HNS Sells Assets

HNS Sells Assets

WEST PALM BEACH, Fla.Mostassets of Health and Nutrition Systems Inc. (OTC BB:HNNSQ) have been sold to TeeZee Inc., a Florida-basedcompany owned by Christopher Tisi, a former chief executive officer and directorof HNNSQ. The sale was part of a reorganization plan approved by theU.S. Bankruptcy Court, Southern District of Florida, filed in October 2004 underChapter 11 federal bankruptcy law.

TeeZee purchased substantially all HNNSQ assets for a total of$2.2 million, including $1.8 million in assumed liabilities, $0.25 million incash and almost $0.03 million in escrowed cash from original agreement topurchase, announced Jan 11. As part of sale, TeeZeee owns the HNNSQ name, whoseformer owners will now be called Ashlin Development Corp., based here.

Ashlin intends to use portions of the proceeds to repaycertain creditors, including Garden State Nutritionals, and to fund any futureoperating expenses for its yet unspecified future business initiatives.