Scaling Capital 1 Corp. Enters into Definitive Agreement to Acquire Matador Gold Technologies Inc.

Calgary, Alberta--(Newsfile Corp. - October 17, 2024) - Scaling Capital 1 Corp. (TSXV: SKAL.P) (the "Company") is pleased to announce that further to the news release dated August 13, 2024, it has entered into a definitive agreement dated October 16, 2024 (the "Arrangement Agreement"), with Matador Gold Technologies Inc. ("Matador"), a private arm's length Ontario incorporated company headquartered in Toronto, Ontario. Pursuant to the Arrangement Agreement, the Company will (i) effect a consolidation of its outstanding common shares on the basis of one "new" common share for every 2.2727 "old" common shares (the "Consolidation"); and (ii) acquire all the issued and outstanding common shares of Matador ("Matador Shares") on the basis of one post-Consolidation common share of the Company (an "SCC Post-Consolidation Share") for each one Matador Share (the "Transaction"). In connection with the Transaction, Matador and the Company intend to complete a non-brokered concurrent financing of a minimum of 7,000,000 and a maximum of 9,000,000 Matador Shares at $0.50 per share to raise minimum gross proceeds of $3,500,000 ("Minimum Offering") and maximum gross proceeds of $4,500,000 (the "Maximum Offering", and collectively with the Minimum Offering, the "Concurrent Financing"). The closing of the Concurrent Financing is not conditional on the closing of the Transaction.

The Company is a Capital Pool Company as defined in TSX Venture Exchange (the "TSXV") Policy 2.4, and the Transaction is intended to constitute the "qualifying transaction" of the Company as defined therein. The Transaction is subject to the receipt of all necessary regulatory and shareholder approvals required by applicable corporate law, including the approval of the TSXV, as well as the satisfaction of conditions to closing as set out in the Arrangement Agreement. The combined company that will result from the completion of the Transaction (thereafter referred to as the "Resulting Issuer") will be renamed "Matador Technologies Inc." or such other name as may be agreed upon between the Company and Matador (the "Name Change"). Subject to TSXV approval, the common shares of the Resulting Issuer will continue the business of Matador and trade on the TSXV under a new trading symbol to be determined by the parties. The Resulting Issuer will seek to be listed as a Tier 2 technology issuer, subject to the approval of the TSXV.

The Transaction is an Arm's Length Transaction (as such term is defined in TSXV Policy 1.1 - Interpretation) and, in connection with the announcement of the Transaction, trading in the common shares of the Company has been halted and is expected to remain halted until the closing of the Transaction.

About Matador

Matador is a technology company headquartered in Toronto, Ontario. Matador is building a product launchpad focused on new initiatives including disrupting and modernizing the gold buying, storage, and selling experience in Canada and beyond. Matador's proprietary mobile application will allow users to buy and sell real gold instantly from their smartphones, with the added security and flexibility of an encrypted mobile application. Combining the best of modern technology, Matador aims to improve the gold dealing experience and bring it into the 21st century. Matador's product will be mobile only at launch (on Android and Apple iOS devices) and is expected to launch publicly in 2024.

The following sets forth selected historical financial information of Matador for the nine month interim period ended July 31, 2024 (unaudited and reviewed):

• Assets: $5,592,841

• Liabilities: $101,421

• Revenues: $0

• Net profits (losses): $(1,149,369)

The Transaction

The Transaction will be carried out pursuant to the terms of the Arrangement Agreement, a copy of which is, or shortly will be, filed on Scaling's SEDAR+ profile at www.sedarplus.ca. The below description of the terms of the Transaction and the Arrangement Agreement is qualified in its entirety by reference to the full text of the Arrangement Agreement.

The Transaction will be effected by way of a plan of arrangement pursuant to section 182 of the Business Corporations Act (Ontario) (the "Arrangement"), in connection with which (i) the Company will effect the Consolidation; (ii) the Company will effect a continuance from the Province of Alberta to the Province of Ontario (the "Continuance"); and (iii) subject to the receipt of all applicable shareholder, regulatory and court approvals, the Arrangement shall be effected pursuant to which:

• each of the existing equity compensation plans of Matador shall be cancelled and shall have no further force or effect;

• all restricted share units of Matador ("Matador RSUs") shall be cancelled and each holder of Matador RSUs will receive, as consideration for their Matador RSUs, one restricted share unit of the Company (an "SCC RSU") governed by a new restricted share unit and performance share unit plan to be adopted by the Company (the "Resulting Issuer RSU/PSU Plan") which shall result in the issuance of one SCC Post-Consolidation Share upon vesting for each Matador RSU held on substantially the same terms as the Matador RSU being replaced;

