Centiva Capital Inc.
TSX VENTURE : CVC

Centiva Capital Inc.

December 13, 2010 17:05 ET

Centiva Capital Announces Reverse Takeover and Private Placement

TORONTO, ONTARIO--(Marketwire - Dec. 13, 2010) -

NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Centiva Capital Inc. ("Centiva" or the "Company") (TSX VENTURE:CVC), is pleased to announce that on December 13, 2010 it has entered into a Share Exchange Agreement with Intech LCD Group Limited ("Intech") and its shareholders to complete an arm's length reverse takeover (the "Proposed Transaction") with the shareholders of Intech in accordance with the policies of the TSX Venture Exchange ("TSXV"). Under the Proposed Transaction, Centiva will acquire all of the issued and outstanding securities of Intech, such that Intech will become a wholly-owned subsidiary of the Company. The Share Exchange Agreement entered into among Centiva, Intech and Intech's shareholders will be made available in due course on SEDAR at www.sedar.com.

About Centiva

Centiva is a corporation existing under the laws of Canada and is a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland. Centiva currently has 16,856,632 common shares outstanding. In addition, options to acquire 1,536,000 common shares of Centiva have been granted to Centiva's directors and officers. Mr. John D. Pennal, Centiva's President and Chief Executive Officer owns 5,709,900 common shares of the Company representing 33.9% of all issued and outstanding common shares.

In conjunction with the Proposed Transaction, the Company will hold a special meeting (the "Meeting") of its shareholders to approve the Proposed Transaction. At the Meeting, Centiva's shareholders will also elect the directors to take office upon closing of the Proposed Transaction.

About Intech

Intech, incorporated in Hong Kong, engages in the research & development, manufacturing and sales of various types of LCD panels and modules, together with after-sales maintenance services. The business of Intech was founded in 1987 in China and has a 23-year history of supplying its customer base of major corporations and institutions worldwide with industry-leading quality LCD products. The various lines of LCD products of Intech are deployed in a diverse array of industries with a special focus on the biotech/medical devices and telecommunication equipment sectors. In 1996, for management structural efficiency, Intech LCD Group Limited was incorporated under the laws of Hong Kong as the holding company of the overall business and its headquarters is located at 1003-8 Landmark North, Sheung Shui, N.T., Hong Kong.

Intech and its subsidiaries employ over 2,000 people of which 100 are research & development personnel. The main manufacturing activities of the Group are currently being relocated from its existing facilities in Shenzhen to its new state-of-the-art facilities in Shaoguan where new product lines, including its LED and LCD Touch Panel products, will commence production. The production capacity of the Group will triple once the Shaoguan production facilities are fully operational. The website of the Group is www.intech-lcd.com.

The names and jurisdictions of residence or incorporation of each shareholder of Intech are as follows:

Name Jurisdiction of Residence/Incorporation
Mark Lum Lee Lam Hong Kong
Cheryl Sun Hong Kong
Madison Partners International Ltd. British Virgin Islands
Monetary Management Consultancy Limited Hong Kong

Summary of Financial Information for Intech

The following table sets forth selected financial information for Intech. The figures have been derived from Intech's unaudited financial statements for the years ended December 31, 2009, 2008 and 2007 and interim financial statements for the nine-month period ended September 30, 2010.

Unit: HK $(1)
  For the period ended September 30, 2010 For the year ended December 31, 2009 For the year ended December 31, 2008 For the year ended December 31, 2007
Total revenues 26,221,547 27,297,127 39,261,922 49,686,085
Cost of sales 16,268,504 17,547,576 24,745,530 31,502,521
Profit (Loss) from Continuing Operations 13,323,925 11,760,068 14,866,141 17,710,936
Net Profit (Loss) 10,749,310 9,200,342 11,923,447 14,432,706
Total Assets 97,046,578 87,030,704 77,891,275 64,337,196
Current liabilities 19,680,422 20,413,859 20,474,772 18,844,140
Shareholders' Equity 77,366,156 66,616,845 57,416,503 45,493,056
(1) On December 10, 2010, the noon rate of exchange reported by the Bank of Canada for conversion of Hong Kong dollars into Canadian dollars was KH$1.00 = Cdn.$0.13.

