Mr. Ben Lui reports

YORKTON EQUITY GROUP INC. ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER ENDED SEPTEMBER 30TH, 2023 AND PROVIDES CORPORATE UPDATE

Yorkton Equity Group Inc. has released its financial results for the third quarter ended Sept. 30, 2023.

Ben Lui, president and chief executive officer of Yorkton, is excited to report: "Our residential rental revenue has increased by 128.7 per cent, to over $1.6-million during Q3 2023, and 122.5 per cent, to over $4.3-million, during the nine months ended Sept. 30, 2023. This noteworthy accomplishment can be directly attributed to our acquisition of The Dwell, a 188-unit luxurious multifamily rental property located in Edmonton, Alta. This acquisition has strategically positioned us to take advantage of the growth potential within Alberta's multifamily rental market, which is fuelled by factors such as a rapidly expanding population from interprovincial and international immigration, a resilient economy, a robust labour market, affordable housing costs, and no rent price controls compared with other markets in Canada."

Q3 2023 financial highlights:

• Residential rental revenue increased by $934,532, or 128.7 per cent, to $1,660,554 and commercial rental revenue increased by $10,553, or 10.3 per cent, to $113,309 in Q3 2023. Total rental revenue in Q3 2023 was $1,773,863.
• Residential rental revenue increased by $2,389,255, or 122.5 per cent, to $4,339,513 and commercial rental revenue increased by $39,465, or 12.9 per cent, to $345,577 during the nine months ended Sept. 30, 2023. Total rental revenue during the nine months ended Sept. 30, 2023, was $4,685,090.
• Net rental income increased by $572,350, or 99.9 per cent, to $1,145,466 in Q3 2023.
• Net rental income increased by $1,606,414, or 112.2 per cent, to $3,038,117 during the nine months ended Sept. 30, 2023.
• The acquisition of The Dwell (Edmonton, Alta.) on Feb. 27, 2023, added $892,982 of rental revenue and $551,642 of net rental income during Q3 2023, and $2,073,181 of rental revenue and $1,388,944 of net rental income to the nine months ended Sept. 30, 2023.
• Over all, net income of $2,400 in Q3 2023 as compared with $34,397 in Q3 2022.
• Over all, net loss of $131,864 during the nine months ended Sept. 30, 2023, as compared with $244,492 in the same period in 2022.
• Yorkton holds 393 residential rental units and 28,036 square feet of commercial space for a total portfolio value of $96,730,863, which grew by 71.7 per cent as compared with Sept. 30, 2022.

During the nine months ended Sept. 30, 2023, the company entered into a loan with Lui Holdings Corp., as previously announced on Oct. 2, 2023, to borrow up to $1.7-million, of which it had received $1.5-million as at Sept. 30, 2023. The loan had a maturity date 24 months from the date of issuance and bore interest at a rate of 5 per cent per annum for the first 30 days and 10 per cent per annum from the 31st day until the maturity date, or upon the early repayment of the loan in full, whichever came first. The loan was made by Lui Holdings for the purpose of satisfying the required deposits and other related payments for the acquisition of The Fuse (discussed in corporate update section below).

Highlights of the residential rental portfolio for the three and nine months ended Sept. 30, 2023, are shown in the associated table.

Corporate update

On Oct. 12, 2023, the company announced a non-brokered private placement of up to 2,200 unsecured convertible debentures at an issue price of $1,000 per convertible debenture for gross proceeds of $2.2-million. Each convertible debenture will have a principal amount of $1,000 with an interest rate equal to 8 per cent per annum, payable annually, only in cash without any conversion of that interest component into common shares. Each convertible debenture will mature on the date that is five years from the date of issuance. The company, after a period of 36 months following the date of closing, will also have the right, but not the obligation, to redeem the principal amount and any unpaid interest of the convertible debenture in cash, without penalty, at any time prior to the date of maturity subject to certain conditions. The principal amount of each convertible debenture may, at the option of the convertible debenture holder, be converted, in whole or in part, into common shares at a conversion price of 20 cents per common share.

On Oct. 17, 2023, the company completed an initial tranche closing on the private placement announced on Oct. 12, 2023, with Lui Holdings, which included the loan from Lui Holdings (discussed in the Q3 2023 financial highlights section above), which adopted the terms and conditions of the convertible debentures offered in the private placement, for a total aggregate subscription of 2,000 convertible debentures in the principal amount of $2-million.

On Oct. 17, 2023, the company also closed on the acquisition of The Fuse, a 125-unit condominium grade multifamily residential complex that was constructed in 2015 and is composed of two buildings situated on approximately 2.67 acres of land located in the Summerside neighbourhood of Edmonton, Alta., for a purchase price of $25,625,000. As part of the financing of the acquisition of the property, the company obtained a Canada Mortgage and Housing Corporation (CMHC)-insured mortgage on The Fuse of $24,423,140 at a fixed interest rate of 4 per cent per annum, amortized over 50 years, maturing on Nov. 30, 2028, and secured by the property, general assignment of rent, specific assignment of present and future leases of the property, and general security agreement. In addition, as a condition on the mortgage payable, the property holding company is required to maintain a minimum of 80 per cent of the units in The Fuse as affordable units, as defined by the CMHC, with residential rents at or below 30 per cent of the median renter income in Edmonton, Alta., at the time of the issuance of the certificate of insurance (COI) and with allowable annual increases according to the consumer price index (CPI) as stipulated by Statistics Canada for Alberta, of which the allowable rent increase is 6.4 per cent for 2024.

On Nov. 1, 2023, Yorkton successfully implemented the Yardi Voyager system, a cloud-based enterprise resource planning system (ERP) suite that covers all the key areas of finance, accounting, human resources and property management, including marketing and leasing, business and market intelligence, customer relationship management (CRM), energy management, supply chain, and end-to-end procurement. It also can provide a two-way real-time connection with tenants via secure tenant portals and mobile applications for on-line payments, concierge services, maintenance requests, property and tenant documents, announcements, and more. The Yardi system is being used to manage certain properties of the company and other properties will be added in the future. It is expected that the use of Yardi will improve the efficiency and effectiveness of Yorkton's operations, and allow Yorkton's management team to measure and monitor the progress and efficacy of its organic growth.

About Yorkton Equity Group Inc.

Yorkton Equity Group is a growth-oriented real estate investment company committed to providing shareholders with growing assets through accretive acquisitions, organic growth and the active management of multifamily rental properties with significant upside potential. Its current geographical focus is in Alberta and British Columbia with diversified and growing economies, and strong population in-migration. Yorkton's business objectives are to achieve growing net operating income (NOI) as well as the asset values in its multifamily rental property portfolio in strategic markets across Western Canada.

The management team at Yorkton Equity Group has well over 30 years of prior real estate experience in acquiring and managing rental assets.

We seek Safe Harbor.