County Capital 2 Ltd.

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- An issuer (a capital pool company) proposes to complete a reverse take-over transaction with a target company -- The proposed transaction, if completed, will serve as the issuer's qualifying transaction under Policy 2.4 Capital Pool Companies of the TSX Venture Exchange (TSXV) -- The issuer applied for relief from the requirements in section 4.10(2)(a)(ii) of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and Item 5.2 of Form 51-102F3 Material Change Report to file, in respect of the proposed transaction, historical audited financial statements of certain predecessor entities that are not material to the issuer. Relief granted, subject to conditions.

Applicable Legislative Provisions

National Instrument 51-102 Continuous Disclosure Obligations, s. 4.10(2)(a)(ii).

Form 51-102F3 Material Change Report, Item 5.2.

October 15, 2021

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the "Jurisdiction") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF COUNTY CAPITAL 2 LTD. (the "Filer")

DECISION

Background

The principal regulator in the Jurisdictions (as defined below) has received an application from the Filer for a decision under the securities legislation of Ontario (the "Legislation") for an exemption from the requirements in subparagraph 4.10(2)(a)(ii) of National Instrument 51-102 -- Continuous Disclosure Obligations ("NI 51-102") and item 5.2 of Form 51-102F3 Material Change Report ("51-102F3") to file all of the financial statements of a reverse takeover acquirer that would be required to be included in the form of prospectus that the reverse takeover acquirer was eligible to use prior to the reverse takeover for a distribution of securities in the Jurisdictions (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in British Columbia and Alberta,

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 51-102 have the same meanings if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filler:

1. The Filer was incorporated under the Business Corporations Act (British Columbia) on October 15, 2019. The Filer is a capital pool company whose common shares ("Shares") are listed on the TSX Venture Exchange ("TSXV"). As a result, the principal business of the Filer to date has been to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction, as that term is defined in Policy 2.4 of the TSXV Corporate Finance Manual.

2. The registered and head office of the Filer is located at 301 -- 1665 Ellis Street, Kelowna, British Columbia.

3. The Filer is a reporting issuer in each of the Jurisdictions and is not in default of securities legislation in any Jurisdiction.

4. The Shares are listed and posted for trading on the TSXV under the trading symbol "CTWO.P."

5. The Filer's financial year end is November 30.

6. Givex was incorporated on April 5, 2000 under the International Business Companies Act (Bahamas) with a head office located at 134 Peter Street, Suite 1400, Toronto, Ontario.

7. Givex is not in default of securities legislation in any jurisdiction.

8. Givex operates as a full-suite omni-channel gift card, loyalty, analytics, stored value ticketing, payments and cloud-based POS solutions provider and its principal business operations are conducted from Toronto, with services provided globally.

9. On September 7, 2021, Givex and the Filer entered into a binding qualifying transaction agreement pursuant to which the Filer will acquire all of the outstanding shares of Givex by way of a merger of Givex and a wholly-owned subsidiary of the Filer (the "Qualifying Transaction").

10. The Qualifying Transaction will be a "reverse takeover" as defined in NI 51-102 and will serve as the Filer's "Qualifying Transaction" under TSXV Policy 2.4 -- Capital Pool Companies. In connection with the Qualifying Transaction, the Filer intends to file a filing statement (the "Filing Statement") in the form of Form 3B2 Information Required in a Filing Statement for a Qualifying Transaction ("TSXV Form 3B2") pursuant to the policies of the TSXV. TSXV Form 3B2 requires disclosure of financial statements of the Filer and Givex prescribed by National Instrument 41-101 -- General Prospectus Requirements and Form 41-101F1 -- Information Required in a Prospectus ("Form 41-101F1"). In addition to applying to the principal regulator for the exemptive relief requested herein, the Filer has made application to the TSXV for a waiver from the equivalent financial statement requirements under TSXV Form 3B2.

11. On October 1, 2018, Givex acquired 100% of ValueAccess Limited ("ValueAccess") for total consideration of approximately $2.34 million.

12. ValuAccess was established in 2005 in Hong Kong and was a gift card processing company in Malaysia, Singapore, China and Hong Kong. This acquisition allowed Givex to expand into Asia Pacific markets, provide further support for its growing list of multinational clients and provide merchants with more effective localized support.

13. On June 1, 2019, Givex acquired 100% of Owen Business Services Ltd. ("OBS") for total consideration of approximately $790,000.

14. OBS has operated for over 50 years in British Columbia, Canada as a distributor and service provider of retail and hospitality POS systems and related equipment throughout Canada. This acquisition provided Givex with an upsell opportunity to OBS's Canadian client base. Givex was also able to integrate OBS's retail POS system, "eStream POS XDB" into its retail POS system to enhance functionality for Givex's customers in fashion, grocery and other retail verticals.

15. On July 1, 2019, Givex acquired 100% of Givex Mexico, S.A. de C.V. (formerly Easy Information Solutions S.A. de C.V.) ("EIS") for total consideration of approximately $860,000.

16. EIS has operated for over 20 years in Mexico as a distributor and reseller of POS, accounting and administrative systems to hotel and restaurant brands. EIS was previously renowned for its experience representing international technology brands in the Mexican market. This acquisition allowed Givex to expand into Mexico and gain access to EIS's existing customer base. This acquisition also allowed Givex to integrate into its product offerings EIS's POS system, self-service kiosks, tableside ordering tablets, online ordering platforms, kitchen management systems and gift card and loyalty programs.

