SEDAR Interim Financial Statements

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS SOLUTION FINANCIAL INC. FOR THE THREE MONTHS ENDED JANUARY 31, 2026 AND 2025 (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, 2026 AND 2025 (Expressed in Canadian dollars) TABLE OF CONTENTS PAGE Financial Statements Condensed Consolidated Interim Statements of Financial Position 1 Condensed Consolidated Interim Statements of Comprehensive Income 2 Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity 3 Condensed Consolidated Interim Statements of Cash Flows 4 Notes to the Condensed Consolidated Interim Financial Statements 5 - 24 SOLUTION FINANCIAL INC. Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian Dollars – Unaudited) The accompanying notes are an integral part of these consolidated financial statements. 1 (Unaudited) January 31, 2026 October 31, 2025 ASSETS Current Cash and cash equivalents (Note 5) $ 1,819,872 $ 1,985,833 Restricted cash (Note 15) 1,738,490 1,599,604 Accounts receivable 548,267 306,197 Deposits and other current assets 161,284 176,654 Current portion of receivable under finance lease (Note 7 and 8) 10,197,922 9,921,038 Inventory (Note 6) 527,249 545,116 14,993,084 14,534,442 Right-of-use assets 33,395 12,201 Receivable under finance leases (Note 7 and 8) 21,965,955 22,602,356 Property under operating leases (Note 9) 166,591 181,456 Property and equipment (Note 10) 252,794 269,844 $ 37,411,819 $ 37,600,299 LIABILITIES AND SHAREHOLDERS' EQUITY Current Bank indebtedness (Note 13) $ 6,997,979 $ 8,813,651 Accounts payable and accrued liabilities 366,425 646,549 Deferred revenue (Note 14) 5,421 8,839 Lease liabilities 18,216 - Short-term portion of securitization financing (Note 15) 5,535,791 4,718,337 Customers' deposits and advances (Note 14) 537,810 484,840 13,461,642 14,672,216 Lease Liabilities 15,420 13,235 Deferred tax liability 738,500 745,000 Customers' deposits (Note 14) 2,026,760 2,004,675 Securitization financing (Note 15) 9,056,973 7,893,450 25,299,295 25,328,576 Shareholders' equity Share capital (Note 16) 9,171,643 9,193,065 Warrants (Note 16) 167,778 167,778 Contributed surplus 792,009 792,009 Retained earnings 1,981,094 2,118,871 12,112,524 12,271,723 $ 37,411,819 $ 37,600,299 Nature of Business (Note 1) APPROVED ON BEHALF OF THE BOARD “Randy Smyth” Director “Bryan Pang” Director SOLUTION FINANCIAL INC. Condensed Consolidated Interim Statements of Comprehensive Income (Expressed in Canadian Dollars – Unaudited) The accompanying notes are an integral part of these consolidated financial statements. 2 For 3 months ended January 31, 2026 For 3 months ended January 31, 2025 Sales Vehicle sales (Note 19) $ 2,324,938 $ 1,555,291 Leasing income (Note 19) 849,307 910,077 Brokerage commissions (Note 18) 10,243 9,106 Total Sales 3,184,488 2,474 --- ,474 Cost of Sales Cost of vehicle sales 2,260,831 1,473,949 Amortization of leased assets 14,865 60,438 Gross profit 908,792 940,087 Expenses Sales and marketing (Note 20) 135,638 209,467 General and administration (Note 20) 477,543 476,542 Provision for credit losses (Note 8) - 26,026 Interest 304,391 293,255 Amortization (Note 10) 26,517 25,839 944,089 1,031,129 Net loss before other items (35,297) (91,042) Other items Listing and financing fees - - Other income 10,954 14,447 Loss before tax (24,343) (76,595) Income taxes (recovery) (6,500) (13,000) Loss and comprehensive loss for the period (17,843) (63,595) Basic and diluted earnings per common share $ (0.000) $ (0.001) Weighted average number of common shares outstanding (Note 17) 84,718,031 85,929,909 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. 3 Number Common shares Warrants Contributed surplus Retained earnings Total shareholders' equity $ $ $ $ $ Balance, October 31, 2024 86,188,273 9,353,133 167,778 792,009 2,437,107 12,750,027 Purchase of common shares for cancellation (525,500) (56,976) - - (88,181) (145,157) Net and comprehensive loss - - - - (63,595) (63,595) Dividends - - - - (86,188) (86,188) Balance, January 31, 2025 85,662,773 9,296,157 167,778 792,009 2,199,143 12,455,087 Purchase of common shares for cancellation (956,500) (103,092) - - (160,971) (264,063) Net and comprehensive income - - - - 337,467 337,467 Dividends - - - - (256,768) (256,768) Balance, October 31, 2025 84,706,273 9,193,065 167,778 792,009 2,118,871 12,271,723 Purchase of common shares for cancellation (200,000) (21,422) - - (35,018) (56,440) Net and comprehensive loss - - - - (17,843) (17,843) Dividends - - - - (84,916) (84,916) Balance, January 31, 2026 84,506,273 9,171,643 167,778 792,009 1,981,094 12,112,524 Share capital Issued and outstanding SOLUTION FINANCIAL INC. Condensed Consolidated Interim Statements of Cash Flows (Expressed in Canadian Dollars – Unaudited) The accompanying notes are an integral part of these interim financial statements. 