Zecotek (TSXV:ZMS) today announced that it has successfully closed the Asset Purchase Agreement of bio-photonic technologies as well as a $5,750,000 Private Placement.

A. The Technology Acquisition

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In December 2004, the Company entered the field of bio-photonics by acquiring the LFS scintillation material that has been licensed to a division of Northrop Grumman. Today, the Company added significantly to its portfolio by acquiring over ten new technologies in development at Zecotek Laboratories (the "Technology Acquisition"). These technologies will, together with the LFS scintillation material, become the backbone of its three major divisions, namely medical imaging, medical lasers, and 3D displays. These new technologies include:

- a real time auto-stereoscopic 3D display, addressing an annual market

estimated at over $1 billion.

- various solid state and fiber laser technologies addressing a world

wide medical laser market of $2.5 billion, including a solid state

laser for bio-instrumentation, and a thin film waveguide micro laser

technology, the latter being currently in development jointly with

UBC;

- enabling technologies for combined PET-MRI machines, addressing a

target market which the Company estimates at $250 million;

- a new scintillation material for medical imaging to eventually serve

as a successor material to the LFS, presently targeted to an annual

market in excess of $300 million;

- a solid state analog to the existing photomultiplier tube, targeted to

a present annual market in excess of $300 million;

- the RFO crystal, aimed at substituting the present YAG crystal for

various laser applications, with a present annual market of $40

million;

- a light source for optical coherence tomography, in development in

conjunction with UBC.

This Technology Acquisition formally positions the Company as a fully integrated R&D and commercialization bio-photonics platform given that all of the scientists and management personnel of Zecotek Laboratories have now joined the Company as employees or consultants.

In consideration for this acquisition, the Company will pay to Zecotek Holdings Singapore Pte. Ltd., a company controlled by Dr. Faouzi Zerrouk (and of which Mr. Michel Coderre is a minority shareholder), cash of $338,000 of which $140,000 was previously paid and issue 11,750,000 common shares which will be subject to a four-month hold period and will be placed in a three year escrow pursuant to the policies of the TSX Venture Exchange. The Company has also granted an aggregate of 2,400,000 options to its directors, officers, employees and consultants. The options are exercisable at $1.76 for a period of five years.

B. The Private Placement

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Concurrently with the Technology Acquisition, the Company today closed the Private Placement consisting of 6,389,400 Units at a price of $0.90 for gross proceeds of $5,750,460. These numbers reflect the exercise by the Agent of its greenshoe option to offer additional Units equal to 15% of the initial Units, which option was triggered due to the Private Placement being oversubscribed. Each Unit consists of one common share and one half of one warrant. Each whole warrant entitles the holder to acquire one common share for a period of 18 months at a price of $1.30. The 18-month exercise period may be accelerated if the closing price of the common shares is greater than $2.00 for more than 20 consecutive trading days. For its services, the Company paid Research Capital Corporation a cash commission of 8% of the gross proceeds and issued an aggregate of 638,940 warrants to acquire Unit at $0.90 for a period of 18 months. All the securities are subject to a four month hold period.

C. Early Warning Announcement

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As a result of the issuance to Zecotek Holdings Singapore Pte. Ltd. of 11,750,000 common shares of the Company in connection with the Technology Acquisition, Dr. Faouzi Zerrouk controls a total of 14,150,000 common shares of the Company, representing approximately 41% of the outstanding common shares. Of these shares, 11,750,000 are held by Zecotek Medical Systems Singapore Pte. Ltd. and 2,400,000 are held by Zecotek Holdings Inc. (each said company controlled by Dr. Zerrouk and in which Mr. Michel Coderre is a minority shareholder). Mr. Michel Coderre may be considered to be a joint actor with Dr. Zerrouk.

In addition, Mr. Zerrouk holds options and warrants entitling him to acquire a further 1,460,000 common shares of the Company, approximately 4.2% of the outstanding common shares. Mr. Coderre holds options to acquire up to 540,000 common shares of the Company, representing approximately 1.6% of the outstanding common shares.

Messrs. Zerrouk and Coderre may increase or decrease their holdings of common shares of the Company as circumstances arise, and may exercise stock options to purchase common shares of the Company.

About Zecotek Medical Systems

Zecotek is a market driven, research and development bio-photonics company based at the University of British Columbia. The Company is focused on the creation of advanced materials and integrated optoelectronic devices for high resolution medical imaging, optical precision surgery and biopharmaceutical research and 3D displays. ZMS grows by developing and acquiring intellectual property and technology. Only after employing know-how through a very thorough selection process mechanism which involves industry leaders and constant interaction with major end-users does Zecotek initiate research and development in any particular field to develop intellectual property and grow its assets. The Company commercializes its technologies through strategic alliances with leading OEM manufacturers and distributors. Shares of Zecotek are listed for trading on the TSX Venture Exchange under the symbol "ZMS".

The TSX Venture Exchange has not reviewed and does not accept

responsibility for the adequacy or accuracy of the content of this

news release.

If you would like to receive news from Zecotek in the future, please

email alison@chfir.com and mention ZMS News in the subject heading.

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For further information: GRANT MACDONALD, CFO, T: (604) 689-4200, E: grant@maccap.com; CHF Investor Relations, JAN C. MOIR, Vice President, T: (416) 868-1079 x237, E: jan@chfir.com

Source: newswire