17. On August 16, 2019, Givex acquired certain assets relating to giftcertificates.ca, a gift card commerce product (the "GIFTPASS Assets"), for total consideration of approximately $2.25 million.

18. Giftcertificates.ca is a product which facilitates the sale of multiple brands' gift cards and e-gift cards directly to consumers and to corporate customers. The GIFTPASS Assets, mainly consisted of a domain name, gift card inventory to a variety of brands, and customer lists. Acquiring the GIFTPASS Assets provided Givex with an additional online marketplace to expand its ability to sell gift cards.

19. On January 1, 2021, Givex acquired 100% of Givex EU (formerly PI Cash Système SARL) ("Pi Cash") for total consideration of approximately $1.8 million.

20. Pi Cash has operated for over 20 years in Switzerland as a provider of POS solutions to hotels, restaurants and retailers in Europe. This acquisition allowed Givex to strengthen its reach in Europe and provided an upsell opportunity to the Pi Cash customer base. Acquiring Pi Cash also allowed Givex to further support its existing European regional clients while strengthening its presence in France, Germany, Spain and Italy. Further, Givex was able to integrate new technology and integration expertise which will facilitate future growth of the Company.

21. With respect to reverse takeover transactions, Section 4.10(2)(a)(ii) of NI 51-102 and item 5.2 of 51-102F3 require that a reporting issuer file, within specified periods, the financial statements as prescribed by the appropriate prospectus form for the reverse takeover acquirer, being Form 41-101F1. The reverse takeover acquirer in respect of the Filer is Givex.

22. The Filing Statement will include the following Givex financial statements (the "Givex Financial Statements"):

(i) Givex's audited consolidated financial statements for the years ended December 31, 2018, 2019 and 2020; and

(ii) Givex's unaudited (but auditor reviewed) consolidated financial statements for the six months ended June 30, 2021 and 2020.

23. The Givex Financial Statements, together with the other disclosure prescribed by TSXV Form 3B2 that will be included in the Filing Statement, will provide disclosure of all material facts relating to the Filer, Givex and Givex's business and will contain sufficient information to permit investors to make a reasoned assessment of the Filer's business following completion of the Qualifying Transaction.

24. Subsection 4.10(2)(a) of NI 51-102 provides that if a reporting issuer completes a reverse takeover, it must file the following financial statements for the reverse takeover acquirer, unless the financial statements have already been filed:

(i) financial statements for all annual and interim periods ending before the date of the reverse takeover and after the date of the financial statements included in an information circular or similar document, or under item 5.2 of the Form 51-102F3 Material Change Report, prepared in connection with the transaction; or

(ii) if the reporting issuer did not file a document referred to in subparagraph (i), or the document does not include the financial statements for the reverse takeover acquirer that would be required to be included in a prospectus, the financial statements prescribed under securities legislation and described in the form of prospectus that the reverse takeover acquirer was eligible to use prior to the reverse takeover for a distribution of securities in the jurisdiction.

25. Item 5.2 of Form 51-103F3 requires a material change report filed in respect of a closing of the Qualifying Transaction to include, for each entity that results from the Qualifying Transaction, disclosure (including financial statements) prescribed under securities legislation and described in the form of prospectus that the entity would be eligible to use.

26. The financial statement requirements for a prospectus are found in NI 41-101 and Form 41-101F1. Item 32.1 of Form 41-101F1 includes the following requirements:

The financial statements of an issuer required under this item to be included in a prospectus must include:

(a) the financial statements of any predecessor entity that formed, or will form, the basis of the business of the issuer, even though the predecessor entity is, or may have been, a different legal entity, if the issuer has not existed for 3 years,

(b) the financial statements of a business or businesses acquired by the issuer within 3 years before the date of the prospectus or proposed to be acquired, if a reasonable investor reading the prospectus would regard the primary business of the issuer to be the business or businesses acquired, or proposed to be acquired, by the issuer, [emphasis added] and

(c) ...

27. Subsection 5.3(1) of the Companion Policy to NI 41-101 notes that both a reverse takeover and a qualifying transaction for a capital pool company are examples of when a reasonable investor might regard the primary business of the issuer to be the acquired business.

28. Accordingly, to the extent any of ValueAccess, OBS, EIS, the GIFTPASS Assets or PiCash are deemed to constitute the primary business of Givex, the Filing Statement would also have to include, in addition to the Givex Financial Statements, audited financial statements of each of ValueAccess, OBS, EIS, the GIFTPASS Assets and PiCash for the "stub" period from January 1, 2018 to the date of acquisition (collectively, the "Stub Period Statements").

29. Provided the Exemption Sought is granted, the Filing Statement will not include the Stub Period Statements and shall be filed forthwith following acceptance by the TSXV.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that:

1. the Filing Statement includes the Givex Financial Statements; and

2. the Filing Statement is filed on SEDAR forthwith following acceptance by the TSXV.

"Marie-France Bourret"

Manager, Corporate Finance

Ontario Securities Commission

OSC File #: 2021/0530