Mr. William Tharp reports

GRENVILLE STRATEGIC ROYALTY ANNOUNCES 2015 THIRD QUARTER RESULTS

Grenville Strategic Royalty Corp. has released its financial and operating results for the three-month period ended Sept. 30, 2015 (third quarter 2015).

Third quarter 2015 financial highlights (comparisons made between fiscal Q3 2015 and fiscal Q3 2014 results, unless otherwise noted):

• Revenues of $4,537,725, an increase of 401 per cent over Q3 2014;
• Realized gains on contract buyouts were $2,196,642;
• Adjusted earnings before interest, taxes, depreciation and amortization of $4,326,034, an increase of 699 per cent over Q3 2014;
• Free cash flow of $2,654,803;
• Income after taxes was $3,899,245, an increase of 638 per cent;
• Declared a November dividend of 0.583 cent per share, or seven cents on an annualized basis, subsequent to the end of the period, representing a 40-per-cent increase over the previous monthly dividend.

Third quarter 2015 portfolio highlights:

• Average royalty payment per $1-million invested was $250,583 for the month of September, 2015, or $242,198 net of an adjustment for two royalty payments as a result of the INOVx contract buyout;
• Including contract buyouts, average royalty payment per $1-million invested of $369,419 and $306,018 for the month of September and the 12-month period ended Sept. 30, 2015, respectively;
• Royalty agreements, follow-on financings and new loans acquired were $4,970,940 for Q3 2015, bringing the aggregate net value of acquired royalties and loans since inception to the end of Q3 2015 to $42,762,458;
• Successful closing of four contract buyouts since the start of Q3, consisting of Wmode and DS Handling, and, subsequent to the end of the period, Above Security and INOVx, totalling $12.1-million.

"The decision to increase the dividend reflects both the consistent performance of our royalty portfolio and its scale. In making this dividend increase, we have retained cash flows and reserves to be able to comfortably manage the business and be consistent with prior communications on our growth plus yield business model. Revenue, adjusted EBITDA and free cash flow continue to grow with our seventh consecutive record quarter. The Q3 results do not include the $2,737,235 of realized gains from the contract buyouts for Above Security and INOVx, which will be reported with the fourth quarter results," said William (Bill) R. Tharp, president and chief executive officer of Grenville. "Our four successful contract buyouts provide additional capital to redeploy into new opportunities. The breadth of these new opportunities allows us to further diversify and strengthen the portfolio, and continue to provide stable and sustainable returns to shareholders."

                             FINANCIAL HIGHLIGHTS

                                Three months ended        Nine months ended
                                          Sept. 30,                Sept. 30,
                                   2015       2014         2015        2014

Revenues                    $ 4,537,725  $ 905,384  $ 8,446,957 $ 1,409,546
Profit/(loss) for the
period                        3,899,245    528,558    5,272,510  (3,377,297)
Basic earnings/(loss) per
share                            0.0394     0.0089       0.0614     (0.0734)
Diluted earnings/(loss) per
share                            0.0321     0.0089       0.0532     (0.0734)
Adjusted EBITDA               4,326,034    541,579    5,904,581     551,810
Adjusted EBITDA
excluding impairment
provision                     3,916,970    541,579    6,503,922     551,810
Free cash flow                2,654,803   (388,668)   3,597,072    (292,587)
Royalty agreements acquired
and new loans in period       4,970,940  9,540,053   18,130,210  18,210,768

Revenues

Revenues were $4,537,725 and $8,446,957 for Q3 2015 and the nine-month period ended Sept. 30, 2015 (year-to-date (YTD) 2015), respectively, compared with $905,384 and $1,409,546 for the corresponding periods in 2014. The increase was driven by two factors: growth in the aggregate investment over the previous year and realized gains on contract buyouts. Royalty payment income increased to $2,298,409 and $5,879,539 for Q3 2015 and YTD 2015, respectively, from $842,595 and $1,283,470 for the corresponding periods in 2014. Realized gains on contract buyouts were $2,196,642 for Q3 2015 and YTD 2015, which related to Wmode and DS Handling, compared with nil last year.

Management believes contract buyouts will contribute to revenue on a regular basis as the portfolio matures, but will fluctuate more than regular monthly portfolio cash flows received from the portfolio. As of Nov. 16, 2015, the company has generated $12.1-million in contract buyouts since its inception.

Operating expense

Total operating expenses were $797,379 and $630,220 for Q3 2015 and YTD 2015, respectively, compared with $31,686 and $4,441,703 for the corresponding periods in 2014. The change was primarily driven by net foreign exchange gains in the 2015 periods and $3,636,197 of expenses directly attributable to the reverse takeover in the YTD 2014 period. The company recorded net foreign exchange gains of $1,510,814 and $2,552,248 in Q3 2015 and YTD 2015, respectively, almost entirely comprising unrealized foreign exchange gains on the translation of royalty agreements acquired in U.S. dollars.

Income after taxes

Income after taxes was $3,899,245 and $5,272,510 for Q3 2015 and YTD 2015, respectively, compared with $528,558 and a loss of $3,377,297 for corresponding periods last year. The improvements were due to higher revenues in each of the 2015 periods, as the company scaled its portfolio, as well as the foreign exchange gains and the RTO expense in 2014. It also includes $409,064 recovered, net of collection costs, related to the $1-million impairment recorded in fourth quarter 2014 related to the APO Group investment.

