April 7, 2000 - ZTEST ACCEPTS PROPOSAL TO SELL SUBSIDIARY
ZTEST Electronics Inc., ZTST - CDN, ("ZTEST") wishes to announce that it has agreed to sell its 53.26% ownership interest in Chessen U.V. Systems Inc. ("Chessen") to Chessen Group Inc. ("CGI") for a total consideration of $1,705,871.00. On February 29, 2000 net acquisition cost for this 53.26% of Chessen carried on ZTEST’s books was $1,464,716.29.
CGI, which previously had held a 17% ownership position in Chessen, offered to buy out ZTEST’s position so it could take control of the ARC-PVD (physical vapour deposition) and UV curing technologies owned by Chessen.
The $1,705,871 was paid to ZTEST by way of a five year convertible debenture secured against the assets of Chessen and CGI and bearing interest at the rate of 5% per annum commencing on July 1, 2000 and coming due on June 29, 2005. The debenture is convertible into preferred shares of CGI at the rate of one (1) preferred share for each $1.00 of principal amount converted. The Preferred Shares will carry a 5% cumulative dividend, will be non-voting, redeemable and convertible into common shares of CGI at the rate of four (4) common shares for each preferred share converted after July 1, 2001. ZTEST shall also have the right to convert the debenture directly into common shares of CGI at the rate of one (1) common share for each $0.25 of principal converted.
The sale of Chessen will further allow ZTEST to focus on its core business, being the development and manufacturing of technology for strategic equity partners in the fields of wireless communication, data security and point of sales validation networks.
ZTEST offers Strategic Partner services in electronic design, development and manufacturing to emerging high tech companies in return for long-term manufacturing contracts, fees for services and equity positions.
For further information, please contact Mr. James E. Lalonde, Manager, Corporate Development, at (905) 569-3344 or visit our website at http://www.ztest.com.
The current outstanding capital of ZTEST is 18,608,816 common shares.