EXHIBIT 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The significant events that occurred during the three- and six-months ended June 30, 2022 and to the date of this MD&A (the "MD&A Date") are described below. All dollar amounts are stated in millions of Canadian Dollars ("C$") unless otherwise stated. Except for per share, stock option, common share, percentages and unit amounts, all figures in the MD&A are reported in millions. The information contained herein is dated as of August 15, 2022 unless otherwise stated.

As at June 30, 2022, the Company had 67,471 connected assets (December 31, 2021 – 63,776). The Company experienced sporadic growth in connected assets up to the start of Q2 2022 resulting from COVID-19 restrictions in the markets where mCloud operates. As the restrictions have been lifted and the Company has undertaken strategic marketing initiatives, the Company expects quarter-on-quarter growth in connected assets and workers in the second half of 2022.

Significant Business Contracts and Partnerships

Partnership with Mercedes-EQ Formula E Team

On January 20, 2022, the Company announced its official team partnership with the Mercedes-EQ Formula E Team. Central to this partnership, Mercedes and the Company are jointly exploring the use of mCloud's AssetCare portfolio of solutions to drive the success of ESG priorities at Mercedes. This announcement was made just ahead of the official opening of Season 8 of the ABB FIA Formula E World Championship – the world's only all-electric FIA World Championship and the only sport certified net zero carbon since inception.

Memorandum of Understanding with Saudi Arabian Oil Company

On January 25, 2022, the Company announced it had signed a memorandum of understanding with Saudi Arabian Oil Company (“Aramco”) to explore the co-development of a digital technology hub for delivering ESG solutions in the Kingdom of Saudi Arabia (the "Kingdom"). The hub will enable the Company and Aramco to jointly develop new AI-powered innovations to facilitate the carbon reduction of complex energy-intensive assets throughout the Kingdom and abroad. Additionally, the Company announced that it planned to develop a center of excellence that will serve as a home base for a dedicated team of ESG and digital transformation experts based in the Kingdom, to leverage the high-performance infrastructure of Virtual Vision, a local provider of cloud computing services in the Kingdom in accordance with a December 15, 2021 agreement between mCloud and Virtual Vision.

Creation of an ESG-Digital Hub in Houston, Texas

On January 26, 2022, the Company announced the creation of a new “ESG-Digital Hub” based in Houston Texas, to serve as an additional focal point for local mCloud teams driving the ongoing technological development and customer delivery of AssetCare solutions. The new Houston-based location joins other Company hubs in Calgary, Alberta, established in collaboration with Invest Alberta, and the hub based in Saudi Arabia, in collaboration with Aramco.

18 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Agreement with Vail Buick Dealership as First AssetCare Electric Vehicle ("EV") Solution to Optimize EV Charging for Auto Dealerships

On March 21, 2022, the Company announced it had signed a March 17, 2022 agreement with Vail Buick Dealership to deliver its AssetCare for Connected Buildings solution to manage the energy efficiency of its dealership in Bedford Hills, New York, the first of 15 planned installations for auto dealerships in New York state to help control rising energy costs in the electric vehicle ("EV") era. mCloud's AssetCare solution will deploy an innovative combination of AI in the cloud, solar power generation, and battery storage to continuously manage the energy cost and carbon footprint of the entire dealership, including the substantial increased energy consumption from on-site EV charging. The Vail Buick Dealership agreement has a 17-year term commencing upon full deployment in the second half of 2022.

Agreement with Carbon Royalty Corp to Fund First 30 AssetCare EV Solutions for Auto Dealerships

On March 30, 2022, the Company announced it had signed a March 28, 2022 agreement on with Carbon Royalty Corp. ("Carbon") to fund the first 30 AssetCare solutions to optimize EV charging efficiency at auto dealerships in certain U.S. States ("EV Dealership Projects"). EV Dealership Projects are the design, installation and operation of integrated power systems consisting of solar, batteries and EV changing power stations for auto dealerships. Pursuant to the agreement between mCloud and Carbon, Carbon will fund the implementation of these AssetCare contracts. As a benefit of this partnership, Carbon receives 50% of the tax incentives, carbon credits (the "Carbon Credits"), and other potential accretive financial benefits mCloud would be eligible to receive in the United States resulting from the implementation of these solutions.

Agreement with Mercedes-Benz Grand Prix Limited to Connect AssetCare at Brackley, Home of the Mercedes-AMG PETRONAS Formula One Team

On July 13, 2022 the Company announced it had entered into a commercial subscription agreement with Mercedes-Benz Grand Prix Limited (the "Mercedes Agreement") to deploy mCloud's AssetCare Connected Buildings solution at the Mercedes-Benz Grand Prix headquarters in Brackley, UK – home of the Mercedes-AMG PETRONAS Formula One™ Team and the Mercedes-EQ Formula E Team.

The Mercedes Agreement was signed on July 12, 2022 and commences with the first phase of what is anticipated to be a multi-year campus-wide implementation of AssetCare. A recurring AssetCare monthly subscription becomes effective at the completion of the initial installation at Brackley, which is expected to occur in September 2022.

This AssetCare deployment is mCloud's largest Connected Buildings solution to-date, cloud-connecting over 650,000 square feet at Brackley and leverages mCloud's AI and analytics to create new energy efficiencies, reductions in CO2e emissions, and improvements to indoor air quality.

Technology Continuation Agreement with Agnity Global Inc.

On August 2, 2022, the Company announced it has entered into a technology continuation agreement with Agnity Global Inc. (the "Technology Continuation Agreement" and "Agnity" respectively), enabling mCloud to build on the success of its existing relationship with Agnity.

The Technology Continuation Agreement will replace the royalty agreement between mCloud and Agnity. Under the terms of the Technology Continuation Agreement, Agnity paid mCloud a one-time payment of US$5.954 million on July 29, 2022. Concurrent with the signing of the Technology Continuation Agreement, a third party acquired all of the outstanding shares in Agnity from its shareholder. As a result of these events, mCloud no longer has control of Agnity, and as of July 29, 2022 the Company will no longer include any of Agnity's operating results in its financial statements and Agnity will no longer be consolidated. The new structure allows the parties to continue delivering and supporting Agnity's technology and builds on mCloud's existing license and continued use of Agnity technology across all of the Company's AssetCare™ offerings going forward.

18 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Agnity provides mCloud with access to secure, Health Insurance Portability and Accountability Act-compliant communications technology used in the Company's AssetCare Mobile solution for remote collaboration with workers in the field. Agnity's technology is used by major telecommunication providers and enables mCloud's native compatibility with these providers to reach connected workers across numerous industries around the world.

