Mr. Brent Billey reports

KADESTONE CAPITAL CORP. REPORTS Q4 AND FULL YEAR 2023 FINANCIAL RESULTS

Kadestone Capital Corp. has released its financial results for the year ended Dec. 31, 2023.

Highlights for the year:

• Cash and cash equivalents of $4,331,129 at Dec. 31, 2023;
• Investments of $12,664,220 in Chilliwack and $10,201,905 in Squamish partnerships;
• Amendment and restatement of existing $10-million term loan by way of a new $10,973,540 term loan.

"We are very pleased with our 2023 fiscal year of operations and are excited about identifying opportunities and securing additional investments in 2024," said Brent Billey, the company's chief executive officer.

Financial results

The company recorded a net loss for the year ended Dec. 31, 2023, of $1,704,148 or four cents per share, compared with a net loss of $4,557,948 or 10 cents per share for the same period in the prior year. The loss was primarily due to expenses incurred for the continuing operations of the company, which included salaries and wages of $1,228,666, share-based compensation of $759,620, interest expense of $1,019,157, and professional fees of $717,727, which were partially offset by income from associates of $2,306,723 and interest revenue of $301,068. Net cash used in operating activities for the year ended Dec. 31, 2023, increased to $2,375,293, compared with $2,348,890 for the year ended Dec. 31, 2022.

The above audited financial information, including comparative information, is expressed in Canadian dollars and has been prepared in accordance with IFRS (international financial reporting standards) accounting standards, using the accounting policies and methods of application as described in notes 2 and 3 of the company's audited consolidated financial statements for the years ended Dec. 31, 2023, and Dec. 31, 2022.

Amended and restated term loan agreement

Further to the company's news release dated April 25, 2024, the company amended and restated its existing $10-million unsecured, non-revolving term loan previously provided by a certain lender to the company by way of an amended and restated term loan agreement, which becomes effective as of May 1, 2024. The increased $10,973,540 aggregate amount of the loan (which includes accrued interest under the previous loan) is evidenced by a promissory note and bears interest at: a rate equal to 9 per cent per annum from May 1, 2024, until April 30, 2025; a rate equal to 11 per cent per annum from May 1, 2025, until April 30, 2026; a rate equal to 13 per cent per annum from May 1, 2026, until April 30, 2027, and a rate equal to 15 per cent from May 1, 2027, to April 30, 2028. The outstanding principal amount of the loan, together with unpaid and accrued interest thereon, is payable in full at the maturity date of May 1, 2028. Scheduled principal payments of $250,000 are payable on the last business day of each fiscal quarter. The restated loan agreement provides the lender with equity participation rights and a right of first offer with respect to the financing of future real estate development projects. The other terms of the original loan agreement remain unchanged.

About Kadestone Capital Corp.

Kadestone was established to pursue the investment in, and acquisition, development and management of, residential and commercial income-producing properties, and procurement and sale of building materials within major urban centres and high-growth, emerging markets in Canada. The company operates five complementary business lines spanning building materials procurement and supply, property development and construction, construction finance, asset ownership, and property management. These synergistic business lines have solidified Kadestone's vision to become a market-leading vertically integrated property company.

We seek Safe Harbor.