Matador Technologies — Management Reports 2024

Mar 28, 2024

Scaling Capital 1 Corp.

(A Capital Pool Company)

Management Discussion & Analysis

For the year ended December 31, 2023

(Stated in Canadian Dollars)

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

Form 51-102F1

The following management discussion and analysis (“ MD&A ”) of the results of the operations and financial position of Scaling Capital 1 Corp. (the “ Corporation ”) should be read in conjunction with the audited financial statements of the Corporation for the years ended December 31, 2023 and 2022 (the " Financial Statements "). The Financial Statements, including the comparative figures, were prepared in accordance with International Financial Reporting Standards (" IFRS ") as issued by the International Accounting Standards Board. Unless otherwise noted, all dollar amounts are in Canadian dollars.

The information in this MD&A is current as of March 28, 2024, unless otherwise noted.

Additional information regarding the Corporation, including the Financial Statements, news releases, and other disclosure items, is available under the Corporation’s profile on SEDAR+ at www.sedarplus.ca.

Forward-Looking Statements

Certain statements and information contained in this MD&A may constitute forward-looking information under applicable securities laws. All statements and information other than statements of historical fact or historical information may be forward-looking information. Forward-looking information typically contains statements with words such as "expect", "intend", "estimate", "will", "anticipated", or similar words, including negatives thereof, suggesting future outcomes or statements regarding an outlook. The forward-looking information is based on a number of factors, expectations and assumptions which have been used to develop such information, and which may prove to be incorrect. Although the Corporation believes that the factors, expectations, and assumptions on which the forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Corporation can give no assurances that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature it involves inherent known and unknown risks and uncertainties which are beyond the control of the Corporation. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information due to a number of factors and risks. Accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that the Corporation will derive therefrom. The forward-looking information included in this MD&A is made as of the date hereof and the Corporation does not undertake an obligation to publicly update such forwardlooking information to reflect new information, subsequent events or otherwise, except as required by applicable law.

The Corporation

The Corporation was incorporated under the Business Corporations Act (Alberta) on November 1, 2021 and is classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the “ Exchange ”) Corporate Finance Manual (the “ Manual ”).

The head office and the registered office of the Corporation is located at 800 - 333 7 Ave SW, Calgary, Alberta, T2P 2Z1.

The principal business of the Corporation will be the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction as such term is defined in the Manual. Such an acquisition will be ‐ subject to the approval of the regulatory authorities concerned and, in the case of a non arm’s length transaction, of the majority of the minority shareholders. The Corporation has not commenced commercial operations and has no assets other than a minimum amount of cash.

Pursuant to the Manual, the proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Corporation. These restrictions apply until completion of a Qualifying Transaction.

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

Initial Public Offering

On February 10, 2023, the Corporation completed a Canadian initial public offering (the “Offering”) to raise gross proceeds of $450,000 on the TSX Venture Exchange by issuing 4,500,000 common shares at a purchase price of $0.10 per share. The proceeds of the Offering will be used by the Corporation, as a capital pool company, to fund its search for a Qualifying Transaction and in accordance with Exchange Policy 2.4.

Summary of Quarterly Financial Results with Selected Financial Information

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Quarter Ended December 31, September 30, June 30, 2023 March 31, 2023
2023 2023
Revenue $0 $0 $0 $0
Net and $(108,325) $(7,185) $(15,351) $(64,266)
comprehensive
loss
Basic and diluted $(0.01) $(0.00) $(0.00) $(0.00)
loss per share
Quarter Ended December 31, September 30, June 30, 2022 March 31, 2022
2022 2022
Revenue $0 $0 $0 $0
Net and $(21,735) $0 $(5,000) $0
comprehensive
loss
Basic and diluted $(0.00) $0.00 $(0.00) $0.00
loss per share
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For the three months ended December 31, 2023, the Corporation earned no revenues and incurred $108,325 in operating expenses.

Scaling Capital 1 Corp. Management Discussion and Analysis

For the year ended December 31, 2023

Statement of Loss and Comprehensive Loss

	Three	months ended	months ended	December	Twelve months	Twelve months	ended	December
				31				31
		2023		2022		2023		2022
Expenses
Professional fees	$	(12,726)	$	21,735	$	41,626	$	26,735
Share based compensation (note 6)		121,051		-		153,501		-
Total Expenses		108,325		21,735		195,127		26,735
Net loss and comprehensive loss	$	108,325	$	21,735	$	195,127	$	26,735
Net loss per share (note 9)
Basic and diluted		(0.01)		(0.00)		(0.01)		(0.00)

Discussion of Operations

Revenue

For the three and twelve months ended December 31, 2023, the Corporation earned $0 in revenue. This compares to $0 revenue for the three and twelve months ended December 31, 2022.

