DecisionPoint Systems (OTCBB: DNPI) Copernic Reports Earnings

DecisionPoint Systems (OTCBB: DNPI) Copernic Reports Earnings

Copernic, Inc., a Quebec City software development company specializing in internet, desktop, and mobile search products, reported their Q3 2010 earnings for the period ending September 30th, 2010. Most notable for this quarter was the company's announcement they would be selling the entire company's asset and rolling the proceeds into wholly-owned subsidiary Comamtech, which will then buyout all the shares of one of WMM's NanoCap members, Decision Point Systems.

For the third quarter, Copernic's revenues were up about a third of a million bucks, flat year over year. Gross margin increased to 98% from 93%, and expenses for the quarter were up about 27% to $1.4M. The increase was directly attributable to expenses the company incurred while investigating potential business acquisitions.

The net loss for the company increased considerable, from $.78M to $1.1, or from a loss of ($.37) per share to ($.52) per share, respectively.

As for the announced reverse merger with DecisionPoint, The completion of the proposed arrangement is subject to court approvals, the approval of the amalgamation by DecisionPoiint shareholders, the closing of the transaction with Constellation Software (the company that agreed to buy Copernic's assets) and certain regulatory approvals. The sale to Constellation is expected to bring in about $8.9M to the soon-to-be-retired company's balance sheet, which will then be used to purchase all of the outstanding shares of DecisionPoint at an exchange rate of 1 Comamtech share for every 8 DecisionPoint shares.

The payoff for DecisionPoint is the strength in numbers Copernic brings to the table that will allow the company to apply for listing on the NASDAQ exchange. Financial projections within 60 days of the closing of the reverse merger indicate the company will have a near cash balance of about $3.5M and an additional $5.4M in receivables. At the end of this year's second quarter, DecisionPoint posted a little under half a million in cash.

Current assets for the company, on a pro forma basis, will be about $24M with total assets exceeding $30M, compared with current and total assets reported in Q2 as $16.4M and $21.6M, respectively. The figures are net of expenses and the deal is still subject to shareholder approval from both sides.

Shares of DecisionPoint are continuing to trend higher, up today $.01, or 3.3% to trade at $.31 a share on average volume. Shares of the company are up about 37% for the month of October and up about 8.5% for the year.

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