Mr. Steve Smith reports

ZTEST ANNOUNCES PROPOSED STRATEGIC INVESTMENT AND PRIVATE PLACEMENT

Ztest Electronics Inc. has entered into a non-binding letter of intent to invest $293,200 in exchange for a 27.14-per-cent equity ownership interest in Twenty49 Ltd., based in Waterloo, Ont., and operating in the United States through its wholly owned subsidiary. Twenty49 is a technology company, developing technology for four business units:

• Data420, Fiscal420 and AI420, which focus on collecting information through proprietary hardware and software and then packaging and selling data to all operational levels of the cannabis industry;
• Fiscal420, which will provide U.S. cities and townships with the ability to automate the collection of cannabis sales taxes from all companies selling cannabis in their jurisdictions.

Among other things, the letter of intent provides that Ztest will have certain pre-emptive rights with respect to future offerings of Twenty49 securities and a right of first refusal on any sales or other transfers of Twenty49 shares among existing Twenty49 shareholders as well as representation on the board of Twenty49. The letter of intent also contemplates that Ztest's subsidiary, Permatech Electronics Corp., will have certain rights with respect to the manufacture of electronic hardware for Twenty49 and that Twenty49 will have the right to obtain a non-exclusive licence, on commercially reasonable terms, to use the distributed ledger software developed by Conversance Inc., in connection with its business. Conversance is a software company based in Waterloo, Ont., in which Ztest currently holds a 25.29-per-cent equity interest.

In connection with the completion of the Twenty49 investment, Ztest proposes to complete a non-brokered private placement of up to 1.7 million units (each unit consisting of one common share and one-half a common share purchase warrant) at an issue price of 30 cents per unit, for aggregate proceeds of $510,000. Each whole warrant is exercisable for one additional common share of Ztest at an exercise price of 40 cents during the period of 18 months from closing of the financing.

Eligible finders may receive up to 7 per cent of the value of proceeds of the sale of units in cash and up to 7 per cent of the number of units sold in the form of broker warrants. Each broker warrant issued in respect of the sale of units entitles the holder to acquire one common share of Ztest at 30 cents for a period of 18 months from the closing of the financing.

All securities issued pursuant to the financing referenced herein are subject to a statutory four-month hold period.

The completion of the strategic investment is conditional upon Ztest raising at least $350,000 pursuant to the private placement and is subject to a number of terms and conditions, including completion of satisfactory due diligence, negotiation of mutually acceptable definitive agreements, and the receipt of all required board and regulatory approvals.

Steve Smith, chief executive officer of Ztest, commented as follows: "Every business today is operating in the world of big data. One of the greatest tasks any industry faces isn't obtaining material on customers, products or sales. Rather, it's drawing something beneficial from the data they're already amassing. Ztest is pleased to be working with David Hwang and his team to assist with the launch of their proprietary software and hardware products."

About Twenty49 Technologies Inc.

Twenty49, based in Waterloo, Ont., and founded by David Hwang, is focused on providing a suite of technologies that enable cannabis entities to boost operational efficiencies and increase revenues. Mr. Hwang is a physicist by training with a wide-ranging background including start-up chief executive officer (with several successful exits mostly in the hospitality space), hedge fund quant, and cannabis entrepreneur. Mr. Hwang will be leveraging his data monetization experience in hospitality technology and simply applying these past learnings to the nascent cannabis vertical. Mr. Hwang is a sought-after speaker on the subject of data monetization (TEDx Raleigh and BigDataTech Talks) and has received several honours, including RSPA Most Innovative Solution Award and Big Data Innovation Summit (finalist).

Mr. Hwang commented as follows: "Data is where business optimization begins. Without data, we are left to guess and blindly react rather than plan and optimize. We are very pleased to be working with the Ztest team on improving our current software and hardware stacks. These improvements will enhance the ability of customers to collect data and benefit from world-leading process improvements."

About Ztest Electronics Inc.

Ztest Electronics Inc., through its wholly owned subsidiary Permatech Electronics Corp., offers electronic manufacturing services (EMS) to a wide range of customers. Permatech's offering includes materials management, printed circuit board (PCB) assembly, testing and design services. Permatech operates from a 20,000-square-foot, ISO 9001:2015-certified facility in North York, Ont., Canada. Ztest also holds a 25.29-per-cent equity interest in Conversance Inc.