Sereno Capital Corporation Announces Signing of Definitive Transaction Agreement to Complete Qualifying Transaction

NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES

Sereno Capital Corporation ("Sereno" or the "Company") (TSX VENTURE:SZZ.H) is
pleased to announce that it has entered into arm's length binding business
combination agreement (the "Agreement") dated September 18, 2013 with Delavaco
Properties Inc. ("Delavaco"), a company incorporated under the laws of Ontario,
whereby Delavaco will amalgamate with a new and direct wholly-owned subsidiary
of Sereno to become a direct, wholly-owned subsidiary of Sereno (the "Business
Combination"). Upon completion, Sereno will remain as the resulting issuer (the
"Resulting Issuer"). The Business Combination will constitute the Qualifying
Transaction of Sereno under the policies of the TSX Venture Exchange (the
"Exchange"). This news release updates the terms of the transaction that were
previously announced in a news release of Sereno dated May 24, 2013 (the
"Original Release").


None of the insiders of the Company, or their associates and affiliates, have
any interest in the Business Combination or are otherwise an insider of, or have
any relationship with, Delavaco or its direct and indirect shareholders, and the
transaction is not a Non-Arm's Length Qualifying Transaction (as such terms are
defined by the Exchange) under the policies of the Exchange.


Assuming completion of the Business Combination, it is expected that the
Resulting Issuer will satisfy the original listing requirements of the Exchange
for a Tier 1 Real Estate or Investment Issuer and will combine its business
under the new name "Delavaco Residential Properties Inc.". The Resulting Issuer
intends to invest in single-family homes and multi-family properties at prices
below replacement costs located in major markets in the United Sates that, in
the opinion of the Resulting Issuer, will be leveraged to the housing recovery
and that exhibit favourable demographics, positive long-term economic growth and
solid rental demand. Upon completion of the Business Combination, and subject to
the completion of the Reorganization (defined below) and other conditions (as
described below), Delavaco is expected to own not less than 524 single-family
homes in Florida and not less than 178 single-family homes in Georgia
(collectively, the "Single-Family Homes") and not less than 627 multi-family
units in Florida and Texas (the "Multi-Family Properties").


Completion of the Qualifying Transaction is subject to certain conditions
including the approval of the Company's and Delavaco's shareholders and is
expected to close in the fourth quarter of this year. The Company anticipates
filing a joint management information circular (the "Circular") with Delavaco
detailing the Qualifying Transaction and related matters in the near future.


About Delavaco

Delavaco was incorporated on January 27, 2011 and since that time has been
investing in single-family homes at prices below replacement costs and
multi-family properties at attractive capitalization rates located in select
markets in the United States, to date primarily in the southern United States,
that were hard-hit by the residential housing market downturn and that, in the
opinion of Delavaco, exhibit favourable demographics, positive economic growth
and solid rental demand. While Delavaco will continue to invest in multi-family
properties on an opportunistic basis, the principal focus will be on the
acquisition of single-family homes, as Management believes that such properties
offer greater potential returns resulting from a housing recovery. The
characteristics used by Delavaco's management team to identify and purchase
single-family homes and multi-family properties have not changed from those set
out in the Original Release and will be further detailed in the Circular in
accordance with applicable securities laws.


Updated Transaction Terms

Amalgamation

In connection with the Business Combination, Sereno will form a new, direct,
wholly-owned subsidiary of Sereno incorporated under the laws of Ontario
("Subco"). Subject to the terms of the Agreement, Subco will amalgamate (the
"Amalgamation") with Delavaco and continue as "Amalco" under the name "Delavaco
Properties Inc.". Amalco will be a wholly-owned subsidiary of Sereno. All of the
property and assets of each of Subco and Delavaco will be the property and
assets of Amalco, and Amalco will be liable for all of the liabilities and
obligations of each of Subco and Delavaco.