• all performance share units of Matador ("Matador PSUs") shall be cancelled and each holder of Matador PSUs will receive, as consideration for their Matador PSUs, one performance share unit of the Company (an "SCC PSU") governed by the Resulting Issuer RSU/PSU Plan which shall result in the issuance of one SCC Post-Consolidation Share upon vesting for each Matador PSU held on substantially the same terms as the Matador PSU being replaced;

• all stock options of Matador ("Matador Options") shall be cancelled and each holder of Matador Options will receive, as consideration for their Matador Options, one stock option of the Company (an "SCC Option") governed by a new stock option plan to be adopted by the Company (the "Resulting Issuer Option Plan") exercisable to acquire one SCC Post-Consolidation Share for each Matador Option held on substantially the same terms as the Matador Options being replaced; and

• each outstanding Matador Share (other than those Matador Shares in respect of which dissent rights are exercised, but inclusive of all Matador Shares issued pursuant to the Concurrent Financing) shall be transferred and assigned to the Company, in exchange for one SCC Post-Consolidation Share.

Also in connection with the Transaction, (i) the Company will adopt the Resulting Issuer RSU/PSU Plan and the Resulting Issuer Option Plan, subject to the receipt of all applicable shareholder and TSXV approvals; (ii) the board of directors of the Company will be revised to be comprised of four individuals; (iii) the current officers and directors of the Company will resign and new directors and officers will be appointed to fill the vacancies as set forth below; (iv) the Company will complete the Name Change; and (v) the appointment, subject to the completion of the Transaction, of Kingston Ross Pasnak LLP as the auditors of the Company and the authorization of the board of directors of the Company to fix the remuneration thereof.

Additional details regarding the annual and special meeting of the shareholders of the Company will be available in a management information circular that is expected to be delivered to shareholders of the Company.

Change of Officers and Directors

Upon the completion of the Transaction and subject to prior acceptance by the TSXV, it is expected that the board of directors of the Company will be revised to be comprised of four individuals, each of the current directors of the Company will resign and there will be appointed in their place as directors of the Resulting Issuer, Deven Soni, Donato Sferra, Richard Murphy and Tyler Evans (collectively, the "Board Reconstitution"). In addition, each of the current officers of the Company is expected to resign and in their respective places will be appointed Deven Soni, Geoff St. Clair and Andrew Newbury as officers of the Company (collectively, the "Management Reconstitution").

Deven Soni - Proposed Director, Chairman and CEO

Mr. Soni is an experienced operations executive and investor. He spent several years as a technology-focused investor at Goldman Sachs and Highland Capital Partners, Mr. Soni has extensive experience in the technology sector and co-founded Wired Investors, a tech-focused buyout firm, and was the founding Chief Operating Officer of Tokens.com, a publicly traded blockchain company.

Geoff St. Clair - Proposed CFO

Mr. St. Clair is Vice President at Hillcrest Merchant Partners, where he supports the firm on all financing and M&A transactions. With a strong background in M&A, reverse-take-over transactions, initial public offerings, and treasury management, Mr. St. Clair has developed extensive operational and transaction experience in both traditional finance and the emerging, high-growth markets. Mr. St. Clair has spent his career in emerging industries, driving growth through business development projects and overseeing financial operations including strategic financial planning, budgeting, forecasting, and risk management.

Sunny Ray - Proposed President

Mr. Ray is a pioneering entrepreneur in the Bitcoin industry with over a decade of experience. He co-founded Unocoin, India's first Bitcoin exchange, which launched in 2013 and is backed by prominent investors including Tim Draper. Under his leadership, Unocoin now serves over 2.5 million users. Mr. Ray also served as Head of Global Business Development at Kraken, one of the largest Bitcoin exchanges globally, and was Director of Business Development at Buttercoin, a Silicon Valley-based Bitcoin exchange backed by Google Ventures and Y Combinator.

Mark Moss - Proposed Chief Visionary Officer

Mr. Moss has over 20 years of experience in digital finance, media, and marketing. A prominent advocate for Bitcoin and decentralized finance, he has built a global following through his popular YouTube channel and iHeartRadio show. Mark is also a partner at the Bitcoin Opportunity Fund, where he identifies and nurtures investments in decentralized finance. His leadership at Matador focuses on Bitcoin and gold-related sectors, positioning the company as a forward-thinking player in digital assets and financial technologies.