Financing

Financing of Electric Vehicle Development Projects

In conjunction with the EV Dealership Projects,, on March 28, 2022, mCloud Technologies (USA) Inc., a subsidiary of the Company (the "Borrower"), executed a promissory note in the aggregate principal amount of US$15.000 million (the “Note”) with Carbon.

The initial principal amount under the Note of US$5.000 million was funded on April 1, 2022 and an additional US$10.000 million was funded on May 5, 2022 (the “Loans”). The Loans mature on March 31, 2025, with 10% per annum interest payable monthly in arrears in USD. In addition to the interest payments, certain income-based payments, including tax incentives, are required to be made by the Borrower to Carbon based on income resulting from the EV dealership projects over their 20-year term. The Loan may not be prepaid unless authorized by Carbon. The Loans contain representations, warranties and covenants which must be complied with to avoid an event of default which will allow Carbon to demand repayment and increase the interest rate to 18%, amongst other consequences of default.

19 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

 

Since the beginning of 2020, governments around the world have been forced to enact emergency measures in response to the World Health Organization's declaration of the COVID-19 pandemic. Businesses around the world have suffered material disruption resulting in economic slowdown, uncertainty and significant volatility in the financial markets. To date, the impacts to the Company's operations and financial matters associated with COVID-19 have included (i) a slow-down in technical services due to the in-person nature of these activities and associated COVID-19 related restrictions such as lock-downs and social distancing requirements in the Company's core geographic markets, (ii) a delay in the collection of receivables from businesses who were most widely impacted by shut-downs and restrictions, and (iii) a delay in certain projects. The long-term impact on the Company’s financial results and cash flows is unknown. While the Company has been negatively impacted by COVID-19, given the nature of the Company's operations, COVID-19 is anticipated to create new opportunities for the Company to engage with new customers and expand its offerings with existing ones by demonstrating the value of the remote connectivity offered by AssetCare™, which we anticipate taking effect in the second half of 2022.

COVID Government Support

The Company received government assistance in Canada, the United States, and Australia to help minimize the financial impact of the pandemic. During the three and six months ended June 30, 2022, government assistance of $0.258 million and $0.638 million, respectively, was recorded in Other Income in the condensed consolidated interim statements of loss and comprehensive loss (three and six months ended June 30, 2021 - $0.941 million and $2.118 million, respectively). The majority of these government assistance programs have now ended.

Impact on Strategic Plan and Growth

The Company continues to assess the economic impacts of the COVID-19 pandemic on its future operations, including the liquidity forecast and valuation of the Company’s intangible and goodwill assets related to recent acquisitions. As at June 30, 2022, the Company's senior management team has determined that the value of the Company’s assets is not materially impacted. In making this judgment, management has assessed various criteria including, but not limited to, existing laws, regulations, orders, disruptions, and potential disruptions in commodity prices and capital markets.

20 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

 

SUMMARY OF QUARTERLY RESULTS

The Company's selected financial information for the last eight completed fiscal quarters is shown in the table below. Accounting policies under International Financial Reporting Standards ("IFRS") were consistently applied across all periods.

For the quarter ended:	Q2 2022		Q1 2022		Q4 2021(2)		Q3 2021 (1)		Q2 2021 (1)		Q1 2021 (1)		Q4 2020(2)		Q3 2020
Total Revenue	2.269		4.430		4.171		7.434		6.556		7.436		9.223		6.137
Net loss	11.612		11.023		10.331		15.616		9.000		9.752		8.918		8.713
Net Loss - mCloud shareholders	8.052		9.778		10.095		15.466		8.930		10.271		9.302		9.417
Basic and diluted loss per share	$	0.50	$	0.61	$	0.73	$	1.22	$	0.88	$	1.12	$	1.02	$	1.15
Total assets	72.697		73.091		72.106		73.818		79.868		75.803		77.319		68.113
Total non-current financial liabilities	26.795		7.532		1.513		12.978		24.565		43.440		33.443		33.319

(1) The results for each of the quarters ended March 31, June 30 and September 30, 2021 have been corrected, which impacted revenue, current and non-current long-term accounts receivables; deferred revenue, and correspondingly, impacted net loss and net loss attributable to mCloud shareholders and related loss per share attributable to mCloud shareholders - basic and diluted. During the quarters ended:

•March 31, 2021, decreased revenue and increased net loss, net loss attributable to mCloud shareholders and loss per share attributable to mCloud shareholders - basic and diluted by $0.945 million ($0.10 per share);

•June 30, 2021, decreased revenue and increased net loss, net loss attributable to mCloud shareholders and loss per share attributable to mCloud shareholders - basic and diluted by $0.652 million ($0.13 per share);

•September 30, 2021, increased revenue and decreased net loss, net loss attributable to mCloud shareholders and loss per share attributable to mCloud shareholders - basic and diluted by $0.098 million ($0.01 per share).

(2) The Company has corrected net loss and other comprehensive loss attributable to mCloud shareholders and non-controlling interest for the years ended, 2020 and 2021. This resulted in a reclassification between net loss attributable to mCloud shareholders and non-controlling interest, other comprehensive loss attributable to mCloud shareholders and non-controlling interest and impacted basic and diluted loss per share for the quarters ended December 31, 2020 and December 31, 2021. During the quarters ended:

•December 31, 2020, net loss attributable to mCloud shareholders decreased by $0.423 million, net loss attributable to non-controlling interest increased by $0.423 million, and loss per share attributable to mCloud shareholders - basic and diluted decreased by $0.05 per share.

•December 31, 2021, net loss attributable to mCloud shareholders increased by $0.433 million, net loss attributable to non-controlling interest decreased by $0.433 million and loss per share attributable to mCloud shareholders - basic and diluted increased by $0.03 per share.

21 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Total revenue was $2.269 million in Q2 2022, compared to $6.556 million in Q2 2021, a decrease of $4.287 million, due to a one-time adjustment to revenue of $2.572 million related to Agnity's business in prior periods, combined with the residual effect of the challenges associated with the COVID-19 restrictions experienced in 2021 and bleeding in to the first half of fiscal 2022. During Q2 2022, the Company continued to execute on strategic marketing activities and expects to see a gradual return to pre-pandemic levels in the second half of 2022. Net loss in Q2 2022 increased to $11.612 million compared to a net loss of $9.000 million in Q2 2021, a change of $2.612 million, primarily attributable to the higher operating loss which increased by $4.798 million as a result of the decrease in revenue, partially offset by an increase of $1.280 million from foreign exchange gains and $1.425 million from fair value gains on derivatives. Net losses in Q2 2022 increased to $11.612 million compared to a net loss of $11.023 million in Q1 2022, primarily due the reversal of revenue in Q2 2022, partially offset by higher foreign exchange gains. Basic and diluted net loss per share of $0.50/share in Q2 2022, was a decrease of $0.38/share, from $0.88/share in Q2 2021 due to lower net loss attributable to mCloud shareholders, and an increase in the number of shares outstanding.

