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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

2021

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to

Commission file Number —
000-02123

MILLS MUSIC TRUST

(Exact name of registrant as specified in its charter)

New York
 
13-6183792
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
incorporation or organization)
Identification No.)

C/O HSBC Bank USA, N.A. Corporate Trust Issuer Services,

452 Fifth Avenue, New York, New York 10018-2706

(Address of principal executive offices and ZIP Code)

(Registrant’s telephone number, including area
code) (212) 525-1349

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
N/A
N/A
N/A
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“non-accelerated
filer,” “smaller reporting company,” and “emerging growth company”
in Rule 12b-2 of the
Exchange Act.

Large accelerated filer ☐  Accelerated filer ☐
Non-accelerated filer ☐☒  Smaller reporting company ☒
   Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the
Exchange Act).    Yes  ☐    No  ☒

The number of the Registrant’s Trust Units outstanding as of June 30, 20202021 was 277,712.

Securities registered pursuant to Section 12(b)

Table of the Act:

Contents
TABLE OF CONTENTS

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

N/AN/AN/A

TABLE OF CONTENTS

PART I — FINANCIAL STATEMENTS

   3 

ITEM 1. FINANCIAL STATEMENTS

   3 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   6 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   9 

ITEM 4. CONTROLS AND PROCEDURES

   9 

PART II — OTHER INFORMATION

   9 

ITEM 1. LEGAL PROCEEDINGS

   9 

ITEM 1A. RISK FACTORS

   9 

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

   10 

ITEM 3. DEFAULT UPON SENIOR SECURITIES

   10 

ITEM 4. MINE SAFETY DISCLOSURES

   10 

ITEM 5. OTHER INFORMATION

   10 

ITEM 6. EXHIBITS

   10 

SIGNATURES

   11 

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PART I — FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

MILLS MUSIC TRUST

STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS

THREE AND SIX MONTHS ENDED

JUNE 30, 20202021 AND JUNE 30, 2019

2020

(UNAUDITED)

   Three Months
Ended June 30		  Six Months
Ended June 30		 
   2020  2019  2020  2019 

Undistributed Cash—Beginning of period

  $46  $65  $46  $65 

Proceeds from Contingent Portion Payments

   229,717   1,296,975(1)   488,752   1,435,466(1) 

General and Administrative Expenses

   (78,186)   (118,823)   (115,703)   (177,720) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Balance Available for Distribution

   151,577   1,178,217   373,095   1,257,811 

Cash Distributions to Unit Holders

   (151,530)   (1,178,152)   (373,048)   (1,257,746) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Undistributed Cash—End of period

  $47  $65  $47  $65 
  

 

 

  

 

 

  

 

 

  

 

 

 

Cash Distributions per Trust Unit (based on 277,712 Trust Units Outstanding)

  $0.55  $4.24  $1.34  $4.53 
  

 

 

  

 

 

  

 

 

  

 

 

 

   
Three Months
Ended June 30
  
Six Months
Ended June 30
 
   
2021
  
2020
  
2021
  
2020
 
Receipts from EMI
  $240,626  $229,717  $521,538  $488,752 
Undistributed Cash at Beginning of Period
  $51,161(1)  $46  $46  $46 
Disbursements - Administrative Expenses
   (134,242)   (78,186)   (134,242)   (115,703) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Balance Available for Distribution
   157,545   151,577   387,342   373,095 
Cash Distributions to Unit Holders
  
 
(157,499
) 
 
 
(151,530
) 
 
 
(387,296
) 
 
 
(373,048
) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Undistributed Cash at End of Period
  
$
46
 
 
$
47
 
 
$
46
 
 
$
47
 
   
 
 
  
 
 
  
 
 
  
 
 
 
Cash Distributions Per Unit (based on 277,712 Trust Units Outstanding)
  
$
0.57
 
 
$
0.55
 
 
$
1.39
 
 
$
1.34
 
   
 
 
  
 
 
  
 
 
  
 
 
 
(1)

The proceeds received

Includes amounts reserved for administrative expenses in the aggregate amount of $51,115 attributable to the three-months ended March 31, 2021 which were actually paid by the Trust for the three and six months ended June 30, 2019 include an audit settlement pursuant to which EMI agreed to pay the Trust $1,000,000. For further information see “Recent Audit Settlement Payment” under Part I — Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

on April 15, 2021.

The accompanying notes are an integral part of the unaudited financial statements.

