TIMIA Capital Provides Supplemental Disclosure on Acquisition of Brightpath Capital

Timia Capital Corporation (" TIMIA " or the " Company ") (TSXV: TCA) (OTCQB: TIMCF), a leading innovator in specialty  private credit, is pleased to provide an update and further information regarding its proposed acquisition of Brightpath Capital Corporation and Brightpath Residential Mortgage LP I (collectively, " Brightpath "). As announced on May 5, 2022 the Company has entered into a non-binding letter of intent to acquire Brightpath (the " Transaction "), one of Canada's leading private providers of residential mortgages focused on Ontario and British Columbia.  The Company and Brightpath are actively negotiating binding definitive transaction documentation.

The Transaction will be one of the items on the agenda at the Company's upcoming Annual General and Special Meeting, to be held on June 7, 2022 , at 10:00am , at Room C300, UBC Robson Square 800 Robson Street, Vancouver, British Columbia (the " Meeting "). The record date for the shareholders entitled to vote at the Meeting has been set as shareholders of record as at the close of business on May 2, 2022 . Business at the Meeting includes setting the number of and electing directors of the Company, appointing auditors for the ensuing year, approving an equity incentive plan and approving the Transaction. A copy of the notice of meeting, proxy and management information circular (" Circular ") for the Meeting (the " Meeting Materials ") are available on the Company's profile at www.sedar.com . Shareholders are reminded and encouraged to complete and return their proxy or voting instruction form in accordance with the instructions included in the Meeting Materials.

TIMIA also wishes to provide the following additional disclosure to supplement the disclosure in the Circular regarding the Transaction. Capitalized terms not otherwise defined below have the meanings given to them in the Circular.

As noted in the Circular, pursuant to Multilateral Instrument 61-101 – Protection of Security Holders in Special Transactions (" MI 61-101 "), the Transaction requires Majority of the Minority Shareholder Approval as Mr. Kenneth Thomson , a director of the Company, indirectly owns or controls approximately 33% of Brightpath Capital and a material limited partnership interest in Brightpath Mortgage LP. At the Meeting, the Transaction must be approved by a simple majority of holders of Common Shares and Preferred Shares in attendance at the Meeting each voting separately as a class, after excluding all Common Shares and Preferred Shares of TIMIA directly and indirectly held by Mr. Thomson. As at the date hereof, Mr. Thomson directly and indirectly owns and controls 5,000,000 Common Shares and 3,500,000 Preferred Shares.

The Circular contains disclosure which summarizes the background to the Transaction, including a brief summary of the Fairness Opinion obtained in respect of the Transaction. TIMIA would like to supplement the disclosure provided.

As noted in the Circular, in December 2021 , management of the Company identified Brightpath as a potential acquisition opportunity.  As a result, in December 2021 , management of the Company provided a preliminary draft non-binding letter of intent to the Brightpath shareholder group to determine if the Brightpath shareholder group was aligned with the objective of completing a potential transaction. At these initial stages, there was no commitment by the Company to proceed with a potential transaction and the board of the Company had not been presented with the transaction. Recognizing Mr. Thomson's interest in Brightpath and the potential transaction, from this point forward, Mr. Thomson recused himself from the negotiation process. Mr. Thomson was also firewalled from accessing documentation relating to the potential transaction.

In mid-January the Brightpath shareholder group advised management of the Company that they were interested in pursuing a potential transaction. The Company was not active in discussions with the Brightpath shareholders group from mid-December 2021 to mid-January 2022 .

On January 19, 2022 , management of the Company presented the potential transaction at a meeting of the TIMIA board for consideration for the first time. The transaction was presented with a valuation of $30.5M based on a multiple of Brightpath's expected 2021 pre-tax net income plus the net increase in deferred transaction fees. At the board meeting, the board evaluated the potential transaction and identified a number of items for management's review and consideration. These items included examining the purchase price and payment options, assessing the requirements for shareholder approval, determining if a fairness opinion was warranted and how much it would cost, as well as evaluating strategic fit. The board requested that management report back after considering these items. Mr. Thomson did not participate in these deliberations.