Operating Expenses

For the three months ended December 31, 2023, the Corporation incurred $108,325 in operating expenses. This compares to $21,735 in the three months period ended December 31, 2022. The difference is due to share based compensation and professional fees.

For the twelve months ended December 31, 2023, the Corporation incurred $195,127 in operating expenses. This compares to $26,735 in the twelve months period ended December 31, 2022. The difference is due to share based compensation and professional fees, particularly those related to the Offering.

Net loss and comprehensive loss

For the three months ended December 31, 2023, the Corporation reported a net loss and comprehensive loss of $108,325. This compares to a net loss and comprehensive loss of $21,735 for the three months ended December 31, 2022.

For the twelve months ended December 31, 2023, the Corporation reported a net loss and comprehensive loss of $195,127. This compares to a net loss and comprehensive loss of $26,735 for the twelve months ended December 31, 2022.

Scaling Capital 1 Corp. Management Discussion and Analysis

For the year ended December 31, 2023

Statement of Financial Position

				As at
				(in Canadian Dollars)
		December 31, 2023		December 31, 2022
Assets
Current
Cash	$	839,314	$	611,757
Deferred issuance costs		-		56,743
HST recoverable		6,091		-
Total Assets	$	845,405	$	668,500
Liabilities
Current
Accounts payable and accrued liabilities	$	21,333	$	85,847
Total Liabilities	$	21,333	$	85,847
Shareholders’ Equity
Share capital (note 6)	$	873,954	$	625,000
Contributed surplus		187,592		-
Deficit		(237,474)		(42,347)
Total Shareholders’ Equity	$	824,072	$	582,653
Total Liabilities and Shareholders’ Equity	$	845,405	$	668,500

As at December 31, 2023, the Corporation had total assets of $845,405 (December 31, 2022 - $668,500). The increase of total assets was mainly the result of the capital raised due to the Offering of $450,000 offset by share issuance costs of $201,046 being taken into share capital during the period.

As at December 31, 2023, the Corporation had total liabilities of $21,333 (December 31, 2022 - $85,847). The decrease in total liabilities was the result of paying down the balance owing on professional fees.

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

Share Capital

a) Authorized and Issued

The Corporation is authorized to issue an unlimited number of Common Shares (as defined herein).

Issued and outstanding Common Shares	Number	Amount ($)
Issuance of Common shares–November 1, 2021	12,500,000	625,000
Balance, December 31, 2022	12,500,000	625,000
Issuance of Common Shares – February10, 2023	4,500,000	450,000
Balance, December 31, 2023	17,000,000	1,075,000

b) Stock Options

On February 10, 2023, directly following closing of the Offering, the Corporation issued to its directors and officers an aggregate of 1,700,000 options to purchase 1,700,000 common shares in the capital of the Corporation at an exercise price of $0.10 per Common Share, expiring February 10, 2033.

The Corporation also issued an Agent’s option to Canaccord Genuity to purchase 450,000 common shares in relation to the Offering at a price of $0.10 per Common Share, expiring February 10, 2028. No more than 50% of the Common Shares received on the exercise of the Agent’s Option may be sold by the Agent prior to the Completion of the Qualifying Transaction.

Scaling Capital 1 Corp. Management Discussion and Analysis

For the year ended December 31, 2023

Statement of Cash Flows

Statement of Cash Flows
		For the Years	Ended December 31
			(in Canadian Dollars)
Operating activities		2023	2022
Net loss for the period	$	(195,127)	(26,735)
Items not involving cash:
Share based compensation		153,501	-
Changes in non-cash working capital:
HST recoverable		(6,091)	-
Accountspayable and accrued liabilities		(64,514)	13,492
Cash used in operating activities	$	(112,231)	(13,243)
Financing activities
Issuance of Common shares (note 6)	$	450,000	-
Share issuance costs		(110,212)	(56,743)
Accounts payable and accrued liabilities related to
financingactivities	$	-	56,743
Cashprovided by financing activities	$	339,788	-
Net change in cash	$	227,557	(13,243)
Cash, beginning ofyear		611,757	625,000
Cash, end ofyear	$	839,314	611,757
Supplemental disclosure of non-cash transactions:
Deferred issuance costs reclassified to share capital	$	56,743	-
Fair value of agent stock options recognized as share
issuance costs	$	34,091	-

For the twelve months ended December 31, 2023, the Corporation’s cash flows used in and provided by operating and financing activities netted to an inflow of $227,557.

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

Additional Disclosure for Venture Issuers without Significant Revenue

Since the Corporation has no revenue from operations, the following is a breakdown of the material costs, including general and administrative expenses incurred for the year ended December 31, 2023.

For the twelve months ended December 31, 2023 (in Canadian Dollars)

Material Costs
Professional fees	$41,626
Share based compensation	153,501
Total	$195,127

Off-Balance Sheet Arrangements

As of the date of this MD&A, the Corporation does not have any off-balance sheet arrangements.

