












Comamtech Inc. Announces 2010 Year-end Results
Published in Science and Technology on Tuesday, March 29th 2011 at 13:10 GMT by Market Wire

MONTREAL, CANADA--(Marketwire - March 29, 2011) -Comamtech Inc., (the "Company"), (PINK SHEETS:COMT), today reported its audited financial results for the year ended December 31, 2010. Unless otherwise stated, all figures in this release are in US dollars.
The financial statements include and reflect the operations of its subsidiary, Copernic Inc. ("Copernic"), before the reorganization and until the date of its disposal by the Company on November 4, 2010. Following this transaction, the Company became a "public shell" company with no operating business and will remain so until completion of the arrangement (the "Arrangement") with DecisionPoint System Inc. ("DecisionPoint") as further described below.
Financial Highlights
- The Company sold Copernic for an amount of $6.01 million. The net book value of this investment was $4.91 million, resulting in a gain on disposal of its operating subsidiary in the amount of $1.10 million.
- The value of the Shareholders' equity is $8.25 million as of December 31, 2010 comprised mainly of cash ($4.27 million), a convertible debenture ($2.73 million) and a balance of sale of receivables ($1.57 million).
Recent Highlights
- On August 25, 2010 Copernic and N. Harris Computer Corporation ("Harris"), a wholly-owned subsidiary of Constellation Software Inc., jointly announced that they had entered into a definitive arrangement agreement ("Harris Plan of Arrangement") with Comamtech under which Copernic would ultimately be acquired and taken private by Harris. On October 25, 2010, at Copernic's Annual General Meeting and Special Shareholders' Meeting, the shareholders approved the proposed transaction. On November 1, 2010, the Ontario Superior Court of Justice granted a final order approving the Harris Plan of Arrangement. Following that, the Harris Plan of Arrangement closed on November 5, 2010, and the shareholders of Copernic became shareholders of Comamtech through an exchange of shares on a 1:1 basis resulting in Copernic becoming a wholly-owned subsidiary of Comamtech. Comamtech retained certain non-operating assets of Copernic having a book value of $2,896,961. This acquisition was accounted for at book values using continuity-of-interest method of accounting.. Consequently, the number presented for the current year include those of Copernic's prior to the Harris Plan of Arrangement and the comparatives were those included in Copernic's audited consolidated financial statements as previously issued.
- On October 20, 2010, Comamtech and its wholly-owned subsidiary 2259736 Ontario Inc.("MergerCo") has entered into an arrangement agreement with DecisionPoint, whereby Comamtech would acquire (through MergerCo) all the outstanding shares of DecisionPoint in a reverse take-over.The Arrangement will be completed by way of a plan of arrangement under Section 182 of the Business Corporations Act and provides for the amalgamation of DecisionPoint with MergerCo. In consideration for the amalgamation, shareholders of DecisionPoint will exchange all of their shares of DecisionPoint into common shares of Comamtech, except that DecisionPoint shareholders holding its preferred shares will exchange such shares for preferred shares of Comamtech, which in turn, shall be convertible into common shares of Comamtech. On March 2, 2011, at the Company's Special Meeting of Shareholders, the shareholders approved the proposed transaction. On March 23, 2011, the Company announced that it had adjourned the request for final order and entered into a second amendment to the Arrangement including an amended plan of arrangement. The amendments to the Arrangement require a new special meeting of the shareholders of Comamtech to approve the revised plan of arrangement.
About Comamtech Inc.
Comamtech Inc. (PINK SHEET:COMT) is the successor to Copernic Inc. which was sold to N. Harris Computer Corporation on November 4, 2010.
Forward Looking Statements
Forward Looking Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that can cause actual outcomes to differ materially from plans, projections, expectations and other anticipated results. Some of these risks and uncertainties are detailed in the Company's filings with the U.S. Securities and Exchange Commission and the Ontario Securities Commission. The Company expressly disclaims an intent or obligation to update any description of the scope, focus or subject matter of the forward-looking statements or any other matters contained in this press release except as otherwise required by law.