On the effective date of the Amalgamation, the common shares of Delavaco (the
"Delavaco Shares") will be cancelled and former shareholders of Delavaco shall
receive that number of Sereno Shares equal to (A) the number of Delavaco Shares
so cancelled, multiplied by (B) 7.36 (the "Consideration Shares"). Sereno will
subsequently consolidate all of the issued and outstanding Sereno Shares
(including the Consideration Shares) on the basis of 7.36 pre-consolidation
shares for one (1) post-consolidation share in the Resulting Issuer (the
"Resulting Issuer Shares"). The common share purchase warrants and the incentive
stock options of Delavaco will, in accordance with their terms, become
exercisable for shares of the Resulting Issuer. The incentive stock options of
Sereno will also be adjusted in accordance with their terms so that they become
exercisable for Resulting Issuer Shares.


The table below outlines the number and terms of the convertible securities of
the Resulting Issuer after giving effect to the 7.36 to 1 consolidation.




----------------------------------------------------------------------------
                                      Conversion                            
Type of Security               Number      Price Expiration / Description   
----------------------------------------------------------------------------
Warrants                                                                    
----------------------------------------------------------------------------
  Delavaco class A warrants   200,000      $1.00 March 13, 2015             
----------------------------------------------------------------------------
  Delavaco class B warrants   632,000      $1.25 Expire 3 years from the    
                                                 date of issuance           
----------------------------------------------------------------------------
  Delavaco class C warrants 3,850,000      $1.18 June 3, 2017               
----------------------------------------------------------------------------
Options                                                                     
----------------------------------------------------------------------------
  Delavaco options          2,500,000      $0.10 33.3% vested December 31,  
                                                 2012 and the balance       
                                                 vesting equally on December
                                                 31, 2013 and 2014          
----------------------------------------------------------------------------
  Sereno options               35,666      $1.18 May 16, 2016               
----------------------------------------------------------------------------



Reorganization and Lender Consents

It is expected that prior to the closing of the Business Combination, Delavaco
will complete an internal corporate reorganization (the "Reorganization")
pursuant to which it will indirectly acquire from Delavaco Real Estate
Opportunities Corp. ("DREOC"), through a "master" limited partnership (the
"Master LP") of Delavaco, certain issued and outstanding limited partnership
units held indirectly by DREOC (the "Multi-Family Partnerships"). Subject to
confirmation of all parties, prior to the closing of the Business Combination,
Delavaco may also acquire all of the issued and outstanding membership interests
in a limited liability company ("Park Colony") that, collectively with the
Multi-Family Partnerships, own the Multi-Family Properties.


The equity interests in the Multi-Family Partnerships are held indirectly by
DREOC, an entity owned and controlled by Mr. Andrew DeFrancesco, Chairman and
Chief Executive Officer of Delavaco. The equity interests in Park Colony are
held by Mr. DeFrancesco directly. In connection with the Reorganization, Mr.
DeFrancesco will cause the general partner to transfer all of the outstanding
units in the Multi-Family Partnerships and provided the acquisition of Park
Colony is undertaken, the equity interests in Park Colony, to the Master LP. As
consideration for such transfer, and subject to the completion of the Business
Combination, DREOC and Mr. DeFrancesco will receive a combined total of
11,156,522 Delavaco Shares, representing the equity value in the Multi-Family
Properties. These shares will subsequently be exchanged for an equal number of
Resulting Issuer Shares in accordance with the terms of the Amalgamation
described above.


The Multi-Family Properties are currently mortgaged in favour of the Federal
National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage
Corporation ("Freddie Mac") in an aggregate amount of US$47,044,000. The consent
of Fannie Mae and, provided the acquisition of Park Colony is undertaken,
Freddie Mac, will serve as a condition precedent to the completion of the
Reorganization (collectively referred to as the "Lender Consents"). Pursuant to
the terms of the Agreement, the Business Combination is conditional on the
completion of the Reorganization (and by extension, the receipt of the Lender
Consents). Delavaco is actively engaged with Fannie Mae and Freddie Mac and
their respective counsel in obtaining the Lender Consents and fully expects
receipt of same within a period of time that will allow for the closing of the
Business Combination. Subject to the receipt of the Lender Consents and
completion of the Business Combination, all of the outstanding mortgages on the
Multi-Family Properties will be assumed by the Resulting Issuer.


