Mr. Praveen Gupta reports

CLIFFSIDE CAPITAL LTD. REPORTS SECOND QUARTER 2022 FINANCIAL RESULTS AND PROVIDES BUSINESS UPDATE

Cliffside Capital Ltd. has released its financial results for the second quarter ended June 30, 2022.

The company reported an increase of $90.2-million or 98.2 per cent in finance receivables, net, from $91.9-million as at June 30, 2021, to a record high of $182.1-million as at June 30, 2022, which generated:

• $900,000 of net income before taxes for the six months ended June 30, 2022;
• $3.2-million or 55.6-per-cent increase in net interest income for the six months ended June 30, 2022, compared with the same period in the prior year;
• $1.3-million of adjusted net income before taxes for the six months ended June 30, 2022 (refer to the reconciliation of non-IFRS (international financial reporting standards) measures section on page 12 of the Q2 2022 management's discussion and analysis (MD&A), available on SEDAR, for an explanation on this measure).

During the quarter, the company also declared a quarterly cash dividend on the outstanding common shares of 0.25 cent per common share (one cent on an annualized basis), which was paid on Aug. 2, 2022. Each such dividend qualified as an eligible dividend as defined in the Income Tax Act (Canada). The dividends were subject to customary Canadian withholding tax for shareholders that are non-resident of Canada.

Business update

Notwithstanding the challenging global macroeconomic environment, the company's partnerships continue to have access to efficient financing from various Canadian lenders for their purchase of new auto loan receivables. Two of these facilities are expected to be renewed for an equal or higher amount. The financing facility used for the purchase of loan receivables into another of the company's partnerships, known as CAR LP I, has been extended through January, 2023. As the mezzanine lender that participated in this financing structure does not wish to further renew its financing beyond that point, Cliffside does not expect to finance further loan receivables into that partnership and does not expect the current facility for CAR LP I to be available past January, 2023. Cliffside will use its other facilities in its other partnerships for normal course monthly purchases of loan receivables.

Global macroeconomic challenges

Recent and continuing macroeconomic global events, including COVID-19, global supply chain delays, the war in Ukraine, higher global inflation as well as the expectation of a continued inflationary environment coupled with rising interest rates, have resulted in alternative and non-bank financial companies, such as Cliffside, facing a challenging environment in which to raise equity capital for growth. While Cliffside maintains access to adequate financing sources and capital to permit it to continue current operations in a manner consistent with its business plan, management believes that these recent macroeconomic challenges could have an adverse effect on the company's ability to raise new equity capital to finance future growth. Accordingly, management believes that the recent pattern of strong growth that the company has experienced may be difficult to maintain. Management and the board of directors are actively monitoring and adjusting to the current environment, and will continue to explore all options available to the company.

Further information on Cliffside's financial results can be found on the company's website.

About Cliffside Capital Ltd.

Cliffside is focused on investing in strategic partnerships with parties that have specialized expertise and a proven record in originating and servicing loans and similar types of financial assets. Cliffside's strategy is to generate revenue as an investor, affording its shareholders an opportunity to invest in the growing alternative lending sector with the potential for attractive yields and minimal operational risk while earning a reliable total return.

We seek Safe Harbor.