Top Source Stockholders Approve Sale of Automotive Subsidiary
16 December 1998
Top Source Stockholders Approve Sale of Automotive Subsidiary
PALM BEACH GARDENS, Fla.--Dec. 16, 1998--Top Source Technologies, Inc. (AMEX: TPS) today announced that at its Annual Meeting held yesterday in New York City, stockholders approved the sale of substantially all of the assets of the Company's subsidiary, Top Source Automotive, Inc., ("TSA") to NCT Audio Products ("NCT Audio"), a subsidiary of the NCT Group, Inc. .In August 1998, the Company entered into an Asset Purchase Agreement with NCT to sell TSA for $10,000,000 in cash, and a potential additional earnout of $6,000,000 based upon the post acquisition financial performance of TSA. Stockholder approval was a material condition. As a direct result of the overwhelming affirmative vote, the Company received the non-refundable $2,050,000 that had been held in escrow, and NCT Audio became the 20% minority owner of TSA.
To date, the Company has received $3,500,000 in cash from NCT Audio as payment toward the $10,000,000 purchase consideration. Under the terms of the agreement between the Company and NCT Audio, the $3,500,000 paid to the Company is non-refundable. The closing of the transaction, which is expressly subject to NCT Audio's ability to secure $6,500,000 in additional financing, is scheduled to occur on or before March 31, 1999.
Will Willis Chairman and CEO, stated, "As a result of this vote, the $3,500,000 equity funding by Mr. G. Jeff Mennen, a director of the Company, and the substantial progress in OSA-II commercialization as evidenced by the recent Flying J OSA-II purchase, the Company's balance sheet and liquidity have improved significantly."
Mr. Willis further stated, "We are now close to consummating the sale of TSA. NCT Audio's proprietary technology, when combined with TSA's profitable operations, should make the new TSA a formidable company."
Michael Parrella, NCT's President, commented, "We look forward to having Top Source Automotive as part of the NCT Audio family. This relationship will be important to the packaging and distribution of our technologies to the automotive channel and will also be a key component to helping make NCT a leading audio company."
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 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 this forward-looking statement may not occur.
An important factor that could cause actual results to differ materially from the forward-looking statement is the inability of NCT Audio to obtain financing to complete the transaction.