• Music Royalties Inc.

2020 CEO Update - Q2 Dividend

Your Music Streaming Pension is Up 20% "FAANG Spotify Pennies from All Over the World"

Despite the global pandemic and corresponding economic lockdown and perhaps because of it people are streaming more than ever so MRI has increased its quarterly dividend by 20% and has now surpassed $500,000 in cumulative dividend payments to shareholders. Of course, Live Music has been shut down and there is a multi-month lag in the payments we receive but our ongoing acquisitions have increased 1H 2020 revenues by 55% to $271,000 vs $175,000 in 1H 2019. Due to the lag in payments from BMG and Universal, we have yet to receive any income from our largest acquisitions to date which closed in December 2019 for interests in songs of the Rolling Stones, The Who, The Kinks and 6 other bands. If this expected income is included, then 2020 YTD revenues have increased almost 100% over the corresponding period in 2019. Our next goal is to crack the $1 million dividend distribution level to drive a $50-100 million valuation level at 1-2% interest or discount rates. MRI endeavours to satisfy the relatively simple investment criteria of most investors – combine Capital Preservation with a Dividend Aristocrat backed by a Growing Economic Moat. We believe this is best achieved through the Royalty Model (the highest margin business) in a Perpetual Roll-Up (for long term growth) backed by Globally Diversified Life of Author plus 70 year Copyright Protection or Contracts generated from the new online or virtual economy – the FAANG stocks. Taking this investment rationale beyond the typical realm of localized real estate, stocks and bonds, MRI is a non-sovereign, non-cyclical, non-correlated global digital FAANG stock currency. We are simply creating a portfolio of hit songs from the soundtrack of our lives from a fragmented market (over 1 million rights holders) like an income producing real estate portfolio but in a growing market. MRI intends to use the public company royalty model to revalue the redistribution of these passive music streaming cash flows(generated from YouTube views, Spotify plays, iTunes spins) paid by the FAANG stocks, Pandora/Sirius Satellite and traditional radio stations (Bell, Corus) to the 120 global non-profit Performing Rights Organizations("PROs")(ASCAP, BMI, PRS, SOCAN) and the record/music publishing companies(BMG, Sony/ATV, Universal, Warner). These entities in turn pay the royalties to the artists, band members, songwriters, managers, producers, etc or their families, children, estates, ex-spouses or assignees such as Music Royalties Inc. if they sell their interest. Mick and Keith turn 77 this year, Paul McCartney just turned 78 and Ringo turns 80 in July – what will happen to their royalties? Warner Music recently went public at $25 per share and has since traded up to $33 for a 32% increase, which raises the profile of the music industry and streaming in particular. A Russian billionaire acquired Warner in 2011 for $3.3 billion and it's now valued at about $17 billion: Warner, whose biggest artists include Ed Sheeran, Bruno Mars and Cardi B, posted an adjusted EBITDA of $755m for the year ended March 31, 2020 - a 22x cash flow multiple. https://www.musicbusinessworldwide.com/is-len-blavatnik-about-to-complete-the-shrewdest-deal-in-the-history-of-the-record-business/ https://www.musicbusinessworldwide.com/warner-music-group-started-today-with-a-12-8bn-valuation-its-now-worth-over-2bn-more/ To stay in touch with industry news, we suggest you sign up for emails or review Music Business Worldwide, Billboard and Variety. Also, review the auction deals on the Royalty Exchange website: https://auctions.royaltyexchange.com/auctions_overview/?origin=listings&state=closed https://variety.com/2020/music/news/warner-music-group-ipo-valuation-analysts-1234624168/ https://www.musicbusinessworldwide.com/hipgnosis-with-a-catalog-worth-nearly-1bn-is-becoming-less-reliant-on-songs-from-the-past-decade/ https://www.billboard.com/articles/business/9396287/warner-music-ipo-reasons-why-matters-doesnt-impact-influence-wmg Please encourage your friends and your family to download and listen to our playlist on Spotify with all the top songs (see Spotify streaming stats below) we have a financial interest in: https://open.spotify.com/playlist/4cAyFuGMA3AHG0sCro8RaI?si=xEORG5siTG6ZyKEKBs_82g 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. Our goal is to allow monthly listeners or fans of artists in which we have a financial interest through a manager, producer, sound recording, writer, etc to be investors and ‘owners’ in a diversified portfolio of their favourite music through a public company, during this period of unprecedented growth in streaming and paid monthly subscriptions – A Partnership of Artists and Fan Investors.

Below is only 25 songs of our +1500 song portfolio with their total number of Spotify plays.

Assuming an average payout per stream of $.00437 these songs have generated US$35 million!


Contact

Tel: (416) 987 0298

Address: 55 University Ave, Suite 1805

Toronto, Ontario M5J 2H7

tim@musicroyaltiesinc.com

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