Centiva Capital Inc.
TSX VENTURE : CVC

Centiva Capital Inc.

June 30, 2011 12:49 ET

Centiva Proposes to Raise New Capital, to Reorganize and to Distribute Assets to Shareholders

TORONTO, ONTARIO--(Marketwire - June 30, 2011) - Centiva Capital Inc. (TSX VENTURE:CVC) ("Centiva" or the "Company") is pleased to announce that it intends to proceed with a private placement of common shares for gross proceeds of a minimum of $3,000,000 and a maximum of $3,500,000 (the "Financing").

Subject to completion of the Financing, the Company also intends to:
  • appoint two new directors to replace two of the existing directors on the Company's board of directors (the "Change of Directors");

  • retain Charles Spackman as the new Chief Executive Officer of the Company with a mandate to broaden and refocus the investment scope of the Company to Asia (mainly Korea and China) by making investments and acquisitions that comply with the investment policy agreed upon by the Company and Charles Spackman (the "Investment Policy").

  • change the name of the Company to Spackman Equities Group Inc. or such other name as is acceptable to the TSX Venture Exchange (the "Name Change"); and

  • distribute its existing assets (with the exception of a promissory note in an amount representing $0.05/common share of Centiva (the "Promissory Note")) to shareholders by way of a Plan of Arrangement (the "Arrangement").

The Company will call an annual and special meeting of shareholders (the "Meeting") to approve, among other things, the Financing, the Change of Directors, the Name Change and the Arrangement. The Company currently expects that the Meeting will be held prior to August 31, 2011. On that basis the record date for determining the holders of common shares of Centiva that will be entitled to receive notice of and to vote at the Meeting will be July 5, 2011.

In addition, TSX Venture Exchange (the "TSXV") approval is required for the proposed transactions contemplated by this reorganization.

Financing

Centiva intends to proceed with a private placement of common shares for gross proceeds of a minimum of $3,000,000 and a maximum of $3,500,000. The securities will be issued at a subscription price of $0.05 per common share. The common shares issued pursuant to the private placement will be subject to resale restrictions for a period of four months and one day following the closing date of the Financing.

Centiva has engaged Hampton Securities Inc. as its sole lead agent in Canada (the "Agent") to raise, on a commercially reasonable best efforts basis, a minimum of $500,000 and a maximum of $1,000,000 of gross proceeds of the private placement. The balance of the Financing will be non-brokered. No new control person will be created as a result of the Financing which will be conducted on an arm's length basis.

The Agent will receive a cash commission equal to 8% of amounts raised by the Agent plus broker warrants equal to 8% of securities sold by the Agent. Each broker warrant shall entitle the Agent to acquire one further common share of the Corporation at a price of $0.05 for a period of 24 months following the closing of the Financing. Centiva will also pay to the Agent a $10,000 administration fee as well as a $12,000 corporate finance fee.

The minimum private placement of $3,000,000 will result in the issue by Centiva of 60,000,000 common shares and the maximum private placement will result in the issue of 70,000,000 common shares, in each case before the exercise of the broker warrants.

At least 50% of the net proceeds of the Financing will be used to make new investments which comply with the Investment Policy and will be subject to the completion of the Financing. The Company expects that it will announce at least two new investments prior to the Meeting. The balance of the net proceeds from the Financing will be used for additional investments and for working capital purposes.

Arrangement

The existing assets of the Company consist of cash and securities, investments in Canadian technology based companies and one operating division, Grapevine Solutions based in Markham, Ontario, which provides Internet survey software. These assets are not consistent with the investment strategy outlined in the Investment Policy and the Company has concluded that these assets will not be of interest to, nor will they be assigned appropriate value by, the new investors who will participate in the Financing. Accordingly, the directors of Centiva concluded that it would be in the best interests of the Company to distribute these assets to the shareholders prior to the closing of the Financing. On June 30, 2011, Centiva and Aylen Capital Inc. ("Aylen") entered into an Arrangement Agreement to distribute the existing assets of Centiva to shareholders by way of a Plan of Arrangement.

