Mills Music Trust

What they do

The Trust was created by a Declaration of Trust dated December 3, 1964 to acquire a deferred contingent purchase price obligation (the Contingent Portion) from Mills Music, Inc. following the sale of its music and lyric copyright catalogue. The Trust does not own the catalogue or any copyrights and is prohibited from engaging in any business activities beyond receiving and distributing Contingent Portion payments. EMI Mills Music Inc. owns and administers the catalogue, with Sony/ATV Music Publishing LLC acting as administrator and manager, and pays the Contingent Portion to the Trust quarterly.

Revenue drivers

• Contingent Portion payments on the catalogue — The Trust's sole receipt is a quarterly Contingent Portion from EMI based on royalty income the catalogue generates, calculated under a formula in the Asset Purchase Agreement.
• U.S. royalty income from pre-1954 copyrights — Based on the Listing, the Trust derives its receipts principally from copyrights established in or prior to 1954 in the United States, with most royalty income produced by a relatively small number of songs.
• Foreign royalty income — The catalogue also generates royalty income in foreign countries in which copyright is claimed.

Recent performance

The Trust's receipts depend on Contingent Portion payments from EMI, which the Trust believes have been deficient under the New Calculation Method. As of December 31, 2025, the Trust identified Calculation Method Underpayments of $69,244 for the quarter ended March 31, 2025 and $78,498 for the quarter ended September 30, 2025, totaling $147,742. The 10-Q for the period ended March 31, 2026 updated the total Calculation Method Underpayments to $346,363, adding $123,398 for the quarter ended March 31, 2026 and $75,223 for the quarter ended June 30, 2026. The Trust has not received any amounts in respect of these underpayments, and EMI has expressly disagreed with the Trust.

Strategy

The Trust has no operating strategy and is prohibited from engaging in any business activities; its sole responsibilities are receiving Contingent Portion payments and distributing available funds to Unit Holders after expenses and liabilities. The Trust's principal active effort is pursuing its interpretation of the post-2010 calculation formula, which it says should be a fixed 75% of gross royalty income less royalty-related expenses, against EMI's disagreement. The Trust relies entirely on EMI to use its best efforts to collect royalties, administer the catalogue and secure copyright renewals under the Asset Purchase Agreement.

Risks

• Calculation Method Dispute — EMI disputes the Trust's New Calculation Method, the Minimum Payment Obligation no longer applies, and the Trust has not received any of the $346,363 in Calculation Method Underpayments it claims as of the latest 10-Q.
• Copyright expiration — As the copyrights for the Copyrighted Songs expire — with known expiration dates for the Top 50 Songs ranging from 2021 to 2049 — less royalty income will be generated and each Contingent Portion payment will be reduced.
• Termination and reversion rights — The Copyrighted Songs are subject to statutory rights of termination of transfers, which may affect whether EMI retains ownership during renewal terms, and EMI, not the Trust, controls renewals.
• Concentration in older songs — Most royalty income comes from a small number of Copyrighted Songs with copyrights established in or prior to 1954, making receipts dependent on the nostalgia appeal and continued popularity of those titles.

Outlook

The Trust states that a number of factors create uncertainties about the catalogue's ability to generate royalty income on a continuing, long-term basis, including copyright law changes, terms of protection, reversionary rights and the ongoing Calculation Method Dispute. The Trust can offer no assurance that it will be able to recover the Calculation Method Underpayments, and it has not received any amounts in respect of them. Because copyrights expire over time, the Trust expects generally that less royalty income will be generated and Contingent Portion payments will be reduced accordingly.