BasicGov Systems, Inc.
TSX VENTURE : BSG

BasicGov Systems, Inc.

September 15, 2010 20:03 ET

BasicGov Announces Shareholder Approval of Sale of Assets & Name Change

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 15, 2010) - BasicGov Systems, Inc. (TSX VENTURE:BSG) ("BasicGov" or the "Company") announces that at the Annual and Special General Meeting of Shareholders held on September 15, 2010 shareholders approved the agreement to sell all of its assets other than cash to 0887901 B.C. Ltd. (the "Purchaser"), a wholly-owned subsidiary of Pender Growth Fund (VCC) Inc. ("Pender"). The transaction was approved by 100% of the shareholders represented in person or by proxy who were eligible to cast votes on this resolution at the meeting. Votes attached to the common shares that are beneficially owned, controlled or directed by shareholders that are interested parties were not eligible to cast votes on this resolution. Pender and certain directors of the Company were interested parties and, as such, their shares were excluded from this vote.

Pursuant to the terms of a Business Assets Purchase and Sale Agreement (the "Sale Agreement") dated August 16, 2010 among the Company, 0887901 B.C. Ltd. and Pender, the Company will sell all of its assets, other than cash, to 0887901 B.C. Ltd. for consideration of approximately $900,000, subject to adjustments for changes in specific working capital balances between July 1, 2010 and the Closing Date (the "Sale Transaction"). This consideration exceeds the value of the Company's BasicGov Software-as-a-Service ("SaaS") business estimated by a business valuator to be between $810,000 and $850,000 as of July 15, 2010.

Consideration for the Company's SaaS business assets is a combination of cash and the assumption of certain liabilities of the Company. The actual amount of cash payable and the value of the assumed liabilities will be calculated as of the completion of the transaction so that adjustments can be made for additional sales of subscriptions of the Company's BasicGov service and increases or decreases in liabilities to be assumed between the date of the Sales Agreement and the date the sale is completed. Subject to the amount of cash consideration not exceeding $780,000, the amount of cash payable is intended to ensure that the Company has $100,000 in working capital after the Closing Date and the share redemption and repayment of advances under it's existing loan facility with Pender. The Company will use this working capital to fund its expenses as a publicly listed shell company and to seek a new business that has the potential to attract greater support from the public market.

The completion of the Sale Transaction triggers redemption rights under the Company's outstanding 250,000 Series 1 Preference Shares that are held by Pender, which shares will be redeemed by the Company concurrent with completion of the Sale Transaction. The Company will also repay all working capital loans made by Pender to the Company concurrent with completion of the Sale Transaction. Payment for the redemption and loan repayment will be made with the cash proceeds of the Sale Transaction.

Since the Company's name is one of the assets to be acquired by 0887901 B.C. Ltd. under the Sale Transaction, Shareholders also approved changing its name upon the closing of the Sale Transaction to "Pedro Resources Ltd." or such other name as may be acceptable to the TSX Venture Exchange.

The Sale Transaction is expected to close by the end of September.

About BasicGov Systems, Inc.

BasicGov Systems, Inc. ("BasicGov") (formerly CloudBench Applications Inc.) (TSX VENTURE:BSG) develops, sells and supports web-based software for cities, counties, state governments and government agencies to streamline planning, permitting and inspections, code enforcement, licensing and citizen access. BasicGov is a reliable, secure solution delivered for an affordable price and the only web-based software for local governments built on the Salesforce.com's Force.com platform, the backbone of cloud computing solutions used by more than 70,000 organizations worldwide. Unlike enterprise software that is expensive to acquire and difficult to implement, BasicGov does not require capital investment and is easy to set up. www.basicgov.com.

Forward-Looking Statements

This news release contains forward-looking statements. Actual events or results may differ materially from those described in the forward-looking statements due to a number of risks and uncertainties, including failure of the Sale Transaction to close, changes in market and competition, technological and competitive developments, cooperation and performance of strategic partners, potential downturns in economic conditions generally. Forward-looking statements are based upon management's estimates, beliefs and opinions. The Company assumes no obligation to update forward-looking statements, other than as required by applicable law.

On behalf of the Board of Directors
BASICGOV SYSTEMS, INC.
"David Roberts"
David Roberts, Director

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information