At a subsequent board meeting on March 14, 2022 , management reported back, noting that shareholder approval would be required and that a fairness opinion would be recommended. At this time, the board struck the special committee comprised of Jan Lederman and Paul Geyer , both independent directors, to further review and consider the Brightpath transaction. Mr. Thomson did not participate in these deliberations.

Subsequent to the board meeting on March 14, 2022 , management, led by Mike Walkinshaw , entered into intensive negotiations with the Brightpath shareholder group, led by Blake Albright . Mr. Albright is at arm's length to the Company. Mr. Thomson was not involved in negotiations on behalf of either party. Mr. Walkinshaw reported the progress of the negotiations to the special committee and incorporated its recommendations in the negotiations. In negotiating the terms of the Transaction, the board and special committee considered the following non-exhaustive list of factors in determining the consideration payable: the market value of the TIMIA securities issuable as consideration; the historical and expected net income of Brightpath; the discounted cash flow of Brightpath; strategic considerations including changes to the macro-economic environment and the benefits of diversifying the Company's lending business; the valuation multiples of comparable companies to Brightpath; and improved Q1 2022 net income of Brightpath. During this period access to the transaction documentation and negotiations was limited to the special committee and Mr. Walkinshaw.

Subsequent to the March 14, 2022 board meeting, the special committee proceeded with engaging MNP LLP to prepare the Fairness Opinion. MNP LLP was engaged on a flat fee and work fee basis. A copy of the Fairness Opinion is available on TIMIA's profile at www.sedar.com . The Fairness Opinion was an important factor relied upon by the special committee in making its recommendation to the board to approve the Transaction. The special committee also relied upon the factors noted above in determining to recommend the Transaction.

Brightpath specializes in arranging mortgages for people who are self-employed, new to the country, experiencing credit issues, or looking at renovation/flip projects. Our knowledge and experience, efficient service, and common-sense approach to lending are just a few of the reasons to select Brightpath Capital for financing needs. We also offer bridge financing for residential properties with flexible terms. Private mortgages at very competitive terms. Interest only payments. Fully open terms. For more information please visit: www.brightpath.ca

The Company democratizes private credit for investors by offering a broad range of specialty private credit opportunities with transparency and efficiency, facilitated by the Company's proprietary technology platform.  These high-yield loan opportunities are delivered through operating divisions: Timia Capital which offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America , and Pivot Financial which specializes in asset-based private credit targeting mid-market borrowers in Canada . The Corporation deploys funds on behalf of limited partnerships, institutions, retail investors, high net worth individuals, its management team and shareholders. For more information about TIMIA and SaaS lending, please visit www.timiacapital.com . For more information about specialized private credit and Pivot please visit: www.pivotfinancial.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.

Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements normally contain words like 'believe', 'expect', 'anticipate', 'plan', 'intend', 'continue', 'estimate', 'may', 'will', 'should', 'ongoing' and similar expressions, and within this news release include any statements (express or implied) respecting the Meeting, negotiation of definitive agreements for the Transaction and expectations regarding completion of the Transaction.

Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the Company and Brightpath will be able to negotiate definitive agreements in respect of the Transaction, that the shareholders of the Company will approve the Transaction, the expected benefits of the Transaction, assumptions concerning general economic growth and the absence of unforeseen changes in the legislative and regulatory framework for the Company. Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to the Company's business. Material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, the Company having insufficient financial resources to achieve its objectives; that the Transaction may not complete on terms agreeable to the Company, or at all; availability of further investments that are appropriate for the Company on terms that it finds acceptable or at all; successful completion of exits from investments on terms that constitute a gain when no such exits are currently anticipated; intense competition in all aspects of business; reliance on limited management resources; general economic risks; new laws and regulations and risk of litigation. Although TIMIA has attempted to identify factors that may cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, predicted, estimated or intended. Also, many of the factors are beyond the control of TIMIA. Accordingly, readers should not place undue reliance on forward-looking statements. TIMIA undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this news release are qualified by this cautionary statement.

SOURCE Timia Capital Corp.

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