4 For 3 months ended January 31, 2026 For 3 months ended January 31, 2025 Operating activities Net income (loss) (17,843) $ (63,595) $ Items not affecting cash and cash equivalents: Amortization of property and equipment 26,517 25,838 Accretion expense on lease liabilities 568 1,369 Deferred Income taxes (6,500) (13,000) Amortization of property under operating lease 14,865 60,438 Amortization of right-of-use assets 15,238 15,164 Provision for credit losses - 26,026 Change in non-cash working capital Accounts receivable (242,070) (20,357) Deposits and other current assets 15,370 (20,657) Inventory 17,867 (168,847) Receivable under finance leases 359,517 (2,563,652) Accounts payable and accrued liabilities (280,124) (172,536) Customers' deposits and advances 75,055 109,500 Deferred revenue (3,418) (11,901) (24,958) (2,796,210) Investing activities Acquisition of property and equipment (9,467) (21,455) Proceeds from sale of property under operating lease (net) - 275,434 Interest payment on lease liabilities (568) (1,369) (10,035) 252,610 Financing activities Proceeds (repayments) from bank indebtedness (1,815,672) 2,341,579 Proceeds from securitization financing 3,277,992 2,968,645 Loan repayments from securitization financing (1,297,015) (1,893,642) Purchase of comm --- on shares for cancellation (56,440) (145,157) Payment of lease liabilities (16,031) (14,919) Payment of dividends (84,916) (86,188) 7,918 3,170,318 Net decrease in cash and cash equivalents (27,075) 626,718 Cash and cash equivalents and restricted cash, beginning of period 3,585,437 2,187,250 Cash and cash equivalents and restricted cash, end of period 3,558,362 $ 2,813,968 $ Supplemental cash flow information (Note 12) SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 5 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 These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These condensed consolidated interim financial statements have been prepared on a consolidated basis except for certain financial assets measured at fair value. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The condensed consolidated interim financial statements are presented in Canadian dollars, which is the functional and presentation currency of the Company. These condensed consolidated interim financial statements include the assets and operations of Solution Financial Inc., and its wholly owned subsidiaries Solution Financial (Canada) Inc. and Solution Financial (Alberta) Inc. All inter-company balances and transactions have been eliminated on consolidation These condensed consolidated interim financial statements were approved by the Company’s Board of Directors and authorized for issue on March 13, 2026. 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 consi --- ders the age of the vehicles along with the timing of annual and model SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 6 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. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 7 3. Material Accounting Policy Information Adoption of new accounting policies Am --- endments 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. 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. 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 Company is still evaluating the impact on its financial statements. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 8 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 facilitat --- es 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. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 9 4. Material Accounting Policy Information (continued) Revenue recognition (continued) Lease interest and rental income Finance lease interest income is included in profit or loss for all financial assets measured at amortized cost using the effective interest method. The effective interest rate is the rate that discounts estimated future cash flows through the expected life of the financial instrument back to the net carrying amount of the financial asset. The calculation takes into account all contractual terms of the financial instrument including prepayment options, fee income charged to the customer on the origination of all financial assets, and all purchase premiums or discounts, net of any transaction costs that are directly attributable to the financial instrument, but not future credit losses. The application of the method has the effect of recognizing revenue on the financial instrument evenly in proportion of the amount outstanding over the period to maturity or repayment. Once the recorded value of a financial asset has been reduced due to an impairment loss, interest revenue continues to be recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. This is offset by a corresponding adjustment to the loan loss provision charge to reflect the fact that this additional revenue may not be collectible. Rental income on operating leases is recognized on a straight-line basis over the lease term. Taxation Income tax expense is comprised of current and deferred income taxes. Current income tax and deferred income tax are recognized in profit or loss. Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The Company follows the liability method to provide for income taxes on all transactions recorded in its financial statements. The liability method requires that income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred income tax assets and liabilities are determined for each temporary difference and for unused losses, as applicable, at rates expected to be in effect when the asset is realized or t --- he liability is settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in earnings or equity in the period that includes the substantive enactment date. Deferred income tax assets are recognized to the extent that it is probable that the assets can be recovered. Inventories New, used and demonstrator vehicle inventories are recorded at the lower of cost and net realizable value with cost determined on a specific item basis. 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 changeovers. For used vehicles, the Company considers recent market data and trends such as loss histories along with the current age of the inventory. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 10 4. Material Accounting Policy Information (continued) The Company retains security over the vehicles associated with each lease. Subject to certain conditions, the Company may repossess a vehicle provided a notice of default has been issued to the customer, or upon the customer voluntarily terminating their contract. The Company attempts to negotiate with customer to avoid the need for repossession whenever possible. Vehicles that are repossessed are either disposed of at the wholesale used vehicle market price or re-leased to new customers with the proceeds offsetting any outstanding balance. The customer is liable for any shortfall. Share capital Common shares are classified as share capital. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects. Warrants issued in units are accounted for with the relative fair value method and classified as warrants reserve. Broker’s warrants values are classified under contributed surplus. Deferred financing costs incurred in connection with the issuance of common shares are capitalized until the financing is completed. In the event the financing is not completed, these costs are expensed to profit or loss. Proceeds that are received in advance of the completion of an issuance of common shares are recorded within equity as subscriptions received in advance. Convertible debentures Convertible debentures, where all significant terms of the agreement are known, are separated into their liability and equity components and accounted for using effective interest rate method. The fair value of the liability component at the time of issue was determined based on an estimated interest rate of the debentures without the conversion feature. The fair value of the equity component was determined as the difference between the face value and the fair value of the liability component. Convertible debentures for which the conversion price is not known are recorded as liabilities in their entirety. Earnings per share (“EPS”) Basic EPS amounts are calculated by dividing net income attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted EPS amounts are calculated with consideration given to convertible preferred shares, stock options and warrants, and assumes that any proceeds received on exercise of options or warrants would be used to purchase common shares at the average market price during the period. Diluted --- EPS amounts also include exchangeable shares using the “if-converted” method to determine the dilutive effect of convertible and subordinate debentures, whereby it is assumed the conversion of the exchangeable shares occurs at the beginning of the reporting period (or at the time of issuance, if later) where applicable. The weighted average number of common shares outstanding is then adjusted by the net change. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 11 4. Material Accounting Policy Information (continued) Share-based compensation Equity-settled share-based compensation to employees and others providing similar services are measured at the fair value of equity instruments at the grant date. The fair value is measured at grant date, using the Black-Scholes option pricing model, and each tranche is recognized on a graded- vesting basis over the period in which options vest. At the end of the reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to contributed surplus. Equity-settled share-based compensation transactions with parties other than employees are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. Consideration received on the exercise of the stock options is recorded in share capital and the related share-based payment in contributed surplus is transferred to share capital. Charges for options that are forfeited before vesting are reversed from equity. Dividends Dividends on common shares are recognized in the Company’s consolidated financial statements in the period the dividends are declared by the Company’s Board of Directors. Property under operating leases The Company determines the classification of a lease at its