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August 8, 2017

Grenville Strategic Royalty Announces 2017 Second Quarter Results

Grenville Strategic Royalty Announces 2017 Second Quarter Results

Records Royalty Payment Income of $1.0 million and Free Cash Flow of $3.5 million in Q2 2017

TORONTO, Aug. 08, 2017 (GLOBE NEWSWIRE) — Grenville Strategic Royalty Corp. (TSX-V:GRC) (“Grenville” or the “Company”) today announced its financial and operating results for the three- and six-month periods ended June 30, 2017. Financial references are in Canadian dollars unless otherwise specified.

2017 Second Quarter Financial Highlights

  • Royalty Payment Income of $1,026,000
  • Adjusted EBITDA(1) of $3,372,000
  • Free Cash Flow(1) of $3,517,000

Operational Highlights

  • Closed five new investments, consisting of US$150,000 in MedWorxs LLC, $125,000 in Fixt Wireless Inc., US$1,500,000 in ConnectAndSell, Inc., US$350,000 in Kare Intellex Inc. and US$500,000 in Frequentz, Inc., and one follow-on investment of US$125,000 in Factor 75
  • Completed a Contract Buyout of $5 million, plus royalties earned, on the $2 million investment in Aquam Corporation
  • Acquired 18.2 million shares in Lattice Biologics Ltd at an issue price of $0.20 per share in exchange for the extinguishment of the US$2,000,000 royalty agreement and US$700,000 in overdue royalty payments
  • Closed after the end of the quarter one new investment in Hybrid Financial Ltd. for $425,000

“We generated positive free cash flow again this quarter as the performing investments and our cost restructuring have established a sustainable path forward for the business. In total, we have generated more than $41 million in cash from the nearly $68 million invested to date,” said Steve Parry, Chief Executive Officer of Grenville. “The Aquam buyout represents our seventh successful Contract Buyout, which provide non-dilutive cash to redeploy into new investments. The five new investments during the quarter and one new investment after the end of the quarter demonstrate we have returned to a consistent pace of capital deployment. We have sufficient cash on hand to continue this pace through calendar 2017, with a robust pipeline of new opportunities that align with the investment criteria of our new investment model that we implemented in mid-2016. We continue to focus on generating monthly royalty income above $400,000 where the business generates sustainable free cash flows.”

Financial Highlights

Canadian dollars Three months ended
June 30, 2017
Three months ended
June 30, 2016
Revenues $   (2,067,408) $   1,290,572
Royalty Payment Income and Interest and Fee Income Earned 1,068,560 2,096,718
Adjusted EBITDA(1)   3,371,884   507,700
Free Cash Flow(1)   3,517,919   340,161
(Loss) for the period   (2,456,208)   (633,250)
Basic (Loss) per share   (0.0231)   (0.0060)
Diluted (Loss) per share   (0.0231)   (0.0060)
Weighted basic average number of shares outstanding   106,317,656   106,267,252
Royalty agreements acquired in period 3,695,503 427,575

(1) Adjusted EBITDA and Free cash flow are non-IFRS measures. Refer to section Definition of Non-IFRS Measures for further explanation and definitions.

Revenues
Revenues were $(2,067,000) and $(5,510,000) for the three-month (Q2 2017) and six-month (YTD 2017) periods ended June 30, 2017, respectively, compared to $1,291,000 and $(1,543,000) for the corresponding periods in 2016. With the adoption of IFRS 9, certain non-cash items are recognized in revenue. Revenues in the quarterly period were negatively impacted by net non-cash items of $3,135,000 made up of $1,213,000 of an unrealized loss in writing-down the fair value of royalty agreements acquired and promissory notes receivable, $1,432,000 for the unrealized loss in the change in the fair value of the shares held in Lattice Biologics Ltd. and the balance for unrealized foreign exchange loss.

Royalty Payment Income and Interest and Fee Income Earned
Royalty payment income plus interest and fee income earned was $1,069,000 and $2,419,000 for Q2 2017 and YTD 2017, respectively, compared to $2,097,000 and $4,715,000 for the corresponding periods in 2016. The change in the quarterly period was due to no royalty payment income recognized in Q2 2017 from seven investees that have failed to pay royalties for at least three months compared to $825,000 of income recognized from this group in the same period last year. Management believes that the core companies from its portfolio will continue to contribute free cash flow(1) on a regular basis as the portfolio matures.

