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AAJ Capital 2 Corp. Completes Qualifying Transaction and Changes Name to TUT Fitness Group Inc.

V.GYM

/NOTFORDISTRIBUTIONTO 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").

AAJ CAPITAL 2 CORP. COMPLETES QUALIFYING TRANSACTION AND CHANGES NAME TO TUT FITNESS GROUP INC. (CNW Group/TUT Fitness Group Limited)

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

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/October2021/05/c7484.html



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