IC Capitalight : Financial Statement

IC CAPITALIGHT CORP.

Management's Discussion And Analysis (MD&A)

For the six and three months ended June 30, 2022 and 2021

Expressed in Canadian Dollars

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking information within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans," "expects," or "does not expect," "is expected," "budget," "scheduled," "goal," "estimates," "forecasts," "intends," "anticipates," or "does not anticipate," or "believes" or variations of such words and phrases or statements that certain actions, events or results "may," "could," "would," "might," or "will be taken," "occur," or "be achieved".

Forward-looking information includes, but is not limited to, information with respect to certain expectations regarding the fair value of the Company's investments and management's expectations regarding our future growth, results of operations, performance and business prospects and opportunities including statements related to the development of existing and future property interests, availability of financing and projected costs and expenses. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. 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 we will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions and speak only as of the date of this report. These are based on current expectations, estimates and assumptions that involve known and unknown risks, uncertainties and other factors that could cause actual results to vary and, in some instances, to differ materially from those anticipated by the Company and described in the forward-looking statements. These risks include, but are not limited to, access to sufficient capital, legal and accounting risks, potential loss of key personnel, sales and marketing issues, operating cost overruns, technology issues, title disputes and compliance with various regulators. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions, (2) a decreased demand or price of our research products (3) a decreased value of our investments, (4) inability to locate, acquire or divest of mineral property interests, (5) the uncertainty of our operating costs, (6) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, and (7) other factors beyond our control. There is a significant risk that such forward-looking statements will not prove to be accurate.

Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward- looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company's expected financial and operating performance and the Company's plans and objectives and may not be appropriate for other purposes.

The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Additional information about these and other assumptions, risks and uncertainties are set out in the section entitled "Risk Factors" below.

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INTRODUCTION

This Management's Discussion and Analysis ("MD&A") dated August 29, 2022 of IC Capitalight Corp. ("Capitalight", "we", "our" or "the Company") should be read in conjunction with Company's Consolidated Financial Statements ("Financial Statements") for the six and three months ended June 30, 2022 and 2021 that were prepared in accordance with International Financial Reporting Standards ("IFRS") International Accounting Standard as issued by the International Accounting Standards Board ("IASB").

All amounts are in Canadian dollars, unless otherwise indicated.

EXECUTIVE SUMMARY

Capitalight is incorporated under the British Columbia Business Corporations Act and its common shares are listed on the Canadian Securities Exchange (the "Exchange") under the symbol "IC". The Company has a fiscal year-end of December 31 and its registered office is at 2200 HSBC Building, 885 West Georgia Street, Vancouver, BC, V6C 3E8.

Capitalight is a merchant bank that pursues value-based investment opportunities in accordance with its internal investment policies through a portfolio of companies, securities, and mineral properties. The securities investments consist primarily of debentures and equities. The Company's business operations include Capitalight Research Inc. ("Capitalight Research"), a wholly owned subsidiary that publishes proprietary subscription-based research focused on (1) equity technical analysis, (2) gold, silver, and critical metals sectors, and (3) Canadian preferred shares, bonds, and economics. Capitalight Research generates recurring revenues and is expected to generate positive operating cash flows as it achieves profitability. The mineral exploration investments consist of the exploration and evaluation stage Blue Lake Cu-Ni-Pt-Pd property near Schefferville, Quebec.

Business Strategy

The business strategy consists of the following:

• Grow the subscriber-base of Capitalight Research to achieve profitability in 2022.
• Realize value from the investment in Stone Investment Group Limited ("Stone") debentures, which were sold on July 19, 2022, for $3,335,200 plus an additional cash payment of $183,625.
• Realize value from the investment in equities.
• Realize value from the investment in mineral assets.

The Company accepts the risks that are inherent to pursuing investment returns. These risks are discussed in greater detail in the Risk Factors section of this MD&A.

HIGHLIGHTS

On February 16, 2022, the Company's wholly owned subsidiary, Capitalight Research Inc., completed the acquisition of all the business assets of Phases & Cycles Inc. ("P&C"), a private corporation that publishes subscription-based market research, in return for a cash consideration of $270,000 (the "Transaction"). The primary reason for the acquisition was an expansion of Capitalight Research's subscription-based research business.

