TUP Capital and Piped Vault Announce Proposed Qualifying Transaction

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OTTAWA, ON / ACCESSWIRE / October 1, 2024 / TUP Capital Inc. (TSXV:TUP.P) ("TUP") and PIPED Vault Inc. ("PIPED" and together with TUP, the "Parties") are pleased to announce the signing of a letter of intent dated effective October 1, 2024 (the "LOI") pursuant to which TUP has agreed to acquire all of the issued and outstanding securities of PIPED (each, a "PIPED Security") in exchange for the issuance of securities of TUP (the "Transaction").

The Transaction will result in a reverse takeover of TUP by PIPED and will constitute TUP's "Qualifying Transaction" as defined in the policies of the TSX Venture Exchange (the "Exchange"). TUP and PIPED are at arm's length and the Transaction will not be a non-arm's length transaction under the policies of the Exchange. On closing of the Transaction (the "Closing"), it is expected that TUP (being, following the Closing, the "Resulting Issuer") will be listed as a Tier 2 Technology Issuer on the Exchange, and its business will be that of PIPED.

About TUP
TUP is a Capital Pool Company (as defined in the policies of the Exchange) led by Paul Barbeau (Chief Executive Officer) and David Chow (Chief Financial Officer). Its principal business activity is to identify and evaluate opportunities to acquire assets or a business. Incorporated in 2020 under the laws of the Province of British Columbia, TUP is a reporting issuer in the Provinces of British Columbia, Alberta and Ontario. Its common shares (each, a "TUP Share") are listed for trading on the Exchange under the symbol "TUP.P".

About PIPED
PIPED, based in Ottawa, Ontario, was incorporated under the CanadaBusiness Corporations Act on May 18, 2021. It is a leading provider of identity verification and secure electronic documents services that develops software solutions for the fast-growing identity verification market. Its portfolio entities include ClearNeed Information Systems Inc., Reliability Screening Solutions Inc. and Orenex Inc., which have a wide network of affiliates using Electronic Fingerprint Capture Device (EFCD) systems. PIPED prioritizes instilling confidence in employees, volunteers and customers by ensuring the authenticity of their identities, which is foundational for organizations. As a consolidator of technology companies, PIPED specializes in serving public and private sectors engaged in personal information protection and electronic documents. PIPED acquires, manages and builds industry-specific software businesses to address the unique needs of its customers, solidifying its position as a trusted leader in the industry.

Terms of the Transaction
The Transaction is expected to proceed by way of an amalgamation, share exchange or such other structure as may be determined by the Parties. As contemplated in the LOI, at Closing, TUP will issue such number of TUP Shares to the holders of the PIPED Securities as have an aggregate value of approximately $10.7 million, based on a deemed price of $0.10 per TUP Share, or such other deemed price per share as may be determined by the Parties.

Completion of the Transaction will be subject to various conditions, including: the Parties entering into a definitive agreement with respect to the Transaction; the Parties obtaining all required directors', shareholders', regulatory and third-party consents for the Transaction, including the conditional approval of the Exchange; completion of the Concurrent Financing (as defined below); and compliance with applicable listing requirements of the Exchange.In connection with the Transaction,TUP has entered into a finder's fee agreement dated June 20, 2024 with iA Capital Markets (a division of iA Private Wealth Inc.), an arm's length finder (the "Finder"), pursuant to which TUP has agreed to pay $100,000 plus applicable taxes in cash to the Finder upon successful completion of the Transaction, subject to the satisfaction of certain conditions and the approval of the Exchange.

As the Transaction is not a non-arm's length transaction under the policies of the Exchange, TUP is not required to obtain shareholder approval for the Transaction. However, TUP intends to hold a special meeting of shareholders to approve certain matters ancillary to the Transaction, which may include, among other things: the adoption of a new omnibus equity incentive plan and amendments to TUP's articles to include advance notice provisions with respect to the nominations of directors.

Upon completion of the Transaction, PIPED will become a wholly-owned subsidiary of the Resulting Issuer, and the Resulting Issuer will change its name to "PIPED Inc." or such other name as may be determined by TUP and PIPED (the "Name Change"), and will continue with the business of PIPED.

The final structure of the Transaction, including any internal reorganization required by PIPED, will be determined after the Parties have considered applicable tax, securities and accounting matters.

Proposed Concurrent Financing
Prior to the Closing, TUP is expected to undertake a concurrent financing for aggregate gross proceeds of a minimum of $500,000 and a maximum of $2,000,000 (the "Concurrent Financing"), or such other amount as may be determined by the Parties, on terms to be determined in the context of the market. Additional information with respect to the Concurrent Financing will be disclosed in a subsequent news release.

