March 23, 2005 - ZTEST ANNOUNCES EQUIPMENT FINANCING FACILITY
NORTH YORK, March 23, 2005 - ZTEST Electronics Inc. ("ZTEST" or the "Corporation") (TSXVE - "ZTE") wishes to advise that its wholly owned subsidiary, Permatech Electronics Corporation ("Permatech") is arranging a credit facility of up to $2,400,000 with an arm's length party. The credit facility will be used to finance future equipment purchases, as required, to expand the business of Permatech. Permatech will be able to finance 88% of the purchase price of each piece of equipment acquired. The advances under the facility will bear interest at the rate of 9.50% per annum and will be repayable over 48 months secured against the machinery purchased. Permatech will be able to draw down $600,000 in the first 30 days after closing, and up to $260,000 in each additional 90-day period as required. Subject to certain conditions, the lender will agree to larger quarterly drawdowns, if warranted. In conjunction with this arrangement, ZTEST has agreed to issue to the lender up to a maximum of 4,000,000 warrants of ZTEST, to be priced at the prevailing market prices at the time of each drawn down on the facility.
The Company also wishes to advise that it is offering up to $135,000 in unsecured convertible debentures (the "Debentures") bearing interest at the rate of 9.50% per annum for 2 years. The Debentures shall be convertible into units at the rate of one (1) unit for each $0.18 of Debenture converted with each unit consisting of one (1) common share and one share purchase warrant entitling the holder to acquire a further common share at a price of $0.18 per share for a period of two years. ZTEST shall pay a 6% finder's fee in respect of this transaction.
Furthermore, the Company wishes to advise that it is arranging a new $350,000 line of credit (the "Line") with an arm's length party bearing interest at the rate of 9.50% per annum for 3 years. The Line will require interest only payments during its term and will be open for repayment at any time. ZTEST shall pay a 6% finder's fee in respect of this transaction.
These transactions are subject to the approval of the TSX Venture Exchange.
"ZTEST is very pleased with this new credit facility. When the expansion program is completed, it will more than double the present capacity of our North York plant. The ability to accelerate this program is especially attractive, given Permatech's revenue increase of over 80% for the two most recently concluded fiscal quarters versus the same periods last fiscal year" said Mr. Drzazga, CEO of ZTEST.
"With this capital expenditure program we will be able to continue servicing our existing customers who have experienced a surge in sales over the past year and still require quick delivery. Some of the new equipment will also expand our capabilities to enable us to quote customers that we are currently unable to service" added Mr. Perreault, President of Permatech. "In addition, Permatech will be ready to meet the European directives WEEE and RoHS which deal with eliminating lead from all electronic products. This will come into effect in 2006 and will affect our customers dealing with Europe and Japan. North America is scheduled to follow in 2007" he concluded.
About Permatech Electronics Corp.
Permatech Electronics Corp., a wholly owned subsidiary of ZTEST Electronics Inc. (TSXVE - "ZTE"), is an ISO 9001:2000 certified Electronic Manufacturing Services (EMS) provider. Permatech's offering includes Materials Management, Printed Circuit Board (PCB) Assembly, Testing and Design services. Permatech operates from a 20,000 square foot facility in North York, Ontario, Canada. The company serves customers in the Medical, Power, Computer, Telecommunication, Wireless, Industrial and Consumer Electronics markets requiring high quality, quick-turn, small and medium size production runs.
For more information contact:
Ted Drzazga, CEO
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.