Atlas Engineered Products Completes Acquisition of South Central Building Systems Ltd.

March 05, 2019

Nanaimo, British Columbia. ATLAS ENGINEERED PRODUCTS LTD. (“AEP” or the “Company”) (TSX-V: AEP)(OTC Markets: APEUF) today reports that it has completed the acquisition of South Central Building Systems Ltd. (“South Central”) of Carman, Manitoba. With this acquisition AEP has added an energetic, high performance team to the AEP family of companies. South Central is a best in class operation with efficient automation, capacity to increase output, and a loyal and growing customer base in the middle of over 25+ growing communities in Southern Manitoba, and easy access to the large Winnipeg market. South Central also offers potential entry into the northern parts of Minnesota and North Dakota.

On closing, AEP paid a $300,000 deposit against the $2,500,000 in cash and assumed a debt that it had agreed to pay on closing (the "Cash Payment"). AEP expects that the balance of the Cash Payment will be paid within the next 7-10 days. AEP will pay the former shareholders of South Central interest on the unpaid portion of the closing cash amounts at a rate of 10% per annum until that amount has been paid. On closing, AEP also issued a total of 1,000,000 common shares to the former shareholders of South Central. In addition, AEP will pay to the former shareholders of South Central an additional $500,000, payable in five equal monthly installments of $100,000each, beginning three months after closing. The former shareholders of South Central may elect to receive these installment payments in AEP common shares at a price of $0.40 per share, provided that the election is made with respect to his or her full pro rata share of the remaining unpaid balance of those installment payments.

AEP has secured bank financing for the balance of the Cash Payment, with flow of funds expected to occur within the next 7-10 days. If the balance of the Cash Payment is not paid by the close of business on April 30, 2018, the transaction will be unwound, the deposit will be returned to AEP less $50,000 and the AEP shares that were issued will be surrendered for cancellation. Post-closing working capital adjustments to the purchase price are expected to be settled within 30 days after closing.

“It’s been a busy year for AEP as we continue to make progress on our integration activities across all plants, removing costs and eliminating duplication,” stated Dirk Maritz, CEO and President of AEP. “In fact, our plants are running full throttle during the typical slowest quarter of the year. We continue to make significant inroads into expanding the customer base, upgraded all plants to a standardized design platform, instituted centralized procurement and introduced wall panels, floor trusses and other engineered products at our Nanaimo facilities which already is starting to render positive results.”

Mr. Maritz continued, “Now, with the South Central Building Systems acquisition our footprint is expanding again. We are well prepared to integrate South Central into the AEP family and excited to grow our presence into the Canadian Prairies.”

Please follow the attached link to view Mr. Dirk Maritz’s interview with Proactive Investors:

AEP also announced that, effective March 4, 2019, it granted options to purchase up to 1,390,000 common shares at an exercise price of $0.30 per share to certain directors, officers and employees. The options expire five years after the grant date, with 1/3 of the options granted vesting every six months over an 18 months period.

About Atlas Engineered Products Ltd.

Atlas Engineered Products is a leading supplier of trusses and engineered wood products. Atlas was formed over 18 years ago and operates manufacturing and distribution facilities in British Columbia and Ontario to meet the needs of residential and commercial builders. Atlas has expert design and engineering teams, multipleshift state-of-the-art truss manufacturing operations, and large inventories of engineered beam and flooring components. Atlas aims to grow its base of business across Canada by pursuing an aggressive acquisition and consolidation and product diversification strategy. Atlas will bring its construction industry partners across Canada unparalleled excellence in service, product, and support and is committed to supplying them with the full array of components and assemblies they might require for their projects – from design to lockup.