Donato Sferra - Proposed Director

Mr. Sferra serves as co-founder of Hillcrest Merchant Partners, and has significant experience in M&A, hostile defense and fairness opinions. He has an extensive background in the financial services industry spanning approximately 20 years, including five years at Dundee Capital Markets, first as Director of Institutional Sales, then as Co-Head of Investment Banking. Mr. Sferra was an advisor in the merger of the four public companies in what was the restart of Osisko Mining. An early mover into the Cannabis industry, Mr. Sferra took Bedrocan Canada Inc. public (the second LP to go public in Canada) and advised on the first two major transactions in the Cannabis space, most recently advising Canopy Growth Corp. on its $430,000,000 acquisition of Mettrum Ltd. and prior to that, advising Bedrocan Canada Inc. in connection with its sale to Tweed Inc. resulting in the creation of Canopy Growth Corporation and "the house of brands" strategy.

Richard Murphy - Proposed Director

Mr. Murphy currently serves as President and CEO of Evolution Nickel Corp., a private mineral exploration company. He was formerly President, CEO and Director of Manitou Gold Inc., a TSXV-listed gold explorer. Mr. Murphy has over 25 years of experience as a Senior Geologist, President and CEO of a number of TSX and TSXV listed companies. He has successfully completed multiple IPOs, financings, acquisitions and divestitures with these companies.

Tyler Evans - Proposed Director

Mr. Evans has been building in the Bitcoin ecosystem since 2014 as the Co-founder BTC Inc., the largest Bitcoin media group that publishes Bitcoin Magazine and hosts the Bitcoin Conference series in Hong Kong, Nashville, Amsterdam and Abu Dhabi. Mr. Evans is also the Co-founder and Managing Partner of UTXO Management, an alternative asset manager focused on high-conviction public and private market investments in the Bitcoin ecosystem. Mr. Evans also serves as a Board Member at Metaplanet Inc., a publicly listed Japanese company with a strategic focus on Bitcoin as a balance sheet asset.

Andrew Newbury - Proposed Corporate Secretary

Mr. Newbury has over 15 years of corporate secretarial, administrative, financial, and operational experience. He has served as Corporate Affairs Manager for junior mineral exploration companies, Logistics Manager for a mineral exploration consulting firm, and as a Sales Administrator and Controller at a yacht dealership. Mr. Newbury joined DSA Corporate Services in 2017, and as a Senior Account Executive he provides Corporate Secretarial consulting services for 25 small to mid cap issuers on the Toronto Stock Exchange, TSXV, and Canadian Securities Exchange in a variety of industries. Mr. Newbury has a Bachelor of Commerce degree from Dalhousie University.

Additional information regarding the nominee directors and officers of the Resulting Issuer will also be set out in the filing statement to be prepared by the parties in accordance with the policies of the TSXV.

Closing Conditions

Closing is subject to the satisfaction of various conditions standard for a transaction of this nature, including but not limited to:

• the Company and Matador obtaining all necessary consents, orders and regulatory approvals, including all applicable securityholder and court approvals, and the conditional approval of the TSXV;

• the absence of any material adverse change in the business, affairs or operations of the Company or Matador, as applicable;

• the completion of the Concurrent Financing as required by the TSXV;

• each of the Consolidation and Continuance having been completed;

• each of the Board Reconstitution and the Management Reconstitution having been completed;

• the execution of voting support agreements by certain shareholders of the Company; and

• the prior exercise of all existing stock options of the Company (the "Existing SCC Options"), subject only to confirmation that the underlying common shares of the Company shall not be subject to escrow pursuant to the regulations of the TSXV.

The Company intends to rely on Section 2.11 of National Instrument 45-106 - Prospectus Exemptions for an exemption from the prospectus requirements for the issuance of the SCC Post-Consolidation Shares, SCC Options, SCC RSUs and SCC PSUs to the securityholders of Matador.

Assuming the completion of the Transaction as well as the Concurrent Financing, the exercise of all Existing SCC Options and that no convertible securities of Matador are exercised prior to Closing, approximately 86,394,240 SCC Post Consolidation Shares are expected to be issued and outstanding in the event of the Minimum Offering, and 88,394,240 SCC Post-Consolidation Shares are expected to be issued and outstanding in the event of the Maximum Offering, on the closing of the Arrangement ("Closing"), of which approximately 82.37% will be held by the former Matador shareholders in the event of the Minimum Offering and approximately 80.51% in the event of the Maximum Offering, approximately 8.65% will be held by existing shareholders of the Company in the event of the Minimum Offering and 8.46% in the event of the Maximum Offering, and approximately 8.10% will be held by the subscribers under the Concurrent Financing in the event of the Minimum Offering and 10.18% in the event of the Maximum Offering.

