Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2023 | Feb. 05, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39795 | |
Entity Registrant Name | RESERVOIR MEDIA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-3584204 | |
Entity Address, Address Line One | 200 Varick Street | |
Entity Address, Address Line Two | Suite 801A | |
Entity Address, City or Town | NY | |
Entity Address State Or Province | NY | |
Entity Address, Postal Zip Code | 10014 | |
City Area Code | 212 | |
Local Phone Number | 675-0541 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,822,260 | |
Entity Central Index Key | 0001824403 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document and Entity Information | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share (the “Common Stock”) | |
Trading Symbol | RSVR | |
Security Exchange Name | NASDAQ | |
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share | ||
Document and Entity Information | ||
Title of 12(b) Security | Warrants to purchase one share of CommonStock, each at an exercise price of $11.50 per share | |
Trading Symbol | RSVRW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (Unaudited) | ||||
Revenues | $ 35,476,172 | $ 29,931,413 | $ 105,710,058 | $ 87,475,894 |
Costs and expenses: | ||||
Cost of revenue | 13,221,974 | 11,750,296 | 41,136,237 | 35,665,462 |
Amortization and depreciation | 6,342,918 | 5,546,301 | 18,613,026 | 16,292,145 |
Administration expenses | 9,389,344 | 8,035,758 | 30,148,848 | 23,031,248 |
Total costs and expenses | 28,954,236 | 25,332,355 | 89,898,111 | 74,988,855 |
Operating income | 6,521,936 | 4,599,058 | 15,811,947 | 12,487,039 |
Interest expense | (5,372,285) | (4,098,910) | (15,865,324) | (10,579,788) |
Loss on early extinguishment of debt | (914,040) | (914,040) | ||
Gain (loss) on foreign exchange | 264 | 56,973 | (69,828) | 337,659 |
(Loss) gain on fair value of swaps | (4,247,523) | (179,573) | (1,774,045) | 4,323,207 |
Other income (expense), net | (990,488) | 43 | (989,952) | 90 |
(Loss) income before income taxes | (4,088,096) | (536,449) | (2,887,202) | 5,654,167 |
Income tax (benefit) expense | (1,226,649) | 3,529,984 | (872,663) | 5,217,691 |
Net (loss) income | (2,861,447) | (4,066,433) | (2,014,539) | 436,476 |
Net income attributable to noncontrolling interests | (101,612) | (340,190) | (135,797) | (230,127) |
Net (loss) income attributable to Reservoir Media, Inc. | $ (2,963,059) | $ (4,406,623) | $ (2,150,336) | $ 206,349 |
(Loss) earnings per common share (Note 13): | ||||
Basic | $ (0.05) | $ (0.07) | $ (0.03) | |
Diluted | $ (0.05) | $ (0.07) | $ (0.03) | |
Weighted average common shares outstanding (Note 13): | ||||
Basic | 64,826,026 | 64,379,536 | 64,731,569 | 64,316,532 |
Diluted | 64,826,026 | 64,379,536 | 64,731,569 | 64,765,381 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) | ||||
Net (loss) income | $ (2,861,447) | $ (4,066,433) | $ (2,014,539) | $ 436,476 |
Other comprehensive income (loss): | ||||
Translation adjustments | 2,384,683 | 4,652,084 | 1,325,726 | (5,283,489) |
Total comprehensive (loss) income | (476,764) | 585,651 | (688,813) | (4,847,013) |
Comprehensive income attributable to noncontrolling interests | (101,612) | (340,190) | (135,797) | (230,127) |
Total comprehensive (loss) income attributable to Reservoir Media, Inc. | $ (578,376) | $ 245,461 | $ (824,610) | $ (5,077,140) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 19,514,381 | $ 14,902,076 |
Accounts receivable | 30,583,910 | 31,255,867 |
Current portion of royalty advances | 13,726,825 | 15,188,656 |
Inventory and prepaid expenses | 6,796,410 | 5,458,522 |
Total current assets | 70,621,526 | 66,805,121 |
Intangible assets, net | 644,525,473 | 617,404,741 |
Equity method and other investments | 1,567,663 | 2,305,719 |
Royalty advances, net of current portion | 56,462,194 | 51,737,844 |
Property, plant and equipment, net | 604,449 | 568,339 |
Operating lease right of use assets, net | 7,239,846 | 7,356,312 |
Fair value of swap assets | 4,982,839 | 6,756,884 |
Other assets | 1,339,652 | 1,147,969 |
Total assets | 787,343,642 | 754,082,929 |
Current liabilities | ||
Accounts payable and accrued liabilities | 7,376,882 | 6,680,421 |
Royalties payable | 37,403,181 | 33,235,235 |
Accrued payroll | 1,386,230 | 1,689,310 |
Deferred revenue | 1,937,650 | 2,151,889 |
Other current liabilities | 8,077,446 | 10,583,794 |
Income taxes payable | 204,987 | |
Total current liabilities | 56,181,389 | 54,545,636 |
Secured line of credit | 342,455,820 | 311,491,581 |
Deferred income taxes | 29,878,778 | 30,525,523 |
Operating lease liabilities, net of current portion | 6,983,373 | 7,072,553 |
Other liabilities | 588,745 | 785,113 |
Total liabilities | 436,088,105 | 404,420,406 |
Contingencies and commitments (Note 15) | ||
Shareholders' Equity | ||
Preferred stock, $0.0001 par value 75,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2023 and March 31, 2023 | ||
Common stock, $0.0001 par value; 750,000,000 shares authorized, 64,813,399 shares issued and outstanding at December 31, 2023; 64,441,244 shares issued and outstanding at March 31, 2023 | 6,481 | 6,444 |
Additional paid-in capital | 340,742,579 | 338,460,789 |
Retained earnings | 12,602,384 | 14,752,720 |
Accumulated other comprehensive loss | (3,529,603) | (4,855,329) |
Total Reservoir Media, Inc. shareholders' equity | 349,821,841 | 348,364,624 |
Noncontrolling interest | 1,433,696 | 1,297,899 |
Total shareholders' equity | 351,255,537 | 349,662,523 |
Total liabilities and shareholders' equity | $ 787,343,642 | $ 754,082,929 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2023 | Mar. 31, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 64,813,399 | 64,441,244 |
Common stock, shares outstanding | 64,813,399 | 64,441,244 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock | Additional paid-in capital | Retained earnings (accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling interests | Total |
Beginning balance at Mar. 31, 2022 | $ 6,415 | $ 335,372,981 | $ 12,213,519 | $ (1,198,058) | $ 1,057,467 | $ 347,452,324 |
Beginning balance (in shares) at Mar. 31, 2022 | 64,150,186 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 359,461 | 359,461 | ||||
Vesting of restricted stock units | $ 14 | (475,872) | (475,858) | |||
Vesting of restricted stock units (in shares) | 140,138 | |||||
Reclassification of liability-classified awards to equity-classified awards | 961,429 | 961,429 | ||||
Net income (loss) | 76,039 | (59,218) | 16,821 | |||
Other comprehensive income (loss) | (5,011,563) | (5,011,563) | ||||
Ending balance at Jun. 30, 2022 | $ 6,429 | 336,217,999 | 12,289,558 | (6,209,621) | 998,249 | 343,302,614 |
Ending balance (in shares) at Jun. 30, 2022 | 64,290,324 | |||||
Beginning balance at Mar. 31, 2022 | $ 6,415 | 335,372,981 | 12,213,519 | (1,198,058) | 1,057,467 | 347,452,324 |
