TORONTO, February 17, 2021 /CNW/ – Trez Capital Senior Mortgage Investment Corporation (TSX: TZS) (the “Company”) today released its financial results for the three months and year ended December 31, 2020. The Company’s audited financial statements and annual management report are available at www.sedar.com Where www.trezcapitalseniormic.com. The Company also announces a change in the composition of its Board of Directors (the “Board”).
Financial Highlights and Business Update
For the three months and year ended December 31, 2020operating profit decreased by $250,000 and $53,000 for the three months and fiscal year ended December 31, 2020respectively, compared to the same periods in 2019. The decrease is mainly the result of an increase in management fees related to a $200,000 fees paid by the Company pursuant to the terms of the Separation and Mutual Release Agreement entered into between the Company and Trez Capital Fund Management LP dated November 23, 2020, as described in the Company’s press release dated the same day. The remaining expenses were largely in line with the same periods in 2019. In addition, the fair value adjustment of the Company’s investments in mortgages was reduced by $2.78 million during the fourth quarter of 2020. This is the result of management’s analysis of a single mortgage for which there was a fair value adjustment based on a number of factors, including flows expected future cash flow on the current mortgage loan, estimated loan-to-value ratio and recent payment history for that mortgage.
During the three months and fiscal year ended December 31, 2020, no mortgages have been funded or fully repaid, although the Company has received substantial repayment on one of its remaining mortgages for which there has been a fair value adjustment. The Company’s investment in existing mortgages decreased by $129,000which resulted primarily from capitalized interest and principal repayment of $3.9 million on one of the two remaining mortgages. Basic and diluted earnings per share were $0.61 and $0.55 for the three months and fiscal year ended December 31, 2020 respectively, compared to $(0.16) and $(0.07) at the same times in 2019.
Changes to the composition of the board
Efficient February 16, 2021, Jordan Kupinski left the board of directors and Brad Nathan was appointed new independent director of the Company. Mr. Kupinsky has resigned from the Board to ensure that there are a sufficient number of independent directors of the Company for the Company to comply with its audit committee membership requirements under the applicable securities. Mr. Kupinsky will continue to act as Chief Executive Officer of the Company and is expected to be nominated by management to serve again on the Board at the Company’s next annual and special meeting of shareholders (the “2021 Meeting “). The Company plans to submit a resolution to shareholders at the 2021 Meeting to approve an amendment to the Company’s articles of association that would allow the Board to increase its size by up to one-third between meetings of shareholders in order to provide the Company greater flexibility regarding the future composition of its Board.
Mr. Nathan is Chairman of Lynx Equity Limited, a Torontoprivate equity and investment firm focused on acquiring small and medium-sized businesses, where he works with Lynx’s management team to set strategy and objectives. His responsibilities at Lynx include overseeing transactions, operations, capital sourcing and transaction origination. After obtaining his Chartered Accountant degree, Mr. Nathan practiced accounting at Price Waterhouse, then at Grant Thornton in Toronto. He then served as Vice President of Merchant Banking at Rothschild Canada Limited. Prior to forming Lynx, Mr. Nathan founded Succession Capital Corporation, a private equity firm that became $40 million in annual income. He also served on the board of the Toronto Wildlife Center for many years and continues to support wildlife-related organizations.
Mr. Kupinsky, CEO of the Company, said, “We are delighted to welcome Brad to the Board and know that his considerable experience and abilities will be a welcome addition to the Board.
About the company
On June 16, 2016, the shareholders of the Company have approved the orderly liquidation of the Company. Pursuant to the plan of orderly liquidation, the Company will distribute the net proceeds by way of special distributions, share repurchases pursuant to the normal course issuer bid or otherwise.
The statements in this press release contain forward-looking information. Such forward-looking information can be identified by words such as “expects”, “plans”, “proposes”, “estimates”, “intends”, “expects”, “believes”, “may” and “will fly”. Forward-looking statements are based on the Company’s expectations and assumptions. Details of the risk factors relating to the Company and its business are set out under the heading “Business risks and uncertainties” in the Company’s annual management report for the financial year ended. December 31, 2020 and under the heading “Risk Factors” in the Company’s Annual Information Form dated March 31, 2020copies of which are available on the Company’s SEDAR profile at www.sedar.com. Most of these factors are beyond the Company’s control. Investors are cautioned not to place 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 laws or regulations, the Company expressly disclaims any intention or obligation to publicly update any forward-looking information, whether as a result of new information, future events or otherwise.
SOURCE Trez Capital Senior Mortgage Investment Corporation
For further information: Jordan Kupinsky, President and CEO, tel. : (416.972.1741), email: [email protected]