DLCG Dominion Lending Centres Inc

Dominion Lending Centres Inc. (TSX:DLCG) (“DLCG” or the “Corporation”), along with Mauris Family Investments Inc. (an entity controlled by Gary Mauris) and 603908 BC Ltd. (an entity controlled by Chris Kayat and family), announced today that they have entered into an agreement with Desjardins Capital Markets as sole bookrunner and lead agent (the “Agent”), on behalf of a syndicate of agents (together “the Agents”), in respect of a fully marketed offering of up to 7,782,400 class “A” common shares (the “Offered Shares”) to be completed by the Selling Shareholders (as defined below) at a price of $7.60 per Offered Share for gross proceeds to the Selling Shareholders of approximately $59.15 million (the “Offering”). DLCG will not receive any proceeds from the Offering. Mauris Family Investments Ltd. (“MaurisCo”) and 603908 BC Ltd. (“KayatCo”) are collectively referred to herein as the “Selling Shareholders”.

Gary Mauris, Executive Chairman and CEO, commented, “DLCG has been built by forging strong partnerships; partnerships with owners, brokers, lenders and employees. Today, we are announcing a small sale of shares by Chris and I to make room for a few select shareholders who we believe will make good long term partners as DLCG continues to grow. We will continue to hold more than 50% of the outstanding shares and remain fully committed to stewarding DLCG. We look forward to completing the transaction and welcoming our new institutional shareholders to DLCG.” 

Prior to the Offering, MaurisCo beneficially owns or controls, directly or indirectly, an aggregate of 23,979,733 class “A” common shares, representing approximately 30.5% of the total issued and outstanding class “A” common shares. Prior to the Offering, KayatCo beneficially owns or controls, directly or indirectly, an aggregate of 23,253,532 class “A” common shares, representing approximately 29.5% of the total issued and outstanding class “A” common shares.   Following the closing of the Offering, MaurisCo will beneficially own or control, directly or indirectly, 20,088,533 class “A” common shares and KayatCo will beneficially own or control, directly or indirectly, 19,362,332 class “A” common shares, representing 25.5% and 24.6%, respectively, of the issued and outstanding class “A” common shares.

Closing of the Offering is expected to be on or about February 28, 2025 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals.

The Offered Shares will be offered on a “best efforts” basis in each of the provinces of Canada by way of private placement to “accredited investors” or pursuant to other available prospectus exemption under National Instrument 45-106 – Prospectus Exemptions. The Offered Shares may also be offered to accredited investors in the United States pursuant to Section 4(a)(2) of the U.S. Securities Act of 1933, as amended, (the “U.S. Securities Act”) or in such other manner as to not require registration under the U.S. Securities Act, and on a private placement to other international purchasers. The Offered Shares will be subject to a four month hold period under applicable securities laws.

Preliminary Year-End and Fourth Quarter 2024 Results

The Corporation is pleased to announce the following preliminary (unaudited) results:

• Funded mortgage volume for the fiscal year ended December 31, 2024 was $67.4 billion and total funded mortgage volume for the three months ended December 31, 2024 (“Q4”) was $19.6 billion, with momentum continuing as January 2025’s volume of over $5.7 billion was a record for any January in the Corporation’s history;
• Revenue for the year is expected to be between $76.5 million and $77.0 million and total revenue for Q4 is expected to be between $22.0 million and $22.5 million; and
• Adjusted EBITDA for the year is expected to be between $35.4 million and $36.1 million and adjusted EBITDA for Q4 is expected to be between $9.6 million and $10.4 million.(1)

Note:

(1) Estimated “Adjusted EBITDA” for the year ended December 31, 2024 and for the three months ended December 31, 2024 are non-IFRS measures. As contemplated by National Instrument 51-112 – Non-GAAP and Other Financial Measure Disclosure of the Canadian Securities Administrators (“NI 51-112”), because the Adjusted EBITDA for the year ended December 31, 2024 and for the three months ended December 31, 2024 are preliminary calculations, they also may be considered forward-looking non-IFRS financial measures. As required by NI 51-112, the “equivalent historical non-GAAP financial measure” for the Corporation is “Adjusted EBITDA” for the nine months ended September 30, 2024 of $25.746 million and for the three months ended September 30, 2024 of $12.218 million, as disclosed in the Corporation’s MD&A dated November 5, 2024 (the “Interim MD&A”). See “Non-IFRS Financial Performance Measures” in the Interim MD&A for a reconciliation of Adjusted EBITDA to Income Before Income Tax, which is the most directly-comparable measure calculated in accordance with IFRS.