lease inception date. An operating lease is one that does not transfer substantially all of the risks and rewards of ownership to the lessee. Property classified as operating leases are carried at cost less accumulated depreciation and are being depreciated to their estimated residual values using the straight-line method over the lease term. Property under operating leases are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds the higher of the asset’s fair value less costs to sell and its value in use. The Company has not been required to record an impairment loss to date. Property, plant and equipment Property and equipment are stated at cost less accumulated amortization and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Residual values, useful lives and methods of amortization are reviewed, and adjusted if appropriate, at each financial year end. Land is not amortized. Unless noted otherwise, amortization of property and equipment is prov --- ided for over the estimated useful life of the assets on the declining balance basis at the following annual rates: SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 12 4. Material Accounting Policy Information (continued) Impairment of non-current assets The carrying amounts of the Company's non-current assets are reviewed at each reporting date for indicators of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the amount of the impairment, if any. The recoverable amount of an asset is evaluated at the Cash Generating Unit ("CGU") level, which is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of a CGU is the greater of its fair value less costs to sell and its value in use. Fair value less cost to sell is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties, less the costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Financial instruments Classification The Company determines the classification of its financial instruments at initial recognition. Upon initial recognition, a financial asset is classified as measured at: amortized cost, fair value through profit and loss (“FVTPL”), or fair value through other comprehensive income (loss) (“FVOCI”). The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial liability is classified as measured at amortized cost or FVTPL. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as FVTPL: • it is held within a business model whose objective is to hold assets to collect contractual cash flows; and • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Land 0% Buildings 4% Leasehold Improvements Straight line basis over the term of the lease Furniture and Equipment 20% Computer Equipment 30% Software 4 years straight line method SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 13 4. Material Accounting Policy Information (continued) A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as FVTPL: • it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. An equity investment that is held for trading is measured at FVTPL. For other equity investments that are not held for trading, the Company may irrevocably elect to designate them as FVOCI. This election is made on an investment-by-investment basis. --- All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or the Company has elected to measure them at FVTPL. Measurement Initial measurement On initial recognition, all financial assets and financial liabilities are measured at fair value adjusted for directly attributable transaction costs except for financial assets and liabilities classified as FVTPL, in which case the transaction costs are expensed as incurred. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 14 4. Material Accounting Policy Information (continued) Subsequent measurement The following accounting policies apply to the subsequent measurement of financial instruments: Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss. Financial assets at amortized cost These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on de-recognition is recognized in profit or loss. Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss. Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income is calculated using the effective interest rate method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On de-recognition, gains and losses accumulated in OCI are reclassified to profit or loss. Impairment of financial instruments Impairment of financial assets at amortized cost: The Company assesses all information available, including on a forward-looking basis, the expected credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as the reporting date, with the risk of default as at the date of initial recognition, based on all information available, and reasonable and supportive forward-looking information. 