Company Announcements

TORONTO , Nov. 4, 2025 /CNW/ - Montfort Capital Corp. ("Montfort" or the "Company") (TSXV: MONT), today announced that it has completed the previously announced sale (the "Pivot Sale") of Pivot Financial I Limited Partnership, Pivot Financial Services Inc. and 2862454 Ontario Inc. (collectively, the "Pivot Group") to Pivot Endgame Corp. (the "Purchaser"), an affiliate of an arm's length, third-party investment fund, pursuant to a securities purchase agreement (the "Pivot SPA") dated August 1, 2025, as amended on October 20, 2025, between the Company, the Purchaser, and an arm's length, third party investment fund affiliated with the Purchaser.

Concurrently with the Pivot Sale, the Company also completed the previously announced repurchase and cancellation (the "Flaro Transaction") of 1,024,299 Series A Class A Preferred Shares and 2,397,368 common shares in the capital of the Company (collectively, the "Repurchased Shares") from Dan Flaro, president of the Pivot Group.

Pivot Sale Terms

At Closing of the Pivot SPA ("Closing"), the Company received $1,000,000 in cash consideration, with this amount paid to Pivot Financial I Limited Partnership ("Pivot LP") at the Company's direction in partial repayment of intercompany debt. The Purchaser also issued a promissory note to the Company in the aggregate amount of $1,278,541 (the "VTB Note"). 

The VTB Note is non-interest bearing, not payable on demand and will be assignable to Pivot LP as Brightpath Capital Corporation repays indebtedness owed to Pivot LP under a secured demand promissory note dated August 24, 2024 (the "Brightpath Receivable"). The assignment of the VTB Note will set-off the indebtedness of the Company owed to Pivot LP under the Pivot-Montfort Note (as defined below) and management of the Brightpath Receivable and assignment of the VTB Note is governed by a three-party agreement executed at Closing between the Vendor, the Purchaser and Pivot LP.

In connection with the Pivot Sale, the Company has issued a non-interest bearing secured demand promissory note to Pivot LP in the amount of $1,278,541 (the "Pivot-Montfort Note") and a secured interest bearing demand promissory note to Pivot LP in the principal amount of $3,050,000 which will accrue interest at a rate equal to the rate of interest charged by Cortland Credit Lending Corporation, as agent for and on behalf of lenders ("Cortland") under a second amended and restated credit agreement made among Cortland, Pivot LP and others as amended or replaced from time to time (currently 9.75% per annum). Also, as part of the Pivot Sale, Montfort has provided a $250,000 secured guarantee for certain loan receivables of Pivot LP (the "Secured Guarantee"), which will not become effective until the earlier of November 1, 2027 and the occurrence of a specified liquidity event associated with the assets held by Pivot LP borrower (the "Legacy Sub Debt"). Any recovery by Pivot LP associated with the Legacy Sub Debt exceeding $200,000 will reduce the Company's liability under the Secured Guarantee on a dollar-for-dollar basis.

Flaro Transaction

Prior to the Flaro Transaction, on October 27, 2025, Dan Flaro converted 730,701 Series A Class A Preferred Shares into 730,701 common shares on a one-for-one basis in accordance with the Company's articles.

The Flaro Transaction was completed immediately prior to the Pivot Sale closing as an exempt issuer bid pursuant to Section 4.7 of National Instrument 62-104 Take-Over Bids and Issuer Bids ("NI 62-104"). The Company repurchased and cancelled 1,024,299 Series A Class A Preferred Shares and 2,397,368 common shares (which includes the 730,701 common shares resulting from the conversion described above) from Dan Flaro for an aggregate purchase price of $275,145.30 (the "Flaro Purchase Price"), calculated in accordance with Section 1.11(1) of NI 62-104.

The cancellation of Repurchased Shares reduced the Company's issued and outstanding common shares by 2.7% and Series A Class A Preferred Shares by 4.99%, which is within the limits of the exempt issuer bid under Section 4.7 of NI 62-104. The Flaro Purchase Price was satisfied through the issuance of a non-interest bearing promissory note (the "Montfort IB Note"), which was subsequently tendered back to the Company as part of the Pivot Sale consideration.

Dan Flaro, as president of the Pivot Group, is a "related party" of the Company under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company relied on exemptions from the formal valuation requirement under section 5.5(b) of MI 61-101 (Issuer Not Listed on Specified Markets) and from the minority shareholder approval requirement under section 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the repurchased shares did not exceed 25% of the Company's market capitalization.

The Company has obtained all necessary approvals for the completion of both transactions, including conditional acceptance from the TSX Venture Exchange and consent from Montfort's senior lender, Cortland.

Montfort builds and manages private credit portfolios that have focused investing strategies for the institutional and accredited investors markets.  For further information, please visit www.montfortcapital.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Forward-Looking Information

Certain statements contained in this press release constitute "forward-looking information" and "forward-looking statements", collectively "forward looking statements". All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "designed", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These forward-looking statements include, but are not limited to: the repayment of the Brightpath Receivable by Brightpath Capital Corporation.

This forward-looking information is based on a number of material factors and assumptions including, but not limited to: stable interest rates and financing costs remaining consistent with current market conditions; no material adverse changes in general economic conditions in key markets; competitive positioning remaining stable in the Company's target markets; stability in the competitive landscape of the Company's businesses with no disruptive new market entrants; credit spreads in private lending markets remaining consistent with current market conditions; no significant changes in asset valuations that would impact collateral values; continued demand for private credit; ability to maintain current loan servicing capabilities and operational efficiencies; ability to maintain relationships with key capital providers, co-lenders and financial partners; and availability of external financing at reasonable rates. These assumptions should be considered carefully by readers.

The forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements. These risks and uncertainties include, but are not limited to: lower than expected revenue growth in the Company's core business segments; potential for increased competition that could compress profit margins; possibility of higher operating costs than forecasted; risk of economic downturn affecting demand for the Company's services; unforeseen regulatory changes impacting the Company's business model and/or cost structure; failure to obtain approval from the TSXV for the Pivot Sale; failure to obtain approval of Cortland Credit Lending Corporation for the Pivot Sale; deterioration of the loan portfolio of the Company and of the Pivot Group; and the Company being unable to continue as a going concern due to its inability to procure additional liquidity and / or financing on reasonable terms. We do not undertake to update any forward-looking information, except as, and to the extent required by, applicable securities laws.

Based on current available information, the Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that those expectations will prove to be correct. The forward-looking statements in this press release are expressly qualified by this statement, and readers are advised not to place undue reliance on the forward-looking statements.

SOURCE Montfort Capital Corp.