ELKHART, IN, June 13, 2018 /CNW/ - TekModo Industries
Inc. (TSX-V: TEK) ("TekModo" or the "Company") would like to take this opportunity to remind shareholders that its
annual and special meeting is being held on June 25, 2018 at Suite 650, 669 Howe Street,
Vancouver, B.C. At the meeting, shareholders will be asked to approve the sale of its operating
subsidiaries (the "Transaction") to TS Investment Holdings, LLC ("TS Investment"). The Transaction is considered to
be a "related party transaction" as defined under MI 61-101, as Jacob Vogel is the managing member
of TS Investment and a director of the Company.
In addition to the disclosure in the Company's information circular filed on SEDAR on May 25,
2018, TekModo wishes to provide shareholders with additional background information regarding the approval process for the
Transaction and the deliberations of the Company's special committee.
On November 9, 2017, the Company announced that it would be proceeding with a non-brokered
private placement of up to $3,000,000 (the "Financing"). When it became apparent that the
Company would not be able to complete the Financing, on December 15, 2017, an independent board
member and the purchaser began discussing the possible sale of the Company's operating subsidiaries. The parties agreed on
the terms of a non-binding letter agreement dated January 17, 2018 (the "Letter Agreement"),
which was announced in a news release on January 19, 2018. Pursuant to the terms of the
Letter Agreement, the Company was able to secure a continued source of funding as well as the ability to seek other alternative
transactions.
On January 19, 2018, the Company formed a special committee with a mandate to evaluate strategic
alternatives, review and report on proposed transactions and carry out negotiations in good faith on behalf of the Company with
regards to the proposed dispositions of the Company's operating subsidiaries. The special committee subsequently engaged
Evans & Evans, Inc. on January 30, 2018 to prepare and deliver a Comprehensive Valuation Report
(the "Valuation") and on May 15, 2018 to prepare and deliver a fairness opinion (the
"Fairness Opinion") regarding the fairness of the Transaction, from a financial point of view, to the TekModo shareholders
aside from Jacob Vogel. Both the Valuation and the Fairness Opinion are attached as schedules to
the Company's information circular.
Since January 19, 2018, the special committee has contacted numerous parties including potential
financiers, industry partners and clients of the Company's subsidiaries in order to determine if they would be interested in
pursuing an alternative transaction. To date, none of these discussions have resulted in any offers for such an alternative
transaction. TekModo did not receive any bona fide offers during the 24 months prior to January 19,
2018, which would have been required to be disclosed pursuant to Subsection 5.3(3)(d) of MI 61-101. There are no
prior valuations which are required to be disclosed pursuant to Subsection 5.3(3)(c) of MI 61-101.
Concurrently with seeking alternative transactions, the special committee worked to finalize the definitive agreement with TS
Investment dated April 10, 2018, which was subsequently announced in a news release on April 12, 2018. The special committee met frequently, commencing on January 19,
2018 until May 23, 2018 to discuss the Transaction, the Valuation, strategic alternatives to
the Transaction, and the Fairness Opinion.
The closing of the Transaction remains subject to a number of conditions including obtaining disinterested shareholder
approval at the Company's meeting. The special committee encourages all interested shareholders to review the information
circular and vote either in person or by proxy at that meeting. The Transaction along with the Valuation and the Fairness Opinion
are described in more detail in the Company's information circular which is available at www.sedar.com.
On Behalf of the Board of TekModo Industries Inc.
John Proust
Executive Director
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.
SOURCE TekModo Industries Inc.
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