EDMONTON, ALBERTA–(Marketwired – July 29, 2014) –
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
OneSoft Solutions Inc. (the “Company” or “OneSoft”), formerly Serenic Corporation (“Serenic”), (TSX VENTURE:SER), reports its financial results for the three months ended May 31, 2014.
|Three months ended May 31|
|2014||2013||Increase / (Decrease||)|
|Basic and diluted loss per share||(0.02)||(0.02)||–|
|Adjusted EBITDA (1)||(132,440)||(238,254)||44.4|
|Adjusted EBITDA as % of sales||(3.9)||(9.2)||57.0|
|Weighted average common shares outstanding – basic||13,961,958||14,639,646|
|Weighted average common shares outstanding – diluted||13,961,958||14,724,023|
(1) Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, and stock option expense. Please review the Serenic Management Discussion and Analysis (“MD&A”) for the Three months ended May 31, 2014 for more information
SALE OF SERENIC SUBSIDIARIES JULY 28, 2014
On July 28, 2014, Serenic closed on a sale transaction whereby Sylogist Ltd. acquired its three operating subsidiaries which were a substantial portion of Serenic’s assets, for net cash of approximately $7,911,471, subject to certain closing adjustments. Please refer to the Serenic Press Release dated July 28, 2014 and the Management’s Discussion and Analysis for the Three months ended May 31, 2014, both of which are posted on SEDAR.
CHANGE OF NAME OF CORPORATION and CHANGE OF CEO
On July 28, 2014, Serenic Corporation changed its name to OneSoft Solutions Inc., as this name change was required as a condition of the sale of the subsidiaries to Sylogist. Dwayne Kushniruk will replace Randy Keith as CEO and President of the Company, effective August 1, 2014. The Board wishes to thank Mr. Keith for his dedicated leadership of the Company since 2007, and looks forward to Mr. Keith’s continued contribution as a director of the Company for the ensuing year.
During the quarter ended May 31, 2014 (“Fiscal 2015 Q1″) revenue increased 29.4% to $3,360,094 from $2,603,370 for the comparative quarter last year. Software license sales were 43.3% higher year over year due to increases in Serenic Navigator license sales that were sold directly by Serenic and by reselling partners in the USA, Canada and in Africa. Services revenue increased 70% due to some large Human Resource Information System (“HRIS”) projects being implemented by subcontractors, which were supplementary to Serenic’s usual level of engagements with implementations and software version upgrades for direct customers. Serenic introduced its Total Care Plan in September 2013, which also added to Services revenue and which has resulted in an increased demand by customers for software version upgrades. Software maintenance contract revenue also increased year over year. The increase in the Canadian to U.S. dollar exchange rate also favourably affected revenues.
Gross profit increased 9.8% year over year, to $1,900,108 from $1,730,542, due to the increase in license and maintenance contracts revenue. Expenses were similar to last year at $2,080,442 versus $2,053,909 in the comparable period last year. While savings were realized from staff reductions that were made in February, 2014, the increase in the foreign exchange rate offset these and other cost savings measures. The net loss reduced year over year, from $317,052 in Q1 of Fiscal 2014 to $210,037 in Q1 of Fiscal 2015. Adjusted EBITDA also decreased year over year, from a loss of $238,254 in Q1 of Fiscal 2014 to a loss of $132,440 in Q1 of Fiscal 2015.
The sale of the Serenic operating companies to Sylogist is very beneficial. This has allowed us to unlock approximately $6.9 million (approximately $0.45 per share on a fully diluted basis) of value for shareholders, and also provide funding to advance the on-going Cloud business. With significant investment already having been made in the Cloud technology and products, we anticipate that new OneSoft divisions will now be operated with only minimal staff, and essentially in “start-up” mode until Cloud-only revenues start to occur and build.
The OneSoft IP includes: the underlying cloud technology that enables Serenic’s legacy Dynamics NAV ERP products to be re-configured for Microsoft’s Cloud and volume strategies: and, three products: Express, Essentials and Donor Vision 2013, which are derivative products of the Serenic legacy products. OneSoft’s first order of business is to execute upon its plans to sell the OneSoft products into new NFP markets that are ideally suited for these products, which have not historically been addressable with Serenic’s legacy solutions. This will be conducted pursuant to the OEM arrangement that OneSoft entered into with the Serenic operating companies immediately prior to Sylogist acquiring the Serenic companies. We intend to also investigate potential opportunities to enter into similar arrangements with other Dynamics NAV vendors who have developed ERP solutions for other vertical markets, whereby OneSoft’s underlying technology can be applied to those products, and new volume markets within those verticals can be addressed. We believe that developing this bridge to Microsoft Cloud is not easily repeatable by or feasible for most small software companies to pursue, particularly by those who had not yet committed to this development strategy and are now lagging from a technology perspective.
Management’s immediate priority is to now accelerate and leverage the OneSoft strategies. Investigation will be conducted to determine alternatives in this regard, which may include organic growth strategies as well as joint venture or M&A scenarios. The Company has sufficient cash to operate as envisioned (which will likely be on a negative EBITDA basis), for approximately four quarters. We anticipate that further announcements to outline future strategies will be forthcoming in the next couple of quarters.
ON BEHALF OF THE BOARD OF DIRECTORS
OneSoft Solutions Inc.
Dwayne Kushniruk, Chairman
This news release contains forward-looking statements relating to the future operations and profitability of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expects”, “believe”, “will”, “intends”, “plans” and similar expressions. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking information is provided for the purpose of providing information about management’s current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. In respect of the forward-looking information and statements, the Company has provided such in reliance on certain assumptions that it believes are reasonable at this time, including expectations and assumptions concerning, among other things: interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; the success of growth projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material development or other costs related to current growth projects or current operations. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release.
Readers are cautioned that the foregoing list of factors is not exhaustive. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by Canadian securities law.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
OneSoft Solutions Inc.
780.426.5387 ext 509
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