Under the terms of the Arrangement, all of the existing assets and liabilities of the Company will be transferred to Aylen in exchange for shares of Aylen and the Promissory Note. The stated capital of Centiva's common shares will then be reduced by an amount equal to the fair market value of the Company's assets less its liabilities on the date such assets and liabilities are transferred to Aylen. Centiva will then distribute, on a pro-rata basis to each shareholder, all the shares of Aylen. It is expected that, subject to regulatory approval, Aylen will seek to list its common shares on the TSXV following the completion of the Arrangement.

Upon completion of the Arrangement Aylen will issue the Promissory Note to Centiva in an amount representing $0.05 per issued and outstanding common share of Centiva immediately prior to the Arrangement. The promissory note will be repayable (in full or in part) by Aylen upon disposition of the assets transferred to it by Centiva and will be secured against the assets of its Grapevine Solutions division.

After the Arrangement is completed, Centiva will continue to carry on the business of identifying and investing into or acquiring small/medium-sized growth companies. It will focus on investing into or acquiring growth companies in Asia (principally in China and Korea) at attractive valuations, building a diversified portfolio of such growth companies and, ultimately, delivering the collective value derived from the performance of these businesses to the shareholders of Centiva.

In due course Centiva will apply for an interim order of the Superior Court of Justice (Ontario) (the "Court") to authorize the Company to, among other things, call a special meeting of its shareholders to consider and, if deemed advisable, pass a special resolution approving the Arrangement. If the interim order is issued by the Court, Centiva will request shareholder approval of the Arrangement at the Meeting. The completion of the Arrangement is subject to certain conditions, including the receipt of the requisite approval of a majority of the minority shareholders of Centiva, the final approval of the Court, the completion of the Financing and other required regulatory approvals.

Change of Directors and Management

Subject to completion of the Financing, Brian Hemming and Douglas Babcock have agreed not to be nominated for election as directors at the Meeting. In addition, John Pennal will resign as the President and Chief Executive Officer of the Company and will be replaced by Charles Spackman. Upon completion of the Arrangement, it is anticipated that the board of directors of Centiva will include the persons identified below.

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 information technology, telecommunications, entertainment & media, biotechnology, alternative energy, and financial services. Before establishing Spackman Group in 1997, Mr. Spackman worked in the investment banking divisions of UBS, 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, 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. Mr. Spackman 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.

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., 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 Norton Rose OR LLP.

Name Change

At the Meeting, shareholders will also be asked to authorize an amendment to the articles of Centiva to effect a change of name of the Company to "Spackman Equities Group Inc." or such other name as the Board of Directors determines appropriate and which all applicable regulatory authorities, including the TSXV, may accept upon completion of the Arrangement.

Completion of the Proposed Transaction is subject to the satisfaction of a number of conditions, including, but not limited to, TSXV acceptance and pursuant to TSXV requirements, majority of the minority shareholder approval. The proposed transactions cannot close until the required shareholder approval is obtained. There can be no assurance that the proposed transactions 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 Meeting, any information released or received with respect to the proposed transactions may not be accurate or complete and should not be relied upon. Trading in the securities of Centiva should be considered highly speculative.

Included in this news release are matters that constitute "forward-looking" information within the meaning of Canadian securities law. Such forward-looking statements may be identified by words such as "plans", "proposes", "estimates", "intends", "expects", "believes", "may" or words of a similar nature. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include among others, regulatory risks, risk inherent in foreign operations, risk inherent in the capital markets and competition. Most of these factors are outside the control of the Company. All subsequent forward-looking statements attributable to the Company or its agents are expressly qualified in their entirety by these cautionary comments. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

Neither the Exchange nor its regulation services provider (as that term is defined in the policies of the Exchange) has in any way passed upon the merits of the proposed transactions and neither of the foregoing entities has approved or disapproved of the contents of this press release.

Contact Information

  • Centiva Capital Inc.
    John D. Pennal
    CEO & President
    (416) 956-4926