5. Financial Instruments and Risk Management Fair value The Company’s financial instruments recognized on the statements of financial position consist of cash, term deposits, accounts receivable, due from related company, car loans receivable, receivable under finance lease, bank indeb --- tedness, accounts payable and accrued liabilities, customers’ advances, customers’ deposits, convertible debentures and lease liabilities. The fair values of the Company’s short term financial instruments approximate their carrying values due to their short-term maturity. The fair values of the Company’s long term financial assets and liabilities approximate their carrying values based on market interest rates. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 15 5. Financial Instruments and Risk Management (continued) The Company has classified financial instruments as follows: Classification Measurement Financial assets: Cash, restricted cash and cash equivalents Loans and receivables Amortized cost Accounts receivable Loans and receivables Amortized cost Deposits and other current assets Loans and receivables Amortized cost Receivable under finance leases Loans and receivables Amortized cost Financial liabilities: Bank indebtedness Financial liabilities Amortized cost Accounts payable accrued liabilities Financial liabilities Amortized cost Customers' deposits and advances Financial liabilities Amortized cost Lease liabilities Financial liabilities Amortized cost Convertible debentures Financial liabilities Amortized cost Securitized financing Financial liabilities Amortized cost The Company’s cash equivalents consist of term deposits maturing within the next year. The Company has exposure to the following risks from its use of financial instruments: credit, interest rate, liquidity, and price risk. The Company reviews its risk management framework on a quarterly basis and makes adjustments as necessary. The fair values of the Company’s financial assets and liabilities held at amortized cost approximates their book values. Credit risk Credit risk arises from the potential that a counter party will fail to perform its obligations. The Company’s financial instruments that are exposed to concentrations of credit risk consist of cash, term deposits, accounts receivable, due from related company, car loans receivable, and lease receivables. The Company attempts to mitigate the risks associated with cash and term deposits by dealing only with major Canadian financial institutions with good credit ratings and performs credit assessments of all customers making material orders. The Company attempts to mitigate the risks associated with car loans receivable and lease receivables through its credit check process performed before entering into any sales arrangement. Interest rate risk Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The Company’s financial instruments that are exposed to concentrations of interest rate risk consist of bank indebtedness and short-term loans. A change in the prime rate of interest of 1% would result in additional interest expense for the Company of $66,980 per year. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 16 5. Financial Instruments and Risk Management (continued) Liquidity risk The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities as they come due. The Company currently settles al --- l 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 (Note 13). Price risk Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from currency risk or interest rate risk). The Company is at risk to changes in commodity prices, which may affect financing options available to the Company. 6. Inventory Inventory at January 31, 2026 and October 31, 2025 consist of vehicles held for sale. The inventory is carried at the lower of cost or net realizable value and as at January 31, 2026 and October 31, 2025, the Company has not recorded any reserves for inventory write downs. 7. Receivable Under Finance Lease Finance lease receivables consist of conditional sales contracts, which have terms of 3 to 72 months with fixed rates of interest. In 2022, the Company adopted the use of guaranteed residual values resulting in substantially all new lease agreements being classified as finance leases. All lease receivables are secured by the corresponding vehicle and typically contain a contractual guarantee of the residual price by the lessor. The contractual maturity of the portfolio outstanding of continuing operations as at January 31, 2026 and October 31, 2025, assuming no prepayments, is as follows: Gross receivable Unearned income Net receivable Gross receivable Unearned income Net receivable $ $ $ $ $ $ Maturity Within 1 year 12,816,558 (2,618,635) 10,197,922 12,634,604 (2,713,565) 9,921,039 In 1 to 3 years 20,841,830 (3,033,040) 17,808,790 21,291,547 (3,146,225) 18,145,322 After 3 years 4,657,388 (181,257) 4,476,131 4,972,947 (196,948) 4,775,999 38,315,775 (5,832,932) 32,482,843 38,899,098 (6,056,738) 32,842,360 Allowance for credit losses (318,966) (318,966) (318,966) (318,966) 37,996,809 (5,832,932) 32,163,877 38,580,132 (6,056,738) 32,523,394 31-Jan-26 31-Oct-25 SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 17 7. Receivable Under Finance Lease (continued) An analysis of the aging of gross finance receivables in each of the years presented is as follows: Age January 31, 2026 October 