Mr. Tom Kusumoto reports

CHANGE OF BUSINESS

Chinook Tyee Industry Ltd. will be pursuing a proposed change of business to a Tier 2 investment company listed on the TSX Venture Exchange.

Summary of the proposed COB

After a thorough review of the company's resources and strategic options, and given the expertise and skill sets of the company's directors, the company's management has determined to focus its business operations on the financial services industry. Under the proposed COB, the company seeks to change its business from inactive to an investment issuer under the classification of financial service holding company. Upon completion of the proposed COB, the company's primary focus will be to seek returns through investments in the securities of other companies and other assets. The company will focus on financial services, merchant banking and private equity activities.

In connection with the proposed COB, the company intends to adopt an investment policy to govern its investment activities and investment strategy. A copy of the investment policy will be posted on the company's profile on SEDAR. A description of the investment policy follows.

Objectives:  Seek a return on investments through returns from financial services, which includes investment gains, interest income and advisory services fees. The company plans to reinvest the profits of its investments to further the growth and development of the company's investment portfolio.

Investment sector:  Middle-to-small-market European and North American private and publicly listed companies

Investment types:  Equity and debt, and any other investment structures or instruments that could be acquired or created

Investment size:  Unlimited

Investment timeline:  Not limited

Composition of portfolio holdings

Subject to the availability of capital, the company intends to create a diversified investment portfolio. The company will aim to structure its investments in such a way as to not be deemed either an investment fund or mutual fund, as defined by applicable securities laws, thereby avoiding the requirement to register as a fund or investment adviser.

Monitoring of portfolio holdings

The company seeks to serve as a lead agent or investor in order to optimize due diligence and capital structure, as well as enable active monitoring of the investment. The company may provide assistance to certain of its portfolio companies, which may involve, among other things, monitoring the operations of the portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies, and providing other organizational and financial guidance. The company generally will receive merchant banking fees for these services and have all of its costs reimbursed.

Procedures and implementation

Prospective investments will be channelled through management. Management shall make an assessment of whether the proposal fits with the investment policy and then proceed with preliminary due diligence, leading to a decision to reject or move the proposal to the next stage of detailed due diligence. This process may involve the participation of outside consultants. If management determines that an investment opportunity should be pursued, the company will engage in an intensive due diligence process and prepare a report for the board. Approval of an investment for financing requires the approval of the majority of the board. All investments shall be submitted to the board for final approval. Management will select all investments for submission to the board and monitor the investment portfolio on a continuing basis, and will be subject to the direction of the board.

Conflicts of interest

The company does not plan to invest in companies in which a board member may already have a material direct investment in. Any potential investments where there is a material conflict of interest involving management or the board may only proceed after receiving approval from disinterested directors of the board. The company is also subject to the related party transaction policies of the TSX-V. All members of the board shall be obligated to disclose any interest in the potential investment.

Amendment of investment policy

The company's investment policy may be amended with approval from the board.

Shareholder approval

The proposed COB requires the approval of the shareholders of the company. The company has scheduled a meeting of its shareholders on Sept. 29, 2014, to obtain this approval. A majority of shareholders present at the meeting must approve the proposed COB for it to proceed. Further information regarding the meeting and the proposed COB will be contained in the management information circular to be mailed to the company's shareholders in respect of the meeting. A copy of the circular will also be available on the company's profile on SEDAR.

Other information

Completion of the proposed COB is subject to a number of conditions, including TSX-V acceptance and shareholder approval. There can be no assurance that the proposed COB will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the circular to be prepared in connection with the proposed COB, any information released or received with respect to the proposed COB may not be accurate or complete and should not be relied upon. Trading in the securities of the company should be considered highly speculative.

We seek Safe Harbor.