Calgary, Alberta--(Newsfile Corp. - August 13, 2024) - Scaling 1 Capital Corp. (TSXV: SKAL.P) (the "Corporation" or "Scaling") is pleased to announce details concerning its proposed arm's length qualifying transaction (the "Transaction") involving a proposed business combination with Matador Gold Technologies Inc. ("Matador"), a private company incorporated under the laws of Ontario.
Matador's team is a strong believer in the digitization of real world assets and is democratizing the gold buying experience by bringing it into the 21st century. Combining the best of modern technology and time-proven investment options, Matador's proprietary app, when launched, will allow users to buy, sell, and store gold 24/7, with the added security and flexibility of an encrypted mobile application. Matador also continues to explore innovative ways to integrate blockchain and digital art to incentivize younger buyers to become interested in the gold market - including the use of Bitcoin Ordinals and digital art. Matador is incorporated in the province of Ontario.
The Corporation has entered into a non-binding letter of intent with Matador dated August 9, 2024 (the "LOI") pursuant to which the Corporation and Matador intend to complete the Transaction by way of share purchase, plan of arrangement, amalgamation, three-cornered amalgamation or alternate structure to be determined, having regard to relevant tax, securities and other factors, to form the resulting issuer to be named such name as may be determined by Matador. Pursuant to the proposed Transaction, (i) the outstanding common shares of Scaling will be consolidated on the basis of one "new" common share (a "Newco Common Share") for every 2.5 "old" common shares of Scaling outstanding (the "Consolidation"); and (ii) each issued and outstanding common share of Matador ("Matador Common Share") will be exchanged into one Newco Common Share on a 1:1 basis resulting in the issuance of approximately 70,151,137 Newco Common Shares (not including any convertible securities of Matador or other securities of Matador or Scaling issued pursuant to the Concurrent Offerings as further discussed below), and each unexercised convertible security of Matador shall be exchanged for a replacement convertible security providing for the issuance of Newco Common Shares in lieu of Matador Common Shares on a 1:1 basis and otherwise on the same terms and conditions. For the purposes of the Transaction, Matador Common Shares and the Newco Common Shares issued in exchange therefor will be valued at CAD$0.50 per share, and each pre-Consolidation common share of Scaling will have a deemed value of CAD$0.20 per share.
Prior to the completion of the Transaction, Scaling and Matador will use their commercially reasonable efforts to complete one or more private placements (the "Concurrent Financings") to raise aggregate minimum gross proceeds of $3,500,000, the terms and conditions of which will be determined based on the market conditions at the time of the Concurrent Financings. The Concurrent Financings are expected to be completed prior to the closing of the Transaction. In connection with the completion of the Transaction, any securities of Matador issued pursuant to the Concurrent Financings shall automatically convert into Newco Common Shares upon the same terms as existing Matador Common Shares, as further described above).
The Transaction does not constitute a Non-Arm's Length Qualifying Transaction as that term is defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange"). A more comprehensive news release will be issued by the Corporation disclosing details of the Transaction, including financial information respecting Matador, further details regarding the Concurrent Financings, the names and backgrounds of all persons who will constitute insiders of Scaling upon completion of the Transaction, and information respecting sponsorship, once certain conditions have been met, including:
(i) approval of the Transaction by the boards of directors of the Corporation and Matador;
(ii) satisfactory completion of due diligence; and
(iii) execution of a formal agreement.
In the event a final agreement is not reached, the Corporation will notify shareholders. Trading in the common shares of the Corporation will remain halted and is not expected to resume trading until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.
Shareholder approval is not required with respect to the Transaction under the rules of the Exchange. However, the structure of the Transaction has not yet been finalized so shareholder approval under corporate law may be required and a meeting of shareholders of the Corporation may be held prior to the closing of the Transaction to approve one or more of the Consolidation, a name change, a new stock option plan, a continuance of the Corporation into Ontario and electing the board of directors as well as other matters. Trading in the common shares of the Corporation will remain halted and is not expected to resume until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.
ABOUT THE CORPORATION
Scaling Capital 1 is a capital pool company (a "CPC") that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the Exchange's CPC Policy, until the completion of its qualifying transaction, the Corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.
For further information, please contact:
| Alex Tapscott President and Chief Executive Officer Scaling Capital 1 Corp. Email: atapscott@ninepoint.com | Deven Soni Chief Executive Officer and Chairman Matador Gold Technologies Inc. Email: deven@matador.network |
Forward-Looking Information Cautionary Statement
Statements in this press release regarding the Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the proposed Transaction, and the terms and completion of the Concurrent Offerings. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. The forward-looking statements and circumstances discussed in this press release, including the completion of the Transaction may not occur or could differ materially as a result of known and unknown risk factors and uncertainties affecting the Corporation and/or Matador, including (without limitation) risks relating to Scaling and/or Matador completing the Concurrent Offerings, risks relating to the viability of Matador's business model and risks regarding market conditions, receipt of applicable regulatory and shareholder approvals, economic factors, and the equity markets generally. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable securities laws, the Corporation and Matador undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Completion of the Transaction is subject to a number of conditions, including but not limited to, execution of a binding definitive agreement relating to the Transaction, completion of satisfactory due diligence, Exchange acceptance, receipt of requisite regulatory approvals, and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approvals, and any ancillary matters thereto, are 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 a capital pool 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 press release.
Neither 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 news release.
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219822
SOURCE: Scaling Capital 1 Corp.
