MAM » Topics » 9. ISSUANCE OF MARICOR PROPERTIES STOCK ACQUIRED BY ASHFORD INVESTMENTS INC.

This excerpt taken from the MAM 10-Q filed Aug 11, 2006.

9.               ISSUANCE OF MARICOR PROPERTIES STOCK ACQUIRED BY ASHFORD INVESTMENTS INC.

 

Maricor Properties Ltd is a Canadian real estate development, redevelopment and investment company focused on sustainable development and “smart growth” principles within second and third tier Canadian markets emphasizing the development and revitalization of downtowns and existing suburbs.  It seeks to develop or invest in public and private facility projects involving the renewal or development of building infrastructure within revitalization districts, promoting renewal of existing areas, thus negating the need for extension of additional infrastructure and promotion of sprawl.  Maricor Properties was a wholly-owned subsidiary of MAM until June 30, 2006.

On that date, Maricor Properties issued one share of its stock acquired by Ashford Investments Inc. (“Ashford”), an unaffiliated real estate management, development, and investment company, for approximately $586,000.  As 50% owner of Maricor Properties, Ashford assumed 50% of the outstanding debt of Maricor Properties Ltd and its subsidiaries, and it agreed to guarantee Maine & Maritimes Corporation’s debt with Merrill Lynch Mortgage Lending related to financing on the Vaughan Harvey Building owned by Maricor Properties in Moncton, New Brunswick and the MacDonald Building owned by Cornwallis Court Developments in Halifax, Nova Scotia.

In accordance with SEC Staff Accounting Bulletin (“SAB”) 51, “Accounting for Sales of Stock by a Subsidiary,” the Company recognized a gain in the amount of $429,000 as non-operating income.  This gain was partially offset by the deferred income tax impact of $172,000.

Under the terms of this agreement, Maine & Maritimes Corporation and Ashford Investments Inc. are now equal shareholders of Maricor Properties and its wholly-owned subsidiary, Cornwallis Court Developments Ltd.  While Ashford, as co-owner of Maricor Properties Ltd, owns 50% of Mecel Properties Ltd, it does not experience economic benefit or risks associated with this entity and Mecel’s owned real estate as a result of a shareholders agreement with MAM.  A 120-day period beginning at the time of the closing of the transaction has been set aside to either gain necessary approvals to sell one-half interest in Mecel to Ashford for additional compensation or to transfer ownership of Mecel to Maine & Maritimes Corporation or another one of its entities.  As part of the shareholders agreement, MAM has indemnified Ashford against a guarantee by Mecel Properties for a MAM term loan of $1.7 million with Bank of America, described in Note 5.  Ashford Properties, a subsidiary of Ashford Investments Inc., provides property management services for all properties owned by Maricor Properties and its subsidiaries, including Mecel.

25




 

The removal of Maricor Properties and its subsidiaries other than Mecel from these consolidated financial statements constitutes a change in reporting entity under SFAS 154, “Accounting Changes and Error Corrections – A Replacement of APB Opinion No. 20 and FASB Statement No. 3.”  Under this guidance, the Company is required to present the prior period financial statements on the same basis as the current period for comparison purposes.

 

26




 

Because the sale was completed on June 30, 2006, the Consolidated Statements of Operations for the three- and six-months ended June 30, 2006 and 2005 include all activity for Maricor Properties for these periods, and are comparable statements. However, this change in reporting entity will impact future Consolidated Statements of Operations.  The Consolidated Balance Sheet for December 31, 2005, has been presented as if Maricor Properties and Cornwallis were treated as equity investments at that time, rather than consolidated, so that the information contained in that Balance Sheet is comparable to the June 30, 2006, presentation.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki