First Quarter (Q1 2025 Management Discussion and Analysis)

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE-MONTH PERIOD ENDED JANUARY 31, 2025 AND 2024

(Expressed in Canadian Dollars)

MANAGEMENT'S DISCUSSION AND ANALYSIS

The Management's Discussion and Analysis ("MD&A") of Solution Financial Inc. (the "Company" or "Solution" or "we" or "our") (formerly Shelby Ventures Inc.("Shelby")), should be read in conjunction with the Company's interim financial statements for the three months ended January 31, 2025 and 2024 ("reporting period") and the accompanying notes to those financial statements.

The Company's consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in accordance with the International Accounting Standards ("IAS"), as issued by the International Accounting Standards Board ("IASB") and are reported in Canadian dollars.

The date of this MD&A is March 14, 2025.

CAUTIONARY STATEMENT

This analysis has been prepared taking into consideration information available to March 14, 2025. Certain statements contained in this report constitute ʺforward‐looking statements. ʺ When used in this report, the words ʺmayʺ, ʺwouldʺ, ʺcouldʺ, ʺwillʺ, ʺintendʺ, ʺplanʺ, ʺanticipateʺ, ʺbelieveʺ, ʺestimateʺ, ʺexpectʺ, and similar expressions, as they relate to the Company or its management, are intended to identify forward‐looking statements. Such statements reflect our current views with respect to future events and are subject to inherent risks, uncertainties and numerous assumptions, including, without limitation, general economic conditions, reliance on debt financing, dependence on non‐prime borrowers, inability to sustain receivables, competition, interest rates, regulation, insurance, failure of key systems, debt service, future capital needs and such other risks or factors described from time to time in reports of Solution that are filed with securities regulatory authorities. By their nature, forward‐looking statements involve numerous assumptions, known and unknown, risks and uncertainties, both general and specific, which contribute to the possibility that predictions, forecasts, projections and other forms of forward‐looking information may not be achieved. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward‐looking statements and readers are cautioned that the list of factors in the foregoing paragraph is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Accordingly, readers are cautioned not to place undue reliance on forward‐ looking statements or interpret or regard forward‐looking statements as guarantees of future outcomes.

OVERVIEW

Solution Financial Inc. specializes in sourcing and leasing luxury and ultraluxury vehicles, yachts and other high value assets in British Columbia, Alberta and Ontario. Solution provides a unique leasing program designed with greater flexibility for upgrading and reselling than traditional leasing companies or financial institutions in Canada. The Company trades on the Toronto Stock Exchange under the symbol "SFI".

The Company's registered and records office is Unit 137, 8680 Cambie Road, Richmond, British Columbia, Canada, V6X 4K1.

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

OVERVIEW (CONTINUED)

The Company's wholly-owned operating subsidiaries include Solution Financial (Canada) Inc. ("Solution Canada") which was incorporated under the Company Act of British Columbia on August 8, 2003 and Solution Financial (Alberta) Inc. which was incorporated August 4, 2022.

Solution provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining, upgrading and reselling luxury and ultra luxury assets in Canada. Typical customers include new immigrants, international students and business owners who tend to upgrade their vehicles more frequently then typical consumers or want to minimize the buying and reselling challenges that many consumers can experience in the automobile industry in Canada.

Solution derives its revenue from three inter-related business streams: in house leasing including financial leases and operating leases; brokerage leasing; and end-of lease auto sales.

SIGNIFICANT EVENTS IN THE PERIOD ENDING JANUARY 31, 2025 TO THE DATE OF THIS REPORT

• On February 24, 2025, the TSX accepted the Company's NCIB renewal. Under the renewed NCIB, a total of up to 4,309,413 common shares may be purchased through the facilities of the TSX and also be made through alternative Canadian trading systems, representing 5% of the issued and outstanding common shares of the Company, and any such purchases will be at market prices.

SUMMARY OF QUARTERLY RESULT (in $ except ratios)

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

SELECTED FINANCIAL INFORMATION

The following table summarizes key financial data to be read in conjunction with the consolidated interim financial statements of the Company for the three months ended January 31, 2025 and 2024.

Financial Highlights

Total revenues were $2,474,474 for the three months ended January 31, 2025 compared to $ 2,658,360 for the three months ended January 31, 2024, a decrease of $183,866 (or 7%). The decrease in revenues was a result of decreased leasing income of $95,292 (9%) and decreased brokerage commissions of $132,508 (94%). The modest decrease in vehicle sales was consistent with normal winter operations which is typically the slowest quarter of the company's operations. The decline in leasing income continues to be primarily related to the switch from operating to finance type leases as the Company's overall lease portfolio continued to grow in the first quarter of 2025, with a consistent decline in the company's costs of leasing costs recognized with operating leases. The decline in brokerage commissions was a result of fewer upgrade opportunities and a tightening market for resale vehicles due to the current economic environment. The Company continues to be cautious with its operations with a commitment to long term relationships with both our dealership networks and leasing customers.

