,713,896		74,191		13,838,676
OIBDA	$	15,388,691	$	10,148,266	$	472,367	$	26,009,324

Warrant Liabilities
Fair value as of December 31, 2020

$
129,250
Change in valuation inputs or other assumptions

233,750
Fair value as of June 30, 2021

363,000


	Three Months Ended December 31, 2020
	Music		Recorded
	Publishing		Music			Other	Consolidated

Total revenue	$	17,745,954	$	3,276,553	$	532,373	$	21,554,880

Reconciliation of OIBDA to operating income:
Operating income		3,928,495		904,195		60,646		4,893,336
Amortization and depreciation		2,529,098		628,781		0		3,157,879
OIBDA	$	6,457,593	$	1,532,976	$	60,646	$	8,051,215


	Nine Months Ended December 31, 2020
	Music		Recorded
	Publishing		Music		Other		Consolidated

Total revenue	$	46,671,027	$	8,705,000	$	808,163	$	56,184,190

Reconciliation of OIBDA to operating income:
Operating income		8,859,977		2,553,779		103,529		11,517,285
Amortization and depreciation		8,726,212		1,720,803		0		10,447,015
OIBDA	$	17,586,189	$	4,274,582	$	103,529	$	21,964,300

~~NOTE 10. SUBSEQUENT EVENTS~~

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, other than the Company’s name change and the consummation of the Business Combination as disclosed in Note 1, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

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Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References in this report (this “Quarterly Report”) to “we,” “us” or the “Company” refer to Roth CH Acquisition II Co. prior to the consummation of the Business Combination and Reservoir Media, Inc. following the consummation of the Business Combination. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of ~~the Company’s~~Reservoir Media, Inc.’s financial condition and results of operations should be read in conjunction with ~~the~~Reservoir Media, Inc.’s condensed consolidated financial statements, ~~and~~including the accompanying notes thereto contained elsewhere in this Quarterly ~~Report.~~Report on Form 10-Q (this “Quarterly Report”). Certain ~~information~~statements contained in the discussion and analysis set forth below ~~includes~~include forward-looking statements that involve risks and ~~uncertainties.~~uncertainties that could cause actual results to differ materially from those expected and projected. Unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company” and “Reservoir” refer collectively to Reservoir Media, Inc. and its consolidated subsidiaries.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the ~~“Securities Act”~~“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and ~~involve risks and uncertainties that could cause actual results~~are intended to ~~differ materially from those expected and projected.~~be covered by the safe harbor created thereby. All statements, other than statements of historical fact included in this ~~Form 10-Q~~Quarterly Report including, without limitation, statements in this ~~“Management’s~~“Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “predict,” “project,” “target,” “goal,” “intend,” “continue,” “could,” “may,” “might,” “shall,” “should,” “will,” “would,” “plan,” “possible,” “potential,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. In addition, any statements that refer to expectations, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current expectations, projections and beliefs based on information currently available. ~~A number~~These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause its actual business, financial condition, results of ~~factors could~~operations, performance and/or achievements to be materially different from any future business, financial condition, results of operations, performance and/or achievements expressed or implied by these forward-looking statements. Factors that might cause ~~actual events, performance~~ or ~~results~~contribute to ~~differ materially from the events, performance~~such a discrepancy include, but are not limited to, those described under “Risk Factors” and ~~results discussed~~“Cautionary Note Regarding Forward-Looking Statements” in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s ~~final prospectus for its Initial Public Offering~~Registration Statement on Form S-1 (file no. 333-257610) (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the ~~“SEC”~~“SEC”). on July 1, 2021, as amended on July 23, 2021 and July 26, 2021, and the Company’s other filings with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at ~~www.sec.gov.~~www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Introduction

We are a holding company that conducts substantially all of our business operations through Reservoir Media Management, Inc. (“RMM”) and RMM’s subsidiaries. Our activities are generally 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 gives us an interest in the future delivery of songs. 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 catalogs.

This management’s discussion and analysis of financial condition and results of operations is organized as follows:

●

Business Overview––This section provides a general description of our business, as well as a discussion of factors that we believe are important in understanding our results of operations and comparability and in anticipating future trends.

●

Results of Operations––This section provides an analysis of our results of operations for the three and nine months ended December 31, 2021 and December 31, 2020.

●

Business Segment Results––This section provides an analysis of our business segment results for the three and nine months ended December 31, 2021 and December 31, 2020.

Table of Contents

●

Liquidity and Capital Resources––This section provides an analysis of our cash flows for the nine months December 31, 2021 and December 31, 2020, as well as a discussion of our liquidity and capital resources as of December 31, 2021. The discussion of our liquidity and capital resources includes recent debt financings and a summary of the key debt covenant compliance measures under our debt agreements.

●

Critical Accounting Policies––This section identifies those accounting policies that are considered important to our results of operations and financial condition, require significant judgement and/or involve significant management estimates. Our significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 2, “Significant Accounting Policies” to our condensed consolidated financial statements as of December 31, 2021 and for the three and nine months ended December 31, 2021 and 2020.

Use of OIBDA

We evaluate our operating performance based on several factors, including our primary financial measure of operating income (loss) before non-cash depreciation of tangible assets and non-cash amortization of intangible assets (“OIBDA”). We consider OIBDA to be an important indicator of the operational strengths and performance of our businesses and believe this non-US GAAP (as defined below) measure provides useful information to investors because it removes the significant impact of amortization from our results of operations. However, a limitation of the use of OIBDA as a performance measure is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses and other non-operating income (loss). Accordingly, OIBDA should be considered in addition to, not as a substitute for, operating income (loss), net income (loss) attributable to us and other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In addition, our definition of OIBDA may differ from similarly titled measures used by other companies. A reconciliation of consolidated OIBDA to operating income (loss) and net income (loss) attributable to us is provided in “—Results of Operations.”

Business Overview

We ~~formed~~are an independent music company operating in music publishing and recorded music. We represent over 140,000 copyrights in our publishing business and over 36,000 master recordings in our recorded music business. Both of our business areas are populated with hit songs dating back to the early 1900s representing an array of artists across genre and geography. We classify our business into two fundamental operations: Music Publishing and Recorded Music. A brief description of each of those operations is presented below.

Music Publishing Operations

Music Publishing is an intellectual property business focused on generating revenue from uses of the musical composition itself. In return for promoting, placing, marketing and administering the creative output of a songwriter or engaging in those activities for other rightsholders, our Music Publishing business garners a share of the revenues generated from use of the musical compositions.

The operations of our Music Publishing business are conducted principally through RMM, our global music publishing company headquartered in New York City, with operations in multiple countries through various subsidiaries, affiliates and non-affiliated licensees and sub-publishers. We own or control rights to more than 140,000 musical compositions, including numerous pop hits, American standards, folk songs and motion picture and theatrical compositions. Assembled over many years, our current award-winning active songwriters exceed 100, while the catalog includes over 5,000 clients representing a diverse range of genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, techno, alternative and gospel.

Music Publishing revenues are derived from five main sources:

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Performance––the rightsholder receives revenues if the musical composition is performed publicly through broadcast of music on television, radio and cable and in retail locations (e.g., bars and restaurants), live performance at a concert or other venue (e.g., arena concerts and nightclubs), and performance of music in staged theatrical productions;

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Digital––the rightsholder receives revenues with respect to musical compositions embodied in recordings distributed in streaming services, download services and other digital music services;

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Mechanical––the rightsholder receives revenues with respect to musical compositions embodied in recordings sold in any machine-readable format or configuration such as vinyl, CDs and DVDs;

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Synchronization––the rightsholder receives revenues for the right to use the musical composition in combination with visual images such as in films or television programs, television commercials and video games; and

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Other––the rightsholder receives revenues for use in sheet music and other uses.

The principal costs associated with our Music Publishing business are as follows:

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Writer Royalties and Other Publishing Costs––the artist and repertoire (“A&R”) costs associated with (i) paying royalties to songwriters, co-publishers and other copyright holders in connection with income generated from the uses of their works and (ii) signing and developing songwriters; and

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Administration Expenses––the costs associated with general overhead, and other administrative expenses, as well as selling and marketing.

Recorded Music Operations

Our Recorded Music business consists of three primary areas of sound recording ownership. First is the active marketing, promotion, distribution, sale and licensing of newly created frontline sound recordings from Current Artists that we own and control. This is a new area of focus for us and does not yet produce significant revenue. The second is the active marketing, promotion, distribution, sale and license of previously recorded and subsequently acquired Catalog recordings. The third is acquisition of full or partial interests in existing record labels, sound recording catalogs or income rights to a royalty stream associated with an established recording artist or producer contract in connection with existing sound recordings. Acquisition of these income participation interests are typically in connection with recordings that are owned, controlled, and marketed by other record labels.

Our Current Artist and Catalog recorded music businesses are both primarily handled by our Chrysalis Records label based in London and our Tommy Boy record label based in New York City. In the United States, we also manage some select Catalog recorded music under our Philly Groove Records and Reservoir Records labels. We also own income participation interests in recordings by The Isley Brothers, The Commodores, Wisin and Yandel, Alabama and Travis Tritt, and an interest in the Loud Records catalog containing recordings by the Wu Tang Clan. Our core Catalog includes recordings under the ~~laws~~Chrysalis Records label by artists such as Sinéad O’Connor, The Specials, Generation X and The Waterboys, as well as recordings under the Tommy Boy record label by artists such as Coolio, House of Pain, Naughty By Nature, Everlast and Digital Underground.

Our Current Artist and Catalog recorded music distribution is handled by a network of distribution partners. Chrysalis Records Catalog releases are distributed through AWAL while our Chrysalis Records Current Artist releases are distributed through PIAS. Tommy Boy Music Catalog releases are distributed via our membership with MERLIN, AMPED and other partners.

Through our distribution network, our music is being sold in physical retail outlets as well as in physical form to online physical retailers, such as amazon.com, and distributed in digital form to an expanding universe of digital partners, including streaming services such as Amazon, Apple, Deezer, SoundCloud, Spotify, Tencent Music Entertainment Group and YouTube, radio services such as iHeart Radio and SiriusXM, and download services. We also license music digitally to fitness platforms such as Apple Fitness+, Equinox, Hydrow and Peloton and social media outlets, such as Facebook, Instagram, TikTok and Triller.

Recorded Music revenues are derived from four main sources:

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Digital––the rightsholder receives revenues with respect to streaming and download services;

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Physical––the rightsholder receives revenues with respect to sales of physical products such as vinyl, CDs and DVDs;

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Synchronization––the rightsholder receives 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; and

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Neighboring Rights––the rightsholder also receives royalties if 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.

