Mr. Amar Leekha reports

FOUNDERS ADVANTAGE RELEASES Q1 2018 RESULTS

Founders Advantage Capital Corp. has released its financial results for the three months ended March 31, 2018 (Q1 2018). For complete information, readers should refer to the full Q1 2018 report or to the consolidated financial statements and management discussion and analysis (MD&A), which are available on SEDAR and the corporation's website. All amounts are presented in Canadian dollars unless otherwise stated.

Stephen Reid, president and chief executive officer, commented: "We are pleased to report that the franchise segment's adjusted EBITDA has increased 69 per cent compared to last year. The segment, which includes DLC, is off to a strong start in 2018, positioning us well for the balance of the year."

                SELECTED CONSOLIDATED FINANCIAL HIGHLIGHTS
          (in thousands except per-share amounts and as noted)

                                                      Three months ended      
                                          March 31, 2018  March 31, 2017

Revenues                                        $ 30,141        $ 13,694 
Income (loss) from operations                      1,442          (1,790)
Adjusted EBITDA (1)                                6,244           1,957  
Adjusted EBITDA attributable to the 
following (1)                                   
Shareholders                                       3,085             705    
Non-controlling interests                          3,159           1,252  
Adjusted EBITDA margin (1)                           21%             14%
Proportionate share of adjusted EBITDA (1)         3,933           2,171  
Free cash flow (1)                                  (271)            180    
Net (loss) for the period                         (2,039)         (1,660)
Net income (loss) attributable to
the following                                     
Shareholders                                      (2,291)         (1,630)
Non-controlling interests                            252             (30)
Adjusted net income (loss) (1)                        71          (1,247)
Adjusted net income (loss) attributable to
the following (1)
Shareholders                                        (779)         (1,249)
Non-controlling interests                            850               2      
Diluted (loss) per share                           (0.06)          (0.04)
Adjusted (loss) per share (1)                      (0.02)          (0.03)
Dividend declared per share                     $ 0.0125        $ 0.0125 

EBITDA means earnings before interest, taxes, depreciation and 
amortization.

The company uses non-GAAP (generally accepted accounting principles) measures to assess its overall performance. Please see the non-IFRS (international financial reporting standards) measures section of the MD&A for additional information on these measures.

Q1 2018 operational highlights

Operational highlights include:

• Successfully navigating the new B20 mortgage guidelines;
• Investing for growth in the fitness industry;
• Integration of new acquisitions.

Navigating the new mortgage guidelines in Canada was front and centre this quarter for Founders' portfolio company, Dominion Lending Centres Group (DLC). DLC is well positioned to help more Canadian consumers obtain a mortgage and has invested in broker recruiting and retention, as well as targeted marketing campaigns. The result of DLC's efforts is higher year-over-year mortgage volumes (increasing from financed volumes of $6.8-billion in Q1 2017 to $7.0-billion in Q1 2018) and increasing market share in most markets (increasing from 34.7 per cent in Q1 2017 to 35.7 per cent in Q1 2018).

Investments in support resources and expansion initiated in 2017 at Club16 Trevor Linden Fitness are expected to well position Club16 for future periods. Membership numbers have increased from 80,296 in Q1 2017 to 82,811 in Q1 2018, a 3-per-cent increase period over period.

Founders' newest acquisitions have provided positive incremental value to the portfolio. Newton Connectivity Systems Inc. (NCS) underwent large-scale integration and restructuring in 2017 and is now set up for short-term and long-term growth. Impact Radio Accessories has initiated many revenue growth initiatives and Astley Gilbert Ltd. (AG) is realizing value from its October, 2017, acquisition expansion.

Q1 2018 financial highlights

Previously, Founders issued 2018 guidance for its expected proportionate share of annual adjusted EBITDA from its four investees of approximately $21.5-million to $22.5-million for the year ended Dec. 31, 2018. This outlook is reaffirmed. Founders' results generally vary from quarter to quarter because of seasonal fluctuations in its business segments. Q1 tends to be a lower quarter for all businesses with increased revenues historically coming in Q2 and Q3. The explanations below reflect the changes from Q1 2017 to Q1 2018.

Revenues for Q1 2018 increased $16.4-million primarily as a result of the acquisitions completed in 2017, although $100,000 of this increase was related to higher financed mortgage volumes in the franchise segment, and $400,000 is related to higher member numbers in the consumer products and services segment. The acquisitions also drove majority of the increase in income from operations, with $2.3-million of the $3.2-million increase coming from the acquisitions.

Adjusted EBITDA increased by $4.3-million from $2.0-million in Q1 2017 to $6.2-million in Q1 2018. The quarter-over-quarter increase was the result of higher mortgage financed volumes, new acquisition earnings and lower costs in both the franchise segment and corporate head office.

Please see the corporation's MD&A and financial statements for additional information relating to the financial results.

Overview of financial results for segments

Founders currently operates a corporate head office and three business segments -- business products and services, consumer products and services, and franchise. Please see the corporation's MD&A for a comprehensive discussion relating to the financial results for the segments.

Non-IFRS measures

Management presents certain non-IFRS financial measures which the company uses as supplemental indicators of its operating performance. Non-IFRS financial performance measures include EBITDA and adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA attributed to shareholders and NCI, proportionate share of investee EBITDA, adjusted net income, adjusted earnings per share, and free cash flow. Readers are cautioned that these non-IFRS measures should not be construed as a substitute or an alternative to applicable generally accepted accounting principle measures as determined in accordance with IFRS. Please see the corporation's MD&A for a description these measures and a reconciliation of these measures to their nearest IFRS measure.

About Founders Advantage Capital Corp.

The corporation is listed on the TSX Venture Exchange as an investment issuer (Tier 1) and employs a permanent investment approach. The corporation has developed an investment approach to create long-term value for its shareholders and partner entrepreneurs (investees) by pursuing controlling 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.

We seek Safe Harbor.