Adjusted EBITDA

Adjusted EBITDA was $4,326,034 and $5,904,581 for Q3 2015 and YTD 2015, respectively, compared with $541,579 and $551,810 for corresponding periods last year. The increases were due to increased revenues of $3,632,341 and $7,037,411, respectively, as a result of $22,641,690 in new royalty agreements acquired since the end of September, 2014, and the realized gains on two contract buyouts of $2,196,642.

Free cash flow

Free cash flow was $2,654,803 and $3,597,072 for Q3 2015 and YTD 2015, respectively, compared with negative $388,668 and negative $292,587 for the corresponding periods last year. The increases were due to the increase in revenues, in particular the realized gains on contract buyouts of $2,196,642.

Dividend

Grenville today declared a November dividend, payable on Dec. 15, 2015, to holders of record on Nov. 30, 2015, in the amount of 0.583 cent per share, which represents seven cents on an annualized basis. The aggregate dividend payments during Q3 2015 were $1,232,194. Subsequent to the end of the period, the company declared aggregate dividends of $825,865 for the months of October and November. All dividend payments have come, or will come, from available free cash flow of the company.

Portfolio performance profile

On a quarterly basis, the company carries out a performance review of the portfolio on royalty agreements acquired and loan receivable balance.

Since December, 2014, portfolio performance for the off-target category has remained at a similar level while the above-target and bought-out categories have shown significant growth, in line with management's expectation, reflecting Grenville's investment strategy to invest across a portfolio of companies diversified by currency, sector and investment type.

Average royalty payment per $1-million invested

The average royalty payment per $1-million invested for the month of September, 2015, was $250,583, prior to an adjustment to $242,198 to account for the adjusted royalty payments related to the INOVx contract buyout. Including realized gains on contract buyouts, the result was $369,419 for the month of September.

The rolling 12-month average of total royalty income was $306,018 for the period ended Sept. 30, 2015, up from $216,967 at the end of Q3 2014 and $246,686 at the end of second quarter 2015.

Rolling three-month average investment per month

As of Oct. 31, 2015, the rolling three-month average investment per month was $2,904,642.

Rolling three-month average investment per transaction

As of Oct. 31, 2015, the rolling three-month average investment per transaction was $814,439.

Outlook

As the company continues to scale its business, it is building a diversified U.S.- and Canadian-dollar portfolio consisting of cyclical, neutral and defensive asset classes, and varying revenue-growth categories. The portfolio has been designed through diversification and asset selection to mitigate a level of portfolio company impairment that would be expected in small to medium enterprise (SME) investments. The company has invested more than $47.4-million of capital across 51 investments in 28 portfolio companies. Management is building a balanced portfolio based on the pricing of risk in the SME market a rate of $250,000 of annual revenue per $1-million of invested capital, equivalent to a portfolio return of 25 per cent. The portfolio has reached a scale at which it is generating stable income and adjusted EBITDA, allowing the company to declare dividends. The four contract buyouts announced since the beginning of Q3 2015 generated a return in excess of the 25-per-cent targeted portfolio return and represent a material ancillary revenue source for the company. Management believes contract buyouts will continue to form a meaningful part of the company's annual revenue stream. However, the timing of buyouts and buydowns will be more irregular than monthly royalty revenue streams of the company's core portfolio, which are consistent in nature. Total contract buyouts to date of $12.1-million have generated additional cash flow to the business of $5.0-million.

Grenville's royalty agreements with its portfolio companies provided revenue to the company of approximately $4.5-million for the three-month period ended Sept. 30, 2015. As of Nov. 16, 2015, management estimates October, 2015, revenues will be approximately $775,000, excluding the $2.31-million in revenue as a result of the buyout of the company's Above Security and INOVx investments. Since the end of the third quarter, Grenville has completed $3.6-million in new investments. Operating expenses for Q3 2015, excluding any foreign exchange effects, were approximately $210,000 per month and are estimated to be in the range of $2.2-million to $2.8-million on an annualized basis in fourth quarter 2015.

Grenville's unique capital offering continues to fill an expansive niche in North American small to medium enterprise, growth capital markets. With continued access to financing accretive to shareholder value, management is confident the company will be able to add new portfolio companies to its existing portfolio holdings. Each new portfolio company added will further diversify and strengthen Grenville's existing portfolio balance. Management also believes that the revenue contribution per portfolio company added will be priced at roughly the same rate as existing companies within the portfolio.

Grenville may also expand the range of financial instruments and solutions employed where the use of these additional instruments can enhance or defend portfolio value, including secured and unsecured short-term debt instruments, obtaining security on existing investments, and equity-based instruments. At the present time, the holding of secured and unsecured short-term debt instruments, totalling $1.9-million in aggregate investments, forms an immaterial percentage of the company's total investments.

Grenville's financial statements and management's discussion and analysis for the three- and nine-month periods ended Sept. 30, 2015, will be filed on SEDAR and will be available on Grenville's website.

Investor relations appointment

Grenville is pleased to announce that it has retained the services of Renmark Financial Communications Inc. to handle its investor relations activities. In consideration of the services to be provided, Grenville has agreed to pay a monthly retainer of $7,000 starting Nov. 1, 2015, to Renmark. Renmark does not have any interest, directly or indirectly, in Grenville or its securities, or any right or intent to acquire such an interest.

We seek Safe Harbor.