The principal costs associated with our Recorded Music business are as follows:

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Artist Royalties and Other Recorded Costs––the A&R costs associated with (i) paying royalties to recording artists, producers, songwriters, other copyright holders and trade unions, (ii) signing and developing recording artists and (iii) creating master recordings in the studio; and product costs to manufacture, package and distribute products to wholesale and retail distribution outlets; and

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Administration Expenses––the costs associated with general overhead and other administrative expenses as well as the costs associated with the promotion and marketing of recording artists and music, including costs to produce music videos for promotional purposes and artist tour support.

Business Combination

On July 28, 2021 (the “Closing Date”), we consummated the ~~State of Delaware on February 13, 2019. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar~~previously announced business combination ~~with one or more businesses, which we refer to herein as our “Business Combination.~~(the “Business Combination”) by and among Roth CH Acquisition II Co., a Delaware corporation (“ROCC”

~~Business Combination~~

~~On April 14, 2021, we entered into the~~), Roth CH II Merger ~~Agreement with Merger~~ Sub Corp., a Delaware corporation and ~~our~~a wholly-owned subsidiary ~~and Reservoir. On July 28, 2021, in connection with the consummation~~ of ~~the transactions contemplated by the Merger Agreement,~~ ROCC (“Merger Sub ~~was~~”) and Reservoir Holdings, Inc., a Delaware corporation (“RHI”). On the Closing Date, Merger Sub merged with and into ~~Reservoir and,~~RHI, with RHI surviving as a ~~result, the separate corporate existence~~wholly-owned subsidiary of ~~Merger Sub ceased and Reservoir survived the merger as our wholly-owned subsidiary.~~ROCC (the “Business Combination”). In ~~addition, in~~ connection with the consummation of the Business Combination, “Roth CH Acquisition II Co.” was renamed “Reservoir Media, Inc.” effective as of the Closing Date. Our common stock, $0.0001 par value per share (the “Common Stock”) and warrants are traded on The Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbols “RSVR” and “RSVRW,” respectively.

~~Results~~The Business Combination was accounted for as a reverse capitalization. Under this method of ~~Operations~~

~~Our only activities from February 13, 2019 (inception) through June 30, 2021 were organizational activities, those necessary to consummate~~accounting, ROCC was treated as the ~~Initial Public Offering, described below, identifying a target~~“acquired” company for accounting purposes, and the Business Combination was accounted as the equivalent of RHI issuing stock for the net assets of ROCC, accompanied by a recapitalization. RHI is deemed to be the accounting predecessor of the combined business and the successor SEC registrant, meaning that RHI’s financial statements for previous periods will be disclosed in future periodic reports filed with the SEC. See Note 3, “Business Combination and ~~negotiating~~PIPE Investment” to the ~~terms~~accompanying unaudited condensed consolidated financial statements for additional information with respect to the Business Combination and related transactions.

COVID-19 Pandemic

In January 2020, a new strain of coronavirus, COVID-19, was identified in Wuhan, China. In March 2020, the World Health Organization declared a global pandemic. The global pandemic and governmental responses thereto have disrupted physical and manufacturing supply chains and required the closures of physical retailers. Additionally, stay-at-home orders, limited indoor and outdoor gatherings and other restrictions have negatively affected our business in other ways, such as, making it impossible to hold live concert tours, delaying the release of new recordings and disrupting the production and release of motion pictures and television programs. However, the disruption from the COVID-19 pandemic may have accelerated growth of other revenue streams such as fitness and interactive gaming (including augmented reality and virtual reality).

Factors Affecting Results of Operations and Comparability

Throughout our history, we have constantly acquired new assets and subsidiaries and signed new writers and more recently new recording artists. These investing activities have had the largest impact on our growth over time. We have also invested in our operations to create a platform for the Music Publishing and Recorded Music segments to scale and grow. The most significant acquisitions of size during the nine months ended December 31, 2021 and 2020 were as follows:

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On April 13, 2020, we acquired, through an asset purchase agreement, all of the music assets of three entities doing business as Shapiro, Bernstein & Co., a century old U.S. music publishing company, which included a diverse catalog of primarily music publishing rights and some ancillary rights. The investment also included the acquisition, through a share purchase agreement, of Shapiro, Bernstein & Co. Limited, a U.K. company, which enabled us to take advantage of its at-source network of collections across Europe.

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On June 2, 2021, we acquired, through a membership interest purchase agreement, Tommy Boy Music, LLC ("Tommy Boy"), a 40-year-old record label, which included a diverse catalog of primarily recorded music rights and some music publishing rights.

Results of Operations

Income Statement

Our income statement was composed of the Merger Agreement with Reservoir. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.following amounts (in thousands):

For the three months ended June 30, 2021, we had net loss of $848,707, which consists of formation and operational costs of $667,324 and change in fair value of warrant liability of $184,250, offset by interest earned on marketable securities held in the Trust Account of $2,867.


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Revenues	$	27,128	$	21,555	$	5,573	26	%	$	74,281	$	56,184	$	18,097	32	%
Costs and expenses:
Cost of revenue		11,436		9,687		1,749	18	%		31,220		23,820		7,401	31	%
Amortization and depreciation		4,982		3,158		1,824	58	%		13,839		10,447		3,392	32	%
Administration expenses		6,732		3,816		2,917	76	%		17,052		10,400		6,651	64	%
Total costs and expenses		23,150		16,662		6,488	39	%		62,111		44,667		17,444	39	%
Operating income		3,978		4,893		(916)	(19)	%		12,171		11,517		653	6	%
Interest expense		(2,500)		(2,259)		(240)	11	%		(8,007)		(6,668)		(1,340)	20	%
Gain (loss) on foreign exchange		(48)		(342)		294	(86)	%		127		(550)		676	(123)	%
Gain on fair value of swaps		1,664		852		811	95	%		2,889		1,260		1,629	129	%
Interest and other income		—		1		(1)	N/A	%		—		6		(6)	(100)	%
Income before income taxes		3,094		3,146		(52)	(2)	%		7,179		5,566		1,614	29	%
Income tax expense		717		759		(41)	(6)	%		1,782		1,336		446	33	%
Net income		2,376		2,387		(10)	(0)	%		5,397		4,229		1,168	28	%
Net (income) loss attributable to noncontrolling interests		(227)		(116)		(111)	96	%		(95)		(12)		(83)	692	%
Net income attributable to Reservoir Media, Inc.	$	2,149	$	2,271	$	(122)	(5)	%	$	5,302	$	4,217	$	1,085	26	%

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~~For~~Revenues

Our revenues were composed of the ~~six~~following amounts (in thousands):



	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Revenue by Type
Performance	$	3,997	$	3,760	$	238	6	%	$	11,046	$	11,735	$	(689)	(6)	%
Digital		8,480		11,654		(3,174)	(27)	%		26,710		25,595		1,115	4	%
Mechanical		744		510		234	46	%		2,114		1,989		125	6	%
Synchronization		2,444		1,367		1,077	79	%		8,541		5,715		2,825	49	%
Other		2,737		455		2,282	502	%		4,407		1,637		2,770	169	%
Total Music Publishing		18,403		17,746		657	4	%		52,817		46,671		6,146	13	%

Digital		4,892		1,541		3,351	217	%		12,466		5,026		7,440	148	%
Physical		1,280		1,169		110	9	%		4,787		2,187		2,599	119	%
Synchronization		1,190		90		1,100	1222	%		1,610		440		1,170	266	%
Neighboring rights		749		476		273	57	%		1,552		1,052		500	48	%
Total Recorded Music		8,110		3,277		4,834	147	%		20,415		8,705		11,710	135	%

Other revenue		615		532		82	16	%		1,050		808		242	30	%
Total Revenue	$	27,128	$	21,555	$	5,573	26	%	$	74,281	$	56,184	$	18,097	32	%
Revenue by Geographical Location
U.S. Music Publishing	$	9,013	$	7,360	$	1,653	22	%	$	26,683	$	24,313	$	2,370	10	%
U.S. Recorded Music		4,011		583		3,427	588	%		10,686		2,668		8,018	301	%
U.S. Other Revenue		615		532		82	16	%		1,050		808		242	30	%
Total U.S.		13,639		8,476		5,163	61	%		38,420		27,789		10,631	38	%
International Music Publishing		9,389		10,386		(997)	(10)	%		26,133		22,358		3,775	17	%
International Recorded Music		4,100		2,693		1,406	52	%		9,728		6,037		3,691	61	%
Total International		13,489		13,079		410	3	%		35,862		28,395		7,467	26	%
Total Revenue	$	27,128	$	21,555	$	5,573	26	%	$	74,281	$	56,184	$	18,097	32	%

Total Revenues

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Total revenues increased by $5,573 thousand, or 26%, to $27,128 thousand for the three months ended December 31, 2021 from $21,555 thousand for the three months ended December 31, 2020. Music Publishing revenues represented 68% and 82% of total revenues for the three months ended December 31, 2021 and December 31, 2020, respectively. Recorded Music revenues represented 30% and 15% of total revenues for the three months ended December 31, 2021 and December 31, 2020, respectively. U.S. and international revenues each represented 50% of total revenues for the three months ended December 31, 2021, and 39% and 61%, respectively, of total revenues for the three months ended December 31, 2020.

Total digital revenues increased by $177 thousand, or 1%, to $13,372 thousand for the three months ended December 31, 2021 from $13,195 thousand for the three months ended December 31, 2020. Total digital revenues represented 49% and 61% of consolidated revenues for the three months ended December 31, 2021 and December 31, 2020, respectively. The decrease in digital revenue as a percentage of consolidated revenue is primarily due to the inclusion of a one-time settlement with a previously unlicensed platform during the three months ended December 31, 2020. There was no such settlement included in the revenue for the three months ended

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December 31, 2021. Adjusting for the impact of the one-time settlement for the three months ended December 31, 2020, total digital revenue increased by $2,877 thousand or 28%.

Music Publishing revenues increased by $657 thousand, or 4%, to $18,403 thousand for the three months ended December 31, 2021 from $17,746 thousand for the three months ended December 31, 2020. U.S. Music Publishing revenues were $9,013 thousand, or 49% of consolidated Music Publishing revenues for the three months ended December 31, 2021, and $7,360 thousand, or 41% of consolidated Music Publishing revenues for the three months ended December 31, 2020. International Music Publishing revenues were $9,389 thousand, or 51% of consolidated Music Publishing revenues for the three months ended December 31, 2021, and $10,386 thousand, or 59% of consolidated Music Publishing revenues for the three months ended December 31, 2020.

The overall increase in Music Publishing revenue during the three months ended December 31, 2021 was mainly driven by acquisitions of catalogs and revenue from the existing catalog, which led to an increase in synchronization revenue of $1,077 thousand, or 79%, other revenue of $2,282 thousand, or 502%, mechanical revenue of $234 thousand, or 46%, and performance revenue of $238 thousand, or 6%. These increases were partially offset by a decrease in digital revenue of $3,174 thousand, or 27%, which is primarily attributed to the one-time settlement during the three months ended December 31, 2020, as described above. The increase in other revenue is primarily the due to the launch of a rights management subsidiary in the Middle East.

Recorded Music revenues increased by $4,834 thousand, or 147%, to $8,110 thousand for the three months ended December 31, 2021 from $3,277 thousand for the three months ended December 31, 2020. U.S. Recorded Music revenues were $4,011 thousand and $583 thousand, or 49% and 18% of consolidated Recorded Music revenues for the three months ended December 31, 2021 and December 31, 2020, respectively. International Recorded Music revenues were $4,100 thousand and $2,693 thousand, or 51% and 82% of consolidated Recorded Music revenues for the three months ended December 31, 2021 and December 31, 2020, respectively.

The overall increase in Recorded Music revenue during the three months ended December 31, 2021, was driven in part by the acquisition of Tommy Boy in June ~~30,~~ 2021, ~~we had net loss~~which contributed $3,829 thousand to Recorded Music revenue during the three months ended December 31, 2021. Digital revenue increased by $3,351 thousand primarily due to the acquisition of ~~$1,096,238,~~Tommy Boy and due to the continued growth at music streaming services. Physical revenue increased by $110 thousand primarily due to the acquisition of Tommy Boy. Synchronization revenue increased by $1,100 thousand primarily due to the acquisition of Tommy boy and the recovery in the film and television industry from the impacts of the COVID-19 pandemic. Neighboring rights revenue increased by $273 thousand primarily due to the acquisition of Tommy Boy.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Total revenues increased by $18,097 thousand, or 32%, to $74,281 thousand for the nine months ended December 31, 2021 from $56,184 thousand for the nine months ended December 31, 2020. Music Publishing revenues represented 71% and 83% of total revenues for the nine months ended December 31, 2021 and December 31, 2020, respectively. Recorded Music revenues represented 27% and 15% of total revenues for the nine months ended December 31, 2021 and December 31, 2020, respectively. U.S. and international revenues represented 52% and 48%, respectively, of total revenues for the nine months ended December 31, 2021, and 49% and 51%, respectively, of total revenues for the nine months ended December 31, 2020.

Total digital revenues increased by $8,555 thousand, or 28%, to $39,175 thousand for the nine months ended December 31, 2021 from $30,621 thousand for the nine months ended December 31, 2020. Total digital revenues represented 53% and 55% of consolidated revenues for the nine months ended December 31, 2021 and December 31, 2020, respectively. The decrease in digital revenue as a percentage of consolidated revenue is due to the continued recovery of synchronization revenue which ~~consists~~contributed a higher portion of ~~formation~~revenue during the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020.

Music Publishing revenues increased by $6,146 thousand, or 13%, to $52,817 thousand for the nine months ended December 31, 2021 from $46,671 thousand for the nine months ended December 31, 2020. U.S. Music Publishing revenues were $26,683 thousand, or 51% of consolidated Music Publishing revenues for the nine months ended December 31, 2021, and ~~operational~~$24,313 thousand, or 52% of consolidated Music Publishing revenues for the nine months ended December 31, 2020. International Music Publishing revenues were $26,133 thousand, or 49% of consolidated Music Publishing revenues for the nine months ended December 31, 2021, and $22,358 thousand, or 48% of consolidated Music Publishing revenues for the nine months ended December 31, 2020.

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The overall increase in Music Publishing revenue during the nine months ended December 31, 2021 was mainly driven by acquisitions of catalogs and revenue from the existing catalog, which led to increases in digital revenue of $1,115 thousand or 4%, synchronization revenue of $2,825 thousand, or 49%, mechanical revenue of $125 thousand, or 6%, and other revenue of $2,770 thousand, or 169%. These increases were partially offset by a decrease in performance revenue of $689 thousand, or 6%, which can be attributed to declines in performance revenue across the industry due to the impact of the COVID-19 pandemic. The increase in digital revenue partially reflects the continued shift to streaming services for music consumption, while the increase in synchronization reflects the recovery in the film and television industry from the impacts of the COVID-19 pandemic.

Recorded Music revenues increased by $11,710 thousand, or 135%, to $20,415 thousand for the nine months ended December 31, 2021 from $8,705 thousand for the nine months ended December 31, 2020. U.S. Recorded Music revenues were $10,686 thousand and $2,668 thousand, or 52% and 31% of consolidated Recorded Music revenues for the nine months ended December 31, 2021 and December 31, 2020, respectively. International Recorded Music revenues were $9,728 thousand and $6,037 thousand, or 48% and 69% of consolidated Recorded Music revenues for the nine months ended December 31, 2021 and December 31, 2020, respectively.

The overall increase in Recorded Music revenue during the nine months ended December 31, 2021, was driven in part by the acquisition of Tommy Boy in June 2021, which contributed $7,473 thousand to Recorded Music revenue to the nine months ended December 31, 2021. Digital revenue increased by $7,440 thousand, or 148%, primarily due to the acquisition of Tommy Boy and due to the continued growth at music streaming services. Physical revenue increased by $2,599 thousand, or 119%, primarily due to an increase in physical sales at Chrysalis Records reflective of the growth in global demand for vinyl. Synchronization revenue increased by $1,170 thousand, or 266%, primarily due to the acquisition of Tommy Boy and the recovery in the film and television industry from the impacts of the COVID-19 pandemic. Neighboring rights revenue increased by $500 thousand, or 48%, primarily due to the acquisition of Tommy Boy.

Revenue by Geographical Location

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

U.S. revenue increased by $5,163 thousand, or 61%, to $13,639 thousand for the three months ended December 31, 2021 from $8,476 thousand for the three months ended December 31, 2020. U.S. Music Publishing revenue increased by $1,653 thousand, or 22%, for the three months ended December 31, 2021 as compared to the three months ended December 31, 2020. U.S. Recorded Music revenue increased by $3,427 thousand, or 588%, for the three months ended December 31, 2021 as compared to the three months ended December 31, 2020. This was primarily driven by the acquisition of Tommy Boy.

International revenue increased by $410 thousand, or 3%, to $13,489 thousand for the three months ended December 31, 2021 from $13,079 thousand for the three months ended December 31, 2020. International Music Publishing revenue decreased $997 thousand, or 10%, for the three months ended December 31, 2021 as compared to the three months ended December 31, 2020. This was primarily driven by the one-time settlement during the three months ended December 31, 2020, as described above, with no corresponding settlement included during the three months ended December 31, 2021. International Recorded Music revenue increased by $1,406 thousand for the three months ended December 31, 2021 as compared to the three months ended December 31, 2020 primarily due to the acquisition of Tommy Boy and the continued growth of music streaming services.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

U.S. revenue increased by $10,631 thousand, or 38%, to $38,420 thousand for the nine months ended December 31, 2021 from $27,789 thousand for the nine months ended December 31, 2020. U.S. Music Publishing revenue increased by $2,370 thousand, or 10%, for the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020. U.S. Recorded Music revenue increased by $8,018 thousand, or 301%, for the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020. This was primarily driven by the acquisition of Tommy Boy.

International revenue increased by $7,467 thousand, or 26%, to $35,862 thousand for the nine months ended December 31, 2021 from $28,395 thousand for the nine months ended December 31, 2020. International Music Publishing revenue increased $3,775 thousand, or 17%, for the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020. This was primarily driven by acquisitions of catalogs, signings of writers and increases in digital revenue, primarily due to growth in streaming.

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International Recorded Music revenue increased by $3,691 thousand for the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020 primarily due to the acquisition of Tommy Boy, the continued growth of music streaming services and a strong physical release schedule.

Cost of Revenues

Our cost of revenues was composed of the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Writer royalties and other publishing costs	$	8,471	$	8,307	$	164	2	%	$	24,214	$	21,196	$	3,018	14	%
Artist royalties and other recorded music costs		2,965		1,380		1,585	115	%		7,007		2,624		4,383	167	%
Total cost of revenues	$	11,436	$	9,687	$	1,749	18	%	$	31,220	$	23,820	$	7,401	31	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Cost of revenues increased by $1,749 thousand, or 18%, to $11,436 thousand for the three months ended December 31, 2021 from $9,687 thousand for the three months ended December 31, 2020. Cost of revenues as a percentage of revenues decreased to 42% for the three months ended December 31, 2021 from 45% for the three months ended December 31, 2020.

Writer royalties and other publishing costs increased by $164 thousand, or 2%, to $8,471 thousand for the three months ended December 31, 2021 from $8,307 thousand for the three months ended December 31, 2020. Writer royalties and other publishing costs as a percentage of ~~$871,563 and~~music publishing revenues decreased to 46% for the three months ended December 31, 2021 from 47% for the three months ended December 31, 2020. The increase in margins was due to the change in the mix of earnings by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Artist royalties and other recorded music costs increased by $1,585 thousand, or 115%, to $2,965 thousand for the three months ended December 31, 2021 from $1,380 thousand for the three months ended December 31, 2020. This increase was due primarily to increased revenue from the acquisition of Tommy Boy. Artist royalties and other recorded music costs as a percentage of recorded music revenues decreased to 37% for the three months ended December 31, 2021 from 42% for the three months ended December 31, 2020. The increase in margins was due to the change in the mix of earnings by type and clients with the specific contractual royalty rates being applied to the revenues.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Our cost of revenues increased by $7,401 thousand, or 31%, to $31,220 thousand for the nine months ended December 31, 2021 from $23,820 thousand for the nine months ended December 31, 2020. Cost of revenues as a percentage of revenues was 42% for both the nine months ended December 31, 2021 and the nine months ended December 31, 2020.

