RIS releases overdue annual report, tagged by auditor   24 Nov 2014

RIS releases overdue annual report, tagged by auditor

By Suze Metherell

Nov. 24 (BusinessDesk) - Shares of RIS Group have resumed trading after the NZAX-listed shell company lodged its overdue annual report, which has been tagged by its auditors and shows it may need to raise more funds to avoid administration.

The Wellington-based company is two weeks late in filing the report, which shows its annual loss widened to $560,000 in the year ended June 30, from a loss of $514,000. It had no revenue.

It is the third time since 2011 shares of RIS have been suspended for filing a late annual report, NZX data shows.

In 2012 RIS sold its Retail Information Systems, a payment systems software, to USG Tech Solutions Limited for US$1 million, with US$150,000 in cash and the remainder if USG shares, which are listed on the Bombay stock exchange, according to its website. As at Nov. 14, its USG investment was valued at $230,000, according to its annual report. As part of the deal RIS was to issue 142 million shares worth A$331,000 to I-Venture Group, which both parties have agreed to push out to January 2015.

The company now has no business operations and is now looking for a reverse listing, where its shell is used by another company for a backdoor listing on the NZAX.

In its emphasis of matter, auditor BDO points to the company's loss and negative working capital of $107,000, saying its liabilities exceed its current assets. "The existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business," BDO says.

In a statement to its accounting policies RIS says the board prepared the financial statements using the "going concern assumption". The company recently completed a $100,000 capital raise and plans to engage a corporate adviser to raise a further $200,000 to pay creditors and provide enough working capital to complete a "major transaction", or backdoor listing. Should it be unsuccessful the board may appoint administrators which could see assets sold at less than carrying value.

According to notes in RIS's financial statements, the board moved in January to re-instate remuneration for alternate director Craige Mayo at $3,000 a month, via the issue of 500,000 shares at one sixth of a cent each, although it was still waiting on shareholder approval. It is now planning to pay other directors' fees via share issues.

The shares last traded on Sept. 2 at 0.1 cent, valuing the company at $745,000, and have declined 86 percent since the start of the year.

(BusinessDesk)

Add a comment