Subsequent events

On July 19, 2022, the Company sold the Stone debentures for $3,335,200 plus an additional payment of $183,625 for the reimbursement of legal expenses.

On July 21, 2022, the Company repaid the credit facility.

On July 29, 2022, the Company granted 1,800,000 stock options under the LTIP. Each option is exercisable for a period of 5 years and has an exercise price of $0.065. The Company also completed a share for debt settlement whereby 2,566,569 common shares were issued to settle debt totalling $166,827.

RESULTS OF OPERATIONS

The Company has three operating segments, consisting of the research business, mineral exploration properties and securities investments.

Financial Results for the six and three months ended June 30, 2022 and 2021

	Six months ended	Six months ended	Three months ended	Three months ended
	June 30,	June 30,	June 30,	June 30,
	2022	2021	2022	2021
Research business segment
Research revenues	$ 333,744	$ 194,017	$ 190,314	$ 97,621
Research expenses
Payroll and benefits	186,017	138,399	103,584	73,114
Consultants and services	112,547	67,570	67,115	42,453

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Legal fees	11,126	-	4,954	-
Travel expenses	7,802	305	5,582	198
Office and administrative	46,093	13,292	29,071	6,881
Bad debts	5,211	11,294	1,408	687
Sales and marketing	14,344	-	3,184	-
Depreciation	4,889	-	4,816	-
Share-based compensation	-	53,300	-	48,425
Total research expenses	388,029	284,160	219,714	171,758
Research business segment income (loss)	(54,285)	(90,143)	(29,400)	(74,137)
Exploration properties segment
Realized gain on sale of mineral property	-	459,999	-	-
Exploration and evaluation expenses
Mineral claim renewal fees	83	561	(336)	-
Total exploration and evaluation expenses	83	561	(336)	-
Exploration properties segment income (loss)	(83)	459,438	336	-
Securities investment segment
Consulting revenues	27,900	11,137	-	-
Coupon income from investments	56,071	96,927	-	48,597
Unrealized gain on investments	659,690	514,235	262,267	335,295
Total securities investment income	743,661	622,299	262,267	383,892
Total segments income (loss)	689,293	991,594	233,203	309,756
General and administrative expenses
Management Consulting fees	130,755	116,850	68,505	57,750
Professional and legal fees	176,089	46,085	87,336	31,235
Public filing fees	-	14,105	-	7,807
Insurance expenses	369	4,200	(278)	2,100
Rent	-	10,200	-	5,100
Office and administrative	14,291	2,219	10,002	2,294
Total general and administrative expenses	321,504	193,659	165,565	106,286
Amortization of brand value	-	6,300	(1,568)	3,150
Interest expense	289,353	123	124,136	83
Share-based compensation	-	95,570	-	-
Accretion	172,039	14,668	98,222	7,434
Loss on remeasurement of credit facility	55,499	-	-	-
Foreign exchange (gain) loss	1,039	36	407	453
Net income (loss) and comprehensive income (loss)	$ (150,141)	$ 681,238	$ (153,559)	$ 192,350

Discussion of the six months ended June 30, 2022 and 2021

The Company realized a net loss and comprehensive loss of $150,141 (2021: net income and comprehensive income of $681,238).

The research business segment generated a loss of $54,285 (2021: loss of $90,143). Research revenues increased to $333,744 (2021: $194,017) due to increased subscription research fees as compared to the prior year. Research expenses increased to $388,029 (2021:

$284,160) due to increased payroll and benefits, consultants and services, legal fees, and sales and marketing expenses.

The exploration segment generated a loss of $82 (2021: income of $459,438). The prior year included the realized gain from the sale of a mineral property.

The securities investment segment generated income of $743,661 (2021: income of $622,299) by earning coupon interest of $56,071 (2021:

$96,927) and unrealized gain of $659,690 (2021: unrealized gain of $514,235) from the revaluation of debentures and common shares.

General and administrative costs increased to $321,504 (2021: $193,659) due to an increase in professional and legal fees to $176,089

(2021: $46,085).

Interest expense increased to $289,353 (2021: $123), which was due to the credit facility standby and drawdown interest. Accretion

increased to $172,039 (2021: $14,668), which is related to the fair value of the credit facility obligation and in the prior year is related to the fair value of the deferred debenture obligation.

