TekModo Industries Announces Private Placement and Share Consolidation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 17, 2017) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TekModo Industries Inc. (TSX VENTURE:TEK) ("TekModo" or the "Company") announces that it is proceeding with a non-brokered private placement and the consolidation of its common shares.

Non-Brokered Private Placement

The Company intends to raise a minimum of C$2 million and up to a maximum of C$3 million in a non-brokered private placement (the "Private Placement"). The Company will issue a minimum of 10 million units (the "Units") at a price of C$0.20 per Unit (post 1:5 consolidation) and a maximum of 15 million Units. Each Unit will consist of one common share and one transferable common share purchase warrant. Each warrant is exercisable at a price of C$0.25 per share for a period of 2 years from the date of issuance. The Company will have the right to force conversion of the warrants if its common shares trade at or above C$0.50 per share (post-consolidation) for 20 consecutive trading days.

The Company intends to use the proceeds of the Private Placement for general working capital. TekModo may pay a 6% finder's fee in cash and/or Units, at the election of the finder, in connection with the Private Placement. Finder's fees will be paid where applicable exemptions permit the Company to pay such fees.

Immediately following closing of the Private Placement, the Company will complete a share consolidation (the "Share Consolidation") on the basis of five (5) pre-consolidation common shares for each one (1) post-consolidation common share. The Company's outstanding incentive stock options and warrants will be adjusted on the same ratio (1:5) in accordance with their respective terms, with proportionate adjustments being made to exercise prices. The Share Consolidation is subject to regulatory approval, including the approval of the TSX Venture Exchange. The common shares and common share purchase warrants issued pursuant to the Private Placement will be issued on a pre-consolidation basis.

Participation in the Private Placement

The Company will be offering Units to:

• Accredited investors;
• Existing shareholders pursuant to the exemptions available in Canada and described below; and
• Investors pursuant to the new Investment Dealer exemption where available.

All or a portion of the Private Placement may be completed pursuant to BC Instrument 45-534 - Exemption from Prospectus Requirement for Certain Trades to Existing Security Holders and similar instruments in other jurisdictions in Canada (the "Existing Security Holder Exemption"). As at the date of this news release, the Existing Security Holder Exemption is available in each of the provinces of Canada, with the exception of Newfoundland and Labrador. The aggregate acquisition cost to a subscriber under the Existing Security Holder Exemption cannot exceed C$15,000 unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment. The Company has fixed February 16^th, 2017, as the record date for the purpose of determining existing shareholders of the Company who are entitled to participate in the Private Placement pursuant to the Existing Security Holder Exemption. Subscribers purchasing securities under the Existing Security Holder Exemption will need to represent in writing that they meet certain requirements of the Existing Security Holder Exemption, including that on or before the record date they became a shareholder of the Company and that they continue to be a shareholder of the Company. If the Company receives subscriptions from investors relying on the Existing Security Holder Exemption exceeding the maximum Private Placement, the Company may adjust the subscriptions received on a pro-rata basis.

In addition to the Existing Security Holder Exemption and other available prospectus exemptions, a portion or all of the Private Placement may be completed pursuant to Multilateral CSA Notice 45-318 - Prospectus Exemption for Certain Distributions through an Investment Dealer ("CSA 45-318") and the corresponding blanket orders and rules implementing CSA 45-318 in the participating jurisdictions in respect thereof (collectively with CSA 45-318, the "Investment Dealer Exemption"). As at the date of this news release, the Investment Dealer Exemption is available in each of Alberta, British Columbia, Saskatchewan, Manitoba and New Brunswick. Pursuant to CSA 45-318, each subscriber relying on the Investment Dealer Exemption must obtain advice regarding the suitability of the investment from a registered investment dealer. There is no material fact or material change of the Company that has not been generally disclosed.

Completion of the Private Placement is subject to regulatory approval including, but not limited to, the approval of the TSX Venture Exchange. The securities issued pursuant to the Private Placement will be subject to statutory hold periods expiring four months and one day from the date of issuance of such securities, and such other restrictions as are required by applicable securities laws.

This news release is not an offer of securities for sale in the United States. The offer and sale of the securities offered in the Private Placement has not been and will not be registered under the US Securities Act of 1933, as amended, or any state securities laws, and such securities may not be offered or sold in the United States absent registration or applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States or in any jurisdiction in which the offer, sale or solicitation would be unlawful.

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.

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", "intends", 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 the use of proceeds associated with the Private Placement. 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.