Beginning balance (in shares) at Mar. 31, 2022 | 64,150,186 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 436,476 | |||||
Ending balance at Dec. 31, 2022 | $ 6,438 | 337,622,033 | 12,419,868 | (6,481,547) | 1,287,594 | 344,854,386 |
Ending balance (in shares) at Dec. 31, 2022 | 64,385,198 | |||||
Beginning balance at Jun. 30, 2022 | $ 6,429 | 336,217,999 | 12,289,558 | (6,209,621) | 998,249 | 343,302,614 |
Beginning balance (in shares) at Jun. 30, 2022 | 64,290,324 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 596,184 | 596,184 | ||||
Vesting of restricted stock units | $ 8 | (8) | ||||
Vesting of restricted stock units (in shares) | 83,580 | |||||
Reclassification of liability-classified awards to equity-classified awards | 145,000 | 145,000 | ||||
Net income (loss) | 4,536,933 | (50,845) | 4,486,088 | |||
Other comprehensive income (loss) | (4,924,010) | (4,924,010) | ||||
Ending balance at Sep. 30, 2022 | $ 6,437 | 336,959,175 | 16,826,491 | (11,133,631) | 947,404 | 343,605,876 |
Ending balance (in shares) at Sep. 30, 2022 | 64,373,904 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 605,146 | 605,146 | ||||
Stock option exercises | $ 1 | 57,712 | 57,713 | |||
Stock option exercises (in shares) | 11,294 | |||||
Net income (loss) | (4,406,623) | 340,190 | (4,066,433) | |||
Other comprehensive income (loss) | 4,652,084 | 4,652,084 | ||||
Ending balance at Dec. 31, 2022 | $ 6,438 | 337,622,033 | 12,419,868 | (6,481,547) | 1,287,594 | 344,854,386 |
Ending balance (in shares) at Dec. 31, 2022 | 64,385,198 | |||||
Beginning balance at Mar. 31, 2023 | $ 6,444 | 338,460,789 | 14,752,720 | (4,855,329) | 1,297,899 | 349,662,523 |
Beginning balance (in shares) at Mar. 31, 2023 | 64,441,244 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 713,802 | 713,802 | ||||
Vesting of restricted stock units | $ 21 | (689,176) | (689,155) | |||
Vesting of restricted stock units (in shares) | 207,733 | |||||
Reclassification of liability-classified awards to equity-classified awards | 664,167 | 664,167 | ||||
Net income (loss) | 277,333 | (112,780) | 164,553 | |||
Other comprehensive income (loss) | 1,139,476 | 1,139,476 | ||||
Ending balance at Jun. 30, 2023 | $ 6,465 | 339,149,582 | 15,030,053 | (3,715,853) | 1,185,119 | 351,655,366 |
Ending balance (in shares) at Jun. 30, 2023 | 64,648,977 | |||||
Beginning balance at Mar. 31, 2023 | $ 6,444 | 338,460,789 | 14,752,720 | (4,855,329) | 1,297,899 | 349,662,523 |
Beginning balance (in shares) at Mar. 31, 2023 | 64,441,244 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (2,014,539) | |||||
Ending balance at Dec. 31, 2023 | $ 6,481 | 340,742,579 | 12,602,384 | (3,529,603) | 1,433,696 | 351,255,537 |
Ending balance (in shares) at Dec. 31, 2023 | 64,813,399 | |||||
Beginning balance at Jun. 30, 2023 | $ 6,465 | 339,149,582 | 15,030,053 | (3,715,853) | 1,185,119 | 351,655,366 |
Beginning balance (in shares) at Jun. 30, 2023 | 64,648,977 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 612,235 | 612,235 | ||||
Stock option exercises | $ 5 | 288,537 | 288,542 | |||
Stock option exercises (in shares) | 56,466 | |||||
Vesting of restricted stock units | $ 11 | (11) | ||||
Vesting of restricted stock units (in shares) | 105,392 | |||||
Reclassification of liability-classified awards to equity-classified awards | 80,000 | 80,000 | ||||
Net income (loss) | 535,390 | 146,965 | 682,355 | |||
Other comprehensive income (loss) | (2,198,433) | (2,198,433) | ||||
Ending balance at Sep. 30, 2023 | $ 6,481 | 340,130,343 | 15,565,443 | (5,914,286) | 1,332,084 | 351,120,065 |
Ending balance (in shares) at Sep. 30, 2023 | 64,810,835 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Share-based compensation | 612,236 | 612,236 | ||||
Vesting of restricted stock units (in shares) | 2,564 | |||||
Net income (loss) | (2,963,059) | 101,612 | (2,861,447) | |||
Other comprehensive income (loss) | 2,384,683 | 2,384,683 | ||||
Ending balance at Dec. 31, 2023 | $ 6,481 | $ 340,742,579 | $ 12,602,384 | $ (3,529,603) | $ 1,433,696 | $ 351,255,537 |
Ending balance (in shares) at Dec. 31, 2023 | 64,813,399 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (2,014,539) | $ 436,476 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Amortization of intangible assets | 18,433,037 | 16,152,354 |
Depreciation of property, plant and equipment | 179,989 | 139,791 |
Share-based compensation | 2,540,146 | 2,408,677 |
Non-cash interest charges | 1,003,626 | 1,738,414 |
Loss on early extinguishment of debt | 914,040 | |
Loss (gain) on fair value of swaps | 1,774,045 | (4,323,207) |
Impairment of equity investment | 991,105 | |
Share of earnings of equity affiliates, net of tax | (34,131) | |
Dividend from equity affiliates | 62,304 | |
Deferred income taxes | (950,760) | 3,658,643 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 671,957 | (1,635,872) |
Inventory and prepaid expenses | (1,337,888) | (1,813,272) |
Royalty advances | (3,262,519) | (5,872,059) |
Other assets and liabilities | 349,257 | (483,961) |
Accounts payable and accrued expenses | 4,234,773 | 13,307,088 |
Income taxes payable | (204,987) | 1,548,111 |
Net cash provided by operating activities | 22,407,242 | 26,203,396 |
Cash flows from investing activities: | ||
Purchases of music catalogs | (46,765,596) | (45,099,964) |
Investments in affiliates | (200,000) | |
Purchase of property, plant and equipment | (216,099) | (310,363) |
Net cash used for investing activities | (47,181,695) | (45,410,327) |
Cash flows from financing activities: | ||
Proceeds from secured line of credit | 34,000,000 | 23,182,694 |
Repayment of secured line of credit | (4,000,000) | |
Proceeds from stock option exercises | 288,542 | 57,713 |
Taxes paid related to net share settlement of restricted stock units | (689,155) | (475,858) |
Deferred financing costs paid | (39,387) | (3,533,253) |
Net cash provided by financing activities | 29,560,000 | 19,231,296 |
Foreign exchange impact on cash | (173,242) | (815,833) |
Increase (decrease) in cash and cash equivalents | 4,612,305 | (791,468) |
Cash and cash equivalents beginning of period | 14,902,076 | 17,814,292 |
