Mr. Praveen Gupta reports

CLIFFSIDE CAPITAL LTD. AND CLIFFSIDE LTD. ANNOUNCE GOING PRIVATE TRANSACTION

Cliffside Capital Ltd. and Cliffside Ltd. (the purchaser) have entered into an arrangement agreement with CFLP LP and LC Asset Management Corp. Pursuant to the arrangement agreement, the purchaser will acquire all of the issued and outstanding common shares in the capital of Cliffside from their holders by way of a statutory plan of arrangement for consideration of 10 cents per common share, other than common shares held by certain shareholders of Cliffside (share electing shareholders) that validly elect to receive common shares in the capital of the purchaser in exchange for their common shares.

Upon completion of the arrangement, Cliffside will be a privately held company.

Concurrently with its entry into the arrangement agreement and to finance the cash consideration payable on closing of the arrangement: (i) the purchaser has entered into a subscription agreement with CFLP, pursuant to which CFLP will subscribe for the number of purchaser shares for an aggregate subscription price of up to $4.1-million; and (ii) CFLP has entered into a subscription agreement in favour of the company with Michael Stein, a director of Cliffside, pursuant to which Mr. Stein has agreed, subject to the terms and conditions set out therein, to subscribe for units of CFLP for an aggregate purchase price of up to $4.1-million.

The arrangement agreement was the result of a comprehensive review of strategic alternatives and a negotiation process that was conducted at arm's length with the supervision and involvement of a committee of independent directors of Cliffside (the independent committee), as advised by external legal and financial advisers. The independent committee was appointed by the board of directors of the company to, among other matters, review the potential transaction and potential alternatives and consider the company's best interests and the implications to shareholders and other stakeholders.

Board approval

The board, with Steve Malone and Michael Stein (the conflicted directors) declaring their conflicts of interest and abstaining from voting, unanimously approved the arrangement following receipt of the unanimous recommendation of the independent committee. The board unanimously, with the conflicted directors abstaining from voting, recommends that shareholders vote in favour of the arrangement.

The company intends to call and hold an annual and special meeting of shareholders in September, 2024, where the arrangement will be considered and voted upon by shareholders of record.

In making their respective determinations, the board and the independent committee considered, among other factors, the fairness opinion of Raymond James Ltd. to the effect that, as of July 16, 2024, subject to the assumptions, limitations and qualifications contained therein, the share consideration to be received pursuant to the arrangement is fair, from a financial point of view, to the share electing shareholders (other than those persons whose votes on the arrangement are required to be excluded pursuant to MI 61-101 (as defined herein)) and the cash consideration to be received pursuant to the arrangement is fair, from a financial point of view, to the shareholders receiving cash consideration.

Transaction details

As part of the arrangement, following the payment of the cash consideration and prior to the issuance of the share consideration, the common shares will be consolidated on the basis of one postconsolidation common share for each 1,000 preconsolidation common shares.

The aggregate purchase price payable by the purchaser under the arrangement is expected to be approximately $9,726,666.70-million, comprising: (i) cash consideration of up to approximately $4.1-million; and (ii) share consideration consisting of approximately 56,283 purchaser shares with an aggregate value of approximately $5,628,376.20. The purchaser shares will be issued on a postshare consolidation basis at a value of $100 per purchaser share, being a value equal to 10 cents per common share on a preshare consolidation basis. The foregoing anticipated purchase price composition is based on the assumption that share electing shareholders will exchange an aggregate of 56,283,762 preshare consolidation common shares for share consideration, representing approximately 57.9 per cent of the issued and outstanding preshare consolidation common shares, and that all other shareholders will receive cash consideration.

Completion of the arrangement is subject to the approval of: (i) at least two-thirds of the votes cast by shareholders, voting as a single class; and (ii) a simple majority of the votes cast by shareholders (excluding common shares required to be excluded pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). The arrangement is also subject to customary closing conditions, including the receipt of court and regulatory approvals, customary non-solicitation covenants subject to "fiduciary out" provisions and a right to match in favour of the purchaser, and customary covenants regarding the conduct of the company's business prior to the closing of the arrangement.

All of the directors of Cliffside and certain shareholders (the supporting shareholders), collectively holding an aggregate of approximately 76 per cent of the outstanding common shares, have entered into voting support agreements with the company, the purchaser and CFLP pursuant to which they have agreed to vote their common shares in favour of the arrangement and, with respect to certain shareholders holding approximately 57.9 per cent of the common shares, have agreed to elect to receive share consideration in exchange for their common shares. Excluding all common shares required to be excluded pursuant to MI 61-101, the supporting shareholders hold approximately 66 per cent of the remaining common shares.

On completion of the arrangement, the asset management agreement dated July 1, 2016, between Cliffside and LC Asset Management will be terminated and of no further force or effect and LC Asset Management will be dissolved.

Following completion of the arrangement, the company will cause the common shares to cease to be listed on the TSX Venture Exchange and intends to submit an application to cease to be a reporting issuer under applicable Canadian securities laws.

The foregoing summary is qualified in its entirety by the provisions of the arrangement agreement, a copy of which, together with the voting support agreements, will be filed on SEDAR+.

Early warning disclosure

Prior to the closing of the arrangement, the purchaser holds no common shares. On closing of the arrangement, the purchaser will acquire 97,266,670 common shares, being 100 per cent the issued and outstanding common shares of Cliffside. Further information may be obtained by contacting Praveen Gupta, chief financial officer of Cliffside, at 647-776-5810 or pgupta@cliffsidecapital.ca.

Advisers

Raymond James is acting as financial adviser to the independent committee. Gardiner Roberts LLP is acting as legal adviser to the independent committee. Bennett Jones LLP is acting as legal adviser to Cliffside.

About Cliffside Capital Ltd.

Cliffside is focused on investing in strategic partnerships with parties who have specialized expertise and a proven record in originating and serving 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.

About Cliffside Ltd.

The purchaser was incorporated on May 27, 2024, pursuant to the laws of the Province of Ontario. The purchaser was incorporated for the sole purpose of completing the arrangement and is controlled by Steve Malone, a director and chief executive officer of Cliffside. Its head office is located at 11 Church St., suite 200, Toronto, Ont., M5E 1W1.

About CFLP LP

CFLP is a limited partnership formed on June 25, 2024, under the laws of the Province of Ontario for the sole purpose of funding the cash consideration payable on completion of the arrangement. Upon completion of the arrangement, CFLP will be the majority shareholder of the purchaser and is controlled by Mr. Stein, a director of Cliffside. Its head office is located at 11 Church St., suite 200, Toronto, Ont.., M5E 1W1.

About LC Asset Management

LC Asset Management was incorporated on March 17, 2016, pursuant to the laws of the Province of Ontario. LC Asset Management is controlled by Mr. Malone and Mr. Stein and provides certain management services to Cliffside. Its head office is located at 11 Church St., suite 200, Toronto, Ont., M5E 1W1.

We seek Safe Harbor.