About the Proposed Transaction

Subject to any regulatory, shareholder, director or other approvals that may be required and other conditions contained in the Share Exchange Agreement, the Proposed Transaction will proceed by way of a reverse take-over transaction which will be effected by way of a share exchange (the "Share Exchange"). Pursuant to the Share Exchange, the holders of common shares of Intech will receive twelve (12) common shares of Centiva for each one (1) common share of Intech held which reflects an agreed upon value between the parties for Intech of $6,000,000 or $0.05 per common share. There are no outstanding options and similar rights to acquire Intech common shares outstanding.

The Proposed Transaction is also subject to the Concurrent Financing described below as well as an internal reorganization of Centiva.

About the Centiva Reorganization

Pursuant to this reorganization Centiva will transfer its existing portfolio of investments and operations to its current shareholders of Centiva. Centiva will incorporate a wholly-owned subsidiary ("Subco"). Centiva will then transfer to Subco all of its existing assets for the assumption by Subco of all of Centiva's liabilities and the issuance to Centiva of that number of Subco common shares that will result in Centiva owning in the aggregate 16,856,632 Subco common shares. Subco will indemnify and save Centiva harmless in respect of the Centiva liabilities assumed by Subco. Upon completion of the Proposed Transaction Centiva will distribute all of the Subco shares held by it to its shareholders on a share-for-share basis and will apply to list the Subco shares on the TSXV.

As a result of the reorganization the current shareholders of Centiva will continue to hold their common shares of Centiva and will also receive, on a share-for-share basis, new shares of Subco for no additional consideration.

After the completion of the Restructuring Transactions, Centiva will have a total of 196,856,632 common shares outstanding.

Shareholders Common Shares %  
       
Existing Centiva Shareholders 16,856,632 8.56 %
       
Private Placement Investors 60,000,000 30.48 %
       
Mark Lum Lee Lam 35,000,000 17.78 %
Cheryl Sun 35,000,000 17.78 %
Madison Partners International Ltd. 36,000,000 18.29 %
Monetary Management Consultancy Limited 14,000,000 7.11 %
       
Total 196,856,632 100.00 %

* On a fully-diluted basis, assuming the exercise of the 1,536,000 existing stock options, Centiva will have a total of 198,392,632 common shares outstanding.

Upon completion of the Proposed Transaction, the Company will initially continue to carry on the business of Intech as currently constituted. In addition, Centiva will also seek to: (i) identify and acquire small/medium-sized growth companies, primarily in the People's Republic of China and the Republic of Korea, that possess proprietary technologies and a track record of profitable operations; (ii) assist the management of each acquired company to enhance its value; (iii) originate collaboration amongst the portfolio of acquired companies to create new opportunities for one another and leverage off each others' capabilities and resources; and (iv) reflect the collective value derived from the performance of the acquired businesses on the share price of Centiva.

Upon completion of the Proposed Transaction, it is expected that the resulting issuer will be a Tier 2 Issuer.

Arm's Length Qualifying Transaction

The Proposed Transaction is an arm's length transaction in accordance with the policies of the TSXV.

Concurrent Private Placement

Concurrently with the Proposed Transaction Centiva will seek to issue up to 60,000,000 common shares at a price $0.05 per share for gross proceeds of up to $3,000,000. Other particulars of the concurrent financing, including the identity of any agent/underwriter will be disclosed in a subsequent press release.

Sponsor

If required pursuant to Policy 2.2 – Sponsorship and Sponsorship Requirements of the TSXV Centiva and Intech will retain a Sponsor in connection with the Proposed Transaction.

Management and Board of Directors of Centiva and Intech

Upon completion of the Proposed Transaction, it is anticipated that the board of directors and management of Centiva will include the persons identified below. Additional proposed directors and officers of Centiva will be identified at a later date.