Operating Expense
Total operating expenses were $803,000 and $2,054,000 for Q2 2017 and YTD 2017, respectively, compared to $1,657,000 and $2,715,000 for the corresponding periods in 2016. The $854,000, or 52%, decrease was due to an overall $179,000 decrease in expenses in Q2 2017 and the $675,000 contract payment made to the former Chief Executive Officer in the prior year period.

Adjusted EBITDA(1) 
Adjusted EBITDA(1) was $3,372,000 and $3,529,000 for Q2 2017 and YTD 2017, respectively, compared to $508,000 and $2,094,000 for the corresponding periods in 2016. The improvement in the quarterly period is primarily due to the $3,000,000 realized gain on the Aquam Contract Buyout and lower operating expenses.

Free Cash Flow(1)
Free cash flow(1) was $3,518,000 and $3,570,000 for Q2 2017 and YTD, respectively, compared to $340,000 and $(251,000) for the corresponding periods in 2016. The improvement in the quarterly period is primarily due to the $3,000,000 realized gain on the Aquam buyout.

Loss After Taxes
Loss after taxes was $2,456,000 and $6,248,000 for Q2 2017 and YTD 2017, respectively, compared to $633,000 and $3,824,000 for the corresponding periods in 2016. The change in the quarterly period was due to an increase of $2,150,000 in the realized loss from investments written-off, lower royalty payment income of $945,000, higher unrealized foreign exchange loss of $334,000, which was partially offset by a higher unrealized gain of $922,000 from investments derecognized and lower operating costs.

Assets

   As at June 30, 2017  As at December 31, 2016
Cash and cash equivalents $ 7,984,838 $ 6,202,412
Royalty agreements acquired and promissory notes 25,376,712 37,562,379
Equity securities in in investee companies 2,190,617
Total assets 43,685,117   49,426,466

Outlook

The Company has invested almost $68 million of capital in 39 portfolio companies, generated Adjusted EBITDA(1) of $19.5 million and generated free cash flow(1) of $11.6 million since inception in July 2013. The core of the portfolio has reached a scale at which it is generating Adjusted EBITDA(1) .

Grenville’s royalty agreements with its portfolio companies generated Adjusted EBITDA(1) to the Company of approximately $3.4 million, including the $3.0 million Contract Buyout of Aquam, for the three-month period ended June 30, 2017. As of August 8, 2017, the Company estimates that for the month of July 2017, royalty payment income, interest and fee income will be $350,000, Free Cash Flow will be $50,000 and Adjusted EBITDA will be $100,000.

Based on information available as of August 8, 2017, management believes that there are additional investments in the portfolio that represent Contract Buyout opportunities. The Company believes that the potential gross amount that could be received from these Contract Buyouts is up to $4.0 million. The Company believes this would significantly increase Adjusted EBITDA(1) up to $2.0 million and Free Cash Flow(1) up to $1.4 million. Given the nature of Contract Buyouts, the timing and the amount of Contract Buyouts are uncertain and any estimates included here may vary either positively or negatively.

Operating expenses (excluding share-based compensation) for Q2 2017, were approximately $245,000 per month and are estimated to be in the range of $2.4 million to $3.0 million on an annualized basis in Q3 2017. The Company’s cash position as at August 8, 2017, is approximately $8.1 million.

Grenville’s unique capital offering continues to fill an expansive niche in the North American small to medium sized enterprise, growth-capital markets. With continued access to funding accretive to shareholder value, management is confident the Company will be able to add new portfolio companies to its existing portfolio holdings. Each new portfolio company added will further diversify and strengthen Grenville’s existing portfolio balance. Management also believes that the revenue contribution per portfolio-company added will be priced at roughly the same rate as existing companies within the portfolio.

Grenville’s financial statements and management’s discussion and analysis for the three-month period ended June 30, 2017, will be filed today on SEDAR at www.sedar.com and also available on Grenville’s website at www.grenvillesrc.com.

(1)  Please refer to the Company’s management’s discussion and analysis for definitions and reconciliations of these non-IFRS measures to measures prescribed by IFRS.

Conference Call Details

Grenville will host a conference call to discuss these results at 8:00 a.m. Eastern Time, Wednesday, August 9, 2017. Participants should call (647) 427-2311 or (866) 521-4909 and ask an operator for the Grenville earnings call. Please dial in 10 minutes prior to the call to secure a line. A replay will be available shortly after the call. To access the replay, please dial (416) 621-4642 or (800) 585-8367 and enter access code 61059448. The replay recording will be available until 11:59 p.m. Eastern Time, August 16, 2017.