22 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Review of Quarterly Financial and Operational Results

The table below provides key financial performance metrics of the Company for Q2 2022, compared with Q2 2021. This information should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2021 (the "2021 Annual Financial Statements").

	Three months ended June 30,				Six months ended June 30,				Q2 to Q2		Q2 to Q2		YTD		YTD
	2022		2021		2022		2021		Change $		Change %		Change $		Change %
Revenue	$	2.269	$	6.556	$	6.699	$	13.992	$	(4.287)	(65)	%	$	(7.293)	(52)	%
Cost of Sales	(1.933)		(2.061)		(3.866)		(5.320)		0.128		(6)	%	1.454		(27)	%
Gross Profit	$	0.336	$	4.496	$	2.833	$	8.672	$	(4.160)	(93)	%	$	(5.839)	(67)	%
Expenses
Salaries, wages and benefits	$	5.059	$	6.333	$	10.374	$	11.204	$	(1.274)	(20)	%	$	(0.830)	(7)	%
Sales and marketing	1.140		0.328		1.902		0.513		0.812		248	%	1.389		271	%
Research and development	0.568		0.712		1.100		1.461		(0.144)		(20)	%	(0.361)		(25)	%
General and administrative	2.065		1.556		4.617		2.893		0.509		33	%	1.724		60	%
Professional and consulting fees	3.560		2.491		6.736		4.230		1.069		43	%	2.506		59	%
Share-based compensation	0.192		0.361		0.444		0.736		(0.169)		(47)	%	(0.292)		(40)	%
Depreciation and amortization	1.826		1.993		3.770		3.964		(0.167)		(8)	%	(0.194)		(5)	%
Total expenses	$	14.410	$	13.774	$	28.943	$	25.001	$	0.636	5	%	$	3.942	16	%
Operating loss	$	(14.074)	$	(9.278)	$	(26.110)	$	(16.329)	$	(4.796)	52	%	$	(9.781)	60	%
Other Expenses (income)
Finance costs	$	2.230	$	1.947	$	4.089	$	4.183	$	0.283	15	%	$	(0.094)	(2)	%
Foreign exchange loss (gain)	(1.116)		0.164		(0.494)		0.532		(1.280)		(780)	%	(1.026)		(193)	%
Business acquisition costs and other expenses	—		0.012		—		0.336		(0.012)		(100)	%	(0.336)		(100)	%
Fair value (gain) loss on derivatives	(2.538)		(1.113)		(5.032)		0.451		(1.425)		128	%	(5.483)		(1216)	%
Other income	(0.264)		(1.155)		(0.662)		(3.065)		0.891		(77)	%	2.403		(78)	%
Loss before tax	$	(12.386)	$	(9.133)	$	(24.011)	$	(18.766)	$	(3.253)	36	%	$	(5.245)	28	%
Current tax expense	$	(0.184)	$	0.241	$	0.105	$	0.479	$	(0.425)	(176)	%	$	(0.374)	(78)	%
Deferred tax recovery	(0.591)		(0.373)		(1.482)		(0.492)		(0.218)		58	%	(0.990)		201	%
Net loss for the period	$	(11.611)	$	(9.001)	$	(22.634)	$	(18.753)	$	(2.610)	29	%	$	(3.881)	21	%

23 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Revenue

In the following tables, revenue is disaggregated by nature and timing of revenue recognition.

Six months ended June 30,

Major Service Line	2022		2021		Change $		Change %
AssetCare Initialization	$	0.443	$	0.819	$	(0.375)	(46)	%
AssetCare Solutions	8.684		12.514		(3.830)		(31)	%
Engineering Services	0.143		0.659		(0.516)		(78)	%
Contract modification revenue reversal	(2.572)		—		(2.572)		(100)	%
Total	$	6.699	$	13.992	$	(7.293)	(52)	%

Timing of Revenue Recognition	2022		2021		Change $		Change %
Revenue recognized over time	$	7.646	$	11.702	$	(4.056)	(35)	%
Revenue recognized at point in time upon completion	$	(0.947)	$	2.290	(3.237)		(141)	%
Total	$	6.699	$	13.992	$	(7.293)	(52)	%

For the six months ended June 30, 2022, total revenue was $6.699 million, a decrease of $7.293 million, compared to $13.992 million for the same period in 2021.

Several factors contributed to the decrease in revenues. From January to April 2022, local and national policies to contain COVID-19 led certain mCloud customers to restrict vendor access to their sites, which impeded the Company’s ability to deliver AssetCare and related services. mCloud also undertook a transition of its royalty agreement with Agnity into a technology continuation agreement during Q2 2022.

As part of this transition, mCloud received a US$5.954 million one-time payment from Agnity on July 29, 2022, which as a result of timing and the negotiation process, prevented mCloud from including certain revenues in the AssetCare Initialization and AssetCare Solutions categories. The net resulting impact was the recording of negligible revenues from newly connected assets for the period. The one-time payment will be recorded as a non-revenue item in Q3 2022.

Also due to this transition, mCloud recorded a one-time adjustment related to Agnity’s business in prior periods. This resulted in the Company making certain required balance sheet adjustments culminating in a $2.572 million decrease to revenues as a standalone adjustment in Q2 2022 and representing the full required adjustment across these prior periods.

Starting in May 2022, the Company began to see an increase in customer activities and the retraction of many COVID-19 restrictions. These factors are expected to have a sustained positive impact on revenue growth in future periods.

24 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Cost of Sales, Gross Profit, Gross Margin %

Six months ended June 30,

	2022			2021			Change $			Change %
Cost of Sales	$	3.866		$	5.320		$	(1.454)		(27)	%
Gross Profit	$	2.833		$	8.672		$	(5.839)		(67)	%
Gross margin %	42.3		%	62.0		%	(19.7)		%	(32)	%

Cost of sales for the six months ended June 30, 2022 were $3.866 million, a decrease of 27% from $5.320 million for the same period in 2021. This decrease is primarily attributable to the decrease in revenue including the one-time adjustment of $2.572 million, partially offset by increased costs associated with a shift in the mix of revenue generating projects. For the six months ended June 30, 2022, gross profit decreased by $5.839 million to $2.833 million from $8.672 million for the same period in 2021, primarily due to the decrease in revenues of $7.293 million, partially offset by a decrease in cost of sales by $1.454 million for the reasons noted above.