The Trust does not prepare a balance sheet or a statement of cash flows.

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MILLS MUSIC TRUST

NOTES TO STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS

THREE AND SIX MONTHS ENDED

JUNE 30, 20202021 AND JUNE 30, 2019

2020

(UNAUDITED)

NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Background

Mills Music Trust (the “
Trust
”) was created by a Declaration of Trust, dated December 3, 1964 (the “
Declaration of Trust
”), for the purpose of acquiring from Mills Music, Inc. (“
Old Mills
”), the rights to receive payment of a deferred contingent purchase price obligation (the “
Contingent Portion
”) payable to Old Mills. The obligation to pay the Contingent Portion arose as the result of the sale by Old Mills of its music and lyric copyright catalogue (the “
Catalogue
”) to a newly formed company pursuant to an asset purchase agreement dated December 5, 1964 (the “
Asset Purchase Agreement
”). Pursuant to the Asset Purchase Agreement, payment of the Contingent Portion to the Trust continues until the end of the year in which the last copyright in the Catalogue expires and cannot be renewed.

The Contingent Portion amounts are currently payable by EMI Mills Music Inc. (“
EMI
”), the owner of the copyrighted materials contained in the Catalogue. The Trust has been advised that Sony/ATV Music Publishing LLC is the administrator and manager of EMI and the Catalogue.

HSBC Bank, USA, N.A. is the Corporate Trustee of the Trust (the “
Corporate Trustee
”), and Lee Eastman and Michael E. Reiss are the Individual Trustees of the Trust (the “
Individual Trustees
” and together with the Corporate Trustee, the “
Trustees
”).

Proceeds from Contingent Portion Payments

The Trust receives quarterly payments of the Contingent Portion from EMI and distributes the amounts it receives to the registered owners of Trust certificates (the “
Unit Holders
”) representing interests in the Trust (the “
Trust Units
”), after payment of, or withholdings in connection with, expenses and liabilities of the Trust. The Declaration of Trust provides that these are the Trust’s sole responsibilities and that the Trust is prohibited from engaging in any business activities.

Payments of the Contingent Portion to the Trust are based on royalty income which the Catalogue generates. The Trust does not own the Catalogue or any copyrights or other intellectual property rights and is not responsible for collecting royalties in connection with the Catalogue. As the current owner and administrator of the Catalogue, EMI is obligated under the Asset Purchase Agreement to use its best efforts to collect all royalties, domestic and foreign, in connection with the Catalogue and to remit a portion of its royalty income to the Trust as its Contingent Portion payment obligation, in accordance with the terms of the Asset Purchase Agreement.

Calculation of Contingent Portion
The amount of each payment of the Contingent Portion is based on a formula set forth in the Asset Purchase Agreement. For information regarding the calculation of the Contingent Portion and a related dispute between EMI and the Trust see “Contingent Portion Payments” under Part I — Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Cash Distributions to Unit Holders

The Declaration of Trust provides for the distribution to the Unit Holders of all funds the Trust receives after payment of, or withholdings in connection with, expenses and liabilities of the Trust. For information regarding cash disbursements made to Unit Holders for the three and six months ended June 30, 20202021 and June 30, 20192020 see the table headed “Statement“Statements of Cash Receipts and Disbursements” under Part I — Item 1, “Financial Statements”.

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The Copyright Catalogue

The Catalogue is estimated to be composed of over 25,000
12,000
music
titles (the “
Copyrighted Songs
”),
of which
approximately 1,600
1,430
produced
royalty income in recent years.
EMI has provided the Trust with a listing of the top 50 earning songs in the Catalogue during the 20192020 calendar year (the “
Top 50 Songs
”), together with certain copyright information with respect to each of the Top 50 Songs (the “2019
2020 Listing
”). A copy of the 20192020 Listing, as provided by EMI, is included in the Trust’s annual report on Form 10-K for the fiscal year ended December 31, 2019.2020. The 20192020 Listing does not include any information regarding Copyrighted Songs for the 20202021 calendar year.

Accounting Policies

Payments to the Trust of the Contingent Portion are typically made in March, June, September and December for the prior calendar quarter. The payments received are accounted for on a cash basis, as are expenses of the Trust. The Declaration of Trust provides for the distribution of the amounts it receives in Contingent Portion payments to the Unit Holders after payment of, or withholdings in connection with, expenses and liabilities of the Trust.