Writer royalties and other publishing costs increased by $3,018 thousand, or 14%, to $24,214 thousand for the nine months ended December 31, 2021 from $21,196 thousand for the nine months ended December 31, 2020. Writer royalties and other publishing costs as a percentage of music publishing revenues increased to 46% for the nine months ended December 31, 2021 from 45% for the nine months ended December 31, 2020. The decrease in margins was due to the change in the mix of earnings by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Artist royalties and other recorded music costs increased by $4,383 thousand, or 167%, to $7,007 thousand for the nine months ended December 31, 2021 from $2,624 thousand for the nine months ended December 31, 2020. This increase was due primarily to increased revenue from the acquisition of Tommy Boy as well as costs associated with the increased physical revenue during the nine months ended December 31, 2021. Artist royalties and other recorded music costs as a percentage of recorded music revenues increased to 34% for the nine months ended December 31, 2021 from 30% for the nine months ended December 31, 2020. This was primarily

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driven by the increase in sales of physical products which have a higher cost base than our other revenue streams, as well as the change in the mix of earnings by type and clients with the specific contractual royalty rates being applied to the revenues.

Administration Expenses

Our administration expenses are composed of the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Administration expenses	$	6,732	$	3,816	$	2,917	76	%	$	17,052	$	10,400	$	6,651	64	%
Total administration expenses	$	6,732	$	3,816	$	2,917	76	%	$	17,052	$	10,400	$	6,651	64	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Total administration expenses increased by $2,917 thousand, or 76%, to $6,732 thousand for the three months ended December 31, 2021 from $3,816 thousand for the three months ended December 31, 2020. Expressed as a percentage of revenues, administration expenses increased to 25% for the three months ended December 31, 2021 from 18% for the three months ended December 31, 2020. Administration expenses associated with being a public company, an increase in share-based compensation expense and increased costs related to acquisitions were the primary drivers of this increase.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Total administration expenses increased by $6,651 thousand, or 64%, to $17,052 thousand for the nine months ended December 31, 2021 from $10,400 thousand for the nine months ended December 31, 2020. Expressed as a percentage of revenues, administration expenses increased to 23% for the nine months ended December 31, 2021 from 19% for the nine months ended December 31, 2020. Administration expenses associated with preparing for and being a public company, along with an increase in share-based compensation, and increased costs related to acquisitions were the primary drivers of this increase. In addition, the benefit of a forgiven PPP Loan (as defined below) of $617 thousand was recorded during the nine months ended December 31, 2020, while no such benefit was recorded for the nine months ended December 31, 2021. Adjusting for the impact of the one-time benefit of the PPP Loan forgiveness for the nine months ended December 31, 2020, administrative expenses increased by $6,034 thousand, or 55%. This increase was in line with management’s expectations of incremental administrative expenses related to preparing for and being a public company as well as anticipated incremental administrative expenses associated with acquisitions.

Interest Expense

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Interest expense increased by $240 thousand, or 11%, to $2,500 thousand for the three months ended December 31, 2021 from $2,259 thousand for the three months ended December 31, 2020. This was primarily driven by increased debt balances due to use of funds in catalog and business acquisitions and writer signings, partially offset by a decline in LIBOR rates as well as lower interest rates as a result of refinancing transactions, the impact of which was in turn partially offset by interest rate swap hedges.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Interest expense increased by $1,340 thousand, or 20%, to $8,007 thousand for the nine months ended December 31, 2021 from $6,668 thousand for the nine months ended December 31, 2020. This was primarily driven by increased debt balances due to use of funds in catalog and business acquisitions and writer signings, partially offset by a decline in LIBOR rates as well as lower interest rates as a result of refinancing transactions, the impact of which was in turn partially offset by interest rate swap hedges.

Gain (Loss) on Foreign Exchange

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

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Loss on foreign exchange was $48 thousand for the three months ended December 31, 2021 compared to $342 thousand for the three months ended December 31, 2020. This change was due to fluctuations in the two foreign currencies we are directly exposed to, namely British pound sterling and euro.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Gain on foreign exchange was $127 thousand for the nine months ended December 31, 2021 compared to a loss on foreign exchange of $550 thousand for the nine months ended December 31, 2020. This change was due to fluctuations in the two foreign currencies we are directly exposed to, namely British pound sterling and euro.

Gain on Fair Value of Swaps

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Gain on fair value of ~~warrant liability~~swaps increased by $811 thousand to $1,664 thousand for the three months ended December 31, 2021 from $852 thousand for the three months ended December 31, 2020. This change was due to a rising forward yield curve for LIBOR and the marking to market of ~~$233,750, offset~~our interest rate swap hedges.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Gain on fair value of swaps increased by $1,629 thousand to $2,889 thousand for the nine months ended December 31, 2021 from $1,260 thousand for the nine months ended December 31, 2020. This change was due to a rising forward yield curve for LIBOR and the marking to market of our interest ~~earned on marketable securities held~~rate swap hedges.

Income Tax Expense

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Income tax expense decreased by $41 thousand, or 6%, to $717 thousand for the three months ended December 31, 2021 from $759 thousand for the three months ended December 31, 2020. The decrease in income tax expense was related to the lower pre-tax income in the ~~Trust Account~~three months ended December 31, 2021 as compared to the three months ended December 31, 2020.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Income tax expense increased by $446 thousand, or 33%, to $1,782 thousand for the nine months ended December 31, 2021 from $1,336 thousand for the nine months ended December 31, 2020. The increase in income tax expense was related to the higher pre-tax income in the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020.

Net Income

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Net income decreased by $10 thousand, or less than 1%, to $2,376 thousand for the three months ended December 31, 2021 from $2,387 thousand for the three months ended December 31, 2020 as a result of ~~$9,075.~~the factors described above.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Net income increased by $1,168 thousand, or 28%, to $5,397 thousand for the nine months ended December 31, 2021 from $4,229 thousand for the nine months ended December 31, 2020 as a result of the factors described above.

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Reconciliation of Operating Income to OIBDA

We use OIBDA as our primary measure of financial performance. The following table reconciles operating income to OIBDA (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Operating income	$	3,978	$	4,893	$	(916)	(19)	%	$	12,171	$	11,517	$	653	6	%
Amortization expense		4,933		3,102		1,831	59	%		13,713		10,279		3,435	33	%
Depreciation expense		49		56		(6)	(13)	%		125		169		(42)	(26)	%
OIBDA	$	8,960	$	8,051	$	908	11	%	$	26,009	$	21,964	$	4,045	18	%

~~For~~

OIBDA

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

OIBDA increased by $908 thousand, or 11%, to $8,960 thousand for the ~~six~~three months ended ~~June 30,~~December 31, 2021 from $8,051 thousand for the three months ended December 31, 2020 ~~we had net loss~~primarily as a result of ~~$85,~~an increase in revenue of $5,573 thousand, partially offset by an increase in cost of revenue of $1,749 thousand and an increase in administration expenses of $2,917 thousand. Expressed as a percentage of total revenue, OIBDA margin decreased to 33% for the three months ended December 31, 2021 from 37% for the three months ended December 31, 2020. OIBDA margin decreased primarily because of increased overhead associated with being a public company and increased costs related to acquisitions.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

OIBDA increased by $4,045 thousand, or 18%, to $26,009 thousand for the nine months ended December 31, 2021 from $21,964 thousand for the nine months ended December 31, 2020 primarily as a result of an increase in revenue of $18,097 thousand, partially offset by an increase in cost of revenue of $7,401 thousand and an increase in administration expenses of $6,651 thousand. Expressed as a percentage of total revenue, OIBDA margin decreased to 35% for the nine months ended December 31, 2021 from 39% for the nine months ended December 31, 2020. Adjusting for the impact of the one-time benefit of the PPP Loan forgiveness of $617 thousand for the nine months ended December 31, 2020 (as described in “—Administrative Expenses”), OIBDA for the nine months ended December 31, 2020 would have been $21,347 thousand. When excluding the impact of the one-time benefit of the PPP Loan forgiveness for the nine months ended December 31, 2020, OIBDA for the nine months ended December 31, 2021 increased by $4,662 thousand, or 22%, which ~~consisted exclusively~~can be attributed to the increased costs for the nine months ended December 31, 2021 associated with preparing for and being a public company as well as anticipated incremental administrative expenses associated with acquisitions.

Depreciation Expense

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Depreciation expense decreased by $6 thousand, or 13%, to $49 thousand for the three months ended December 31, 2021 from $56 thousand for the three months ended December 31, 2020, primarily due to the full depreciation of ~~formation~~some prior capital expenditures.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Depreciation expense decreased by $42 thousand, or 26%, to $125 thousand for the nine months ended December 31, 2021 from $169 thousand for the nine months ended December 31, 2020, primarily due to the full depreciation of some prior capital expenditures.

Amortization Expense

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

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Amortization expense increased by $1,831 thousand, or 59%, to $4,933 thousand for the three months ended December 31, 2021 from $3,102 thousand for the three months ended December 31, 2020, primarily due to the acquisition of additional music catalogs and ~~operational costs.~~music company purchases, including Tommy Boy.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Amortization expense increased by $3,435 thousand, or 33%, to $13,713 thousand for the nine months ended December 31, 2021 from $10,279 thousand for the nine months ended December 31, 2020, primarily due to the acquisition of additional music catalogs and music company purchases, including Tommy Boy.

Business Segment Results

Revenues, operating income and OIBDA by business segment were as follows (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Music Publishing
Revenues	$	18,403	$	17,746	$	657	4	%	$	52,817	$	46,671	$	6,146	13	%
Operating income		908		3,928		(3,020)	(77)	%		5,338		8,860		(3,522)	(40)	%
OIBDA		4,450		6,458		(2,008)	(31)	%		15,389		17,586		(2,197)	(12)	%
Recorded Music
Revenues	$	8,110	$	3,277	$	4,834	147	%	$	20,415	$	8,705	$	11,710	135	%
Operating income		2,747		904		1,843	204	%		6,434		2,554		3,881	152	%
OIBDA		4,163		1,533		2,630	172	%		10,148		4,275		5,874	137	%
Other
Revenues	$	615	$	532	$	82	16	%	$	1,050	$	808	$	242	30	%
Operating income		322		61		262	428	%		398		104		295	NM
OIBDA		347		61		286	469	%		472		104		369	NM
Total
Revenues	$	27,128	$	21,555	$	5,573	26	%	$	74,281	$	56,184	$	18,097	32	%
Operating income		3,978		4,893		(916)	(19)	%		12,171		11,517		653	6	%
OIBDA		8,960		8,051		908	11	%		26,009		21,964		4,045	18	%

Music Publishing

Revenues

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Music Publishing revenues increased by $657 thousand, or 4%, to $18,403 thousand for the three months ended December 31, 2021 from $17,746 thousand for the three months ended December 31, 2020. The increase was primarily attributed to the increase in Other revenue of $2,282 thousand from $455 thousand to $2,737 thousand, or 502%. Additionally, Performance, Mechanical, and Synchronization revenues increased by 6%, 46%, and 79%, respectively. The overall increase was partially offset by a decline in Digital revenues of 27%.