Expenses

Six months ended June 30,

Expenses	2022		2021		Change $		Change %
Salaries, wages and benefits	$	10.374	$	11.204	$	(0.830)	(7)	%
Sales and marketing	1.902		0.513		1.389		271	%
Research and development	1.100		1.461		(0.361)		(25)	%
General and administration	4.617		2.893		1.724		60	%
Professional and consulting fees	6.736		4.230		2.506		59	%
Share-based compensation	0.444		0.736		(0.292)		(40)	%
Depreciation and amortization	3.770		3.964		(0.194)		(5)	%
Total	$	28.943	$	25.001	$	3.942	16	%

Total expenses for the six months ended June 30, 2022 increased by 16% or $3.942 million compared with the same period in 2021. The most significant changes between 2022 and 2021 are as follows:

•Professional and consulting expenses increased by 59% or $2.506 million, primarily related to increased costs for professional services in the six months ended June 30, 2022, associated with Company's NASDAQ listing and financing activities undertaken during the period.

•General and administration expenses increased by 60% or $1.724 million due to increased insurance premiums following the Company's NASDAQ listing in Q4 2021, increased IT subscription costs as the Company ramps up to return its resources to pre-COVID-19 levels.

•Sales and marketing costs increased by 271% or $1.389 million, due to the execution of a strategic marketing plan with an increase in marketing activities, including travel and mCloud's participation in conferences, high-visibility activities and hosting customer events specific to advancing the Company's presence in Houston and growing customer engagement with mCloud's Digital Oil & Gas offerings in the six months ended June 30, 2022.

•Salaries, wages and benefits costs decreased by 7% or $0.830 million, primarily attributed to a level-setting of overall headcount.

25 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

•Research and development expenses decreased by $0.361 million in the first six months of 2022 compared with the same period in 2021, the result of careful management and targeted deployment of these activities in 2022. Research and development relates to the ongoing development of technologies across the AssetCare portfolio.

•Depreciation and amortization non-cash costs decreased by 5% or $0.194 million for the six months ended June 30, 2022, due to fewer additions of property and equipment assets, combined with fully depreciated assets at or nearing the end of their useful life.

Other Expenses (Income)

Six months ended June 30,

Other expenses (income)	2022		2021		Change $		Change %
Finance costs	$	4.089	$	4.183	$	(0.094)	(2)	%
Foreign exchange loss (gain)	(0.494)		0.532		(1.026)		(193)	%
Business acquisition costs and other expenses	—		0.336		(0.336)		(100)	%
Fair value (gain) loss on derivatives	(5.032)		0.451		(5.483)		(1216)	%
Other income	(0.662)		(3.065)		2.403		(78)	%
Total	$	(2.099)	$	2.436	$	(4.536)	(186)	%

Other expenses (income) was $4.536 million higher during the six months ended June 30, 2022, compared to the same period in 2021.

•Finance costs decreased by $0.094 million during the six months ended June 30, 2022, compared to the same period in 2021, primarily due to transaction costs on the issuance of convertible debentures expensed in the six months ended June 30, 2021, partially offset by the increased loans and borrowings.

•Foreign exchange was a gain of $0.494 million for the six months ended June 30, 2022, compared to a loss of $0.532 million for the same period in 2021, due to a weakening Canadian dollar.

•Fair value changes on derivatives were a gain of $5.032 million for the six months ended June 30, 2022. These are non-cash gains resulting from the remeasurement of the warrant liabilities at June 30, 2022. These liabilities include the warrants issued on conversion of the convertible unsecured subordinated debentures issued between December 7, 2020 and May 25, 2021 ("2021 Convertible Debentures") and the warrants issued in November 2021.

•Other income decreased by $2.403 million for the six months ended June 30, 2022, to $0.662 million from $3.065 million for the same period in 2021. Other income consists primarily of wage and rent subsidies for COVID-19 programs received from the Canadian government and low-interest loans from the US government. The majority of these programs have now ended.

26 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Revenue

In the following tables, revenue is disaggregated by nature and timing of revenue recognition.

Three months ended June 30,

Major Service Line	2022		2021		Change $		Change %
AssetCare Initialization	$	0.029	$	0.303	$	(0.274)	(90)	%
AssetCare Solutions	4.695		6.080		(1.385)		(23)	%
Engineering Services	0.117		0.173		(0.056)		(32)	%
Contract modification revenue reversal	(2.572)		—		(2.572)		(100)	%
Total	$	2.269	$	6.556	$	(4.287)	(65)	%

Timing of Revenue Recognition	2022		2021		Change $		Change %
Revenue recognized over time	$	3.783	$	6.253	$	(2.470)	(39)	%
Revenue recognized at point in time upon completion	$	(1.514)	0.303		(1.817)		(599)	%
Total	$	2.269	$	6.556	$	(4.287)	(65)	%

For the three months ended June 30, 2022, total revenue was $2.269 million, a decrease of $4.287 million, compared to $6.556 million for the same period in 2021.

When the impacts as described in the YTD discussion are considered, the decline in quarterly revenue was primarily attributable to the related impact to the AssetCare Initialization and AssetCare Solutions categories, which resulted in negligible revenues from newly connected asset for the period. The Company also received a one-time US$5.954 million payment from Agnity on July 29, 2022 and recorded a one-time adjustment of $2.572 million to revenues related to Agnity’s business in prior periods as at June 30, 2022.

Starting in May 2022, the Company began to see an increase in customer activities and the retraction of many COVID-19 restrictions. These factors are expected to have a sustained positive impact on revenue growth in future periods.

Cost of Sales, Gross Profit, Gross Margin %

Three months ended June 30,

	2022			2021			Change $		Change %
Cost of Sales	$	1.933		$	2.061		$	(0.127)	(6)	%
Gross Profit	0.336			4.496			(4.160)		(93)	%
Gross margin %	14.8		%	68.6		%			(78)	%

27 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Cost of sales for the three months ended June 30, 2022 were $1.933 million, an decrease of 6% from $2.061 million for the same period in 2021. This decrease was attributable to the reduction in revenue, offset by changes in revenue mix in the period, with the projects in 2022 requiring higher costs to complete. For the three months ended June 30, 2022, gross profit decreased by $4.160 million to $0.336 million from $4.496 million for the same period in 2021, primarily due to the decrease in revenues of $4.287 million.

