REGISTERED NUMBER: 06712061 (England and Wales)

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

FOR

PLEDGEMUSIC.COM LTD

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

B Rogers

R Rieger

J Sason

N Ledbetter

REGISTERED OFFICE:

22 Endell Street

London

WC2H 9AD

REGISTERED NUMBER:

06712061 (England and Wales)

AUDITORS:

Oury Clark Chartered Accountants

Statutory Auditors

Herschel House

58 Herschel Street

Slough

Berkshire

SL1 1PG

FIXED ASSETS

Intangible assets

4

37,770

42,060

Tangible assets

5

604,370

335,088

Investments

6

20,900

20,900

663,040

398,048

CURRENT ASSETS

Debtors

7

241,811

203,238

Cash at bank

202,450

1,232,329

444,261

1,435,567

CREDITORS

Amounts falling due within one year

8

6,352,341

5,712,051

NET CURRENT LIABILITIES

(5,908,080

)

(4,276,484

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(5,245,040

)

(3,878,436

)

CREDITORS

Amounts falling due after more than one year

9

405,000

-

NET LIABILITIES

(5,650,040

)

(3,878,436

)

CAPITAL AND RESERVES

Called up share capital

11

15,007

5,605

Share premium

10,343,930

8,446,765

Retained earnings

(16,008,977

)

(12,330,806

)

SHAREHOLDERS' FUNDS

(5,650,040

)

(3,878,436

)

The financial statements have been prepared and delivered in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors on 16 November 2017 and were signed on its behalf by:

R Rieger - Director

1.	STATUTORY INFORMATION

Pledgemusic.com Ltd is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on the going concern basis despite the losses incurred in the

company so far. The company has a signed agreement that allows it to draw upon an additional £1 million of

lending for working capital purposes. The directors believe that this additional financing, in conjunction with

several cost cutting measures that are being implemented in the company and increased revenues will be

sufficient for the company to continue as a going concern for a period of at least 12 months and 1 day from the

approval of these financial statements.

Preparation of consolidated financial statements

The financial statements contain information about Pledgemusic.com Ltd as an individual company and do not

contain consolidated financial information as the parent of a group. The company has taken the option under

Section 398 of the Companies Act 2006 not to prepare consolidated financial statements.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Revenue recognition

Turnover represents commission net of value added tax due to the company once pledges are fully funded

according to the terms and conditions of the business.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less

any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Plant and machinery etc

-

Between 5 and 20 years

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off against the profits in the year in which it is incurred.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance

sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date

of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Financial instruments

Basic Financial Instruments as covered by Section 11 of FRS102 are measured at amortised cost. The company

does not have any Other Financial Instruments as covered by Section 12 of FRS102.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 13 .

4.	INTANGIBLE FIXED ASSETS

Other

intangible

assets

£

COST

At 1 January 2016

48,925

Additions

1,305

At 31 December 2016

50,230

AMORTISATION

At 1 January 2016

6,865

Charge for year

5,595

At 31 December 2016

12,460

NET BOOK VALUE

At 31 December 2016

37,770

At 31 December 2015

42,060

5.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1 January 2016

431,253

Additions

497,915

At 31 December 2016

929,168

DEPRECIATION

At 1 January 2016

96,165

Charge for year

228,633

At 31 December 2016

324,798

NET BOOK VALUE

At 31 December 2016

604,370

At 31 December 2015

335,088

6.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2016

and 31 December 2016

20,900

NET BOOK VALUE

At 31 December 2016

20,900

At 31 December 2015

20,900

The company's investments at the Balance Sheet date in the share capital of companies include the following:

Pledgemusic Publishing Ltd

Registered office: 22 Endell Street, London, WC2H 9AD

Nature of business: Publishing company

%

Class of shares:

holding

Ordinary

90.00

31.12.16

31.12.15

£

£

Aggregate capital and reserves

(1,870

)

(3,692

)

Profit for the year

1,823

57,244

Pledgemusic Retail Ltd

Registered office: 22 Endell Street, London, WC2H 9AD

Nature of business: Retail company

%

Class of shares:

holding

Ordinary

100.00

31.12.16

31.12.15

£

£

Aggregate capital and reserves

(2,272

)

254

(Loss)/profit for the year

(2,526

)

4,108

Pledgemusic Recordings Ltd

Registered office: 22 Endell Street, London, WC2H 9AD

Nature of business: Recording company

%

Class of shares:

holding

Ordinary

95.00

31.12.16

31.12.15

£

£

Aggregate capital and reserves

5,453

7,592

(Loss)/profit for the year

(2,139

)

51,999

Pledgemusic.com USA, Inc.

