Canfe Ventures Announces Agreement in Principle with Dinan Engineering and its Shareholders


    VANCOUVER, Aug. 29 /CNW/ - Canfe Ventures Ltd. ("Canfe") (TSX-V:FEY.P), a
capital pool company as defined under Policy 2.4 of the TSX Venture Exchange
(the "TSX-V"), is pleased to announce that it has entered into an agreement
dated August 28, 2008, (the "Letter Agreement"), for the arm's length
acquisition of 100% of the shares of common stock of Dinan Engineering, Inc.
("Dinan"), a company incorporated under the laws of California, USA. Stephen
J. Dinan and Janice Dinan, both residents of California, and Canaccord Capital
Corporation will be the vendors of the Dinan shares. This transaction is
intended to qualify as Canfe's "Qualifying Transaction" under TSX-V Policy
    Pursuant to the Letter Agreement, Canfe will acquire all of the issued
and outstanding shares of Dinan in consideration for securities of Canfe
consisting of common shares (the "Canfe Shares") and other securities
convertible or exercisable into Canfe Shares so that if converted or exercised
on closing, the shareholders of Dinan would hold in the aggregate 53,343,333
common shares in the capital of Canfe at a deemed price of $0.50 per Canfe
Share for a total deemed value of $26,671,667. The proposed business
combination with Dinan (the "Proposed Transaction"), when completed, is
intended to enable Canfe to qualify as a Tier 1 Technology/Industrial Issuer
on the TSX-V.
    Dinan, a private company located in Morgan Hill, California, USA, was
founded in 1979. Dinan's software division develops performance enhancing
software for BMW engine management and other control systems, as well as the
tools necessary for BMW dealers to efficiently install the software. In
addition, the company designs, manufactures and markets an extensive line of
high performance products and systems for cars manufactured by BMW. Unique to
Dinan, through a 10 year relationship with BMW North America, Dinan products
carry an identical warranty to that offered by BMW North America. Dinan
products are distributed through a North American network of 143 authorized
Dinan BMW performance centers, offering professional sales, installation and
after sales support.
    Dinan has been featured in over 70 road tests and 11 cover stories in the
automotive press. For more detailed information about Dinan see:
    Based on audited financial statements for the fiscal year ended
December 31, 2007, Dinan had gross revenues of $9,151,079, gross margin of
$5,161,176 and total expenses of $6,284,954, resulting in a net loss of
$1,123,778. As at December 31, 2007, Dinan had a working capital deficiency of
$450,929, total assets of $5,060,326 and total liabilities of $5,511,255 (of
which $2,332,870 were current liabilities).
    According to unaudited management prepared financial statements for the
six months ended June 30, 2008, Dinan had gross revenues of $7,056,766, gross
margin of $4,914,074, and total expenses of $4,573,010, resulting in a net
profit of $161,819. As at June 30, 2008, Dinan had total assets of $5,692,070
and total liabilities of $6,438,376 (of which $2,918,694 were current
    In conjunction with the Proposed Transaction, Canfe plans to conduct a
brokered financing of common shares (the "Concurrent Financing") to raise up
to $5,000,000 with an over-allotment option of $2,000,000, and the parties
have agreed to engage Canaccord Capital Corporation ("Canaccord") to act as
the agent to conduct the Concurrent Financing. The pricing of the Concurrent
Financing is subject to market conditions and will be finalized through
negotiation among Canfe, Canaccord, Dinan and the Dinan shareholders, details
of which will be announced when settled. The net proceeds of the Concurrent
Financing will be used for Dinan's business operations, for repayment of
shareholder loans to certain of Dinan's shareholders, and for general working
capital purposes.
    The securities contemplated to be issued in the Concurrent Financing have
not been and will not be registered under the Securities Act of 1933, as
amended, or any state securities laws, and the securities may not be offered
or sold in the United States absent registration or an applicable exemption
from such registration. This press release does not constitute an offer of
    The Letter Agreement will be superceded by a definitive agreement to be
negotiated between the parties. The parties have agreed to use their
commercially reasonable efforts to complete the Proposed Transaction by
November 30, 2008. Completion of the Proposed Transaction is subject to
certain conditions, including the completion of the Concurrent Financing, the
completion of any necessary regulatory approvals in respect of the Proposed
Transaction, a change of Canfe's name to "Dinan Engineering Corporation" or
such other name as the parties may agree and which may be acceptable to the
relevant regulatory authorities, the election/appointment of new board members
of Canfe, the adoption by Canfe's shareholders of a 10% rolling stock option
plan, a valuation supporting the value of Dinan if required by the TSX-V, the
satisfactory completion by each party of their respective due diligence
investigations, and such other closing conditions as may be specified in the
Definitive Agreement. Shareholder approval of the Proposed Transaction is not
expected to be required by the TSX-V.
    Pursuant to the Letter Agreement, upon completion of the Proposed
Transaction the board of directors of Canfe will consist of five directors, of
which four directors will be nominees of Dinan and one director will be the
nominee of Canfe. The officers of Canfe upon the completion of the Proposed
Transaction include:

