Decisive Dividend : 1ST QUARTER 2024 FINANCIAL STATEMENTS

Financial Statements of

For the three months ended March 31, 2024

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Financial Position (Unaudited - Expressed in thousands of Canadian dollars)

		March 31,		December 31,
		2024		2023
Assets
Cash	$	4,211	$	4,050
Accounts receivable		21,457		22,647
Inventory		25,758		24,351
Prepaid expenses and deposits		1,682		1,399
Total current assets		53,108		52,447
Property and equipment		27,406		23,776
Intangible assets		31,986		32,648
Goodwill		43,818		43,696
Total assets	$	156,318	$	152,567
Liabilities
Accounts payable and accrued liabilities	$	23,029	$	26,107
Dividends payable (note 8)		865		756
Warranty provision		690		700
Customer deposits		750		1,281
Current portion of lease obligations (note 5)		1,949		1,693
Current portion of long-term debt (note 6)		230		224
Total current liabilities		27,513		30,761
Lease obligations (note 5)		9,997		9,014
Long-term debt (note 6)		50,555		45,037
Deferred income taxes		9,774		10,004
Total liabilities		97,839		94,816
Equity
Share capital (note 7)		69,174		66,611
Contributed surplus		1,506		1,378
Cumulative profit		15,389		15,202
Cumulative dividends (note 8)		(29,900)		(27,418)
		56,169		55,773
Accumulated other comprehensive income		2,310		1,978
Total equity		58,479		57,751
Total liabilities and equity	$	156,318	$	152,567

Approved on behalf of the Board of Directors:

"James Paterson"Director

"Michael Conway"Director

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

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Profit and Comprehensive Income

(Unaudited - Expressed in thousands of Canadian dollars, except per share amounts)

For the Three Months Ended March 31,		2024		2023
Sales (note 9)	$	29,350	$	30,854
Manufacturing costs (note 10)		18,115		19,732
Gross profit		11,235		11,122
Expenses
Amortization and depreciation		1,479		932
Financing costs (note 11)		1,217		755
Occupancy costs		575		476
Professional fees		509		396
Salaries, wages and benefits		5,193		4,171
Selling, general and administration		2,168		1,837
		11,141		8,567
Operating profit		94		2,555
Other items
Interest and other income		17		18
Foreign exchange gains		232		42
Gain on sale of equipment		3		69
		252		129
Profit before income taxes		346		2,684
Income taxes
Current expense		401		906
Deferred recovery		(242)		(188)
		159		718
Profit	$	187	$	1,966
Other comprehensive income
Foreign operation currency translation differences		332		261
Total comprehensive income	$	519	$	2,227
Profit per share
Basic		0.01		0.13
Diluted		0.01		0.12
Weighted average number of shares outstanding (000s):
Basic		19,046		14,988
Diluted		20,415		16,473

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

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Equity

(Unaudited - Expressed in thousands of Canadian dollars)

											Accumulated
	Share Capital					Deficit			Other
	Number				Contributed		Cumulative		Cumulative	Comprehensive		Total
For the Three Months Ended March 31, 2024 and 2023	(000s)		Amount		Surplus		Dividends		Profit		Income		Equity
Balance, January 1, 2023	14,888	$	44,094	$	1,028	$	(19,686)	$	6,869	$	1,825	$	34,130
Shares issued under ESPP	76		430		20		-		-		-		450
Shares issued under DRIP	71		369		-		-		-		-		369
Exercise of stock options	56		158		(72)		-		-		-		86
Share-based payment awards	-		-		218		-		-		-		218
Total comprehensive income for the period	-		-		-		-		1,966		261		2,227
Dividends declared	-		-		-		(1,426)		-		-		(1,426)
Balance, March 31, 2023	15,091	$	45,051	$	1,194	$	(21,112)	$	8,835	$	2,086	$	36,054
Balance, January 1, 2024	18,911		66,611		1,378		(27,418)		15,202		1,978		57,751
Shares issued under ESPP (note 7)	57		629		35		-		-		-		664
Shares issued under DRIP (note 7)	79		728		-		-		-		-		728
Exercise of stock options (note 7)	116		410		(147)		-		-		-		263
Exercise of warrants (note 7)	107		796		(35)		-		-		-		761
Share-based payment awards (note 7)	-		-		275		-		-		-		275
Total comprehensive income for the period	-		-		-		-		187		332		519
Dividends declared (note 8)	-		-		-		(2,482)		-		-		(2,482)
Balance, March 31, 2024	19,270	$	69,174	$	1,506	$	(29,900)	$	15,389	$	2,310	$	58,479

