RSI Closes Sale of Principal Asset and Pursues New Business Acquisition
VANCOUVER, British Columbia, Feb. 13, 2019 (GLOBE NEWSWIRE) — RSI International Systems Inc. (TSX-V: RSY) (“RSI” or the “Company”) is pleased to report that it has closed the sale (the “Transaction”) of its RoomKeyPMS business to NSight Inc., (“NSight” or the “Purchaser”) as originally announced September 7,, 2018 and updated January 9, 2019. Initial gross proceeds from the sale, which are for all of the Company’s business assets, are approximately $6 million. After providing for adjustments to the Purchaser net proceeds from the Transaction are approximately $5.6 million. The Company intends to use the funds to acquire a new business.
Mr. David Keys, Chairman of RSI and a representative for the Ernest W. Moody Revocable Trust, which holds 44.4% of RSI’s outstanding shares commented, “With this transaction closed and funds in hand, we are moving as quickly as possible to conclude a suitable acquisition. In the interim, we are minimizing our costs and expect to fund our expenses as much as possible from the interest generated on our cash.”
Shareholders’ Approval of the Transaction
At the RSI shareholder meeting held on Feb 5, 2019, 64.7% of the Company’s outstanding shares were voted in person or by proxy. 100% of the votes cast in respect of the Transaction were in favour.
For further details on the Transaction, please see the Company’s news releases dated September 7, 2018 and January 9, 2019, as well as the Company’s Information Circular dated January 9, 2019 and available at www.sedar.com
Proceeds from the Transaction
As per the Definitive Agreement announced by the Company January 9, 2019, the Company sold its RoomKeyPMS business to NSight Inc. on an arm’s length basis, for gross proceeds of US$4.6 million. This amount was adjusted to a Canadian dollar amount of approximately C$6 million by averaging the posted Bank of Canada rate for the average of the seven business prior to September 7, 2018 and the average of the seven business days prior to February 5, 2019, to arrive at an exchange rate of 1.3127 US to Canadian dollars. As NSight is not assuming any of RSI’s liabilities except where necessary to run the business going forward, the assumption of any such liabilities was deducted from the gross proceeds. The gross proceeds were adjusted to account for the timing of certain receivables, payables, deferred revenue, prepaid costs and other items that are assumed by NSight. Totaling these adjustments and subtracting them from the gross purchase price, leaves a net proceeds figure of approximately C$5.6 million. In addition, by undertaking the Transaction, the Company incurred additional costs, including approximately C$247 thousand for change of control payments to departing senior managers.
Appointment of New Senior Management and Board Member
In conjunction with the sale of the RoomKeyPMS business, all of the Company’s management have resigned to take roles with NSight. Accordingly, the Company also announces that it has appointed Adam Ho, as President & Chief Executive Officer, (“CEO”) replacing Tim Major. Mr. Ho has been a member of the Company’s Board of Directors since August 2016 and was instrumental in completing the sale of the Company’s business.
The Company also announces the appointment of Sam Wong as Chief Financial Officer, (“CFO”) replacing Giovanni Susin. Mr. Wong is currently the Chief Financial Officer of various junior mining public companies that are listed on the TSX Venture. He was also previously the Chief Financial Officer of Goldgroup Mining Inc, where he significantly decreased the cost of and levels of debt through various cost cutting and restructuring initiatives. Mr. Wong is a Chartered Professional Accountant and articled at Deloitte LLP in Vancouver, BC.
The Company also reports that at its February 5, 2019 shareholder meeting, shareholders re-elected David Keys and Adam Ho as Directors and elected Anthony Balic to the Company’s Board for the first time. Mr. Balic replaces Mr. Fai Ambrose Heng Chan, who did not stand for re-election. Mr. Balic is a Director of Montan Mining Corp. and has worked with Canadian and U.S. publicly listed companies for the past 13 years. He is currently the CFO of Goldgroup Mining Inc., Captiva Verde Land Corp., Omni Commerce Corp. and Montan Mining Corp. Prior to his involvement with public companies, Mr. Balic was a Senior Manager at Deloitte LLP in Vancouver, where he specialized in assurance and advisory services for clients in various industries.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
With the acquisition of the RoomKeyPMS business, NSight continues to aggressively identify and acquire leading technology platforms that are core to hotel’s operations. This strategy provides middle market hotels more efficient technology solutions while creating exceptional value for NSight shareholders.
RSI International Systems Inc. has recently sold its only business asset, RoomKeyPMS. The Company is now seeking to use the net sale proceeds to acquire a new business.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements. Any statements that are not strictly historical fact are considered “forward-looking statements.” Forward-looking statements cannot be guaranteed and involve assumptions and are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and not place undue reliance upon forward-looking statements. Any forward-looking statements made herein are made as of the date hereof, and the Company assumes no obligation and disclaims any intention to revise or update any forward-looking information and statements except as required by applicable laws.
For more information, please contact:
RSI Systems International Inc.
Adam Ho, CEO & Director