Jaxsta Ltd (ASX: JXT), a music technology company from the information technology sector announced that it had signed a digital product agreement (DPA) with the Universal Music Group (UMG) for granting license and authorization to use the data of UMG across the world. Against the license and license and authorization, the company will be compensating UMG through an ongoing license fee.
As per the agreement, Jaxsta would be able to gain access to relevant music data from the Universal Music Group for ingestion to Jaxsta Platform. Through the data partners of Jaxsta, the Jaxsta Platform will be provided with official authoritative data sources as opposed to crowd sourced information. Thus, it improvises the accuracy of the data that is used in the Jaxsta Platform. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
Apart from the digital product agreement with the Universal Music Group, in the past 18 months, Jaxsta has entered into twenty-six licensing data agreements. It also included The Recording Academy and Sony Music Entertainment.
The announcement also stated that Jaxsta’s product schedule is on track with the Jaxsta.com. In the first half of CY2019, the company is going to launch the Beta site. Also, the commercial API is scheduled during the last quarter of CY2019.
The initial term of the digital product agreement is for two years. After the completion of one year, UMG holds the right to terminate the deal with a provision where it will provide a 30 days’ notice to JXT.
In relation to the digital product agreement, the company would be issuing 2,852,420 warrants to UMG to subscribe for one new ordinary share in Jaxsta. The exercise price of these warrants will be $0.01 per warrant and is exercisable in multiple tranches for seven years based on certain vesting conditions.
On 26 February 2019, the company published its half-yearly results for the period ended 31 December 2018. During the period, Jaxsta Limited incurred a loss of A$15.628 million, which was down by 1617% as compared to the previous corresponding period. The loss during the period included the listing expenses. In October 2018, the company successfully completed an initial public offering and raised a fund worth $5.269 million through reverse-takeover of Mobilarm Limited (ASX: MBO). The company got re-listed on the official list of ASX on 28 December 2018.
During the period, Jaxsta Limited continued to progress towards the soft launch for Jaxsta Beta. It also conducted Jaxsta Beta’s preview with record labels, performance rights organizations, publishers, awards as well as charting association. There were also discussions with the global music labels as well as the record companies regarding the commercial data access arrangements along with the metadata and the artwork agreements.
Since its inception, the stock has given a return of 20.14%. However, in the last six months, the stock has generated a negative return of 36.84%. After the announcement that the company has signed a digital product agreement with Universal Music Group, the shares of JXT zoomed up by 50%. At present, the shares of JXT is trading at A$0.180 (Closing price as on 12 March 2019). The company has a market capitalization of A$26.17 million with approximately 218.11 million outstanding shares.
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