Serenic Reports Pending Sale of Serenic Subsidiaries and Its Financial Results for the Year Ended February 28, 2014

Serenic Reports Pending Sale of Serenic Subsidiaries and Its Financial Results 
for the Year Ended February 28, 2014 
EDMONTON, ALBERTA -- (Marketwired) -- 06/26/14 --  Serenic
Corporation (the "Company" or "Serenic") (TSX VENTURE: SER), an
international software developer specializing in integrated financial
management and human capital management ("HCM") solutions for
Non-Profit ("NFP") organizations, government agencies and Microsoft
Dynamics NAV users, reports the pending sale of Serenic subsidiaries
and announces its financial results for the three months and year
ended February 28, 2014. 
On June 26, 2014, the Company entered into a definitive agreement to
sell the shares of Serenic Canada Inc., Serenic Software Inc. and
Serenic Software (EMEA) Limited (collectively, the "SOC's") to
Sylogist Ltd. The aggregate purchase price to be paid by Sylogist for
the purchased shares is $11,880,431 less net liabilities of these
subsidiaries to be assumed by Sylogist which are estimated to be
approximately $3,880,431 to yield estimated cash of $8,000,000 to
Serenic. The estimated net liabilities will be adjusted to actual on
the closing date, which is forecasted to be July 25, 2014. Serenic
will retain all cash and cash equivalents on the closing date which
is estimated to be $11,000,000 including the proceeds from the sale.
The use of this cash has not yet been made final; however, it is
contemplated that an estimated aggregate amount of $7,500,000 (or
approximately $0.45 per share on a fully diluted basis) would be
distributed to shareholders. This would consist of an amount
estimated to be $4,000,000 or approximately $0.24 per common share to
be paid through a reduction of the paid-up capital of the
Corporation, subject to TSX Venture Exchange approval; and an amount
estimated to be $3,500,000 or approximately $0.21 per common share
held, to be paid as a special dividend, subject to TSX Venture
Exchange approval. The balance of the funds, net of costs associated
with closing of the transaction and estimated income tax expense,
would be retained in Serenic to fund further development of Serenic's
Cloud business, which is not part of the assets being sold to
Sylogist. A further press release will be issued with respect to the
timing and procedure of the cash distribution. Serenic intends to
maintain its listing on the TSX Venture Exchange, subject to
maintaining the Continuing Listing Requirements.  
Closing of the transaction is subject to the approval of the Serenic
shareholders to be voted upon at the Annual General and Special.
Shareholders' meeting to be held on July 22, 2014, the receipt of all
necessary regulatory and stock exchange approvals and satisfaction of
certain other closing conditions which are customary in transactions
of this nature. Please see the Press Release "Sylogist to Acquire
Serenic Operating Companies" dated June 26, 2014 as filed on SEDAR
for further details of this transaction. 
Serenic intends to rebrand and form a new operating division referred
to as "Cloudco", which will retain the SOC's existing intellectual
property associated with Serenic's cloud technology. Sylogist will
grant a royalty bearing OEM license involving certain of the SOC's
products to Cloudco. Cloudco will re-brand and market these solutions
to new customers segments that the SOCs have not historically
pursued. The parties intend to work non-competitively to pursue new
volume markets for mutual benefit.  
Financial results are summarized as follows:  

                                     Three months ended February 28         
                                                                  Increase /
                                        2014            2013      (Decrease)
                                           $               $               %
Revenue                            2,858,758       3,905,255          (26.8)
Net (loss) income                (1,158,329)         575,636         (301.2)
Basic and diluted (loss)                                                    
 income per share                     (0.08)            0.04         (300.0)
Adjusted EBITDA (1)                (600,144)         778,151           177.1
Adjusted EBITDA as % of                                                     
 sales                                (21.0)            19.9           205.4
Weighted average common                                                     
 shares outstanding - basic       14,448,208      14,511,647                
Weighted average common                                                     
 shares outstanding -                                                       
 diluted                          14,448,208      14,518,081                
                                         Year ended February 28             
                                                                  Increase /
                                        2014            2013      (Decrease)
                                           $               $               %
Revenue                           11,333,123      12,071,865           (6.1)
Net (loss) income                (2,048,306)          39,110       (5,337.3)
Basic and diluted (loss)                                                    
 income per share                     (0.14)            0.00      (14,100.0)
Adjusted EBITDA (1)              (1,230,928)         547,153           325.0
Adjusted EBITDA as % of                                                     
 sales                                (10.9)             4.5           339.6
Weighted average common                                                     
 shares outstanding - basic       14,448,208      14,732,450                
Weighted average common                                                     
 shares outstanding -                                                       
 diluted                          14,448,208      14,815,670                

