Royalties acquires 1.05 million Music Royalties shares

Executive Summary

• Royalties Inc. has acquired an additional 1.05 million common shares of Music Royalties Inc. (MRI) for $525,000, bringing its total holding to 5.05 million shares.
• The transaction was structured as a share-for-share exchange, with Royalties Inc. issuing 8,750,000 of its own shares to two private investors to acquire the MRI shares.
• The acquisition increases Royalties Inc.'s annual dividend income from MRI to $181,800, which the company states will fully cover its corporate overhead costs when combined with other royalty income.

Key Details

• Transaction Structure: Acquisition of 1.05 million MRI common shares for a total value of $525,000.
• Consideration: Issuance of 8,750,000 shares of Royalties Inc. to two private investors.
• Price per Share: 50 cents per MRI share.
• Total Holdings: Royalties Inc. now holds 5.05 million shares in MRI, with a total cost basis of $2,525,000.
• Financial Impact: The new holding generates $181,800 in annual dividend income.
• MRI Profile: Toronto-based private company acquiring passive music royalties from iconic songs; holds a portfolio of 31 cash-flowing music royalties.
• MRI Dividend History: Pays a monthly dividend with a 7.2% annual yield; has paid out over $12 million in 67 dividend payments since 2019.
• Securities Restriction: All securities issued in this transaction carry a hold period legend of four months and one day from the date of issuance.
• Company Background (Royalties Inc.): Owns 100% interest (subject to 1.5% NSR) in the Bilbao silver-zinc-lead project in Mexico; owns 88% of Minera Portree de Zacatecas S.A. de C.V. (MPZ), which holds a legal dispute over a 2% NSR royalty on the Portree claims against Capstone Copper Corp.

Notable Quotes

• "The company will now hold 5.05 million shares in MRI at a cost of $2,525,000, generating $181,800 in annual dividend income, which, combined with the income from the company's other royalties, will fully cover corporate overhead costs."