TORONTO, March 24, 2023 /CNW/ - Standard Mercantile Acquisition Corp. (TSX: SMA) (the "Company") today released its financial results for the three months and year ended December 31, 2022. The audited financial statements and annual MD&A of the Company can be found at www.sedar.com or www.standardmercantileacquisition.com.
Financial Highlights & Business Update
For the three months and year ended December 31, 2022, income from operations decreased by $65 thousand and $35 thousand compared to the same periods in 2022. For the three months and year ended December 31, 2022, the decrease was primarily the result of lower interest revenue of $9 thousand and $183 thousand, higher administration costs of $90 and $19 thousand offset by lower share compensation expenses of $34 and $167 thousand as compared to the same periods in 2021. Additionally, there was a fair value adjustment on investments in mortgages in the year ended December 31, 2022. The Company recorded a fair value gain adjustment of $230 thousand resulting in an accumulated fair value adjustment of $(110) thousand to the Company's investment in mortgages.
The Company's investments in existing mortgages decreased by $2.1 million during the year ended December 31, 2022, which was primarily the result of capitalized interest and a principal repayment of $2.8 million on one of the two remaining mortgages. Basic earnings per share was $0.04 and $0.06 for the three months and year ended December 31, 2022, respectively, compared to $0.06 and $0.08 in the same periods in 2021. Diluted earnings per share was $0.04 and $0.06 for the three months and year ended December 31, 2022 respectively, compared to $0.06 and $0.08 in the same periods in 2021.
During the three months and year ended December 31, 2022, no mortgages were funded or fully repaid. On November 30, 2022, the Company negotiated a favorable renewal of its mortgage for a property in Calgary, Alberta (the "Alberta Mortgage") pursuant to which a new renewal (the "Mortgage Renewal") for such mortgage was signed effective December 1, 2022 to December 1, 2023. Under the Mortgage Renewal, interest payments shall be paid by the borrower under such mortgage to the Company on a monthly basis and the borrower agreed to make three principal payments to the Company of $2.8 million on December 1, 2022 and June 1, 2023 and December 1, 2023. On December 1, 2022, the first such principal payment of $2.8 million was received by the Company in addition to a renewal fee of $84 thousand. The Alberta Mortgage was previously renewed in November 2020.
About the Company
The Company holds a portfolio of two mortgages in Canada. At the 2021 annual and special shareholders meeting of the Company, the Company sought and received shareholder approval to change its name to "Standard Mercantile Acquisition Corp.", among other amendments to the Articles. The Company is focused on monetizing its remaining mortgage assets and is considering options to enable its shareholders to participate in the potential future value of the Company. The board of directors of the Company has experience in sourcing, evaluating and executing transactions of this nature.
Forward-Looking Statements
Statements in this press release contain forward-looking information. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may" and "will". The forward-looking statements are founded on the basis of expectations and assumptions made by the Company. Details of the risk factors relating to the Company and its business are discussed under the heading "Business Risks and Uncertainties" in the Company's annual Management's Discussion & Analysis for the year ended December 31, 2022 and under the heading "Risk Factors" in the Company's Annual Information Form dated March 24, 2023, copies of which are available on the Company's SEDAR profile at www.sedar.com. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. These statements speak only as of the date of this press release. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
SOURCE Standard Mercantile Acquisition Corp.
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