/NOT FOR DISTRIBUTION TO
UNITED STATES WIRE SERVICES OR
DISSEMINATION IN THE UNITED
STATES./
VANCOUVER, BC, Oct. 5, 2021
/CNW/ - TUT Fitness Group Inc. (formerly, AAJ Capital 2 Corp.) (the
"Company" or "TUT Fitness") (TSXV: GYM.P), is pleased
to announce that it has completed its previously announced
"Qualifying Transaction" pursuant to which the Company acquired all
of the issued and outstanding shares of TUT Fitness Group Limited
and 1195143 B.C. Ltd. (together, the
"TUT Group") in exchange for the issuance of common shares
of the Company ("Common Shares") pursuant to an amalgamation
and share exchange (the "Transaction").
The Transaction
The Company, TUT Fitness Group Limited and 1302612 B.C. Ltd. (a wholly-owned subsidiary of
the Company) entered into an amalgamation agreement (the
"Amalgamation Agreement") dated April
30, 2021, whereby the parties agreed to complete an
amalgamation. The Company also entered into a share exchange
agreement (the "Share Exchange Agreement") on April 30, 2021 with 1195143 B.C. Ltd and the shareholders of
1195143 B.C. Ltd. to acquire all of
the issued and outstanding shares of 1195143
B.C. Ltd in exchange for Common Shares of the Company. The
Transaction was closed on September 29,
2021 and, pursuant to the Amalgamation Agreement and Share
Exchange Agreement, shareholders of TUT Group became shareholders
of the Company, resulting in the issuance of an aggregate of
21,870,651 Common Shares in the capital of the Company at a
deemed price of $0.50 per Common
Share.
Immediately prior to closing the Transaction, the Company
undertook a share consolidation, issuing shareholders one new
Common Share for each two old Common Shares. Following the share
consolidation, completion of the Transaction and conversion of the
subscription receipts under the Concurrent Financing, the Company's
issued and outstanding share capital consists of 30,715,461 Common
Shares.
Upon completion of the Transaction, the Company completed a name
change from "AAJ Capital 2 Corp." to "TUT Fitness Group Inc.". The
Company will continue the business which was previously conducted
by the TUT Group. TUT Fitness is expected to commence trading on
the TSX Venture Exchange (the "TSXV") under the trading
symbol "GYM" on Wednesday October 6,
2021.
The Transaction was a Non Arm's Length Qualifying Transaction
under TSXV Policy 2.4 – Capital Pool Companies (the "CPC
Policy"), on the basis that a controlling shareholder of the
Company and a controlling shareholder of TUT are Associates (as
defined under the CPC Policy). The Company was therefore required
to obtain shareholder approval of the Qualifying Transaction from a
majority of disinterested shareholders. This disinterested
shareholder approval of the Transaction was obtained via written
consents on September 24, 2021.
For additional information concerning the Transaction and the
foregoing matters, please refer to the Company's filing statement
dated September 20, 2021 (the
"Filing Statement") which is available under the
Company's SEDAR profile at www.sedar.com.
The Concurrent Financing
As previously disclosed in the Company's news release of
May 13, 2021, the Company closed a
non-brokered private placement of 6,144,810 subscription receipts
on May 11, 2021 for aggregate gross
proceeds of $3,072,405 (the
"Concurrent Financing"). The gross proceeds of the
Concurrent Financing were held in escrow pending satisfaction of
certain release conditions. The escrow release conditions were
satisfied on September 29, 2021 and
proceeds of the financing were released to the Company (the
"Escrow Release"). Proceeds will be utilized to fund the
Company's business, as further described in the Filing
Statement.
Upon Escrow Release, each subscription receipt was automatically
converted into one Common Share and one Common Share purchase
warrant of the Company (a "Warrant"), with each Warrant
exercisable at a price of $1.00 for a
period of 24 months from Escrow Release. Participants in the
Concurrent Financing received an aggregate of 6,144,810 Common
Shares and 6,144,810 Warrants.
The subscription receipts issued in the Concurrent Financing
were issued subject to a four month hold period which expired on
September 12, 2021. The Common Shares
and Warrants issued upon conversion of the subscription receipts
are not subject to a hold period.
Finder's fees were paid to six finders in connection with the
Concurrent Financing. An aggregate of $85,400 was paid in cash and 170,800 finder's
warrants (the "Finder's Warrants") were issued to the
finders following Escrow Release. Each Finder's Warrant is
non-transferrable and is exercisable to purchase one Common Share
at a price of $0.50 for a period of
one year from Escrow Release. The Finder's Warrants are subject to
a hold period expiring on January 30,
2022.
