Zecotek Photonics Inc ZMSPF

New MD&A

[Pandora]

BirdView Insight Inc. and Zecotek Photonics Inc. have mutually agreed to terminate the letter agreement between the parties as previously described in the Zecotek’s December 19, 2019 news release on the basis that the parties have been unable to identify sufficient funds to complete the acquisition.Further to the corporate restructuring announced on December 19, 2019, aspecial committee has provided a favourable recommendation to the Company’s board ofdirectors and the board has agreed to pursue an offer from Wang Holdings Corp. and its affiliates (“WHC”) to purchase all of the issued and outstanding shares of Zecotek’s wholly owned subsidiary, Zecotek Photonics Singapore Pte Ltd. (“ZPS”). WHC has offered to purchase the shares of ZPS (the “Transaction”) in consideration for WHC (a) agreeing to release the Company from its obligation to repay $5.983 million to WHC for advances previously provided and (b) paying an additional US$550,000 to the Company, which payment has been made. Zecotek intends to use the funds for payables and the costs of the reorganization. WHC is a British Columbia company owned and controlled by Ziming Wang. ZPS owns 90% of Zecotek Imaging Systems Singapore Pte. Ltd (“ZIS”) and Zecotek Display Systems Singapore Pte. Ltd. (“ZDS”). The remaining 10% of ZIS and ZDS are held by Zecotek Holdings Singapore Pte. Ltd. (“ZHS”), a private company controlled by Dr. Faouzi Zerrouk, President and CEO of Zecotek. In making its decision to pursue the Transaction, the special committee and the Board of Directors considered the Company’s financial position, the termination of the reverse takeover and concurrent financing associated with the letter agreement with BVI and the COVID-19 pandemic which has affected the production of crystals and detectors in China and Malaysia, with official lockdowns preventing technical personnel from carrying out their work. As a result of the foregoing, the Company has not been able to physically or financially support its operations. If completed, the sale of ZPS will constitute a sale of all or substantially all of the undertaking of the Company as contemplated in section 301 of the B.C. Business Corporations Act and a reviewable disposition under Policy 5.3 of the TSX Venture Exchange. Zecotek and WHC have not yet entered into formal agreements regarding the Transaction.Upon the completion of the Transaction, Zecotek Photonics Inc. intends to change its name. Details of the name change will follow in a subsequent news release.In connection with the proposed sale of ZPS to WHC, Zecotek will write-off all the inter-company loans within the subsidiaries. The details of the write-off are in the news release on July 31, 2020.