The Issuer:

Keystone Mortgage Investment Corporation (the “Corporation”) is a mortgage investment corporation incorporated under the Business Corporations Act (Canada).

The Corporation is not a reporting issuer or equivalent in any jurisdiction and its securities are not listed or posted for trading on any stock exchange or market.

Securities Offered:

An unlimited number of Class “A” Non-Voting Preferred Shares (“Class A Preferred Shares”) of the Corporation.

An unlimited number of Class “B” Non-Voting Preferred Shares (“Class B Preferred Shares”) of the Corporation.

An unlimited number of Class “F” Non-Voting Preferred Shares (“Class F Preferred Shares”, and collectively with the Class A Preferred Shares and the Class B Preferred Shares, the “Preferred Shares”) of the Corporation.

Type of Transaction:

The offering of Preferred Shares in the capital of the Corporation (the “Offering”) is a private placement to be made pursuant to an offering memorandum in reliance on one or more of the prospectus exemptions as set out in National Instrument 45-106 Prospectus Exemptions.

Price Per Security:

$10.00 per Preferred Share.

Minimum Subscription Amount:

There is no minimum or maximum offering. The Corporation will offer an unlimited number of Preferred Shares on a continuous basis.

The minimum subscription amount for each of Class A Preferred Shares, Class B Preferred Shares and Class F Preferred Shares is as follows:

25,000 Class A Preferred Shares ($250,000.00)

2,500 Class B Preferred Shares ($25,000.00)

2,500 Class F Preferred Shares ($25,000.00)

Selling Agent:

The Corporation has entered into a dealer agreement with each of Parvis Investment Services Inc. and Indigoblue Capital Corporation and may authorize other registered dealers to sell the Preferred Shares, from time to time. The Corporation may pay a commission to registered dealers or a referral fee up to a maximum of 5.0% of the aggregate purchase price of the Class A Preferred Shares and Class B Preferred Shares sold. No commission is payable on Class F Preferred Shares, but the Corporation may enter into referral arrangements with wealth advisors in respect thereof.

Proposed Closing Dates:

Closings will occur on a continuous basis as subscriptions are received and accepted at the discretion of the Corporation. Generally, it is expected that all accepted subscriptions will be effective on the last day of each month and settled within three business days.

Use of Proceeds:

The proceeds of the Offering will be used to invest primarily in residential, commercial, construction and other mortgages in accordance with the Corporation’s investment policies.

Targeted Dividends:

The board of directors of the Corporation may from time to time declare and authorize the payment of dividends in its sole discretion. The Corporation targets cumulative preferential cash dividends at a projected annual rate of 9.5% for Class A Preferred Shares, 9.0% for Class B Preferred Shares, and 9.5% for Class F Preferred Shares. Dividends, if any, are payable monthly in arrears, no later than the 15th day of the month following the applicable month in which such dividends were declared.

The priority of payments of dividends is as follows:

(1)   First. Holders of the Preferred Shares are entitled to receive, pari passu and rateably, as and when declared by the board of directors out of monies of the Corporation properly applicable to the payment of dividends, preferential cash dividends at a projected annual rate of 5.0% per annum of the issue price of the Preferred Shares, respectively (the “Initial Preferred Share Dividends”).

(2)   Second. Following payment of the Initial Preferred Share Dividends to each applicable holder, holders of the Class A Preferred Shares and the Class F Preferred Shares are entitled to receive, pari passu and rateably, as and when declared by the board of directors out of monies of the Corporation properly applicable to the payment of dividends, preferential cash dividends at a projected annual rate of 4.5% per annum of the issue price of the Class A Preferred Shares and the Class F Preferred Shares, respectively (the “Classes A and F Priority Dividends”).

(3)   Third. Following payment of the Classes A and F Priority Dividends to each applicable holder, holders of the Class B Preferred Shares are entitled to receive, pari passu and rateably, as and when declared by the board of directors out of monies of the Corporation properly applicable to the payment of dividends, preferential cash dividends at a projected annual rate of 4.0% per annum of the issue price of the Class B Preferred Shares (the “Class B Catch-Up Dividends”). For greater certainty, no dividends may be declared or paid on the Class B Preferred Shares, following payment of the Initial Preferred Share Dividends, until 9.5% cumulative dividends have first been paid on the Class A Preferred Shares and Class F Preferred Shares.

(4)   Fourth. Following payment of the Class B Catch-Up Dividends, each Preferred Shareholder shall be entitled to receive, pari passu and rateably, along with holders of Common Shares, as and when declared by the Board of Directors out of monies of the Corporation properly applicable to the payment of dividends, any other cash dividends. For greater certainty, no dividends shall be declared or paid on the Preferred Shares and the Common Shares, following payment of the Classes A and F Priority Dividends, until 9.0% cumulative dividends have first been paid on the Class B Preferred Shares.

Redemption Rights:

The Preferred Shares are redeemable after 12 months following the subscription date and upon an advance notice of 90 days.

The right to redeem is qualified by the provisions of the Corporation’s articles relating to such redemptions, including, among other things, adherence to notice provisions, quarterly limits on the number of securities that may be repurchased, and limitations necessary for the Corporation to maintain its status as a mortgage investment corporation under the Income Tax Act (Canada) (the “Tax Act”).

In addition, redemptions may be subject to early redemption penalties based on the period of time the Preferred Shares are held for and a processing fee of $350.00 per redemption request, according to the chart below. As a result, you might not receive the amount of proceeds that you want.

Refer to the Offering Memorandum for Redemption Penalties

The board of the directors of the Corporation may, in its sole discretion, waive all or any part of the early redemption penalty in the case of any particular holder of Class A Preferred Shares or Class B Preferred Shares.

Income Tax Consequences:

The Preferred Shares will be qualified investments for inclusion in registered plans subject to the Corporation maintaining its status as a mortgage investment corporation under the Tax Act.

View our fund facts sheet here.

Read the Memorandum here.

Disclaimer: This website is directed only to Canadian residents that are qualified to purchase securities under applicable prospectus exemptions pursuant to National Instrument 45-106 Prospectus Exemptions and other applicable securities laws. This document is for informational purposes only and does not constitute an offer to sell or a solicitation to purchase securities. An offering memorandum containing important information relating to the securities of Keystone Mortgage Investment Corporation has or will be filed with the securities regulatory authorities in each of the Canadian jurisdictions where a distribution has occurred or will occur (the "Offering Jurisdictions") pursuant to the offering memorandum. A copy of the offering memorandum is required to be delivered to you at the same time or before you sign the agreement to purchase the securities of Keystone Mortgage Investment Corporation. This document does not provide disclosure of all information required for an investor to make an informed investment decision. Investors should read the offering memorandum of Keystone Mortgage Investment Corporation, especially the risk factors relating to the securities offered, before making an investment decision. Any offer or sale of, or advice on, any securities described in this document will be made only by a dealer or adviser registered or relying on an exemption from registration in the applicable Offering Jurisdiction. For further information, please contact: steven@parvisinvest.com or marcus@indigoblue.ca