ZoomMed inc.
TSX VENTURE : ZMD
TSX CROISSANCE : ZMD

ZoomMed inc.

June 02, 2005 23:59 ET

ZoomMed announces the signature of an agreement in principle regarding a qualifying transaction

MONTREAL, June 2 - ZoomMed inc. ("ZoomMed"), a capital pool
corporation (TSX Venture Exchange: ZMD.P), is proud to announce that it signed
an agreement in principle on May 26, 2005 (the "Agreement in Principle")
providing for the acquisition of all the issued and outstanding common shares
of 9103-8240 Québec inc. (the "Target Company"), which in turn holds all the
issued and outstanding shares of 4130936 Canada Inc. (collectively, the
"Businesses")

This share purchase will be made in consideration of a price of
$4,500,000, payable by the issuance of 18,000,000 common shares of ZoomMed, at
a price of $0.25 per share. This transaction constitutes ZoomMed's qualifying
transaction pursuant to the applicable regulations of the TSX Venture Exchange
Inc. (the "Exchange") and is hereinafter referred to as the "Qualifying
Transaction".

The conditions precedent to the completion of the Qualifying Transaction
are the following:

(i) the completion of a due diligence of the Businesses by ZoomMed;
(ii) receipt of a sponsorship report from a firm recognized by the
Exchange, in accordance with the requirements of the Exchange;
(iii) receipt of all required regulatory authorizations pursuant to laws,
regulations and applicable policies; and
(iv) the absence of any adverse material change in the Businesses'
affairs between February 28, 2005 and the date of the closing of
the Qualifying Transaction.

The true Vendors in respect of the Qualifying Transaction are the
shareholders of the Target Company, that is to say: (i) Mr. Alain Bourassa of
St-Mathieu (Quebec), (ii) Mr. Mariel Vachon of Cochrane (Ontario), (iii) Mr.
Yves Marmet of St-Bruno (Québec), (iv) Ms. Marie-Hélène Pinard of St-Bruno
(Québec), (v) Mr. Yves Rajotte of Sutton (Québec), (vi) Mr. André Marmet of
Ste-Julie (Québec), and (vii) 4126009 Canada inc., a corporation duly
incorporated under the Canada Business Corporations Act, controlled by Mr.
Benoît Girard of Laval (Québec).

M. Alain Bourassa and Mariel Vachon are the sole directors and officers
of the Target Company.

The head office of the Target Company is located at 9610 Place Ignace,
Brossard, Quebec, J4Y 2R4 and all the important assets of the Businesses are
located at such address.

The Businesses are specialized in the reinstatement, management and
restoration of pre-used or, if needed, new medical and laboratory equipment,
and also offers as a complement, replacement parts. In this respect, the
Businesses purchase used equipment, see to its restoration, and finally,
resell such equipment in the market.

In addition to equipment restoration, the Businesses have also developed
an expertise in inventory management, in consulting services, in the purchase
and sale of equipment from public and private health institutions (hospitals,
laboratories and CLSCs), and in the delivery, collection, restoration,
maintenance and consignment of equipment.

The Businesses also offer an eBay® style, multilingual Web portal
specialised in the purchase and sale of medical equipment giving potential
clients the possibility of finding equipment, parts and services that respond
to their needs.

The Businesses also offer a Web solution specialised in the management of
the life cycle of medical equipment. This solution offers specialists the
possibility of efficiently managing inventories, preventive and curative
maintenance, formal follow-ups, document and service contract management.

Finally, the Businesses intend to create a new product, which will change
the way drugs are prescribed and dispensed in Canada, known as the "ZRx"
product, an electronic prescriber.

This project consists of offering a computer tool to doctors, which uses
cutting-edge technologies, allowing them to execute various tasks related to
drug management. It consists of developing a simple and free Web product,
which will use Pocket PC technology or Phone Pocket Pc (PPPc), the whole in
collaboration with doctors, with partners having therapeutic advisor software
and drug interaction software and with other suppliers working in the
pharmaceutical field.

The Target Company generated revenues of $422,310 for the nine (9) month
period from June 1st, 2004 to February 28, 2005. The Target Company had, as at
February 28, 2005, assets totalling $1,396,100, liabilities of $530,460,
shareholder's equity totaling $865,640, a negative working capital of $11,466
and net loss of $126,120. These results are taken from the audited financial
statements of the Target Company for the nine (9) month period from June 1st,
2004 to February 28, 2005.

Following the completion of the Qualifying Transaction, ZoomMed intends
to continue the current activities of the Businesses and it is expected that
as at the closing date of the proposed Qualifying Transaction, ZoomMed will
have $1,500,000 of cash on hand.

After giving effect to the Qualifying Transaction, 29,500,000 common
shares of ZoomMed will be issued and outstanding, of which 3,000,000 shares
were issued as discount seed capital for a price of $0.10 per share, 8,500,000
shares were issued at the closing of ZoomMed's initial public offering of last
May 18th, for a price of $0.20 per share and 18,000,000 shares which will be
issued upon completion of the Qualifying Transaction.

ZoomMed expects to grant 1,150,000 options to its directors allowing them
to acquire 1,150,000 common shares of ZoomMed at a price of $0.20 per share
for a period of 5 years, subject to the provisions of the stock option
agreements and has granted 425,000 options to Dlouhy Merchant Group Inc., the
agent having completed the initial public offering of ZoomMed, allowing it to
acquire 425,000 common shares of ZoomMed at a price of $0.20 per share for a
period of 18 months.

The Qualifying Transaction will not be subject to the approval of the
shareholders of ZoomMed. The Qualifying Transaction is an arm's length
transaction. The Businesses and its officers and ZoomMed and its officers are
not related parties pursuant to the applicable securities laws.

Once the Qualifying Transaction is completed, it is anticipated that the
insiders of ZoomMed will be Mr. Alain Bourassa, Mr. Mariel Vachon, Mr. Pietro
Perrino, Mr. Valier Boivin, Mr. Robert Powell, Mr. Lawrence Noreyko and Mr.
Jean-Denis Talon.

Mr. Alain Bourassa has been working in the medical field for many years.
Before founding the Target Company in 1999, he acquired experience in the
medical field. As such, he was the manager of a orthopaedic center, marketing
director, general manager and coordinator of commercial projects of medical
equipment retail sales network.

Mr. Mariel Vachon acts principally as an investor and has worked in the
forestry transportation field since 1979.

Mr. Pietro Perrino is the founder and President of Pergui Groupe Conseil
since 1999, where he acts as a consultant for business leaders, helping them
with their strategic positioning and business development. Mr. Perrino
obtained a Masters in Business Administration (MBA) from the Université du
Québec à Montréal (January 2001).

Mr. Valier Boivin is the founder and a partner of Boivin O'Neil,
s.e.n.c., a Montreal law firm, since 1987. Mr. Boivin obtained a Bachelor of
Administration degree from Université de Chicoutimi (June 1973), a Master of
Taxation degree from Université de Sherbrooke (October 1978) and a Bachelor of
law degree from Université de Montréal (September 1985).

Mr. Robert Powell is President of CANSYS Inc. since the late 1980s. Mr.
Powell obtained a Bachelor in Civil Engineering from the University of Toronto
(1970).

Mr. Lawrence Noreyko is the founder and President of Les Ventes Futura
Inc., a private company specialized in the field of lighting consultation,
since 1987.

Mr. Jean-Denis Talon is the Chairman of the Board of AXA Canada
(insurance company) since April 2004. For 20 years prior thereto, Mr. Talon
was the President and Chief Executive Officer of AXA Canada.

In order to allow the Businesses to pursue their operations until the
closing of the Qualifying Transaction, ZoomMed has granted a non-refundable
deposit of 25,000$ to the Target Company. ZoomMed also intends to grant a
secured loan in the amount of $50,000 to the Target Company, upon approval by
the Exchange. This loan will bear interest at an annual rate of 8%, will be
secured by a hypothec charging all of the Target Company's assets and will be
repayable in one (1) year.

ZoomMed has made a request to the Exchange in order that the trading of
its shares on the Exchange be halted until the closing of the Qualifying
Transaction.

Pursuant to a letter dated March 24, 2005, ZoomMed retained Demers
Beaulne as the expert in order to evaluate the shares of the Target Company to
be bought in the framework of the proposed Qualifying Transaction.

Subject to completion of satisfactory due diligence, Versant Partners
Inc. (formerly Dlouhy Merchant Group inc.) has agreed to act as sponsor in
connection with the Qualifying Transaction. An agreement to sponsor should not
be construed as any assurance with respect to the merits of the transaction or
the likelihood of its completion and the sponsor report will not constitute a
formal estimate of the value of the securities of the Target Company.
Moreover, there is no assurance that the Qualifying Transaction will be
completed. Neither ZoomMed, nor the Businesses are related to or associated
with Versant Partners Inc. However, Versant Partners Inc. will receive a fee
for its sponsorship report regarding the Qualifying Transaction.

Completion of the Qualifying Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and if
applicable pursuant to Exchange Requirements, majority of the minority
shareholder approval. Where applicable, the transaction cannot close until the
required shareholder approval is obtained. There can be no assurance that the
transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management
information circular or filing statement to be prepared in connection with the
transaction, any information released or received with respect to the
transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered
highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the contents of
this press release. The TSX Venture Exchange has neither approved nor accepts
any responsibility with respect to the veracity or exactitude of this press
release.

Contact Information

  • ZoomMed inc.
    Valier Boivin
    Director
    (514) 844-5468