Mr. Charles C. Spackman, Chairman of the Board and Chief Executive Officer. Mr. Spackman is Chairman, Chief Executive Officer, and Founder of Spackman Group Limited, a Hong Kong-based diversified investment company. Spackman Group has invested into and owns companies that are engaged in such businesses as air and wastewater treatment, alternative energy, motion picture & TV productions, marketing & communications, information technology and financial services. Before establishing Spackman Group in 1997, Mr. Spackman worked in the investment banking divisions of UBS Securities, Peregrine Securities, Jardine Fleming Securities, and Smith Barney Securities. In addition to heading Spackman Group, he is Vice Chairman of the Standing Council of the Guangdong Society for Strategic and Management Research, an economic advisory committee of the Guangdong Provincial Government in China. He is President of The Spackman Foundation, and sponsor of The Charles C. Spackman Scholarship Fund at Harvard University, a financial aid fund for Asian students admitted to Harvard College. He graduated from Harvard College with an A.B. in Economics. 

Mr. Martin A. Mohabeer, Director. Mr. Mohabeer is Managing Director of Spackman Group and also serves as Chief Executive Officer of Spackman Capital Group, the Group's New York-based investment arm. Prior to joining Spackman Group, Mr. Mohabeer worked in the investment banking division of Goldman Sachs, specializing in financial institutions. He began his investment banking career in the financial institutions group of Donaldson, Luftkin & Jenrette in New York and also worked as a management consultant at Mitchell Madison Group. Mr. Mohabeer graduated from Harvard College with an A.B. in Statistics and from The Wharton School, University of Pennsylvania with an M.B.A. degree in Risk Management. He is registered with the NASD as a General Securities Representative (Series 7).

Mr. John D. Pennal, Director. Mr. Pennal has been the President and Chief Executive Officer of TriNorth Capital Inc., a company listed on the TSXV, since January 1994; and he has been the President and Chief Executive Officer of Centiva Capital Inc., another TSXV-listed company since October 2007. Mr. Pennal is a graduate of the University of Toronto Law School and was called to the Ontario bar in 1973. He serves as counsel to the law firm of Ogilvy Renault LLP.

Mark Lum Lee Lam, Chairman and Chief Executive Officer of Intech. Mr. Lam serves as the Chairman of the Board of Directors and Chief Executive Officer of Intech. In the 1980's, Mr. Lam was one of the first entrepreneurs in the LCD business in China and was responsible for introducing U.S. manufacturing technology to China for the first generation of LCD production. Since then, he has been the founder of eight LCD companies in his 23-year career in the industry. Mr. Lam is responsible for overall management and strategic planning of the Intech group of companies. He also serves on several industry associations and government boards which include serving as Vice Chairman of the Hong Kong Critical Components Manufacturers Association, Chairman of the China Information Industry Association, Vice Chairman of the Hong Kong Electronics Technologies Association, Director of the Greater China Education Fund, and Director of the Hong Kong Vocational Training Board Electronic Committee. Apart from his business endeavors, he is also an ideologist and writer. His book, "The National Culture and Hong Kong's Youngsters," has influenced the lives of many youths in Hong Kong and has been recommended by the Education and Culture Foundation of China.

Cheryl Sun, Director and General Manager of Intech. Ms. Sun is a Director and General Manager of Intech and oversees all aspects of the daily operations, including purchasing, manufacturing, sale, and finance.

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

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Centiva should be considered highly speculative.

Forward-Looking Statements

This press release contains forward-looking statements relating to the proposal to complete the Proposed Transaction and associated Transactions, including statements regarding the terms and conditions of the Merger. Readers are cautioned to not place undue reliance on forward-looking statements. Forward-looking statements are based on certain key assumptions made by the Company, including assumptions regarding the ultimate terms of the Proposed Transaction, the satisfaction of conditions to the completion of the Proposed Transaction and the Merger and the receipt of all regulatory and stock exchange approvals. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Transaction and associated transactions, that the ultimate terms of the associated transactions will differ from those that currently are contemplated, and that the Proposed Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The forward-looking statements in this press release are made as of the date of this release and the Company undertakes no obligation to update publicly or revise any forward-looking statements whether as a result of new information or otherwise, except as required by applicable securities laws.

Not for distribution to U.S. Newswire Service or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) has in any way passed upon the merits of the Proposed Transaction and the associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Contact Information

  • Centiva Capital Inc.
    John D. Pennal
    President and CEO
    (416) 956-4926
    or
    Spackman Group Limited
    Charles Spackman
    Chairman
    (852) 3902-3113
    or
    Intech LCD Group Limited
    Mark Lam
    Chairman
    (852) 2671-6373