Concurrent Debt Conversion

As part of the Reorganization, the US$15.25 million of secured debt of DREOC due
August 31, 2013 will be converted such that, in connection with the Business
Combination, 14,413,989 Resulting Issuer Shares will be distributed to existing
secured convertible noteholders of DREOC in satisfaction of their outstanding
indebtedness at an effective price of US$1.058 per Resulting Issuer Share. In
addition, the US$10 million of unsecured debt of Delavaco due December 20, 2014
will convert into 10,230,179 Resulting Issuer Shares at an effective price of
US$0.9775 per Resulting Issuer Share.


Private Placement

The private placement by Delavaco of certain secured debentures as previously
announced will no longer be completed. Since the issuance of the Original
Release, Delavaco has instead completed a series of private placements pursuant
to which it issued US$12,300,000 (with the option to issue up to a total of
US$15,000,000) aggregate principal amount of 7.00% unsecured debentures due July
31, 2018 (the "Debentures"), on a private placement basis to accredited
investors. The proceeds from the issuance of the Debentures will be used to
acquire additional single-family homes in the Southeast United States, to pay
down outstanding indebtedness and for general working capital purposes.


In accordance with the terms of the Debentures, upon the occurrence of a
"liquidity event" (which includes the completion of the Business Combination),
all of the principal amount of the Debentures, plus accrued but unpaid interest
thereon, may be converted, at the option of the holders thereof, into Resulting
Issuer Shares at price equal to $1.15 per Resulting Issuer Share.


PowerOne Capital Markets Ltd. acted as agent in connection with the private
placement of Debentures and was paid customary compensation for such agency
services.


Management and Board of Directors

Subject to Exchange approval, on completion of the Business Combination, the
management team and the board of directors of the Resulting Issuer will include
the persons identified in the Original Release. In addition, subject to Exchange
approval, Romeo De Gasperis will be appointed as an independent director.


Romeo De Gasperis - Director

Romeo De Gasperis serves as Chief Executive Officer and Vice President of
Con-Drain Company Ltd. Mr. De Gasperis has also managed the operations and
personnel of Swisher Hygiene Inc. and was responsible for tendering new projects
as well as overseeing networking and communications. He has been with Con-Drain
Company Ltd. for over 18 years. Mr. De Gasperis is also a Principal and
Vice-President of Countrywide homes and Condor Properties Limited, operating in
Concord, Ontario, Canada. He served as a Director of Swisher Hygiene Inc. since
November 17, 2006 and served in the same position from 2000 to August 15, 2006.
In 1988, Mr. De Gasperis completed his Civil Engineering Technician course at
Seneca College.


Significant Shareholders

Mr. Andrew DeFrancesco, Chief Executive Officer and Chairman of the Board of
Directors, has taken the initiative in founding and organizing Delavaco. Upon
completion of the Business Combination, Mr. DeFrancesco is expected to own or
control, directly or indirectly, approximately 27.0% of the outstanding
Resulting Issuer Shares. In addition, Dynamic Power Hedge Fund, PowerOne Capital
Corp. and Mardis Group are expected to own or control, directly or indirectly,
approximately 11.9%, 11.29% and 10.09%, respectively, of the outstanding
Resulting Issuer Shares. Mr. DeFrancesco is a resident of United States. Each of
the other foregoing investors is resident in the Province of Ontario.


Summary Financial Information

The following tables set forth certain selected financial information for
Delavaco in respect of the year ended December 31, 2012, and the period from
incorporation on January 27, 2011 through December 31, 2011, and as at December
31, 2012 and 2011, each presented in US dollars.




----------------------------------------------------------------------------
                                                    2012                2011
----------------------------------------------------------------------------
Rental Revenue                                $3,108,834            $929,660
----------------------------------------------------------------------------
Operating Costs(1)                            $1,658,745            $835,309
----------------------------------------------------------------------------
Net Operating Income(2)                       $1,450,089             $94,351
----------------------------------------------------------------------------
Investment Properties                        $33,940,819          $8,851,396
----------------------------------------------------------------------------
Total Assets                                 $46,764,652          $9,415,883
----------------------------------------------------------------------------
Total Liabilities                            $32,711,831          $4,485,277
----------------------------------------------------------------------------

(1) Operating costs include costs directly attributable to operating the
    properties, including, but not limited to, insurance, utilities,
    property taxes, management fees and maintenance.
(2) Net Operating Income is equal to Rental Revenue less Operating Costs.



