Aquarius AI Inc. (CNSX:AQUA) entered into a definitive agreement to acquire 70% stake in Jellyworks Inc. for CAD 3.6 million on October 5, 2022. As per deal transaction, Aquarius shall acquire a minimum of 70% stake of the issued and outstanding common shares of Jellyworks Inc. in exchange for approximately 60,565,708 common shares of Aquarius, representing approximately 33% of the Common Shares that will be issued and outstanding as of closing of the Acquisition. In connection with the completion of the Acquisition, 6,130,050 Common Shares are to be issued to Mr. Bradley, a director and Chief Executive Office of the Company, in exchange for 613,005 Jellyworks Shares held by Mr. Bradley and 5,018,940 Warrants in exchange for 501,894 Jellyworks Warrants held by Mr. Bradley, upon completion of the Acquisition and 5,443,170 Common Shares are to be issued to Mr. Woodman, a director and Executive Chair of the Company, in exchange for 544,317 Jellyworks Shares held by Mr. Woodman and 4,443,170 Warrants in exchange for 444,317 Jellyworks Warrants held by Mr. Woodman, upon completion of the Acquisition. 6,130,050 Common Shares and 5,018,940 Warrants will be issued to Mr. Bradley upon completion of the Acquisition. Prior to the completion of the Acquisition, Mr. Bradley will hold, directly or indirectly, 1,250,000 Common Shares and 875,000 Warrants, representing 1.02% of the Common Shares of the Company on an undiluted basis and 1.75% on a partially diluted basis. Upon closing of the Acquisition, Mr. Bradley will hold an aggregate of 7,380,050 Common Shares, representing 3.53% of the Common Shares of the Company on an undiluted basis and 6.19% on a partially diluted basis, upon closing of the Acquisition. 5,443,170 Common Shares and 4,443,170 Warrants will be issued to Mr. Woodman upon completion of the Acquisition. Prior to the completion of the Acquisition, Mr. Woodman will hold, directly or indirectly, 3,311,000 Common Shares and 2,150,000 Warrants, representing 2.70% of the Common Shares of the Company on an undiluted basis and 4.49% on a partially diluted basis. Upon closing of the Acquisition, Mr. Woodman is expected to hold an aggregate of 8,754,170 Common Shares and 6,593,170 Warrants, representing 4.19% of the Common Shares of the Company on an undiluted basis and 7.18% on a partially diluted basis upon closing of the Acquisition.

The closing of the Acquisition is subject to a number of conditions including the satisfactory completion of due diligence and satisfaction of other customary closing conditions. A resolution of the board of directors was passed on October 4, 2022 approving the Acquisition. No special committee was established in connection with the Acquisition, and no materially contrary view or abstention was expressed or made by any director. Mr. Woodman and Mr. Bradley reserved from voting.