(1) Adjusted EBITDA represents earnings before interest, taxes,
depreciation, amortization, stock option expense and impairment
provisions. Please review the Serenic Management Discussion and
Analysis ("MD&A") for the Three months and Year ended February 28,
2014 for more information. 
Although Serenic's business continued to operate as a consolidated
entity during Fiscal 2014, management believes it is useful to review
Serenic's financial information from the perspective of divisional
profit centers. This is the measurement being adopted in Fiscal 2015
and which was not previously used to assess performance and allocate
resources. Serenic has reorganized its business into three
operational, profit-center business-units for Fiscal 2015: 

1.  the NFP business unit that provides on-premise perpetual license
    solutions for mid to large enterprise level not-for-profit organizations
    and certain public sector organizations; 
2.  the HCM business unit that provides on-premise human capital management
    license products to small and medium business ("SMB") customers that are
    not-for-profit, public sector and for-profit organizations; and 
3.  the "Cloud" business unit that is developing versions of the Company's
    software solutions for deployment as Software as a Service ('SaaS")
    solutions, in alignment with Microsoft's volume and Cloud strategies. 

Serenic's Cloud division has developed technology that enables
applications based on the Microsoft's Dynamics NAV ERP and CRM
platforms to operate on Microsoft's new Cloud technology platform
known as Azure. Cloud technology facilitates access and use of
computer applications by any computer device that is browser-capable,
without the requirement for such programs and data to be installed on
the device. Serenic's Cloud solutions can include integration with
Microsoft Office 365 and other cloud products.  
Whereas the NFP and HCM divisions are mature businesses that
management expects to continue to operate profitably, the Cloud
division is still in a pre-revenue stage, and will sustain operating
losses until software subscription fees paid by new customers for the
new products offset the expenses being funded from the Company's
cash. The two mature divisions both currently realize greater than
50% of their revenues from recurring software maintenance contracts,
which are purchased by customers to obtain software updates and
associated services to keep their software solutions current.
Although total revenue growth declined in Fiscal 2014 from the prior
year by about 6%, the compound annual revenue growth rate as measured
over the past eight years remains positive, and is indicative of a
growing business.  
The following table represents the financial results of the Company's
three business units during Fiscal 2014, using the perspective of
divisional business units which is being adopted in Fiscal 2015 and
which was not previously used by management to measure performance
and to allocate resources.  

Serenic Corporation Fiscal                                                  
 2014                                            HCM                     NFP
Revenue                      $             1,694,448 $             9,811,046
Direct costs                                 291,163               3,909,632
Gross Profit                               1,403,285               5,901,414
 Personnel                                 1,041,633               4,021,029
 Marketing                                    39,708                 450,820
 General and administrative                  159,854                 584,435
Total expenses                             1,241,195               5,056,284
Corporate expenses                                                          
Adjusted EBITDA (1)          $               162,090 $               845,130
Serenic Corporation Fiscal                    Consolidation                 
 2014                                 Cloud     adjustments     Fiscal 2014 
Revenue                      $       73,130  $     (245,501) $   11,333,123 
Direct costs                         51,838        (245,501)      4,007,132 
Gross Profit                         21,292               -       7,325,991 
 Personnel                        1,411,702               -       6,474,364 
 Marketing                          300,547               -         791,075 
 General and administrative         174,387               -         918,676 
Total expenses                    1,886,636               -       8,184,115 
Corporate expenses                                                  372,804 
Adjusted EBITDA (1)          $   (1,865,344) $            -  $   (1,230,928)