The Trust’s financial statements reflect only cash transactions and do not include transactions that would be recorded in financial statements presented on the accrual basis of accounting, as contemplated by generally accepted accounting principles in the United States. The Trust does not prepare a balance sheet or a statement of cash flows.

These unaudited financial statements should be read in conjunction with the financial statements and related notes in the Trust’s Annual Report on
Form 10-K
for the fiscal year ended December 31, 2020. The cash receipts and distributions for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
NOTE 2. INCOME TAXES

No

NaN provision for income taxes has been made since the liability thereforethereof is that of the Unit Holders and not the Trust.

NOTE 3. GOVERNANCE OF THE TRUST

The Trust does not have, nor does the Declaration of Trust provide for, officers, a board of directors or any employees. HSBC Bank, USA, N.A. is the Corporate Trustee of the Trust, and Lee Eastman and Michael E. Reiss are the Individual Trustees of the Trust. Pursuant to the Declaration of Trust, Trustees of the Trust serve until their removal, resignation, incapacity, or in the case of Individual Trustees, their death.

On December 23, 2014, the Trust adopted a code of ethics (as defined in Item 406
of Regulation S-K under the
Securities Exchange Act of 1933) applicable to the Individual Trustees and the trust officers of the Corporate Trustee. A copy of the Code of Ethics will be provided to any person without charge upon written request to the Trust at its administrative office, c/o HSBC BANK USA, N.A., Corporate Trust, Issuer Services, 452 Fifth Avenue, New York, NY. In addition, the Trust relies on the Corporate Trustee to abide by HSBC Bank, USA, N.A.’s Statement of Business Principles and Code of Ethics, which is available on the Corporate Trustee’s website at http://www.us.hsbc.com.

The Trust is not a corporate entity and thus does not have an Audit Committee. The Trust has established a policy with regard to audit, audit-related
and certain non-audit engagements of
its independent auditors. Under this policy, the Trust annually approves certain limited, specified recurring services which may be provided by the Trust’s accountant or independent auditors. All other engagements for services to be performed by the Trust’s independent auditors must
be separately pre-approved by the
Trust. Joel Faden of Schulman Lobel et al. LLP acts as Chief Financial Individual providing accounting services for the Trust.

NOTE 4. RELATED PARTY TRANSACTIONS

The Trustees are paid in accordance with the Declaration of Trust, which provides that each Trustee shall receive annual compensation of $2,500, provided that such aggregate compensation to the Trustees as a group may not
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exceed 3% of the Contingent Portion amounts received by the Trust in any year. The Declaration of Trust also provides for the reimbursement of expenses reasonably incurred in the performance of a Trustee’s duties to the Trust, including clerical and administrative services. Accordingly, the Trustees are entitled to receive annual compensation and reimbursement for services performed for the Trust, including the Corporate Trustee’s services as the Registrar and Transfer Agent of the certificates representing the Trust Units. The Declaration of Trust also provides that if a Trustee performs unusual or extraordinary services, reasonable compensation for such services shall be paid, subject to the terms and conditions of the Declaration of Trust.

Pursuant to the Declaration of Trust, disbursements were made as follows to the Trustees for the three and six months ended June 30, 20202021 and June 30, 2019:

   Three Months
Ended June 30		   Six Months
Ended June 30		 
   2020   2019   2020   2019 

Corporate Trustee Fees and Expenses

  $625   $625   $1,250   $1,250 

Individual Trustee Fees and Expenses

   1,250    1,250    2,500    2,500 

Transfer Agent and Registrar(1)

   3,750    3,750    7,500    7,500 

TOTALS

  $5,625   $5,625   $11,250   $11,250 

2020:
   
Three Months
Ended June 30
   
Six Months
Ended June 30
 
   
2021
  
2020
   
2021
   
2020
 
Corporate Trustee Fees and Expenses
  $1,250  $625   $1,250   $1,250 
Individual Trustee Fees and Expenses
   2,500   1,250    2,500    2,500 
Transfer Agent and Registrar
(1)
   7,500   3,750    7,500    7,500 
   
 
 
  
 
 
   
 
 
   
 
 
 
TOTALS
  
$
11,250
(2)
 
 
$
5,625
 
  
$
11,250
 
  
$
11,250
 
   
 
 
  
 
 
   
 
 
   
 
 
 
(1)

These services are performed by the Corporate Trustee.