Expenses

Three months ended June 30,

Expenses	2022		2021		Change $		Change %
Salaries, wages and benefits	$	5.059	$	6.333	$	(1.274)	(20)	%
Sales and marketing	1.140		0.328		0.812		248	%
Research and development	0.568		0.712		(0.144)		(20)	%
General and administration	2.065		1.556		0.509		33	%
Professional and consulting fees	3.560		2.491		1.069		43	%
Share-based compensation	0.192		0.361		(0.169)		(47)	%
Depreciation and amortization	1.826		1.993		(0.167)		(8)	%
Total	$	14.411	$	13.774	$	0.636	5	%

Total expenses for the three months ended June 30, 2022 increased by 5% or $0.636 million compared with the same period in 2021. The most significant changes between 2022 and 2021 are as follows:

•General and administration expenses increased by 33% or $0.509 million due to increased insurance premiums following the Company's NASDAQ listing in Q4 2021, and increased IT subscriptions as the Company ramps up to return its resources to pre-COVID-19 levels.

•Professional and consulting expenses increased by 43% or $1.069 million, primarily related to increased costs for professional services in Q2 2022 associated with the financing activities undertaken in 2022, as well as the ongoing costs associated with the Company's NASDAQ listing. Additionally, consultants also filled positions in Q2 2022 that were previously held by employees, correlating with a 20% decrease in salaries, wages and benefits costs described below.

•Sales and marketing costs increased by 248% or $0.812 million, due to the execution of increased marketing to build awareness and pipeline growth, along with initiatives to drive AssetCare sales and business development in Q2 2022.

•Salaries, wages and benefits costs decreased by 20% or $1.274 million, as a number of roles that were previously held by employees were filled by consultants.

•Research and development expenses decreased by $0.144 million in Q2 2022 compared with the same period in 2021, resulting from careful and targeted management of these activities. Research and development relates to the ongoing development of technologies across the AssetCare portfolio.

•Depreciation and amortization non-cash costs decreased by 8% or $0.167 million for Q2 2022, due to fewer additions of property and equipment assets, combined with fully depreciated assets at or nearing the end of their useful life.

28 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Other Expenses (Income)

Three months ended June 30,

Other expenses (income)	2022		2021		Change $		Change %
Finance costs	$	2.230	$	1.947	$	0.283	15	%
Foreign exchange loss (gain)	(1.116)		0.164		(1.280)		(780)	%
Business acquisition costs and other expenses	—		0.012		(0.012)		(100)	%
Fair value (gain) loss on derivatives	(2.538)		(1.113)		(1.425)		128	%
Other income	(0.264)		(1.155)		0.891		(77)	%
Total	$	(1.688)	$	(0.146)	$	(1.543)	1057	%

Other expenses (income) increased by $1.543 million during the three months ended June 30, 2022, compared to the same period in 2021.

•Finance costs increased by $0.283 million during the three months ended June 30, 2022, compared to the same period in 2021, primarily due to a $0.162 million loss on debt modification recorded on the term loan as a result of the Accommodation Agreement signed with Fiera in Q2 2022, as well as increased loans and borrowings.

•Foreign exchange was a gain of $1.116 million for the three months ended June 30, 2022, compared to a loss of $0.164 million for the same period in 2021, due to a weakening Canadian dollar.

•Fair value changes in derivatives were a gain of $2.538 million for the three months ended June 30, 2022, which was an increase of $1.425 million compared to the same period in 2021. These are non-cash gains resulting from the remeasurement of the warrant liabilities at June 30, 2022.

•Other income decreased by $0.891 million for the three months ended June 30, 2022, to $0.264 million from $1.155 million for the same period in 2021. The majority of Other income includes wage and rent subsidies for COVID-19 programs received from the Canadian government and low-interest loans from the US government. These programs have now ended.

CAPITAL RESOURCES

The Company’s objective and polices for managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Company manages its capital structure and makes changes based on economic conditions, risks that impact the consolidated operations and future significant capital investment opportunities. In order to maintain or adjust its capital structure, the Company may issue new equity instruments or raise additional debt financing.

The Company assesses its capital resources on an ongoing basis based on current market factors, and has not identified any trends or fluctuations likely to affect the Company’s capital resources beyond standard market conditions.

29 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Analysis of Cash Flows

As at June 30, 2022, the Company had $4.406 million in cash (December 31, 2021 - $4.588 million). All cash was held in bank accounts, primarily with Canadian and US banks. The following table summarizes cash inflows and outflows.

Six months ended June 30,

Cash provided by (used in):	2022		2021
Operating activities	$	(16.150)	$	(12.955)
Investing activities	(0.036)		(0.774)
Financing activities	16.027		19.169
Net increase (decrease) in cash, before effect of exchange rate fluctuation	$	(0.159)	$	5.440

Cash flows used in operating activities increased to $16.150 million in the six months ended June 30, 2022 compared with $12.955 million in the same period of 2021, primarily as a result of a higher net loss in Q2 2022, partially offset by an increase in working capital in 2022 compared with 2021. Cash flow from operations can vary significantly from period to period as a result of the Company’s working capital requirements, which are dependent on operations and increased spending to grow the Company and expand its presence in the market.

Cash flows used in investing activities decreased in the six months ended June 30, 2022, to $0.036 million compared with $0.774 million in the same period of 2021, as the Company has reduced spending on the acquisition of property and equipment as a means of conserving cash.

Cash flows provided by financing activities decreased to $16.027 million for the six months ended June 30, 2022, compared with $19.169 million for the same period in 2021. In the six months ended June 30, 2022, mCloud received net proceeds from loans and bank indebtedness of $25.377 million and made repayments of $8.224 million. In the same period of 2021, the Company received net proceeds from loans and indebtedness of $8.761 million, from issuance of shares of $12.396 million and from convertible debentures of $5.527 million and made repayments of $7.009 million.

Financing Arrangements and Credit Facilities

2019 Convertible Debentures

The Company's convertible unsecured subordinated debentures issued in July 2019 ("2019 Convertible Debentures") are described in Note 14 of the 2021 Annual Financial Statements. The 2019 Convertible Debentures matured on June 30, 2022. The Company is actively exploring financing options to repay the principal amount of $23,458 million and continues to accrue interest until such time as they are repaid.

Term Loan

The Company's term loan facility with Fiera (the "Term Loan") is described in Note 12 of the 2021 Annual Financial Statements. The Term Loan was classified as current at December 31, 2021 as the Company did not meet certain minimum covenants and therefore the term loan was due on demand ("Fiera Covenant Breach").