31, 2025 Current 32,295,604 $ 32,826,689 $ Contractually past due: 31-60 days 171,568 15,671 Over 60 days 15,671 - 32,482,843 $ 32,842,360 $ Allowance for credit losses (318,966) (318,966) 32,163,877 $ 32,523,394 $ In accordance with IFRS 9, the Company records a provision for credit losses using the Expected Credit Losses model that segments its finance receivables into three stages- Stage 1 “performing”, Stage 2 “underperforming” and Stage 3 “non-performing”. There is credit risk inherent in finance receivables resulting from the potential non-payment or other objective evidence of deterioration in the collectability of the receivable. The primary evidence of impairment used by the Company is monitoring for timely payment with payments over 90 days being an indication of non-performance. Receivables past due may be indicative of underperforming receivables should they persist or not be collected within 120 days. Prior to 2022, the Company primarily entered into lease --- agreements with unguaranteed residual values resulting in a limited number of finance type leases and were categorized as performing due to limited payment defaults and no historical credit losses. The Company’s leases also typically include down payments and customer deposits to discourage non-performance. 8. Allowance For Credit Losses Under IFRS 9, the Company using forward-looking indicators to determine the allowance for credit losses. The analysis performed by the Company looked at several factors including the rate of unemployment, used vehicle market conditions in the luxury automobile sector, comparative and general economic statistics including GDP, immigration statistics and housing values which may be early indicators that might indicate potential future credit losses. Despite the Company’s historical performance, early indicators of an economic recession, rising interest rates, and the elevated used vehicle market influenced the judgement applied in respect of modelling the Expected Credit Loss allowance. The Company recognized a provision for credit losses of $nil during the three months ended January 31, 2026 and $26,026 for the three months ended January 31, 2025. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 18 9. Property Under Operating Leases The Company acts as a lessor in connection with operating leases and recognizes the leased assets in its statements of financial position. The lease payments received, are recognized in net income as rental revenue. 31-Jan-26 31-Oct-25 $ $ COST At the beginning of the period 503,168 2,220,991 Disposals - (1,717,823) At the the end of the period 503,168 503,168 ACCUMULATED DEPRECIATION At the beginning of the period 321,712 1,120,225 Depreciation charge for the period 14,865 192,028 Disposals - (990,541) At the the end of the period 336,577 321,712 Net carrying amount 166,591 181,456 For the period and year end Below are the future minimum lease payments arising from non-cancellable operating leases of continuing operations: 31-Jan-26 31-Oct-25 Within 1 year 38,489 52,501 In 1 to 3 years 9,620 14,430 48,109 $ 66,931 $ SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 19 10. Property and Equipment Land Buildings Furniture and Equipment Computer Equipment Software Leasehold Improvement Total Cost Balance, October 31, 2024 $ 161,883 $ 94,025 $ 141,441 $ 21,845 $ 346,514 $ 17,550 $ 783,258 Additions - - - - 21,455 - 21,455 Balance, January 31, 2025 $ 161,883 $ 94,025 $ 141,441 $ 21,845 $ 367,969 $ 17,550 $ 804,713 Accumulated Amortization Balance, October 31, 2024 $ - $ 49,542 $ 115,612 $ 20,196 $ 248,151 $ 14,040 $ 447,541 Additions - 445 1,292 227 22,997 877 25,838 Balance, January 31, 2025 $ - $ 49,987 $ 116,904 $ 20,423 $ 271,148 $ 14,917 $ 473,379 Net Book Value Balance, January 31, 2025 $ 161,883 $ 44,038 $ 24,537 $ 1,422 $ 96,821 $ 2,633 $ 331,334 Land Buildings Furniture and Equipment Computer Equipment Software Leasehold Improvement Total Cost Balance, October 31, 2025 $ 161,883 $ 94,025 $ 143,791 $ 24,396 $ 384,052 $ 17,550 $ 825,697 Additions - - - - 9,468 - 9,468 Balance, January 31, 2026 $ 161,883 $ 94,025 $ 143,791 $ 24,396 $ 393,519 $ 17,550 $ 835,164 Accumulated Amortization Balance, October 31, 2025 $ - $ --- 51,321 $ 121,013 $ 21,805 $ 344,164 $ 17,550 $ 555,853 Additions - 427 1,139 356 24,595 - 26,517 Balance, January 31, 2026 $ - $ 51,748 $ 122,152 $ 22,161 $ 368,759 $ 17,550 $ 582,370 Net Book Value Balance, January 31, 2026 $ 161,883 $ 42,277 $ 21,639 $ 2,235 $ 24,760 $ - $ 252,794 11. Related Party Transactions In accordance with IAS 24, Related Party Disclosures, related party transactions include transactions with parties that have control or joint control over the reporting entity, have significant influence over the entity, are members of key management personnel of the Company including the Directors and Senior Executives of the Company, and close family members of those individuals. The Senior Executive team includes the Chief Executive Officer (“CEO”), Chief Financial Officer, and VP Operations. The Company uses an