Spackman Equities Group Inc. (the "Company" or "SEGI") (TSX VENTURE:SQG) today
reported its financial results for the year ended December 31, 2013.
Revenue for the year ended December 31, 2013 was $12,924,424 compared to
$6,234,458 for the same period one year ago, an increase of 107.3% for the year.
The increase in revenue is primarily attributable to the commercial success of
the film COLD EYES, which was produced by SEGI's subsidiary ZIP Cinema Co., Ltd.
Net profit for the year was $1,876,755 or $0.013 per share compared with a net
loss of $913,757 or $0.007 for fiscal 2012, an increase of 305.4% for the year.
At December 31, 2013 SEGI had $14.7 million in cash, cash equivalents and
marketable securities, or $0.099 per share. There are 148,900,183 common shares
outstanding.
Regarding the results for the fiscal year 2013, Charles Spackman, Chairman and
Chief Executive Officer of SEGI said, "We are pleased to announce our 2013
year-end results which increased significantly year-on-year predominantly due to
the box office success of COLD EYES produced by our subsidiary Zip Cinema. Any
production income derived from the 2013 release of SNOWPIERCER, which was
produced by our subsidiary Opus Pictures, is expected at the end of this current
year or next year as the film is still playing in theaters throughout the world.
This year, we are looking forward to the release of four films by Zip Cinema and
Opus Pictures, and especially to the planned Singapore listing of our
subsidiary, Spackman Entertainment Group Limited, expected at the end of June or
early July."
The audited financial statements for the year ended December 31, 2013 and
Management's Discussion and Analysis of the results, are posted on SEDAR at
www.sedar.com.
Highlights of Fiscal 2013
-- On July 3, 2013, COLD EYES, a crime thriller produced by the Company's
subsidiary Zip Cinema Co., Ltd. ("Zip"), opened at #1 at the Korean box
office. With a total budget of approximately KRW 6.7 billion (CAD $6.8
million), COLD EYES eventually sold over 5.5 million tickets and grossed
KRW 40 billion (CAD $40.3 million) at the Korean box office, placing the
film as one of the highest grossing domestic films of 2013.
-- On July 31, 2013, SNOWPIERCER, the critically-acclaimed sci-fi action
film produced by the Company's subsidiary Opus Pictures Limited
Liability Company ("Opus"), opened at #1 at the Korean box office,
breaking the record for the best non-holiday opening ever and the
fastest film to reach 4 million ticket admissions in Korean history.
With a production budget of KRW 42 billion (CAD 42.4 million),
SNOWPIERCER eventually sold over 9.3 million tickets and grossed over
KRW 67 billion (CAD $67.6 million) at the Korean box office. SNOWPIERCER
is being released worldwide throughout 2014.
-- On August 2, 2013, Spackman Entertainment Group Limited ("SEGL"), the
entertainment holding subsidiary of the Company, engaged PrimePartners
Corporate Finance Pte. Ltd. as its Full Sponsor for the planned listing
on the Catalist board of the Singapore Exchange Securities Trading
Limited. The listing is expected to be completed in June/July 2014.
-- On September 18, 2013, in preparation for SEGL's planned listing on the
Catalist board of the Singapore Exchange, SEGL subscribed for 200,000
common shares, or 50.25%, of Spackman Entertainment Korea Inc. ("SEKI")
at a price per share of KRW 5,000 (par value) for a total subscription
consideration of KRW 1,000,000,000 (CAD $1.0 million). SEKI is an
investment company incorporated in Korea that makes early-stage
investments into films developed and produced by Zip and Opus. The
remaining 49.75% of SEKI was owned by the Company until December 23,
2013, when it sold this stake to SEGL (see below).
-- On September 24, 2013, in preparation for SEGL's planned listing on the
Catalist board of the Singapore Exchange, SEGL purchased 100% of the
outstanding shares of Spackman Equities Limited ("SEL"), a holding
company that owns 7% of each of Zip and Opus, from the Company, for a
consideration of CAD 700,000 in cash. As a result of this transaction,
SEGL beneficially owns 100% of Zip and Opus.
-- On September 30, 2013, SEGL closed the first tranche of pre-IPO
financing by raising a total of USD 2,850,000 (CAD $3,027,000) by way of
a private placement to a group of private investors by (i) issuing 1,850
common shares to a group of private investors at a price of USD 1,000
per share (which is equivalent to a pre-money valuation for SEGL of USD
10 million) for a total equity financing of USD 1,850,000 (CAD
1,965,000) and (ii) issuing two USD 500,000 convertible promissory notes
for a total of USD 1,000,000 (CAD $1,062,000) to two private investors.
The convertible notes have a term of two years, bear interest at the
rate of 2% per annum and are convertible into common shares of SEGL at a
conversion price of USD 1,000 per share at any time prior to maturity.
The Company participated in the SEGL private placement by subscribing
for 350 common shares of SEGL for USD 350,000 (CAD $372,000).