Management, Directors and Insiders of the Resulting Issuer
At the Closing, it is anticipated that the officers of TUP will be comprised of Greg Wilson and such other persons as may be determined by the Parties, and that the board of directors of the Resulting Issuer will consist of at least five directors, one of whom will be nominated by PIPED, one of whom will be selected by PIPED from the current TUP board of directors, and three of whom will be mutually agreed upon by the Parties. It is expected that G.B. Wilson Enterprises Ltd., a corporation existing under the Canada Business Corporations Act and controlled by Mr. Wilson, will hold a controlling interest in the Resulting Issuer following the Closing.

A biography for Mr. Wilson is set out below. Information regarding other anticipated directors, officers and insiders of the Resulting Issuer will be disclosed in subsequent news releases.

Greg Wilson - Chief Executive Officer
Greg Wilson of Ottawa, Ontario has been the Chief Executive Officer of PIPED since its formation in May 2021, and CEO of its affiliates, Reliability Screening Solutions Inc. since 2009, and Orenex Inc. since 2001, building a solid foundation in the identity verification and information security market. With extensive experience across industries, Greg has led impactful initiatives at companies such as Saint John Shipbuilding Ltd. and Amherst Aerospace (now IMP Group), where his focus on productivity improvement contributed to substantial performance gains. At technology firms including Imagis Technologies Inc. and xwave Solutions Inc. (now part of Bell Canada), Greg developed high level strategies to position these companies for growth and market leadership. His work has consistently centered around operational efficiency and building strong client relationships and long-term supply agreements. Greg holds a Master of Engineering (M.Eng.) and a Bachelor of Engineering (B.Eng.) in Electrical Engineering from McMaster University. He is a registered Professional Engineer (P.Eng.) and a Notary Public in the Province of Ontario.

Sponsorship
The Transaction will be subject to the sponsorship requirements of the Exchange unless a waiver or exemption from the sponsorship requirement is available. If required, a sponsor will be identified at a later date and will be announced in a subsequent news release. TUP intends to apply for a waiver of the sponsorship requirement in connection with the Transaction.

Trading in TUP Shares
Trading in TUP Shares on the Exchange has been halted in compliance with the policies of the Exchange in connection with the announcement of the proposed Transaction and is expected to remain halted pending the review of the proposed Transaction by the Exchange, and satisfaction of the conditions of the Exchange for resumption of trading. It is not expected that trading in the TUP Shares will resume prior to the Closing.

Resale Restrictions
All of the securities to be issued under the Concurrent Financing will be subject to a statutory hold period of four months and one day from the closing of the Concurrent Financing under applicable Canadian securities laws and may be subject to additional resale restrictions under applicable securities laws of other jurisdictions, including the United States. In addition, certain of the TUP Shares to be issued to holders of PIPED Securities pursuant to the Transaction will be subject to escrow or other resale restrictions under applicable securities laws or the policies of the Exchange.

None of the securities to be issued in connection with the Transaction or the Concurrent Financing will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws, and may not be offered or sold within the United States or to any U.S. Person (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where such offer or solicitation would be unlawful, including the United States.

Further Information
A summary of significant financial information with respect to PIPED, as well as further details about the proposed Transaction, the Concurrent Financing, and the expected directors, officers and other insiders of the Resulting Issuer following the Closing, will be included in subsequent news releases.

Further details about the Resulting Issuer will be provided in the disclosure document to be prepared and filed in connection with the Transaction. Investors are cautioned that, except as disclosed in such disclosure document, any information released with respect to the Transaction may not be accurate or complete and should not be relied upon.

All information in this news release concerning TUP and PIPED, as applicable, was supplied by management of such party and has not been independently verified by the other party.

The Company also confirms that its previously announced letter of intent with respect to a proposed Qualifying Transaction with Orthoforge Inc. was terminated in accordance with its terms.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of TUP should be considered highly speculative.

The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

For further information, please contact:

TUP Capital Inc.
Paul Barbeau, Chief Executive Officer
Phone: 613.218.5319
Email: paul@npn.ca

PIPED Vault Inc.
Greg Wilson, Chief Executive Officer
Phone: 613.859.4734
Email: greg@pipedvault.com

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements are statements other than statements of historical fact that can be identified by phrases such as "expects", "anticipates", "intends", "aims", "plans" and "believes", and are based on expectations, estimates and projections as at the date of this news release. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the proposed terms of the Transaction, the definitive agreement and the Concurrent Financing; the expected directors and officers of the Resulting Issuer; and the business of PIPED. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; failure to enter into a definitive agreement with respect to the Transaction; failure to complete the Concurrent Financing; failure of the Exchange to approve the Transaction; that factors may occur which impede PIPED's future business plans; the results of continued development, marketing and sales; and other factors beyond the control of TUP and PIPED. 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. Accordingly, readers should not place undue reliance on forward-looking statements. TUP disclaims any intention or obligation to update or revise any forward-looking statements in this news release, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: TUP Capital Inc.