Solution Financial Announces Closing of Qualifying Transaction

Solution Financial Inc. (TSXV:SLY.H) (the “Company”) is pleased to announce that further to its press release dated June 15, 2018, it has completed its Qualifying Transaction (the “Transaction”), as defined in the policies of the TSX Venture Exchange (the “TSXV”) pursuant to which it acquired all of the issued and outstanding shares of Solution Financial (Canada) Inc. (formerly, Solution Financial Inc.) (“Solution Financial”). The Company expects to resume trading as a Tier 2 Industrial Issuer on the TSXV under the symbol “SFI” at market open on Wednesday, June 27, 2018.

• In connection with the closing of the Transaction (the “Closing”), the Company:
• completed a consolidation its common shares on the basis of one post-consolidation common share for every 2.4510 pre-consolidation common shares (the “Consolidation”),
• changed its name to “Solution Financial Inc.”;
• issued 13,610,000 post-Consolidation common shares (“Shares”) on a conversion of subscription receipts (“Subscription Receipts”) issued in connection with the concurrent financing for the Transaction, pursuant to which the Company raised aggregate gross proceeds of $3,402,500;
• issued 1,369,000 Shares pursuant to a non-brokered private placement, pursuant to which the Company raised aggregate gross proceeds of $342,250; and
• appointed new officers and directors, all as further described in this news release and in the Company’s filing statement dated June 15, 2018 (the “Filing Statement”) with respect to the Transaction, which is available under the Company’s profile on SEDAR at www.sedar.com.

About Solution Financial

Solution Financial was incorporated under the provisions of the Business Corporations Act (British Columbia) in 2004 and specializes in sourcing and leasing luxury and exotic vehicles, yachts and other high value assets. Solution Financial works with a select group of automotive and marine dealerships providing lending solutions to clients who cannot obtain leasing terms with traditional Canadian financial institutions or other sub-prime lenders. Typical customers include new immigrants, business owners and international students. Solution Financial provides a unique leasing experience whereby it partners with its clients to help them navigate the challenges of acquiring, insuring, maintaining and upgrading vehicles and luxury assets in Canada.

Closing of Qualifying Transaction

In connection with the Closing, the Company acquired all of the issued and outstanding common shares of Solution Financial, with Solution Financial becoming a wholly-owned subsidiary of the Company. The Company issued 52,000,000 Shares to the former shareholder of Solution Financial. In addition, the Company also issued 2,000,000 Shares to an arm’s length finder and issued 4,000,000 Shares and 2,000,000 common share purchase warrants to settle debt in the aggregate principal amount of $1,000,000 owed by Solution Financial to an arm’s length party
which was assumed by the Company in connection with the Transaction. After giving effect to the completion of the Transaction and the Consolidation, the Company has 78,979,031 Shares issued and outstanding (on an undiluted basis), of which 54,081,599 Shares are subject to a Tier 2 Surplus Escrow pursuant to the policies of the TSXV, which will be released in tranches over the next 36 months, with the first release upon issuance of the TSXV’s Final Exchange Bulletin.

Prior to the Transaction, the Company was a Capital Pool Company (as defined under the policies of the TSXV), and had not commenced commercial operations and had no assets other than cash. The Transaction constituted the Company’s “Qualifying Transaction”, as such term is defined in Policy 2.4 of the TSXV. Final acceptance of the Transaction will occur upon the issuance of a Final Exchange Bulletin by the TSXV. Upon issuance of the Final Exchange Bulletin, the Company will cease to be a Capital Pool Company and will recommence trading.

New Board and Management Team

In connection with the Closing, the Company welcomes a new board of directors and management team. The Company will be led by Bryan Pang, as President and Chief Executive Officer, Sean Hodgins as Chief Financial Officer and Corporate Secretary and Vincent Lau as Vice-President of Operations. The Company’s board of directors will be comprised of Mr. Pang, Mr. Hodgins, Mr. Lau, Steve Saville, Kerry Meier and Desmond Balakrishnan. In connection
with the Closing, Antonio Ricci, Zula Kropivnitski, Joel Dumaresq and Nitin Kaushal resigned from their respective director and officer positions, and the Company thanks them for their service in bringing the Company to completion of the Transaction.

Closing of Financings

Immediately prior to the Closing, the Company converted an aggregate of 13,610,000 previously issued Subscription Receipts issued pursuant to a brokered private placement at a price of $0.25 per Subscription Receipt for gross proceeds of $3,402,500 (the “Brokered Financing”).

As previously announced (see press release dated October 24, 2017), Industrial Alliance Securities Inc. (the “Agent”) acted as agent on a “best efforts” basis in respect of the Brokered Financing.

