The nature of the financial demands for delivering 24/7 Broadcast service, mean that in order for the Network to launch services, funding as set out within the financial requirements of of one of the three proposed Budget Tiers must be achieved as a minimum, in order that services resemble the corporate vision described within this proposal. Investment of at least 25% (up to 75% of the US subsidiary) is sought from the US in order to satisfy FCC licensing requirements.

In the case of utilising an IPO or ICO as the funding mechanism, initial investment to back formation of the Network and cover initial costs of either of those processes is the lowest conceivable investment to move forward, and is expected to account for up to £26m of requirements. The most likely results of lower funding levels would be: Insufficient capital to maintain long-term service; the removal of 24/7 broadcasting capability in any form; deterioration of Production standards and audience perception of the quality of service.

Venture Capital

Venture Capital Investment to establish the Network and initiate Broadcast as defined in this proposal is seen as the most likely path to the launch of services. This may be achieved via a single source or Group of private or institutional investors. Depending on how this may be achieved with or without introduction fees will effect the total funds required to establish the Network.

IPO (Initial Public Offering)

An Initial Public offering based on the development of the Network’s Intellectual Property is conceivable. Though, it would require suitable investment to establish the company to the satisfaction of investors and regulatory reporting requirements for a listing on a respected stock-exchange. An IPO is viewed by the management as most likely to offer an exit strategy for Institutional Investment.

Crowdfunding

Crowdfunding is not seen as a feasible method to raise full-funding capital levels, or to initiate Broadcast. However, it could conceivably raise the Capital to pay for up-front costs or all costs in respect of an IPO or ICO (initial Coin Offering). Crowdfunding may also provide funding for further proof of concept, intermittent, once weekly, or monthly OTT service. At present the highest stand-alone crowdfunding is in the region of US$20m.

FAANG Stocks

Consideration has been given in preparation of Budgets and Accounts to the option for the project to be adopted and funded within a major Technology Corporation, to bring News delivery in-house as part of the ongoing development of their platform’s content delivery strategy. The proposal may be delivered as is or tailored to the requirements of the parent company.

ICO (Initial Coin Offering)

ICO’s are a relatively new concept, and the issuance of a Digital Currency greatly interests the Network. The Management emphasise the need for complete transparency, legitimacy, and the involvement of respected brokers acting from a recognised financial hub.

Given the need to obtain licences from the FCC, an ICO would have to meet all US regulatory requirements, and would most likely be considered a security by default. Consideration of UK, EU and Singaporean criteria and potential future regulations would also need to be met.

Digital Coins may be issued purely as a security, or as a mechanism to pay for the Network’s own content upon its platforms. The management has already had some discussions on this matter and has been offered a white-paper on the subject if it wishes to proceed.

Fees in Respect of Funding

For the 2018/19 Proposal, it has been decided to re-introduce Accounts based on the potential for the Network to incur Fees in respect of achieving full funding of the various Budget Tiers. It is envisioned that these fees may be incurred in the pursuit of Venture Capital; an ICO (Initial Coin Offering); or IPO (Initial Public Offering). These have been calculated based on 12% of total allocation (those expected as the result of an IPO). Consolidated Management Accounts are supplied for each Budget Tier to demonstrate the difference to requirements should such fees not be incurred, and full accounts for such options are available by arrangement. This option has also been prepared with inclusion of considerations for Equipment Leasing. The allocation for fees is made to Exceptional Items in Year 1.

Exit Strategy

A number of exit strategies are possible depending on how the Network is funded at launch:

  1. Crowd-funding may be paid in full following further funding rounds, an ICO or IPO.
  1. Venture Capital – Exit can be achieved via a further funding round, IPO or Direct sale. M&A interest and activity has always been strong in Media & Entertainment, and numerous options to sell the Network to a larger organisation exist. Media plurality would however, be a regulatory issue.
  2. IPO – Following successful establishment of services via an IPO, sale of shareholdings, additional issue of shares, or a corporate buyback of shares are all possibilities, and the Network is projected to have considerable cash at hand by Yr 5 after projected dividend payments.
  3. ICO – Exit from an ICO does depend on whether large blocks of crypto currency are held by institutional investors or whether the currency is subscribed to and traded by service-users. An IPO of the company at a later date is not precluded by the issue of a crypto-currency to achieve funding; and it is possible to convert the crypto currency into shares at a later date; or maintain the currency in tandem with a share issue. & Exit Strategy