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

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows (Unaudited - Expressed in thousands of Canadian dollars)

For the Three Months Ended March 31,		2024		2023
Operating activities
Profit	$	187	$	1,966
Adjusted by:
Amortization and depreciation		2,157		1,320
Financing costs		1,217		755
Share-based compensation		310		239
Foreign exchange gains		(232)		(42)
Gain on sale of equipment		(3)		(69)
Income tax expense		159		718
		3,795		4,887
Changes in non-cash working capital (note 12)		(3,513)		(3,598)
		282		1,289
Income taxes paid		(722)		(1,322)
Cash used in operating activities		(440)		(33)
Financing activities
Proceeds from issuance of shares		1,669		520
Dividends paid (note 8)		(1,660)		(979)
Proceeds from long-term debt (note 6)		51,200		-
Repayment of long-term debt (note 6)		(45,147)		(607)
Debt issuance costs		(561)		-
Lease payments		(435)		(316)
Interest paid		(1,192)		(711)
Cash provided by (used in) financing activities		3,874		(2,093)
Investing activities
Acquisitions (note 4)		(2,789)		-
Purchase of property and equipment		(558)		(721)
Proceeds from sale of property and equipment		20		81
Cash used in investing activities		(3,327)		(640)
Increase (decrease) in cash during the period		107		(2,766)
Cash, beginning of period		4,050		4,734
Effect of movements in exchange rates		54		73
Cash, end of period	$	4,211	$	2,041

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

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023

(Unaudited -Expressed in thousands of Canadian dollars, except per share amounts)

1. Nature and Operations

Decisive Dividend Corporation (the "Company") was incorporated under the British Columbia Business Corporations Act on October 2, 2012 and is listed on the TSX Venture Exchange, trading under the symbol "DE". The address of the Company's head office is #260 - 1855 Kirschner Road, Kelowna, B.C. V1Y 4N7.

Decisive Dividend Corporation is an acquisition-oriented company, focused on opportunities in manufacturing. The Company's purpose is to be the sought-out choice for exiting legacy-minded business owners, while supporting the long-term success of the businesses acquired, and through that, creating sustainable and growing shareholder returns. The Company uses a disciplined acquisition strategy to identify already profitable, well-established, high quality manufacturing companies that have a sustainable competitive advantage, a focus on non-discretionary products, steady cash flows, growth potential and established, strong leadership.

The principal wholly-owned operating subsidiaries of the Company, as at March 31, 2024, are managed through two reportable segments and were acquired as follows:

Finished Product Segment

• Valley Comfort Systems Inc. and its wholly-owned subsidiary Blaze King Industries Inc. ("Blaze King USA"), collectively referred to herein as "Blaze King"; acquired in February 2015.
• Slimline Manufacturing Ltd. ("Slimline"); acquired in May 2018.
• Marketing Impact Limited ("Marketing Impact"); acquired in April 2022.
• ACR Heat Products Limited ("ACR"); acquired in October 2022.
• Capital I Industries Inc. and its sister company, Irving Machine Inc. (together, "Capital I"); acquired in April 2023.
• Innovative Heating Technologies Inc. ("IHT"); acquired in July 2023.

Component Manufacturing Segment

• Unicast Inc. ("Unicast"); acquired in June 2016.
• Hawk Machine Works Ltd. ("Hawk"); acquired in June 2018.
• Northside Industries Inc. ("Northside"); acquired in August 2019.
• Micon Industries Ltd. ("Micon"); acquired in April 2023.
• Procore International Radiators Ltd. ("Procore"); acquired in April 2023.

These consolidated financial statements comprise the Company and its subsidiaries, collectively referred to as the "Group". The consolidated financial statements include the results of acquired subsidiaries from their dates of acquisition.

Subsequent to March 31, 2024, and before these financial statements were authorized, the Company acquired Techbelt Limited ("Techbelt"). These financial statements do not include any assets, liabilities, revenue, expenses or cash flows related to Techbelt or its acquisition. Further details of this acquisition are included in note 4.