Significant Accounting Policies

The Corporation’s significant accounting policies are summarized in Note 3 of the Financial Statements. There were no critical accounting policy estimates or changes in accounting policies during the period ended December 31, 2023.

Financial instruments

The Corporation's financial instruments consist of cash and accounts payable and accrued liabilities. Cash is classified as an asset at amortized cost. Accounts payable and accrued liabilities are classified as a liabilities at amortized cost.

Related Party Transactions

The Corporation’s key management personnel include Directors and Officers with the responsibility of planning, directing and controlling activities of the Corporation. The Corporation’s management includes its shareholders, who are also employees and controlling shareholders of a non-arms length entity – Ninepoint Partners LP. The Corporation recorded an expense of $153,501 (2022 - $NIL) with respect to stock options provided to its key management personnel during the year.

Related Party Balances

Related party balances relate to professional services fees paid by Ninepoint Partners LP on behalf of the Corporation. All balances are non-interest bearing and carry no specific terms of repayment. As at December 31, 2023 the amounts owing were $NIL (2022 - $31,322).

Liquidity and Capital Management

The Corporation's objective when managing capital is to maintain adequate cash resources to support planned activities which include identifying and evaluating potential acquisitions. The Corporation includes shareholders' equity of $824,072 (2022 - $582,653) in the definition of capital.

In managing capital, the Corporation estimates its future cash requirements by preparing a budget. The budget establishes the activities for the upcoming year and estimates the costs associated with these activities. Management believes it has sufficient cash to meet its ongoing operations and to be able to identify, evaluate, and complete a Qualifying Transaction.

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

The Corporation's plan is to raise capital through the issuance of additional common shares. There are no assurances that funds will be made available to the Corporation when required.

The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used to cover prescribed costs of issuing common shares or administrative and general expenses of the Corporation. These restrictions may apply until completion of a Qualifying Transaction by the Corporation as defined under the policies of the Exchange.

Risks and Uncertainties

The Corporation has a limited history of existence. There can be no assurance that a Qualifying Transaction will be completed. Equity or debt financing may be required to complete a Qualifying Transaction. There can be no assurance that the Corporation will be able to obtain adequate financing to continue. The securities of the Corporation should be considered a highly speculative investment. The following risk factors should be given special consideration when evaluating an investment in any of the Corporation’s securities:

• A) until completion of a Qualifying Transaction, the Corporation is not permitted to carry on any business other than the identification and evaluation of potential Qualifying Transactions;

• B) the Corporation has had no business activity and has not acquired any material assets since its incorporation other than cash;

• C) the Corporation does not have a history of earnings, nor has it paid any dividends and will not generate earnings or pay dividends until at least after the completion of the Qualifying Transaction;

• D) the Corporation has only limited funds with which to identify and evaluate potential Qualifying Transactions and there can be no assurance the Corporation will be able to identify a suitable Qualifying Transaction;

• E) even if a proposed Qualifying Transaction is identified, there can be no assurance that the Corporation will be able to successfully complete the transaction;

• F) the Qualifying Transaction may be financed in all or part by the issuance of additional securities by the Corporation and this may result in further dilution to the investor, such dilution may be significant, and which may also result in a change of control of the Corporation;

• G) there can be no assurance that an active and liquid market for the common shares will develop and an investor may find it difficult to resell its common shares; and

• H) the Corporation competes with other Capital Pool Companies that are seeking suitable Qualifying Transactions. Other Capital Pool Companies may have substantially greater financial resources than the Corporation.

In addition, the Corporation is exposed to general risks faced by all businesses, including:

Financial risk

The Corporation's activities are exposed to a variety of financial risks: credit risk and liquidity risk. The Corporation's overall risk management program focuses on the unpredictability of financial and economic markets and seeks to minimize potential adverse effects on the Corporation's financial results. Risk management is carried out by financial management in conjunction with overall corporate governance.

Credit risk

Credit risk is the risk of loss associated with the counterparty's ability to fulfil its payment obligations. The Corporation is not susceptible to significant credit risk as cash is held at a major financial institution.

Liquidity risk

The Corporation's exposure to liquidity risk is dependent on purchasing commitments and obligations and ability to raise funds to meet commitments and sustain operations. As at December 31, 2023, the Corporation has cash of $839,314 to settle financial liabilities of $21,333.

Scaling Capital 1 Corp. Management Discussion and Analysis For the year ended December 31, 2023

Measurement Uncertainty

The preparation of financial statements in conformity with IFRS accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates used in the financial statements. The Corporation does not have any significant estimates in its Financial Statements as of December 31, 2023.

Additional Information

Additional information about the Corporation can also be found on SEDAR+ at www.sedarplus.ca.