MelodyVR Raises $9 Million In Convertible Note Funding After Acquiring Napster

Settlement Reached in Rhapsody Napster Mechanicals Class-Action Suit

A little over a month after officially completing its $70 million acquisition of Napster, VR startup MelodyVR has generated more than $8.97 million (£6.48 million) in convertible note funding.

MelodyVR recently announced the multimillion-dollar fundraising effort, which will see Swiss corporate finance services provider Nice & Green SA front a total of 648 loan notes worth $13,848 (£10,000) apiece. Nice & Green will group the notes into 12 tranches (each worth $747,738/£540,000) “at the Company’s request,” and MelodyVR is set to receive the first of these 12 payments this month.

“No interest will be payable on the” capital, but Nice & Green will receive a five percent commitment fee on the tranches’ principal, while MelodyVR (which is preparing to formally change its name to Napster Group) will have the option of redeeming the notes in cash at a three percent premium to their nominal value.

Lastly, in terms of the convertible note funding deal’s nuances, Nice and Green will be able to convert the notes into ordinary shares of Napster stock (which will begin trading on February 26th) at “a price calculated with reference to” 93 percent “of the lowest daily VWAP [volume-weighted average price] during the 6 trading days immediately preceding” the notice of conversion.

If Napster’s stock price falls after a notice of conversion is issued but before the shares begin trading on the London Stock Exchange’s Alternative Investment Market (AIM), MelodyVR will pay in cash or equity an amount “equal to the difference [in value] multiplied by” 20 percent of “the total volume of ordinary shares traded” during this pre-admission period.

As MelodyVR mentioned upon closing the Napster buyout, it intends to create a “cross-platform, hybrid music service,” featuring music, music-related videos, livestreams, and more. The six-year-old company reiterated its ambitious plans for the new platform in the release announcing the convertible note funding, but didn’t shed light upon a specific release date; as it stands, the new Napster is expected to debut “during the course of 2021.”

In a statement, Nice & Green managing partner Benoit Villers emphasized his ambitious vision for MelodyVR’s updated Napster platform. “Following its recent acquisition of Napster, MelodyVR will pioneer the next-generation of music service and offer the first ever music entertainment platform combining immersive visual content and music streaming,” said Villers.

“Nice & Green is proud to finance and invest in such an ambitious, disruptive and ground-breaking project supported by a fantastic team,” he finished.

MelodyVR stock dipped by 1.9 percent during today’s trading hours, to $4.27 (£3.09) per share. The aforementioned Napster stock listing will generate a total of as much as $13.83 million (£10 million), meaning that investors aside from Nice & Green will be able to purchase shares from the remaining $4.84 million (£3.5 million) tranche.

3 Responses

  1. Avatar
    Johnny

    How come the people who started Napster didn’t go to jail? Sounds kinda fishy to me. They give our music away for free (without our permission) while at the same time keeping all the revenues from Advertising for themselves. This is called BREAKING THE LAW! Instead now most of them are now Millionaires. Very fair arrangement! You gotta to wonder why the AFM and other Unions seemed to go along with this new business model? And how about the Politicians who did nothing to support the creative community? VERY FISHY INDEED….

    • Avatar
      Will

      Actually, it doesn’t sound like you understand how Napster or P2P worked. Napster was a platform for enabling people. It wasn’t giving away music for free. P2P requires 4 things to work – a host (Internet service providers), a platform (Napster, Grokster, Limewire, etc.), a sharer (the person who allows their music files to be accessed) and an accessor (the person who grabs files from the sharer). In all the legal action that took place against Napster, they contended that they didn’t do anything except provide the ability for others to connect, and what those others did while connecting was out of their control.

      The real fishy thing about this article is how anyone could give $9M to a dead brand. Nobody outside 50+ year olds even remember Napster, and these aren’t the people who care about digital music, sharing, etc.

      • Avatar
        RavensT

        Lol…I have the same question my friend.. But look at GameStop !