SLI co-founder resigns after reducing his stake at end of escrow period

Co-founder of SLI Systems [NZX: SLI] Geoff Brash, who last week halved his stake in the search engine developer, has resigned as vice president from the company as the shares trade at a record low.

Brash will end 13 years with the company when he formally resigns as vice president from Business Intelligence at the end of this year, the Christchurch-based company said in a statement after close of trading. Last week, he was among initial shareholders who sold some 6.8 percent of the company, at a 23 percent discount to last year's offer price, following the end its 16-month lock-up period. Brash halved his stake to 1.2 million shares, or about 2 percent of the company.

SLI listed on the NZX in May 2013 at $1.50 a share, closing today at a record low of $1.05.

"After 13 years with SLI, I have decided now is the right time for me to develop new projects," said Brash in a statement. "As a major shareholder, I look forward to continuing to share in its success."

Last week, Brash said "personal and family circumstances" prompted his sell-down, and that he continued to support the business. All up, initial shareholders sold off some 4.2 million of the 40.1 million locked-up shares at $1.15 apiece on Sept. 22.

SLI, which is unprofitable, is investing to fund its growth plans as it hopes to capitalise on the growing e-commerce market, particularly in the US, and says its software as a service is the second biggest after Oracle to provide online retailers with suggestive search engines.​

The shares fell 4.6 percent to a record low of $1.05 on the NZX today and have declined some 64 percent from a high in January of $2.90.

SLI chief executive Shaun Ryan, who didn't sell down shares after the escrow period ended, said the "movement is on low volumes and is despite the favourable exchange rate movements for SLI over the past week." There was nothing further to disclose, Ryan said.

In August, SLI posted a loss of $5.7 million for the 12 months ended June 30, smaller than the $7.2 million loss forecast in its offer documents in May last year. Operating revenue was $22.1 million, about matching its forecast for $22.2 million, while cash reserves were $11.4 million, versus the $7.3 million flagged in its prospectus.

(BusinessDesk)