For the three months ended January 31, 2025, the Company reported net loss of $63,595 compared to net income of $21,171 for the comparative three months period ending January 31, 2024. The decrease was a result of a combination of lower brokerage commissions revenues as well as higher sales and marketing and general and administrative costs. Gross profit for the quarter was higher for the three months ended January 31, 2025 to $940,087 compared to $902,832 for the three months ended January 31, 2024, amounting to a $37,255 or 4% increase. This increase was a result of higher finance interest income which continues to grow as a percentage of total revenue. Total expenses increased to $1,031,129 for the three months ended January 31, 2025 compared to $897,917 for the three months ended January 31, 2024, an increase of $133,212 or 15%. The higher expenses were a result of continued increases in public company compliance requirements as well as increases in sales and marketing commissions.

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

During the quarter ended January 31, 2025, the Company's net operating lease portfolio decreased by $335,872 or 31% while the Company's receivables under finance leases increased by $2,537,267 to $29,432,032 or 9%. Commencing in fiscal 2022, the Company focused entirely on finance type leases which typically include a guaranteed residual by the lessee in conjunction with the Company's new securitization financing plans. During the quarter ended January 31, 2025, new lease originations in total outpaced terminations by $802,251, resulting in the net increase in the total lease portfolio. The Company is enthusiastic that continued decreases in the Canadian prime lending rates will continue to bolster new leasing opportunities as the Company reduces its rates in parallel, increasing demand.

DESCRIPTION OF NON‐IFRS FINANCIAL METRICS (in $ except ratios)

Throughout this MD&A, management uses the following terms and ratios not found in IFRS and which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other issuers, and therefore require definition. These non‐IFRS measures and additional information should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Management reviews non-IFRS measures on an ongoing basis and expects to introduce additional non-IFRS measures in the near future.

Revenue run-rate

Revenue run rate is the financial revenue in a particular period, annualized. It provides an indication of annual revenue that would be generated based on the revenue in the particular reported period. As the Company expands its in-house leasing portfolio it will recognize revenue as interest income which gets recognized over the lease term rather than brokered lease transactions that get recognized immediately. As a result, the annualized run-rate provides a useful longer-term perspective on the Company's expected revenue performance.

Financial leverage ratio and total capitalization

The financial leverage ratio is defined as the total of credit facilities and loans divided by total equity. The financial leverage ratio provides an indication and extent to which the Company can access additional debt financing with which to expand its operating lease portfolio. This is one of the primary growth drivers for the business and is helpful for evaluating the Company's ability to leverage additional debt.

The Company's annualized revenue run rate was $9,897,896 compared to $10,633,436 for the comparative quarter in 2024. This decrease is primarily a result of the decrease in portfolio vehicle sales the Company experienced in the first quarter of 2025. The Company's long term growth objectives remain focused on increasing its overall lease portfolio which is primarily tied to the volume of new luxury vehicles hitting the market.

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

The Company's financial leverage ratio (debt/equity ratio) on January 31, 2025 decreased to 1.76 :1 as compared to that of 1.18 :1 at January 31, 2024. This modest improvement in the debt-to-equity ratio is a result of the Company's decreasing liabilities at quarter end combined with increasing retained earnings.

RESULTS OF OPERATIONS

The following table summarizes financial results for each of the reported periods:

Revenue

Vehicle sales

For the three months ended January 31, 2025, the revenues from vehicle sales increased to $1,526,950 compared to $1,501,213 for the three months ended January 31, 2024, an increase of $ 25,737(or 2%). This modest decrease in vehicle sales were consistent with sales during typically the slowest quarter of the Company's fiscal year.

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

Revenue from leases and loans

The Company provides direct operating leases (rental) and finance leases (loans) collectively referred to as ("in-house leasing") to consumers that are typically unable to obtain financing from traditional sources. The Company generates rental, interest charges and fee income from these leases. For the three months ended January 31, 2025, the revenues derived from finance lease vehicle sales increased to $28,341 compared to $10,164 for the three months ended January 31, 2024, a increase of $18,177 (or 179%). The decrease was a result of exclusively providing finance type leases in 2024 which results in lower net sales profits on sales, whereas operating leases reflect revenue for vehicle sales at the gross amount offset by a cost of sale associated with the carrying value of the vehicle when sold. Although the Company expects this change will reduce the overall total revenue on each lease and each lease vehicle sale, the Company's goal is to grow its overall finance lease portfolio more quickly as these types of leases are favourable for bank financing opportunities. As the legacy operating leases expire, the revenue from leases is expected to correlate more directly to the year over year and quarter over quarter lease originations. The Company also increased its quoted lease interest rates during the year and anticipates these rates continuing to parallel the prime lending rates in Canada.

Brokerage commissions

In addition to providing in-house leases and loans, the Company facilitates lease brokering and end of lease sales through third-party dealerships. The Company bears limited inventory risks in these transactions and does not have latitude in setting vehicle prices and therefore the Company only recognizes the net fees or brokerage commissions.

