AAJ Capital 2 Corp. Enters into Definitive Agreements with TUT Fitness Group for a Qualifying Transaction & Completes $3 Million Subscription Receipt Financing

VANCOUVER, BC, May 13, 2021 /PRNewswire/ – AAJ Capital 2 Corp. (TSXV: AAJC.P) (“AAJ2” or the “Company“), a capital pool firm is happy to announce that it has entered into definitive transaction agreements (the “Definitive Agreements“) with TUT Fitness Group Limited (“TUT“) and 1195143 B.C. Ltd. (“119BC” and along with TUT, the “TUT Fitness Group“) pursuant to which AAJ2 will purchase the entire issued and excellent securities of the TUT Fitness Group (the “Transaction“), and has closed its $3,000,000 subscription receipt financing (“Subscription Receipt Financing“), every as extra significantly described beneath. The Transaction and the Subscription Receipt Financing had been initially introduced in AAJ2’s information launch dated December 7, 2020, indicating AAJ2 and TUT had entered right into a letter of intent with respect to the Transaction.

The Transaction is topic to a variety of phrases and circumstances as set forth within the Definitive Agreements, together with (amongst different issues) the approval of the TSX Venture Exchange (the “Exchange” or the “TSXV“). Upon completion of the Transaction, TUT and 119BC will change into wholly-owned subsidiaries of the Company and AAJ2 will change its identify to “TUT Fitness Group Ltd.”, or such different identify because the events might moderately agree upon and which is suitable to the Exchange. If accomplished, the Transaction will represent the “Qualifying Transaction” of AAJ2, as such time period is outlined in Policy 2.4 of the Exchange, and the mixed entity (the “Resulting Issuer“) will proceed the enterprise of the TUT Fitness Group as a Tier 2 “know-how” issuer on the Exchange. In reference to the transaction, AAJ2 has utilized to the alternate to order GYM as the brand new ticker image.

“We are extraordinarily happy with the completion of our capital elevating aims and the signing of the definitive agreements. The significance of well being and wellness in our lives can’t be overstated and TUT Fitness is strategically positioned to change into a market chief in offering reasonably priced health options by means of its distinctive patents, manufacturing relationships, and skilled administration.” mentioned Praveen Varshney, director of AAJ2.

Robert Smith, President of TUT commented: “This is a crucial time for our enterprise,  and we’re very appreciative of the investor help we have now obtained to this point.  We are creating an entire new class of health with our patented stackable resistance band TUT PlatesTM that may change cumbersome fitness center gear and conventional metallic weights. By providing extra worth, increased efficiency and comfort in a single resolution, with over 250 workout routines, customers won’t must really feel compelled to pay extra for a number of items of kit that won’t meet all their wants.”

The Transaction

AAJ2 has entered right into a three-cornered amalgamation settlement dated April 30, 2021 (the “Amalgamation Agreement“) with TUT and 1302612 B.C. Ltd. (“130BC“), a wholly-owned subsidiary of AAJ2. Pursuant to the Amalgamation Agreement, TUT and 130BC will amalgamate and AAJ2 will purchase the entire issued and excellent securities of TUT from TUT’s securityholders. Each holder of TUT frequent shares (every, a “TUT Share“) will obtain one frequent share of the Resulting Issuer (“Resulting Issuer Share“) for every TUT Share held. All excellent convertible securities of TUT, together with TUT frequent share buy warrants and TUT inventory choices might be exchanged or changed with convertible securities of the Resulting Issuer on a one-to-one foundation and on the identical financial phrases and circumstances as beforehand issued.

The Company has additionally entered right into a share alternate settlement with 119BC and the shareholders of 119BC dated April 30, 2021 (the “Share Exchange Agreement“), pursuant to which AAJ2 will purchase the entire issued and excellent securities of 119BC from 119BC’s shareholders. Each Class A share of 119BC might be exchanged for one Resulting Issuer Share.

The Transaction is comprised of the transactions contemplated beneath each the Amalgamation Agreement and the Share Exchange Agreement and is conditional upon, amongst different issues:

  1. the representations and warranties of every of AAJ2 and TUT, as set out within the Definitive
    Agreement, being true and proper in all materials respects on the closing of the
    Transaction;
  2. the absence of any materials antagonistic change within the enterprise of every of the events;
  3. the events receiving all requisite regulatory approval, together with the approval of the
    Exchange, and any third occasion approvals and authorizations;
  4. TUT acquiring the requisite shareholder approval for the Transaction;
  5. the events acquiring requisite board approvals for the Transaction;
  6. completion by AAJ2 of a consolidation of the AAJ2 securities on a 2 for 1 foundation (the
    Consolidation“); and
  7. completion of the Subscription Receipt Financing.

