Ontario Commission des 22^nd Floor 22e étage

Securities valeurs mobilières 20 Queen Street West 20, rue queen ouest

Commission de l’Ontario Toronto ON M5H 3S8 Toronto ON M5H 3S8

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

Brattle Street Investment Corp. (the Filer)

Decision

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the requirement in National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) that financial statements required to be audited must be accompanied by an auditor’s report that expresses an unmodified opinion does not apply to the auditor’s report that accompanies the audited statement of financial position of South Dakota Partners, Inc. (the Target) as at January 1, 2018, and the audited financial statements as at December 31, 2018 and for the year then ended (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 and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

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

1. The Filer was originally incorporated on September 17, 2013 under the Canada Business Corporations Act. On July 7, 2015, the Filer completed a triangular amalgamation and then immediately continued into British Columbia and completed a vertical short form amalgamation under the Business Corporations Act (British Columbia).

2. The Target was incorporated under the laws of the State of South Dakota on April 8, 2016.

3. The Target is a contract manufacturer specializing in the manufacture of medical devices and other products. The Target’s business is not seasonal.

4. The Target’s fiscal year end is December 31.

5. The Filer is a “reporting issuer” in the Provinces of British Columbia, Alberta and Ontario. The common shares of the Filer are listed for trading on the TSX Venture Exchange (the TSXV) under the symbol “BRTL”.

6. Neither the Filer nor the Target are in default of securities legislation in any jurisdiction of Canada.

7. The Target has never been a “reporting issuer” in any jurisdiction of Canada and its common stock is not listed on any stock exchange or posted for trading on any quotation system.

9. Upon completion of the Acquisition, the Target will be an indirect subsidiary of the Filer and the Filer will carry on the business of the Target.

10. The Acquisition will constitute a “change of business” as defined in Policy 5.2 - Changes of Business and Reverse Takeovers of the TSXV.

11. The completion of the Acquisition is subject to, among other things, the approval of the TSXV, which is expected to include a requirement for shareholders of the Filer to approve the Acquisition.

12. In connection with the Acquisition, the Filer will file an information circular (the Information Circular) prepared pursuant to TSXV Form 3D1 Information Required in an Information Circular for a Reverse Take-Over or Change of Business (Form 3D1) with the TSXV and on SEDAR and will deliver it to shareholders of the Filer.

13. Item 14.2 of Form 51-102F5 Information Circular (51-102F5) requires that the disclosure for the Target must be described in the form of prospectus that the Target would be eligible to use immediately prior to the sending and filing of the Information Circular.

14. The applicable form of prospectus for the Target is Form 41-101F1 Information Required in a Prospectus.

15. The Information Circular will include (i) the audited statement of financial position as at January 1, 2018 (ii) audited annual financial statements for the Target as at December 31, 2019 and December 31, 2018 and for the years then ended, and (ii) reviewed interim financial statements for the Target for the three and nine month periods ended September 30, 2020.

16. SRCO Professional Corporation, Chartered Accountants (the Auditors), were not appointed as auditors of the Target until September 2020 and were not able to observe the counting of physical inventories of the Target as at any of January 1, 2018, December 31, 2018 and December 31, 2019; however, by applying alternative procedures, the Auditors were able to obtain sufficient and appropriate audit evidence regarding inventory balances as at December 31, 2018 and December 31, 2019.

17. Since opening inventories enter into the determination of financial performance and cash flows, the Auditors were unable to determine whether any adjustments to the consolidated financial performance and consolidated cash flows might be necessary for the year ended December 31, 2018.

18. As a result, the Auditors expressed a modified opinion relating to inventory on the Target’s statement of financial position as at January 1, 2018 and on the financial performance and cash flows for the year ended December 31, 2018 (the Inventory Qualification).

19. Section 47.4 of Form 3D1 requires that the financial statements of the Target included in the Information Circular be accompanied by an auditor’s report without a reservation of opinion.