The following table summarizes the brokerage leases and sales for each of the reported periods:

For the three months ended January 31, 2025, the Company brokered $337,427 of vehicle sales transactions compared to $847,464 during the three months ended January 31, 2024, a decrease of $510,037 or 60%. For the three months ended January 31, 2025, the Company net brokerage sales revenue was $9,106 compared to $141,614 for the three months ended January 31, 2024, a decrease of $132,508 or 94%. Brokerage sales transactions and net margins can vary depending on market conditions and despite the drop in gross brokerage sales, the net profits remained relatively consistent quarter over quarter. The current economic situation in Canada is limiting the availability of profitable upgrades and early terminations which is reflecting in the lower gross sales and profits. Unlike traditional leasing companies, Solution tends to proactively refinance or upgrade vehicles before lease end termination, but this is only applicable when the markets are generating a premium in resale. As a result, the Company is simply maintaining its portfolio for longer.

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

Operating and other expenses

The following table summarizes the operating and other expenses:

Interest on loans

Interest expense for the three months ended January 31, 2025 increased modestly to $2,379,318 compared to $2,379,318 (or 11%) as a result of expanded use of the Securitization Financing compared to the Company's operating bank facility. The Company's Securitization Financing generally provides the lowest interest rates and locks the debt at a fixed rate over the corresponding period of the securitization leases. The Company's operating bank facility is entirely dependent on the variable prime lending rates.

Provision for credit losses

The company recognized a provision for credit losses of $26,026 during the three months ended January 31, 2025 compared to $29,282 in the prior comparative quarter. The provision for credit losses recognizes the growing utilization of finance type leases by the Company. This provision was determined by looking at several market and economic conditions based on its historical loss ratios on all lease types as well as the allowance levels of Canadian National banks personal retail lending levels which represents a 1% allowance.

General and administrative

General and administrative expenses include the following major expenses by nature:

Significant components of the Company's general and administrative expenses include salaries and benefits, regulatory and transfer agent fees, and lease administration costs that are not directly attributable to the acquisition of a direct lease or loan. For the three months January 31, 2025, general and

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

administrative expenses increased by $6,693 (or 1.4%). This moderate increase was primarily a result of higher public company compliance costs offset by lower salaries and wages.

Sales and marketing

Sales and marketing expenses include the following major expenses by nature:

Significant components of the Company's sales and marketing expenses include commissions and benefits paid to sales personnel, as well as advertising and social media marketing fees. For the three months ended January 31, 2025, sales and marketing expenses increased by $70,225 (or 50%).

FINANCIAL POSITION

The following table summarizes the Company's financial position:

Assets

Total assets increased by $3,018,786 (or 9.6%) to $34,416,160 as of January 31, 2025 from $31,397,374 as of January 31, 2024. The Company's revenue generating assets consist primarily of finance lease receivable and operating leases. These asset groups make up the Company's portfolio assets. The Company's non-portfolio assets represented 12% (October 31, 2024- 11%) of the total assets, and consist primarily of cash and cash equivalents, restricted cash, inventory, prepaids, other assets, and property and equipment. The Company generates considerable cash flows from monthly pre-authorized payments on

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SOLUTION FINANCIAL INC.

Management Discussion and Analysis - January 31, 2025

its lease portfolio, and generally limits the amount of unutilized cash by way of the Company's banking credit facilities that allow the ability to access cash resources when required. This strategy ensures that the Company maximizes its rate of returns on its revenue generating assets.

Lease receivables

Lease receivables contain leases that are classified as finance leases. 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 or contain a contractual guarantee by the lessee which the Company formally adopted in early 2022. Lease receivables increased by $2,537,626 (or 9%) at January 31, 2025 to $29,432,032 compared to $26,894,406 as at October 31, 2024.

Properties under operating lease

An operating lease is one that does not transfer substantially all the risks and rewards of ownership to the lessee. The carrying value of properties under operating lease decreased by $335,872 (or 31%) to $764,894 as at January 31, 2025 from $1,100,766 as at October 31, 2024. The decrease in the properties under operating lease is a result of the Company focusing exclusively on finance type leases that contain contractual lessee guarantees. The properties under operating lease are expected to slowly decrease as these lease agreements reach maturity.

LIQUIDITY AND CAPITAL RESOURCES

The Company's approach to managing capital is to ensure that it will have sufficient liquidity to meet liabilities as they come due. The Company currently settles all of its financial obligations out of cash generated from operations. The ability to do so relies on the Company maintaining sufficient cash in excess of anticipated needs. To help manage its liquidity the Company has obtained an operating loan agreement through a major schedule 1 Canadian Financial Institution. To fund the acquisition of vehicles for leasing purposes, the Company utilizes its credit facilities and when additional capital is required, it will be raised through debt and share issuances.

The Company is subject to externally imposed capital requirements pursuant to the covenants of the secured credit facility. Management reviews its capital management approach on an ongoing basis.

The table below represents the financial leverage ratio and equity capitalization for the periods ended January 31, 2025 and January 31, 2024:

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