Top Source Receives Second Payment for Automotive Subsidiary
3 August 1998
Top Source Announces That $2,050,000 Received as Second Payment for Automotive Subsidiary Sale
PALM BEACH GARDENS, Fla.--July 31, 1998--Top Source Technologies, Inc. (the "Company") (AMEX: TPS) announced today that the proposed buyer of the Company's automotive subsidiary, Top Source Automotive, Inc. ("TSA"), had made a second payment of $2,050,000 towards the $10,000,000 minimum purchase price.
Previously, the Company announced that it had received a $1,450,000 non-refundable payment in June in connection with the signing of a letter of intent. The $2,050,000 is being held in escrow where it will remain pending the signing of a definitive agreement with the buyer and pending approval of the Company's stockholders.
Since it appears that all major contractual issues have been resolved, the Company expects that the definitive agreement will be signed within the next several weeks. Once the definitive agreement has been executed, the Company intends to promptly file a preliminary proxy statement with the Securities and Exchange Commission ("SEC"). The definitive proxy material will be mailed to the Company's stockholders for their consideration of the proposed sale of TSA at the Company's 1998 Annual Meeting of Stockholders ("Annual Meeting"). Although the Annual Meeting was previously expected to be held on or before September 24, 1998, due to delays in negotiating the definitive agreement, the Company now expects that the Annual Meeting will be held at the earliest possible date subsequent to September 24, 1998. Additionally, the Company plans to file a Form 8-K with the SEC after the definitive agreement has been executed. If shareholder approval for the transaction is received at the Annual Meeting, the buyer will become a 35% minority shareholder of TSA and will receive the exclusive right to purchase the remaining 65% and close the transaction on or before December 31, 1998.
Will Willis, Top Source Chairman and Chief Executive Officer commented, "We believe that the TSA divestiture is in the best interests of the Company and its stockholders and that is why we are confident that it will ultimately be consummated. We continue to be on track with the strategy of increasing OSA-II awareness. Most recently, we have entered into an agreement to place seven units in retail tire locations located throughout Jacksonville, Florida. We are working on continuing to build momentum. The additional cash from the automotive subsidiary sale will allow us to accelerate OSA-II marketing efforts."
Top Source Technologies, Inc. develops, assembles, and markets sophisticated technologies including the patented MotorCheck(TM) On-Site Analyzer, "an oil analysis mini-lab in a box," and proprietary Overhead Sound Systems.
Forward-Looking Statements
The statements discussed in this press release relating to the Company's expectations that it anticipates (1) signing a definitive agreement for the sale of TSA, (2) receiving shareholder approval for the TSA transaction, and (3) closing the TSA transaction, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The results anticipated by some or all of these forward-looking statements may not occur.
Important factors that could cause actual results to differ materially from the forward-looking statements include the following: (1) unforeseen legal, financial, or operational problems preventing the execution of a final definitive agreement, (2) shareholder dissatisfaction with the terms of the transaction, and (3) the inability of the purchaser to obtain financing to complete the transaction.