On May 5, 2022, in order to enable the execution of the Loan with Carbon, the Company and Fiera executed an Accommodation Agreement (the “Accommodation Agreement”) and the parties agreed that a portion of the outstanding principal amount under the Term Loan would be paid in addition to a prepayment penalty and accommodation fee. The Company paid a total of $2.044 million on May 6, 2022. The parties also agreed that the remainder of the principal and interest due under the Term Loan would be

30 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

paid on or before October 31, 2022 (the “Repayment Date”). The Term Loan was amended to increase the interest rate charged from 6.85% to 9.5% effectively immediately. There are no financial covenants under the Accommodation Agreement and the Company is no longer required to maintain the previous financial covenants. The Company may be required to repay the Term Loan before the Repayment Date if the Company is in default or breach of the Accommodation Agreement. As part of the Accommodation Agreement, Fiera signed an agreement whereby Fiera’s security is subordinate to certain security granted to Carbon.

ATB Financial Facility

The Company’s secured revolving operating facility (“ATB Facility”) with ATB Financial (“ATB”) is described in Note 13 to the 2021 Annual Financial Statements. During the six months ended June 30, 2022, additional draws of $1.077 million were made and $0.864 million was repaid in accordance with the agreement.

The ATB Facility is subject to certain reporting and financial covenants. The Company was not in compliance with these covenants at June 30, 2022.

The MasterCard Facility

The Company’s credit facility with MasterCard (the “MasterCard Facility”) with a total limit of $0.750 million provides cash security to MasterCard held on deposit for expenses outstanding on the Company issued credit cards. As at June 30, 2022, the MasterCard Facility was drawn to $0.372 million (December 31, 2021 - $0.297 million).

Financing of Electrical Vehicle Development Projects

In conjunction with the EV Dealership Projects, on March 28, 2022, mCloud Technologies (USA) Inc, a subsidiary of the Company executed the Note with Carbon.

The initial principal amount under the Note of US$5.000 million was funded on April 1, 2022 and an additional US$10.000 million was funded on May 5, 2022. The Loans mature on March 31, 2025, with 10% per annum interest payable monthly in arrears in USD. In addition to the interest payments, the Note requires certain income-based payments, including tax incentives, are required to be made from the borrower to the lender based on income resulting from the EV Dealership Projects over their 20-year term. The Loans may not be prepaid unless authorized by the lender. The Loans contain representations, warranties and covenants which must be complied with to avoid an event of default which will allow the lender to demand repayment and increase the interest rate to 18%, amongst other implications.

On May 5, 2022, the Company, Carbon and Fiera executed a Subordination and Postponement Agreement (the “Subordination Agreement”), whereby the parties agreed that the security against certain assets of the Company previously held by Fiera would be subordinate to the security granted to Carbon commencing on the date of the agreement. The security granted to Carbon includes, to the extent related to the EV Dealership Projects, all accounts, equipment and machinery, contracts and contract rights, including contracts with auto dealerships, inventory, cash and proceeds, rent and profits.

LIQUIDITY

The principal liquidity needs of the Company are for working capital requirements, debt servicing and repayment obligations, and costs associated with the growth of the business. The Company is exposed to liquidity risk which is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due in the normal course of business. The Company manages its liquidity risk by monitoring its operating requirements, reducing costs where possible given the status of the COVID-19 pandemic, and applying for any available government funding to support its business. The Company generally relies on funds generated from operations and external financing to provide sufficient

31 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

liquidity to meet budgeted operating requirements. The Company assesses its liquidity on an ongoing basis based on current market factors, and has not identified any trends or fluctuations likely to affect the Company’s liquidity beyond standard market conditions. See Note 26 of the 2021 Annual Financial Statements for further discussion on the Company's liquidity risk.

The COVID-19 pandemic and the measures adopted by governments in countries worldwide to mitigate the pandemic’s spread have negatively impacted the Company. These measures required the Company to restrict deployment of technical services due to the in-person nature of these activities and delayed the start of certain projects throughout 2021 and into 2022. This negatively impacted the Company’s financial performance and liquidity position. While restrictions continue to ease there have been increased cases of COVID-19 and there is still uncertainty over how COVID-19 will impact the Company’s business and the timing of future revenues.

During the three and six months ended June 30, 2022, the Company generated a net loss of $11.612 million and $22.635 million, respectively, and negative cash flows from operating activities of $16.150 million for the six months ended June 30, 2022. At June 30, 2022, the Company had a working capital deficiency of $44.055 million. Working capital deficiency is a non-IFRS measure which is calculated as current assets less current liabilities. Current liquidity levels and available sources of capital are not adequate to fund the working capital deficiency.

The most significant expected cash outflows in current liabilities at June 30, 2022 include the 2019 Convertible Debentures of $23.653 million; loans and borrowings of $12.721 million including principal and interest payments; payment of trade and other payables of $16.343 million; and payments associated with leases of approximately $1.408 million.

Based on the Company’s liquidity position at the date of authorization of these condensed consolidated interim financial statements and considering the uncertainty surrounding the impact of the pandemic, management estimates that it will need additional financing to meet its financial obligations. The Company is currently working with stakeholders and others to address the working capital deficiency. In the long-term, the ability of the Company to operate as a going concern is dependent on its ability to achieve and maintain profitable operations and positive cash flow from operations, and, as necessary, to obtain the necessary equity or debt financing to continue with operations. To date, the Company has funded its operations through debt and equity financing. While the Company has been successful in raising capital in the past and anticipates the lenders will not accelerate repayment of loans with covenant breaches as of June 30, 2022, and potential breaches forecasted over the coming year, there is no assurance that it will be successful in closing further financings in the future or obtaining waivers of the covenant breaches.

As a result, these factors are indicators that material uncertainties exist that raises significant doubt about the Company’s ability to continue as a going concern and, therefore, its ability to realize assets and discharge liabilities in the normal course of business.

In making their assessment, management considered all available information, together with forecasts and other mitigating strategies, about the future which is at least, but not limited to, 12 months from the end of Q2 2022. Management has considered the following in its assessment that the going concern assumption remains appropriate:

•the plan for the repayment of the 2019 Convertible Debentures;

•the repayment of the term loan in full on or before October 31, 2022;

•the likelihood that undrawn funds under the revolving operating facility will be available and will not be required to be repaid;

•the required cash principal and interest payments on indebtedness;

•the likelihood of payments required under contingent consideration arrangements;

32 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

•cash inflows from current operations, expected government assistance in the form of wage and rent subsidies, and expected increases in revenues and cash flows resulting from new revenue contracts expected over the next 12 months due to the anticipated reduction of COVID-19 related restrictions; and

•future debt and equity raises.

