ELKHART, IN, July 11, 2018 /CNW/ - TekModo Industries Inc. (TSXV: TEK) ("TekModo" or the "Company") announces that it has sold its operating subsidiaries (the "Subsidiaries") to TekModo Holdings LLC, a company managed by Jacob Vogel (the "Transaction"). On July 6, 2018 the parties entered into an amended and restated purchase agreement replacing TS Investment Holdings with TekModo Holdings LLC as the purchaser. The material terms of the Transaction remained the same. Jacob Vogel is the sole managing member of both TS Investment Holdings LLC and TekModo Holdings LLC. The Transaction was a "related party transaction" as defined under MI 61-101, as Jacob Vogel is the managing member is also a director of the Company, which was approved by 98.16% of disinterested shareholders at an annual general and special meeting held on June 25, 2018 (the "Shareholder Meeting").
Pursuant to the terms of the Transaction, the Company received (i) US$75,000 as cash consideration; (ii) US$200,000 for the expenses related to the Transaction; (iii) the assignments to the Subsidiaries of the loans from Jacob Vogel and Steve Vogel, including adjustments and interest, in the aggregate amount of US$1,367,384.02; (iv) the release of the Company from the loan guaranty with Centier Bank in the aggregate amount of approximately US$780,445 (the "Equipment Loan"); and (v) confirmation that the Subsidiaries paid a line of credit in full from the US$500,000 cash deposit held by Centier Bank. The Company now has no further obligations to Centier Bank. Prior to closing the Transaction, the Company extended the maturity dates of an aggregate of C$500,000 of convertible debentures until September 6, 2018.
From the Company's financial point of view, the approximate aggregate value of the consideration set out above is US$2,422,829, which includes the assignments of the Company's debt and the release of the Equipment Loan. The approval process for the Transaction and the deliberations of the Company's special committee are described in the Company's information circular filed on SEDAR on May 25, 2018 and a news release dated June 13, 2018.
The Transaction along with the Valuation and the Fairness Opinion are described in more detail in the Company's information circular as well as the Amended and Restated Purchase Agreement which is available at www.sedar.com.
At the Shareholder Meeting, the shareholders of the Company passed a resolution approving the consolidation of the issued and outstanding shares in the capital of the Company on the basis of one (1) post-consolidation common share for up to every ten (10) common shares currently issued and outstanding (the "Consolidation"). The Company will now proceed to effect the Consolidation, change its name to Lincoln Ventures Ltd. and apply to list on the NEX board of the TSXV in order to restructure its affairs and pursue new opportunities.
On Behalf of the Board of TekModo Industries Inc.
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 "expects", "will", "intends", "is expected to" 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. In particular, the Company's expectations regarding its name change, share consolidation, listing on the NEX, restructuring its affairs and pursuit of new opportunities are forward-looking statements. There can be no guarantee that that the Company will change its name to Lincoln Ventures Ltd., proceed with the Consolidation, become listed on the NEX board of the TSXV, restructure its affairs and pursue new opportunities. 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.
SOURCE TekModo Industries Inc.
For further information: John Proust, Director, Tel: 778-725-1487