TekModo Industries Inc.

TekModo Industries Inc.

June 30, 2017 16:25 ET

TekModo Announces Closing of Fully Subscribed Rights Offering for Gross Proceeds of $2,173,121 and Completion of Share Consolidation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 30, 2017) -


TekModo Industries Inc. (TSX VENTURE:TEK) ("TekModo" or the "Company") announces the closing of its previously announced rights offering. All unexercised rights expired at 5:00 p.m. (Toronto time) on June 26, 207 (the "Expiry Time") and are void and of no value. Details of the rights offering are set out in the rights offering notice and circular dated May 18, 2017, which are available on the Company's profile at www.sedar.com. The rights offering was over-subscribed and the Company has closed on the total offering amount of C$2,173,121 which was the maximum amount offered by the Company.

TekModo has completed its previously announced share consolidation of the outstanding share capital on the basis of 2.5 pre-consolidation common shares for 1 new post-consolidated common share (the "Consolidation"). The Consolidation was effective at the open of the market on June 30, 2017. The Company's name and trading symbol will remain unchanged.

Prior to the Consolidation, the Company issued 144,874,759 common shares pursuant to its rights offering discussed in further detail below. After closing of the rights offering, and prior to the Consolidation, the Company had 289,749,518 common shares issued and outstanding. As a result of the Consolidation, the Company's issued and outstanding 289,749,518 common shares were reduced to 115,899,777 shares after rounding adjustments.

116,305,073 rights were exercised at a subscription price of C$0.015 prior to the Expiry Time under the basic subscription privilege entitling holders of rights to acquire an aggregate of 116,305,073 units (the "Units") (46,522,029 post Consolidation) of the Company. Of these 27,385,849 Units (10,954,339 post Consolidation) were issued to insiders and 88,919,224 (35,567,689 post Consolidation) were issued to other shareholders. In addition, all 28,569,686 (11,427,874 post consolidation) of the remaining Rights offered were subscribed for under the additional subscription privilege. Of these, 15,533,800 (6,213,520 post Consolidation) were issued to insiders and 13,035,886 (5,214,354 post Consolidation) were issued to other shareholders. After the Consolidation, each Unit consists of one post-consolidated common share and one share purchase warrant (a "Warrant"). Each Warrant is exercisable into one post-consolidated common share for a period of 5 years from the issuance date of the Units, at a price of $0.0625.

No fees or commissions were paid in connection with the rights offering. The Company issued 25,121,887 warrants (10,048,755 post Consolidation) to purchase common shares at a price of $0.0625 (post Consolidation) for a period of 5 years to the standby guarantors in consideration for the standby commitment, the full amount of which was advanced as a loan prior to completion of the rights offering.

Subscribers for Units under the rights offering should note that their shares and warrants underlying the Units are being issued on a post Consolidation basis and that they do not need to take any further action with respect to any letter of transmittal as it relates to these shares and warrants.

Jacob Vogel, a director of the Company, through TS Investment Holdings LLC acquired on a post Consolidation basis 16,825,009 common shares and 16,825,009 warrants of TekModo under the rights offering. As a result of the foregoing, Mr. Vogel has direct and indirect control of 27,436,498 common shares of the Company, representing approximately 23.67% of the issued and outstanding shares on a post Consolidation basis. In addition, on a post Consolidation basis, Mr. Vogel also has direct and indirect control over 16,825,009 warrants to purchase common shares and 160,000 options to purchase common shares. If Mr. Vogel exercises all of the warrants and options, he would then have direct and indirect control over 37,953,885 common shares, representing approximately 33.42% of the issued and outstanding common shares on a partially diluted basis, assuming that no further common shares of the Company have been issued.

The securities acquired will be held for investment purposes. Mr. Vogel may, depending on market and other conditions, increase or decrease his beneficial ownership of the Company's securities, whether in the open market, by privately negotiated agreements or otherwise, subject to a number of factors, including general market conditions and other available investment and business opportunities. This information is issued pursuant to Multilateral Instrument 62-104, which also requires a report to be filed with the B.C. Securities Commission and the Ontario Securities Commission containing additional information with respect to the foregoing matters.

On Behalf of the Board of TekModo Industries Inc.

Jacob Vogel, Executive Chairman

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.

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