An audio recording of the conference call will be also available on the investors’ page of Grenville’s website at grenvillesrc.com.

About Grenville

Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, information with respect to: prospective financial performance; including the Company’s opinion regarding the current and future performance of its portfolio, expenses and operations; anticipated cash needs and need for additional financing; anticipated funding sources; future growth plans; royalty acquisition targets and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; business prospects and strategy; anticipated trends and challenges in the Company’s business and the markets in which it operates; the amount and timing of the payment of dividends by the Company; and the Company’s financial position. By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.

An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s limited operating history; the Company’s ability to generate sufficient revenues; the Company’s ability to manage future growth; the limited diversification in the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases from new investee companies; the Company’s dependence on the operations, assets and financial health of its investee companies; the Company’s limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of the Company’s investments; the Company’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company being classified as a Passive Foreign Investment Company (“PFIC”); the Company’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel, particularly the Company’s founders; dilution of shareholders’ interest through future financings; and general economic and political conditions; as well as the risks discussed under the heading “Risk Factors” on pages 16 to 22 of the Annual Information Form of the Company dated February 11, 2015 and the risks discussed herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect the Company’s business and its ability to identify and close new opportunities with new investees are material factors that the Company considered when setting its strategic priorities and objectives, and its outlook for its business.

Key assumptions include, but are not limited to: assumptions that the Canadian and U.S. economies relevant to the Company’s investment focus will remain relatively stable over the next 12 to 24 months; that interest rates will not increase dramatically over the next 12 to 24 months; that the Company’s existing investees will continue to make royalty payments to the Company as and when required; that the businesses of the Company’s investees will not experience material negative results; that the Company will continue to grow its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change significantly in Canada and the U.S.; that more small to medium private and public companies will continue to require access to alternative sources of capital; that the Company will have the ability to raise required equity and/or debt financing on acceptable terms; and that the Company will have sufficient free cash flow to pay dividends. The Company has also assumed that access to the capital markets will remain relatively stable, that the capital markets will perform with normal levels of volatility and that the Canadian dollar will not have a high amount of volatility relative to the U.S. dollar. In determining expectations for economic growth, the Company primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this PRESS RELEASE are made as of the date of this PRESS RELEASE, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Neither 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 release.

For further information, please contact: 

Grenville Strategic Royalty Corp.:
Steven Parry
Chief Executive Officer
Tel: (416) 777-0383

Grenville Strategic Royalty Announces $425,000 Royalty Agreement with Hybrid Financial Ltd.

Grenville Strategic Royalty Announces $425,000 Royalty Agreement with Hybrid Financial Ltd.

TORONTO, Ontario, August 8, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced it has signed a royalty purchase agreement with Hybrid Financial Ltd. (“Hybrid”) to provide $425,000 CDN in growth capital. The JV partners are expected to close additional funds in the next week for a total commitment from the three parties of $750,000 CDN to Hybrid.

Based in Toronto, Hybrid provides investor relations and retail-focused origination and distribution services to the investment management industry throughout North America. Leveraging technology and one of the most comprehensive databases of the Canadian and US retail investment advisor landscape, Hybrid has become one of the leading financial sales and investor relations firms in Toronto.

“Like many Fintech companies, Hybrid has successfully reinvented important steps in the capital markets process” said Grenville CEO Steve Parry. “Their platform transforms and merges the deal origination, distribution and communications functions for companies and capital providers. As both an investor and a potential customer, we see their approach as state of the art with higher success rates than traditional practices.”

About Hybrid Financial Ltd.

Hybrid, founded in 2011 by Steven Marshall, is a specialized investment products and corporate sales, distribution and Investor relations business which delivers its services on an outsourced basis on behalf of several of Canada’s largest and most well respected financial institutions. As a result of its unique automated sales and marketing platform, Hybrid offers a compelling value proposition to publicly listed corporations, investment managers and issuers seeking to find a more efficient and cost-effective means of generating sales through the retail broker/dealer networks

About Grenville

Based in Toronto, Grenville is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

August 2, 2017

Notice of Grenville Strategic Royalty’s Second Quarter 2017 Financial Results Conference Call

Notice of Grenville Strategic Royalty’s Second Quarter 2017 Financial Results Conference Call

– Financial results to be released after markets on Tuesday, August 8, 2017 –

TORONTO, Ontario, August 2, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced it will release its second quarter 2017 financial results after the markets close on Tuesday, August 8, 2017. Mr. Steve Parry, Chief Executive Officer, and Mr. Donnacha Rahill, Chief Financial Officer, will host a conference call at 8:00 a.m. ET the next day, Wednesday, August 9, 2017, to review the results. A question and answer session will follow the corporate update.

