subject: DecisionPoint Systems (OTCBB: DNPI) Applauds Shareholder Approval for Reverse Merger [print this page] DecisionPoint Systems (OTCBB: DNPI) Applauds Shareholder Approval for Reverse Merger
In a blog last week, I covered the DecisionPoint Systems merger in an WMM article titled, "Reverse Merger Beefs Operations." Earlier that morning on October 20th, DecisionPoint had announced the company would be engaging in a reverse merger by allowing Copernic to divulge it's assets into a holding company and purchase all of the outstanding DecisionPoint shares.
The deal makes great sense for the company. Consider this excerpt:
"The payoff for DecisionPoint is the strength in numbers Copernic brings to the table. Financial projections within 60 days of the closing of the reverse merger indicate the company will have a cash balance in 60 days will be $3.5M ($2.5M at closing plus $1M in 60 days from closing) plus $5.4M in short term receivables (including $1.5M in escrowed funds)".
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. Working capital will improve from negative $2.5M to positive $.5M, and stockholders' equity will improve from a negative $4.3M to positive $3.6M.The figures are net of expenses and the deal is still subject to shareholder approval from both sides.
Now, it seems, the deal makes great sense to Copernic investors too. This morning, shareholders of Copernic approved the sale of the company to N. Harris Computer Corp., a wholly-owned subsidiary of Constellation Software, Inc. The plan is to book the cash from the sales, expected to be $3.5M cash and installment payments due of $5.4M for a total of $8.9M, and transfer those assets to a successor company, Comamtech. The successor company will then purchase of the outstanding shares of DecisionPoint and keep the name. DNPI share peaked at $.38 that morning before settling down to today's expected close of $.29 per share for a session loss of about 3.3%.
Terms of the merger agreement call for Comamtech to acquire all of the outstanding common shares of DecisionPoint at an exchange ratio of 1 Comamtech share for every 8 DecisionPoint outstanding common shares held by shareholders, for a total issuance of approximately 4.2M common shares. Warrants and options for Comamtech will also be traded 1-for-8.
"We are pleased by the result of this important shareholder vote," said Nicholas Toms, Chief Executive Officer of DecisionPoint. "With this positive outcome, the operating businesses of Copernic will be monetized, enabling DecisionPoint and Comamtech to continue on the path to completing our reverse merger agreement."
