VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb 14, 2017) - TekModo Industries Inc. (TSX VENTURE:TEK) ("TekModo" or the "Company") is providing an update on its current operations and business plan going forward.
Highlights
- Jake Vogel becomes Executive Chairman.
- Marc LaCounte assumes the role of President.
- Bill Fenech joins Jeff Schwartz as an Elkhart based Strategic Advisor.
- Equipment failure causes seven weeks of production down time. Production is now resuming.
- The GRP gel coat manufacturing line is expected to be completed in March 2017.
- Multiple Activated Carbon orders received.
- Need for immediate financing.
TekModo manufactures, assembles and distributes a wide range of advanced composite material to the RV, trailer, panel van, box truck, shuttle bus and marine industries from its 50,000 square foot facility in Elkhart, Indiana. RV customers are demanding superior quality and manufacturers are confronting increasing warranty claims. TekModo products fulfill both consumer and manufacturer goals by replacing legacy wood construction with vastly superior advanced composite materials.
Operational Update
At year end, the Company experienced an unexpected manufacturing equipment failure which resulted in approximately seven weeks of production down time and substantially reduced sales and cash flow for the months of January and February 2017. The equipment is being repaired and upgraded and the manufacturing schedule is being resumed.
In addition to several existing manufacturing and assembly lines, the construction of the new GRP gel coat manufacturing line is expected to be completed in March and will initially allow the Company to produce commercial samples of SpectraLite™ exterior skin replacement, for initial select customers. TekModo intends to commercially launch its SpectraLite™ product in July 2017. SpectraLite™ is a highly engineered exterior wall panel to be produced in a continuous process, resulting in a high-gloss seamless panel with improved optics, reduced weight and extreme durability. After completion and subject to testing, this product, when integrated with the Company's proprietary substrate (secondary layer) material, Fortis, will be designed to provide the most advanced seamless sidewall skin system in the marketplace due to its appearance, quality and durability. Based on preliminary discussions with TekModo customers, demand for the patentable, disruptive SpectraLite™ is anticipated to be very strong.
TekModo announced the delivery of its first shipment of distributed, pelletized activated carbon on December 8, 2016. Since then, the demand for this product has increased, and resulted in multiple orders.
Business Plan Going Forward and Financing
The business plan of the Company going forward will be to continue to grow the customer base and demand for the current manufactured, assembled, and distributed products while in parallel, focusing on the development of the GRP gel coat manufacturing line and the commercialization of the SpectraLite™ product. This will involve the completion of construction of the GRP manufacturing line, commissioning of the GRP line, and development and evaluation by potential customers of the SpectraLite™ product. The commercialization will be dependant on the quality of the product, the rate at which the product can be produced, and pricing enabling TekModo to achieve acceptable margins. Commercialization cannot be assured.
As a result of the January shutdown and the associated interruption to cash flow, the Company requires an immediate equity financing to maintain its current business operations and complete the GRP commercialization. Discussions are being held with various parties and progress will be reported in a future news release. The amount and pricing is yet to be determined.
Transition to Elkhart, Indiana and Associated Leadership Changes.
TekModo has made the decision to consolidate all of the Company activities in Elkhart, Indiana including administration, accounting and corporate finance. As part of this initiative, Jake Vogel has been appointed Executive Chairman and John Proust has stepped down as Chairman and will remain on the board as Executive Director. Marc LaCounte, a founding Director and former Business Development Officer, has been appointed President. Mr. LaCounte has a thorough understanding of the TekModo business operations, suppliers, customers and employees. The board has great confidence in Marc to lead the Company and execute the business plan.
