Solution Financial Reports Year End 2022 Financial Results

Vancouver, British Columbia–(Newsfile Corp. – January 27, 2023) – Solution Financial Inc. (TSX: SFI) (the “Company“), a leading provider of luxury automotive and yacht leasing in Canada, today announced its financial results for the year ending October 31, 2022.

Earnings Highlights for the Year End:

• Net income for the year decreased to $837,554 compared to $907,166 in 2021.
• Adjusted net income⁽¹⁾ increased to $1,613,436 compared to $1,386,778 in 2021.
• Revenue decreased to $20,347,916 compared to $20,452,133 in 2021.
• Total leasing portfolio decreased 6% to $26,211,442 compared to 2021.

Operational Highlights for the Year End:

• Enhanced the Company’s lease quote and administration system to support faster deal flow and meet reporting requirements of senior level lenders.
• Secured a new $15 million credit facility to support expanded, non-dilutive financing.
• Subsequent to year end, secured a $35 million securitization facility with Sun Life Assurance Company of Canada.

“We set in motion a number of significant initiatives in 2022 that will position Solution Financial extremely well for 2023 and beyond,” began Bryan Pang, Solution’s Chief Executive Officer. “We continued to perform well in 2022 despite the overall slow down in new model luxury vehicle sales due to the ongoing COVID-19 supply chain challenges. We took advantage of this time to work with Randy Smyth, our Chairman of the Board, and his team at Geminus Acquisition and Management (“Geminus”) to implement several improvements and enhancements that position us very well for our expansion plans and our ability to support a larger and more diverse leasing market across Canada. Thank you to all our customers, partners, and investors, and we wish you all a safe and successful 2023,” concluded Bryan.

Financial Results

Solution is reporting net income of $837,554, or $0.009, per share for the year ending October 31, 2022. This compares to net income of $907,166 or $0.011 per share for the year ending October 31, 2021.

Adjusted net income, which is more reflective of actual cash earnings, for the year ending October 31, 2022, was $1,613,436⁽¹⁾ or $0.018 per share compared to $1,386,788 or $0.016 per share for the year ending October 31, 2021. Adjusted Net Income excludes the non-cash accretion expense related to the convertible debentures and right of use assets of $154,782, income tax provision of $268,000, amortization of $67,522, and non-recurring listing and financing fees of 228,600.

Lease Portfolio

At October 31, 2022, Solution had 309 vehicles in its lease portfolio, a net decrease of 33 vehicles over the year amounting to $1,577,251 of value during the year as a result of the resale of a number of older vehicles in the Company’s lease portfolio to bring the total lease portfolio to $26.2 million.

At October 31, 2022 the average remaining lease term for the portfolio was 1.6 years, weighted by net book value for each vehicle. At October 31, 2021, Solutions’ 309 leases were generating annualized gross rental and lease revenue of approximately $7.4 million.

About Solution

Solution Financial 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 Financial 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.

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About Geminus

Geminus is an independent Canadian financial company that facilitates consumer and commercial lending solutions across various asset types and credit classes. Headquartered in Calgary, AB, Geminus supports multiple lending platforms across Canada with combined assets under management of $385 Million as of December 31, 2022. For more information about Geminus, visit www.geminus.ca.

Note 1- Non-IFRS Financial Metrics

Solution provides all financial information in accordance with International Financial Reporting Standards (“IFRS”). To supplement our consolidated financial statements presented in accordance with IFRS, we are also providing with this press release, certain non-IFRS financial measures, including Adjusted Net Income. In calculating these non-IFRS financial measures, we have excluded certain transactions that are not necessarily indicative of our ongoing 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 to similar measures presented by other issuers. These measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking information” as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management’s beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management’s current beliefs and is based on information currently available to management. Although forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with this forward-looking information. Certain statements included in this press release may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such the financial outlook may not be appropriate for purposes other than this press release.

The forward-looking information contained in this press release is made as of the date of this press release and should not be relied upon as representing Solution’s views as of any date subsequent to the date of this press release. Except as required by applicable law, management and Solution’s Board of Directors undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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

ON BEHALF OF THE BOARD

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

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