Mr. Jordan Kupinsky reports
STANDARD MERCANTILE ACQUISITION CORP. ANNOUNCES 2022 SECOND QUARTER RESULTS
Standard Mercantile Acquisition Corp. today released its financial results for the quarter ended June 30, 2022. The financial statements and MD&A (management's discussion and analysis) for the three and six months ended June 30, 2022, can be found on SEDAR and the company's website.
Financial highlights and 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 $22,000 and $7,000, respectively, due to a lower average mortgage portfolio, lower administrative fees in 2022 and lower share-compensation expenses in 2022 compared with same periods last year.
Basic and diluted income per share from the three and six months ended June 30, 2022, was 0.4 cent, as compared with one cent in the same periods in 2021.
At June 30, 2022, cash on hand was $690,000, a decrease of $250,000 compared with the amount held at Dec. 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 the company's business are not fully known at this time. These impacts could include further decreases in the fair value of the company's mortgage investments, or potential future decreases in revenue or profitability of the company's continuing 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 the company's ability to complete its orderly wind-up plan, as amended by amended by shareholders of the company at the company's annual and special meeting of shareholders held on May 6, 2021.
Regular monthly and 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.
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, 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.
We seek Safe Harbor.
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