Cash and cash equivalents end of period | $ 19,514,381 | $ 17,022,824 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | NOTE 1. DESCRIPTION OF BUSINESS Reservoir Media, Inc. (formerly known as Roth CH Acquisition II Co. (“ ROCC Company Following a business combination between ROCC and Reservoir Holdings, Inc., a Delaware corporation (“ RHI Business Combination Common Stock NASDAQ The Company’s activities are organized into two operating segments: Music Publishing and Recorded Music. Operations of the Music Publishing segment involve the acquisition of interests in music catalogs from which royalties are earned as well as signing songwriters to exclusive agreements which give the Company an interest in the future delivery of songs. The publishing catalog includes ownership or control rights to more than 150,000 musical compositions that span across historic pieces, motion picture scores and current award-winning hits. Operations of the Recorded Music segment involve the acquisition of sound recording catalogs as well as the discovery and development of recording artists and the marketing, distribution, sale and licensing of the music catalog. The Recorded Music operations are primarily conducted through the Chrysalis Records platform and Tommy Boy Music and include the ownership of over 36,000 sound recordings. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Dec. 31, 2023 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 2. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and its majority-owned subsidiaries and have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “ SEC US GAAP The condensed consolidated balance sheet of the Company as of March 31, 2023, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by US GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods. The results for the three and nine months ended December 31, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, the fiscal year ending March 31, 2024 or any other period. The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Significant estimates are used for, but not limited to, determining useful lives of intangible assets, intangible asset recoverability and impairment and accrued revenue. Actual results could differ from these estimates. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Dec. 31, 2023 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“ FASB ASU Income Taxes (Topic 740): Improvements to Income Tax Disclosures ASU 2023-09 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ASU 2023-07 CODM Accounting Standards Recently Adopted In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 4. REVENUE RECOGNITION For the Company’s operating segments, Music Publishing and Recorded Music, the Company accounts for a contract when it has legally enforceable rights and obligations and collectability of consideration is probable. The Company identifies the performance obligations and determines the transaction price associated with the contract. Revenue is recognized when, or as, control of the promised services or goods is transferred to the Company’s customers, and in an amount that reflects the consideration the Company is contractually due in exchange for those services or goods. Certain of the Company’s arrangements include licenses of intellectual property with consideration in the form of sales- and usage-based royalties. Royalty revenue is recognized when the subsequent sale or usage occurs using the best estimates available of the amounts that will be received by the Company. The Company recognized revenue of $3,682,276 and $3,478,970 from performance obligations satisfied in previous periods for the nine months ended December 31, 2023 and 2022, respectively. CRB Disaggregation of Revenue The Company’s revenue consisted of the following categories during the three and nine months ended December 31, 2023 and 2022: Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 2023 2022 Revenue by Type Digital $ 13,938,412 $ 10,717,506 $ 38,594,301 $ 32,428,357 Performance 4,272,420 4,407,361 15,280,829 12,355,228 Synchronization 4,012,451 3,670,065 11,512,976 11,382,565 Mechanical 390,831 589,209 2,202,140 2,104,190 Other 529,496 770,990 2,252,741 2,394,879 Total Music Publishing 23,143,610 20,155,131 69,842,987 60,665,219 Digital 6,589,119 5,246,986 19,476,308 16,122,688 Physical 1,671,093 1,104,207 7,138,031 3,252,740 Neighboring rights 956,984 822,106 2,618,529 2,248,387 Synchronization 782,224 388,305 1,978,668 2,402,179 Total Recorded Music 9,999,420 7,561,604 31,211,536 24,025,994 Other revenue 2,333,142 2,214,678 4,655,535 2,784,681 Total revenue $ 35,476,172 $ 29,931,413 $ 105,710,058 $ 87,475,894 Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 2023 2022 Revenue by Geographical Location United States Music Publishing $ 14,063,281 $ 11,187,010 $ 41,435,627 $ 35,946,459 United States Recorded Music 5,315,263 4,188,061 16,722,726 12,958,074 United States other revenue 2,333,142 2,214,678 4,655,535 2,784,681 Total United States 21,711,686 17,589,749 62,813,888 51,689,214 International Music Publishing 9,080,329 8,968,121 28,407,360 24,718,760 International Recorded Music 4,684,157 3,373,543 14,488,810 11,067,920 Total International 13,764,486 12,341,664 42,896,170 35,786,680 Total revenue $ 35,476,172 $ 29,931,413 $ 105,710,058 $ 87,475,894 Only the United States represented 10% or more of the Company’s total revenues in the three and nine months ended December 31, 2023 and 2022. Deferred Revenue The following table reflects the change in deferred revenue during the nine months ended December 31, 2023 and 2022: 2023 2022 Balance at beginning of period $ 2,151,889 $ 1,103,664 Cash received during period 3,029,695 4,977,624 Revenue recognized during period (3,243,934) (3,337,864) Balance at end of period $ 1,937,650 $ 2,743,424 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Dec. 31, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 5. ACQUISITIONS In the ordinary course of business, the Company regularly acquires publishing and recorded music catalogs, which are typically accounted for as asset acquisitions. During the nine months ended December 31, 2023 and 2022, the Company completed such acquisitions totaling $43,816,768 and $36,264,222, respectively, inclusive of deferred acquisition payments, none of which were individually significant. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS Intangible assets subject to amortization consist of the following as of December 31, 2023 and March 31, 2023: December 31, 2023 March 31, 2023 Intangible assets subject to amortization: Publishing and recorded music catalogs $ 767,747,589 $ 721,904,892 Artist management contracts 919,526 893,283 Gross intangible assets 768,667,115 722,798,175 Accumulated amortization (124,141,642) (105,393,434) Intangible assets, net $ 644,525,473 $ 617,404,741 Straight-line amortization expense totaled $6,281,016 and $5,496,020 in the three months ended December 31, 2023 and 2022, respectively. Straight-line amortization expense totaled $18,433,037 and $16,152,354 in the nine months ended December 31, 2023 and 2022, respectively. |
ROYALTY ADVANCES
ROYALTY ADVANCES | 9 Months Ended |
Dec. 31, 2023 | |
ROYALTY ADVANCES | |
ROYALTY ADVANCES | NOTE 7. ROYALTY ADVANCES The Company made royalty advances totaling $13,430,007 and $15,706,783 during the nine months ended December 31, 2023 and 2022, 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. The following table reflects the change in royalty advances during the nine months ended December 31, 2023 and 2022: 2023 2022 Balance at beginning of period $ 66,926,500 $ 57,012,754 Additions 13,430,007 15,706,783 Recoupments (10,167,488) (9,834,724) Balance at end of period $ 70,189,019 $ 62,884,813 |
SECURED LINE OF CREDIT
SECURED LINE OF CREDIT | 9 Months Ended |
Dec. 31, 2023 | |
SECURED LINE OF CREDIT | |
SECURED LINE OF CREDIT | NOTE 8. SECURED LINE OF CREDIT Long-term debt consists of the following: December 31, 2023 March 31, 2023 Secured line of credit $ 347,828,410 $ 317,828,409 Debt issuance costs, net (5,372,590) (6,336,828) $ 342,455,820 $ 311,491,581 Credit Facilities On December 16, 2022, Reservoir Media Management, Inc. (“ RMM Second Amendment RMM Credit Agreement Senior Credit Facility RMM is required to pay an unused fee in respect of unused commitments under the 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 fixed charge coverage ratio of not less than 1.10:1.00 for each four fiscal quarter period, and (ii) a consolidated senior debt to library value ratio of 0.45:1.00, 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 Senior Credit Facility. The Senior Credit Facility also includes an “accordion feature” that permits RMM to seek additional commitments in an amount not to exceed $150,000,000. As of December 31, 2023, the Senior Credit Facility had a borrowing capacity of $450,000,000, with remaining borrowing availability of $102,171,590. Interest Rate Swaps At December 31, 2023, RMM had the following interest rate swaps outstanding, under which it pays a fixed rate and receives a floating interest payment from the counterparty based on SOFR with reference to notional amounts adjusted to match the amended scheduled principal repayments pursuant to the Senior Credit Facility: Notional Amount at Pay Fixed Effective Date December 31, 2023 Rate Maturity March 10, 2022 $ 7,875,000 1.533 % September 2024 March 10, 2022 $ 87,621,062 1.422 % September 2024 December 31, 2021 $ 54,503,938 0.972 % September 2024 September 30, 2024 $ 100,000,000 2.946 % December 2027 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 9. INCOME TAXES Income tax (benefit) expense for the three months ended December 31, 2023 and 2022 was $(1,226,649) and $3,529,984, respectively. Income tax (benefit) expense for the nine months ended December 31, 2023 and 2022 was $(872,663) and $5,217,691, respectively. During the three months ended December 31, 2022, the Company changed its estimate of the applicable tax rate used to measure its international deferred tax liabilities in the United Kingdom resulting in a significant increase in its effective tax rate for the three and nine months ended December 31, 2022. The increase of the estimate of the applicable future tax rate from 19% to 25% used to measure the international deferred tax liabilities in the United Kingdom resulted in incremental tax expense of $3,658,643 during the three and nine months ended December 31, 2022 due to the increase in the value of deferred tax liabilities. |
SUPPLEMENTARY CASH FLOW INFORMA
SUPPLEMENTARY CASH FLOW INFORMATION | 9 Months Ended |
Dec. 31, 2023 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
SUPPLEMENTARY CASH FLOW INFORMATION | NOTE 10. SUPPLEMENTARY CASH FLOW INFORMATION Interest paid and income taxes paid for the nine months ended December 31, 2023 and 2022 were comprised of the following: 2023 2022 Interest paid $ 13,019,891 $ 8,006,819 Income taxes paid $ 285,507 $ 43,446 Non-cash investing and financing activities for the nine months ended December 31, 2023 and 2022 were comprised of the following: 2023 2022 Acquired intangible assets included in other liabilities $ 1,910,555 $ 2,748,436 Reclassification of liability-classified awards to equity-classified awards $ 744,167 $ 1,106,429 Right-of-use assets received in exchange for operating lease obligations $ 595,370 $ 6,146,064 |
WARRANTS
WARRANTS | 9 Months Ended |
Dec. 31, 2023 | |
WARRANTS | |
WARRANTS | NOTE 11. WARRANTS As of December 31, 2023, the Company’s outstanding warrants included 5,750,000 publicly-traded warrants (the “ Public Warrants Private Warrants Warrants The Warrants will expire on July 28, 2026, which is 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 three business days before the Company sends the notice of redemption to the registered holders. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 12. SHARE-BASED COMPENSATION Share-based compensation expense totaled $812,860 ($626,015, net of taxes) and $791,187 ($609,829, net of taxes) during the three months ended December 31, 2023 and 2022, respectively. Share-based compensation expense totaled $2,540,146 ($1,956,263, net of taxes) and $2,408,677 ($1,856,553, net of taxes) during the nine months ended December 31, 2023 and 2022, respectively. Share-based compensation expense is classified as “Administration expenses” in the accompanying condensed consolidated statements of income. During the three and nine months ended December 31, 2023 and 2022, the Company granted restricted stock units (“ RSUs |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 9 Months Ended |
Dec. 31, 2023 | |
(LOSS) EARNINGS PER SHARE | |
(LOSS) EARNINGS PER SHARE | NOTE 13. (LOSS) EARNINGS PER SHARE The following table summarizes the basic and diluted (loss) earnings per common share calculation for the three and nine months ended December 31, 2023 and 2022: Three Months Ended Nine Months Ended December 31, December 31, 2023 2022 2023 2022 Basic (loss) earnings per common share Net (loss) income attributable to Reservoir Media, Inc. $ (2,963,059) $ (4,406,623) $ (2,150,336) $ 206,349 Weighted average common shares outstanding - basic 64,826,026 64,379,536 64,731,569 64,316,532 (Loss) earnings per common share - basic $ (0.05) $ (0.07) $ (0.03) $ — Diluted (loss) earnings per common share Net (loss) income attributable to Reservoir Media, Inc. $ (2,963,059) $ (4,406,623) $ (2,150,336) $ 206,349 Weighted average common shares outstanding - basic 64,826,026 64,379,536 64,731,569 64,316,532 Weighted average effect of potentially dilutive securities: — — — — Effect of dilutive stock options and RSUs — — — 448,849 Weighted average common shares outstanding - diluted 64,826,026 64,379,536 64,731,569 64,765,381 (Loss) earnings per common share - diluted $ (0.05) $ (0.07) $ (0.03) $ — Because of their anti-dilutive effect, 7,895,381 shares of Common Stock equivalents, comprised of 1,381,916 stock options, 625,965 RSUs and 5,887,500 warrants have been excluded from the diluted earnings per share calculation for the three and nine months ended December 31, 2023. Because of their anti-dilutive effect, 7,830,870 shares of Common Stock equivalents, comprised of 1,483,554 stock options, 459,816 RSUs and 5,887,500 warrants have been excluded from the diluted earnings per share calculation for the three months ended December 31, 2022. Because of their anti-dilutive effect, 5,922,218 shares of Common Stock equivalents, comprised of 34,718 RSUs and 5,887,500 warrants have been excluded from the diluted earnings per share calculation for the nine months ended December 31, 2022. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Dec. 31, 2023 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | NOTE 14. FINANCIAL INSTRUMENTS The Company is exposed to the following risks related to its financial instruments: (a) Credit Risk Credit risk arises from the possibility that the Company’s debtors may be unable to fulfill their financial obligations. Revenues earned from publishing and distribution companies are concentrated in the music and entertainment industry. The Company monitors its exposure to credit risk on a regular basis. (b) Interest Rate Risk The Company is exposed to market risk from changes in interest rates on its Senior Credit Facility. As described in Note 8, “ Secured Line of Credit, The fair value of the outstanding interest rate swaps was a $4,982,839 asset as of December 31, 2023 and a $6,756,884 asset as of March 31, 2023. Fair value is determined using Level 2 inputs, which are based on quoted prices and market observable data of similar instruments. The change in the unrealized fair value of the swaps during the three and nine months ended December 31, 2023 of $4,247,523 and $1,774,045, respectively, was recorded as a Loss on fair value of swaps. The change in the unrealized fair value of the swaps during the three months ended December 31, 2022 of $179,573 was recorded as a Loss on fair value of swaps. The change in the unrealized fair value of the swaps during the nine months ended December 31, 2022 of $4,323,207 was recorded as a Gain on fair value of swaps. (c) Foreign Exchange Risk The Company is exposed to foreign exchange risk in fluctuations of currency rates on its revenue from royalties, writers’ fees and its subsidiaries’ operations. (d) Equity Investments without readily determinable fair value The Company holds investments in equity securities of three unconsolidated entities in which the Company is not able to exercise significant influence, that do not have readily determinable market values. The Company accounts for these investments using a measurement alternative that measures these securities at initial cost, minus any impairment, plus or minus changes resulting from observable price changes on a non-recurring basis. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3 with gains or losses, if any, classified as Other income (expense), net in the consolidated statements of loss (income). During the three and nine months ended December 31, 2023, the Company recognized an impairment charge of $991,105 to write-down an investment to its estimated fair value. (e) Financial Instruments Financial instruments not described elsewhere include cash, accounts receivable, accounts payable, accrued liabilities and the Company’s secured line of credit. The carrying values of these instruments as of December 31, 2023 do not differ materially from their respective fair values due to the immediate or short-term duration of these items or their bearing market-related rates of interest. |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 9 Months Ended |
Dec. 31, 2023 | |
CONTINGENCIES AND COMMITMENTS | |
CONTINGENCIES AND COMMITMENTS | NOTE 15. CONTINGENCIES AND COMMITMENTS (a) Litigation The Company is subject to claims and contingencies in the normal course of business. To the extent the Company cannot predict the outcome of the claims and contingencies or estimate the amount of any loss that may result, no provision for any contingent liabilities has been made in the condensed consolidated financial statements. The Company believes that losses resulting from these matters, if any, would not have a material adverse effect on the financial position, results of operations or cash flows of the Company. All such matters which the Company concludes are probable to result in a loss and for which management can reasonably estimate the amount of such loss have been accrued for within these condensed consolidated financial statements. The Company was involved in a royalty dispute, which commenced in 2017, and was settled in October 2023 (the “Royalty Dispute”). Under the terms of the Company’s royalty contract, the Company was indemnified for legal expenses and attorneys’ fees incurred by the Company in connection with the Royalty Dispute, including, without limitation, the right to withhold royalties or offset all such legal expenses and attorneys’ fees against royalties otherwise owed under the contract. The Company recorded legal expenses and attorneys’ fees incurred as recoupable advances against the royalty account under such contract beginning in 2017. In September 2023, the Company engaged in mediation sessions in an effort to reach a settlement of the Royalty Dispute. Following such mediation and associated settlement negotiations, the Company agreed to pay previously accrued but unpaid royalties plus interest and forego its right to recoup its historical legal expenses and attorneys’ fees in order to resolve the Royalty Dispute. Consequently, during the nine months ended December 31, 2023, the Company recorded approximately $2,700,000 of Administration expenses to write-off recoupable legal expenses and attorneys’ fees and recorded $620,000 of interest expense based on amounts it paid in October 2023. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Dec. 31, 2023 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 16. SEGMENT REPORTING The Company’s business is organized in two reportable segments: Music Publishing and Recorded Music. The Company identified its Chief Executive Officer as its Chief Operating Decision Maker (“ CODM OIBDA The following tables present total revenue and reconciliation of OIBDA to operating income by segment for the three and nine months ended December 31, 2023 and 2022: Three Months Ended December 31, 2023 Music Recorded Publishing Music Other Consolidated Total revenue $ 23,143,610 $ 9,999,420 $ 2,333,142 $ 35,476,172 Reconciliation of OIBDA to operating income: Operating income 2,834,443 3,259,368 428,125 6,521,936 Amortization and depreciation 4,925,562 1,393,961 23,395 6,342,918 OIBDA $ 7,760,005 $ 4,653,329 $ 451,520 $ 12,864,854 Nine Months Ended December 31, 2023 Music Recorded Publishing Music Other Consolidated Total revenue $ 69,842,987 $ 31,211,536 $ 4,655,535 $ 105,710,058 Reconciliation of OIBDA to operating income: Operating income 5,641,437 9,152,980 1,017,530 15,811,947 Amortization and depreciation 14,020,165 4,522,079 70,782 18,613,026 OIBDA $ 19,661,602 $ 13,675,059 $ 1,088,312 $ 34,424,973 Three Months Ended December 31, 2022 Music Recorded Publishing Music Other Consolidated Total revenue $ 20,155,131 $ 7,561,604 $ 2,214,678 $ 29,931,413 Reconciliation of OIBDA to operating income: Operating income 1,659,409 2,278,413 661,236 4,599,058 Amortization and depreciation 4,165,456 1,358,898 21,947 5,546,301 OIBDA $ 5,824,865 $ 3,637,311 $ 683,183 $ 10,145,359 Nine Months Ended December 31, 2022 Music Recorded Publishing Music Other Consolidated Total revenue $ 60,665,219 $ 24,025,994 $ 2,784,681 $ 87,475,894 Reconciliation of OIBDA to operating income: Operating income 4,472,540 7,336,090 678,409 12,487,039 Amortization and depreciation 12,129,949 4,096,356 65,840 16,292,145 OIBDA $ 16,602,489 $ 11,432,446 $ 744,249 $ 28,779,184 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Dec. 31, 2023 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
