Thanks for sharing,
I am neither qualified nor authorised to give investment advice and therefore readers should take their own independent and professional advice before making any investment decisions as the initial observations below are simply my own based on my limited understanding and visibility of the company and the music that it claims to own that I’m still trying to get my head round as a retired Music Executive myself who still knows little about the PRO Music catalog or the company operations despite my best efforts to follow and seek to understand the business model and its music from publicly available sources and platforms as none of my contacts I spoke to so far knew much about the company either
As Jake had claimed his music catalog was worth over $300 million I was half ( or maybe 5% ) hoping to see a detailed report by an experienced and trusted and independent and professional valuer of music rights explaining and detailing exactly what music rights PRO Music owned and how their IP rights and Accounts Receivable were valued but sadly that independent and detailed report or a summary thereof from such an industry respected profesional was not attached to the share exchange agreement as I assume would be normal with a transaction claimed to be $300 million plus in the music sector
As the professional music valuation community is a small one it would have been obvious to me as a retired Music Executive whether the report could have been relied upon after a few calls round the music valuation community to check out the credentials of the valuer
To have credibility the report would have needed to be from a top tier and respected valuer of music rights not from a back street firm doing a valuation on the cheap that has zero credibility in the music community
I am no lawyer but based on my own past experience of transactions big and small in the music, media and tech sectors I would also normally expect to see the footprint of tier 1 (or more likely good tier 2 ) corporate lawyers, accountants and investment bankers associated with a transaction claimed to be over $300 million particularly where there are minority shareholders involved and public listing issues to consider.
Indeed I wouldn’t personally consider leading such a transaction of $300 million plus myself without the input and support of tier 1 or trusted tier 2 advisors as I’m a mere Music Executive not a specialist banker , lawyer or valuation accountant
Yet here you see the footprint of a non specialist crowd funded auditor who I understand from another post allegedly has a mailbox address and small law firms without the tax, corporate, regulatory and other specialists that a big legal firm would throw at tightening up the agreements, warranties, representations and other documentation on a claimed $300 million plus transaction involving listed shares.
Again I am no lawyer but it strikes me as a layman that the share exchange agreement is missing important whole sections such as (most obviously) a list of definitions of key terms used in the agreement such as “Assets” and is poorly drafted with what appears to be at least one key typo even I can see as a non-lawyer on my brief read through with few tightly drafted and tailored warranties or representations from either party which often implies poor pre-transaction due diligence by both parties or poor selection of advisors by both parties.
For an acquisition of a claimed $300 million plus music company the agreement and supporting documentation seems to me to be particularly loose on intellectual property rights and owned IP assets which the good IP lawyers and IP accountants and IP investment bankers I worked with on transactions in the past would have tightened up on as that’s the first thing many experienced investors in a music business look for as third party valuations by respected professionals can be relied upon much more than internal valuation reports or valuations by amateurs
Turning now to my brief read through the share exchange agreement
Based on my own experience in my humble opinion as a non lawyer the signed share exchange agreement here is more normal in a transaction between two entities both wholly owned by one common shareholder owing 100% of both companies or for a much smaller transaction than the $300 million plus valuation claimed by Jake
But maybe this is normal for the OTC market I just don’t know as I normally wouldn’t even look at an OTC company as most independent music companies I tend to look at these days are privately owned as there is a lot of experienced private money available from experienced IP investors with deep pockets who really understand IP and creative companies and who not only help fund but also help grow good private IP based businesses with strong management teams who also understand IP and their craft as well as their limitations and know when to ask for help from their more experienced investors
Sadly as expected, in summary, in my humble opinion the share exchange agreement is just another document signed by Jake as CEO of both companies albeit with sign off by the individual shareholders of PRO Music that sheds little light on my understanding of the fair valuation value of PRO Music at the transaction date or even today
My current understanding is that as well as being CEO of both companies Jake was also the majority shareholder of both companies prior to the transaction date and that his shares in what became SONG were only transferred to his family office at a later date somehow
Interestingly Article 2 names the directors of PRO Music who deemed the transaction to be advisable and in the best interests of PRO Music and its shareholders but article 3 does not name the directors of NUVG who deemed the transaction to be advisable and in the best interests of NUVG and its majority and minority shareholders to consummate the transaction
My current understanding is that Jake Noch was the CEO and sole director at the time and assume the Officers and Directors equivalent of section 2.13 would have been included in an earlier draft of Article 3 as it seems strange to list the directors in Article 2 but not in Article 3. Who else but Jake would have asked for this clause naming him as the sole director of NUVG to be deleted from Article 3 ?
Unfortunately the share exchange agreement and other filings I have seen so far personally get me no closer to understanding what is the fair value of PRO Music at either the transaction date nor today and I would probably need to see the details of an independent valuation report from someone I trusted before making such a judgement as sadly I’m just not finding the information I need to ascribe any significant value to most of the small percentage of the 2.5 million music tracks the company claims to own that I have listened to so far
And the other rights more recently at or above market value acquired seem to be small from what I have read about so far
I may just be looking in the wrong places or may have just misunderstood things and would love to be shown what I’m missing or misunderstood
A valuation based on simply applying the share price of NUVG prior to or immediately after the transaction date to the 3,500,000,000 shares issued to former PRO music shareholder is in my humble opinion meaningless given the new shares totally outweigh the number shares in a penny stock in issue prior to the transaction date
Sadly I am still drawing a total blank on understanding what music rights the company actually owns from what I have read so far and will not be investing personally or not until accrued revenues have turned into actual recurring revenue streams without needing to sue the customer base and the company takes steps to build better relations with all of its stakeholders
My current personal valuation of the company shares is much closer to zero than $300 million for sure given the $12 million annual basic salary Jake awarded himself which quickly eats into any IP valuation alongside the modest operating cash flows from the music catalog since inception
But that’s just my humble opinion based on what I have read so far and could be totally wrong as other people here know the company far better than I do
I sincerely hope that Jake takes my advice and considers commissioning a good and respected tier 1 music valuer to independently value his current IP rights to start to build trust in the investment community assuming of course that he does own the music rights that he claims - just get a top tier firm to do the job and not a cheap firm without the experience or reputation to be taken seriously
I also trust that Jake will reflect and also immediately withdraw his request social media sites to provide confidential information of 350 people including myself who are asking genuine questions about a public company and offering up genuine advice that Jake may or may not wish to take
If a Jake wants to fight 350 social media users including myself and receive 350 counter claims he really has to immediately withdraw his fishing request to get our personal and private details from social media platforms without our express consent as genuine people such as myself who are asking genuine questions of a Public company and it’s CEO will not hesitate to unleash our own top tier litigation lawyers with counter claims to protect our own brands that Jake is damaging by not withdrawing our names from his list