(2)
Includes amounts reserved for administrative expenses in the aggregate amount of $5,625 attributable to the three-months ended March 31, 2021 which were actually paid by the Trust on April 15, 2021.
The administrative office of the Trust is located at the offices of the Corporate Trustee, HSBC Bank, USA, N.A., Corporate Trust Issuer Services, 452 Fifth Avenue, New York, New York 10018. Except for fees paid to the Corporate Trustee in accordance with the Declaration of Trust, no0 expense is being charged or paid by the Trust for the office space and office equipment of the Corporate Trustee that is being utilized for the Trust.

NOTE 5. SUBSEQUENT EVENTS

None.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Copyright Catalogue

The Catalogue is estimated to be composed of over 25,00012,000 music titles, of which approximately 1,6001,430 produced royalty income in recent years. Based on the 20192020 listing, the majority of the Trust’s receipts are derived principally from copyrights established prior to 19581960 in the Unites States. The receipts fluctuate based on consumer interest in the nostalgia appeal of older songs and the overall popularity of the songs contained in the Catalogue. The Catalogue also generates royalty income in Canada and other foreign countries in which copyright is claimed.

A number of factors create uncertainties with respect to the Catalogue’s ability to continue to generate royalty income on a continuing, long-term basis for the Trust. These factors include: (i) the effect that foreign and domestic copyright laws and any changes thereto have or will have on renewal rights (e.g., vesting of renewal term rights), (ii) the length of the term of copyright protection under foreign and domestic copyright laws, (iii) reversionary rights that may affect whether EMI is able to retain its rights to the Copyrighted Songs during certain renewal terms (e.g., statutory termination of transfers or “copyright recapture”) and (iv) ongoing disputes regarding the payment and calculation of the Contingent Portion.

The Trust does not own the Catalogue or any copyrights or other intellectual property rights and is not responsible for collecting royalties in connection with the Catalogue. As the current owner and administrator of the Catalogue, EMI is obligated under the Asset Purchase Agreement to use its best efforts to collect all royalties, domestic and foreign, in connection with the Catalogue and to remit a portion of its royalty income to the Trust in accordance with its Contingent Portion payment obligation.

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The Trust’s income is dependent, in part, on EMI’s ability to maintain its rights in the Copyrighted Songs through copyright protection. As the copyrights for the Copyrighted Songs expire, less royalty income will be generated and the size of each payment of the Contingent Portion will be reduced accordingly.

Based on the 20192020 listing, the Top 50 Songs obtained copyright registration under the United States Copyright Act of 1909 (the “
1909 Act
”) between 1922 and 1958.1960. For copyrighted works subject to the 1909 Act, copyright law

generally provides for a possible 95 years of copyright protection, subject to certain factors, including the initial registration date of each copyright and compliance with certain statutory provisions including notice and renewal. The Copyright expiration dates for the Top 50 Songs range between 19972022 and 2088,2055, as set forth in the 20192020 Listing.

The Copyrighted Songs are subject to statutory rights of termination of transfers, which may impact whether EMI is able to retain its ownership of the Copyrighted Songs during their respective terms of copyright protection. For copyrights governed by the 1909 Act, this termination right vests at the end of two different renewal terms, which vary for each Copyrighted Song. As the owner of the Catalogue, EMI (and not the Trust) is responsible for administrating the Catalogue and seeking renewals of the Copyrighted Songs. The Asset Purchase Agreement provides that EMI is obligated to use its best efforts to secure renewals.

Contingent Portion Payments

Payments of the Contingent Portion to the Trust are ordinarily made on a quarterly basis, approximately two to three months after a quarter ends. The Trust distributes the amounts it receives in Contingent Portion payments to the Unit Holders after payment of, or withholdings in connection with, expenses and liabilities of the Trust.

The amount of each payment of the Contingent Portion is based on a formula provided in the Asset Purchase Agreement. Prior to the first quarter of 2010, the Contingent Portion was calculated as an amount ranging from 65% to 75% of gross royalty income from the exploitation of the Catalogue for each quarterly period, less royalty expenses. In addition, the Contingent Portion was guaranteed to be at least a minimum of $167,500 per quarter (the “
Minimum Payment Obligation
”).

Beginning with the first quarter of 2010, the Asset Purchase Agreement provides for certain changes with respect to the calculation of the Contingent Portion. One such change is that the Minimum Payment Obligation is no longer in effect. The Trust is also of the view that the Contingent Portion payable to the Trust changed to a fixed 75% of gross royalty income from the exploitation of the Catalogue for each quarterly period, less royalty related expenses (the “
New Calculation Method
”). However, EMI has disputed that the New Calculation Method is the correct interpretation of the Asset Purchase Agreement. As a result of the New Calculation Method not being applied, EMI’s payments of the Contingent Portion have been deficient, in the Trust’s view, by the following amounts (the “
Underpayments
”):

Quarterly Payment Period

  Amount of
Deficiency		 

March 31, 2016

  $79,889 

September 30, 2016

  $37,529 

March 31, 2017

  $85,359 

September 30, 2017

  $41,557 

March 31, 2018

  $98,901 

September 30, 2018

  $75,712 

March 31, 2019

  $71,489 

June 30, 2019

  $41,786 

September 30, 2019

  $68,571 

December 31, 2019

  $42,572 

March 31, 2020

  $40,025 
  

 

 

 

Total

  $683,390 

Quarterly Payment Period
  
Amount of
Deficiency
 
March 31, 2016
  $79,889 
September 30, 2016
   37,529 
March 31, 2017
   85,359 
September 30, 2017
   41,557 
March 31, 2018
   98,901 
September 30, 2018
   75,712 
March 31, 2019
   71,489 
June 30, 2019
   41,786 
September 30, 2019
   68,571 
December 31, 2019
   42,572 
March 31, 2020
   40,025 
June 30, 2020
   15,557 
September 30, 2020
   40,085 
March 31, 2021
   42,742 
June 30, 2021
   43,148 
   
 
 
 
Total
  
$
824,922
 
   
 
 
 
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As of the date hereof, the Trust has not received the Underpayments.Underpayments, and EMI has expressly disagreed with the Trust. The Trust can offer no assurance that it will be able to recover any of the Underpayments or that it will resolve favorably the
on-going
dispute relating to the New Calculation Method with respect to future payments of the Contingent Portion.

Recent Audit Settlement Payment

In January 2016, the Trustees

The Trust has engaged Prager Metis CPAs, LLC (“Prager”),Citrin Cooperman & Company LLP, an accounting firm specializing in auditing royalty income, to conduct a special audit of the books and records of EMI administered by Sony/ATV to resolve the ongoing dispute and also determine if payments of the Contingent Portion by EMIwhether there have been properly made in accordance withany other material royalty omissions or expense over-deductions for the Asset

Purchase Agreement during the periodperiods beginning on OctoberJanuary 1, 20112016 and ending onended December 31, 2015 (the “Audit Period”). Prager’s final report (the “Prager Report”) was delivered to Sony/ATV on August 14, 2017. The audit cost the Trust an aggregate of $130,284, all of which has been paid to date. The Prager Report identified multiple asserted royalty omissions and expense over-deductions from the Contingent Portion during the Audit Period.

As of April 23, 2019, EMI, the Trust and the Trustees entered into an audit settlement agreement pursuant to which EMI agreed to pay the Trust $1,000,000 in full and final settlement (the “Settlement”) of (i) all Trust claims related to the underpayments identified by the Prager Report and (ii) that portion of the Underpayments attributable to the Audit Period. The Settlement does not cover any claims for any periods of time after expiration of the Audit Period, nor does it adjust the parties’ entitlements arising from the consequences of any future writer royalty underpayment audits relating to the Audit Period.

2020.

Recent Contingent Portion Payment

On May 29, 2020,28, 2021, the Trust received $229,717$240,626 ($0.8270.8664 per Trust Unit) from EMI for royalty income generated by the Catalog during the first quarter of 2020,2021, as compared to $296,975$229,717 ($1.06930.8272 per Trust Unit) for the payment attributable to the first quarter of 2019.

2020.

Recent Distributions to Unit Holders

On June 22, 2020,23, 2021, the Trust made a distribution of $151,530$157,499 ($0.54570.5671 per Trust Unit) to the Trust’s Unit Holders of record at the close of business on June 21, 2019.22, 2021. For computation details regarding the distribution please refer to the quarterly distribution report, dated June 22, 2019,23, 2021, attached as Exhibit 99.1 to the Current Report on
Form 8-K,
filed by the Trust with the Securities and Exchange Commission on June 26, 2019.

July 1, 2021.

Cash and Administrative Expenses

As of August 1, 2020,July 19, 2021, the Trust was holding $47$46 in cash and had received invoices for an aggregate of $18,843$59,905 in unpaid administrative expenses for services rendered to the Trust.

Inflation

The Trust does not believe that inflation has materially affected its activities.

Liquidity and Capital Resources

The Declaration of Trust provides for the distribution to the Unit Holders of all funds the Trust receives after payment of, or withholdings in connection with, expenses and liabilities of the Trust.

See the table headed “Statement“Statements of Cash Receipts and Disbursements” under Part 1 — Item 1, “Financial Statements” for information regarding cash disbursements made to Unit Holders during the three and six months ended June 30, 20202021 and June 30, 2019.

2020.

Off-Balance Sheet Arrangements

There
are no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on the Trust’s financial condition, changes in financial condition, revenues or expenses, results of operations or liquidity that is material to investors.

Impact of COVID-19

In late 2019, an outbreak of a novel coronavirus (“
COVID-19
”) emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Across the United States and the world, governments and municipalities instituted measures in an effort to control the spread of
COVID-19,
includingquarantines,
shelter-in-place
orders, school closings, travel restrictions and the closure of
non-essential
businesses. By the end of March, the macroeconomic impacts became significant, exhibited by, among other things, a rise in unemployment and

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market volatility. The
trajectory of COVID-19 remains highly
uncertain and it is plausible that the Trust’s business and results of operations may be directly and negatively impacted. As a result, the Trust’s past results may not be indicative of its future performance and historical trends in proceeds from Contingent Portion Payments and cash distributions to Unit Holders, among others, may differ materially.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

As of the end of the period covered by this quarterly report, the Trust carried out an evaluation of the effectiveness of the design and operation of the Trust’s “disclosure controls and procedures” (as defined in
Rules 13a-15(e)
and
15d-15(e)
of the Securities Exchange Act)Act of 1934, as amended (the “
Exchange Act
”)) under the supervision and with the participation of the Trust’s management, including the chief financial individualChief Financial Individual providing accounting services and the trust officers of the Corporate Trustee. Based on that evaluation, the chief financial individualChief Financial Individual providing accounting services and the trust officer of the Corporate Trustee concluded that the Trust’s disclosure controls and procedures are effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Trust’s reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Trust’s reports filed under the Exchange Act is accumulated and communicated to Trust’s management, including the chief financial individualChief Financial Individual providing accounting services and the trust officer of the Corporate Trustee, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Trust’s internal control over financial reporting (as such term in defined
in Rule 13a-15(f) under the
Exchange Act) during the fiscal period covered by this quarterly report that materially affected, or are reasonably likely to materially affect, the Trust’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 1A.

RISK FACTORS

General Risks

The continuing
impacts of COVID-19 are highly
unpredictable and could be significant, and may have an adverse effect on the Trust’s business, operations and future financial performance.

In late
2019, COVID-19
emerged and by March 11, 2020 was declared a global pandemic by The World Health Organization. Across the United States and the world, governments and municipalities instituted measures in an effort to control the spread of
COVID-19,
including quarantines,
shelter-in-place
orders, school closings, travel restrictions and the closure
of non-essential businesses.
By the end of March, the macroeconomic impacts became significant, exhibited by, among other things, a rise in unemployment and market volatility. The trajectory
of COVID-19
remains highly uncertain and it is plausible that the Trust’s business and results of operations may be directly and negatively impacted. As a result, the Trust’s past results may not be indicative of its future performance and historical trends in proceeds from Contingent Portion Payments and cash distributions to Unit Holders, among others, may differ materially.

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ITEM 2.

UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.

DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

Exhibit

    No.    

  

Description

31.1  Certification by the Chief Financial Individual providing accounting services pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2  Certification by the trust officer of the Corporate Trustee pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1*  Certification by the Chief Financial Individual providing accounting services pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2*  Certification by the trust officer for the Corporate Trustee Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.1NS  XBRL Instance Document
101.SCH  XBRL Schema Document
101.CAL  XBRL Calculation Linkbase Documents
101.DEF  XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  XBRL Labels Linkbase Documents
101.PRE  XBRL Presentation Linkbase Documents
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*

Furnished, not filed

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 14, 202016, 2021  

Mills Music Trust

(Registrant)

  By: 

/s/ Garfield Barrett

   Garfield Barrett
   

Trust Officer of the Corporate Trustee

HSBC Bank USA, NA

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