October 30, 2001 - STATUS UPDATE
MISSISSAUGA, ONTARIO--ZEST Electronics Inc. ("ZTEST" or the "Corporation")(CDNX - "YZT") wishes to announce that it is continuing the due diligence process necessary to complete the acquisition of the remaining outstanding shares of Permatech Electronics Corp. ("Permatech") as set out in its press release of September 4, 2001. The parties are currently awaiting the completion of audited financial statements for Permatech as at September 30, 2001. Once the statements are available, ZTEST will take steps necessary be obtain shareholder approval to the acquisition.
ZTEST also wishes to announce that Dion Entertainment Corporation ("Dion") has made an offer to acquire all of the issued and outstanding common shares of Gametele Systems Inc. ("Gametele") on the basis of one (1) common share of Dion for each five (5) issued and outstanding common shares of Gametele. ZTEST has agreed to tender its current position of 2,170,000 common shares (representing approximately 20.6% of Gametele's current issued and outstanding capital) to the Dion offer. ZTEST has also agreed to convert an existing $250,000 debenture owed to it into 3,000,000 common shares of Gametele which will be tendered to the offer. In addition, ZTEST has agreed to accept 400,000 common shares of Dion in settlement of $496,480 of debt owed by Gametele to ZTEST and to accept a new debenture of Gametele with a principal amount of $4,468,320 in settlement of all remaining amounts owed to ZTEST. The debenture will have a term of five years, will be interest free for the first year and thereafter bear interest at the rate of 6% per annum and will be payable in installments. Dion will have the option to reduce Gametele's indebtedness under the Debenture by issuing stock of Dion at the rate of one Dion share for each 1.2412 of debt acquired. If Gametele at any time defaults on the payment of the debenture ZTEST will be entitled to require Dion to convert the entire amount outstanding into Dion shares at the same rate. The acquisition is scheduled to close on November 15, 2001.
The issued and outstanding capital of ZTEST is 24,071,167 common shares.
FOR FURTHER INFORMATION PLEASE CONTACT:
ZTEST Electronics Inc.
Mr. Ted Drzazga President & CEO
(905) 238-3543 ext. 230
or visit our web site at http://www.ztest.com
The Canadian Venture Exchange has neither approved nor disapproved of the contents of this press release.