Mr. Andrew Abouchar reports

MONTFORT CAPITAL ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS

Montfort Capital Corp. has released its financial results for the first quarter ended March 31, 2023. All figures are reported in Canadian dollars unless otherwise noted.

First quarter 2023 highlights

For the three months ended March 31, 2023, the company had the following highlights:

• Total revenue of $13.1-million, an increase of $8.8-million or 209 per cent from $4.2-million in the three months ended March 31, 2022 (the prior-year period);
• Interest income from investments was $9.5-million, an increase of $6.0-million or 169 per cent from $3.5-million in the prior-year period;
• Income from transaction and other fees of $3.1-million, an increase of 420 per cent from $600,000 in the prior-year period;
• Net loss of $1.9-million or three-cent loss per common share compared with net income of $800,000 or one-cent gain per common share in the prior-year period, due in part to restructuring costs related to severance and the relocation of its head office plus a non-cash expected credit loss provision incurred in the first quarter of 2023;
• Total assets of $465.4-million as at March 31, 2023, compared with $462.5-million at Dec. 31, 2022. Cash balance, as part of assets, was $9.0-million compared with $7.0-million as at Dec. 31, 2022;
• Montfort's loan investment portfolio (loans receivable) decreased to $378.9-million in the first quarter 2023 compared with $380.7-million as of Dec. 31, 2022;
• Adjusted net income (loss) attributable to shareholders and adjusted net income (loss) per common share were a loss of $500,000 and one-cent loss per share in the three months ending March 31, 2023, compared with adjusted net income attributable to shareholders of $300,000 and zero cents per share in the prior-year period.

On a comprehensive basis:

• Reported net comprehensive loss of $1.9-million or three cent loss per common share for the three months ended March 31, 2023, compared with net comprehensive income of $400,000 or zero-cent income per common share for the three months ending March 31, 2022.

"We continue to see positive business indicators in the marketplace indicating that private credit is assuming a more prominent role within the lending industry," said Andrew Abouchar, interim chief executive officer of Montfort Capital. "We have significantly expanded our business scale and are actively leveraging this increased scale to explore new verticals. The current economic environment remains dynamic, and we feel that the underwriting infrastructure that we have put into place across the company is well suited to seek out additional opportunities. Our dedicated management teams, composed of highly experienced professionals specializing in various lending markets, are well equipped to drive our future endeavours. I am genuinely excited at the possibilities that lie before us as we continue to forge ahead."

Detailed financial review

The company utilizes a proprietary loan origination platform to originate, underwrite and service private-market, high-yield loan opportunities through its operating divisions:

• TIMIA Capital, a technology lending platform that offers revenue-based investment to fast growing, business-to-business software-as-a-service (or SaaS) businesses in North America;
• Pivot Financial, which specializes in asset-backed private credit targeting mid-market borrowers in Canada;
• Brightpath Capital, one of Canada's leading private providers of residential mortgages;
• Langhaus Financial, provides insurance policy-backed lending solutions to high-net-worth individuals and entrepreneurs in Canada.

Montfort's overall assets under management and administration (AUMA) includes assets under management plus loans managed on behalf of third parties. Montfort's overall AUMA, as at March 31, 2023, was $480-million compared with $490-million in overall AUMA as at Dec. 31, 2022.

The company divides its private credit business into two distinct segments: consumer lending made up of Brightpath and Langhaus, and corporate lending which includes TIMIA Capital and Pivot Financial.

Consumer lending

Brightpath's consumer lending loan portfolio includes a portfolio of over 600 mortgages. Mortgages are secured by residential property, located mainly in Ontario, and have a maturity of one year or less.

Langhaus is primarily involved in providing loans to entrepreneurs that are ensuring their personal and corporate affairs are optimally structured to allow for planning opportunities that generate more after-tax liquidity.

The consumer lending segment reported over $347-million AUMA as at March 31, 2023.

Corporate lending

TIMIA targets companies seeking capital primarily in the following three subsectors: software as a service (SaaS), software-enabled service companies and hardware-enabled service companies. The company is able to efficiently originate transactions, automate aspects of the underwriting process as well as manage the loan portfolio and investors on a continuing basis.

Pivot addresses the borrowing needs of small to mid-sized enterprises in Canada with bespoke term debt structures, bridge loans, asset-based revolving loan facilities and accounts receivable factoring facilities. Pivot portfolio companies typically have one to 100 employees and $1-million to $100-million in revenue.

Corporate lending segment reported $133-million of AUMA as at March 31, 2023.

First quarter 2023

During the first quarter of 2023, the company benefited from the investment in its consumer lending business and the acquisition of Brightpath Capital and Langhaus Financial, and also incurred restructuring costs related to severance and the relocation of its head office and an expected credit loss provision.

Total consolidated revenue for the three months ended March 31, 2023, increased $8.8-million or 209 per cent to $13.1-million from $4.2-million in the three months ended March 31, 2022.

Interest income for the three months ended March 31, 2023, was $9.5-million compared with $3.5-million in the three months ended March 31, 2022; income from transaction and other fees was $3.1-million in the first quarter 2023 compared with $600,000 in the prior-year period; performance fee income was $500,000 versus $100,000 in the prior-year period.

During the first quarter ended March 31, 2022, Montfort benefited from increased payments (combined principal and interest) as a result of the continued revenue growth of its underlying portfolio and the acquisition of Brightpath Capital and Langhaus Financial in the second half of 2022.

Total expenses for the three months ended March 31, 2023, were $14.9-million compared with $3.4-million for the prior year. The majority of the increase in expenses reflect the acquisitions of Brightpath and Langhaus and the continued investment in infrastructure.

During the three months ended March 31, 2023, the company posted net loss of $1.9-million compared with net income of $800,000 for the three months ended March 31, 2022.

During the three months ended March 31, 2023, the company posted a comprehensive loss of $1.9-million compared with comprehensive income of $400,000 for the three months ended March 31, 2022.

As at March 31, 2023, the company's cash balance was $9.0-million compared with $7.0-million as at Dec. 31, 2022, while working capital was negative $14.1-million compared with positive $73.9-million as at Dec. 31, 2022. The negative working capital is mainly driven by one loan payable that moved from long term to current in the period as it is due less than one year from March 31, 2023. The company continues to monitor the matching between loans receivable and loans payable to ensure all obligations are met. The company generates cash from interest earned on loans receivable as well as fees for assets managed and administered. The company has sufficient working capital to meet its obligations and objectives.

This news release is qualified in its entirety by the company's financial statements for the three months ended March 31, 2023, and March 31, 2022, and the associated management's discussion and analysis respecting the same periods, which can be downloaded from the company's profile on SEDAR.

About Montfort Capital Corp.

Montfort manages a diversified family of specialized private credit brands that utilize focused strategies and experienced management teams combined with advanced technology to improve fee-related performance. Montfort facilitates transparency for all of its investors through public company reporting.

We seek Safe Harbor.