As previously announced, the Corporation acquired (the “Preferred Share Acquisition”) all issued and outstanding series I class B preferred shares in exchange for class “A” common shares and cash on December 17, 2024 (the “Preferred Share Closing Date”). The Preferred Share Acquisition was initially announced on October 2, 2024 (the “Preferred Share Announcement Date”). During the time between the Preferred Share Announcement Date and the Preferred Share Closing Date, the closing price for the class “A” common shares increased. This closing price was applied to the share consideration issued, creating a significant non-cash loss on the Preferred Share Acquisition, due to the difference between the consideration granted for the preferred shares and their book value (which had been recorded at their amortized cost). As such, the Corporation expects to record a net loss for the year ended December 31, 2024 of between $125.8 million and $128.8 million.

Final revenue, adjusted EBITDA and net loss amounts will be included in the Corporation’s audited annual financial statements, which the Corporation anticipates will be released on or about March 27, 2025.

Forward-Looking Non-IFRS Financial Performance Measures Management presents adjusted EBITDA, a non-IFRS financial performance measure, which we use as a supplemental indicator of our operating performance. This non-IFRS measure does not have any standardized meaning, and therefore is unlikely to be comparable to the calculation of similar measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Non-IFRS measures are defined and reconciled to the most directly-comparable IFRS measure. Although the Corporation has provided forward-looking non-IFRS measures, management is unable to reconcile, without unreasonable efforts, forward-looking adjusted EBITDA to the most comparable IFRS measure, due to unknown variables and uncertainty related to future results. See “Non-IFRS Financial Performance Measures” in the Interim MD&A for a reconciliation of Adjusted EBITDA for the three and nine months ended September 30, 2024, which is the “equivalent historical non-GAAP financial measure”, to Income Before Income Tax, which is the most directly-comparable measure calculated in accordance with IFRS. The Corporation’s MD&A is available on SEDAR+ at www.sedarplus.ca.

Forward-Looking Information Certain statements in this document constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate,” “believe,” “estimate,” “will,” “expect,” “plan,” or similar words suggesting future outcomes or outlooks. Forward-looking information in this document includes, but is not limited to: the timing and anticipated closing of the Offering; the obtaining of all necessary approvals, and the expected revenue, adjusted EBITDA and net loss for the three months and year ended December 31, 2024.

Such forward-looking information is based on many estimates and assumptions, including material estimates and assumptions, related to the following factors below that, while considered reasonable by the Corporation as at the date of this press release considering management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to:

• Changes in interest rates;
• The DLC Group’s ability to maintain its existing number of franchisees and add additional franchisees;
• Changes in overall demand for Canadian real estate (via factors such as immigration);
• Changes in overall supply for Canadian real estate (via factors such as new housing-start levels);
• At what period in time the Canadian real estate market stabilizes;
• Changes in Canadian mortgage lending and mortgage brokerage laws and regulations;
• Changes in the Canadian mortgage lending marketplace;
• Changes in the fees paid for mortgage brokerage services in Canada;
• Demand for the Corporation’s products remaining consistent with historical demand; and
• Demand for the Corporation’s class "A" common shares and the satisfaction of the conditions to closing of the Offering

Many of these uncertainties and contingencies may affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All forward-looking statements made in this document are qualified by these cautionary statements. The foregoing list of risks is not exhaustive. The forward-looking information contained in this document is made as of the date hereof and, except as required by applicable securities laws, we undertake no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise.

About Dominion Lending Centres Inc.Dominion Lending Centres Inc. is Canada’s leading network of mortgage professionals. DLCG operates through Dominion Lending Centres Inc. and its three main subsidiaries, MCC Mortgage Centre Canada Inc., MA Mortgage Architects Inc. and Newton Connectivity Systems Inc., and has operations across Canada. DLCG extensive network includes over 8,500 agents and over 500 locations. Headquartered in British Columbia, DLC was founded in 2006 by Gary Mauris and Chris Kayat.

DLCG can be found on X (Twitter), Facebook and Instagram and LinkedIn @DLCGmortgage and on the web at www.dlcg.ca. 

Contact information for the Corporation is as follows:

Eddy CocciolloPresident647-403-7320eddy@dlc.ca		James BellEVP, Corporate and Chief Legal Officer403-560-0821jbell@dlcg.ca

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