C2W execs not paid since September
CASH-STRAPPED song publisher C2W Music said that its executives have not been paid since last September.
What's more, salaries were cut by 75 per cent and have been accruing on the balance sheet since October 2013.
"The compensation committee will meet in due course to discuss the writing off of the total accrued amounts," said a disclosure issued to the Jamaica Stock Exchange last week.
C2W's latest audited financials showed that just under US$5,000 of payables to directors stood on the balance sheet as at December 31, 2013.
On the other hand, key management compensation totalled US$223,000 last year, up from US$135,000 in 2012.
Indeed, the bulk of the company's spending -- just shy of US$1 million from start-up in 2012 to the end of last year -- has been on administrative expenses, while US$350,000 was spent on songwriting camps and development expenses.
Moreover, it recorded just over US$27,000 in sales since commencing operations in mid-2012, while other income (mostly sponsorship) of US$108,000 could hardly cover the huge cost of operations.
The company reported that it started to see royalty-driven earnings out of Barbados in its last quarter, but it just realised US$9,300 in the three months to December 31, 2013.
Consequently, net loss for the year totalled US$620,000, bringing C2W's accumulated losses to US$1.24 million up to December 31, 2013.
The board had projected that it would earn US$1.32 million from royalties in 2012, with the expectations that income would grow to US$6.4 million by 2016.
The huge shortfall in income coupled with administrative expenses resulted in the depletion of almost all of the US$1.28 million that C2W raised on the Jamaica Stock Exchange (JSE) in June 2012 -- it had less than US$1,000 in cash and cash equivalent at the end of 2013, but that's after it took two one-year loans valued at US$70,000 last July.
The lenders have the option to convert the loans and the interest into shares in the company, albeit not at a price higher than the shares are trading at on the stock exchange.
The song publisher said that it continues to work closely with all Caribbean performing rights societies to create proper integration of its systems, which will show an accurate collection of royalties from the region.
"We are hopeful that our collective efforts would be recognised by the second quarter of 2014 and onwards, resulting in more royalty collections," wrote company CEO Ivan Berry, in the latest financial statements.
The company says it has embarked on a number of strategies to achieve sustainablity.
"Exploitation of the company's catalogue that has been developed in the past two years to improve royalty income; pursuance of negotiation with global multi-national song publishing companies to carve out a part of the market share with respect to sub-publishing fees; continued reduction of expenses; and the targeting of strategic investors," the company said in its latest financial statements.