After completion of the Reorganization, Delavaco expects to own assets with a
fair value in excess of US$120,000,000.


Resulting Issuer

The following table sets forth the pro forma capitalization of the Resulting
Issuer after giving effect to the Business Combination (including the proposed
consolidation).




Equity                                                                      
                                                                            
Shares held by Delavaco shareholders                              25,075,000
Shares held by current Sereno shareholders                           638,587
Shares to be issued with respect to Reorganization                11,156,522
Shares to be issued with respect to US$15.25 million DREOC                  
 debt conversion                                                  14,413,989
Shares to be issued with respect to US10 million Delavaco                   
 debt conversion                                                  10,230,179
Shares to be issued for executive services rendered                  600,000
Shares underlying options and warrants                             7,217,666
Total (fully-diluted)                                             80,027,595
Debt                                                                        
                                                                            
Secured debt due 2016                                          US$25,000,000
Multi-Family mortgages with Fannie Mae and Freddie Mac         US$47,044,000
Unsecured debt due 2018                                        US$12,300,000



Conditions of Completion

Completion of the Business Combination, including the proposed consolidation and
name change of the Resulting Issuer to "Delavaco Residential Properties Inc.",
is subject to the satisfaction or waiver of a number of terms and conditions
including, but not limited to: (i) receipt of all the Lender Consents and the
completion of the Reorganization; (ii) the approvals from each of the
shareholders of Sereno and Delavaco and the approval and acceptance of the
Exchange; (iii) the Resulting Issuer being in compliance with the initial
listing requirements of the Exchange; and (iv) there not having occurred a
material adverse effect with respect to Sereno or Delavaco.


Sponsorship

Sponsorship of a Qualifying Transaction of a capital pool company is required by
the Exchange, unless an exemption from the sponsorship requirement is available.
Sereno intends to apply to the Exchange for an exemption from the sponsorship
requirement. There is no assurance that the Company will be able to obtain such
an exemption.


Information contained herein pertaining to Delavaco and the proposed members of
Management and the Board of Directors of the Resulting Issuer has been furnished
to Sereno by Delavaco.


Completion of the transaction is subject to a number of conditions, including
but not limited to, Exchange acceptance and if applicable pursuant to Exchange
Requirements, majority of the minority shareholder approval. Where applicable,
the transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the 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 transaction,
any information released or received with respect to the transaction may not be
accurate or complete and should not be relied upon. Trading in the securities of
a capital pool company should be considered highly speculative.


Certain information in this news release constitutes forward-looking statements
under applicable securities law. Any statements that are contained in this news
release that are not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "intend" and similar
expressions. Forward-looking statements in this news release include, but are
not limited to, statements with respect to the closing or completion of the
Qualifying Transaction. Forward-looking statements necessarily involve known and
unknown risks, including, without limitation, risks that closing of the Proposed
Transaction may not occur; risks related to the receipt of approval by the
Exchange, the completion of the Qualifying Transaction; risks associated with
general economic conditions; adverse industry events; marketing costs; loss of
markets; volatility of real estate prices; inability to access sufficient
capital from internal and external sources, and/or inability to access
sufficient capital on favourable terms; industry and government regulation;
changes in legislation, income tax and regulatory matters; the ability of the
Resulting Issuer to implement its business strategies; competition; currency and
interest rate fluctuations; and other risks. Readers are cautioned that the
foregoing list is not exhaustive.


Readers are further cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions or
expectations upon which they are placed will occur. Such information, although
considered reasonable by management at the time of preparation, may prove to be
incorrect and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are expressly
qualified by this cautionary statement.


The forward-looking statements contained in this news release represent the
expectations of the Company and Delavaco as of the date of this news release,
and, accordingly, are subject to change after such date. Neither the Company nor
Delavaco undertakes any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities law.


The 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.


Neither the Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the Exchange) accepts responsibility for the adequacy
or accuracy of this release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Sereno Capital Corporation
Brandon Gordon
Director
416-214-9672