Pre-Closing Capitalization of AAJ2

As of the date hereof, AAJ2’s approved share capital consists of a limiteless variety of frequent shares (“AAJ2 Common Shares“) and a limiteless variety of most popular shares within the capital of AAJ2, issuable in sequence, of which 5,150,000 AAJ2 Common Shares and no AAJ2 most popular shares are issued and excellent. In addition, AAJ2 has 515,000 inventory choices and 250,000 dealer warrants issued and excellent. Prior to the closing of the Transaction, AAJ2 will full the Consolidation. AAJ2 has additionally reserved for issuance pursuant to the Subscription Receipt Financing, 6,144,810 Resulting Issuer Shares and 6,144,810 frequent share buy warrants of the Resulting Issuer, and agreed to concern 170,800 Finder’s Warrants (as outlined beneath beneath Closing of Subscription Receipt Financing) upon completion of the Transaction and launch of the escrowed proceeds of the Subscription Receipt Financing.

Pre-Closing Capitalization of TUT and 119BC

As of the date hereof, 18,870,651 TUT Shares, 3,000,000 119BC Shares, 2,755,000 inventory choices of TUT (“TUT Options“), 2,186,500 warrants to buy TUT shares and a pair of,000,000 efficiency warrants of TUT topic to sure milestone necessities are issued and excellent. No different rights to accumulate securities of TUT or 119BC exist.

Capitalization of the Resulting Issuer

Following the completion of the Consolidation and the Transaction and conversion of the Subscription Receipts, the Resulting Issuer can have 30,590,461 Resulting Issuer Shares issued and excellent in addition to 3,012,500 choices excellent to accumulate Resulting Issuer Shares and 10,627,110 frequent share buy warrants excellent.

The Transaction will represent an arm’s-length transaction, and as such, the enterprise mixture won’t require approval by the shareholders of AAJ2. AAJ2 is making ready and can submit a submitting assertion in reference to the Transaction in the end.

Closing of Subscription Receipt Financing

On May 11, 2021, the Company closed a non-brokered personal placement of 6,144,810 subscription receipts (the “Subscription Receipts“) at a worth of $0.50 per Subscription Receipt for gross proceeds of $3,072,405 (the “Subscription Receipt Financing”). The proceeds of the Subscription Receipt Financing might be held in escrow pending the satisfaction of sure launch circumstances (“Escrow Release“) set out in a subscription receipt settlement (the “Subscription Receipt Agreement“) between AAJ2, TUT and Computershare Trust Company of Canada. Conditions of Escrow Release embody, amongst different issues, all circumstances precedent to the Transaction set out within the Definitive Agreements being glad or waived and conditional approval of the Exchange of the Transaction because the Company’s Qualifying Transaction.

Each Subscription Receipt will, upon Escrow Release, with no further consideration payable or motion required by the Subscription Receipt holders, routinely convert into one Resulting Issuer Share and one Resulting Issuer frequent share buy warrant (every a “Financing Warrant“), with every Financing Warrant exercisable right into a Resulting Issuer Share at an train worth of $1.00 for a interval of twenty-four months from Escrow Release.

Finder’s Fees

In reference to the Subscription Receipt Financing, the Company has agreed to pay finder’s charges upon Escrow Release. The finder’s charges encompass an mixture of $85,400 in money funds and issuance of an mixture of 170,800 finder’s warrants (the “Finder’s Warrants“) to eligible finders. Each Finder’s Warrant entitles the holder thereof to accumulate one Resulting Issuer Share at an train worth of $0.50 for a interval of twelve months from Escrow Release.

In accordance with relevant securities legal guidelines, the Subscription Receipts, the Finder’s Warrants and the Resulting Issuer Shares issuable upon conversion of the Subscription Receipts and train of the Financing Warrants and the Finder’s Warrants, are topic to a maintain interval till the date that’s 4 months and a day after May 11, 2021. If the escrow launch circumstances should not accomplished on or earlier than September 30, 2021, the proceeds of the Financing might be returned to the subscribers.

TUT Financings

In addition to the Company’s $3,072,405 Subscription Receipt Financing, TUT has undertaken numerous rounds of financing (the “TUT Financings“), elevating an mixture of $1,674,980 since December 2020, together with $200,175 raised by means of FrontFundr, a number one on-line personal markets investing platform and an exempt market supplier inside Canada. The Subscription Receipt Financing and the TUT Financings have raised whole gross proceeds of $4,747,385 raised previous to the Qualifying Transaction.

It is anticipated that the proceeds of the Subscription Receipt Financing and the TUT Financings might be used for the TUT Fitness Group’s ongoing enterprise and towards the remaining prices of finishing the Qualifying Transaction.