In the preparation of the condensed consolidated interim financial statements and the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions that affect the carrying amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during each reporting period. The estimates and associated assumptions are limited by the relevance of historical data and uncertainty of future events. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized in the period in which the estimates are revised and in any future period. See Note 3 of the 2021 Annual Financial Statements for more detailed information on the critical judgments and estimates, including significant areas of estimation uncertainty in applying policies, applied by the Company.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

A description of the Company's financial instruments and financial risks that the Company is exposed to and management of these risks can be found in Notes 25 and 26, respectively, of the Company's 2021 Financial Statements. Except for those noted below, there were no significant changes to the Company's exposures to those risks during Q2 2022.

Contractual Obligations

During the six months ended June 30, 2022, the most significant changes in contractual obligations were: (a) the addition of a new 12-year lease obligation of approximately $10.200 million for Calgary office space and variable lease payments of approximately $8.600 million; (b) new financing of US$15.000 million; and (c) an increase in trade payables and accrued liabilities, which includes the cash payment for the settlement of a previous warrant liability. Contractual obligations at December 31, 2021, have been reduced by normal course payments made during the six months ended June 30, 2022.

Foreign Currency Risk

At June 30, 2022, the C$ equivalent carrying amount of the Company’s USD denominated monetary assets and liabilities was $12.016 million and $32.282 million, respectively (December 31, 2021 - $14.554 million and $11.685 million) with the majority of the change associated with the Carbon promissory note denominated in USD. Assuming all other variables remain constant, a fluctuation of +/- 5.0% in the exchange rate between the C$ and USD would impact the net loss for the period by approximately $1.013 million (December 31, 2021 - $0.143 million).

33 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Transactions Between Related Parties

The Company's related parties include its subsidiaries, its non-controlling interest and key management personnel. The related party transactions are in the normal course of operations and have been valued at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Key Management Personnel Compensation

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company defines key management personnel as key officers and executives of the Company and directors. For the six months ended June 30, 2022, the contractual and discretionary compensation awarded to key management personnel including director fees is as follows:

Six months ended June 30,

	2022		2021		Change %
Salaries, fees and short-term benefits	$	0.950	$	0.791	20	%
Share-based compensation	$	0.279	$	0.155	80	%
	$	1.229	$	0.946	30	%

As at June 30, 2022, the Company had $0.185 million (December 31, 2021 - $0.234 million) due to an entity controlled by the principal owner of Agnity for the purchase of assets. The amount is unsecured, non-interest bearing and due on demand.

The Company engaged an entity partially owned by the principal owner of Agnity to perform consulting services in the amount of $2.322 million during six months ended June 30, 2022, (three and six months ended June 30, 2021 - $1.539 million). As at June 30, 2022, the Company owed the entity $1.344 million (December 31, 2021 - $1.112 million).

ACCOUNTING MATTERS

Basis of Presentation and Accounting Policies

The condensed consolidated interim financial statements include the accounts of mCloud, the ultimate parent company of the consolidated group, and its subsidiaries and are prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Certain disclosures included in the Company's annual financial statements prepared under IFRS as issued by the IASB have been condensed or omitted. Accordingly, the Company's condensed consolidated interim financial statements should be read in conjunction with the 2021 Annual Financial Statements.

The accounting policies applied in the preparation of the Q2 2022 Financial Statements are consistent with those applied and disclosed in Note 33 of the 2021 Annual Financial Statements.

The Company has reclassified certain expenses during the three and six months ended June 30, 2021 in the condensed consolidated interim statements of loss and comprehensive loss. These adjustments impacted previously reported amounts for the three and six months ended June 30, 2021 by decreasing

34 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

cost of sales by $0.539 million, increasing salaries, wages and benefits by $0.749 million and decreasing professional and consulting fees by $0.209 million.

Critical Accounting Estimates and Judgements

Management is required to make judgments, estimates and assumptions that affect the carrying amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during each reporting period. The estimates and associated assumptions are limited by the relevance of historical data and uncertainty of future events. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.

The Company applied critical judgements and estimates, including significant areas of estimation uncertainty in applying policies, as described in Note 3 of the 2021 Annual Financial Statements. The Company has not adopted any other accounting policies, nor does it expect to adopt any other accounting policies subsequent to the end of the most recently completed financial year.

Off-Balance Sheet Arrangements

Various forms of security have been granted by the Company and certain of its subsidiaries in favour of arm’s length lenders. The security granted gives the lenders a comprehensive level of protection against a default by the borrower in the performance of its obligations including the repayment of the indebtedness and interest thereon.

CONTROLS AND PROCEDURES

Prior to 2022, the Company was not required to establish and maintain disclosure controls and procedures ("DC&P") and internal controls over financial reporting ("ICFR") pursuant to National Instrument ("NI") 52-107. The Company is listed on the TSX Venture Exchange and on November 24, 2021 also listed and commenced trading its shares on the NASDAQ. As a result of the NASDAQ listing, the Company is no longer a venture issuer. Accordingly, commencing in 2022, mCloud is required to establish and maintain DC&P and ICFR.

In light of these new requirements for 2022, the following discussion provides commentary about the Company's D&CP and ICFR.

Disclosures Controls and Procedures

The Company’s DC&P, as defined in National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) are designed to provide reasonable assurance that information required to be disclosed in the Company's filings under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation. They are also designed to provide reasonable assurance that all information required to be disclosed in these filings is accounted for, accumulated and communicated to the Company’s senior management team including the Chief Executive Officer ("CEO") and Chief Financial Officer (“CFO”) as appropriate. This is meant to allow for timely decisions regarding public disclosure.

The Company cannot provide absolute assurance that all information required to be disclosed in its filings is reported within the time periods specified in securities legislation because of the limitations in control systems to prevent or detect all misstatements due to error or fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within the Company have been detected.

35 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

Internal Controls over Financial Reporting

The Company’s senior management team is responsible for establishing and maintaining adequate ICFR, as defined in NI 52-109. ICFR means a process designed by or under the supervision of the CEO and CFO, and effected by the Company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS, and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) are designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management's Evaluation of Disclosure Controls and Procedures and Internal Controls over Financial Reporting

The Company's management, under the supervision and with the participation of its CEO and CFO, will conduct an evaluation of the effectiveness of the Company’s ICFR as of December 31, 2022, using the criteria set forth by the COSO 2013 Framework. Commencing the first quarter of 2022, the Company is required to report any material weaknesses in the design of ICFR. Any such material weaknesses would also impact DC&P. Although the Company has not completed a full evaluation as of June 30, 2022, the Company is aware of material weaknesses in the design of ICFR at June 30, 2022 as described below. Management have concluded that the Company’s ICFR were not designed effectively as of June 30, 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management identified the following material weaknesses:

•An ineffective control environment resulting from an insufficient number of trained financial reporting and accounting, information technology (IT) and operational personnel with the appropriate skills and knowledge and with assigned responsibility and accountability related to the design, implementation and operating effectiveness of internal control over financial reporting.