The overall increase in Music Publishing revenue was mainly driven by reasons described in “—Total Revenues” and “—Revenue by Geographical Location.”

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

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Synchronization revenue of $2,825 thousand from $5,715 thousand to $8,541 thousand, or 49%. Additionally, Digital, Mechanical, and Other revenues increased by 4%, 6%, and 169%, respectively. The overall increase was partially offset by a decline in Performance revenues of 6%.

The overall increase in Music Publishing revenue was mainly driven by reasons described in “—Total Revenues” and “—Revenue by Geographical Location.”

Cost of Revenues

Music Publishing cost of revenues was composed of the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Writer royalties and other publishing costs	$	8,471	$	8,307	$	164	2	%	$	24,214	$	21,196	$	3,018	14	%
Total cost of revenues		8,471		8,307	$	164	2	%	$	24,214	$	21,196	$	3,018	14	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Music Publishing cost of revenues increased by $164 thousand, or 2%, to $8,471 thousand for the three months ended December 31, 2021 from $8,307 thousand for the three months ended December 31, 2020. This increase was due primarily to acquisitions of catalogs and writer signings. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues decreased to 46% for the three months ended December 31, 2021 from 47% for the three months ended December 31, 2020. The increase in margins was due to the change in the mix of earnings by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Music Publishing cost of revenues increased by $3,018 thousand, or 14%, to $24,214 thousand for the nine months ended December 31, 2021 from $21,196 thousand for the nine months ended December 31, 2020. This increase was due primarily to acquisitions of catalogs and writer signings. Expressed as a percentage of Music Publishing revenue, Music Publishing cost of revenues increased to 46% for the nine months ended December 31, 2021 from 45% for the nine months ended December 31, 2020. The decrease in margins was due to the change in the mix of earnings by type and songwriting clients with their specific contractual royalty rates being applied to the revenues.

Administration Expenses

Music Publishing administration expenses were comprised of the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,					2021 vs. 2020			December 31,				2021 vs. 2020
		2021		2020		$ Change	% Change			2021	2020		$ Change		% Change
Administration expenses	$	5,481	$	2,517	$	2,964	118	%	$	13,214	$	7,425	$	5,789	78	%
Total administration expenses	$	5,481	$	2,517	$	2,964	118	%	$	13,214	$	7,425	$	5,789	78	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

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Music Publishing administration expenses increased by $2,964 thousand, or 118%, to $5,481 thousand for the three months ended December 31, 2021 as compared to $2,517 thousand for the three months ended December 31, 2020. This was partly due to new administration expenses associated with being a public company along with increased costs related to acquisitions. Expressed as a percentage of Music Publishing revenues, Music Publishing administration expenses increased to 30% for the three months ended December 31, 2021 from 14% for the three months ended December 31, 2020.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Music Publishing administration expenses increased by $5,789 thousand, or 78%, to $13,214 thousand for the nine months ended December 31, 2021 as compared to $7,425 thousand for the nine months ended December 31, 2020. This was partly due to new administration expenses associated with preparing for and being a public company along with increased costs related to acquisitions. Additionally, administration expenses for the nine months ended December 31, 2020 included a benefit of approximately $617 thousand for a forgiven PPP Loan while no such benefit was recorded for the nine months ended December 31, 2021. Expressed as a percentage of Music Publishing revenues, Music Publishing administration expenses increased to 25% for the nine months ended December 31, 2021 from 16% for the nine months ended December 31, 2020. Adjusting for the impact of the one-time benefit of the PPP Loan forgiveness for the nine months ended December 31, 2020, administrative expenses increased by $5,172 thousand, or 64%.

Operating Income and OIBDA

Music Publishing OIBDA includes the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Operating income	$	908	$	3,928	$	(3,020)	(77)	%	$	5,338	$	8,860	$	(3,522)	(40)	%
Depreciation and amortization		3,541		2,529		1,012	40	%		10,051		8,726		1,324	15	%
OIBDA	$	4,450	$	6,458	$	(2,008)	(31)	%	$	15,389	$	17,586	$	(2,197)	(12)	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Music Publishing OIBDA decreased by $2,008 thousand, or 31%, to $4,450 thousand for the three months ended December 31, 2021 from $6,458 thousand for the three months ended December 31, 2020. Expressed as a percentage of Music Publishing revenues, Music Publishing OIBDA margin decreased to 24% for the three months ended December 31, 2021 from 36% for the three months ended December 31, 2020. The decrease in Music Publishing OIBDA was primarily attributed to new administration expenses associated with being a public company, substantially all of which are included in the Music Publishing segment.

Music Publishing operating income decreased by $3,020 thousand, or 77%, to $908 thousand for the three months ended December 31, 2021 from $3,928 thousand for the three months ended December 31, 2020 due to the factors that led to the decrease in Music Publishing OIBDA noted above.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Music Publishing OIBDA decreased by $2,197 thousand, or 12%, to $15,389 thousand for the nine months ended December 31, 2021 from $17,586 thousand for the nine months ended December 31, 2020. Expressed as a percentage of Music Publishing revenues, Music Publishing OIBDA margin decreased to 29% for the nine months ended December 31, 2021 from 38% for the nine months ended December 31, 2020. The decrease in Music Publishing OIBDA was primarily attributed to higher administration expenses related to preparing for and being a public company, substantially all of which are included in the Music Publishing segment. Adjusting for the impact of the one-time benefit of the PPP Loan forgiveness for the nine months ended December 31, 2020, Music Publishing OIBDA decreased by $1,580 thousand, or 9%, from the nine months ended December 31, 2020 to the nine months ended December 31, 2021.

Music Publishing operating income decreased by $3,522 thousand, or 40%, to $5,338 thousand for the nine months ended December 31, 2021 from $8,860 thousand for the nine months ended December 31, 2020 due to the factors that led to the decrease in Music Publishing OIBDA noted above.

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Recorded Music

Revenues

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Recorded Music revenues increased by $4,834 thousand, or 147%, to $8,110 thousand for the three months ended December 31, 2021 from $3,277 thousand for the three months ended December 31, 2020. The increase was attributed to the increase in digital revenue from $1,541 thousand to $4,892 thousand, or 217%. Additionally, Physical, Synchronization, and Neighboring Rights revenues increased by 9%, 1,222%, and 57%, respectively. These increases were primarily driven by the acquisition of Tommy Boy.

The overall increase in Recorded Music revenue was driven reasons described in “—Total Revenues” and “—Revenue by Geographical Location.”

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Recorded Music revenues increased by $11,710 thousand, or 135%, to $20,415 thousand for the nine months ended December 31, 2021 from $8,705 thousand for the nine months ended December 31, 2020. The increase was attributed to the increase in digital revenue from $5,026 thousand to $12,466 thousand, or 148%. Additionally, Physical, Synchronization, and Neighboring Rights revenues increased by 119%, 266%, and 48%, respectively. These increases were primarily driven by the acquisition of Tommy Boy and increased physical sales by Chrysalis.

The overall increase in Recorded Music revenue was driven reasons described in “—Total Revenues” and “—Revenue by Geographical Location.”

Cost of Revenues

Recorded Music cost of revenues was composed of the following amounts (in thousands):


	For the Three Months Ended								For the Nine Months Ended
	December 31,				2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Artist royalties and other recorded music costs	$	2,965	$	1,380	$	1,585	115	%	$	7,007	$	2,624	$	4,383	167	%
Total cost of revenues	$	2,965	$	1,380	$	1,585	115	%	$	7,007	$	2,624	$	4,383	167	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Recorded Music cost of revenues increased by $1,585 thousand, or 115%, to $2,965 thousand for the three months ended December 31, 2021 from $1,380 thousand for the three months ended December 31, 2020. Expressed as a percentage of Recorded Music revenue, cost of revenues decreased to 37% for the three months ended December 31, 2021 from 42% for the three months ended December 31, 2020. The increase in margins was due to the change in the mix of earnings by type and clients with the specific contractual royalty rates being applied to the revenues.

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Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Recorded Music cost of revenues increased by $4,383 thousand, or 167%, to $7,007 thousand for the nine months ended December 31, 2021 from $2,624 thousand for the nine months ended December 31, 2020. Expressed as a percentage of Recorded Music revenue, cost of revenues increased to 34% for the nine months ended December 31, 2021 from 30% for the nine months ended December 31, 2020. This was primarily driven by the increase in sales of physical products which have a higher cost base than our other revenue streams as well as the change in the mix of earnings by type and clients with the specific contractual royalty rates being applied to the revenues.

Administration Expenses

Recorded Music administration expenses were composed of the following amounts (in thousands):


		For the Three Months Ended							For the Nine Months Ended
		December 31,				2021 vs. 2020			December 31,					2021 vs. 2020
		2021		2020	$ Change		% Change		2021		2020			$Change	% Change
Administration expenses	$	983	$	756	$	227	30	%	$	3,260	$	2,199	$	1,061	48	%
Total administration expenses	$	983	$	756	$	227	30	%	$	3,260	$	2,199	$	1,061	48	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Recorded Music administration expenses increased to $983 thousand for the three months ended December 31, 2021 from $756 thousand for the three months ended December 31, 2020. The increase in administration expenses was primarily due to increases at Chrysalis Records and the acquisition of Tommy Boy. Expressed as a percentage of Recorded Music revenue, Recorded Music administration expense decreased to 12% for the three months ended December 31, 2021 from 23% for the three months ended December 31, 2020. This was primarily due to taking advantage of operating leverage on the Recorded Music platform.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Recorded Music administration expenses increased to $3,260 thousand for the nine months ended December 31, 2021 from $2,199 thousand for the nine months ended December 31, 2020. The increase in administration expenses was primarily due to increases at Chrysalis Records and the acquisition of Tommy Boy. Expressed as a percentage of Recorded Music revenue, Recorded Music administration expense decreased to 16% for the nine months ended December 31, 2021 from 25% for the nine months ended December 31, 2020. This was primarily due to taking advantage of operating leverage on the Recorded Music platform.