Comamtech Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
As at December 31, 2010 and 2009 | |||||
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) | |||||
2010 | 2009 | ||||
$ | $ | ||||
Assets | |||||
Current assets | |||||
Cash | 4,265,488 | 465,949 | |||
Temporary investments | - | 3,504,930 | |||
Accounts receivable | 63,537 | 256,110 | |||
Income taxes receivable | - | 337,802 | |||
Balance of sale receivable | - | 655,131 | |||
Prepaid expenses | 21,783 | 118,149 | |||
Other assets | 2,993,274 | - | |||
7,344,082 | 5,338,071 | ||||
Balance of sale receivable | - | 3,694,060 | |||
Property and equipment | - | 115,110 | |||
Intangible assets | - | 202,597 | |||
Goodwill | - | 3,362,003 | |||
Other assets | 1,567,751 | - | |||
8,911,833 | 12,711,841 | ||||
Liabilities | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | 666,679 | 1,010,140 | |||
Deferred revenue | - | 103,668 | |||
Deferred rent | - | 1,534 | |||
Current portion of obligations under capital leases | - | 50,630 | |||
666,679 | 1,165,972 | ||||
Obligations under capital leases | - | 7,906 | |||
Future income taxes | - | 45,146 | |||
Shareholders' Equity | |||||
Capital stock | |||||
Authorized | |||||
Unlimited number of common shares, no par value | |||||
Issued and outstanding | |||||
2,097,861 (2,091,437 as at December 31, 2009) common shares | 96,567,321 | 96,556,485 | |||
Contributed Surplus | 5,931,048 | 5,853,737 | |||
Accumulated other comprehensive income | 561,137 | 561,137 | |||
Accumulated deficit | (94,814,352 | ) | (91,478,542 | ) | |
8,245,154 | 11,492,817 | ||||
8,911,833 | 12,711,841 |
Comamtech Inc. | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) | ||||||||
For the twelve months ended December 31, | For the three months ended December 31, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
$ | $ | $ | $ | |||||
Revenues | 1,261,759 | 1,653,026 | 181,794 | 372,943 | ||||
Cost of revenues | 25,393 | 62,304 | 2,988 | 7,136 | ||||
Gross Margin | 1,236,366 | 1,590,722 | 178,806 | 365,807 | ||||
Expenses | ||||||||
Marketing, sales and services | 403,073 | 625,243 | 30,625 | 193,312 | ||||
General and administration | 3,373,805 | 2,329,947 | 1,048,088 | 566,536 | ||||
Product development and technical support | 649,000 | 1,125,102 | 12,609 | 271,085 | ||||
Amortization of property and equipment | 52,703 | 117,909 | 7,329 | 30,834 | ||||
Amortization of intangible assets | 69,871 | 720,729 | 11,427 | 182,335 | ||||
Gain on disposal of property and equipment | (3,746 | ) | - | (919 | ) | - | ||
Gain on disposal of intangible assets | (9,960 | ) | - | - | - | |||
Write-downs of long-lived assets | - | 10,924 | - | 10,924 | ||||
Restructuring charges | - | 33,677 | - | 13,053 | ||||
Interest and other income | (331,062 | ) | (333,979 | ) | (106,801 | ) | (149,272 | ) |
Gain on disposal of an investment | - | (169,239 | ) | - | - | |||
Gain on disposal of its operating subsidiary | (1,109,736 | ) | - | (1,109,736 | ) | - | ||
Loss (gain) on foreign exchange | 48,601 | 70,772 | (976 | ) | 23,643 | |||
3,142,549 | 4,531,085 | (108,354 | ) | 1,142,450 | ||||
Earning (loss) from continuing operations before income taxes and discontinued operations | (1,906,183 | ) | (2,940,363 | ) | 287,160 | (776,643 | ) | |
Current income taxes | 9,877 | 1,498 | 9,877 | - | ||||
Future income taxes | (15,709 | ) | (656,347 | ) | (2,856 | ) | (60,067 | ) |
(Recovery of) income taxes | (5,832 | ) | (654,849 | ) | 7,021 | (60,067 | ) | |
Net income (Loss) from continuing operations before discontinued operations | (1,900,351 | ) | (2,285,514 | ) | 280,139 | (716,576 | ) | |
Net income (loss) from discontinued operations | (1,435,459 | ) | 4,399,406 | 19,904 | 14,295 | |||
Net income (loss) for the year | (3,335,810 | ) | 2,113,892 | 300,043 | (702,281 | ) | ||
Basic and diluted loss / share - continuing operations | (0.91 | ) | (1.09 | ) | 0.13 | (0.34 | ) | |
Basic and diluted earnings / share - discontinued operations | (0.68 | ) | 2.10 | 0.01 | 0.01 | |||
