Interviews

5 Questions with Serenic President and CEO Randy Keith DVC: (from John in Hull) Serenic makes money by selling software to non-profit groups. Is this really a growth area? Doesn't non-profit mean that these groups have little or no money to spend? Randy Keith: That is actually one of the lingering misconceptions that has caused this market segment to have been neglected by the legacy or "mainstream" software vendors. In normal economic conditions, no-profits are generally very well funded from a variety of sources including private contributions, grants and endowments, and through various government agencies. Non Profits and Non Governmental Organizations, (NGOs), as they are generally referred to outside of the U.S., represent one of, if not the fastest growing segment for financial management software applications. There are currently over a million non profits in North America and nearly that many beyond our boundaries. And, while many of them are very small, a significant number of these organizations are of sufficient size and complexity to implement a Serenic solution. DVC: (from Paul in Waterloo) I'm a potential client. How will your software improve my bottom line next year? Randy Keith: Non profits are not generally concerned over the "bottom line" as in the commercial world. Their challenges generally revolve around a couple of critical issues. 1. Effective and transparent accountability and reporting. This means not only being able to accommodate the nuance involved in non profit accounting, it means being able to provide the government and their donor community with the information necessary to retain their tax exempt status and to assure their donor constituency that their dollars are being managed and dispersed properly. 2. Satisfying their mission. The primary reason most people form or join non profits is to satisfy some humanitarian need in their community or in the world at large. Serenic assists in this endeavor by helping these organizations operate more efficiently thus enabling them to devote more of their precious resources to their work. DVC: (from Dan is Mississauga) You have had all sorts of awards recently -Deloitte and Touche named you as part of their "Fast 500" -the fastest growing tech companies in North America, they also named you as one of the fastest growing tech companies in Canada-now that Serenic has matured somewhat, can you keep up the top line growth? Randy Keith: Over the past couple of years, we have indeed invested a lot of resources to position us for sustainable growth. And, while it is virtually impossible to predict near term growth rates given the current state of global affairs, we remain very optimistic about our prospects, particularly in the international markets where we are successfully expanding our operations and where we foresee very good growth opportunity for the future. One of our core objectives is to remain focused on what we do best and maintain the resources necessary to ensure our long term health and vitality. DVC: (from Arnold in Estevan) Which award the company has received means the most to you? Randy Keith: It's hard to single out just one, but I think one of the recent awards that had the most impact is being named Microsoft's ISV of the Year in 2007. Not only is this a distinct badge of honor within the Microsoft partner community, it helped expose Serenic to a lot of people, inside and outside of Microsoft, who might otherwise not have come to know who we are. DVC: (from Matt in Seattle) After generally being a profitable company, Serenic has posted some losses recently. Can you shed some light on whether these were planned or unexpected and whether Serenic is in good enough shape to withstand a prolonged downturn in the economy? Randy Keith: We actually spotted this trend back in late summer and started making adjustments to remain strong during a downturn. That said, I nor anyone I know could have predicted the ultimate severity of this downturn in the economy and the global markets. However, we have a strong balance sheet, virtually no debt, and will continue to make adjustments as they are required to remain a vital company and poised to take advantage of the recovery when it comes. DVC: (from Jason in Vancouver) Many investors like to pick individual stocks to find value, but they also like to invest in sectors and industries they think will grow. For the investor that is comfortable with the valuation of your stock, do you see industry trends that will help put the wind at your back? Randy Keith: All one really has to do is watch other vendors scramble to try and introduce themselves into our markets. There is a reason for this, no matter the market, and that is they see the activity occurring in our segment and finally consider it worthy of their attention. Disclaimer: All principals of Dollarton Venture Capital own Serenic stock. In addition, on Feb. 13, 2008 Serenic engaged Dollarton Venture Capital to provide investor relations services. During the 12-month term of the agreement, Dollarton will be compensated with a monthly retainer fee of $6,000 (six thousand dollars) and 180,000 (one hundred and eighty thousand) options to purchase Serenic shares. The options will have an exercise price of $0.55 with a 15-month term expiring May 15, 2009, and shall vest in equal amounts on May 15th, 2008, August 15th, 2008, November 15th, 2008, and February 15th, 2009. Shares acquired on exercise shall be subject to a 4 month hold period.