CV Holdings, Inc. announces the acquisition of Centra Leasing, Inc. and formation of CV Capital Funding, LLC

November 28, 2016

CV Holdings, Inc. announces the acquisition of Centra Leasing, Inc. and formation of CV Capital Funding, LLC

CV Holdings, Inc. announces the (i) acquisition of Centra Leasing, Inc., through its newly-formed subsidiary, Centra Funding, LLC (“Centra”) to enter the “small ticket” equipment finance business and (ii) formation of its new commercial real estate bridge lending business, CV Capital Funding, LLC (“CVCF”).

NEWPORT BEACH, Calif., Nov. 28, 2016 /PRNewswire/ — CV Holdings, Inc. (Other OTC: CVHL) (the “Company”) today announced that, as part of its strategic plan to grow into other finance-related businesses, it recently: (i) closed the acquisition of Centra Leasing, Inc. through a newly-formed subsidiary Centra Funding LLC, as well as (ii) formed and launched CV Capital Funding, LLC. Centra and CVCF join the previously announced VenSource business (“VenSource,”) as new finance verticals that the Company intends to fund from the proceeds derived from the investment from funds managed by Tricadia Capital Management, LLC (collectively, “Tricadia”), as described in the Company’s previous press releases, including the June 30, 2015 press release. As stated, in such previous releases, the primary purpose of the capital invested and to be invested by Tricadia is to assist the Company in making investments in new or existing financial services platforms, as well as to supplement the Company’s co-investment obligations relating to its non-performing loan (NPL) business. The Company’s strategy with respect to each new vertical is to grow each business by leveraging the capital invested in each business (through the Company’s role as a “general partner”-type party in such business) and raising both debt and incremental third party capital to create enterprise value for the benefit of the Company’s shareholders.

Below is a summary of the aforementioned transactions:

Centra Funding LLC

On November 28, 2016, the Company closed on its acquisition of Centra Leasing, Inc. (“Centra”) through its newly-formed subsidiary, Centra Funding, LLC (“Centra Funding”). Centra’s business is focused on commercial “small ticket” equipment leases or finance contracts. Originations utilize a vendor-based model. Centra’s business is nationwide across 16 industries, with an average finance contract or lease of $35,000. The Company acquired 100% of Centra’s stock pursuant to a reverse triangular merger in which the founder and owner of Centra, John Boettigheimer (“JB”), received a “common” interest in 10% of the ownership of Centra Funding. This “common” interest is subject to the Company achieving a 10% preferred return on its capital invested, plus some other minor working capital and other agreed upon expense adjustments (including any indemnification obligations stemming from the acquisition of Centra). JB has the potential to earn an incremental 9.9% common interest in Centra Funding if certain IRR hurdles are achieved. The Company made a $10,000,000 capital commitment to invest in Centra Funding based on meeting certain conditions, with an initial $5,000,000 investment at the closing.

JB has been in the equipment leasing industry for over 30 years. In late 1984, together with Bernie Boettigheimer, he started and developed Pioneer Credit Corp. Together they grew the business into one that originated over $35,000,000 in annual volume and sold it to IFC Credit Corp. in 2004.

The Company intends to leverage its equity investment in Centra Funding by securing a warehouse financing facility to further grow Centra Funding’s business as part of the Company’s overall strategic business plan. Centra Funding may also selectively sell portions of its production to third parties and will retain the majority for its own balance sheet.

CV Capital Funding LLC

As part of its strategic plan, the Company identified the commercial real estate bridge financing business as an attractive business to enter, given the growth of the private real estate lending sector combined with its attractive risk-adjusted internal rates of return and the deep experience of the Company’s senior management in this area. The Company’s senior management spent a year researching the opportunity and looking at multiple avenues to enter such business, including acquisitions of existing businesses, joint ventures and internal hires. Given management’s experience in the commercial real estate business and what management viewed as unrealistic valuation expectations for similar existing businesses, the Company determined to grow the business internally. On October 2016, the Company hired Anthony Iervolino, a proven originator in this business, and launched CV Capital Funding LLC or CVCF.