TUT and its Business

TUT Fitness Group is a personal British Columbia based mostly health firm that has designed, developed and manufactured one of many world’s smallest and most reasonably priced excessive efficiency gyms. Incorporated in 2018, TUT is an rising participant within the linked Home Gym and Fit Tech {hardware} area, concentrating on the US$9.4B1 Global Home Exercise Equipment Market with a novel, transportable strategy to incorporate Time Under Tension (the period of time a muscle is beneath pressure throughout a repetition). The TUT system makes use of industry-first, patented stackable resistance band based mostly TUT PlatesTM in 2, 5, 10, 20, & 40 lb. increments somewhat than metallic weights, a breakthrough in energy and cardio coaching, that targets each muscle group, and generates the next caloric burn, with out the added strain to joints and tendons. At a mixed 32 lbs., TUT’s flagship merchandise, the TUT TrainerTM and Rower are extra handy and reasonably priced than different main residence fitness center and cardio gear merchandise. The TUT TrainingTM app targets the Online Fitness Market, anticipated to be US$30B2 by 2026, by offering customers and trainers with a digital connection to on-demand coaching movies and health associated coaching content material. The App seamlessly integrates with Apple Watch/Healthkit, Fitbit, Withings, My Fitness Pal.

See www.TUTFitnessGroup.com or our social channels:Instagram, Facebook, Twitter, LinkedIn, YouTube (TUT Highlights) for extra info.

The following abstract monetary info is derived from the unaudited monetary statements of TUT for the 6 months interval ended March 31, 2021, the yr ended September 30, 2020 and the interval from October 3, 2018 to September 30, 2019:

TUT Fitness Group Ltd.

 

(Statement of Income and Comprehensive Loss)

 


(Unaudited)

(USD)

6 months ended

March 31, 2021         

Year ended

September 30,
2020

Period from
October

3, 2018
(incorporation

date) to
September

30, 2019

Sales

21,508

29,138

30,297

Cost of Goods Sold

(18,820)

(4,055)

(4,511)

Total Operating Expenses

275,264

102,842

164,151

Net Comprehensive Loss for the Period

(272,576)

(77,759)

(152,687)

TUT Fitness Group Ltd.

 

(Balance Sheet)

 


(Unaudited)

(USD)                                                                         

As at

March 31, 2021         

As at
September 30,
2020

As at
September 30, 
2019
                 

Current Assets

839,437

14,825

12,538

Total Assets

933,885

99,153

61,047

Current Liabilities

169,475

334,879

219,015

Total Liabilities

169,475

334,879

219,015

Shareholders’ Equity (deficit)

764,410

(235,726)

(157,967)

Proposed Management of the Resulting Issuer

Subject to Exchange approval, on completion of the Transaction, it’s presently anticipated that the administration crew of the Resulting Issuer might be comprised of Aaron Fader (CEO), Robert Smith (President), Praveen Varshney (CFO), Satnam Brar (Corporate Secretary) and Mitch Malandrino (VP, Corporate Development). The board of administrators of the Resulting Issuer will encompass a minimal of 4 (4) administrators. Information with respect to sure of the proposed administrators and officers of the Resulting Issuer is ready forth beneath:

Aaron Fader, Founder, CEO & Director

Mr. Fader is the founder, chief government officer and a director of TUT. As founder and CEO of each personal and public firms, Mr. Fader is a serial entrepreneur with over 30 years of expertise in new enterprise improvement, new product improvement and worldwide distribution. Over the years, Mr. Fader’s firms have produced award-winning, market-changing improvements which can be distributed worldwide.

Robert Smith, President & Director

Mr. Smith is presently the president of TUT and has been an investor and adviser to technology-related and growth-related companies for the previous 25 years. He brings a singular perspective within the areas of financing, enterprise improvement and model positioning, and has been a director of each personal and public firms. Currently, he’s a founding accomplice in Sociable Ventures, a Vancouver-based boutique enterprise capital agency, and an adviser to NEXE Innovations Inc.

Praveen Varshney, CFO & Director

Mr. Varshney is presently a director of AAJ2. Mr. Varshney brings over 30 years of expertise in enterprise capital, technique, service provider banking, and, since 1991, in mergers and acquisitions as a director for Varshney Capital Corp. He has intensive expertise serving as a director for private and non-private firms similar to MOGO (Toronto Stock Exchange) and Carmanah Technologies, which turned Canada’s largest photo voltaic firm. He can also be a co-founder, investor or adviser to a variety of different social impression companies, like Little Kitchen Academy.

Mervyn Pinto, Independent Director

Mr. Pinto is presently the president and CEO of Minaean SP Construction Corp. (TSXV) and Mojave Brands Inc. (CSE). He has been a director and government officer of assorted publicly traded firms together with Kepler Acquisition Corp., which later accomplished its qualifying transaction with ESE Entertainment Inc.

