Mr. Ted Drzazga reports

ZTEST SIGNS AGREEMENT TO ACQUIRE FURTHER INTERESTS IN CONVERSANCE

Ztest Electronics Inc. has signed an agreement with Conversance Inc. pursuant to which the Ztest can increase its equity ownership interest in Conversance by up to 15.08 per cent to a total equity ownership interest of up to 34.99 per cent by investing a further $2-million in cash in tranches. Ztest has a pre-emptive right to maintain its equity interest by participating in further financing of Conversance. Conversance is a Waterloo-based private company focused on developing and marketing proprietary artificial-intelligence supported distributed ledger technologies. Joseph Chen is the founder and chief executive officer of Conversance.

Ztest acquired a further 4.86-per-cent interest in Conversance to increase its equity interest to 19.91 per cent in January, 2018 (see press release dated Jan. 10, 2018). Pursuant to the terms of the further investment agreement, Ztest has an option to acquire up to an additional 10.09-per-cent interest in Conversance by making a cash payment of $500,000 on or before Feb. 28, 2018, and a further cash payment of up to $500,000 on or before April 20, 2018. Once the initial $500,000 payment is made, Ztest will have the right to increase its investment in Conversance at the rate of $6.3492 per Class A share to a maximum of 157,500 Class A shares.

Ztest will use the proceeds from the closing of the first tranche of its private placement (see press release dated Jan. 31, 2018), to finance the initial $500,000 payment for which it will acquire a further 78,750 Class A shares and earn a further 5.38-per-cent interest in Conversance to increase its investment in Conversance to 25.29 per cent. This investment will be made on or before Feb. 28, 2018.

If the 30-per-cent option is exercised, Ztest will have the further option to acquire up to an additional 4.99-per-cent interest in Conversance to increase its interest in Conversance to up to 34.99 per cent by making a further investment of $1-million on or before June 15, 2018. Ztest will have the right to increase its investment in Conversance at the rate of $10.4166 per Class A share to a maximum of a further 96,000 Class A shares.

About Ztest Electronics Inc.

Ztest Electronics, 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 9001:2008 certified facility in North York, Ont., Canada. The company serves customers in the medical, power, computer, telecommunication, wireless, industrial and consumer electronics markets requiring high-quality, quick-turn, small- and medium-size production runs.

About Conversance Inc.

Conversance, a private company based in Waterloo, Ont., founded by Mr. Chen, is focused on developing and marketing proprietary artificial-intelligence supported distributed ledger technologies. Mr. Chen is an electrical engineer with a strong background in radio frequency, digital signal processing, VLSI (very-large-scale integration), complex systems, chemistry and physics. Mr. Chen joined Research in Motion (now BlackBerry) in 1999, becoming a senior member of the office of the chief technology officer, where he was instrumental in many of Blackberry's key telephony innovations and patents. While at BlackBerry, the office of the CTO first began looking into blockchain in 2008.

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