Securities Law & Instruments

Headnote

Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the British Columbia Business Corporations Act.

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Ont. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF R.R.O. 1990, REGULATION 289/00, AS AMENDED (the "Regulation") MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO), R.S.O. 1990, c. B.16, AS AMENDED (the "OBCA") AND IN THE MATTER OF 22 CAPITAL CORP.

CONSENT (Subsection 4(b) of the Regulation)

UPON the application (the "Application") of 22 Capital Corp. (the "Applicant") to the Ontario Securities Commission (the "Commission") requesting the consent of the Commission, pursuant to subsection 4(b) of the Regulation, for the Applicant to continue in another jurisdiction pursuant to section 181 of the OBCA;

AND UPON considering the Application and the recommendation of the staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was incorporated by way of articles of incorporation under the OBCA on January 4, 2017.

2. The Applicant's head office is located at 82 Richmond St. East, 1st floor, Toronto, ON M5C 1P1.

3. The authorized capital of the Applicant consists of an unlimited number of common shares (the "Common Shares") of which 10,140,000 were issued and outstanding as of October 16, 2017.

4. The Applicant's shares are listed and posted for trading on the TSX Venture Exchange under the symbol LFC.P. The Applicant does not have any of its securities listed on any other exchange.

5. The Applicant intends to apply (the "Application for Continuance") to the Director of the OBCA for authorization to continue under the British Columbia Business Corporations Act, S.B.C. 2002, c.57 (the "BCBCA") pursuant to section 181 of the OBCA (the "Continuance").

6. Pursuant to subsection 4(b) of the Regulation, the Application for Continuance must, in the case of an "offering corporation" (as that term is defined in the OBCA), be accompanied by a consent from the Commission.

7. The Applicant is an "offering corporation" under the OBCA and is a reporting issuer under the Securities Act, R.S.O. 1990, c. S.5, as amended (the "Act") and the securities legislation of each of the provinces of British Columbia and Alberta (the "Legislation").

8. The Applicant intends to remain a reporting issuer under the Act and the Legislation after the Continuance.

9. The Applicant is not in default of any of the provisions of the OBCA, the Act or the Legislation, including any of the regulations or rules made thereunder.

10. The Applicant is not a party to any proceeding or, to the best of its knowledge, information and belief, pending proceeding under the OBCA, the Act or the Legislation.

11. A summary of the material provisions respecting the proposed Continuance was provided to the shareholders of the Applicant in the management information circular of the Applicant dated September 8, 2017 (the "Circular") in respect of the Applicant's special meeting of shareholders which was held on October 16, 2017 (the "Meeting"). The Circular includes full disclosure of the reasons for, and the implications of, the Continuance and a summary of the material differences between the OBCA and the BCBCA. The proposed articles of the continued corporation were also described in the Circular, and a copy was made available to the Shareholders at the Meeting. The Circular was mailed on September 22, 2017 to shareholders of record at the close of business on September 8, 2017 and was filed on the System for Electronic Document Analysis and Retrieval.

12. In accordance with the OBCA and the Applicant's constating documents, the special resolution of the shareholders (the "Continuance Resolution") to be obtained at the Meeting in connection with the proposed Continuance required the approval of not less than two-thirds of the aggregate votes cast by the shareholders present in person or represented by proxy at the Meeting. Each shareholder was entitled to one vote for each Common Share held.

13. Pursuant to section 185 of the OBCA, all shareholders of record as of the record date for the Meeting had the right to dissent in connection with the Continuance Resolution. The Circular advised the shareholders of their dissent rights in accordance with applicable law.

14. The Continuance resolution was approved at the Meeting by 100% of the votes cast by the shareholders of the Applicant. None of the shareholders of the Applicant exercised dissent rights pursuant to section 185 of the OBCA.

15. The qualifying transaction will be carried out in accordance with the terms and conditions of a share exchange agreement between the Applicant and nDivision Inc. ("nDivision"), pursuant to which the Applicant will acquire all of the issued and outstanding shares of nDivision Shares in exchange for the issuance of consolidated shares and restricted shares of the Applicant. In addition to the approval of the Continuance resolution, shareholders of the Applicant approved the following items of business at the Meeting in connection with the proposed qualifying transaction: (i) an amendment to the Applicant's articles of incorporation to effect a consolidation of the common shares of the Applicant on the basis of 0.416666667 of one common share for one (1) post-consolidation common share; (ii) a change of the name of the Applicant from "22 Capital Corp." to "nDivision Technology Group Inc."; (iii) the creation of a new class of convertible restricted voting shares; and (iv) the election of eight (8) new directors to replace the current directors of the Applicant immediately following the proposed reverse take-over of the Applicant by nDivision. The Registrar of Companies, British Columbia has granted the Applicant the reservation for the name change to "nDivision Technology Group Inc.".

16. The Applicant is of the view that it would be appropriate to continue the corporation as a British Columbia company considering the international nature of the resulting issuer's management, shareholder base and operations. The Continuance will provide the Applicant with more flexibility as there are no residency requirements for the directors of a company existing under the BCBCA.

17. Following the Continuance, the Applicant intends to remain a reporting issuer in Ontario and in each of the other jurisdictions where it is currently a reporting issuer. Ontario is currently the Applicant's principal regulator and will remain its principal regulator following the Continuance.

18. The material rights, duties and obligations of a corporation governed by the BCBCA are substantially similar to those of a corporation governed by the OBCA.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest:

THE COMMISSION HEREBY CONSENTS to the continuance of the Applicant as a corporation under the BCBCA.

DATED at Toronto, Ontario this 20th day of October, 2017.

"Philip Anisman"
Commissioner
Ontario Securities Commission
 
"Deborah Leckman"
Commissioner
Ontario Securities Commission