First Quarter (Q1 2025 Financial Statements)

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

SOLUTION FINANCIAL INC.

FOR THE THREE MONTHS ENDED JANUARY 31, 2025 AND 2024

(UNAUDITED- PREPARED BY MANAGEMENT) (Expressed in Canadian dollars)

Unit 137 - 8680 Cambie Road

Richmond, BC

Canada

V6X 4K1

Solution.Financial

These unaudited interim condensed consolidated financial statements of Solution Financial Inc. (the "Company") have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these interim financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity's auditor.

SOLUTION FINANCIAL INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

FOR THE THREE MONTHS ENDED JANUARY 31, 2025 AND 2024 (Expressed in Canadian dollars)

SOLUTION FINANCIAL INC.

(Condensed Consolidated Interim Statements of Changes in Shareholders' Equity

(Expressed in Canadian Dollars - Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

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SOLUTION FINANCIAL INC.

Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2025 and 2024 (Expressed in Canadian dollars- Unaudited)

1. Nature of Business and Share Exchange Agreement

Solution Financial Inc. (the "Company" or "Solution"), provides sourcing and leasing solutions for luxury and ultra-luxury vehicles, yachts and other high value assets in Western Canada.

The Company's registered and records office is Unit 137, 8680 Cambie Road, Richmond, British Columbia, Canada, V6X 4K1. The Company's shares trade on the Toronto Stock Exchange (the "TSX") under the trading symbol "SFI".

2. Basis of Presentation and Statement of Compliance

Statement of Compliance

These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the IASB have been condensed or omitted and these unaudited interim condensed financial statements should be read in conjunction with the Company's audited financial statements for the year ended October 31, 2024.

These financial statements were approved by the Company's Board of Directors and authorized for issue on March 14, 2025.

3. Critical Accounting Estimates and Use of Judgement

The preparation of financial statements requires management to make estimates and judgments about the future. Estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. Areas of financial reporting that require management's estimates and judgments are discussed below.

Significant estimates used in the preparation of these financial statements include the following:

Determination of the Company's allowance for credit losses

Estimates and judgments are required as to the timing of establishing an allowance for credit losses and the amount of the required allowance taking into consideration counterparty creditworthiness, current economic trends, the expected residual value of leased assets and past experience.

Valuation of inventory

Inventories are recorded at the lower of cost and net realizable value with cost determined on a specific item basis for new and used vehicles. In determining net realizable value for new vehicles, the Company primarily considers the age of the vehicles along with the timing of annual and model

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SOLUTION FINANCIAL INC.

Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2025 and 2024 (Expressed in Canadian dollars- Unaudited)

3. Critical Accounting Estimates and Use of Judgement (continued)

changeovers. For used vehicles, the Company considers recent market data and trends such as loss histories along with the current age of the inventory. The determination of net realizable value for inventories involves the use of estimates.

Valuation of underlying residual values of leased assets

The Company has significant investments in leased vehicles recorded as operating leases, which relate to vehicle leases. At the beginning of the lease contract a determination is made of the estimated realizable value of the vehicle at the end of the lease term, which is the critical assumption underlying the estimated carrying value of leased assets. The estimated realizable value is based on the lower of the contracted residual value or the current market estimate of residual value based on independent lease guides. Since the customer is not obligated to purchase the vehicle at the end of the contract, the Company is exposed to a risk of loss to the extent the value of the vehicle at the end of the lease term is below the residual value estimated at contract inception. Over the life of the lease the Company evaluates the adequacy of the estimate of the residual value and may make adjustments to the extent the expected value of the vehicle at lease termination changes. Adjustments could result in a change in the depreciation rate of the leased asset or if an impairment exists, an impairment charge.

Useful lives of equipment

The Company's capitalized property and equipment balances are determined in part through the use of estimates of the useful lives of the underlying assets. In developing their accounting policy for property and equipment, the Company makes estimates of these useful lives. Changes in useful lives of property and equipment may result in adjustments to these capitalized balances in future periods if there are signs that estimates may no longer be accurate.

Income taxes

The determination of current tax expense requires estimates and assumptions. Further the Company's estimates of its deferred income tax assets and liabilities require subjective assumptions regarding future income tax rates and the likelihood of utilizing tax carry-forwards. Changes in these estimates and assumptions could materially affect the recorded amounts.