The legacy HCM and NFP divisions contributed positively to the overall
financial results. We continued to derive revenue from the legacy
divisions by increasing new customer adds, and by providing updates,
maintenance and support services to our customer base. Recurring
revenue from existing customers accounted for more than half of the
gross revenue recorded in Fiscal 2014; however, the Company's
significant investment into the Cloud project during Fiscal 2014
greatly reduced EBITDA and earnings, and resulted in the loss
recorded for the year.  
Revenues for the current year were $11,333,123 a decline of 6% from
revenue of $12,071,865 in Fiscal 2013. Gross profit was $7,325,991
versus $8,209,696 in the prior fiscal year, primarily due to
decreased license sales revenue from Serenic's reseller partner
channel. In the current year, HCM license sales grew by 22.7%, as a
result of the typically consistent pace of payroll and other HCM
product licenses and sales pertaining to the new advanced human
resource information system ("HRIS") solution. An initiative was
launched during the year to integrate an OEM-licensed HRIS solution
with Serenic's payroll products for both Serenic Navigator and
Dynamics NAV users, with the expectation that the fully integrated
solution will be released to market in June, 2014.  
While revenue from Cloud products was nominal during the year, we
started to showcase our Cloud solutions during Fiscal 2014 in various
webinars which have, in management's opinion, yielded good attendance
and interest. Our sales team successfully completed the first sale of
a prescriptive version of Serenic Navigator, which will be
implemented using a fixed-price, streamlined methodology. This lean
Cloud deployment methodology is different from the highly
consultative sale and implementation methodology that typifies
Serenic's historical Enterprise level business and it is considered
essential to allow Serenic to be competitive in the SMB volume
markets. The first of the new Cloud ERP products targeted at the SMB
space, Navigator Express, was released in December, 2013. The
objective is to allow new customers to self-initiate a trial
installation of the entry-level Navigator solution on an Azure cloud
server using a "Click-Try-Buy" process, import their own financial
records, work with the trial version for a period of time, and
subsequently purchase the product - all of which can be accomplished
with little or no interaction with Serenic personnel.  
In Fiscal 2014, the Company recorded a non-cash impairment charge of
$421,376 related to certain of its intellectual properties, and
capitalized $169,257 less costs than in Fiscal 2013. Expenses
included certain costs associated with the reorganization to operate
as segmented business units in Fiscal 2015, including reduction in
personnel, the engagement of independent vendors contracted to work
on Cloud initiatives, and for legal and other matters. The
combination of the reduced gross profit and increased expenses
resulted in the Company recording a net loss of $2,048,306 in Fiscal
2014 compared to the net income of $39,110 earned in the prior year  
Management also continued to actively explore strategic corporate
alternatives, with the objective being to potentially increase and
unlock shareholder value. During the year, the Company purchased
536,500 of its shares for cancellation under its Normal Course Issuer
Cash resources as at February 28, 2014 were $3,318,602, a reduction
of $1,013,976 from cash resources of $4,332,578 as at February 28,
2013. The net loss was primarily responsible for the reduction of
cash. Management believes the cash resources continue to be adequate
for the Company to operate in its anticipated manner. 
Total revenue for the quarter was $2.9 million, a decrease of 26.8%
from revenue of $3.9 million in the same quarter last year. Software
license sales decreased by $1.3 million due to a large sale having
been recorded in Q4 of 2013 and no sales of similar magnitude being
recorded in this fiscal year. HCM license sales were on par with last
year. Services revenue increased $100,000 or 15.1% as the combination
of the HRIS system implementations, Total Care Plan amortization and
an increase in SaaS or cloud monthly fees boosted revenues. Software
maintenance contract revenue increased by 13.9% to $200,000 due to
high contract renewal rates with existing customers and new clients
being added. In total, revenues were assisted by a strengthening U.S.
dollar which had the effect of increasing revenues by approximately
Gross profit decreased by $996,224 due to the decrease in software
license revenues and their related gross margin.  
Expenses increased by $822,990 or 39.5%. A non-cash impairment charge
of $421,376 was recorded in the quarter due to the non-cash
impairment charge related to the write down in value of internally
generated software. The higher U.S. dollar increased this cost
category by approximately $114,000. At year-end, as the Company
reorganized to implement its Fiscal 2015 strategies, the Company
reduced its work force and a severance provision was accrued.
Incentive pay reduced sharply in the period and sales and marketing
costs were flat quarter over quarter.  
Due to the reduced sales and gross profit, the increase in expenses,
and the non-cash impairment charge, the net income of $575,636
recorded in the fourth quarter of 2013 reduced to a net loss of
$1,158,329 in the current quarter. Adjusted EBITDA decreased by
$1,378,295 due to the net loss experienced this quarter. 
