RSI Signs Definitive Agreement for Sale of RoomKeyPMS Business and Sends Shareholder Meeting Materials

CBJ Newsmakers

VANCOUVER, British Columbia, Jan. 09, 2019 (GLOBE NEWSWIRE) — RSI International Systems Inc. (TSX-V: RSY) (“RSI” or the “Company”) is pleased to report that it has signed a Definitive Agreement (the “Definitive Agreement”) with NSight, Inc. for the arm’s length sale of RSI’s RoomKeyPMS business and assets for gross proceeds of US$4.6m in cash, before applicable adjustments (the “Transaction”) and costs, as originally announced September 7, 2018. Shareholder approval for the Transaction will be sought at the Company’s Annual and Special Meeting of Shareholders scheduled for February 5, 2019.

Mr. David Keys, Chairman of the RSI Board of Directors and a representative for the Ernest W. Moody Revocable Trust, which holds 44.4% of RSI’s outstanding shares commented, “We strongly believe that the sale of the RoomKeyPMS business is in the best interests of our shareholders and other stakeholders, as the purchase price represents cash proceeds significantly in excess of the market capitalization of our Company immediately before the Transaction was announced.”

Mr. Keys added, “Post Transaction-closing, our goal is to minimize costs, while looking for a new business to buy and vend into the RSI public vehicle. We’ve seen some interesting candidates so far, but nothing that we believe will deliver the value we want both as shareholders and stewards of the Company. To that end, we are casting our nets far and wide in search of a reasonably valued business that can be made better with some additional funds.”  

The Company expects the Transaction to close before February 15, 2019. Under the terms of the Definitive Agreement, NSight will pay RSI gross proceeds of US$4.6m, (the “Purchase Price”) for the Company’s current business and assets related to the development and operation of RSI’s RoomKeyPMS. The US-dollar figure will be converted to Canadian dollars by averaging the posted Bank of Canada US$/C$ exchange rate for the seven days preceding the Letter of Intent as announced September 7, 2018, and for the seven days preceding the closing of the transaction. Should the exchange rate move more than five percentage points, in either direction, from the seven-day average prior to September 7th, the disadvantaged party will have the option to terminate the transaction.

Assuming the 7-day average of the posted Bank of Canada US$/C$ exchange rates for the seven days preceding September 7, 2018, of 1.3063 and the Company’s 36,835,278 issued and outstanding shares, the Purchase Price translates to approximately C$6m, or just over C$0.16 per share, before any adjustments and costs incurred as a result of the Transaction. Accordingly, the final amount of cash available to the Company will be less than this amount. RSI’s shares last traded on the TSX-V at C$0.04. 

NSight is not assuming any of RSI’s liabilities, except where necessary to run the business going forward, and the assumption of any such liabilities will be deducted from the Purchase Price. The Purchase Price will be adjusted to account for the timing of certain receivables, payables, deferred revenue, prepaid costs and other items that are assumed by NSight, including:

  • increased by an amount equal to 65% of accounts receivable up to $205,000, and a further 100% of accounts receivable in excess of $205,000;
  • decreased by an amount equal to 100% of accounts payable assigned to the Purchaser and any other Assumed Liabilities;
  • increased by an amount equal to 100% of the pro-rated amount remaining of any prepaid expenses;
  • decreased by an amount equal to 35% of any deferred revenues up to $550,000, and a further 100% of deferred revenues in excess of $550,000;
  • decreased by an amount equal to 50% of the transferring employees’ accrued employment benefits;
  • where the annualized value of any existing customer contracts which are not assigned to the Purchaser (“Terminated Contracts”) exceeds the annualized value of any new customer contracts (“New Contracts”) by at least $100,000, the purchase price shall be decreased by an amount equal to 100% of the recurring revenue from the Terminated Contracts in the 12 months prior to the closing;
  • where the annualized value of any New Contracts exceeds the annualized value of any Terminated Contracts by at least $100,000, the purchase price shall be increased by an amount equal to 100% of the recurring revenue from the New Contracts in the 12 months following the closing; and
  • decreased by an amount equal to 5% of the recurring revenues from all customer contracts expiring or requiring renewal after July 31, 2019

As a result of completing the Transaction, RSI will incur some costs related to winding up its business and transitioning employees. In particular, three members of the Company’s senior management team have change of control provisions as part of their employment agreements. The maximum total payments under these agreements is $305,000 and the Company is currently negotiating with the applicable parties to reduce the payments. The Company will also incur costs for items such as runoff insurance and some payments for employee benefits that have been accrued to date.

The transaction remains subject to a number of conditions in favour of NSight, including RSI’s receipt of all necessary approvals, there being no material adverse change in the Business, the discharge of all encumbrances on RSI’s assets, RSI’s significant customers consenting to the assignment of their contracts to NSight, RSI’s employees having accepted NSight’s offer for continued employment, and RSI’s delivery to the Purchaser of a disclosure letter and closing disclosure letter satisfactory to the Purchaser, by January 18, 2019 and as of the closing date, respectively.  The Definitive Agreement also provides for a non-competition period of two years, and a break fee payable to NSight of US$460,000 if the Definitive Agreement is terminated as a result of RSI accepting a superior proposal. The closing of the Transaction is also subject to conditions in favour of RSI, which the Company may waive, including a provision that the final Purchase Price following all Purchase Price adjustments is not less than US$3.5m.

There can be no assurances that NSight will have the financial and other resources to complete the transaction.

For further details on the Transaction and shareholder considerations, please see the Company’s Information Circular at or on the Company’s website at

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.

About NSight
With the acquisition of RSI, NSight Inc. continues to rapidly assemble a portfolio of hospitality technology solutions to accelerate growth in the middle market hotel segment. Currently, NSight’s cornerstone acquisition, nSight for Travel, provides predictive data and marketing solutions for hotels and destinations helping deliver incremental revenue through improving their pricing and marketing practices.  

About RSI 
RSI International Systems Inc. is the developer of RoomKeyPMS, a web-based Property Management System (PMS) that incorporates a fully integrated Online Reservation Booking engine and seamless real-time connectivity to the major Global Distribution and Internet Distribution Systems.  RSI markets its RoomKeyPMS and a number of other proprietary “hosted” software solutions to a wide variety of Hospitality Industry clients around the world. For more information, please see our website at

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.
Tim Major, President & CEO