CarbonOne Technologies Inc.

CarbonOne Technologies Inc.

September 27, 2016 16:12 ET

CarbonOne Technologies Closes Financing for C$4.04 Million (US$3.1 Million), Acquires the TekModo Group of Companies

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 27, 2016) -


CarbonOne Technologies Inc. (TSX VENTURE:CX) ("CarbonOne" or the "Company") today announced that the Company has closed its previously announced non-brokered private placement financing ("Financing"). The Company sold 26,933,333 units ("Units") at a price of C$0.15 per Unit, for gross proceeds to the Company of C$4,040,000. Each Unit comprises one common share and one half of one transferable common share purchase warrant, with each full warrant (a "Warrant") entitling the holder to purchase one additional common share for a period of two years at an exercise price of C$0.25. CarbonOne will use reasonable commercial efforts to have the Warrants listed for trading on the TSX Venture Exchange ("TSX-V"). The shares issued in association with the Financing are subject to a standard four-month hold period expiring on January 27, 2017.

In connection with the Financing, CarbonOne paid finders fees of 6% of the gross proceeds in cash in the aggregate amount of C$136,707 and 10% in warrants in the aggregate amount of 1,518,966 finder's warrants. The finder's warrants entitle the holder to purchase one common share of CarbonOne for a period of one year at an exercise price of C$0.15.

Proceeds from the Financing will be used to fund the costs associated with the Acquisition (defined below), and to advance the business of TekModo Industries Inc.

Concurrently with completion of the Financing, CarbonOne has acquired the TekModo group of companies ("Acquisition"). As described in CarbonOne's press release dated September 2, 2016, CarbonOne has acquired all of the units of TekModo Structures LLC and TekModo LLC (collectively "TekModo") in consideration for the payment of US$436,980 and the issuance of 56,879,506 exchangeable non-voting common shares in TekModo Holdings Inc., a U.S. subsidiary of CarbonOne. The shares issued in association with the Acquisition are exchangeable for shares of CarbonOne, subject to a release schedule over time and a standard four-month hold period.

As part of the agreement with TekModo, CarbonOne arranged for lenders to advance a sidecar loan of US$600,000 to TekModo for continued development and manufacturing of TekModo's products. The lenders agreed to take repayment of the loan in Units rather than cash, for total consideration of 5,200,000 Units. In addition, in consideration for the lenders completing this loan, CarbonOne agreed to issue 1,040,000 shares to the lenders.

CarbonOne will also issue 1,534,667 shares and pay C$11,510 in GST to Fiore Management & Advisory Corp. in connection with these transactions.

With the Acquisition now complete, CarbonOne has made an application to the TSX Venture Exchange to change its name to TekModo Industries Inc. The Company's shares are expected to resume trading in the first week of October under the name TekModo Industries Inc. and the new symbol "TEK".

In connection with the Financing, the Company issued 714,999 Units to insiders. Each insider's subscription constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101″) and Policy 5.9 - Protection of Minority Security Holders in Special Transactions of the TSX-V ("Policy 5.9"). The Company has determined that exemptions from the various requirements of Policy 5.9 and MI 61-101 are available for the issuance of the Units to the related parties (Formal Valuation - Issuer Not Listed on Specified Markets; Minority Approval - Fair Market Value Not More than $2,500,000). Members of the board of directors of the Company unanimously approved the Financing. The Company did not file a material change report more than 21 days in advance of the closing of the Financing, which the Company deems reasonable and necessary in the circumstances as the closing date of the Financing had not been established at that time and the Company wished to complete the Financing in an expeditious manner.

On Behalf of the Board of CarbonOne Technologies Inc.

John Proust, Chairman & CEO

The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

Cautionary Notes Regarding Forward-looking Statements

This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively "forward-looking statements"). Certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "will", "expects" and 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, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, including the use of proceeds associated with the Financing, listing of the Warrants on the TSX-V, the consideration payable to Fiore Management & Advisory Corp., the resumption of trading, the name change and new stock symbol. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. 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 and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.

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