The net proceeds of the Concurrent Financing are expected to be deployed into product development and building out additional functionalities on the Matador platform, purchasing gold and bitcoin for Matador to hold on its balance sheet, and also used for working capital and general corporate purposes. There will be no finder's fees or commissions payable in connection with the Concurrent Financing.

Immediately following Closing, it is expected that the only 10% or greater shareholder of the Resulting Issuer will be Donato Sferra who will hold, directly or indirectly, an aggregate of approximately 16,110,000 SCC Post-Consolidation Shares representing approximately 18.23% of all SCC Post-Consolidation Shares issued and outstanding and accordingly will be an insider of the Resulting Issuer under the polices of the TSXV. Also upon Closing, it is expected that there will be approximately 11,615,434 SCC Options, 266,000 SCC RSUs and 3,000,000 SCC PSUs outstanding.

Sponsorship

Under the policies of the TSXV, the parties to the Transaction will be required to engage a sponsor for the Transaction unless an exemption or waiver from this requirement can be obtained. The Company intends to apply to the TSXV for a waiver from the sponsorship requirements for the Transaction based upon the waivers available in TSXV policies. There is no assurance that a waiver from this requirement can or will be obtained.

Arm's Length Transaction

The Transaction was negotiated by parties who are dealing at arm's length with each other and therefore, the Transaction is not a Non-Arm's Length Qualifying Transaction in accordance with the policies of the TSXV.

Finder's Fees

No finder's fees or commissions are payable by the Company or Matador in connection with the closing of the Transaction.

Filing Statement

In connection with the Transaction and pursuant to TSXV requirements, the Company will file a filing statement under its profile on SEDAR+ at www.sedarplus.ca, which will contain details regarding the Transaction, the Arrangement Agreement, the Concurrent Financing, the Company, Matador and the Resulting Issuer.

Shareholder approval is not required with respect to the Transaction under the rules of the TSXV. In the event any of the conditions set forth above are not completed or the Transaction does not proceed, the Company will notify shareholders. Trading in the common shares of the Company will remain halted and is not expected to resume trading until the Transaction is completed or until the TSXV receives the requisite documentation to resume trading.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction, nor shall there be any offer, sale, or solicitation of securities in any state in the United States in which such offer, sale, or solicitation would be unlawful.

Additional Information

All information contained in this news release with respect to the Company and Matador was supplied, for inclusion herein, by each respective party and each party and its directors and officers have relied on the other party for any information concerning such other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the 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 the Company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

For additional information, please contact:

 
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Forward Looking Statements

Certain statements in this news release are forward-looking statements, within the meaning of Canadian securities laws regarding the Company, Matador and the Resulting Issuer and their respective businesses, which reflect the expectations of management regarding the Company's completion of the Transaction and related transactions. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to, the Company completing the Transaction, the completion of the Concurrent Financing, shareholder approvals of the Company for the required meeting matters, the shareholder approval of Matador shareholders, the proposed composition of the board of directors of the Resulting Issuer, the proposed business and business plans of the Resulting Issuer, the conditions to be satisfied for completion of the Transaction, completion of each of the Name Change, Continuance and/or the Consolidation, the name and business carried on by the Resulting Issuer, the reliance on a prospectus exemption for the issuance of the SCC Post-Consolidation Shares to be issued in connection with the Transaction, the terms and timing on which the Transaction and the Concurrent Financing are intended to be completed and obtaining a waiver from the TSXV sponsorship requirements. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes", "estimates" or variations of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations and views of future events of the management of each entity, and are based on assumptions and subject to risks and uncertainties. Although the management of each respective entity believes that the assumptions underlying the forward-looking information as applicable to them or their respective businesses or the Transaction are reasonable, such forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, Matador and the Resulting Issuer to be materially different from those expressed or implied by such forward-looking information and may prove to be incorrect. Such statements are subject to assumptions, risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of the Company. The risks include the following: the requisite corporate, court and shareholders approvals required to be obtained by the Company or Matador, as applicable, may not be obtained; the parties may be unable to close the Concurrent Financing in full or in part; the TSXV may not approve the Transaction; any estimated amounts, timing of the Concurrent Financing, the equity markets generally and risks associated with early stage companies, general capital market conditions and market prices for securities, and junior market securities; that the parties may be unable to satisfy the closing conditions in accordance with the terms and conditions of the Arrangement Agreement; and other risks that are customary to transactions of this nature. Although the Company and Matador have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. The reader is cautioned not to place undue reliance of any forward-looking statements. 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. Forward-looking 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. The Company and Matador each disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/227018