Discussion of the three months ended June 30, 2022 and 2021

The Company realized a net loss and comprehensive loss of $153,559 (2021: net income and comprehensive income of $192,350).

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The research business segment generated a loss of $29,400 (2021: loss of $74,137). Research revenues increased to $190,314 (2021: $97,621) due to increased subscription research fees as compared to the prior year. Research expenses increased to $219,714 (2021: $171,758) due to increased payroll and benefits, consultants and services, legal fees, and sales and marketing expenses.

The exploration segment generated a gain of $336 (2021: $nil) due to the reversal of certain accrued expenses

The securities investment segment generated income of $262,267 (2021: income of $383,892) due to unrealized gains of $262,267 (2021: unrealized gain of $335,295) from the revaluation of debentures and common shares.

General and administrative costs increased to $165,565 (2021: $106,286) due to an increase in professional and legal fees to $87,336 (2021: $31,235).

Interest expense increased to $124,136 (2021: $83), which was due to the credit facility standby and drawdown interest. Accretion increased

to $98,222 (2021: $7,434), which is related to the fair value of the credit facility obligation and in the prior year is related to the fair value of the deferred debenture obligation.

STATEMENT OF FINANCIAL POSITION

Cash and Cash Equivalents

Cash and cash equivalents decreased to $114,572 (2021: $422,719) and are deposited with major financial institutions in Canada.

Accounts Receivable, Amounts Receivable and Prepaid Expenses

Accounts receivables decreased to $16,847 (December 31, 2021: $10,630). All accounts receivable over 90 days are fully provisioned as

bad debts until subsequently collected. Amounts receivables increased to $132,699 (December 31, 2021: $50,067) due to an increase in Canadian sales tax receivables and receivables due from the vendor of the business of Phases and Cycles. Debenture interest receivable decreased to $nil (2021: $57,317) since no coupon will be earned for the final quarter the debentures are outstanding. Prepaid expenses increased to $21,221 (December 31, 2021: $18,669).

Investments

As of June 30, 2022, the investment portfolio consisted of:

• 3,032 debentures issued by Stone Investment Group Limited ("Stone"). Each debenture has a $1,000 face value and 7.5% coupon paid quarterly in cash resulting in a total face value of $3,032,000. On April 7, 2022, Stone announced it entered into an agreement with Starlight Investment Capital LP ("Starlight") whereby Starlight will acquire Stone and will pay, pursuant to the terms and conditions of the trust indenture governing the debentures, the principal amount of $1,000 per debenture, plus accrued and unpaid interest thereon, including any additional interest, to complete the repayment of the debentures. The fair value on June 30, 2022 was estimated at $3,335,200 using a Level 2 fair value hierarchy of $1,100 per debenture based on the offer by Starlight Investments. The debentures were sold on July 19, 2022.
• 112,810 common shares of Stone. The fair value was estimated at $nil.
• 409,333 common shares of Prospector Metals Corp., which reflects a 1:3 share consolidation that was completed on April 6, 2022. The fair market value was estimated at $192,385 based on the closing market price on June 30, 2022.

During the six months ended June 30, 2022, the Company had an unrealized gain on investments of $659,689 (2021: unrealized gain of $514,235) from the revaluation of debentures and common shares. During the six months ended June 30, 2022, the Company recognized debenture interest income of $56,071 (2021: $96,927) and as of June 30, 2022, had a debenture interest receivable balance of $nil (December 31, 2021: $57,317).

The Company's investments portfolio consisted of the following as of June 30, 2022:

Investments	Opening	Purchases	Purchases	Net	Realized	Unrealized	Ending
	Balance	(Non-Cash)	(Cash)	Proceeds	Gains (Losses)	Gains (Losses)	Balance
Debentures	$ 2,425,602	$ -	$ -	$ -	$ -	$ 909,598	$ 3,335,200
Common shares	442,294	-	-	-	-	(249,909)	192,385
Total	$ 2,867,896	$ -	$ -	$ -	$ -	$ 659,689	$ 3,527,585

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities increased to $882,022 (December 31, 2021: $624,255).

Short-Term and Long-Term Debt

Short-term debt consists of $727,776 (2021: $242,342) for the fair value of the credit facility obligation and $40,000 (2021: $40,000) for the CEBA loan.

Deferred Revenues

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