Registered office: 265 Canal street, New York, USA

Nature of business: Music company

%

Class of shares:

holding

Ordinary

100.00

31.12.16

31.12.15

£

£

Aggregate capital and reserves

356,573

186,592

Profit for the year

169,981

90,955

Pledgemusic.com GmbH

Registered office: Grünberger Str. 1 10243, Berlin, Germany

Nature of business: Music company

%

Class of shares:

holding

Ordinary

100.00

31.12.16

31.12.15

£

£

Aggregate capital and reserves

106,032

104,574

Profit for the year

1,457

3,263

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.16

31.12.15

£

£

Amounts owed by group undertakings

5,236

-

Other debtors

236,575

203,238

241,811

203,238

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.16

31.12.15

£

£

Trade creditors

305,717

59,951

Amounts owed to group undertakings

286,900

332,710

Taxation and social security

28,098

16,039

Other creditors & accruals

5,731,626

5,303,351

6,352,341

5,712,051

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.16

31.12.15

£

£

Other creditors

405,000

-

10.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

31.12.16

31.12.15

£

£

Within one year

31,500

31,500

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.16

31.12.15

value:

£

£

1,500,677

Ordinary A1, A2 and B1

£0.01

15,007

5,605

940,106 Ordinary A1, A2 and B1 shares of £0.01 each were allotted as fully paid during the year.

The company issued 283,736 £0.01 B1 shares at a premium of £5.26.

12.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 16 of the financial statements. This note describes that

the financial statements have been prepared on the going concern basis as, despite continuing losses, the company

has put in place cost cutting measures and has access to additional funding if needed.

However, the current balance sheet position indicates the existence of material uncertainty which may cast

significant doubt about the Company's ability to continue as a going concern.

Emma Crowley (Senior Statutory Auditor)

for and on behalf of Oury Clark Chartered Accountants

We would like to draw your attention to the following statement contained within our audit report as included

within the full financial statements:-

"This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed."

13.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to a director subsisted during the years ended 31 December 2016 and

31 December 2015:

31.12.16

31.12.15

£

£

B Rogers

Balance outstanding at start of year

5,301

5,301

Amounts repaid

-

-

Amounts written off

-

-

Amounts waived

-

-

Balance outstanding at end of year

5,301

5,301

14.	RELATED PARTY DISCLOSURES

The company has taken advantage of the exemptions available not to disclose transactions with wholly owned

subsidiaries. Other related party transactions with non-wholly owned subsidiaries are as follows:

Pledgemusic Publishing Ltd (a 90% subsidiary of the company) - During the year, Pledgemusic.com Ltd incurred

expenses on behalf of Pledgemusic Publishing Ltd to the value of £1,963 (2015: £Nil).

There was a debtor balance of £1,963 outstanding as at 31 December 2016 (2015: £Nil).

Pledgemusic Recordings Ltd (a 95% subsidiary of the company) - During the year, Pledgemusic.com Ltd incurred

expenses on behalf of Pledgemusic Recordings Ltd to the value of £1,450 (2015: £Nil).

There was a debtor balance of £1,450 outstanding as at 31 December 2016 (2015: £Nil).

15.	ULTIMATE CONTROLLING PARTY

In the opinion of the directors, there is no ultimate controlling party.

16.	UNCERTAINTY OVER GOING CONCERN AND POST BALANCE SHEET EVENTS

The directors recognise that the company has continued to make losses in the current financial year and also since

the balance sheet date. However, the company has a signed agreement that allows it to draw upon an additional

£1 million of lending for working capital purposes. The directors believe that this additional financing, in

conjunction with several cost cutting measures that are being implemented within the company and increased

revenues, will be sufficient for the company to continue as a going concern for a period of at least 12 months and

1 day from the approval of these financial statements.

17.	FIRST YEAR ADOPTION

The company adopted FRS102 for the accounting year ended 31 December 2016. There were no adjustments

arising at the transition date or at the end of the comparative period, therefore there is no difference between

equity under the previous financial reporting framework and equity under FRS102.