Page 1

XSFINANCIAL EQUIPMENT LEASING XS FINANCIAL REPORTS SECOND QUARTER 2021 FINANCIAL RESULTS Continued revenue growth and record lease originations highlight productive quarter LOS ANGELES , CA , August 30 , 2021 - XS Financial Inc. ( " XS Financial " , " XSF " or the " Company " ) ( CSE : XSF ) ( OTCQB : XSHLF ) , a specialty finance company providing equipment leasing solutions to cannabis companies in the United States , is pleased to report its financial results today for the quarter year ended June 30 , 2021 ( " Q2 / 21 " ) . All amounts are expressed in U.S. dollars . Q2 / 21 Financial Highlights • • • • • Revenues of $ 0.6 million compared to $ 0.0 million in Q2 2020 , representing an increase of $ 0.6 million ; Net loss of $ 0.5 million compared to a net loss of $ 0.9 million Q2 2020 , representing a favorable decrease of $ 0.4 million ; 492 % increase in funded leases from $ 2.0 million in Q2 2020 to $ 11.9 million in Q2 2021 with customers such as Columbia Care , PharmaCann , Ayr Wellness , Skymint Brands , and an undisclosed confidential company , resulting in 14 new lease schedules ; 100 % increase on monthly recurring payments during the quarter to $ 0.6 million from $ 0.3 million at Q1 2021 ; 113 % increase in gross lease receivables during the quarter from $ 12.2 million in Q1 2021 to $ 26.0 million ; EBITDA loss of $ 0.2 million ( Q2 / 20 - loss of $ 0.7 million ) ; Adjusted EBITDA¹ loss of $ 0.1 million ( Q2 / 20 - loss of $ 0.3 million ) . Post - Quarter Portfolio and Corporate Highlights As of Q4 / 20 As of Q1 / 21 As of Q2 / 21 As of 8/30/21 # of Customers # of Active Leases 6 16 7 24 8 38 9 48 Total Funded Leases Since Inception $ 7.2 million Average Lease Size by Customer $ 1.2 million $ 10.5 million $ 1.5 million $ 22.1 million $ 2.8 million Total Equipment Cost $ 10.9 million $ 15.2 million $ 30.4 million $ 34.0 million $ 3.8 million $ 44.6 million Monthly Recurring Payments $ 0.2 million Gross Lease Receivables $ 8.8 million $ 0.3 million $ 12.2 million $ 0.6 million $ 26.0 million $ 0.9 million $ 38.8 million • Upsized Ayr Wellness lease facility to $ 21.4 million after the initial $ 5.3 million facility announced in November 2020 had been fully drawn ; • Doubled revolving credit line with FDIC bank by upsizing our facility from $ 2.0 million to $ 4.0 million with improved terms ; • 10 new lease schedules with Columbia Care , Hollister Biosciences and Ayr Wellness , resulting in lease originations totaling $ 11.9 million and equipment value totaling $ 14.2 million ; • Continued growth of syndication platform by expanding participation to a total of $ 5.4 million of lease transactions . David Kivitz , CEO of XS Financial , commented : " We have continued to build upon tangible success over the recent fiscal quarters and achieved several key milestones during Q2 . Our expanding portfolio of high - quality , market - leading customers illustrates the strong demand for our CAPEX and equipment financing solutions . The recent upsizing of $ 21.4 million with Ayr Wellness represents our largest commitment to date . On a quarter - by - quarter basis , we have 1 Adjusted EBITDA is a non - IFRS financial performance measure . Adjusted EBITDA is calculated as operating income adjusted for non - cash expenses , non - cash equity incentives and one - time non - operating expenses . 1