CONFERENCE CALL DETAILS

DATE:                                          Wednesday, August 9, 2017

TIME:                                           8:00 AM Eastern Time

DIAL IN NUMBER:                     647-427-2311 or 866-521-4909

TAPED REPLAY:                         416-621-4642 or 800-585-8367

REFERENCE NUMBER:            61059448

A recording of the call will be archived on the Company’s website at www.grenvillesrc.com/financials/ .

About Grenville

Based in Toronto, Grenville is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

For further information, please contact:

Steve Parry

Chief Executive Officer

Tel: (416) 777-0383

June 21, 2017

Grenville Strategic Royalty Announces USD$500,000 Royalty Agreement with Frequentz, Inc.

Grenville Strategic Royalty Announces USD$500,000 Royalty Agreement with Frequentz, Inc.

TORONTO, Ontario, June 21, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced it has signed a royalty purchase agreement with Frequentz, Inc. (“Frequentz”) to provide USD$500,000 in growth capital.

Based in Palo Alto, CA, Frequentz is a leading provider of comprehensive supply chain traceability and information management solutions, serving some of the world’s largest food and life sciences distributors and manufacturers.  Leveraging technology initially built by Earthbound Farm and IBM, the company’s software provides valuable insights into supply chains and critical business processes by collecting, storing, and analyzing serialized ingredient data through each stage of processing down to their source.

“Frequentz represents an opportunity for Grenville to invest alongside highly regarded Silicon Valley investors and entrepreneurs with deep domain expertise in a leading supply chain technology company” said Grenville CEO Steve Parry. “This is a good example of our focus on investments with quality management and capital partners, where our royalty product is ideally suited to act as a catalyst for future growth.”

Frequentz, Inc.

Frequentz provides serialized data, supply chain traceability, and information management software solutions to major food and life sciences companies. Frequentz ’s primary offering, their Information Repository & Intelligence Server (“IRIS”) tracks, traces, serializes, verifies, captures, stores, and analyses product event data, at the unit or lot level, as the product moves through the supply chain.

About Grenville

Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Neither 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 release.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

June 14, 2017

Grenville Strategic Royalty Announces Completion of Transaction To Restructure Lattice Biologics Investment

Grenville Strategic Royalty Announces Completion of Transaction To Restructure Lattice Biologics Investment

TORONTO, June 14, 2017 (GLOBE NEWSWIRE) — Grenville Strategic Royalty Corp. (TSXV:GRC) (“Grenville” or the “Company”) today announced that, as previously disclosed, it has acquired 18,246,600 common shares (“Shares”) of Lattice Biologics Ltd (TSXV:LBL) (“Lattice”) at an issue price of CDN$0.20 in exchange for the extinguishment of USD$2,000,000 of Grenville’s original royalty investment in Lattice and USD$700,000 of overdue royalty payments owing by Lattice to Grenville under the existing royalty agreement between the parties. As a result of the issuance of the Shares, Grenville holds approximately 19.68% of the total issued and outstanding common shares of Lattice. The Shares are subject to a four-month hold period under applicable securities laws. Grenville has filed an early warning report on SEDAR in respect of its acquisition of the Shares.

About Grenville
Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Neither 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 release.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

June 5, 2017

Grenville Strategic Royalty Announces $USD350,000 Royalty Agreement with Kare Intellex Inc.

Grenville Strategic Royalty Announces $USD350,000 Royalty Agreement with Kare Intellex Inc.

TORONTO, June 05, 2017 (GLOBE NEWSWIRE) — Grenville Strategic Royalty Corp. (TSXV:GRC) (“Grenville” or the “Company”) today announced it has signed a royalty purchase agreement with Kare Intellex Inc. (“Kare”) to provide USD$350,000 in acquisition and growth capital.

Kare offers software that automates tedious paper record-keeping and insurance billing for home health agencies. With this financing, the company has completed the acquisition of Alternacare Home Health Services Inc. (“Alternacare”) which will serve as a platform for demonstrating the value of the Kare  software.  By combining the two businesses, Kare will be able to fully integrate with medical providers, large insurance providers, and families to significantly improve the way home care is delivered.