Basic and diluted net loss / share | (1.59 | ) | 1.01 | 0.14 | (0.34 | ) | ||
Comamtech Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(expressed in U.S. dollars and in accordance with generally accepted accounting principles in Canada) | ||||||||
For the twelve months ended December 31, | For the three months ended December 31, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
$ | $ | $ | $ | |||||
Cash flows from (used for) | ||||||||
Operating activities | ||||||||
Loss from continuing operations | (1,900,351 | ) | (2,285,514 | ) | 280,139 | (716,576 | ) | |
Adjustments for | ||||||||
Amortization of property and equipment | 52,703 | 117,909 | 7,329 | 30,834 | ||||
Amortization of intangible assets | 69,871 | 720,729 | 11,427 | 182,335 | ||||
Employee stock-based compensation | 77,311 | 106,709 | 385 | 21,991 | ||||
Gain on disposal of property and equipment | (3,746 | ) | - | (3,746 | ) | - | ||
Gain on disposal of intangible | (9,960 | ) | - | - | - | |||
Write-down of goodwill | - | - | - | - | ||||
Write-down of intangible assets | - | 1,462 | - | 1,462 | ||||
Write-down of property and equipment | - | 9,462 | - | 9,462 | ||||
Gain on disposal of an investment | - | (169,239 | ) | - | - | |||
Gain on disposal of its operating subsidiary | (1,109,736 | ) | - | (1,109,736 | ) | - | ||
Future income taxes | (15,709 | ) | (656,347 | ) | (2,856 | ) | (60,067 | ) |
Accreted interest on balance of sale receivable | (217,603 | ) | (200,823 | ) | - | (74,730 | ) | |
Accreted interest on other assets | (107,335 | ) | - | (107,335 | ) | - | ||
Unrealized loss (gain) on foreign exchange | - | 10,529 | (542 | ) | 2,027 | |||
Net change in non-cash working capital items | 53,382 | 130,297 | 203,444 | (48,642 | ) | |||
Cash used for operating activities from continuing operations | (3,111,174 | ) | (2,214,826 | ) | (721,491 | ) | (651,904 | ) |
Cash provided by discontinued operations | 2,828 | 1,051,219 | 19,904 | (18,104 | ) | |||
Cash used for operations | (3,108,346 | ) | (1,163,607 | ) | (701,587 | ) | (670,008 | ) |
Investing activities | ||||||||
Increase in other assets | (263,957 | ) | - | (198,320 | ) | - | ||
Proceeds on the disposal of an investment | - | 169,239 | - | - | ||||
Proceeds on the disposal of its operating subsidiary, net of cash | 3,199,800 | - | 3,199,800 | - | ||||
Proceeds on the disposal of an intangible | 9,960 | - | - | - | ||||
Proceeds on the disposal of property and equipment | 3,746 | - | 3,746 | - | ||||
Purchase of intangible assets | (2,098 | ) | (14,373 | ) | - | (11,149 | ) | |
Purchase of property and equipment | (3,357 | ) | (30,627 | ) | - | (1,730 | ) | |
Net decrease in temporary investments | - | 3,005,227 | - | - | ||||
Cash provided by (used for) contiuning operations | 2,944,094 | 3,129,466 | 3,005,226 | (12,879 | ) | |||
Cash used in discontinued operations | 493,507 | (579 | ) | - | 229,090 | |||
Cash provided from (used for) investing activities | 3,437,601 | 3,128,887 | 3,005,226 | 216,211 | ||||
Financing activities | ||||||||
Issuance of capital stock | 10,836 | - | 1,703 | - | ||||
Repayment of obligations under capital leases | (45,482 | ) | (62,106 | ) | (201 | ) | (17,641 | ) |
Cash provided from (used for) financing activities | (34,646 | ) | (62,106 | ) | 1,502 | (17,641 | ) | |
Net change in cash and cash equivalents during the year | 294,609 | 1,903,174 | 2,305,141 | (471,438 | ) | |||
Cash and cash equivalents – Beginning of the year | 3,970,879 | 2,067,705 | 1,960,347 | 4,442,317 | ||||
Cash and cash equivalents – End of year | 4,265,488 | 3,970,879 | 4,265,488 | 3,970,879 | ||||
Cash and cash equivalents comprise: | ||||||||
Cash | 4,265,488 | 465,949 | 4,265,488 | 465,949 | ||||
Temporary investments | - | 3,504,930 | - | 3,504,930 | ||||
Temporary investments with maturity date in excess of 3 months from date of issuance | - | - | - | - | ||||
4,265,488 | 3,970,879 | 4,265,488 | 3,970,879 |