    Stephen J. Dinan - President and Chief Executive Officer
    Jeffery Lutjens - VP Sales and Marketing
    Matt Overman - VP Retail Dealer Development

    Their backgrounds are as follows:

    Stephen J. Dinan

    Stephen Dinan founded Dinan in 1979 and is currently its President and
Chief Executive Officer. He has 40 years of experience in the automotive
engineering business, and has specialized in BMWs for 31 of those years.
Mr. Dinan also designs BMW engines for professional racing applications.

    Jeff Lutjens

    Jeff Lutjens is the current Vice President of Sales and Marketing for
Dinan. He has worked in Dinan's sales department for the past two years, and
has more than 22 years of experience in the marketing and printing industry.
Mr. Lutjens attended San Diego State University with a focus on marketing and
business management.

    Matt Overman

    Matt Overman is Dinan's Vice President of Retail Dealer Development. He
has over 18 years of experience in the automotive industry.

    All information contained in this press release with respect to Dinan,
Stephen J. Dinan, Jeffery Lutjens and Matt Overman was supplied by management
of Dinan.
    Completion of the Proposed Transaction is subject to a number of
conditions, including but not limited to TSX-V acceptance. Where applicable,
the Proposed Transaction cannot close until any required shareholder approvals
are 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 or filing statement to be prepared in connection with the
Proposed 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 Canfe should be considered highly

    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.

    Trading of the common shares of Canfe has been halted in connection with
the dissemination of this press release, and will recommence at such time as
the TSX-V may determine, having regard to the completion of certain
requirements pursuant to TSX-V Policy 2.4.

    On behalf of Canfe Ventures Ltd.

    "Robert Bick"

    Robert Bick
    President & CEO

    This press release contains forward-looking statements about Canfe
Ventures Ltd. and Dinan Engineering, Inc., (collectively referred to as the
"resulting issuer") their respective businesses and future plans, including
the planned acquisition, Concurrent Financing and proposed business.
Forward-looking statements are statements that are not historical facts and
include the nature of the Qualifying Transaction, deemed value of securities
anticipated to be issued to Dinan shareholders, Tier 1 listing on the
TSX-Venture Exchange, amount of the proposed Concurrent Financing, available
exemptions for sponsorships and timing of the proposed transactions. The
forward-looking statements in this press release are subject to various risks,
uncertainties and other factors that could cause the resulting issuer's actual
results or achievements to differ materially from those expressed in or
implied by forward-looking statements. These risks, uncertainties and other
factors include, without limitation, uncertainty as to resulting issuer's
ability to achieve the goals and satisfy the assumptions of management;
uncertainties as to the availability and cost of financing; the risk that
development projects will not be completed successfully or in a timely manner;
uncertainty as to the demand for the resulting issuer's products and the
resulting issuer's ability to meet such demand; the effect of fluctuating
energy prices on the Dinan business; general economic factors and other
factors that may be beyond the control of the parties. Forward-looking
statements are based on the beliefs, opinions and expectations of the
management of Canfe Ventures Ltd. and Dinan Engineering, Inc., at the time
they are made, and Canfe Ventures Ltd. does not assume any obligation to
update its forward-looking statements if those beliefs, opinions or
expectations, or other circumstances, should change.

    %SEDAR: 00026853E

For further information:

For further information: Robert Bick, President & CEO, Canfe Ventures
Ltd., (604) 688-9588

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