“We are very pleased to add to our technology-enabled healthcare portfolio with the investment in Kare Intellex,” said Grenville CEO Steve Parry. “Hanad Duale, Cindy Thiel and their industry-expert board are taking advantage of the strongest trend in US healthcare – the move towards homecare as a more cost effective and patient-friendly method of delivering services. We believe the combination of Kare’s technology platform with the acquisition of Alternacare is a great model for demonstrating this approach.”

About Kare Intellex Inc.

Kare Intellex Inc. has developed an on-demand mobile platform that is transforming homecare delivery by empowering patients, caregivers and payers to reduce costs and focus resources where they’re needed most, patient care.  Via its recent acquisition of Alternacare, the company now offers home health services to patients located in the South East of the state of Ohio.

About Grenville

Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Neither 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 release.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

May 10, 2017

Grenville Strategic Royalty Announces 2017 First Quarter Results

Grenville Strategic Royalty Announces 2017 First Quarter Results

– Records Royalty Payment Income of $1.3 million in Q1 2016 –

TORONTO, Ontario, May 10, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced its financial and operating results for the three-month period ended March 31, 2017 (“Q1 2017”). Financial references are in Canadian dollars unless otherwise specified.

2017 First Quarter Financial Highlights

  • Royalty Payment Income of $1,333,000
  • Adjusted EBITDA(1) of 157,000
  • Free Cash Flow(1) of $52,000

Operational Highlights

  • Closed four investments subsequent to the end of the quarter, consisting of three new investments of US$150,000 in Medworxs LLC, $125,000 in Fixt Wireless Inc. and US$1.5 million in ConnectAndSell, Inc. and one follow-on investment of US$125,000 in Factor 75
  • Announced a Contract Buyout of $5 million, plus royalties earned, on the $2 million investment in Aquam Corporation, subsequent to the end of the quarter

“Our results are starting to reflect the important improvements we have made in the business during the last twelve months. We have reduced our cost structure to a point where we generate cash on a consistent basis. While we are still seeing fair value decreases on the balance sheet related to the legacy portfolio, we are generating significant free cash flows related to Contract Buyouts, including the April buyout of Aquam. The Aquam buyout increased capital available for new investments to approximately $10 million, which along with investments by our joint venture partners is sufficient to fund a robust program in 2017,” said Steve Parry, Chief Executive Officer of Grenville.  “To put this in perspective, we have generated more than $40 million in cash from the $66 million invested to date. The core positions within the portfolio are producing and align well with our go-forward investment model reflecting the profound learning we have extracted from the first four years of deploying this unique SME royalty product.”

Financial Highlights

Canadian dollars

Three months ended March 31, 2017

Three months ended March 31, 2016

Revenues

$          (3,442,258)

$          (2,833,267)

Royalty Payment Income and Interest Income Earned

1,333,641

2,581,429

Adjusted EBITDA(1)

157,101

               1,586,562

Free Cash Flow(1)

                    52,232

               (639,064)

(Loss)/Profit for the period

            (3,792,281)

            (3,190,773)

Basic Earnings/(Loss) per share

                 (0.0357)

                 (0.0306)

Diluted Earnings/(Loss) per share

                 (0.0357)

                 (0.0306)

Weighted basic average number of shares outstanding

           106,297,830

           104,227,591

Royalty agreements acquired in period

98,130

5,373,594

  • Adjusted EBITDA and Free cash flow are non-IFRS measures. Refer to section Definition of Non-IFRS Measures for further explanation and definitions.

Revenues

Revenues were $(3,442,000) for Q1 2017, compared to $(2,833,000) for the same period in 2016. With the adoption of IFRS 9, certain non-cash items are recognized in revenue. Revenues were negatively impacted by net non-cash items of $4,793,000 compared to $5,451,000 for the same period in 2016. This non-cash amount of $4,793,000 relates to $1,036,000 for an unrealized gain from the change in fair value of royalty agreements acquired and promissory notes receivable which is offset by a realized loss of $5,145,000 from investments written-off and unrealized foreign exchange loss of $685,000. The realized loss from investments written off relates to two investments (BG Furniture Inc. and PFO Global Group) that were written-off in Q1 2017 as the recovery is expected to be small. The unrealized foreign exchange loss related to the translation of the royalty agreements acquired and promissory notes receivable denominated in U.S. dollars and reflects the movement in the exchange rate from $1.3427 at December 31, 2016 to $1.3299 at March 31, 2017.