Recent Accounting Pronouncements | Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“ FASB ASU Income Taxes (Topic 740): Improvements to Income Tax Disclosures ASU 2023-09 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ASU 2023-07 CODM Accounting Standards Recently Adopted In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2016-13 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
Schedule of revenue | Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 2023 2022 Revenue by Type Digital $ 13,938,412 $ 10,717,506 $ 38,594,301 $ 32,428,357 Performance 4,272,420 4,407,361 15,280,829 12,355,228 Synchronization 4,012,451 3,670,065 11,512,976 11,382,565 Mechanical 390,831 589,209 2,202,140 2,104,190 Other 529,496 770,990 2,252,741 2,394,879 Total Music Publishing 23,143,610 20,155,131 69,842,987 60,665,219 Digital 6,589,119 5,246,986 19,476,308 16,122,688 Physical 1,671,093 1,104,207 7,138,031 3,252,740 Neighboring rights 956,984 822,106 2,618,529 2,248,387 Synchronization 782,224 388,305 1,978,668 2,402,179 Total Recorded Music 9,999,420 7,561,604 31,211,536 24,025,994 Other revenue 2,333,142 2,214,678 4,655,535 2,784,681 Total revenue $ 35,476,172 $ 29,931,413 $ 105,710,058 $ 87,475,894 Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 2023 2022 Revenue by Geographical Location United States Music Publishing $ 14,063,281 $ 11,187,010 $ 41,435,627 $ 35,946,459 United States Recorded Music 5,315,263 4,188,061 16,722,726 12,958,074 United States other revenue 2,333,142 2,214,678 4,655,535 2,784,681 Total United States 21,711,686 17,589,749 62,813,888 51,689,214 International Music Publishing 9,080,329 8,968,121 28,407,360 24,718,760 International Recorded Music 4,684,157 3,373,543 14,488,810 11,067,920 Total International 13,764,486 12,341,664 42,896,170 35,786,680 Total revenue $ 35,476,172 $ 29,931,413 $ 105,710,058 $ 87,475,894 |
Schedule of change in deferred revenue | 2023 2022 Balance at beginning of period $ 2,151,889 $ 1,103,664 Cash received during period 3,029,695 4,977,624 Revenue recognized during period (3,243,934) (3,337,864) Balance at end of period $ 1,937,650 $ 2,743,424 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets subject to amortization | December 31, 2023 March 31, 2023 Intangible assets subject to amortization: Publishing and recorded music catalogs $ 767,747,589 $ 721,904,892 Artist management contracts 919,526 893,283 Gross intangible assets 768,667,115 722,798,175 Accumulated amortization (124,141,642) (105,393,434) Intangible assets, net $ 644,525,473 $ 617,404,741 |
ROYALTY ADVANCES (Tables)
ROYALTY ADVANCES (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
ROYALTY ADVANCES | |
Schedule of royalty advances | 2023 2022 Balance at beginning of period $ 66,926,500 $ 57,012,754 Additions 13,430,007 15,706,783 Recoupments (10,167,488) (9,834,724) Balance at end of period $ 70,189,019 $ 62,884,813 |
SECURED LINE OF CREDIT (Tables)
SECURED LINE OF CREDIT (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
SECURED LINE OF CREDIT | |
Schedule of long-term debt | December 31, 2023 March 31, 2023 Secured line of credit $ 347,828,410 $ 317,828,409 Debt issuance costs, net (5,372,590) (6,336,828) $ 342,455,820 $ 311,491,581 |
Schedule of interest rate swaps | Notional Amount at Pay Fixed Effective Date December 31, 2023 Rate Maturity March 10, 2022 $ 7,875,000 1.533 % September 2024 March 10, 2022 $ 87,621,062 1.422 % September 2024 December 31, 2021 $ 54,503,938 0.972 % September 2024 September 30, 2024 $ 100,000,000 2.946 % December 2027 |
SUPPLEMENTARY CASH FLOW INFOR_2
SUPPLEMENTARY CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
SUPPLEMENTARY CASH FLOW INFORMATION | |
Schedule of interest paid and income taxes paid | 2023 2022 Interest paid $ 13,019,891 $ 8,006,819 Income taxes paid $ 285,507 $ 43,446 |
Schedule of non-cash investing and financing activities | 2023 2022 Acquired intangible assets included in other liabilities $ 1,910,555 $ 2,748,436 Reclassification of liability-classified awards to equity-classified awards $ 744,167 $ 1,106,429 Right-of-use assets received in exchange for operating lease obligations $ 595,370 $ 6,146,064 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
(LOSS) EARNINGS PER SHARE | |
Summary of basic and diluted (loss) earnings per common share calculation | Three Months Ended Nine Months Ended December 31, December 31, 2023 2022 2023 2022 Basic (loss) earnings per common share Net (loss) income attributable to Reservoir Media, Inc. $ (2,963,059) $ (4,406,623) $ (2,150,336) $ 206,349 Weighted average common shares outstanding - basic 64,826,026 64,379,536 64,731,569 64,316,532 (Loss) earnings per common share - basic $ (0.05) $ (0.07) $ (0.03) $ — Diluted (loss) earnings per common share Net (loss) income attributable to Reservoir Media, Inc. $ (2,963,059) $ (4,406,623) $ (2,150,336) $ 206,349 Weighted average common shares outstanding - basic 64,826,026 64,379,536 64,731,569 64,316,532 Weighted average effect of potentially dilutive securities: — — — — Effect of dilutive stock options and RSUs — — — 448,849 Weighted average common shares outstanding - diluted 64,826,026 64,379,536 64,731,569 64,765,381 (Loss) earnings per common share - diluted $ (0.05) $ (0.07) $ (0.03) $ — |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
SEGMENT REPORTING | |
Schedule of total revenue and reconciliation of OIBDA to operating income by segment | Three Months Ended December 31, 2023 Music Recorded Publishing Music Other Consolidated Total revenue $ 23,143,610 $ 9,999,420 $ 2,333,142 $ 35,476,172 Reconciliation of OIBDA to operating income: Operating income 2,834,443 3,259,368 428,125 6,521,936 Amortization and depreciation 4,925,562 1,393,961 23,395 6,342,918 OIBDA $ 7,760,005 $ 4,653,329 $ 451,520 $ 12,864,854 Nine Months Ended December 31, 2023 Music Recorded Publishing Music Other Consolidated Total revenue $ 69,842,987 $ 31,211,536 $ 4,655,535 $ 105,710,058 Reconciliation of OIBDA to operating income: Operating income 5,641,437 9,152,980 1,017,530 15,811,947 Amortization and depreciation 14,020,165 4,522,079 70,782 18,613,026 OIBDA $ 19,661,602 $ 13,675,059 $ 1,088,312 $ 34,424,973 Three Months Ended December 31, 2022 Music Recorded Publishing Music Other Consolidated Total revenue $ 20,155,131 $ 7,561,604 $ 2,214,678 $ 29,931,413 Reconciliation of OIBDA to operating income: Operating income 1,659,409 2,278,413 661,236 4,599,058 Amortization and depreciation 4,165,456 1,358,898 21,947 5,546,301 OIBDA $ 5,824,865 $ 3,637,311 $ 683,183 $ 10,145,359 Nine Months Ended December 31, 2022 Music Recorded Publishing Music Other Consolidated Total revenue $ 60,665,219 $ 24,025,994 $ 2,784,681 $ 87,475,894 Reconciliation of OIBDA to operating income: Operating income 4,472,540 7,336,090 678,409 12,487,039 Amortization and depreciation 12,129,949 4,096,356 65,840 16,292,145 OIBDA $ 16,602,489 $ 11,432,446 $ 744,249 $ 28,779,184 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) | 9 Months Ended | ||