-- On November 12, 2013, SEGL closed the second tranche of pre-IPO
financing by raising an additional USD 1,800,000 (CAD $1,912,000) by way
of a private placement to a group of private investors by (i) issuing
1,300 common shares at a price of USD 1,000 per share (which is
equivalent to a pre-money valuation for SEGL of USD 11.85 million) for a
total equity financing of USD 1,300,000 (CAD $1,381,000) and (ii)
issuing three convertible promissory notes for a total of USD 500,000
(CAD $531,000). The convertible notes have the same terms as the notes
issued by SEGL in September 2013. After this financing the Company owns
52.7% of SEGL.
-- On December 23, 2013 in preparation for the planned listing of SEGL on
the Catalist board of the Singapore Exchange, the Company sold all its
198,000 shares, or 49.75%, of its ownership in SEKI to SEGL for CAD
$880,000 in cash. As a result, SEGL owns 100% of SEKI.
-- On December 23, 2013 the Company increased its ownership in SEGL by
purchasing 800 shares from treasury at USD 1,000 per share for a total
subscription price of USD 800,000 (CAD $850,000). As a result of this
subscription the Company owns 55.4%, of the outstanding shares of SEGL.
-- Effective January 1, 2014, Kyoungwon Na was appointed Chief Financial
Officer of the Company replacing Jenifer Cho who resigned as of December
31, 2013. Mr. Na is a member of ISCA (Institute of Singapore Chartered
Accountants) and KICPA (Korean Institute of Certified Public
Accountants). Prior to joining the Company Mr. Na worked for over ten
years with KPMG in both Korea and Singapore. He has an MBA in Accounting
from Seoul National University and a B.Eng. in Material Science and
Engineering from Seoul National University. Mr. Na is also the Chief
Financial officer of SEGL.
About Spackman Equities Group Inc.
Spackman Equities Group Inc. ("SEGI") is an investment holding company that
invests into and develops small/medium-sized growth companies that possess
industry-specific know-how or proprietary technologies, primarily in Asia. SEGI
also makes investments in selected publicly-traded companies that SEGI believes
are attractive investment propositions. The objectives of SEGI are to (i) invest
into or acquire businesses with compelling growth potential at attractive
valuations, (ii) build a diversified and balanced portfolio of investments, and
(iii) deliver the collective value derived from the performance of its portfolio
of investments to the shareholders of SEGI. As of April 30, 2014, SEGI's
holdings include:
-- 44.9% ownership of Spackman Entertainment Group Limited, an
entertainment holding company that wholly-owns Zip Cinema Co., Ltd.,
Opus Pictures Limited Liability Company, and Spackman Entertainment
Korea Inc.;
-- 100% of SEGI Investments Limited, an investment company that invests
into Korean public equities; and
-- a selective portfolio of marketable securities.
Visit www.spackmanequities.com for further information.
About Spackman Entertainment Group Limited
Spackman Entertainment Group Limited ("SEGL") is a leading entertainment
production company that is primarily engaged in the independent development,
production, and financing of theatrical motion pictures in Korea.
Its two wholly-owned motion picture production subsidiaries, namely, Zip Cinema
Co., Ltd. ("Zip") and Opus Pictures Limited Liability Company ("Opus"), are two
of the most recognized film production labels in Korea, and have originated and
produced some of Korea's most commercially successful theatrical films for the
past seven years. Films produced by Zip and Opus are theatrically distributed
and released in Korea and overseas markets, as well as for subsequent
post-theatrical worldwide release in other forms of media, including cable
television, broadcast television, IPTV, video-on-demand, and home video/DVD,
etc. Zip and Opus' motion pictures are released into wide-theatrical exhibition
initially in Korea, and then in overseas and ancillary markets.
Collectively, Zip and Opus produced and released a total of 14 theatrical motion
pictures since 2007, the majority of which were profitable and some of which
were among the top grossing films in Korea in recent years. Recent theatrical
releases of our motion pictures include some of Korea's highest grossing and
award-winning films such as SNOWPIERCER (2013), COLD EYES (2013), and ALL ABOUT
MY WIFE (2012).
SEGL also owns 100% of Spackman Entertainment Korea Inc. ("SEKI"), an investment
company incorporated in Korea that makes early-stage investments into films
developed and produced by Zip and Opus. SEKI also owns a majority equity
interest in Upper West Inc., the operator of a trendy cafe lounge in Korea's
Gangnam district.
On August 2, 2013, SEGL engaged PrimePartners Corporate Finance Pte. Ltd. as its
Full Sponsor to prepare for an initial public offering on the Catalist board of
the Singapore Exchange. Through this proposed listing, SEGL plans to raise
capital to expand Zip's and Opus' future slate of productions, make further
acquisitions of production businesses and brands, and for general working
capital. The listing is expected to be completed in June/July 2014.
Visit www.zipcine.com and www.opuspictures.com for further information.
Forward-Looking Statements
Included in this news release may be 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, commodity prices 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 TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in policies of the TSX Venture Exchange) has in any way approved or
disapproved of the contents of this press release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Spackman Equities Group Inc.
Floria Lin
+852 3902 3287
info@spackmanequities.com
www.spackmanequities.com
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