Significant judgements made as part of the preparation of these financial statements include the following:

Determination of lease type

On entering lease arrangements, the Company assesses whether the lease is a finance lease or an operating lease. As part of this determination, the Company makes a number of estimates associated with the lease, the customer, and the fair value of the underlying assets. The accounting for an operating lease is significantly different from that of a finance lease. As such, this determination has a significant impact on the way the leased assets are presented within the Company's financial statements.

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SOLUTION FINANCIAL INC.

Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2025 and 2024 (Expressed in Canadian dollars- Unaudited)

3. Critical Accounting Estimates and Use of Judgement (continued)

Share-based payments

The Company uses the Black-Scholes option pricing model to determine the fair value of options and warrants in order to calculate share-based compensation expense and the fair value of agent warrants. The Black-Scholes model involves six key inputs to determine fair value of an option: risk-free interest rate, exercise price, market price at date of issue, expected dividend yield, expected life, and expected volatility. Certain of the inputs are estimates that involve considerable judgment and are or could be affected by significant factors that are out of the Company's control. The Company is also required to estimate the future forfeiture rate of options based on historical information in its calculation of share- based payments expense.

4. Material Accounting Policy Information

Adoption of new accounting policies

The Company adopted Disclosure of Accounting Policies (Amendments to IAS1 and IFRS Practice Statements 2) from November 1, 2023.

The amendments required the disclosure of "material" rather than "significant" accounting policies. The amendments also provide guidance on the application of materiality to disclosure of policies, assisting entities to provide useful, entity specific accounting policy information that users need to understand other information in the financial statements.

This amendment did not have a material impact on the Company.

Standards issued but not yet effective

The Company has elected to not early adopt standards, interpretations or amendments that have been issued but are not yet effective. The new and amended standards and interpretations that have been issued, but are not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. If applicable, the Company intends to adopt when they become effective.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

The amendments to IAS 1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. These amendments are effective for reporting periods beginning on or after January 1, 2024.

The Company does not expect the adoption of this new amendment to have a significant impact on the consolidated financial statements.

IFRS 18: Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued amendments to IAS 1, "Presentation of Financial Statements" to specify the requirements for reporting and disclosures. The amendments clarify:

• Categories for income and expenses;
• Requirement to disclose performance measures in the notes to financial statements

The amendments are effective for annual reporting periods beginning on or after January 1, 2027. The amendments are not expected to have a material impact on the Company at this time.

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SOLUTION FINANCIAL INC.

Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2025 and 2024 (Expressed in Canadian dollars- Unaudited)

4. Material Accounting Policy Information (continued)

Cash, restricted cash, and cash equivalents

Cash consists of amounts held in banks with maturities less than three months at inception. Interest from cash is recorded on an accrual basis. The Company's cash equivalents consist of term deposits maturing within the next year. Restricted cash consists of funds held in escrow subject to security conditions related to the Company's Securitization Financing (see Note 15).

Lease receivables

The Company recognizes and measures finance lease receivables in accordance with IFRS 9, Financial Instruments ("IFRS 9").

Under a finance lease substantially all the risks and rewards incidental to legal ownership are transferred by the lessor to the lessee at the inception of the lease transaction.

Direct financing leases, which are contracts under terms that provide for the transfer of substantially all the benefits and risks of equipment ownership to customers, are carried at amortized cost. These leases are recorded at the aggregate minimum payments plus guaranteed residual values less unearned finance income. Unearned finance income includes origination fees earned.

Direct financing leases and loans are recognized as being impaired when the Company is no longer reasonably assured of the timely collection of the full amount of principal and interest. As a matter of practice, a direct financing lease or a loan is deemed to be impaired at the earlier of the date it has been individually provided for when timely collection is not assured or when it has been in arrears for 120 days. When amounts receivable are considered impaired, their book value is adjusted to their estimated realizable value based on the fair value of any collateral underlying the receivable, net of any costs of realization, by totally or partially writing off the loan and/or establishing an allowance for credit losses.

Revenue recognition

Brokerage Commissions

The Company facilitates vehicle sales through third-party dealerships where customers have low or limited credit history. The Company bears limited inventory risk in the transaction and does not have latitude in setting vehicle prices and therefore the Company only recognizes the net fees. In these situations, the fees are recorded as revenue at the time the customer enters into the contract and the Company is entitled to the fee. The Company is not the obligor under any of these contracts.

Automobile sales

Revenue is recognized when the risks and rewards of ownership have been transferred to the customer and the revenue and costs can be reliably measured and it is probable that economic benefits will flow to the Company. In practice, this means that revenue is recognized when vehicles are invoiced and physically delivered to the customer and payment has been received or credit approval has been obtained by the customer.

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