The gross proceeds of the Brokered Financing (the “Brokered Escrowed Funds”) were deposited into escrow with Computershare Trust Company of Canada, as escrow agent (the “Escrow Agent”), pursuant to the terms of a subscription receipt agreement dated March 29, 2018 (the “Subscription Receipt Agreement”) among the Company, the Escrow Agent and the Agent, pending satisfaction of the Release Condition (as defined in the Subscription Receipt
Agreement), which included that all conditions precedent to the closing of the Transaction be
satisfied or waived.

Upon the satisfaction of the Release Condition under the Subscription Receipt Agreement, the Brokered Escrowed Funds (less the cash portion of the Agents’ Fee (as defined herein) and the Agents’ expenses, which were released to the Agent) were released to the Company, and each Subscription Receipt, without payment of additional consideration or further action on the part of the holders thereof, converted into one unit (a “Unit”). Each Unit is comprised of one Share and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant is exercisable by the holder to acquire one additional Share at a price of $0.40 until
December 22, 2019.

The securities issued on conversion of the subscription receipts are subject to a hold period expiring four months and one day after original the issuance of the Subscription Receipts on March 29, 2018 and expiring on July 30, 2018.

In connection with the Brokered Financing, the Agent was paid a cash commission equal to 7% of the Subscription Receipts sold (excluding Subscription Receipts sold to certain excluded purchasers in respect of which the Agent was paid a cash commission of 1%). In addition, the Agent was issued broker warrants (“Broker Warrants”) equal to 7% of the Subscription Receipts sold (excluding Subscription Receipts sold to certain excluded purchasers). Each
Broker Warrant is exercisable for one Unit at an exercise price of $0.25 per Unit until December 22, 2019. In aggregate, the Agent (and its selling group) were paid a cash commission of $118,175 and were issued an aggregate of 392,700 Broker Warrants (together, the “Agent’s Fee”). In addition, the Agent was paid a corporate finance fee of $40,000 (plus applicable taxes) and was reimbursed for reasonable expenses.

In addition to the Brokered Financing, in connection with closing the Transaction, the Company also completed a non-brokered private placement financing of 1,369,000 Units for gross proceeds of $342,250 (the “Non-Brokered Placement”).

The securities issued in connection with the Non-Brokered Placement will be subject to a hold period expiring on October 23, 2018 pursuant to applicable Canadian securities laws and the rules of the TSXV.

The proceeds of the Brokered Financing and the Non-Brokered Placement are expected to be used for new leasing capital, marketing and expansion initiatives and for general working capital purposes.

Grant of Stock Options

In connection with the Closing, the Company agreed to grant an aggregate of 4,490,000 stock options of the Company, effective as of the date of the Final Exchange Bulletin with respect to the Transaction, to certain consultants, directors, officers, employees, and advisors of the Company. Each of the options will be exercisable into one common share of the Company at a price of $0.25 per share for a period of three years following the Closing.

Of the options to be granted, (i) 1,400,000 will be granted to Mr. Lau which will vest over four years; (ii) 500,000 will be granted to Mr. Hodgins which will vest over four years; and (iii) 250,000 will be granted to each of Mr. Saville, Mr. Meier and Mr. Balakrishnan which will vest immediately.

No securities of the Company (including, for greater certainty, the Shares issued to the former Solution shareholder, on conversion of the Subscription Receipts or pursuant to the NonBrokered Placement) have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state, district or commonwealth of the United States (as defined in Regulation S under the U.S. Securities Act).

Accordingly, these securities may not be offered or sold, directly or indirectly, within the United States or to or for the account or benefit of any “U.S. Person” (as defined in Regulation S under the U.S. Securities Act), absent an exemption from the registration requirements of the U.S.

Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States or any jurisdiction where such offer or sale would be unlawful, or for the account or benefit of any U.S. Person or person within the United States.

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

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release. Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, final Exchange.

The Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release. Investors are cautioned that, except as disclosed in the filing statement dated June 15, 2018 prepared in connection with the Qualifying Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.

Trading in the securities of a capital pool company should be considered highly speculative.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state

securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

All information contained in this news release with respect to the Company and Solution Financial was supplied by the parties, respectively, for inclusion herein, and the Company and its directors and officers have relied on Solution Financial for any information concerning such party.

This news release contains forward-looking statements relating to the timingof the resumption of trading of the Company’s securities, the future operations of the Company, and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the future plans and objectives of the Company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause actual results to differ
materially from the Company’s expectations are detailed from time to time in the filings made by
the Company with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such
information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forwardlooking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

Click here to connect with Solution Financial Inc. (TSXV:SFI) for an Investor Presentation

Source: solution.financial