There’s a stark warning delivered within the latest financial filing for B2B digital-music company 7digital. “The Company currently believe that it still needs to raise Additional Funds of at least £4.5 million by 31 July 2019, failing which it is highly likely that the Company would need to be placed into administration.”
This follows the investment of £1.3m in the troubled company by a consortium including Magic Investments and Shmuel Koch Holdings, with eMusic CEO Tamir Koch involved, and set to be appointed to 7digital’s board as part of the investment – announced earlier this month as a proposed debt-for-equity swap.
That announcement also warned that 7digital’s business has experienced “significant disruption” in the first half of 2019, with its board expecting revenues to be “significantly behind the equivalent period in the prior year”.
And swirling around all this are Koch’s plans for 7digital: “An arms-length commercial agreement is expected to follow later this year which would allow DIY artists to upload content via blockchain, directly to the platform for distribution to a global network of music service providers.” explained a separate press release from eMusic yesterday. This involves the company’s eMU token that would be earned and spent by fans, and also paid out to artists in royalties.
As a rescue plan for a financially-troubled company, it feels like something of a Hail Mary. The coming days should bring more developments though.