Royalty Payment Income and Interest Income Earned

Royalty payment income plus interest income earned was $1,334,000 for Q1 2017, compared to $2,581,000 in the same period in 2016. The change was due to no royalty payment income revenue recognized in Q1 2017 from eight investees that have failed to pay royalties for at least three months. Management believes that the core companies from its portfolio will continue to contribute free cash flow(1) on a regular basis as the portfolio matures.

Operating Expense

Total operating expenses were $1,251,000 for Q1 2017, compared to $1,058,000 for the same period in 2016. The $193,000 increase is due to an once-off $400,000 HST provision expense offset by $85,000 lower salaries due to management team taking a lower salary and two fewer employees, lower professional fees of $69,000 and lower office and general administrative expenses of $36,000.

Adjusted EBITDA(1)

Adjusted EBITDA(1) was $157,000 for Q1 2017, compared to $1,587,000 for the same period in 2016. The change was due to the lower royalty payment income and the HST provision expense, each of which are referenced above.

Free Cash Flow(1)

Free cash flow(1) was $52,000 for Q1 2017, compared to negative $639,000 for the same period in 2016. The improvement was due to the crystallization of short-term working capital timing differences of $1,112,000 in the prior period, Q1 2016, as well as higher income tax payable of $255,000 in Q1 2016. These improvements were partially offset by lower royalty payment income received of $810,000 in Q1 2017.

Income (Loss) After Taxes

Income (Loss) after taxes was $(3,792,000) for Q1 2017, compared to $(3,191,000) in the same period in 2016. The change was due to an unrealized loss from the change in fair value of royalty agreements acquired and promissory notes receivable (net of realized loss from investments written-off) of $1,189,000, lower royalty payment income of $1,172,000 and the once-off $400,000 HST provision expense in Q1 2017. The impact of these items was partially offset by a lower unrealized foreign exchange loss of $1,848,000.

Assets

 

 As at March 31, 2017

 As at December 31, 2016

Cash and cash equivalents

$6,609,776

$6,202,412

Royalty agreements acquired and promissory notes

32,563,987

37,562,379

Total assets

46,303,933

              49,426,466

Outlook

The Company has invested more than $66 million of capital in 36 portfolio companies, generated Adjusted EBITDA(1) of $16.6 million and has generated free cash flow(1) of $8.1 million since inception in July 2013. The core of the portfolio has reached a scale at which it is generating Adjusted EBITDA(1) .

Grenville’s royalty agreements with its portfolio companies generated Adjusted EBITDA(1) to the Company of approximately $0.2 million for the three-month period ended March 31, 2017. As of May 10, 2017, the Company estimates that for the month of April 2017, royalty payment income, interest earned and Contract Buyout gain will be $3.35 million, Free Cash Flow will be $3.6 million and Adjusted EBITDA will be $3.2 million.

Based on information available as of May 10, 2017, management believes that there are additional investments in the portfolio that represent Contract Buyout opportunities in the next few quarters. The Company believes that the potential gross amount that could be received from these Contract Buyouts is up to $4.0 million spread over the next few quarters. The Company believes this would significantly increase Adjusted EBITDA(1) up to $2.0 million and Free Cash Flow(1) up to $1.4 million. Including the cash balance as of May 10, 2017, of $9.8 million, the available capital for investment in new companies would be up to $13.1 million. Given the nature of Contract Buyouts, the timing and the amount of Contract Buyouts are uncertain and any estimates included here may vary either positively or negatively.

Operating expenses (excluding share-based compensation and HST provision expense) for Q1 2017, were approximately $0.25 million per month and are estimated to be in the range of $2.4 million to $3.0 million on an annualized basis in Q2 2017.

Grenville’s unique capital offering continues to fill an expansive niche in the North American small to medium sized enterprise, growth-capital markets. With continued access to funding accretive to shareholder value, management is confident the Company will be able to add new portfolio companies to its existing portfolio holdings. Each new portfolio company added will further diversify and strengthen Grenville’s existing portfolio balance. Management also believes that the revenue contribution per portfolio-company added will be priced at roughly the same rate as existing companies within the portfolio.

Grenville’s financial statements and management’s discussion and analysis for the three-month period ended March 31, 2017, will be filed today on SEDAR at www.sedar.com and also available on Grenville’s website at www.grenvillesrc.com.

(1)  Please refer to the Company’s management’s discussion and analysis for definitions and reconciliations of these non-IFRS measures to measures prescribed by IFRS.