Satnam Singh Brar, Corporate Secretary

Mr. Brar is presently the company secretary of AAJ2. He is an affiliate at Varshney Capital Corp. and Humanitas Capital, a social-impact enterprise capital agency that appears to deal with international systematic points by means of the appliance of Smart Planet applied sciences. Mr. Brar has a bachelor of commerce diploma with a specialization in actual property (honours) from the University of British Columbia. He additionally presently serves as a director of Mojave Brands Inc. (CSE).

Mitchell Malandrino, VP, Corporate Development

Mr. Malandrino is presently the vice-president of company improvement of AAJ2. He heads up the enterprise crew because the account supervisor for Trainerize, one of many world’s main health software program firms, generally known as a digital engagement health app for unbiased trainers and enormous enterprise clients. Mr. Malandrino can also be the previous basic supervisor of Innovative Fitness, one among Canada’s largest networks of private coaching studios.

See AAJ2’s information releases dated December 7, 2020, January 7, 2021 and January 20, 2021 for extra details about the Transaction, TUT and its enterprise. AAJ2 and TUT will concern further information releases associated to the Transaction, further unbiased administrators of the Resulting Issuer and different materials info because it turns into accessible. There might be no assurance that the Transaction might be accomplished as proposed or in any respect.

Trading within the shares of AAJ2 is presently halted. The shares of AAJ2 will stay halted till the Transaction is accomplished and authorised by the Exchange.

Contact Information:

Rob Smith
President & Director
TUT Fitness Group
Email: [email protected]

This information launch doesn’t represent a suggestion to promote or a solicitation of a suggestion to purchase any of the securities described herein in the United States. The securities described herein haven’t been registered beneath the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities legislation and will not be supplied or offered in the “United States“, as such time period is outlined in Regulation S promulgated beneath the U.S. Securities Act, until registered beneath the U.S. Securities Act and relevant state securities legal guidelines or an exemption from such registration necessities is accessible.

Completion of the Transaction is topic to a variety of circumstances, together with however not restricted to, Exchange acceptance and, if relevant, pursuant to the necessities of the Exchange, shareholder approval. There might be no assurance that the Transaction might be accomplished as proposed or in any respect.

Investors are cautioned that, besides as disclosed within the submitting assertion to be ready in reference to the Transaction, any info launched or obtained with respect to the Transaction will not be correct or full and shouldn’t be relied upon. Trading within the securities of a capital pool firm must be thought of extremely speculative.

All info on this information launch regarding TUT Fitness Group has been offered for inclusion herein by TUT. Although AAJ2 has no information that will point out that any info contained herein regarding TUT Fitness Group is unfaithful or incomplete, AAJ2 assumes no duty for the accuracy or completeness of any such info.

The Exchange has under no circumstances handed upon the deserves of the proposed Transaction and has neither authorised nor disapproved the contents of this information launch.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that time period is outlined within the insurance policies of the TSX Venture Exchange) accepts duty for the adequacy or accuracy of this launch.

Forward-Looking Statements

Certain statements on this launch are forward-looking statements or info, which embody completion of the proposed Transaction and associated financing, improvement of applied sciences, future plans, regulatory approvals and different issues. Forward-looking statements encompass statements that aren’t purely historic, together with any statements concerning beliefs, plans, expectations or intentions concerning the long run. Such info can usually be recognized by means of forwarding-looking wording similar to “might”, “count on”, “estimate”, “anticipate”, “intend”, “imagine” and “proceed” or the unfavourable thereof or comparable variations. The reader is cautioned that assumptions used within the preparation of any forward-looking info might show to be incorrect. Events or circumstances might trigger precise outcomes to vary materially from these predicted, because of quite a few recognized and unknown dangers, uncertainties, and different elements, a lot of that are past the management of the Company, together with however not restricted to, enterprise, financial and capital market circumstances, the power to handle working bills, safety threats, and dependence on key personnel. Such statements and data are based mostly on quite a few assumptions concerning current and future enterprise methods and the setting during which the Company will function sooner or later, together with the demand for its merchandise, anticipated prices, and the power to attain objectives. Factors that would trigger the precise outcomes to vary materially from these in forward-looking statements embody, failure to acquire regulatory approval, the continued availability of capital and financing, gear failures, litigation, enhance in working prices, the impression of COVID-19 or different viruses and ailments on the Company’s potential to function, failure of counterparties to carry out their contractual obligations, authorities rules, lack of key workers and consultants, and basic financial, market or enterprise circumstances. Forward-looking statements contained on this information launch are expressly certified by this cautionary assertion. The reader is cautioned to not place undue reliance on any forward-looking info.

The forward-looking statements contained on this information launch are made as of the date of this information launch. Except as required by legislation, AAJ2 disclaims any intention and assumes no obligation to replace or revise any forward-looking statements, whether or not because of new info, future occasions or in any other case. Additionally, AAJ2 undertakes no obligation to touch upon the expectations of, or statements made by, third events in respect of the issues mentioned above.

SOURCE TUT Fitness Group Limited

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