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Group's interim results are impacted by seasonality factors primarily driven by weather patterns, including the impact thereof on heating, planting and harvesting seasons, as well as the timing of ground freeze and thaw in Western Canada and the effect thereof on the oil and gas industry, including the cost of energy. Blaze King and ACR's businesses historically experience lower demand in the first and second quarters of the calendar year, Slimline's business historically experiences lower demand in the third and fourth quarters and Hawk's business historically experiences lower demand in the second quarter. Seasonality does not have a significant impact on the businesses of the Company's other subsidiaries. In each subsidiary, there are substantial fixed costs that do not meaningfully fluctuate with product demand in the short-term.

2. Basis of Preparation and Statement of Compliance

1. Statement of compliance
   These interim condensed consolidated financial statements (the "financial statements") for the period ended March 31, 2024 have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") applicable to the preparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting.
   These financial statements were approved by the Audit Committee of the Company for issue on May 8, 2024.
2. Judgments, accounting estimates and assumptions
   The preparation of financial statements requires management to make judgments that affect the application of accounting policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period.
   The preparation of financial statements in conformity with IFRS Accounting Standards requires management to make estimates based on assumptions about future events that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
   Actual results could differ from those estimates.
   There were no changes to the Group's critical accounting estimates and judgments from those described in the most recent annual financial statements.

3. Material Accounting Policies

The material accounting policies and methods of computation used in the preparation of these financial statements are the same as those disclosed in Note 3 to the Company's 2023 audited consolidated financial statements.

During Q1 2024 the Company adopted the amendments to IAS 1, Presentation of Financial Statements covering non-current liabilities with covenants, which are effective for annual periods beginning on or after January 1, 2024. The amendments clarify that covenants of loan arrangements which an entity must comply with only after the reporting date do not affect classification of a liability at the reporting date. Covenants that an entity is required to comply with on or before the reporting date do affect the classification as current or non-current, even if the covenant is only assessed after the reporting date. The amendments also introduce new disclosure requirements for non-current liabilities with covenants. The adoption of these amendments did not impact the Company's presentation or disclosures.

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Acquisitions

In 2024, the Company completed two acquisitions as described below. The assets of Alberta Production Machining Ltd. ("APM") were acquired on March 14, 2024. Techbelt was acquired subsequent to March 31, 2024, and before these financial statements were authorized, on April 10, 2024. The consideration paid on these acquisitions is as follows:

		APM		Techbelt		Total
Cash (net of cash acquired)	$	2,789	$	5,678	$	8,467
Common shares		-		603		603
	$	2,789	$	6,281	$	9,070

The initial accounting for the acquisition of Techbelt is not complete and is pending the determination of the fair value of identifiable assets acquired and liabilities assumed as of the acquisition date.

The preliminary allocation of the purchase price, to the fair value of the assets acquired and liabilities assumed on the acquisition of APM is as follows:

		APM
Accounts receivable	$	240
Inventory		37
Property and equipment		3,289
Accounts payable and accrued liabilities		(266)
Lease obligation		(511)
	$	2,789

Subsequent adjustments to the purchase price allocation, if any, can be recognized if they occur within twelve months of the acquisition date. After twelve months, adjustments are recognized through profit or loss. The adjustments made as a result of finalizing the provisional accounting are retrospectively recognized from the acquisition date. In Q1 2024, the Company incurred acquisition-related costs of $75 relating to legal fees, accounting fees, and due diligence costs. These costs are included in professional fees in the consolidated statement of profit and comprehensive income.

a) APM

On March 14, 2024, the Company acquired, through Hawk, all of the assets of APM. The assets of APM are operated out of a leased facility in Edmonton, Alberta, and provides Hawk with increased machining capabilities and access to additional equipment and people to service the demand from its growing customer base.

The APM asset purchase agreement contains negotiated representations, warranties, indemnities and closing conditions. The purchase price (which is subject to customary post-closing adjustments) was settled in cash funded through the Company's syndicated credit facility (Note 6).

b) Techbelt

Subsequent to March 31, 2024, and before these financial statements were authorized, on April 10, 2024, the Company acquired all of the shares of Techbelt. Techbelt, which is located in Huddersfield in the United Kingdom, is a manufacturer of polytetrafluoroethylene ("PTFE") conveyor belts, PTFE tapes, and PTFE materials which are used in a wide range of end markets including food and beverage, packaging, textiles, agriculture, and fast-moving consumer goods.

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Techbelt purchase agreement contains negotiated representations, warranties, indemnities and closing conditions. The purchase price included a payment of cash (which is subject to customary post- closing adjustments) and the issuance of common shares to the vendors. The cash portion of the consideration was initially funded through the Company's syndicated credit facility (Note 6). The share portion of the consideration was funded through the issuance of 57,879 common shares to the vendors of Techbelt (Note 7).