office leased by Solution Lease Club, a Company controlled by the CEO of the Company for administration and promotional purposes. Solution Lease Club’s office is at Unit 6, 11220 Voyageur Way, Richmond. The Company pays Solution Lease Club a $400 fee for each sales and lease transaction for property usage. During the three months ended January 31, 2026, the Company paid $28,500 to Solution Lease Club (2025 - $45,000). During the three months ended January 31, 2026, remuneration of directors and other members of key management personnel are $95,450 (2025 - $145,462). Included in this remuneration are financing fees of $9,000 (2025- $9,000) paid to a Company with a director in common for assistance in securing the Company’s banking and securitization facilities. During the three months ended January 31, 2026 services provided by law firms where a partner is a director of the Company amounted to $nil (2025-$3,717). Additionally, as of January 31, 2026, service fees owing to the CFO was $10,500 (2025- $10,500). Two directors of the Company have automobile lease agreements with the Company under standard SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 20 commercial terms. These leases bear interest at rates consistent with terms available to other customers in similar circumstances. 12. Supplemental Cash Flow Information Significant non-cash transactions during the three months ended January 31, 2026 and 2025 affecting cash flows from investing and financing activities included: January 31, 2026 2025 Cash paid for interest $ 303,823 $ 291,887 13. Bank Indebtedness On August 31, 2022, the Company secured a $15 million Operating Loan Facility with ATB Financial (“ATB”). The $15 million Operating Loan Facility bears interest at prime plus 1.5% per annum and is secured by a General Security Agreement, subject to permitted encumbrances, a first-ranking security interest over all assets and priority over the Unsecured Convertible Debentures. The Operating Loan Facility is subject to monthly, quarterly and annual reporting covenants including Total Debt to Equity and Working Capital Ratios. As at January 31, 2026, the total outstanding balance on the loan agreement is $6,997,979 (October 31, 2025 - $8,813,651) and was in compliance with all covenants. 14. Customers’ Deposits and Deferred Revenue Customers’ deposits are refundable security deposits received by the Company at lease inception. They are applied to the residual balance if a buyout option is exercised or will be refunded at the maturity --- of the lease upon return of the vehicle. As at January 31, 2026, the Company has deposits of $537,810 on leases coming due in the next year (October 31, 2025 - $484,840) and $2,026,760 deposits coming due in more than a year (October 31, 2025 - $2,004,675). Balance, October 31,2024 1,960,285 $ Additions 357,400 Refunds (247,900) Balance, January 31, 2025 2,069,785 $ Additions 1,097,750 Refunds (678,020) Balance, October 31,2025 2,489,515 $ Additions 279,420 Refunds (204,365) Balance, January 31, 2026 2,564,570 $ Deferred revenue are lease down payments received by the Company at lease inception. They are recognized as rental income on a straight-line basis over the terms of the lease. In case of pre-mature termination, any balance of the unrealized down payment will be recognized at the same time. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 21 15. Securitization Financing On December 22, 2022, the Company entered into a $35 million Master Purchase and Service Agreement or “Securitization Financing” with Sun Life Assurance Company of Canada. Securitization financings are subject to eligibility criteria of pledged finance lease receivables. Funds are drawn against the securitization facility in tranches. The corresponding interest rates of applicable tranches are set at fixed yield rates tied to specified Government of Canada Bonds with terms that most closely approximate the term of the pledged finance lease receivables included in each tranche. The facility is repayable in monthly instalments of principal and interest in accordance with amortization schedule of the respective tranches. The facility is secured by assignment of the vehicle lease receivables. Restricted cash represents cash held as security for borrowings provided by securitization lender. A cash reserve account held by the lender is maintained at an amount equal to 2% of the loan principal outstanding or a minimum of $500,000. Refundable customer deposits are also held in restricted cash accounts. The Securitization financing is subject to certain reporting and financial covenants which the Company was compliant with throughout 2026, including maintaining a Tangible Net Worth of at least $10,000,000 and maintaining a ratio of Total Liabilities and Securitized Obligations to Tangible Net Worth of less than 9.0 to 1.00. During three months ended January 31, 2025, the company completed an additional tranche amounting to $2,968,645, securitizing corresponding gross finance lease receivables of $3,492,524. During three months ended January 31, 2026, the company completed an additional tranche amounting to $3,277,992 securitizing corresponding gross finance lease receivables of $3,856,461. As at January 31, 2026, the Securitization financing debt was $14,592,764 (2025 - $13,111,328) of which $5,535,791 (2025 - $4,718,337) is current. 