Dec. 31, 2023 segment item $ / shares | Mar. 31, 2023 $ / shares | Jul. 28, 2021 $ / shares | |
DESCRIPTION OF BUSINESS | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Number of operating segments | segment | 2 | ||
Music Publishing | |||
DESCRIPTION OF BUSINESS | |||
Minimum ownership or control rights | 150,000 | ||
Recorded Music | |||
DESCRIPTION OF BUSINESS | |||
Minimum ownership or control rights | 36,000 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue recognized from performance obligations satisfied in previous period | $ 3,682,276 | $ 3,478,970 | ||
Revenues | $ 35,476,172 | $ 29,931,413 | 105,710,058 | 87,475,894 |
United States | ||||
Revenues | $ 21,711,686 | $ 17,589,749 | $ 62,813,888 | $ 51,689,214 |
Percentage of revenue more than Company's total revenue | 10% | 10% | 10% | 10% |
International | ||||
Revenues | $ 13,764,486 | $ 12,341,664 | $ 42,896,170 | $ 35,786,680 |
Music Publishing | ||||
Revenues | 23,143,610 | 20,155,131 | 69,842,987 | 60,665,219 |
Music Publishing | United States | ||||
Revenues | 14,063,281 | 11,187,010 | 41,435,627 | 35,946,459 |
Music Publishing | International | ||||
Revenues | 9,080,329 | 8,968,121 | 28,407,360 | 24,718,760 |
Recorded Music | ||||
Revenues | 9,999,420 | 7,561,604 | 31,211,536 | 24,025,994 |
Recorded Music | United States | ||||
Revenues | 5,315,263 | 4,188,061 | 16,722,726 | 12,958,074 |
Recorded Music | International | ||||
Revenues | 4,684,157 | 3,373,543 | 14,488,810 | 11,067,920 |
Other revenue | ||||
Revenues | 2,333,142 | 2,214,678 | 4,655,535 | 2,784,681 |
Other revenue | United States | ||||
Revenues | 2,333,142 | 2,214,678 | 4,655,535 | 2,784,681 |
Digital | Music Publishing | ||||
Revenues | 13,938,412 | 10,717,506 | 38,594,301 | 32,428,357 |
Digital | Recorded Music | ||||
Revenues | 6,589,119 | 5,246,986 | 19,476,308 | 16,122,688 |
Performance | Music Publishing | ||||
Revenues | 4,272,420 | 4,407,361 | 15,280,829 | 12,355,228 |
Synchronization | Music Publishing | ||||
Revenues | 4,012,451 | 3,670,065 | 11,512,976 | 11,382,565 |
Synchronization | Recorded Music | ||||
Revenues | 782,224 | 388,305 | 1,978,668 | 2,402,179 |
Mechanical | Music Publishing | ||||
Revenues | 390,831 | 589,209 | 2,202,140 | 2,104,190 |
Physical | Recorded Music | ||||
Revenues | 1,671,093 | 1,104,207 | 7,138,031 | 3,252,740 |
Neighboring rights | Recorded Music | ||||
Revenues | 956,984 | 822,106 | 2,618,529 | 2,248,387 |
Other | Music Publishing | ||||
Revenues | $ 529,496 | $ 770,990 | $ 2,252,741 | $ 2,394,879 |
REVENUE RECOGNITION - Change in
REVENUE RECOGNITION - Change in deferred revenue (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
REVENUE RECOGNITION | ||
Balance at beginning of period | $ 2,151,889 | $ 1,103,664 |
Cash received during period | 3,029,695 | 4,977,624 |
Revenue recognized during period | (3,243,934) | (3,337,864) |
Balance at end of period | $ 1,937,650 | $ 2,743,424 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Publishing and recorded music catalogs | ||
ACQUISITIONS | ||
Total consideration transferred | $ 43,816,768 | $ 36,264,222 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
Intangible assets subject to amortization: | |||||
Gross intangible assets | $ 768,667,115 | $ 768,667,115 | $ 722,798,175 | ||
Accumulated amortization | (124,141,642) | (124,141,642) | (105,393,434) | ||
Intangible assets, net | 644,525,473 | 644,525,473 | 617,404,741 | ||
Amortization expense | 6,281,016 | $ 5,496,020 | 18,433,037 | $ 16,152,354 | |
Publishing and recorded music catalogs | |||||
Intangible assets subject to amortization: | |||||
Gross intangible assets | 767,747,589 | 767,747,589 | 721,904,892 | ||
Artist management contracts | |||||
Intangible assets subject to amortization: | |||||
Gross intangible assets | $ 919,526 | $ 919,526 | $ 893,283 |
ROYALTY ADVANCES (Details)
ROYALTY ADVANCES (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
ROYALTY ADVANCES | ||
Balance at beginning of period | $ 66,926,500 | $ 57,012,754 |
Additions | 13,430,007 | 15,706,783 |
Recoupments | (10,167,488) | (9,834,724) |
Balance at end of period | $ 70,189,019 | $ 62,884,813 |
SECURED LINE OF CREDIT - Schedu
SECURED LINE OF CREDIT - Schedule of long-term debt (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Long-term Debt, by Current and Noncurrent | ||
Debt issuance costs, net | $ (5,372,590) | $ (6,336,828) |
Long-term portion | 342,455,820 | 311,491,581 |
Secured loan | ||
Long-term Debt, by Current and Noncurrent | ||
Secured line of credit | $ 347,828,410 | $ 317,828,409 |
SECURED LINE OF CREDIT - Credit
SECURED LINE OF CREDIT - Credit Facilities (Details) | 3 Months Ended | 9 Months Ended | |||
Dec. 16, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
SECURED LINE OF CREDIT | |||||
Loss on early extinguishment of debt | $ (914,040) | $ (914,040) | |||
Capitalized debt issuance costs | $ 5,372,590 | $ 6,336,828 | |||
New Senior Credit Facility | |||||
SECURED LINE OF CREDIT | |||||
Unused fee (in percent) | 0.25% | ||||
Fixed charge coverage ratio | 1.10 | ||||
Consolidated senior debt to library value ratio | 0.45 | ||||
Additional commitments | $ 150,000,000 | ||||
Borrowing capacity | 450,000,000 | ||||
Remaining borrowing availability | $ 102,171,590 | ||||
RMM credit agreement | |||||
SECURED LINE OF CREDIT | |||||
Margin (in percent) | 0.25% | ||||
Total leverage ratio | 7.50 | ||||
Total Leverage of cash balance | $ 20,000,000 | ||||
Fixed charge coverage ratio | 1.10 | ||||
Consolidated senior debt to library value ratio | 0.450 | ||||
Loss on early extinguishment of debt | $ 914,000 | ||||
Capitalized debt issuance costs | $ 3,500,000 | ||||
Base rate | RMM credit agreement | |||||
SECURED LINE OF CREDIT | |||||
Margin (in percent) | 1% | ||||
SOFR | RMM credit agreement | |||||
SECURED LINE OF CREDIT | |||||
Margin (in percent) | 2% | ||||
Maximum | RMM credit agreement | |||||
SECURED LINE OF CREDIT | |||||
Aggregate amount | $ 450,000,000 | ||||
Incremental borrowing available under the facility | 150,000,000 | ||||
Minimum | RMM credit agreement | |||||
SECURED LINE OF CREDIT | |||||
Aggregate amount | 350,000,000 | ||||
Incremental borrowing available under the facility | $ 50,000,000 |
SECURED LINE OF CREDIT - Intere
SECURED LINE OF CREDIT - Interest Rate Swaps (Details) - Senior Credit Facility | Dec. 31, 2023 USD ($) |