Escrow Provisions
An aggregate of 10,350,000 Common Shares issued to of the former
shareholders of TUT Group are subject to escrow in accordance with
a Tier 2 Value Security escrow agreement. In addition, an aggregate
of 1,325,000 Common Shares held by principals and former principals
of the Company prior to completion of the Transaction remain
subject to escrow under a CPC escrow agreement in accordance with
the CPC Policy.
Of the Common Shares of the Company issued to the former
shareholders of TUT Group pursuant to the Transaction, an aggregate
of 17,000,000 Common Shares are subject to a voluntary pooling
agreement restricting their transfer other than in accordance with
a staggered release schedule over a five year period (the "5
Year Pooling Agreement"), and a further 4,470,301 Common Shares
are subject to a voluntary pooling agreement restricting their
transfer other than in accordance with a staggered release schedule
over a nine month period.
The Company's Filing Statement inadvertently omitted
certain disclosures with respect to the 5 Year Pooling Agreement.
The number of Common Shares subject to the 5 Year Pooling Agreement
was disclosed to be 17,250,000, but 250,000 of such shares are
subject to the CPC escrow agreement and not subject to the 5 Year
Pooling Agreement. The total number of Common Shares subject to the
5 Year Pooling Agreement is 17,000,000. Further, the Filing
Statement did not disclose the release schedule applicable to the
pooled shares under the 5 Year Pooling Agreement. Pursuant to the 5
Year Pooling Agreement, 5% of the pooled shares will be released on
the date of the TSXV bulletin relating to the Qualifying
Transaction (the "Bulletin Date"), 5% will be released 6
months following the Bulletin Date, and 10% will be released every
6 months thereafter until the date that is 60 months from the
Bulletin Date.
Management and Director Changes
Upon completion of the Transaction, former director of the
Company, Ravinder Kang, and former
director and officer of the Company, Karamveer Thakur, resigned.
The management of TUT is now comprised of: Robert Smith (Chief Executive Officer),
Aaron Fader (Chief Product Officer),
Praveen Varshney (Chief Financial
Officer and Corporate Secretary) and Mitchell Malandrino (VP, Corporate
Development).
TUT's board of directors will consist of four directors:
Robert Smith, Praveen Varshney, Satnam
Brar and Mervyn Pinto. The
Company's Filing Statement identified that Aaron Fader would also serve on the board of
Directors of the Company but due to limitations of the Company's
board size Mr. Fader has not been appointed at this time. Mr. Fader
will serve as Chief Product Officer of the Company, as disclosed in
the Filing Statement, and may in future be nominated for
appointment to the Company's board of directors if board size is
increased.
About the Company
TUT Fitness is a British
Columbia-based company that has designed, patented and
manufactured one of the world's smallest and most affordable
high-performance home gyms. TUT is an emerging player in the
connected home gym and fit tech hardware space, targeting the
$9.5-billion (U.S.) global home
exercise equipment market and on-line fitness market, expected to
be $30-billion (U.S.) by 2026. At 32
pounds, TUT's flagship products, the TUT Trainer and TUT Rower, are
lightweight and more affordable than other alternatives. TUT's
proprietary Time Under Tension technology creates more load on the
muscles than conventional training and cardio machines, while
placing less pressure on joints and tendons. The net result is a
higher caloric burn and a better workout than comparable
machines.
For more information, please contact:
TUT Fitness Group Inc.
Rob
Smith
CEO & Director
Email: robs@tutfitnessgroup.com
Cautionary Note Regarding Forward-Looking
Information
Certain information contained herein constitutes
"forward-looking information" under Canadian securities
legislation. Forward-looking information includes, but is not
limited to, statements with respect to the trading date of the
Company's common shares on the TSXV and future appointments to the
Company's board of directors. Generally, forward-looking
information can be identified by the use of forward-looking
terminology such as "will" or variations of such words and phrases
or statements that certain actions, events or results "will" occur.
Forward-looking statements are based on the opinions and estimates
of management as of the date such statements are made and they are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results to be materially different from
those expressed or implied by such forward-looking statements or
forward-looking information. There can be no assurance that such
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Readers should not place undue reliance on
forward-looking statements and forward-looking information. The
Company will not update any forward-looking statements or
forward-looking information that are incorporated by reference
herein, except as required by applicable securities laws.
Additional
information identifying risks and uncertainties is contained in filings by the
Company
with the Canadian securities regulators, which
filings are available at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE TUT Fitness Group Limited
