Mr. Stephen Reid reports

FOUNDERS ADVANTAGE CAPITAL CORP. ANNOUNCES THIRD QUARTER 2016 RESULTS

Founders Advantage Capital Corp. has released its financial results for the third quarter ended June 30, 2016. The comparative period is the third quarter ended June 30, 2015. Readers should refer to the third quarter 2016 management's discussion and analysis and condensed interim consolidated financial statements for complete information, which are available on SEDAR and on the corporation's website.

Third quarter 2016 financial and operational highlights:

• The corporation completed a $28.8-million subscription receipt offering in April, 2016, along with a $20.0-million bridge financing in May, 2016. This cash was used to partially finance the acquisition of a 60-per-cent interest in Dominion Lending Centres (DLC), which closed on June 3, 2016. As a result, the corporation's results are materially impacted by the consolidation of DLC's financial information as at and for the 27 days ended June 30, 2016.
• Revenues were $3.0-million, compared with nil during third quarter 2015. This increase is due to the consolidation of DLC during the quarter.
• Loss from operations was $1.8-million, compared with $800,000 during third quarter 2015. This increase is due to additional expenses being incurred as a result of the change in business model of the corporation, as well as share-based compensation of $1.1-million, compared with $200,000 during third quarter 2015. These increases in costs were partially offset by the $1.4-million income from operations generated by DLC during the current quarter.
• Net income was $1.0-million, compared with a net loss of $900,000 during third quarter 2015. This increase is significantly due to the recognition of a deferred tax recovery for $3.8-million, partially offset by additional expenses being incurred as a result of the change in business model, as well as interest expense related to the bridge debt facility used to partially finance the DLC acquisition.

DLC highlights

For the three months ended June 30, 2016, the corporation would like to highlight the following financial highlights relating to DLC (the following DLC financial data are provided for the full three months ended June 30, 2016, and the company notes that the DLC acquisition was completed by the corporation on June 3, 2016):

• DLC's revenue increased by 29 per cent to $8,172,558 for the three months ended June 30, 2016, when compared with the same prior-year period ($6,346,000).
• DLC's expenses increased by 68 per cent to $3,775,440 for the three months ended June 30, 2016, when compared with the same prior-year period ($2,243,710), primarily as a result of the growth in the business due to DLC's acquisition of MA Mortgage Architects Inc., effective Dec. 31, 2015.
• DLC's earnings before interest, taxes, depreciation and amortization increased by 14 per cent to $2,804,860 for the three months ended June 30, 2016, when compared with the same prior-year period ($2,466,248).
• DLC's business tracks the seasonality of home purchases in Canada. Based on the seasonality of DLC's operations, readers are cautioned not to weight quarterly financial data equally for all quarters. In addition, the company notes that DLC earns mortgage volume bonuses from lenders in the latter quarters of each year as mortgage volume targets are achieved.

About Founders Advantage Capital

The corporation has developed an investment approach to create long-term value for its shareholders and partner entrepreneurs (investees) by pursuing majority interest acquisitions of cash flow positive middle-market privately held entities. The corporation seeks to win mandates by appealing to the segment of the market which is not aligned with traditional private equity control, royalty monetizations or related structures. The corporation's innovative platform offers disproportionate incentives (contractually) for growth in favour of its partner entrepreneurs.