Interest rate swaps | |
SECURED LINE OF CREDIT | |
Notional Amount | $ 7,875,000 |
Pay Fixed Rate (in percent) | 1.533% |
Interest rate swap one | |
SECURED LINE OF CREDIT | |
Notional Amount | $ 87,621,062 |
Pay Fixed Rate (in percent) | 1.422% |
Interest rate swap two | |
SECURED LINE OF CREDIT | |
Notional Amount | $ 54,503,938 |
Pay Fixed Rate (in percent) | 0.972% |
Interest rate swap three | |
SECURED LINE OF CREDIT | |
Notional Amount | $ 100,000,000 |
Pay Fixed Rate (in percent) | 2.946% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAXES | ||||
Income tax (benefit) expense | $ (1,226,649) | $ 3,529,984 | $ (872,663) | $ 5,217,691 |
Deferred tax liabilities on tax expense | $ 3,658,643 | $ 3,658,643 | ||
Maximum | ||||
INCOME TAXES | ||||
Effective tax rate (in percent) | 25% | 25% | ||
Minimum | ||||
INCOME TAXES | ||||
Effective tax rate (in percent) | 19% | 19% |
SUPPLEMENTARY CASH FLOW INFOR_3
SUPPLEMENTARY CASH FLOW INFORMATION (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUPPLEMENTARY CASH FLOW INFORMATION | ||
Interest paid | $ 13,019,891 | $ 8,006,819 |
Income taxes paid | 285,507 | 43,446 |
Acquired intangible assets included in other liabilities | 1,910,555 | 2,748,436 |
Reclassification of liability-classified awards to equity-classified awards | 744,167 | 1,106,429 |
Right-of-use assets received in exchange for operating lease obligations | $ 595,370 | $ 6,146,064 |
WARRANTS (Details)
WARRANTS (Details) - Warrants | 9 Months Ended | |
Dec. 15, 2020 shares | Dec. 31, 2023 D $ / shares shares | |
WARRANTS | ||
Number of warrants outstanding | shares | 5,750,000 | |
Number of warrants sold | shares | 137,500 | |
Number of shares issuable per warrant | shares | 1 | |
Exercise price of warrants | $ / shares | $ 11.50 | |
Warrants expiration term (in years) | 5 years | |
Redemption price per public warrant (in dollars per share) | $ / shares | $ 0.01 | |
Minimum threshold written notice period for redemption of public warrants | 30 days | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ / shares | $ 18 | |
Threshold trading days for redemption of public warrants | 20 days | |
Threshold consecutive trading days for redemption of public warrants | 30 days | |
Threshold number of business days before sending notice of redemption to warrant holders | D | 3 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | ||||
Share-based compensation expense | $ 812,860 | $ 791,187 | $ 2,540,146 | $ 2,408,677 |
Share-based compensation expense net of taxes | 626,015 | 609,829 | 1,956,263 | 1,856,553 |
Restricted Stock Units (RSUs) | Additional Paid-in Capital | ||||
SHARE-BASED COMPENSATION | ||||
Accounts payable to accrued liabilities to additional paid-in capital | $ 744,167 | $ 1,106,429 | $ 744,167 | $ 1,106,429 |
(LOSS) EARNINGS PER SHARE - Bas
(LOSS) EARNINGS PER SHARE - Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Basic (loss) earnings per common share | ||||
Net (loss) income attributable to Reservoir Media, Inc. | $ (2,963,059) | $ (4,406,623) | $ (2,150,336) | $ 206,349 |
Weighted average common shares outstanding - basic | 64,826,026 | 64,379,536 | 64,731,569 | 64,316,532 |
(Loss) earnings per common share - basic | $ (0.05) | $ (0.07) | $ (0.03) | |
Diluted (loss) earnings per common share | ||||
Net (loss) income attributable to Reservoir Media, Inc. | $ (2,963,059) | $ (4,406,623) | $ (2,150,336) | $ 206,349 |
Weighted average common shares outstanding - basic | 64,826,026 | 64,379,536 | 64,731,569 | 64,316,532 |
Weighted average effect of potentially dilutive securities: | ||||
Effect of dilutive stock options and RSUs | 448,849 | |||
Weighted average common shares outstanding - diluted | 64,826,026 | 64,379,536 | 64,731,569 | 64,765,381 |
(Loss) earnings per common share - diluted | $ (0.05) | $ (0.07) | $ (0.03) |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
(LOSS) EARNINGS PER SHARE | ||||
Anti-dilutive effect of common shares | 7,895,381 | 7,830,870 | 7,895,381 | 5,922,218 |
RSU's | ||||
(LOSS) EARNINGS PER SHARE | ||||
Anti-dilutive effect of common shares | 625,965 | 459,816 | 625,965 | 34,718 |
Warrants | ||||
(LOSS) EARNINGS PER SHARE | ||||
Anti-dilutive effect of common shares | 5,887,500 | 5,887,500 | 5,887,500 | 5,887,500 |
Employee Stock Option | ||||
(LOSS) EARNINGS PER SHARE | ||||
Anti-dilutive effect of common shares | 1,381,916 | 1,483,554 | 1,381,916 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
FINANCIAL INSTRUMENTS | |||||
Impairment of equity investment | $ 991,105 | $ 991,105 | |||
Level 2 | Interest rate swaps | |||||
FINANCIAL INSTRUMENTS | |||||
Fair value of the outstanding interest rate swaps | 4,982,839 | 4,982,839 | $ 6,756,884 | ||
Gain (loss) on changes in fair value of derivative instruments | $ 4,247,523 | $ 179,573 | $ 1,774,045 | $ 4,323,207 |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Details) | 9 Months Ended |
Dec. 31, 2023 USD ($) | |
CONTINGENCIES AND COMMITMENTS | |
Provision for any contingent liabilities | $ 0 |
Administration expenses to write-off | 2,700,000 |
Interest expense | $ 620,000 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) | 9 Months Ended |
Dec. 31, 2023 segment | |
SEGMENT REPORTING | |
Number of reportable segments | 2 |
SEGMENT REPORTING - Total reven
SEGMENT REPORTING - Total revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
SEGMENT REPORTING | ||||
Total revenue | $ 35,476,172 | $ 29,931,413 | $ 105,710,058 | $ 87,475,894 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 6,521,936 | 4,599,058 | 15,811,947 | 12,487,039 |
Amortization and depreciation | 6,342,918 | 5,546,301 | 18,613,026 | 16,292,145 |
OIBDA | 12,864,854 | 10,145,359 | 34,424,973 | 28,779,184 |
Music Publishing | ||||
SEGMENT REPORTING | ||||
Total revenue | 23,143,610 | 20,155,131 | 69,842,987 | 60,665,219 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 2,834,443 | 1,659,409 | 5,641,437 | 4,472,540 |
Amortization and depreciation | 4,925,562 | 4,165,456 | 14,020,165 | 12,129,949 |
OIBDA | 7,760,005 | 5,824,865 | 19,661,602 | 16,602,489 |
Recorded Music | ||||
SEGMENT REPORTING | ||||
Total revenue | 9,999,420 | 7,561,604 | 31,211,536 | 24,025,994 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 3,259,368 | 2,278,413 | 9,152,980 | 7,336,090 |
Amortization and depreciation | 1,393,961 | 1,358,898 | 4,522,079 | 4,096,356 |
OIBDA | 4,653,329 | 3,637,311 | 13,675,059 | 11,432,446 |
Other | ||||
SEGMENT REPORTING | ||||
Total revenue | 2,333,142 | 2,214,678 | 4,655,535 | 2,784,681 |
Reconciliation of OIBDA to operating income: | ||||
Operating income | 428,125 | 661,236 | 1,017,530 | 678,409 |
Amortization and depreciation | 23,395 | 21,947 | 70,782 | 65,840 |
OIBDA | $ 451,520 | $ 683,183 | $ 1,088,312 | $ 744,249 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (2,963,059) | $ (4,406,623) | $ (2,150,336) | $ 206,349 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |