TORONTO, Aug. 12, 2022 /CNW/ - Standard Mercantile Acquisition Corp. (TSX: SMA) (the "Company") today released its financial results for the quarter ended June 30, 2022. The financial statements and MD&A for the three and six months ended June 30, 2022 can be found at www.sedar.com or www.standardmercantileacquisition.com.
Financial Highlights & Business Update
As at June 30, 2022, the Company had two mortgages outstanding. Of the two mortgages remaining, the more significant one is set to mature in December 2022. During the second quarter of 2020, the borrower requested a three month deferral of mortgage payments, due to the inability of tenants to pay rent as a result of the COVID-19 economic and health crisis. The deferral was granted. Regular payments resumed during the third quarter of 2020, and the Company made certain amendments to this mortgage in December 2020, including extending the term of this mortgage through December 2022 in consideration of certain lump-sum repayments which commenced in December 2020. As of June 30, 2022, the Company did not make any fair market value adjustments based on the management's assessment of the fair market value of its investment in both mortgages.
Income from operations for the three and six months ended June 30, 2022 was lower than the same periods last year by $22 thousand and $7 thousand, respectively, due to a lower average mortgage portfolio, lower administrative fees in 2022 and lower share-compensation expenses in 2022 compared to same periods last year.
Basic and diluted income per share from the three and six months ended June 30, 2022 was $0.004 as compared to $0.01 and $0.01 in the same period in 2021.
At June 30, 2022, cash on hand was $0.69 million, a decrease of $0.25 million compared to the amount held at December 31, 2021. The decrease is primarily the result of timing in working capital.
During the quarter ended March 31, 2020, the COVID-19 outbreak (including its variants) was declared a pandemic by the World Health Organization. Since that time, the situation has continued to be dynamic and the duration and magnitude of the impact on the economy and our business are not fully known at this time. These impacts could include further decreases in the fair value of our mortgage investments or potential future decreases in revenue or profitability of our ongoing operations. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company as it relates to its ability to complete the orderly wind-up plan of the Company, as amended by amended by shareholders of the Company at the Company's annual and special meeting of shareholders held on May 6, 2021 (the "2021 Meeting").
Regular Monthly & Special Distributions
There were no regular distributions made for the three months ended June 30, 2022 (June 30, 2021 - nil).
There were no special distributions made for the six months ended June 30, 2022 (June 30, 2021 - $3,510,819).
The Board anticipates from time to time making further special distributions as the two remaining mortgages in the portfolio mature or are sold, or if the Board otherwise determines that it is appropriate to do so based on cash balances, subject to reasonable expected operating expenditures and repayment of the senior loan participant on one of the remaining mortgages.
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, 2021 and under the heading "Risk Factors" in the Company's Annual Information Form dated March 30, 2022, 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.
About the Company
The Company holds a portfolio of mortgages in Canada. At the 2021 Meeting, the Company sought and received shareholder approval to change its name to "Standard Mercantile Acquisition Corp.", among other amendments to the articles of the Company. 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 through transactions that could capitalize on the Company's public listing and the Company's management and board of directors have experience in sourcing, evaluating and executing transactions of this nature.
SOURCE Standard Mercantile Acquisition Corp.