Mr. Brian Pang reports

SOLUTION FINANCIAL REPORTS Q2 2023 FINANCIAL RESULTS

Solution Financial Inc. has released its financial results for the second quarter ending April 30, 2023.

Earnings highlights for the quarter:

• Revenues were $3.5-million, down from the comparative quarter which was $5.6-million.
• Net income was $37,826 compared with net income of $203,054 during the comparative quarter.
• Adjusted net income was $136,707, down from $263,690 during the comparative quarter.
• Total lease portfolio decreased to $24.7-million compared with $24.8-million during the prior quarter.

"Our performance in the second quarter of 2023 was hindered by the high prime borrowing rates introduced to address inflationary challenges in Canada, along with the ongoing sluggishness in new vehicle releases across our key markets," explained Bryan Pang, chief executive officer of Solution. "In 2022, we took advantage of the scarcity issue in the luxury market and achieved significant sales by capitalizing on the attractive gross profit premiums available. However, in 2023, our focus has shifted to sustaining and expanding our lease portfolio. To accomplish this, we are leveraging our securitization facility with SunLife, enabling us to offer highly competitive solutions to our long-standing dealerships in B.C. and Alberta, as well as exploring new opportunities in Ontario. The company's experience in navigating slowdowns lies in exercising patience and staying committed to our fundamental strategies," concluded Mr. Bryan.

Solution is reporting net income of $37,826 or (0.04 cent), per share for the quarter ending April 30, 2023. This compares with net income of $203,054 or 0.2 cent per share for the quarter ending April 30, 2022.

Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending April 30, 2023, was $136,707 or 0.2 cent per share compared with $275,827 or 0.3 cent per share for the quarter ending April 30, 2022. Adjusted net income excludes the non-cash accretion expense related to the convertible debentures and right-of-use assets of $65,559, income tax provision of $14,000, amortization expense of $15,659 and non-cash credit provisions of $3,663.

Solution's operating cash flow for the three months ending April 30, 2023, saw net outflows of $133,332 (net of the operating lease asset disposals) compared with cash inflows of $290,278 during the comparative quarter of 2022.

Lease portfolio

At April 30, 2023, Solution had 295 vehicles in its lease portfolio, a net decrease of three vehicles during the quarter to bring the total lease portfolio to $24.6-million.

At April 30, 2023, the average remaining lease term for the portfolio was 1.9 years, weighted by net book value for each vehicle. At April 30, 2023, Solutions' 295 leases were generating annualized gross rental and lease revenue of approximately $6.5-million.

About Solution Financial Inc.

Solution Financial was incorporated under the provisions of the Business Corporations Act (British Columbia) in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high-value assets. Solution works with a select group of automotive and marine dealerships, providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other subprime lenders. Typical customers include new immigrants, business owners and international students. Solution provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets in Canada.

We seek Safe Harbor.