Top Source Technologies to Sell Automotive Subsidiary Assets

17 August 1998

Top Source Technologies, Inc. Signs Definitive Agreement to Sell Automotive Subsidiary Assets

    PALM BEACH GARDENS, Fla.--Aug. 17, 1998--Top Source Technologies, Inc. (AMEX: TPS) today announced the signing of a definitive agreement for the ś sale of substantially all of the assets of its automotive subsidiary, Top Source Automotive, Inc. ("TSA") to NCT Audio Products, Inc., ("NCT Audio"), a subsidiary of Noise Cancellation Technologies, Inc. of Stamford, Connecticut .
    The $16,000,000 purchase price consists of $7,500,000 in cash, a secured note of $2,500,000; and an earnout of up to $6,000,000 in additional cash or NCT Audio stock, over a two-year period subsequent to closing. The payment of the $6,000,000 earnout is expressly contingent upon NCT Audio achieving certain financial milestones operating the former TSA business during the post closing two-year period.
    To date, NCT Audio has paid $3,500,000 toward the purchase price of which $2,050,000 is being held in escrow until the Company's stockholders approve the transaction at the Top Source Annual Meeting expected to take place on November 5, 1998 in New York City. If approval is obtained, the $2,050,000 in escrow will become non- refundable.
    The proxy statement, outlining the specific details of the transaction and meeting location, is expected to be mailed to shareholders of record by September 30th, 1998. The firm of Morrow & Co. has been retained for the solicitation of proxies.
    Will Willis, Chairman and CEO, stated, "We are pleased with the progress of the transaction thus far. We believe that TSA will prosper as part of the NCT group of companies and we are excited about having the opportunity to share in their upside potential. Completion of this transaction is a critical element within our strategic plan."
    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 the press release relating to the Company's expectations that it anticipates (1) receiving shareholder approval for the TSA transaction, and (2) 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) shareholder dissatisfaction with the terms of the transaction, (2) the inability of the purchaser to obtain financing to complete the transaction, and (3) unforeseen legal, financial, or operational problems preventing the execution of the transaction.