For Fiscal 2015, Serenic's operational teams have been reorganized
into the legacy NFP and HCM business units in order to optimize their
financial performance and provide adequate funding for development of
the Cloud unit. Notwithstanding the continued investment in Cloud,
Management and the Board have budgeted for a significant improvement
in financial performance and EBITDA contribution on a consolidated
basis during Fiscal 2015. The legacy business units have been
streamlined to operate more efficiently and profitably, and as much
of the foundational work in the Cloud division has been completed,
greater revenue generation from Cloud division is anticipated to
occur during the latter portion of Fiscal 2015, which we anticipate
will reduce the losses incurred by the Cloud project.   
Serenic will continue to nurture and grow its traditional niche
market customers by selling and deploying enhanced versions of
historical products to those organizations that wish to continue to
embrace on-premise perpetual license solutions. Concurrently, we will
provide a bridge to the SaaS world for those NFP and HCM customers
who choose to transition to Cloud-deployed solutions. As well, we
intend to investigate new volume niche markets that are now
addressable with our new Cloud products, essentially using
Click-Try-Buy and other volume-enabling features.   
Other potential opportunities with Cloud may be investigated,
including the provision of Serenic's underlying Cloud technology to
other Dynamics NAV vendors who require technology to migrate their
ERP solutions to the Microsoft Cloud. Serenic has enjoyed a close and
beneficial working relationship with Microsoft for more than ten
years, and expenditures to adopt Microsoft's Cloud strategies have
given Serenic a competitive advantage and are estimated to have
exceeded $3 million to date. Management believes 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.  
The Company is also expanding its product offerings through
collaboration with other software vendors, including an alliance with
a U.S. based organization that focuses on donor management for faith
based organizations. This donor management application and the HRIS
offering have both yielded initial success in Fiscal 2014 and
management believes they bode well for future opportunity to increase
revenues and contribution.  
Regarding corporate development matters, management continues to
believe that the market capitalization and share price of the Company
does not adequately reflect Serenic's fair value, particularly
considering the results of our mature software divisions, the solid
value of our loyal customer base, the high ratio of recurring revenue
we experience, and our technological leadership with respect to Cloud
for Dynamics NAV products. If the pending sale of Serenic
subsidiaries noted above does not close, we intend to continue to
investigate and pursue potential alternatives to optimize and unlock
shareholder value, and remain confident that our strategies will
ultimately generate greater value for our shareholders.  
Interested parties are urged to read Serenic's audited consolidated
Financial Statements and Management's Discussion and Analysis for the
year ended February 28, 2014 which can be located on  
About Serenic Corporation  
Serenic Corporation publishes mission-critical software products for
not-for-profits, educational institutions and governments. The
Company's products are based on leading application and technology
platforms from Microsoft, including Dynamics NAV, SQL Server, and
.NET, and are distributed in North America and internationally
through value-added resellers and a direct sales organization.
Serenic Corporation is the exclusive developer of human resource
management and payroll products for Microsoft Dynamics NAV ERP users
in North America. Serenic has offices in Edmonton, Alberta and
Denver, Colorado and staff located in Canada, England, Africa and
throughout the USA. 
Dwayne Kushniruk, Chairman 
Forward Looking Statements  
This release contains forward-looking information within the meaning
of applicable securities laws ("forward-looking statements") that
relate to Serenic's products and potential benefits derived
therefrom; and other matters such as those related to the pending
sale of Serenic subsidiaries. Such forward-looking statements involve
known and unknown risks, uncertainties, assumptions and other factors
that may cause the actual results, performance or achievements to
differ materially from the anticipated results, performance or
achievements or developments expressed or implied by such
forward-looking statements. Such factors include, but are not limited
to, the factors and assumptions discussed in the section entitled,
"Risks and Uncertainties" in Managements' Discussion and Analysis
filed with the Alberta and British Columbia Securities Commissions.
Readers are cautioned not to place undue reliance upon any such
forward-looking statements, which speak only as of the date made. We
do not undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
to reflect any change in our expectations or any change in events,
conditions or circumstances on which any such statement is based. 
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. 
Serenic Corporation
Dwayne Kushniruk 
Serenic Corporation
Paul Johnston
1-877-426-5385 x 509 
Investor Relations
Cantech Communications
Nick Waddell
Toll free: (877) 737-3642 x144
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