Zecotek's New LFS Crystal Production Facility Generating New Business From new and old Customers

Tuesday, September 4, 2018 General News
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VANCOUVER, British Columbia, September 4, 2018 /PRNewswire/ --

Zecotek Photonics Inc. ("Zecotek"

or the "Company") (TSX-V: ZMS) (Frankfurt: W1I) (OTCPK: ZMSPF), a developer of leading-edge photonics technologies for healthcare,áindustrial and scientific markets, isápleased to provide an update to the corporate activities undertaken by the Company
in China, following the successful opening of its LFS Crystal Production Facility in Shanghai. As expected the strategy of opening a crystal production facility has generated business and renewed interest from existing and new customers.

"Our new crystal growing facility in Shanghai, is a game changer for Zecotek Imaging as we now have full control of the production of our patented LFS scintillation crystals," said Dr. A.F.áZerrouk, Chairman, President, and CEO ofáZecotekáPhotonics Inc. "During the month of July and at the official opening ceremony, several of our customers inspected the premises and were impressed by the new facility and the lab installation of crystal growing ovens. The recent shift in intellectual property rights by the healthcare industry presented an opportunity for Zecotek to open its own crystal production facility. By doing so, not only are we experiencing renewed interests from existing partners like EBO Optoelectronics and Hamamatsu Photonics, but we have also had new customers making significant orders and new investors investing at the divisional level. This is a very exciting time for our Company."

In late 2017 and early 2018, the medical scanning industry responded to recent patent litigation over scintillation crystals and other technologies incorporated into new high resolution medical scanning devices. With intellectual property rights being enforced around the world, including China, many PET OEMs are demanding that suppliers which produce a strategic product, own the underlying patent.

Due to the opening of the new LFS Crystal Production Facility in Shanghai, Zecotek is experiencing renewed interest in its patented LFS scintillation crystal from new and old customers. ZecotekáImaging China Ltd. is currently working with long standing customers including the EBO Optoelectronics Technology Company (EBO) and Hamamatsu Photonics to resume deliveries of Zecotek's patented LFS scintillation crystals. Recently announced LFS crystal orders are being processed using crystals from the Company's current inventory. Additional boules are grown in the new production facility in accordance with provincial environmental guidelines.

The new production strategy is attracting local investor interest. Earlier this year Zecotek sold equity interest ináZecotek?Imaging?ChinaáLtd.?for proceeds ofá$5ámillion, based on a value ofáZecotek'sápatented LFS scintillation crystal technologyáofáapproximatelyá$75ámillion. In July the same group of local Chinese investors paid $2ámillionáto acquireáaá2% interest in ZecotekáImaging SystemsáPte.áLtd.ábased solely on the appraised pre-commercialized value of approximately $100 million.áOngoing discussions are taking place, based on offers for substantial government incentives for production facility expansion to manufacture all variants of LFS as well as different configurations, such as single crystal elements, different size arrays and assembly to corresponding electronics.

Zecotek Imaging China, a subsidiary of Zecotek Imaging Systems (Singapore), is commercializing patented LFS scintillation crystals through its new crystal production facility in Shanghai, China. Zecotek Imaging China is poised to become a leaderáin large-scale production, cutting and polishing of scintillation crystalságrown by the Czochralski method in China.áUsing a proprietary manufacturing process, very large-diameter boules with uniform properties and without cracks are produced resulting in high element output with lower unit costs.á

The ISO certified LFS Crystal Production Facility has sufficient capacity to meet the delivery schedule of our Tier 1 clients and will be expanded to meet growing demand in late 2018 and early 2019.

Zecotek's patented LFS scintillation crystals are grown using the Czochralski method with internal modifications. This proprietary growing method produces very large-diameter boules with uniform properties and without cracking (a problem with many competing scintillation materials). This highly efficient method produces a great number of high quality elements from each boule. Larger, higher quality boules, produce more single elements resulting in greater output and lower unit costs.

Cutting, polishing and array assembly will also be done at the production facility in Shanghai. Zecotek has developed a proprietary automated manufacturing process that uses robotics to assemble the LFS crystal arrays. The automated process will translate into faster manufacturing of arrays and improve the performance of the arrays with repeatable uniformity and much greater accuracy. á

Zecotek's LFS series of scintillation crystals are protected in China and jurisdictions around globe by a worldwide patent (including US patent No. 7,132,060). The crystals cover a wide range of emission wavelengths which can be tailored to match the spectral sensitivity of various photo detectors including Zecotek's own solid-state MAPD/T photo detector arrays.

Zecotek is focused on of becoming a leading supplier of scintillation crystals and other key photonic components in China and around the world.

About Zecotek

Zecotek Photonics Inc. (TSX-V: ZMS) (Frankfurt: W1I) (OTCPK: ZMSPF) is a photonics technology company developing high-performance scintillation crystals, solid-state photo detectors, 3D displays and related technologies for applications in medical, high-tech and industrial sectors. Founded in 2004, Zecotek has three operating divisions: Zecotek Imaging Systems, Zecotek Optronics Systems, and Zecotek Autotronics with labs located in Canada, Korea, Russia, Singapore and U.S.A. It is commercializing over 55 patented and patent pending novel photonic technologies directly and through strategic alliances with the Shanghai EBO Optoelectronics Technology Company (China), Hamamatsu Photonics (Japan), the European Organization for Nuclear Research (Switzerland), NuCare Medical Systems (South Korea), the University of Washington (United States), and National NanoFab Center (South Korea). For more information visitáhttp://www.zecotek.comáand follow @zecotek on Twitter.

This press release may contain forward-looking statements that are based on management's expectations, estimates, projections and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what may have been stated. á

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts 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 visit the corporate website at http://www.zecotek.com.

For additional information please contact: Zecotek Photonics Inc. Michael Minder T: +1(604)783-8291 ir@zecotek.com

SOURCE Zecotek Photonics Inc.



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