Mr. Andrew Abouchar reports

MONTFORT CAPITAL ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS

Montfort Capital Corp. has released financial results for the third quarter ended Sept. 30, 2023.

Third quarter 2023 highlights

For the three months ended Sept. 30, 2023, the company had the following highlights:

• Total revenue of $13.0-million, an increase of $5.1-million or 64 per cent from $7.9-million in the three months ended Sept. 30, 2022;
• Interest income was $9.2-million, an increase of $3.5-million or 60 per cent from $5.7-million in the prior-year period;
• Income from transaction and other fees was $3.4-million, an increase of 63 per cent from $2.1-million in the prior-year period;
• A net loss of $3.9-million or five cents per common share compared with net income of $500,000 or two cents per common share in the prior-year period, reflecting a $3.4-million non-cash impairment charge;
• Total assets of $374.4-million as at Sept. 30, 2023, compared with $455.5-million at Dec. 31, 2022; the reduction was the result of management's strategic decision to eliminate a low-margin portion of the loan portfolio; cash balance, as part of assets, was $6.7-million compared with $7.0-million as at Dec. 31, 2022;
• Montfort's loan investment portfolio (loans receivable) decreased to $292.2-million in the third quarter 2023 compared with $380.7-million as of Dec. 31, 2022;
• Adjusted net loss (a non-generally accepted accounting principle measure) attributable to shareholders and adjusted net loss per common share attributable to shareholders (a non-generally accepted accounting principle measure) were $3.1-million and four cents per share in the three months ending Sept. 30, 2023, compared with adjusted net income attributable to shareholders of $800,000 and zero per share in the prior-year period.

On a comprehensive basis:

• Reported net comprehensive loss of $3.9-million for the three months ended Sept. 30, 2023, compared with net comprehensive income of $2.6-million for the three months ending Sept. 30, 2022.

"While our private credit business model continues to deliver as the company generated $13-million of revenue in the third quarter, our bottom line was impacted by a non-cash impairment charge," said Andrew Abouchar, interim chief executive officer of Montfort. "We made the decision to take an impairment to one of our loans given the facts that we were presented with at the end of the quarter. We feel strongly that this was a prudent course of action given the current economic environment; however, management is actively pursuing recovery. We may see all or part of the impairment reversed in the coming quarters. Montfort rigorously reviews our portfolio on a monthly basis. We believe the remainder of our portfolio is performing well. We are excited about our business prospects as the uncertain economic environment has driven both corporate and consumer borrowers to look for alternatives outside of the traditional bank lending channels."

Financial review

The company utilizes focused management teams and proprietary systems 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 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 include assets under management plus loans managed on behalf of third parties. Montfort's overall AUMA, as at Sept. 30, 2023, was $388-million compared with $490-million in overall AUMA as at Dec. 31, 2022. Total assets were $374.4-million as at Sept. 30, 2023, compared with $455.5-million as at Dec. 31, 2022. The decrease in total assets was due to a decision by management to terminate a low-margin administration partnership on a portfolio of loans.

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 who 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 $269-million AUMA as at Sept. 30, 2023.

Corporate lending

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

Pivot Financial 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 Financial portfolio companies typically have one to 100 employees and $1-million to $100-million in revenue.

Corporate lending segment reported $119-million AUMA as at Sept. 30, 2023.

This news release is qualified in its entirety by the company's financial statements for the three months ended Sept. 30, 2023, and 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 utilizes 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.