CASH-STRAPPED start up expects to start seeing revenue by the second quarter of 2014

C2W Music expects to start seeing revenue by the second quarter of 2014.

What’s more, the song publisher is looking at taking on outside investors and plans to bring a proposal to current shareholders for consideration through an extraordinary general meeting (EGM), once the “right strategic partner” has been identified.

But while it waits to see income from its 900 song catalogue as well as sub-pulishing arrangements with BMG Chrysalis and Warner Chappell to collect royalties on their behalf for a percentage, it figures it doesn’t need that much cash to continue operating.

“While C2W has very low cash reserves, the company does not require as much operating cash as it did in 2012/2013,” said a company notification to the Jamaica Stock Exchange (JSE).

Indeed it took 16 months to burn through the US$1.47 million it raised on the Jamaica Stock Exchange (JSE), receiving US$1.28 million after IPO costs in June 2012.

The bulk of the company’s spending — US$850,000 from start-up last year to September 30, 2013 — was on administrative expenses, while US$350,000 was spent on songwriting camps and development expenses.

But the start-up has

had difficulty generating income.

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.

Instead it recorded just over US$8,000 ($800,000) in sales since commencing operations last year and accummulated losses of US$1.1 million up to September 30, 2013, even while other income (mostly sponsorship) of US$108,000 failed to cover the huge cost of operations.

Consequently, C2W had less than US$2,000 in cash and cash equivalent at the end of September, although it reports having other current assets valued at just over US$34,000, most of which is classified as advances to songwriters.

“From an administration and reconciliation point of view, this is new and challenging ground for all involved, an action plan is in place and new systems will prove

to be successful at collecting our royalties within the region,” said C2W’s media release to the JSE. “As we are first of it’s kind in the region, we are working closely with the region’s performing rights societies (broadcast, live and other associated rights) to import our robust catalogues and decipher what our rightful earnings are.”

Back in May this year, C2W’s CEO Ivan Berry said that the company’s board was working on coming up with “alternative ideas to allow us to continue doing what we are doing to get enough cash for the next nine months”.