Operating Income and OIBDA

Recorded Music OIBDA included the following amounts (in thousands):


	For the Three Months Ended									For the Nine Months Ended
	December 31,					2021 vs. 2020				December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change		2021		2020		$ Change		% Change
Operating income	$	2,747	$	904	$	1,843	204	%	$	6,434	$	2,554	$	3,881	152	%
Depreciation and amortization		1,416		629		787	125	%		3,714		1,721		1,993	116	%
OIBDA	$	4,163	$	1,533	$	2,630	172	%	$	10,148	$	4,275	$	5,874	137	%

Three Months Ended December 31, 2021 vs. Three Months Ended December 31, 2020

Recorded Music OIBDA increased by $2,630 thousand, or 172%, to $4,163 thousand for the three months ended December 31, 2021 from $1,533 thousand for the three months ended December 31, 2020 as a result of the acquisition of Tommy Boy and increases from Chrysalis Records. Expressed as a percentage of Recorded Music revenues, Recorded Music OIBDA margin increased to 51% for

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the three months ended December 31, 2021 from 47% for the three months ended December 31, 2020. This increase in OIBDA margin reflects taking advantage of operating leverage on the Recorded Music platform.

Recorded Music operating income increased by $1,843 thousand to $2,747 thousand for the three months ended December 31, 2021 from $904 thousand for the three months ended December 31, 2020 due to the factors that led to the increase in Recorded Music OIBDA noted above.

Nine Months Ended December 31, 2021 vs. Nine Months Ended December 31, 2020

Recorded Music OIBDA increased by $5,874 thousand, or 137%, to $10,148 thousand for the nine months ended December 31, 2021 from $4,275 thousand for the nine months ended December 31, 2020 as a result of the acquisition of Tommy Boy and increases from Chrysalis Records. Expressed as a percentage of Recorded Music revenues, Recorded Music OIBDA margin increased to 50% for the nine months ended December 31, 2021 from 49% for the nine months ended December 31, 2020. This increase in OIBDA margin reflects taking advantage of operating leverage on the Recorded Music platform.

Recorded Music operating income increased by $3,881 thousand to $6,434 thousand for the nine months ended December 31, 2021 from $2,554 thousand for the nine months ended December 31, 2020 due to the factors that led to the increase in Recorded Music OIBDA noted above.

Liquidity and Capital Resources

On December 15, 2020, we consummated the Initial Public Offering of 11,500,000 Units, inclusive of the underwriters’ election to fully exercise their option to purchase an additional 1,500,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $115,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 275,000 Private Units to the Sponsor at a price of $10.00 per Private Placement Unit generating gross proceeds of $2,750,000.

Following the Initial Public Offering, the exercise of the over-allotment option in full and the sale of the Private Units, a total of $115,000,000 was placed in the Trust Account. We incurred $1,654,977 in transaction costs, including $1,150,000 of underwriting fees and $504,977 of other offering costs.

For the six months ended June 30, 2021, cash used in operating activities was $572,174. Net loss of $1,096,238 was offset by fair value of change in warrant liability of $233,750 and interest earned on marketable securities held in the Trust Account of $9,075. Changes in operating assets and liabilities provided $299,389 of cash for operating activities.Capital Resources

As of ~~June 30,~~December 31, 2021, we had ~~marketable securities held in the Trust Account~~$225,277 thousand of ~~$115,015,688 consisting~~debt (net of ~~securities held in a money market fund that invests in U.S Treasury securities with a maturity~~$6,369 thousand of ~~185 days or less. Interest income on the balance in the Trust Account may be~~deferred financing costs), $14,633 thousand of cash and equivalents and net debt of $210,644 thousand (defined as total debt, less cash and equivalents and deferred financing costs).

We used by us to pay taxes. Through June 30, 2021, we did not withdraw any interest earned on the Trust Account to pay our taxes. We intend to use substantially all of the funds held in the Trust Account to acquire a target business and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect a Business Combination, the remaining funds held in the Trust Account will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our Business Combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

As of June 30, 2021, we had cash of $124,393. We intend to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Insiders, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the proceeds from the Business Combination and PIPE Investment to repay $80,600 thousand of debt (amounts to related parties) associated with the Tommy Boy acquisition and $55,000 thousand of debt under the New Senior Credit Facility.

Cash Flows

The following table summarizes our historical cash flows (in thousands).


	For the Nine Months Ended
	December 31,				2021 vs. 2020
	2021		2020		$ Change		% Change
Cash provided by (used in):
Operating activities	$	14,414	$	17,332	$	(2,917)	(17)	%
Investing activities	$	(160,143)	$	(107,313)	$	(52,830)	49	%
Financing activities	$	152,534	$	38,231	$	114,303	299	%

Operating Activities

Cash provided by operating activities was $14,414 thousand for the nine months ended December 31, 2021 compared to $17,332 thousand for the nine months ended December 31, 2020. The primary driver of the $2,917 thousand decrease in cash provided by operating activities during the nine months ended December 31, 2021 as compared to the nine months ended December 31, 2020 was an increase in cash used for working capital, ~~held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be~~primarily used for ~~such repayment.~~

~~We do not believe we will need~~royalty advances (net of recoupments) and to ~~raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying~~ a ~~target business, undertaking in-depth due diligence~~lesser extent inventory and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.prepaid expenses, partially offset by higher earnings.

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~~Off-Balance Sheet Financing Arrangements~~Investing Activities

~~We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2021. We do not participate~~Cash used in ~~transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established~~investing activities was $160,143 thousand for the ~~purpose~~nine months ended December 31, 2021 compared to $107,313 thousand for the nine months ended December 31, 2020. The increase in cash used in investing activities was primarily due to increased acquisitions of ~~facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet~~music catalogs, including Tommy Boy.

Financing Activities

Cash provided by financing ~~arrangements, established any special purpose entities, guaranteed any debt or commitments~~activities was $152,534 thousand for the nine months ended December 31, 2021 compared to cash provided by financing activities of ~~other entities, or purchased any non-financial assets.~~

~~Contractual Obligations~~

~~We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.~~

~~Critical Accounting Policies~~

$38,231 thousand for the nine months ended December 31, 2020. The ~~preparation of financial statements and related disclosures in conformity with accounting principles generally accepted~~increased cash provided by financing activities in the ~~United States~~nine months ended December 31, 2020 reflects the proceeds from the Business Combination and PIPE Investment and an increase in net borrowings used for investing activities, primarily acquisitions of ~~America requires management~~catalogs, partially offset by the payment of financing costs.

Liquidity

Our primary sources of liquidity are the cash flows generated from our subsidiaries’ operations, available cash and cash equivalents and funds available for drawing under our New Senior Credit Facility (as described below). These sources of liquidity are needed to fund our debt service requirements, working capital requirements, strategic acquisitions and investments, capital expenditures and other investing and financing activities we may elect to make ~~estimates and assumptions that affect~~in the ~~reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at~~future.

During the ~~date~~nine months ended December 31, 2020, we borrowed $617 thousand (the “PPP Loan”) under the Paycheck Protection Program (the “PPP”). The PPP, established as part of the ~~financial statements,~~Coronavirus Aid, Relief and ~~income~~Economic Security Act of 2020, as amended (the “CARES Act”), provided for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and ~~expenses during~~accrued interest are forgivable after as long as the ~~periods reported. Actual results could materially differ from those estimates. We have identified~~borrower uses the ~~following critical accounting policies:~~

~~Common Stock Subject to Possible Redemption~~

~~We account~~loan proceeds for ~~our common stock subject to possible conversion in~~eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. In accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the controlterms of the ~~holder or subject~~PPP, we applied for and received confirmation of loan forgiveness for the entire amount borrowed under the PPP.

We believe that our primary sources of liquidity will be sufficient to ~~redemption upon~~support our existing operations over the ~~occurrence~~next twelve months.

Existing Debt as of ~~uncertain events not solely within~~December 31, 2021

As of December 31, 2021, our ~~control) is classified~~outstanding debt consisted of $231,646 thousand borrowed under the New Senior Credit Facility.

We use cash generated from operations to service outstanding debt, consisting primarily of interest payments through maturity, and we expect to continue to refinance and extend maturity on the New Senior Credit Facility for the foreseeable future.

Debt Capital Structure

Since 2014, RMM has been the borrower under a revolving credit and term loan agreement (the “Prior Credit Facility”) with SunTrust Bank (Truist Bank) as ~~temporary equity. At all other~~the administrative agent and lead arranger. The Prior Credit Facility has been amended and restated a number of times ~~common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered~~since 2014, generally leading to ~~be outside~~extensions of ~~our control~~maturity dates and ~~subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside~~increases in the facility size.

On July 28, 2021, in connection with the consummation of the ~~stockholders’ equity section~~Business Combination, RMM amended and restated the Prior Credit Facility by entering the Fourth Amended and Restated Credit Agreement (the “RMM Credit Agreement”), providing RMM with a senior secured credit facility in an aggregate amount of ~~our balance sheets.~~

~~Warrant Liability~~

$248,750 thousand. On December 7, 2021, RMM entered into an amendment (the “First Amendment”) to the RMM Credit Agreement. The ~~Company accounts for warrants as either equity-classified or liability-classified instruments based on~~First Amendment amended the RMM Credit Agreement to increase RMM’s senior secured revolving credit facility from $248,750 thousand to an ~~assessment~~aggregate amount of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”$350,000 thousand (the “New Senior Credit Facility”). The ~~assessment considers whether~~New Senior Credit Facility matures on October 16, 2024, and Borrowings under the ~~warrants are freestanding financial instruments pursuant~~New Senior Credit Facility bear interest at a rate equal to ~~ASC 480, meet~~either the ~~definition~~sum of a ~~liability pursuant to ASC 480, and whether~~base rate plus a margin of 1.25% or the ~~warrants meet all~~sum of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the usea LIBO rate plus a margin of ~~professional judgment,~~2.25%. RMM is ~~conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.~~

~~For issued or modified warrants that meet all of the criteria for equity classification, the warrants are~~also required to ~~be recorded as~~pay an unused fee in respect of unused commitments under the New Senior Credit Facility, if any, at a ~~component~~rate of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants was estimated using a Binomial Lattice Model (see Note 9).0.25% per annum.

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~~Net Income (Loss) Per Common Share~~Subject to market conditions, we expect to continue to take opportunistic steps to extend our maturity dates and reduce related interest expense. From time to time, we may incur additional indebtedness for, among other things, working capital, repurchasing, redeeming or tendering for existing indebtedness and acquisitions or other strategic transactions.

~~We apply~~Certain terms of the ~~two-class method~~New Senior Credit Facility are described below.

Guarantees and Security

The obligations under the New Senior Credit Facility are guaranteed by us, RHI and subsidiaries of RMM. Substantially all of our, RHI’s, RMM’s and other subsidiary guarantors’ tangible and intangible assets are pledged as collateral to secure the obligations of RMM under the New Senior Credit Facility, including accounts, receivables, cash and cash equivalents, deposit accounts, securities accounts, commodities accounts, inventory and certain intercompany debt owing to us or our subsidiaries.

Covenants, Representations and Warranties

The New Senior Credit Facility contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants contained in ~~calculating earnings per share. Net income (loss) per common share, basic~~the New Senior Credit Facility limit the ability our, RHI’s, RMM’s and ~~diluted for common~~certain of its subsidiaries ability 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.

Events of Default

The New Senior Credit Facility includes customary events of default, including nonpayment of principal when due, nonpayment of interest or other amounts, inaccuracy of representations or warranties in any material respect, violation of covenants, certain bankruptcy or insolvency events, certain ERISA events and certain material judgments, in each case, subject to ~~possible redemption is calculated by dividing~~customary thresholds, notice and grace period provisions.

Interest Rate Swaps

As of December 31, 2021, RMM had entered into five interest rate swaps. Two of these swaps expire on March 10, 2022, one with a notional amount of $40,228 thousand and one with a notional amount $59,325 thousand. Under the terms of the interest ~~income earned~~rate swaps, RMM pays a fixed rate of 2.8% and 3.0%, respectively, to the counterparty and receives a floating interest from the counterparty based on LIBOR with reference to notional amounts adjusted to match the ~~Trust Account, net~~original scheduled principal repayments pursuant to the indenture agreement.

As of ~~applicable taxes, if any, by~~December 31, 2021, two additional interest rate swaps, which were entered into during the ~~weighted average number~~year ended March 31, 2020, had notional amounts of ~~shares~~$8,875 thousand and $88,099 thousand. These swaps have an effective date of ~~common stock~~March 10, 2022, which coincides with the expiration of the previous two swaps and expire in September 2024. RMM will pay a fixed rate of 1.6% and 1.5%, respectively, and receive a floating interest rate from the counterparty based on LIBOR with reference to notional amounts adjusted to match the original scheduled principal repayments pursuant to the indenture agreement. Additionally, on December 1, 2021, RMM added an interest rate swap in the amount of $53,030 thousand, which has an effective date of December 31, 2021, and expires in September 2024. RMM pays a fixed rate of 1.0% 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

Covenant Compliance

The New Senior Credit Facility contains financial covenants that requires us, on a consolidated basis with our subsidiaries, to maintain, (i) a total leverage ratio of no greater than 7.50:1.00 (net of up to $20,000 thousand of certain cash balances) 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 no greater than 0.475:1.00, subject to ~~possible redemption~~certain adjustments. RMM’s ability to borrow funds under the New Senior Credit Facility may depend upon its ability to meet the leverage ratio test at the end of a fiscal quarter to the extent it has outstanding ~~for~~debt.

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Non-compliance with the ~~period. Net income (loss) per common share, basic~~leverage ratio, fixed charge coverage ratio and ~~diluted for and non-redeemable common stock is calculated by dividing net income (loss) less income attributable~~consolidated senior debt to ~~common stock~~library value ratio could result in the lenders, subject to ~~possible redemption, by~~customary cure rights, requiring the ~~weighted average number~~immediate payment of ~~shares of non-redeemable common stock~~all amounts outstanding ~~for~~under the ~~period presented.~~

~~Recent Accounting Standards~~

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”),New Senior Credit Facility, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2020-06 effective as of January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

~~Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would~~could have a material adverse effect on our business, cash flows, financial condition and results of operations. As of December 31, 2021, we were in compliance with each of the financial covenants under the New Senior Credit Facility.

Dividends

Our ability to pay dividends is restricted by covenants in the New Senior Credit Facility. For the three months ended December 31, 2021, we did not pay any dividends to stockholders.

Summary

Management believes that funds generated from our operations and borrowings under the New Senior Credit Facility and available cash and equivalents will be sufficient to fund our debt service requirements, working capital requirements and capital expenditure requirements for the foreseeable future. We also have additional borrowing capacity under the New Senior Credit Facility. However, our ability to continue to fund these items and to reduce debt may be affected by general economic, financial, competitive, legislative and regulatory factors, as well as other industry-specific factors such as the ability to control music piracy and the continued transition from physical to digital formats in the recorded music and music publishing industries. It could also be affected by the severity and duration of natural or man-made disasters, including pandemics such as the COVID-19 pandemic. We and our affiliates continue to evaluate opportunities to, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity and other factors, seek to pay dividends or prepay outstanding debt or repurchase or retire our outstanding debt, privately negotiated purchases or otherwise. The amounts involved in any such transactions, individually or in the aggregate, may be material and may be funded from available cash or from additional borrowings or equity raises. In addition, from time to time, depending on market conditions and prices, contractual restrictions, our financial liquidity, and other factors, we may seek to refinance the New Senior Credit Facility with existing cash and/or with funds provided from additional borrowings.

Contractual and Other Obligations

As of December 31, 2021, there have been no material changes, outside the ordinary course of business, in our contractual obligations since March 31, 2021. See “RHI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual and Other Obligations” in the Registration Statement for information regarding our contractual obligations.

Critical Accounting Policies

As of December 31, 2021, there have been no material changes to our critical accounting policies since March 31, 2021. See “RHI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Registration Statement for information regarding our critical accounting policies. We believe that our accounting policies involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations. The preparation of our condensed consolidated financial statements in conformity with US GAAP requires us to make estimates and judgments that affect the amounts reported in those condensed consolidated financial statements and the accompanying notes thereto. The future effects of the COVID-19 pandemic on our results of operations, cash flows and financial position are unclear. However, we believe we have used reasonable estimates and assumptions in preparing the condensed consolidated financial statements. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

Off-Balance Sheet Arrangements

As of December 31, 2021, we had no off-balance sheet arrangements.

New Accounting Pronouncements

See Note 2, “Significant Accounting Policies” to the accompanying unaudited condensed consolidated financial statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Following~~We are a smaller reporting company as defined by Rule 12b-2 of the ~~consummation of our Initial Public Offering,~~Exchange Act and are not required to provide the proceeds held in the trust account have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.information otherwise required under this Item 3, “Quantitative and Qualitative Disclosures About Market Risk.”

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of ~~the end of the fiscal quarter ended June 30,~~December 31, 2021, as such term is defined in Rules 13a-15(e) and ~~15d-15(e)~~15(d)-15(e) under the Exchange Act.

Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this ~~report,~~Quarterly Report, our disclosure controls and procedures were not effective atdue to the material weaknesses in internal control over financial reporting identified in the Registration Statement. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable ~~assurance level~~possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Our previously identified material weaknesses in internal control over financial reporting relate to (i) an ineffective control environment due to improper segregation of duties and ~~accordingly, provided reasonable assurance~~a lack of qualified personnel to address certain complex accounting transactions, and (ii) an ineffective risk assessment process resulting in improper design of control activities to address certain risks of material misstatement. Notwithstanding these material weaknesses, management has concluded that the ~~information required~~condensed consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with US GAAP.

We continue to take steps to remediate the material weaknesses described above by hiring additional qualified accounting personnel and further evolving our accounting processes. We will not be ~~disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized~~able to fully remediate these material weaknesses until these steps have been completed and ~~reported within the time periods specified in the SEC’s rules and forms.~~we have been operating effectively for a sufficient period of time.

Changes in Internal Control over Financial Reporting

There ~~was~~have been no ~~change~~changes in our internal control over financial reporting ~~that occurred~~(as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the ~~fiscal quarter of~~three months ended December 31, 2021 ~~covered by this Quarterly Report on Form 10-Q~~ that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls and Procedures

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all cases of error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

~~None.~~We may, from time to time, become involved in various legal and administrative proceedings, claims, lawsuits and/or other actions incidental to the conduct of our business. Some of these legal and administrative proceedings, claims, lawsuits and/or other actions may be material and involve highly complex issues that are subject to substantial uncertainties and could result in damages, fines, penalties, non-monetary sanctions or relief. We recognize provisions for claims or pending litigation when we determine that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Due to the inherently uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates. As of the date of this Quarterly Report, we are not involved in any legal proceedings that we believe could have a material adverse effect on our business, financial condition and/or results of operations.

Item 1A. Risk Factors.

As a ~~smaller reporting company,~~result of the consummation of the Business Combination, certain of the risk factors previously disclosed in Part I, Item 1A of ROCC’s Annual Report on Form 10-K for the year ended December 31, 2020, may no longer apply. Following the consummation of the Business Combination, factors that could cause our actual results to differ materially from the results set forth in this Quarterly Report are any of the risks described in our registration statement on Form S-1 (file no. 333-257610) (the “Registration Statement”) filed with the SEC on July 1, 2021, as amended on July 23, 2021 and July 26, 2021. Any of these factors could result in a significant or material adverse effect on our business, financial condition and/or results of operations. Additional risk factors not presently known to us or that we ~~are not required~~currently deem immaterial may also impair our business, financial condition and/or results of operations. As of the date of this Quarterly Report, there have been no material changes to ~~make disclosures under this Item 1A.~~the risk factors previously disclosed in the definitive proxy statement filed by ROCC with the SEC on July 8, 2021 and the Registration Statement. We may, however, disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In connection with the consummation of the Business Combination, ROCC consummated the PIPE Investment, pursuant to which ROCC issued 15,000,000 shares of ROCC Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $150.0 million to certain accredited investors. In addition, in connection with the consummation of the Business Combination, the Company issued an aggregate of 44,714,705 shares of Common Stock to the former stockholders of RHI pursuant to, and in accordance with, the Merger Agreement. Each of the issuance of (x) the shares of ROCC Common Stock to certain accredited investors pursuant to the PIPE Investment and (y) the shares of Common Stock to the former stockholders of RHI pursuant to, and in accordance with, the Merger Agreement was made pursuant to and in accordance with the exemption from registration contained in Section 4(a)(2) and/or Regulation D of the Securities Act. The Registration Statement relating to 15,000,000 shares of ROCC Common Stock and 44,714,705 shares of Common Stock was declared effective by the SEC on July 28, 2021. We did not and will not receive any proceeds from the sale of Common Stock included on the Registration Statement by the selling stockholders named therein.

There have been no other unregistered sales of equity securities during the three ~~and six~~ months ended ~~June 30,~~December 31, 2021, which have not been previously disclosed ~~a Quarterly Report~~ on ~~Form 10-Q or~~ a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

~~Item 5. Other Information.~~

~~None.~~

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Item 5. Other Information.

None.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly ~~Report on Form 10-Q.~~Report.

No.		Description of Exhibit

~~2.1†~~3.1		~~Agreement~~Second Amended and ~~Plan~~Restated Certificate of ~~Merger, dated as~~Incorporation of ~~April 14, 2021, by and among Roth CH Acquisition II Co., Roth CH II Merger Sub Corp. and~~ Reservoir ~~Holdings,~~Media, Inc. (incorporated by reference to Exhibit ~~2.1~~3.1 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s Current Report on Form 8-K filed with the SEC on ~~April 15,~~July 28, 2021).†
~~4.1~~3.2		~~Stockholders Agreement, dated as~~Amended and Restated Bylaws of ~~April 14, 2021, by and among Roth CH Acquisition II Co.,~~ Reservoir ~~Holdings,~~Media, Inc. ~~and CHLM Sponsor-1 LLC~~ (incorporated by reference to Exhibit ~~10.5~~3.2 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s Current Report on Form 8-K filed with the SEC on ~~April 15,~~July 28, 2021).
~~4.2~~10.1†		~~Lockup~~Fourth Amended and Restated Credit Agreement, dated as of ~~April 14,~~July 28, 2021, by and among ~~Roth CH Acquisition II Co.~~Reservoir Media Management, Inc., Reservoir Media, Inc., the lenders party thereto from time to time and ~~Reservoir Holdings, Inc.’s executive officers and securityholders~~Truist Bank, as administrative agent (incorporated by reference to Exhibit ~~10.2~~10.6 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s Current Report on Form 8-K filed with the SEC on ~~April 15, 2021).~~
~~10.1~~		Amended and Restated Registration Rights Agreement, dated as of April 14, 2021, by and among Roth CH Acquisition II Co., Roth CH Acquisition II Co.’s executive officers, directors and securityholders and Reservoir Holdings, Inc.’s securityholders (incorporated by reference to Exhibit 10.6 to Roth CH Acquisition II Co.’s Current Report on Form 8-K filed with the SEC on April 15,July 28, 2021).
10.2		~~Form of Subscription Agreement, dated as of April 14,~~Reservoir Media, Inc. 2021 ~~entered into by Roth CH Acquisition II Co. in connection with the PIPE Investment~~Omnibus Incentive Plan (incorporated by reference to Exhibit ~~10.3~~10.1 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s ~~Current Report~~Registration Statement on Form ~~8-K~~S-8 filed with the SEC on ~~April 15,~~October 14, 2021).
10.3		Form of ~~Registration Rights~~Non-Employee Director Restricted Stock Unit Award Agreement ~~dated as of April 14, 2021, entered into by Roth CH Acquisition II Co. in connection with the PIPE Investment~~ (incorporated by reference to Exhibit ~~10.4~~10.2 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s ~~Current Report~~Registration Statement on Form ~~8-K~~S-8 filed with the SEC on ~~April 15,~~October 14, 2021).
10.4		~~Acquiror Support~~Form of Nonqualified Stock Option Award Agreement ~~dated as of April 14, 2021, by and among Roth CH Acquisition II Co., Reservoir Holdings, Inc. and Roth CH Acquisition II Co.’s executive officers, directors and securityholders~~ (incorporated by reference to Exhibit ~~10.1~~10.3 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s ~~Current Report~~Registration Statement on Form ~~8-K~~S-8 filed with the SEC on ~~April 15,~~October 14, 2021).
10.5		~~Letter~~Form of ~~Employment, dated April 1, 2021, by and between Reservoir Media Management, Inc. and Golnar Khosrowshahi~~Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit ~~10.13~~10.4 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s Registration Statement on Form ~~S-1~~S-8 filed with the SEC on ~~July 1,~~October 14, 2021).
10.7		First Amendment to the Fourth Amended and Restated Credit Agreement, dated as of December 7, 2021, by and among Reservoir Media Management, Inc., Reservoir Media, Inc., the other loan parties party thereto from time to time, the lenders party thereto from time to time and Truist Bank, as administrative agent (incorporated by reference to Exhibit 10.1 to Reservoir Media, Inc.’s Current Report on Form 8-K filed with the SEC on December 7, 2021).
10.6		~~Amended and Restated Letter~~Form of ~~Employment, dated April 1, 2021, by and between Reservoir Media Management, Inc. and Rell Lafargue~~Stock Award Agreement (incorporated by reference to Exhibit ~~10.14~~10.5 to ~~Roth CH Acquisition II Co.~~Reservoir Media, Inc.’s Registration Statement on Form ~~S-1~~S-8 filed with the SEC on ~~July 1, 2021).~~
~~10.7~~		Amended Letter of Employment, dated April 1, 2021, by and between Reservoir Media Management, Inc. and Jim Heindlmeyer (incorporated by reference to Exhibit 10.15 to Roth CH Acquisition II Co.’s Registration Statement on Form S-1 filed with the SEC on July 1,October 14, 2021).
31.1*		Certification of ~~Principal~~Chief Executive Officer Pursuant to Securities Exchange Act ~~Rules~~Rule 13a-14(a) ~~and 15d-14(a)~~, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
31.2*		Certification of ~~Principal~~Chief Financial Officer Pursuant to Securities Exchange Act ~~Rules~~Rule 13a-14(a) ~~and 15d-14(a)~~, as ~~adopted~~Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.1**		Certification of ~~Principal~~Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
32.2**		Certification of ~~Principal~~Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002.
~~101.INS~~101.INS*		Inline XBRL Instance ~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~Document.
~~101.SCH~~101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
~~101.CAL~~101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
~~101.DEF~~101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
~~101.LAB~~101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document.

~~Table of Contents~~

~~No.~~		~~Description of Exhibit~~

~~101.PRE~~101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File ~~(Embedded within the~~(formatted as Inline XBRL ~~document~~ and ~~included~~contained in ~~Exhibit)~~Exhibit 101).

*	~~Filed herewith.~~

**	~~Furnished.~~

†	~~Schedules~~Certain of the schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules or exhibits upon request by the ~~Securities and Exchange Commission.~~SEC.

*
Filed herewith.
**
Furnished herewith.

2551

Table of Contents

SIGNATURES

~~In accordance with~~Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	RESERVOIR MEDIA, INC.

Date: ~~August 6, 2021~~February 8, 2022	By:	/s/ Golnar Khosrowshahi
	~~Name:~~	Name: Golnar Khosrowshahi
	~~Title:~~	Title: Chief Executive Officer
		~~(Principal~~ (Principal Executive Officer)

Date: ~~August 6, 2021~~February 8, 2022	By:	/s/ Jim Heindlmeyer
	~~Name:~~	Name: Jim Heindlmeyer
	~~Title:~~	Title: Chief Financial Officer
		(Principal Financial and Accounting Officer)

2652


	June 30,		December 31,
	2021		2020
	(unaudited)		(as Revised)
ASSETS
Current assets
Cash	$	124,393	$	696,567
Prepaid expenses		309,961		395,887
Total Current Assets		434,354		1,092,454

Cash and marketable securities held in Trust Account		115,015,688		115,006,613
TOTAL ASSETS	$	115,450,042	$	116,099,067

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	297,117	$	83,654
Total current liabilities		297,117		83,654

Warrant liabilities		363,000		129,250
Total Liabilities		660,117		212,904

Commitments and Contingencies

Common stock subject to possible redemption; 11,500,000 and 11,088,616 shares at redemption value as of June 30, 2021 and December 31, 2020, respectively		115,000,000		110,886,160

Stockholders’ Equity (Deficit)
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,150,000 and 3,561,384 shares issued and outstanding (excluding 11,500,000 and 11,088,616 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively		315		357
Additional paid-in capital		1,008,811		5,122,609
Accumulated deficit		(1,219,201)		(122,963)
Total Stockholders’ Equity (Deficit)		(210,075)		5,000,003
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	115,450,042	$	116,099,067


	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2021		2020		2021		2020
Operating and formation costs	$	667,324	$	—	$	871,563	$	85
Loss from operations		(667,324)		—		(871,563)		(85)

Other income (expense):
Interest earned on marketable securities held in Trust Account		2,867		—		9,075		—
Change in fair value of warrant liabilities		(184,250)		—		(233,750)		—
Other expense, net		(181,383)		—		(224,675)		—

Loss before income taxes		(848,707)		—		(1,096,238)		(85)
Benefit from (provision for) income taxes		—		0		—		—
Net loss	$	(848,707)	$	0	$	(1,096,238)	$	(85)

Basic and diluted weighted average shares outstanding, Common stock subject to possible redemption		11,063,863		—		11,076,171		—

Basic and diluted net loss per share, Common stock subject to possible redemption	$	0.00	$	0.00	$	0.00	$	0.00

Basic and diluted weighted average shares outstanding, Non-redeemable common stock		3,586,137		2,500,000		3,573,829		2,500,000

Basic and diluted net loss per share, Non-redeemable common stock	$	(0.24)	$	(0.00)	$	(0.31)	$	(0.00)


	Six Months Ended June 30,
	2021		2020
Cash Flows from Operating Activities:
Net loss	$	(1,096,238)	$	(85)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(9,075)		—
Change in fair value of warrant liabilities		233,750		—
Changes in operating assets and liabilities:
Prepaid expenses		85,926		—
Accounts payable and accrued expenses		213,463		(225)
Net cash used in operating activities		(572,174)		(310)

Net Change in Cash		(572,174)		(310)
Cash – Beginning		696,567		25,000
Cash – Ending	$	124,393	$	24,690

Non-cash investing and financing activities:
Change in value of common stock subject to possible redemption	$	4,113,840	$	—


		June 30,		December 31,
Description	Level	2021		2020
Assets:
Marketable securities held in Trust Account	1	$	115,015,688	$	115,006,613

Liabilities
Warrant liabilities – Private Placement Warrants	3	$	363,000	$	129,250


	At			As of
	December 31,			June 30,
	2020			2021
Stock price	$	9.54		$	9.93
Strike price	$	11.50		$	11.50
Volatility		17.5	%		35.6	%
Risk-free rate		0.41	%		0.84	%
Dividend yield		0.0	%		0.0	%
Fair value of warrants	$	0.94		$	2.64


	Warrant Liabilities
Fair value as of December 31, 2020	$	129,250
Change in valuation inputs or other assumptions		233,750
Fair value as of June 30, 2021		363,000