SHARBOT
LAKE, ON, April 30, 2024 /CNW/ - Frontenac Mortgage
Investment Corporation ("FMIC") announces that it has filed
audited annual financial statements and related management's
discussion and analysis ("MD&A") for the year ended
December 31, 2023 (the "2023
Audited Annual Financial Statements"). The 2023 Audited Annual
Financial Statements include amended and restated audited annual
financial statements for the year ended December 31, 2022 (the "2022 Restated Audited
Annual Financial Statements"). FMIC will also be filing amended
and restated interim unaudited financial statements for the
quarters ended March 31, 2023,
June 30, 2023 and September 30, 2023 and MD&A thereof (together
with the 2022 Restated Audited Annual Financial Statements, the
"Restatement"). The Restatement is being filed with the
agreement of the Ontario Securities Commission (the "OSC")
following a review by the OSC and relates to the measurement of
mortgage impairment provisions in accordance with International
Financial Reporting Standards ("IFRS") for a loan package
(the "Loans") that had been made to a borrower in relation
to a large residential development property (the "Property")
and has been impaired.
The Restatement corrects an error in the application of IFRS to
the expected credit losses of the Loans (the "Error"). In
general terms, it involves reducing the estimated proceeds from a
sale of the Property, increasing the estimated expenses and
liabilities associated with selling the Property pursuant to FMIC's
mortgage rights and increasing the estimated time that it would
take to sell the Property under FMIC's mortgage rights. The effect
of the Restatement will be an increase in the provision for
mortgage impairment losses, and a reduction in assets, net income
and carrying value per share for the year ended December 31, 2022. As a result of the
Restatement, the carrying value per share for the year-ended
December 31, 2022 is $29.44 compared to a carrying value per share of
$30 as originally reported as at
December 31, 2022.
Purchasers who overpaid for shares of FMIC in 2023 as a result
of the Error will be reimbursed in respect of the full amount of
their overpayment. Additionally, the applicable management fee and
administration fee paid to W.A. Robinson Asset Management Ltd., as
manager, and Pillar Financial Services, as administrator will be
adjusted to reflect the impact of the Restatement on FMIC's assets
under management.
The amended and restated financial statements as well as FMIC's
2023 Audited Annual Financial Statements will be made available
under FMIC's profile on SEDAR+ at www.sedarplus.ca.
Resumption of Distributions, Redemptions and Sales
As disclosed in FMIC's Press Release of March 25, 2024, FMIC approved and declared a
special dividend of $0.8247974 per
share, payable on March 28, 2024 to
shareholders of record as of March 26,
2024. This special dividend represented FMIC's approximate
net taxable income calculated as of December
31, 2023, less dividends paid in 2023, together with
approximate net taxable income for January
31, 2024.
FMIC intends to make a further special distribution to
shareholders in May 2024 representing
its net income for the three months ended April 30, 2024 and expects to provide further
details regarding this distribution in a separate press release .
FMIC expects to continue its regular monthly distributions of net
income beginning with the distribution of May 2024 net income.
Subsequent to processing the aforementioned special distribution
of income, FMIC proposes to resume the processing of redemption
requests ("Redemption Requests"), beginning with a special
redemption on May 31, 2024, at the
share value then calculated. As of April 29,
2024, FMIC has received requests to redeem $50.2 million of common shares. FMIC will
not redeem all requested Redemption Requests on May 31, 2024 but will restrict redemptions on
that date to 5% of the aggregate net asset value of FMIC's loan
portfolio as of May 31, 2024 and will
fulfill redemption requests on a pro rata basis, as opposed to a
first-come first-serve basis. Shareholders wishing to participate
in the special redemption and who have not already submitted a
redemption request must provide their redemption requests to FMIC
by 4:00 p.m. ET on May 24, 2024. Thereafter, FMIC will continue to
process unfulfilled Redemption Requests, together with subsequently
received Redemption Requests, on a quarterly pro rata basis
irrespective of the timing of receipt by FMIC of the redemption
requests prior to the then applicable redemption cut-off date, with
the next regular redemption beginning on August 30, 2024 at the share value calculated as
of August 30, 2024. It is expected
that such redemptions will be subject to the aforementioned
quarterly redemption limitation of 5% of the aggregate net asset
value of FMIC's loan portfolio.
Also subsequent to processing the aforementioned special
distributions of income, FMIC expects to resume monthly sales of
common shares to qualified purchasers in the exempt market,
beginning on June 3, 2024.
Subscriptions received that have been held in escrow will be
processed by FMIC upon confirming such subscriptions with qualified
investors.
Forward-Looking Statements
This press release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of
applicable Canadian securities laws, which may include, but are not
limited to, information and statements regarding or inferring the
future business, operations, financial performance, prospects, and
other plans, intentions, expectations, estimates, and beliefs of
the Corporation. All statements other than statements of present or
historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of
words such as "anticipate", "achieve", "could", "believe", "plan",
"intend", "objective", "continuous", "ongoing", "estimate",
"outlook", "expect", "may", "will", "project", "should" or similar
words, including negatives thereof, suggesting future outcomes.
Forward-looking statements involve and are subject to
assumptions and known and unknown risks, uncertainties, and other
factors beyond FMIC's ability to predict or control which may cause
actual events, results, performance, or achievements of FMIC to be
materially different from future events, results, performance, and
achievements expressed or implied by forward-looking statements
herein. Forward-looking statements are not a guarantee of future
performance. Although FMIC believes that any forward-looking
statements herein are reasonable, in light of the use of
assumptions and the significant risks and uncertainties inherent in
such statements, there can be no assurance that any such
forward-looking statements will prove to be accurate. Actual
results may vary, and vary materially, from those expressed or
implied by the forward-looking statements herein. Accordingly
readers are advised to rely on their own evaluation of the risks
and uncertainties inherent in forward-looking statements herein and
should not place undue reliance upon such forward-looking
statements. All forward-looking statements herein are qualified by
this cautionary statement. Any forward-looking statements herein
are made only as of the date hereof, and except as required by
applicable laws, FMIC assumes no obligation and disclaims any
intention to update or revise any forward-looking statements herein
or to update the reasons that actual events or results could or do
differ from those projected in any forward-looking statements
herein, whether as a result of new information, future events or
results, or otherwise.
SOURCE Frontenac Mortgage Investment Corporation