Mr. Bryan Pang reports

SOLUTION FINANCIAL REPORTS Q1 2024 FINANCIAL RESULTS

Solution Financial Inc. has released its financial results for the first quarter ending Jan. 31, 2024.

Earnings highlights for the quarter:

• Net income for the quarter was $21,171, compared with a net loss of $328,781 in the comparative quarter in 2023.
• Adjusted net income (1) increased to $112,604, compared with $77,272 in the comparative quarter.
• Revenue decreased to $3,087,791, compared with $5,105,308 in the comparative quarter.
• Total leasing portfolio decreased 4.4 per cent to $24,459,091 during the quarter.

Operational highlights for the quarter:

• The company finalized a new auto leasing program with partner dealerships rolling out in Q2 2024, aimed at supporting local consumers where recent increases in interest rates from existing lenders have made Solution's unique approach to leasing far more attractive to customers beyond the new immigrant and international student markets.
• In January, 2024, the company initiated a new luxury corporate leasing program aimed at providing guidance on optimizing and understanding executive auto leasing programs, with an emphasis on the newly increased CRA (Canadian Revenue Agency) leasing allowances, corporate executive incentive strategies and personal usage considerations.

Bryan Pang, chief executive officer, added: "Our first quarter has been a period of strategic adaptation and pro-active initiative, particularly in light of the challenges posed by tightening consumer lending impacting the Canadian auto market. These include rising interest rates and stringent lending criteria, which are now notably impacting local customers, including those with strong credit ratings. Historically, Solution Financial has primarily served new immigrants and international students. However, the current economic climate, combined with our robust balance sheet and exceptionally competitive interest rates, positions us uniquely to appeal to a broader, more traditional leasing consumers with high credit ratings.

"With this expanded market focus, we have been actively collaborating with our partner dealerships to introduce innovative programs," continued Mr. Pang. "These are designed to leverage the growing opportunity presented by the changing market dynamics. We are optimistic that these initiatives will not only support our dealership partners in boosting vehicle sales but also drive significant growth for Solution Financial. We're enthusiastic about the potential of these new programs to generate strong returns and further our commitment to providing best-in-class leasing solutions."

Financial results

Solution is reporting net income of $21,171 or 0.02 cent per share for the quarter ending Jan. 31, 2024. This compares with a net loss of $328,781 or 0.4 cent per share for the quarter ending Jan. 31, 2023.

Adjusted net income, which is more reflective of actual cash earnings, for the quarter ending Jan. 31, 2024, was $112,604 (1) or 0.1 cent per share, compared with $77,272 or 0.1 cent per share for the quarter ending Jan. 31, 2023. Adjusted net income excludes the non-cash accretion expense related to the convertible debentures and right-of-use assets of $32,436, income tax provision of $8,100, amortization of $21,615, and provision for credit losses of $29,282.

Lease portfolio

At Jan. 31, 2024, Solution had 297 vehicles in its lease portfolio, a net decrease of 13 vehicles over the quarter to bring the total lease portfolio to $24.5-million.

At Jan. 31, 2024, the average remaining lease term for the portfolio was 1.7 years, weighted by net book value for each vehicle. At Jan. 31, 2024, Solutions' 297 leases were generating annualized gross rental and lease cash flows of approximately $6.5-million.

About Solution Financial Inc.

Solution commenced operations 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 luxury automotive and marine dealerships, providing lending solutions to clients who prefer more flexible leasing options than those traditionally offered by banks and other lease providers. Typical customers include new immigrants, business owners and international students who tend to upgrade their vehicles more frequently than traditional lease agreements allow. Solution provides a unique leasing experience whereby it partners with its clients to help source limited-edition and difficult-to-acquire vehicles, as well as providing white glove services to clients for insuring, maintaining, upgrading and reselling their vehicles.

(1) Non-IFRS (international financial reporting standards) financial metrics

Solution provides all financial information in accordance with IFRS. To supplement its consolidated financial statements presented in accordance with IFRS, the company is also providing with this news release certain non-IFRS financial measures, including adjusted net income. In calculating these non-IFRS financial measures, the company has excluded certain transactions that are not necessarily indicative of its continuing operations or do not impact cash flows. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable with similar measures presented by other issuers. These measures should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS.

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