20. A modified opinion is contrary to subsection 3.3(1) of NI 52-107.

21. Subsection 5.8(2) of Companion Policy 41-101CP to National Instrument 41-101 General Prospectus Requirements contemplates that relief may be granted to non-reporting issuers in appropriate circumstances to permit the auditor’s report on financial statements to contain a qualified opinion relating to opening inventory if there is a subsequent audited period of at least six months on which the auditor’s report expresses an unmodified opinion and the business is not seasonal.

22. Due to the Inventory Qualification, the Filer will not be able to obtain TSXV approval of the Acquisition or comply with the requirements of 51-102F5 unless the Exemption Sought is granted.

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:

(a) the Target includes in the Information Circular the audited annual financial statements of the Target as at December 31, 2019 and for the year then ended that express an unmodified audit opinion;

(b) the Target includes in the Information Circular the reviewed interim financial statements for the Target for the three and nine month periods ended September 30, 2020; and

(c) the only modification in the Auditor’s report on the audited statement of financial position as at January 1, 2018 and the audited annual financial statements of the Target as at December 31, 2018 and for the year then ended is the Inventory Qualification.

“Cameron McInnis”

Cameron McInnis, Chief Accountant

Ontario Securities Commission

Brattle Street Investment Corp. (Re), 2021 CanLII 9147

Case Summary

(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.

2. The Target was incorporated under the laws of the State of South Dakota on April 8, 2016.

3. The Target is a contract manufacturer specializing in the manufacture of medical devices and other products. The Target’s business is not seasonal.

4. The Target’s fiscal year end is December 31.

5. The Filer is a “reporting issuer” in the Provinces of British Columbia, Alberta and Ontario. The common shares of the Filer are listed for trading on the TSX Venture Exchange (the TSXV) under the symbol “BRTL”.

6. Neither the Filer nor the Target are in default of securities legislation in any jurisdiction of Canada.

7. The Target has never been a “reporting issuer” in any jurisdiction of Canada and its common stock is not listed on any stock exchange or posted for trading on any quotation system.

9. Upon completion of the Acquisition, the Target will be an indirect subsidiary of the Filer and the Filer will carry on the business of the Target.

10. The Acquisition will constitute a “change of business” as defined in Policy 5.2 - Changes of Business and Reverse Takeovers of the TSXV.

11. The completion of the Acquisition is subject to, among other things, the approval of the TSXV, which is expected to include a requirement for shareholders of the Filer to approve the Acquisition.

13. Item 14.2 of Form 51-102F5 Information Circular (51-102F5) requires that the disclosure for the Target must be described in the form of prospectus that the Target would be eligible to use immediately prior to the sending and filing of the Information Circular.

14. The applicable form of prospectus for the Target is Form 41-101F1 Information Required in a Prospectus.

17. Since opening inventories enter into the determination of financial performance and cash flows, the Auditors were unable to determine whether any adjustments to the consolidated financial performance and consolidated cash flows might be necessary for the year ended December 31, 2018.

18. As a result, the Auditors expressed a modified opinion relating to inventory on the Target’s statement of financial position as at January 1, 2018 and on the financial performance and cash flows for the year ended December 31, 2018 (the Inventory Qualification).

19. Section 47.4 of Form 3D1 requires that the financial statements of the Target included in the Information Circular be accompanied by an auditor’s report without a reservation of opinion.

20. A modified opinion is contrary to subsection 3.3(1) of NI 52-107.

22. Due to the Inventory Qualification, the Filer will not be able to obtain TSXV approval of the Acquisition or comply with the requirements of 51-102F5 unless the Exemption Sought is granted.

(a) the Target includes in the Information Circular the audited annual financial statements of the Target as at December 31, 2019 and for the year then ended that express an unmodified audit opinion;

(b) the Target includes in the Information Circular the reviewed interim financial statements for the Target for the three and nine month periods ended September 30, 2020; and

(c) the only modification in the Auditor’s report on the audited statement of financial position as at January 1, 2018 and the audited annual financial statements of the Target as at December 31, 2018 and for the year then ended is the Inventory Qualification.