Conference Call Details

Grenville will host a conference call to discuss these results at 8:00 a.m. Eastern Time, Thursday, May 11, 2017. Participants should call (647) 427-2311 or (866) 521-4909 and ask an operator for the Grenville earnings call. Please dial in 10 minutes prior to the call to secure a line. A replay will be available shortly after the call. To access the replay, please dial (416) 621-4642 or (800) 585-8367 and enter access code 17234196. The replay recording will be available until 11:59 p.m. Eastern Time, May 18, 2017.

An audio recording of the conference call will be also available on the investors’ page of Grenville’s website at grenvillesrc.com.

About Grenville

Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, information with respect to: prospective financial performance; including the Company’s opinion regarding the current and future performance of its portfolio, expenses and operations; anticipated cash needs and need for additional financing; anticipated funding sources; future growth plans; royalty acquisition targets and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; business prospects and strategy; anticipated trends and challenges in the Company’s business and the markets in which it operates; the amount and timing of the payment of dividends by the Company; and the Company’s financial position. By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.

An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in the Company; the volatility of the Company’s share price; the Company’s limited operating history; the Company’s ability to generate sufficient revenues; the Company’s ability to manage future growth; the limited diversification in the Company’s existing investments; the Company’s ability to negotiate additional royalty purchases from new investee companies; the Company’s dependence on the operations, assets and financial health of its investee companies; the Company’s limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of the Company’s investments; the Company’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters, including the potential impact of the Foreign Account Tax Compliance Act on the Company; the potential impact of the Company being classified as a Passive Foreign Investment Company (“PFIC”); the Company’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel, particularly the Company’s founders; dilution of shareholders’ interest through future financings; and general economic and political conditions; as well as the risks discussed under the heading “Risk Factors” on pages 16 to 22 of the Annual Information Form of the Company dated February 11, 2015 and the risks discussed herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect the Company’s business and its ability to identify and close new opportunities with new investees are material factors that the Company considered when setting its strategic priorities and objectives, and its outlook for its business.

Key assumptions include, but are not limited to: assumptions that the Canadian and U.S. economies relevant to the Company’s investment focus will remain relatively stable over the next 12 to 24 months; that interest rates will not increase dramatically over the next 12 to 24 months; that the Company’s existing investees will continue to make royalty payments to the Company as and when required; that the businesses of the Company’s investees will not experience material negative results; that the Company will continue to grow its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change significantly in Canada and the U.S.; that more small to medium private and public companies will continue to require access to alternative sources of capital; that the Company will have the ability to raise required equity and/or debt financing on acceptable terms; and that the Company will have sufficient free cash flow to pay dividends. The Company has also assumed that access to the capital markets will remain relatively stable, that the capital markets will perform with normal levels of volatility and that the Canadian dollar will not have a high amount of volatility relative to the U.S. dollar. In determining expectations for economic growth, the Company primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.

The forward-looking information and forward-looking statements contained in this PRESS RELEASE are made as of the date of this PRESS RELEASE, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Neither 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 release.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

May 9, 2017

Grenville Strategic Royalty Announces $1,500,000 Royalty Agreement with ConnectAndSell, Inc.

Grenville Strategic Royalty Announces $1,500,000 Royalty Agreement with ConnectAndSell, Inc.

TORONTO, Ontario, May 8, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced it has signed a royalty purchase agreement with ConnectAndSell, Inc. (“ConnectAndSell”) to provide US$1,500,000 in growth capital.

ConnectAndSell, a Silicon Valley–based corporation established in 2007, has developed the world’s most advanced on-demand sales-acceleration platform. ConnectAndSell’s technology-enabled service overcomes the limitations of commonly used predictive and power dialers and increases the average number of live conversations per rep by a factor of 8-10X. The company achieves this through a combination of patented technology and minimal human agent touch. To date, ConnectAndSell has made more than 100 million dials and delivered over five million conversations to more than one thousand B2B customers, ranging from aggressive startups to the most established enterprises.

“With over 100 million fully navigated dials executed for its customers, ConnectAndSell has clearly demonstrated the value of its sales acceleration platform, earning recognition by Forbes Magazine as one of the 10 Most Innovative Companies to Watch in 2016,” said Grenville CEO Steve Parry. “We are investing with this management team of highly regarded Silicon Valley veterans including Chris Beall, Shawn McLaren and Jonti McLaren because they have demonstrated their commitment to the enterprise by growing the business with their own capital. Our non-dilutive royalty product, an alternative to traditional venture capital, is a very good fit with their continuing objective to retain strong ownership while accelerating growth.”

About ConnectAndSell, Inc.