5. Lease Obligations

The Group's right of use assets and associated lease obligations are related to lease commitments for office and shop premises. The maturity dates of the lease obligations are between October 2024 and September 2033. As at March 31, 2024, minimum lease payments required over the next five years were as follows:

For the twelve month periods ending March 31,								2024
2025									2,460
2026									2,173
2027									1,990
2028									2,017
2029									1,567
thereafter									4,013
									14,220
Less: interest portion									(2,274)
Less: current portion									(1,949)
							$		9,997
6. Long-term Debt
		Effective					March 31,	December 31,
	Interest	Interest	Maturity				2024		2023
	Rate	Rate	Date		Authorized		Outstanding		Outstanding
Syndicated credit facility	see below	7.8%	Mar-27	$	100,000	$	51,200	$	-
Equipment loans	2.3%	2.3%	Dec-25		367		367		415
Previous credit agreement
Revolving term operating facility	P+1.0%	NA	NA		-		-		10,491
Revolving term acquisition facility	P+2.5%	NA	NA		-		-		6,600
Non-amortizing term loan	6.9%	NA	NA		-		-		28,000
					100,367		51,567		45,506
Less: current portion							(230)		(224)
Long-term portion							51,337		45,282
Less: debt issuance costs							(782)		(245)
Total long-term debt						$	50,555	$	45,037
"P" in the table above denotes prime rate

In March 2024, the Company entered into a syndicated credit facility providing for a committed $100,000 senior secured revolving term loan and a $75,000 accordion, which the Company can request as an increase, in whole or in part, to the total amount available under the syndicated credit facility. The syndicate lenders include National Bank of Canada, CWB Maxium Financial (a wholly owned division of Canadian Western Bank), Royal Bank of Canada and Fédération des caisses Desjardins du Québec, with National Bank of Canada acting as administrative agent on behalf of the syndicate.

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The syndicated credit facility replaced the credit agreement the Company had in place with Canadian Western Bank, the details of which are outlined in the table above. The syndicated credit facility consists of a single senior secured revolving term loan, compared to the three separate loan tranches outlined under previous credit agreement in the table above. There are no required principal payments for the committed three-year term of the syndicated credit facility, which also provides for annual extension provisions, and all drawn amounts will mature in March 2027.

Borrowings under the syndicated credit facility may be made by way of Canadian prime rate, U.S. base rate, CORRA or SOFR advances. The syndicated credit facility bears interest at the Canadian prime rate or U.S. base rate plus 0.75% to 2.25%, or at the Canadian overnight repo rate average ("CORRA") or the U.S. Federal reserve secured overnight financing rate ("SOFR") plus 2.00% to 3.50%. These interest rate ranges are dependent on certain financial ratios of the Company. In addition, standby fees ranging from 0.40% to 0.70% per annum are paid quarterly on the unused portion of the syndicated credit facility depending on certain financial ratios of the Company. There are no fees paid on the accordion until amounts are made available.

The syndicated credit facility is secured by a general security agreement, assignment of insurance, and unlimited corporate cross guarantees. Additionally, the Group has agreed to maintain the following ratios (as defined in the credit agreement) on a consolidated trailing twelve-month basis, otherwise outstanding facilities are due on demand:

• Maximum total debt to adjusted EBITDA of 3.25:1
• Minimum interest coverage ratio of 1.50:1

As at March 31, 2024, the Company was in compliance with these ratios.

As at March 31, 2024, principal payments required over the next four years on the Company's long-term debt were estimated as follows:

For the twelve month periods ending March 31,
2025	$	230
2026		137
2027		51,200
2028		-
	$	51,567

7. Share Capital

a) Shares issued and outstanding

	Shares (000s)		Amount
Balance as at, January 1, 2024	18,911	$	66,611
Shares issued under ESPP	57		629
Shares issued under DRIP	79		728
Exercise of stock options	116		410
Exercise of warrants	107		796
Balance as at, March 31, 2024	19,270	$	69,174

The Company had the following share capital transactions for the three months ended March 31, 2024:

1. The Company issued 56,995 common shares pursuant to the employee share purchase plan (the "ESPP").
2. The Company issued 78,731 common shares pursuant to the dividend reinvestment and cash purchase plan (the "DRIP")

FIRST QUARTER 2024

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DECISIVE DIVIDEND CORPORATION