CVCF will provide capital for a wide range of real estate asset classes in the US, with a concentration in the New York metropolitan area, New Jersey, Connecticut, Delaware, Pennsylvania and Florida. CVCF will specialize in offering bridge loans secured by commercial real estate assets and other assets as part of special situations. Property types intended for consideration include: multi-unit residences, industrial, office, hospitality and other commercial properties. Core financial products are diverse with anticipated loan sizes ranging from $500,000 to $20,000,000. These would include:

• Bridge Loans
• Mezzanine Loans
• Renovation Finance
• PreferredEquity/PartnershipInterest • Debt Purchases

The Company is committing $20,000,000 of its capital to CVCF and intends to raise additional debt and equity capital to further capitalize the business. CVCF will act as the management company and will manage the Company’s invested capital in CVCF Fund I, L.P., a new entity indirectly owned entirely by the Company. CVCF will be based out of the existing Company offices in CT, CA and a new CVCF office in New York City.

About CV Holdings, Inc.

Prior to the merger with ClearVue Management, Inc. in 2013, we were a commercial real estate, specialty finance company primarily focused on managing a diversified portfolio of commercial real estate-related loans and securities. After the merger, in addition to performing our obligations in connection with our legacy assets in commercial real estate, we are currently a finance company focused on: (i) the residential NPL business through our wholly-owned servicer LongVue Mortgage Capital, Inc., (ii) the venture leasing business through our VenSource business, (iii) the small-ticket equipment finance business through our Centra business and (iv) the bridge commercial real estate business through our newly-formed CV Capital Funding business.

Our common stock is currently quoted on the OTC Markets Group, or OTC Markets. While not a requirement, the OTC Markets encourages companies having their securities quoted thereon to provide adequate current information in accordance with its disclosure guidelines. We will evaluate the need to issue press releases containing information similar to such information disclosed herein. We do not undertake any obligation nor do we give any assurance that we will provide timely periodic disclosures or any public disclosure at all.

We elected to qualify as a real estate investment trust, or REIT, for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2005. As a REIT, we generally will not be subject to U. S. federal income tax on that portion of our income that we distribute to our stockholders for so long as we continue to qualify as a REIT, which qualifications require, among other things, that we distribute at least 90% of our annual “REIT taxable income” to our stockholders, after taking effect of any benefits provided by our net operating loss carry forward.

It should be noted that the new finance businesses the Company has entered into, combined with the decline in the balance of the Company’s old CDOs as part of their natural liquidation, may generate income that could cause the Company to cease to qualify as a REIT. The Company continues its process of evaluating such potential conversion to being taxed on a C-Corp basis in the future, as it analyzes the mix and character of its business. If such conversion were to take place the Company would avail itself of its significant existing net operating loss carryforward to the extent applicable and would retain some of its predecessor assets relating to its collateralized debt obligations in a subsidiary REIT. The Company endeavors to conduct its operations so as to not be or become regulated as an investment company under the Investment Company Act of 1940. The Company has not had federal taxable income since 2007 and does not expect any federal taxable income in the foreseeable future.

Forward-Looking Information and Other Information

This press release contains forward-looking statements based upon the Company’s beliefs, assumptions and expectations of its future performance, including the expected performance of the equipment finance, leasing market and the commercial real estate specialty finance market, taking into account all information currently available. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to the Company or are within its control. If a change occurs, the Company’s business, financial condition, liquidity and results of operations may vary materially from those expressed in its forward- looking statements.

Factors that could cause actual results to vary from the Company’s forward-looking statements include: the U.S. general economy; the Company’s liquidity and ability to continue to cover its operating cash requirements; the Company’s ability to redeem the outstanding shares of its preferred stock when and as its obligations to do so mature; the continued success of the VenSource JV or the NPL business; the successful integration and expansion of Centra and Centra Funding respectively; the successful launch of CVCF; the Company’s future operating results; its business operations and prospects; availability, terms and deployment of short-term and long- term capital; availability of qualified employees; changes in interest rates; adverse development in the debt securities, credit and capital markets, adverse developments in the commercial finance and real estate markets; adverse regulatory or compliance developments in the businesses the Company operates in; adverse developments in the venture capital business, adverse development in the leasing business, performance and financial condition of borrowers, lessees and corporate customers; any future litigation that may arise; the ultimate resolution of the Company’s numerous defaulted loans; the performance of the Company’s joint venture investments; the ability to continue to qualify as a REIT; the ability to continue as a going concern. The Company undertakes no obligation to publicly update or revise any of the forward-looking statements.

There can be no assurances that the Company will be successful in raising debt and equity capital for either our existing LongVue (NPL) or VenSource businesses or Centra Funding and CVCF or that any of those businesses will be able to identify adequate opportunities, invest its allocated capital and run on a profitable basis.

CONTACT: Rick Koenigsberger or Ken Witkin, or