ConnectAndSell, a Silicon Valley–based corporation established in 2007, has developed the world’s most advanced on demand sales-acceleration platform. ConnectAndSell’s technology-enabled service overcomes the limitations of commonly used predictive dialers and increases the average of number of live conversations per rep by a factor of 8-10X. The company achieves this through a combination of patented technology and minimal human agent touch.

 About Grenville

Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

Neither 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 release.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steven Parry

Chief Executive Officer

Tel: (416) 777-0383

May 4, 2017

Notice of Grenville Strategic Royalty’s First Quarter 2017 Financial Results Conference Call

Notice of Grenville Strategic Royalty’s First Quarter 2017 Financial Results Conference Call

– Financial results to be released after markets on Wednesday, May 10, 2017 –

TORONTO, Ontario, May 3, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced it will release its first quarter 2017 financial after the markets close on Wednesday, May 10, 2017. Mr. Steve Parry, Chief Executive Officer, and Mr. Donnacha Rahill, Chief Financial Officer, will host a conference call at 8:00 a.m. ET the next day, Thursday, May 11, 2017, to review the results. A question and answer session will follow the corporate update.

CONFERENCE CALL DETAILS

DATE:                                          Thursday, May 11, 2017

TIME:                                           8:00 AM Eastern Time

DIAL IN NUMBER:                     647-427-2311 or 866-521-4909

TAPED REPLAY:                         416-621-4642 or 800-585-8367

REFERENCE NUMBER:            17234196
A recording of the call will be archived on the Company’s website at www.grenvillesrc.com/financials/ .

About Grenville

Based in Toronto, Grenville is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.

For further information, please contact:

Grenville Strategic Royalty Corp.:

Steve Parry

Chief Executive Officer

Tel: (416) 777-0383

April 26, 2017

Grenville Strategic Royalty Announces Restructuring of Lattice Biologics Investment

Grenville Strategic Royalty Announces Restructuring of Lattice Biologics Investment

TORONTO, Ontario, April 26, 2017 – Grenville Strategic Royalty Corp. (TSXV: GRC) (“Grenville” or the “Company”) today announced that, subject to the approval of the TSV Venture Exchange, 18,246,600 common shares (“Shares”) of Lattice Biologics Ltd (TSXV: LBL) (“Lattice”) will be issued to the Company at an issue price of CDN$0.20 in exchange for the extinguishment of USD$2,000,000 of Grenville’s original royalty investment in Lattice and USD$700,000 of overdue royalty payments owing by Lattice to Grenville under the existing royalty agreement between the parties. Immediately following the issuance of the Shares, Grenville expects that it will hold approximately 19.7% of the total issued and outstanding common shares of Lattice. The Shares will be subject to a four-month hold period under applicable securities laws.

Pursuant to the transaction, the existing royalty agreement will be terminated and additional overdue royalty payments of US$69,512 will be extinguished. The remaining USD$1,000,000 of the original royalty investment will be converted to a new royalty equal to 1.25% of the revenue of Lattice, payable quarterly as and when cash and cash equivalents of Lattice for a quarter exceed the cash and cash equivalents of Lattice for the previous quarter by at least USD$100,000.
In addition, the parties have agreed to amend the secured note in the principal amount of USD$700,000 issued by Lattice to Grenville on July 31, 2015 (the “Secured Note”) to extend the maturity date until April 24, 2022, and to change the interest rate from 12.5% per annum to 4.244% per annum. Accrued interest owing under certain unsecured promissory notes issued by Lattice to Grenville will also be extinguished.

“Lattice has made good progress on their development of new products,” said Grenville CEO Steve Parry. “Based on this progress, Grenville believes that transitioning our investment to a blend of equity, royalty and debt provides the best opportunity for positive financial returns for Grenville’s shareholders while improving Lattice’s balance sheet for future growth opportunities.”
Completion of the transaction is subject to all necessary approvals, including the approval of the TSX Venture Exchange.

About Grenville
Based in Toronto, Grenville Strategic Royalty Corp. is a publicly-traded royalty company that makes investments in established businesses with revenues of up to $50 million dollars. Grenville generates revenues from royalty payments and buyouts from contracts. The non-dilutive royalty financing structure offered by Grenville competes directly with traditional equity to meet the long-term financing needs of companies on more attractive commercial terms.
Neither 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 release.
For further information, please contact:

Grenville Strategic Royalty Corp.:
Steven Parry
Chief Executive Officer
Tel: (416) 777-0383