Solution Financial Completes Convertible Debenture Financing

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Vancouver, British Columbia–(Newsfile Corp. – July 29, 2022) – Solution Financial Inc. (TSX: SFI) (OTCQX: SLNFF) (the Company“) is pleased to announce that it has closed a non-brokered financing of unsecured convertible debentures (the “Debentures“) with a principal amount of $3,175,400. The Debentures mature on the second anniversary of the date of issuance and bear interest at a rate of 5.00% per annum, calculated and paid semi-annually. The principal amount and any accrued and unpaid interest on the Debentures may be convertible into common shares in the capital of the Company (“Shares“), in whole or in part, at any time before or on the maturity date at a conversion price of $0.38 per Share. The Debenture financing consisted of a reinvestment of convertible debentures with a principal amount of $3,175,400 set to mature in March 2023.

“We would like to thank our debenture holders for the continued support as we continue to position ourselves to support the long term needs of our network of dealerships in BC, Alberta and Ontario”, began Bryan Pang, CEO. Our lease portfolio continues to perform very well despite the recent increases in the Canadian prime lending rates. Securing this fixed rate 5% financing will help limit the impact of increasing lending rates on the business. Although the luxury auto industry has seen its share of challenges in 2022, we remain committed and supportive of the industry which has yielded premium valuations on our portfolio resales and allowed us to maintain steady profitability,” concluded Bryan.

The Company plans to use the proceeds of the financing to support the Company’s portfolio of in-house leases.

The offering of the Debentures is subject to the receipt of all necessary regulatory approvals. The Debentures and any Shares issued upon conversion within four months and one day of the closing date are subject to a statutory holder period until November 29, 2022. The Debentures are not listed or posted for trading on any exchange.

Sean Hodgins, the Chief Financial Officer of the Company, and Kerry Meier, a director of the Company, both participated in the private placement. Mr. Hodgins acquired Debentures with a principal amount of $100,000 and Mr. Meier acquired Debentures with a principal amount of $300,000. Such participation constitutes a “related party transaction” within Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The issuance to the insiders is exempt from the valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in sections 5.5(a) and 5.7(1)(a) as the fair market value of the consideration of the securities issued to the related parties did not exceed 25% of the Company’s market capitalization.

This news release does not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Debentures and the Shares which may be issued on exercise thereof have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About Solution Financial

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. Typical customers include new immigrants, business owners and international students. Solution Financial 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.

For further information please contact Sean Hodgins at (778) 318-1514.

ON BEHALF OF THE BOARD

(signed) “Bryan Pang
Bryan Pang
President, CEO and Director

Information set forth in this news release contains forward-looking information and statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. The terms and phrases “goal”, “commitment”, “guidance”, “expects”, “would”, “will”, “continuing”, “drive”, “believes”, “indicate”, “look forward”, “grow”, “outlook”, “forecasts”, “intend”, and similar terms and phrases are intended to identify these forward-looking statements, including but not limited to statements regarding the use of proceeds from the Debenture offering. The Company cautions that all forward looking information and statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company’s control. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information.

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