•The insufficient number of personnel described above contributed to an ineffective risk assessment process necessary to identify all relevant risks of material misstatement and to evaluate the implications of relevant risks on its internal control over financial reporting.

•An ineffective information and communication process resulting from (i) insufficient communication of internal control information, including objectives and responsibilities, such as delegation of authority; and (ii) ineffective general IT controls and ineffective controls related to spreadsheets, resulting in insufficient controls to ensure the relevance, timeliness and quality of information used in control activities.

•As a consequence of the above and as a result of inadequate segregation of duties and secondary review, the Company had ineffective control activities related to the design, implementation and

36 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

operating effectiveness of process level and financial reporting controls which had a pervasive impact on the Company's internal control over financial reporting.

•An ineffective monitoring process resulting from the evaluation and communication of internal control deficiencies, including monitoring corrective actions, not being performed in a timely manner.

Remediation

During Q2 2022, the Company continued to consider the full extent of the procedures to implement in order to remediate the material weaknesses described above. As at the MD&A date, the current remediation plan includes:

•Identifying key positions necessary to support the Company’s initiatives related to internal controls over financial reporting and expanding its hiring efforts accordingly.

•Hiring consultants to assist with process improvements and control remediation efforts in targeted accounting, IT and operations processes.

•Formalizing its entity-wide risk assessment process and documenting internal ownership of risk monitoring and mitigation efforts, with improved risk monitoring activities and regular reporting to those charged with governance at an appropriate frequency.

•Finalize a delegation of authority matrix to enforce desired limits of authority for key transactions, events, and commitments, and communicating these limits of authority to relevant personnel throughout the Company.

•Further simplify and streamline its spreadsheet models to reduce the risk of errors in mathematical formulas and improve the ability to verify the logic of spreadsheets.

•Hiring a consultant to assist management with process improvements and control remediation for general IT controls.

•Continuing to perform scoping exercises and planning for an Enterprise Resource Planning implementation to streamline the number of applications used for financial reporting activities.

Material Changes to the Control Environment

There have been no changes to the Company’s ICFR during the three months ended June 30, 2022 that have materially affected, or are likely to materially affect, the Company’s ICFR.

37 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

 

The Company's authorized capital includes an unlimited number of common shares. As at August 11, 2022, the following common shares, share purchase warrants, stock options, restricted share units and convertible debt conversion options were outstanding:

	Securities Outstanding
Shares issued and outstanding	16,155,654
Share purchase warrants (1)	8,120,708
Stock options	968,103
Restricted share units	401,153
2021 Convertible Debentures (2)	15,750
Total	25,661,368

(1) Share purchase warrants offer the holder the right to purchase a common share of the Company at a specified price by a specific date. Share purchase warrants outstanding have exercise prices ranging from Canadian dollar equivalent at date of issuance between $4.12 - $22.50 and a weighted average remaining contractual life of 2.6 years.

(2) Debentures are convertible at the option of the holder and have a conversion price of $5.85 which has been converted to Canadian dollars at August 11, 2022. The Debentures have a remaining life to maturity of 1.4 years.

38 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

 

This MD&A contains certain "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information contained herein and therein may include, but is not limited to, information relating to:

•the expansion of the Company's business to new geographic areas, including Australia, China, Southeast Asia, Continental Europe and the Middle East;

•the performance of the Company's business and operations;

•the intention to grow the business and operations of the Company;

•expectations with respect to the advancement of the Company's products and services, including the underlying technology;

•expectations with respect to the advancement and adoption of new products, including the adoption of new products by the Company's existing customer base;

•the estimated market value of the potential connected commercial buildings and industrial sites the Company could service;

•the acceptance by customers and the marketplace of the Company's products and solutions;

•the ability to attract new customers and develop and maintain existing customers, including increased demand for the Company's products;

•the ability to successfully leverage current and future strategic partnerships and alliances;

•the anticipated trends and challenges in the Company's business and the markets and jurisdictions in which the Company operates;

•the ability to obtain capital;

•the competitive and business strategies of the Company;

•sufficiency of capital;

•general economic, financial market, regulatory and political conditions in which the Company operates; and

•the Company's ability to meet the evolving ESG needs of its clients (as ESG is a rapidly developing landscape, and ESG is a key component of the Company's business model).

By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are 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 to be materially different from those expressed or implied by such information and statements.

39 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech

An investment in securities of the Company is speculative and subject to a number of risks including, without limitation, the risks discussed under the heading "Risk Factors" on pages 31 to 44 of the Company's Annual Information Form dated April 4, 2022, a copy of which is available under the Company’s System for Electronic Document Analysis and Retrieval (SEDAR) profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

In connection with the forward-looking information and forward-looking statements contained in this MD&A, the Company has made certain assumptions, including, but not limited to:

•the Company will be able to successfully consolidate acquired businesses with the Company's existing operations;

•the Company will be able to incorporate acquired technologies into its AssetCare platform;

•the Company will be able to realize synergies with acquired businesses;

•the customers of any acquired businesses will remain customers of the Company following the completion of an acquisition;

•the Company will continue to comply with regulatory requirements;

•the Company will have sufficient working capital and will, if necessary, be able to secure additional funding necessary for the continued operation and development of its business;

•wide-spread acceptance of the use of AI and the other technologies that the Company integrates into its product and services;

•no significant changes to the Company's effective tax rate, recurring revenue, and number of shares outstanding;

•the Company will be able to scale its services and reach all potential markets;

•the estimated number of connected commercial buildings and industrial sites the Company can service is accurate;

•the Company will be able to develop its technologies and leverage certain partnerships to meet its clients' rapidly developing ESG needs and goals;

•the Company's continued compliance with third party intellectual property rights

•key personnel will continue their employment with the Company, and the Company will be able to obtain and retain additional qualified personnel, as needed, in a timely and cost-efficient manner;

•the effects of competition in the industry;

•currency exchange rates and interest rates;

•the stability of general economic and market conditions; and

•general economic conditions and global events, including the ongoing impact of COVID-19.

Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this MD&A are made as of the date of this MD&A. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

40 | Management's Discussion and Analysis mCloud Technologies Corp. mCloud Technologies Corp. mCloud Tech