Top Source Receives Final Payment From the Sale of Automotive Assets

1 November 1999

Top Source Receives Final Payment From the Sale of Automotive Assets

    PALM BEACH GARDENS, Fla.--Nov. 1, 1999--Top Source Technologies, Inc. (the "Company") (AMEX: TPS) today announced that its 85%-owned non-operating subsidiary, Top Source Automotive, Inc. ("TSA"), and the Company, respectively, had received from Onkyo America, Inc. ("Onkyo America"), the remaining $6,546,479 in cash and $1,000,000 of Onkyo America Series A. 5% Convertible Preferred Stock ("Preferred Stock") from the sale of TSA assets. Under the terms of the Asset Purchase Agreement between the Company and Onkyo America, TSA placed $500,000 of its cash proceeds into an interest bearing escrow account, for a period of up to one year to cover customary deal contingencies. This consideration represents payment in full by Onkyo America for its September 30, 1999 purchase of substantially all of the assets of TSA and certain assets of the Company used in the business of TSA. As a result, TSA will be accounted for as a discontinued operation for the period ended September 30, 1999.
    David Natan, Top Source's Vice President and CFO, stated, "The consummation of the TSA transaction, coupled with last year's Mennen Trusts' funding and their recently announced thirteen-month 'lockup', has significantly improved our liquidity and balance sheet, and has enabled us to substantially reduce debt. Additionally, last week, we successfully financed a number of long-term OSA-II customer leases, thus generating additional cash proceeds. This form of financing yields the Company up front cash, enables us to effectively maintain ownership of the OSA-II units through a nominal buy-back provision, and allows us to record ongoing revenue from the OSA-II leases on a monthly basis in the same method, as if no financing had occurred."
    Will Willis, Chairman and CEO of Top Source, stated, "We appreciate the professional manner in which Onkyo America's management team has handled this transaction, and we look forward to potentially enjoying significant future appreciation on our Preferred Stock investment, while generating interim dividend income. Now that the TSA transaction is behind us, we have the financial resources to expand our sales and marketing efforts to more fully exploit the opportunities for the OSA-II and related technologies."

    Top Source Technologies, Inc. assembles and markets the patented MotorCheck(TM) On-Site Analyzer, which in five minutes accurately diagnoses the condition of a vehicle's engine and/or transmission. Domestic and international automakers, auto dealerships, auto auctions, truck-stop chains, an air force base, and traditional oil analysis laboratories are using the proprietary OSA-II technology.

    Forward-Looking Statements

    The statements discussed in this press release relating to the Company's expectations about exploiting future OSA-II and related technology opportunities, and the potential future appreciation of its Onkyo Preferred Stock holdings, are a forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The results anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ materially from this forward-looking statement are: (1) the continued reliability of the OSA-II technology over an extended period of time, (2) the Company's ability to market OSA-IIs, (3) the acceptance of the OSA-II technology by the marketplace, (4) the general tendency of large corporations to slowly change from known technology to emerging new technology, (5) potential future competition from third parties that may develop proprietary technology, which either does not violate the Company's proprietary rights or is claimed not to violate the Company's proprietary rights, (6) the Company's ability to attract strategic partners for the OSA-II, and (7) the ability of Onkyo America's management team to increase the visibility and value of Onkyo America, Inc. Investors should also consider information contained in documents filed by the Company with the Securities and Exchange Commission.