Standard Mercantile Acquisition Corp. Announces 2022 First Quarter Results

TORONTO, May 16, 2022 /CNW/ - Standard Mercantile Acquisition Corp. (TSX: SMA) (the "Company") today released its financial results for the quarter ended March 31, 2022.  The financial statements and MD&A can be found at www.sedar.com or www.standardmercantileacquisition.com.

During the quarter ended March 31, 2020, the COVID-19 outbreak 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").

Income from operations for the three months ended March 31, 2022 was higher than same quarter last year due to lower revenue of $69 thousand compared to same period last year, as a result of reduced mortgage portfolio as the mortgage monetization strategy continues, offset by lower expenses related to share-based compensation expense of $55 thousand and lower general and administrative expenses of $29 thousand compared to same period last year.

Basic income per share from the three months ended March 31, 2022 was $0.01 compared to $0.01 in the same period in 2021. 

As at March 31, 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 March 31, 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.

There were no regular distributions made for the three months ended March 31, 2022 (March 31, 2021 - nil).

There were no special distributions made for the three months ended March 31, 2022 (March 31, 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.

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.

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. The Board has experience in sourcing, evaluating and executing transactions of this nature.

SOURCE Standard Mercantile Acquisition Corp.

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