16. Share Capital Authorized share capital Unlimited number of common shares without par value. Issued share capital During the three months ended January 31, 2026 the Company completed the following transaction: (i) The Company paid dividends of $84,916 or $0.001 per share. (ii) The Company purchased and cancelled 200,000 of its common shares on the open market at an average price of $0.28 for total cost of $56,440, pursuant to a normal course issuer bid (the “NCIB”). SOLUTION FINANCIAL INC. Notes to Condensed C --- onsolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 22 (iii) 16. Share Capital (continued) During the three months ended January 31, 2025 the Company completed the following transactions: (i) The Company paid dividends of $86,188 or $0.001 per share. (ii) The Company purchased and cancelled 525,500 of its common shares on the open market at an average price of $0.27 for total cost of $145,157, pursuant to a normal course issuer bid (the “NCIB”). Stock options and warrants The Company follows the policies of the TSX under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. Under the policies, the exercise price of each option equals the market price, or a discounted price of the Company’s stock as calculated on the date of grant. The options can be granted for a maximum term of three years and vest at the discretion of the Board of Directors. There were no stock option or warrants outstanding during the three months ended January 31, 2026 and 2025. SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 23 17. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: For the three months ended January 31, 2026 2025 Net income available to common shareholders for basic and diluted earnings per share (24,343) $ (63,595) $ Weighted average number of common share outstanding - basic 84,718,031 85,929,909 Effect of dilutive securities - share-based payments - - Weighted average number of common shares outstanding- diluted 84,718,031 85,929,909 Earnings per share - reported: Basic (0.000) $ (0.001) $ Diluted (0.000) $ (0.001) $ 18. Brokerage Commissions The gross sales classified as agent sales were: For the three months ended January 31 2026 2025 Brokerage sale $ 179,392 $ 337,427 Cost of brokerage sale (169,149) (328,321) Total $ 10,243 $ 9,106 19. Sales by Nature Sales include the following major sales by nature: For the three months ended January 31 2026 2025 In-house vehicle sales $ 2,317,089 $ 1,526,950 Finance lease vehicle sales 7,850 28,341 Vehicle Sales $ 2,324,938 $ 1,555,291 Interest and administrative income $ 769,897 $ 734,209 Rental revenue 28,248 78,588 Registration fees 51,162 97,280 Leasing Income $ 849,307 $ 910,077 SOLUTION FINANCIAL INC. Notes to Condensed Consolidated Interim Financial Statements For the three months ended January 31, 2026 and 2025 (Expressed in Canadian dollars- Unaudited) 24 20. Expense by Nature Sales and marketing expenses include the following major expenses by nature: For the three months ended January 31 2026 2025 Advertising and promotion $ 10,871 $ 17,200 Commissions 99,103 133,502 Marketing 25,665 54,219 Meals and entertainment - 4,546 Total $ 135,638 $ 209,467 General and administrative expenses include the following major expenses by nature: For the three months ended January 31 2026 2025 Accounting and legal $ 158,798 $ 143,983 Consulting fees 2,500 2,500 Regulatory and transfer agent 69,699 76,462 Insurance, license and permit 17,228 14,042 Office and miscellaneous 35,028 37,271 Repairs and maintenance 450 770 Salaries and wages 193,840 201,514 Total $ 477,543 $ 476,542 20. Capital Management Th --- e Company’s objectives, when managing capital, are to safeguard cash as well as maintain financial liquidity and flexibility in order to preserve its ability to meet financial obligations and deploy capital to grow its businesses. The Company’s financial strategy is designed to maintain a flexible capital structure consistent with the objectives stated above and to respond to business growth opportunities and changes in economic conditions. In order to maintain or adjust its capital structure, the Company may issue shares or issue debt (secured, unsecured, convertible and/or other types of available debt instruments). The Company is subject to certain externally imposed capital requirements as described in Note 13 Bank Indebtedness and Note 15 Securitization Financing. The Company did not change its capital management strategy in the three months ended January 31, 2026. 21. Segmented Information The Company operates in one business segment being retail sales, leases, and financing for high- end automotive vehicles, boats, and commercial equipment and out of three locations being Richmond, BC, Calgary, AB and Vaughan, ON.