2020 CEO Update - Q1 Dividend
"Your Music Pension Plan"
We have paid out 4 quarterly dividends totalling over C$400,000 and passed the 2nd Anniversary of our first acquisition of a producer’s interest in The Nights by Avicii in March 2018 for US$145,000 for which we have collected US$37,641 in 9 quarterly payments from www.bmi.com. Annualized the average yield is 12% for Avicii, although interestingly, the January and March payments totalled US$9,359 in 2020 vs US$6,733 in 2019. In Canadian dollars at the US$.70 rate, this represents C$24,000 per year to MRI and about 5% of the annual dividend. If this declines to an average C$15,000 per year for the next 70 years this will generate over C$1 million. We closed our largest Acquisitions to date #19, 20 and 21 in late December for a total of US$1.35 million for writer or producer interests in the songs of the Rolling Stones, The Who and the Kinks with 6 other bands. In February 2020, we completed Acquisitions #22 and #23 for US$81,000 and an estimated annual cash flow of US$12,000 at roughly 7x trailing average cash flow for a 14% yield. Songs written or co-written by Ron Altbach and recorded by King Harvest, Celebration and the Beach Boys including Lady Lynda, a UK favourite and Alone on Christmas Day. In February 2020, on the Royalty Exchange’s secondary market platform, we sold the Karadashian TV music catalog which we acquired for US$24,550 in July 2018 for US$27,255, an 11% capital gain of US$2,705 plus income of $10,010 for a total of US$12,715 or a 52% total return. Please encourage your friends and your family to download and listen to our playlist on Spotify with all the top songs we have a financial interest in: https://open.spotify.com/playlist/4cAyFuGMA3AHG0sCro8RaI?si=xEORG5siTG6ZyKEKBs_82g Our 2020 goal is to increase the dividend, which is dependent on raising funds to acquire more catalogs but investors are likely to do nothing until the current storm passes. However, all our revenues are in US dollars so the roughly 10% decline in the Canadian dollar and the decline in bond yields has both increased our income and conceptual valuation. Since MRI dividends are long term bond-like payments then our valuation perspective is that we should be valued like a “Perpetual Bond” so if we pay out $500,000 per year when the 10 year bond rate is 2% then MRI is worth $25 million, if rates decrease to 1% then MRI is worth $50 million and if rates decrease to 0.5% MRI is worth $100 million. For the foreseeable future, we are in a deflationary low interest rate world, due to aging demographics, obscene debt levels and the current Covid19 recession, so all higher yield cash flows are valuable ‘pension plans’ and we need to acquire as many as we can. We have 22 income streams generating $500-600,000. To date we have received 100 wires or cheques from The Royalty Exchange, ASCAP, BMI and Darby Music. In a zero interest real yield world, we are simply revaluing long term cash flow distribution to create capital gains in the public market while the music industry is in growth mode over the next decade due to global growth in streaming and paid monthly subscriptions. MRI is a long term investment and we hope that all shareholders will help us continue to grow the dividend and the share price by finding and funding new deals through active sharing of our story and incremental investment through their family, friends and other investor introductions. Take care of yourself and your family during this unprecedented time of uncertainty.